A resort in Hillsboro Beach, Florida, previously managed by the now-defunct short-term rental company Sonder, is facing a $26 million foreclosure lawsuit. The suit was filed by an entity of Emerald Creek Capital against the ownership entities of the Hillsboro Beach Resort. These entities are controlled by Daniel Lebensohn and Gregory Freedman of BH3 Management, based in Fort Lauderdale.
The property, located at 1159 Hillsboro Mile, has 81 rooms and occupies just under two acres. In 2022, Emerald Creek provided a $26 million loan to the resort’s owners. According to the lawsuit, the owners defaulted on the loan in March 2024 after failing to pay real estate taxes. The lender paid $731,000 for overdue taxes and later covered an additional $2.19 million.
The complaint states that when the loan matured in August it was not repaid. A subsequent forbearance agreement expired on January 1 without payment from the owners. The debt equates to about $321,000 per room.
A spokesperson for the ownership described the hotel as “an oceanfront gem.” The spokesperson cited rising interest rates and Sonder’s bankruptcy in November as significant challenges and indicated that refinancing has likely been difficult. The spokesperson also stated that efforts continue with their lender: “The owners are still trying to work it out with their lender.”
Lebensohn and Freedman completed development of the nearly 71,000-square-foot resort in 2021. BH3 Management itself is not named as a defendant in the lawsuit. Other projects by BH3 include an 844-unit multifamily development in Fort Lauderdale’s Flagler Village and a planned conversion of a Hallandale Beach property into 250 condominiums with PPG Development.
Sonder’s financial collapse affected several markets nationwide and reportedly caused operational issues at its hotels in Manhattan and problems for Los Angeles short-term rental owners. After attempts such as partnering briefly with Marriott failed, Sonder filed for bankruptcy and ceased operations.
According to TRD Data, New Orleans saw the greatest impact from Sonder’s closure with 32 properties affected; other markets impacted included Miami, Orlando, Palm Springs, and Boca Raton.
