Owner Henley faced $37M in unpaid debt
The pandemic brought especially bad timing for the owner of a South Beach hotel, which purchased it last year, embarked on a multimillion-dollar renovation, and ended up losing its investment.
Leste Group and its partner, Moto Capital Group, last month foreclosed on the newly renovated Lord Balfour Hotel on Ocean Drive, The Real Deal has learned.
The mezzanine lenders completed an out-of-court UCC foreclosure of the 81-key hotel at 350 Ocean Drive, according to sources. Senior lender Värde Partners had an inter-creditor agreement with Leste and Moto Capital, which held the mezzanine loan and assumed all obligations related to the property, and now control it.
Hotel borrowers nationwide are facing the threat of foreclosure by their senior lenders, as well as UCC foreclosures from mezzanine lenders, the latter of which are often faster.
In August of last year, the U.S. arm of Henley, a United Kingdom-based private equity firm, paid nearly $35 million for Lord Balfour. Slated to become a Life House property, it marked the fourth deal for Henley and Life House.