Top Attorneys Handle Important Financial Transactions for Their Clients

South Florida Legal Guide
October 20, 2014

Structuring A Complex Project
One of the most complex real estate deals in Miami Beach’s recent history would not have been possible without the efforts of a Bilzin Sumberg team led managing partner John C. Sumberg. The $900 million redevelopment project --- which contains almost 2 million square feet of building space including a hotel, two residential condominium towers, a commercial condominium, and related uses---is expected to be completed later this year.

Sumberg and partners Carter McDowell, Jon ChassenMitch Widom and Melissa Pallett-Vasquez, represent an entity comprised of Starwood Capital, the LeFrak Organization and Invesco Ltd. in the purchase and renovation of South Beach’s largest oceanfront luxury resort property - including the former Gansevoort Hotel South, now known as the 1 Hotel and Homes South Beach, and the development and sale of 156 residential condominium units.

“We assisted the client in extensive due diligence to price the acquisition and succeed over other competing bidders,” said Sumberg. The acquisition involved extended contract negotiations with both the seller and with the lender having a mortgage on the property, requiring the modification and extension of the mortgage debt. The property consisted of a hotel, 259 residential condominium units and a commercial condominium and adjacent undeveloped property on the west side of Collins Avenue.

“This deal was incredibly complex, due to the building’s size and scope of ownership, with nearly two million square feet owned by four major entities along with a shared facility space,” said Sumberg. “The acquisition required close coordination of multiple disciplines beginning with the due diligence and analysis for the client. The legal team drew on its real estate and land use experience to advise on the permitted uses and ability to reposition the property and obtain needed governmental approvals and permits for the project.

Because the acquisition was from a mezzanine lender that had foreclosed its mezzanine loan, there were multiple bidders for the property and the deal had to be put together within weeks, even though the seller did not have complete documentation on the project. “This put enormous pressure on the legal team to do quick, efficient and thorough due diligence on all aspects of the project,” Sumberg said.

Sumberg’s team was also involved in the resolution of outstanding litigation, including a contentious settlement with an existing condominium association, which shares the structure on the property, over certain rights and obligations of the master association.

The settlement permitted the Bilzin Sumberg client to invest more than $150 million in improvements to transform the Perry Hotel into the luxury, eco-friendly 1 Hotel & Homes brand being launched by Barry Sternlicht, CEO of Starwood Capital and founder of the W Hotel brand.

With the lawsuits resolved and the retail lease areas recaptured, the buyer was able to proceed with its renovation and redevelopment of the property, according to Sumberg. “Our team has continued to handle all the zoning and permitting issues for the project, which is well under way,” he added. “The 1 Hotel & Homes South Beach is expected to open later this year, and our client is selling large oceanfront condominium units in the north tower.”

This article was first published in the October 2014 Issue of the South Florida Legal Guide Financial Edition.

John C. Sumberg
Founder, Chairman
Press Release May 11, 2017
Managing Partner John C. Sumberg has been honored by United Way of Miami-Dade as a Donor Next Door. Passionate about giving back to the community, John holds leadership positions in several civic and charitable organizations. He is particularly involved with United Way of Miami-Dade, where he has se...
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