For the second time in two years, Raoul Thomas’ CGI Merchant Group could lose a South Florida hotel to foreclosure.
The legal action is the latest blow to Thomas’ real estate empire, which has been significantly reduced in the past year following the seizure of other commercial properties.
An affiliate of Miami-based CGI allegedly defaulted on a $69 million mortgage debt secured by the 140-key Gabriel South Beach at 620-650 Ocean Drive in South Beach, according to real estate database Vizzda and a July 17 lawsuit filed by Park Central Lender, an entity managed by Shadi Shomar in Miami.
Consisting of four buildings completed in the 1930s, the Art Deco hotel is also known as The Park Central Miami Beach. A 13,000-square-foot addition was built in 2020.
In February, Park Central Lender acquired the loan from the original lender, Deutsche Bank, which had initiated a uniform commercial code (UCC) foreclosure action in 2023 to seize Gabriel South Beach. However, auctions to sell the 0.7-acre property were postponed several times, records show.
Thomas and Michael Gallinar, an attorney representing Park Central Lender, declined comment.
In 2021, CGI paid $108.6 million for the hotel, designed by the late prominent Art Deco architect Henry Hohauser, via a hospitality opportunity fund that counts retired baseball player Alex Rodriguez among its investors. The same year, CGI obtained a $71 million loan from Deutsche Bank, records show.
In 2023, Deutsche Bank twice extended a maturity date in exchange for two payments totaling $5 million from CGI, mortgage documents attached to the lawsuit show. CGI defaulted on the loan when it failed to repay the loan in full in March of the same year, the complaint states.
Thomas and his firm have been hemorrhaging properties since last summer when CGI lost a Waldorf Astoria-branded hotel in Washington D.C., and the Gabriel Downtown Miami hotel, in foreclosure auctions won by two separate lenders. CGI allegedly owed $285 million on the Washington D.C. property and $60.4 million on the Miami hotel.
In February, CGI lost its five-story office headquarters in Miami’s Coconut Grove in a UCC foreclosure auction. Coconut Grove-based Torose Equities, led by Scott Sherman, won the bid by assuming a $32.5 million mortgage from New York-based Madison Realty Capital.
In another UCC foreclosure auction in May, CGI lost the Coral Gables office building called 550 Biltmore Way after allegedly defaulting on a $48.8 million loan, records show. The same month, CGI sold 65 distressed commercial units in a Coral Gables mixed-use building for $28.5 million, staving off a pending foreclosure.
