BI
The Raleigh, a prominent condo and hotel project along the glitzy Miami Beach waterfront, could soon change hands after six years of stalled development.
Two people with direct knowledge of sales discussions said Nahla Capital, a New York City based residential builder, has won a bidding process to purchase the property. One of those people said Nahla agreed to pay around $275 million for the project.
They requested anonymity because the sales discussions are confidential.
Real estate developer Michael Shvo. who acquired in the Art Deco district of Miami Beach in 2019 for roughly $243 million, is attempting to match Nahla’s offer and retain control of the project, the two people said. They cited a provision that gives Shvo a first right of refusal on bids. To proceed, he would have to raise fresh capital to pay off his partners in the project and also potentially arrange new debt or extend his current loan.
The Raleigh development consists of three adjacent hotels in the Art Deco district of Miami Beach: the Richmond, the South Seas, and the 80-year old namesake property the Raleigh.
Among Shvo’s chief financial backers was Bayerische Versorgungskammer, a large German pension system known as BVK that has invested in several US real estate deals with Shvo.
“BVK generally does not comment on market rumors and speculation about transactions,” a BVK spokesman wrote in an emailed statement.
A deal could herald a new chapter for the project, which for years has consisted of little more than the derelict remains of the three hotels and a vacant dirt lot.
Shvo has said he would restore and redevelop the hotel properties, build an exclusive beach club and restaurant abutting a famous historic pool at the site, and raise a new ultra-high-end condo tower designed by the star architect Peter Marino.
But aside from preliminary site work, including demolition of existing structures, the development never got off the ground. In January, a team from the commercial real estate brokerage and services firm Newmark was hired by an undisclosed partner in the project to shop it to interested takers, as Business Insider has previously reported.
Helping to push a sale is the project’s $190 million of debt, which was due to expire on July 16. BH3, the Miami-based commercial lender and developer that provided the loan, recently agreed to a three month extension to allow the Nahla, or Shvo, to arrange an acquisition, one of the people with knowledge of the deal said.
Holding the property has saddled the current owners with considerable costs. As Business Insider previously reported, the group paid nearly $20 million in interest on the project’s loan in 2023, alone, and millions of dollars more in taxes, insurance, and other charges.
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