T
he Holiday Inn Port of Miami-Downtown is facing foreclosure after lender Cirrus Real Estate Partners filed a Uniform Commercial Code (UCC) foreclosure against the property's owner, 340 Biscayne Owner LLC. The auction, scheduled for next Tuesday, will be for the interest in the limited liability company that owns the hotel, not the building itself. This means that even if the auction is successful, the buyer would only acquire ownership of the LLC, not the physical property.

    The UCC foreclosure stems from a $70 million loan provided by Cirrus Real Estate Partners last year. The loan has a floating rate, which has been affected by the Federal Reserve's interest rate hikes in 2022 and this year. Despite these challenges, the hotel remains open for business and is "doing great," according to Linda Jackson, an attorney for 340 Biscayne Owner.

    The LLC, led by Brazilian investor Gilberto Bomeny, is working to refinance the outstanding debt on the property, which would resolve the issues with Cirrus Real Estate Partners. The hotel has been slated for redevelopment since 2014, but no project has moved forward yet. In fact, 340 Biscayne Owner filed for Chapter 11 bankruptcy in 2021 and secured court approval for its reorganization plan in 2022.

    The property was also found to be in violation of building codes last year, but Jackson says this is being resolved through the recertification process. Engineers have determined that the hotel is safe for occupancy, and the city has identified areas that need attention, which are being addressed on schedule.

    This is not an isolated incident; at least two other South Florida properties have faced UCC foreclosures in recent months. However, 340 Biscayne Owner remains optimistic about its asset's future, with downtown Miami hotel occupancy averaging around 71% this year and revenue per available room increasing by 6.6%.