Florida Property Valued at $62 Million Transferred to Lender Through Foreclosure

Photo byTexas Ally

There’s been a major shake-up at The Gabriel hotel in downtown Miami, and it’s raising a lot of eyebrows. The once-promising 15-story hotel at 1100 Biscayne Blvd has now been handed over to its lender, Madison Capital Group, in a deal valued at $62 million. This transfer, finalized through a deed in lieu of foreclosure on August 23, signals the end of a tough chapter for the property’s former owners.

So, what led to this? The Gabriel was previously under the control of CGI 1100 Biscayne Management, part of Miami-based CGI Merchant Group. But when financial pressures mounted, the company found itself in a tough spot. Rather than going through the painful process of foreclosure, CGI decided to voluntarily transfer ownership to 1100 Biscayne Propco LLC, an affiliate of Madison Realty Capital, which had taken over the loan after CGI allegedly defaulted. The paperwork was handled by Jerold C. Feuerstein, an attorney from the New York-based law firm Kriss & Feuerstein, LLP.

This move came after CGI struggled to keep up with the rising costs and economic challenges that have hit many in the hospitality industry hard. They were tied to a $60.4 million loan from Madison Realty Capital, and as the market continued to shift, the hotel’s performance didn’t meet expectations. CGI acknowledged these difficulties, citing uncontrollable circumstances like rising debt costs and broader market conditions as key factors.

In a statement, CGI Merchant Group expressed their commitment to their investors, emphasizing their responsibility to navigate these challenges. They also hinted at the possibility of reclaiming the property in the future, saying, "We remain confident that we have an imminent solution that will allow us to do exactly this."

Despite the change in ownership, it’s important to note that the hotel’s financial obligations are still in play. Madison Realty Capital, which is now in charge, has yet to reveal what they plan to do with The Gabriel. The hotel is part of the Marquis Residences skyscraper and includes 129 guest rooms, so it’s definitely a valuable piece of real estate.

For those unfamiliar with Madison Realty Capital, the New York-based firm has been a major player in real estate finance since 2004. They stepped in to refinance CGI’s $60 million loan from Apollo Commercial Real Estate Finance in 2021, which set the stage for this recent takeover.

Meanwhile, The Gabriel’s market value has been estimated at $18.3 million, which shows just how much the property’s value has fluctuated over time. The hotel has clearly faced its share of struggles, and CGI Merchant Group, led by founder and CEO Raoul Thomas, has had to make some tough decisions.

As the dust settles, all eyes are on what Madison Realty Capital will do next with The Gabriel. Will it get a fresh start, or will it undergo a major transformation? Whatever happens, it’s clear that The Gabriel’s story is still unfolding, and there’s more to come as this iconic Miami property enters a new chapter.