Monroe Capital sued the developer of the Mondrian Hallandale Beach Residences to recover a $70 million loan, just as the luxury condo tower is being completed.
Chicago-based Monroe, led by Ted Koenig, sued Maltese Diplomat 100 Mezz LLC, PPG Development’s Ari Pearl, BH3’s Daniel Lebensohn, Greg Freedman and Eric Edidin, and two secondary guarantors in New York on Monday, court filings show.
Monroe alleges the developer LLC failed to make its payment in February, triggering a default on the mezzanine loan. Monroe is seeking full repayment, which now totals about $72.7 million, plus costs and attorneys’ fees.
The mezzanine debt was part of a $225 million refinancing that Hallandale Beach-based PPG and Fort Lauderdale-based BH3 secured a year ago for the residential tower at 101 Diplomat Parkway. At the time, the building was operating as rentals.
The 26-story, 250-unit building was completed by PPG and Michael Herman’s Premium Capital Resources. In 2022, Fort Lauderdale-based BH3 bought a 50 percent stake in the tower.
In June of last year, PPG and BH3 announced they planned to convert the apartment building into Mondrian-branded condos with sales led by Edgardo Defortuna’s Fortune Development Sales.
The lawsuit alleges that the redevelopment is “woefully behind schedule” with an “underdeveloped” sales plan that resulted in just one signed contract.
In a statement provided to The Real Deal, the developer’s LLC said it is “fully committed to the project and to a resolution with our lender.”
“We have been in active discussions with our mezzanine lender and understand the need to protect their position,” the statement reads.
PPG and Premium bought the development site in 2018 for $43.3 million, which includes the adjacent former Diplomat Golf & Tennis Club, now rebranded into the luxury Shell Bay Club. Shell Bay is being redeveloped by PPG and Witkoff. In 2024, the developers secured a $273 million construction loan for the mixed-use luxury condo and hotel project from J.P. Morgan and BDT & MSD Partners.
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