CGI Merchant Group is catching zero breaks, as its South Florida portfolio unravels under the crushing weight of debt woes.
In the latest trouble, the firm lost the 15-story 550 Biltmore office building, at 550 Biltmore Way, in Coral Gables.
Miami-Dade Circuit Judge Abby Cynamon issued a judgment last month for $61.3 million in favor of lender SDI Biltmore Borrower, an entity tied to Coral Gables-based Secured Debt Investments, ordering a foreclosure sale March 23. The amount breaks down to $49.2 million owed in principal for a 2021 loan, $12.1 million in default interest and $68,000 for attorney fees and for other expenses.
But CGI Merchant already had lost the building in a Uniform Commercial Code proceeding before the judicial foreclosure, according to the lender.
550 Biltmore, completed in 1986 on a 1-acre site, has a Mediterranean Revival style that’s common in Coral Gables. CGI Merchant paid $54.4 million for the building in 2019, borrowing $46.5 million from MSD Partners (now called BDT & MSD Partners). In 2021, New York-based Cerberus Capital Management refinanced the loan, bumping it to $48.7 million, records show.
CGI Merchant’s affiliate, CGI Fund I Biltmore, defaulted on the loan when it matured in May 2024, according to a Miami-Dade Circuit Court complaint filed in August.
Cerberus first filed a UCC foreclosure on the building in late 2024. A UCC foreclosure is generally much quicker than a judicial proceeding and is a foreclosure on the interest in the entity that owns an asset, instead of on the property itself.
Cerberus assigned the loan to Secured Debt Investments in May, records show. Secured Debt Investments finalized the UCC foreclosure, essentially acquiring the interest in CGI Fund I Biltmore but then filed the August judicial foreclosure suit in Miami-Dade Circuit Court, according to Secured Debt Investments’ Orlando Garcia. The judicial proceeding is done to ensure there are no liens or other issues with the property, he said.
Secured Debt Investments plans to submit a credit bid at the foreclosure sale and also to see who else bids, Garcia added.
CGI representatives and Thomas didn’t return requests to comment for this story.
Since 2024, the firm has been bleeding assets as landlords nationwide felt the sting from elevated interest rates. Landlords in South Florida also were hit with skyrocketing insurance and other increases in overhead and maintenance expenses. The higher interest rates translated to larger debt obligations for landlords with floating-rate loans and no loan interest caps, and it made refinancing for maturing debt more expensive.
In previous interviews, Thomas said he was diligently working to refinance some of his debt, saying he had capital and equity lined up for some of his properties and was working to try to take back title to buildings he already lost to lenders.
At the time of Cerberus’ UCC foreclosure, a CGI representative said in a statement the firm “is working with all parties for a mutually positive resolution.”
In December, CGI lost its 140-key Gabriel South Beach hotel in a court-ordered sale, with Park Central Lender acquiring the property for a $77,800 bid, according to court records. Park Central Lender, which had assumed the property’s loan from Deutsche Bank, filed for foreclosure in July over the $69 million loan.
On the same August day in 2024, CGI lost both the 129-key Gabriel Downtown Miami hotel and the Waldorf Astoria Washington DC, which the firm had bought in 2022 from the Trump Organization.
CGI has staved off foreclosure on some of its properties, selling 65 commercial units at Ten Aragon Condominium in Coral Gables last year for $28.5 million. This allowed it to pay off most of the allegedly delinquent $24.2 million loan on the units that were in foreclosure.
CGI Merchant sold its five-property Nexus co-working office portfolio in Palm Beach and Martin counties to Coral Springs-based commercial real estate investment firm TMT Properties for $31 million in November. TMT has a licensing agreement to continue operating the buildings under the Nexus name. At the time of the deal, three of the properties had loans that entered special servicing in January of last year due to delinquent debt payments, according to Morningstar Credit.
Read more
Map: A look at CGI Merchant’s unraveling real estate investments amid mounting debt woes
Foreclosure woes worsen for Raoul Thomas’ CGI Merchant Group
Hammered by mounting debt, Raoul Thomas’ hotel investments are crumbling. But he’s not giving up
