Grant Cardone and Penn-Florida Companies are teaming up to possibly convert the distressed 101 Via Mizner multifamily project in Boca Raton into condos.
At a Thursday hearing, U.S. Bankruptcy Judge Peter Russin will consider a motion by the Penn-Florida entity that owns the 14-story building with 366 units at 101 East Camino Real to sell the property for $235 million. The potential buyer is a joint venture between Cardone and Penn-Florida, led by president Mark Gensheimer, court records show. The building was completed in 2017.
An affiliate of Cardone’s Aventura-based Cardone Capital had recently submitted a $230 million stalking horse bid for 101 Via Mizner. A court auction scheduled for Thursday was cancelled as a result of the latest motion. In January, Penn-Florida’s entity filed for Chapter 11 reorganization in order to delay a UCC auction to sell the 3.1-acre development.
Lawyers for Penn-Florida’s entity did not respond to requests for comment. Via text, Cardone said the plan is to convert 101 Via Mizner’s units into condos. Cardone plans to sell shares of the 101 Via Mizner’s new ownership entity to regular investors, as well as shares in 1,000 bitcoin (roughly $109 million) when the deal closes, he said.
“101 Via Mizner is our fifth real estate/bitcoin project this year,” Cardone said. “With a total of 12 planned before the end of summer — all funded by loyal investors.”
The partnership with Penn-Florida comes on the heels of a federal appeals court reinstating a class action lawsuit by the daughter of a late Los Angeles-based investor against Cardone, Cardone Capital and two funds. The complaint alleges Cardone, a crowdfunding guru and social media celebrity, misled investors by allegedly over-promising investor returns, downplaying their financial liability and not fully disclosing the fees he collected.
Since submitting the stalking horse bid, Cardone and Penn-Florida have continued negotiations to improve his offer “for the benefit of the debtor’s estate,” the July 3 motion by 101 Via Mizner’s ownership entity states. Under a revised purchase and sale agreement, Penn-Florida would kick in $15 million toward the $235 million purchase price.
Cardone would provide the remaining $220 million that will go toward paying creditors, including a Blackstone Mortgage Trust that sought a UCC foreclosure against the multifamily property. The trust alleged that Penn-Florida failed to repay a $145 million loan on its maturity date.
In the event the building’s units are sold as individual condos, sale proceeds will be distributed to equity investors until total sales hit at least $300 million. After that, Penn-Florida and Cardone would equally split any profit, the motion states.
“The debtor expects the condo conversion to result in proceeds exceeding $400 million,” according to the motion. “Accordingly, the debtor expects to receive at least $50 million from the condo conversion on the back end of the deal.”Cardone is also working with Penn-Florida to complete a planned Mandarin Oriental-branded hotel adjacent to 101 Via Mizner, he added.
