A $188 million commercial mortgage-backed securities (CMBS) loan tied to the St. Regis Bal Harbour Resort has been transferred to special servicing, according to a report from Morningstar. The resort, located at 9703 Collins Avenue in Bal Harbour, faces a loan maturity next month.
Despite being current on its mortgage payments and having an option to extend the maturity date, the property’s owner, Al Rayyan Tourism Investment Company (ARTIC), is seeking an extension from its lender, San Francisco-based Column. Morningstar notes that Column is currently reviewing ARTIC’s request for more time.
The decision to move the loan into special servicing comes as ARTIC’s net cash flow for 2024 reportedly dropped to about half of what it was in 2021. This decline in cash flow may be leading bondholders to increase their scrutiny of the asset. However, ARTIC has maintained a debt service coverage ratio above breakeven.
ARTIC, led by CEO Tarek El Sayed and chaired by Sheikh Faisal Bin Qassim Al Thani of Qatar’s ruling family, obtained the $188 million loan in 2021. The company used part of the proceeds to withdraw $44.5 million in equity and pay off a previous $132 million mortgage that had been held by London-based Reuben Brothers.
The St. Regis Bal Harbour complex consists of three 27-story towers with 192 hotel rooms and 205 condominiums. ARTIC acquired the hotel portion in 2014 for $213 million from Starwood Capital Group. Since then, ARTIC has invested $40 million in renovations.
In 2023, the condo association for St. Regis Bal Harbour Residences filed a lawsuit against ARTIC in Miami-Dade Circuit Court. The association alleges building defects, health and safety issues, and financial mismanagement. It seeks a comprehensive assessment of the property and remediation for various issues identified within the complex.
Earlier this year, ARTIC sold the ownership entity for W Miami—a separate hotel property in Brickell—to a joint venture between BH Group and Süzer Group. Details about the sale price were not disclosed.
