Owner of Aloft Miami Brickell hotel files for bankruptcy
Developer Pedro Villar said he’s trying to stave off an aggressive foreclosure by lender Torchlight Investors
Looking to ward off an “aggressive foreclosure action” by its Park Avenue lender, the owner of the Aloft Miami Brickell hotel has filed for Chapter 11 bankruptcy.
In a declaration that is part of the bankruptcy petition, hotel developer Pedro Villar said New York City’s Torchlight Investors improperly tried to seize Aloft Miami Brickell’s income and collect a multi-million dollar prepayment fee
“Throughout [the pandemic, the hotel maintained its value in excess of $30 million and is entirely unencumbered, but for its $17.8 million mortgage,” Villar wrote. “Torchlight is, and has always been, unwilling to engage in negotiations to achieve a workout.”
Villar and his attorney Joseph Pack declined comment. Torchlight and attorneys representing the real estate investment firm in the foreclosure lawsuit did not respond to requests for comment.
The 160-room hotel, at 1001 Southwest Second Avenue, is owned by the entity Mary Brickell Village Hotel LLC, which is managed by Villar, president of Miami-based Sunview Companies.
Completed in 2013, the hotel has assets totaling $34 million, and $18 million in liabilities, according to the bankruptcy filing. Its largest creditor is an affiliate of Torchlight that extended the $17.8 million loan. The largest unsecured claim is for $252,098, which is owed to the Miami-Dade County Tax Collector.
Villar’s company is the second Miami hotel owner in recent weeks to seek bankruptcy protection after weathering the pandemic-induced economic downturn. The owner of the Holiday Inn at 340 Biscayne Boulevard in downtown Miami also filed for Chapter 11, which allows a company to restructure its debts while satisfying creditors.
“Last year, the hotel was confronted with its most serious challenge since it opened its doors during the Summer of 2013: the COVID-19 pandemic and the restrictions placed on
businesses, particularly those in the hospitality industry,” Villar wrote in his declaration. “When COVID-19 arrived in March of 2020, the loan was supported by hundreds of thousands of dollars in reserves.”
The hotel owner did not miss a single loan payment prior to the pandemic and reached out to Wells Fargo, which was servicing the mortgage, to come up with a contingency plan in the event of missed payments while Covid-19 restrictions remained in place, Villar wrote.
Months later, he learned that a Torchlight affiliate had taken over servicing the loan and would not be assisting the hotel ownership entity in making any modifications, Villar alleged. He claimed that the hotel was unable to operate and that communication with Torchlight “was close to impossible.”
Instead, Torchlight began demanding default rate interest, special servicer fees and legal fees that Villar’s company disputed, the declaration states. In March, Torchlight filed the foreclosure action against the hotel owner.
“Torchlight had no sincere interest in negotiating in good faith and had decided early on in the process that they wanted to seize the hotel,” Villar alleged. “Mary Brickell Village Hotel has made no headway in negotiating with Torchlight and is of the view that Torchlight’s legal positions are legally unsound, and even potentially expose a nefarious business model.”