$188M St. Regis Bal Harbour Resort Loan Transferred to Special Servicing

A $188 million commercial mortgage-backed securities (CMBS) loan backed by the oceanfront St. Regis Bal Harbour Resort near Miami Beach, Fla., is headed to special servicing, despite the owner making timely payments, Morningstar reported. 

Al Rayyan Tourism Investment Company (ARTIC), which is run by a member of the Qatari ruling family, obtained the debt in 2021 from Column Financial. The financing is set to mature next month. 

ARTIC — whose chairman is Sheikh Faisal Bin Qassim Al Thani — used the funds to replace a $132 million loan from the Reuben Brothers and to withdraw about $44.5 million in equity, per The Real Deal, which first reported the special servicing transfer. 

The transaction came as Florida tourism was rebounding following COVID-19 lockdowns. But, now, the lender is reviewing ARTIC’s request for an extension. Morningstar’s report suggests that Column Financial is seeking a replacement interest rate cap, which ARTIC has yet to buy. 

Although the loan remained current, and the 192-room resort maintained an above break-even debt service coverage ratio, cash flow from last year was about half of what it was in 2021, per Morningstar.

ARTIC purchased the hotel for $213 million in 2014 from Barry Sternlicht’s Starwood Capital Group. Located at 9703 Collins Avenue, the property features three 27-story towers, including a 205-unit condo component. All were completed in 2011.

The hotel owner has had issues with the condo owners, who sued ARTIC for allegedly poorly maintaining the property, including covering up mold colonies and ignoring cracking concrete. This month, the Bal Harbour North South Condominium Association and an affiliate of ARTIC reached a settlement, Bisnow reported.

A spokesperson for ARTIC did not immediately respond to requests for comment, while representatives for Column Financial could not be reached for comment. 

Julia Echikson can be reached at jechikson@commercialobserver.com.