A luxury penthouse buyer sued Terra and Russell Galbut alleging a bait-and-switch amenity offering at their 48-story Five Park condo tower in South Beach.
Former hedge fund portfolio manager Jay Newman, as trustee for the Jay H. Newman trust, alleges the development entity failed to make short-term guest suites available for condo owners’ invitees, despite promising them as part of marketing the development, according to the suit. The complaint against the development entity, TCH 500 Alton, was filed in Miami-Dade Circuit Court in August.
The trust led by Newman, a former portfolio manager at Paul Singer’s Elliott Management, paid $17.3 million for a penthouse in 2024, about a month after the 48-story Five Park was completed.
He tried to reserve a guest apartment and allegedly was told there’s no such amenity at the tower and that the developers were listing the apartments for sale, the lawsuit claims. Newman is an author and a former portfolio manager of Paul Singer’s Elliott Management who focused on sovereign debt.
Coconut Grove-based Terra, led by David Martin, and Miami-based GFO Investments, Galbut’s family office, developed the condo at 500 Alton Road in South Beach with 227 units.
As a prospective buyer, Newman was shown marketing materials including a fact sheet promising the guest suites, a mockup identifying nine guest suites on the fifth floor, and a condo declaration saying guest units are available to condo owners and tenants and the relatives, guests and invitees of condo owners, the lawsuit alleges.
The developers’ joint venture declined to comment on the allegation.
In a court response to the complaint, the joint venture denied wrongdoing and said the short term guest suites aren’t available yet but will be made available for any unit owner’s use.
Five Park is among the crop of recently completed South Florida condos that became a magnet for well-heeled buyers during the tri-county region’s boom in recent years. In April, Daniel Krizek, a biotech fund manager at Citadel’s Surveyor Capital, paid $19.5 million for a Five Park penthouse.
A limited liability company linked to waste management mogul Patrick Dovigi’s Toronto-based GFL Environmental also bought a penthouse, paying $17.5 million.
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