A prime retail space at the base of the 50 Biscayne condominium tower in downtown Miami is set to hit the foreclosure auction block after the property’s owner, Boca Raton-based AZB I LLC, lost a $4.27 million court judgment. The upcoming auction marks the latest chapter in the ongoing legal battle that has embroiled the commercial units within one of Miami’s most prominent high-rise buildings.
The retail spaces in question, which span 7,531 square feet across three commercial units (CU-1, CU-2, and CU-3), will be sold in an online auction on October 30 through Miami-Dade County's court system. This foreclosure is part of a broader trend in South Florida’s real estate market, where economic pressures have led to an uptick in foreclosures, particularly within the commercial sector. Let’s dive into the details of this case and what it could mean for downtown Miami’s retail landscape.
The Judgment and Auction Details
The foreclosure process stems from a court decision by Miami-Dade County Circuit Judge Reemberto Diaz, who ruled in favor of Fort Lauderdale-based Fuse 10 LLC. The court awarded Fuse 10 a $4.27 million foreclosure judgment against AZB I LLC on August 29, primarily concerning a mortgage with $3.4 million in outstanding principal, along with additional interest and fees.
According to property data firm Vizzda, the commercial units involved in the foreclosure are located at 50 Biscayne Blvd, a 57-story condominium building that was completed in 2007, directly across from Bayfront Park. This prime location in downtown Miami has long been a coveted spot for both residential and commercial tenants, and the commercial space here offers unique opportunities for retail, dining, or office use.
The foreclosure auction is scheduled for October 30, with the first mortgage held by Fuse 10 LLC taking priority over any junior debts. Those additional debts include a $2.86 million second mortgage held by TTN Holdings LLC and a $60,000 third mortgage from Karan Investment Trust. Only after Fuse 10’s mortgage is satisfied will any remaining proceeds be allocated to these secondary lenders.
How Did This Happen?
The financial troubles began after AZB I LLC acquired the commercial condo spaces at 50 Biscayne for $5.8 million in May 2023 from TTN Holdings LLC, which provided seller financing in the form of a second mortgage. In addition to the seller financing, AZB I LLC also secured a $3.4 million first mortgage from Fuse 10, which carried an interest rate of 11.75%.
However, by July 2023, the borrower had fallen into default. Fuse 10 filed a foreclosure complaint in February, citing missed loan payments, unpaid property taxes, and a failure to maintain insurance coverage on the property. With the commercial units largely vacant, AZB I’s financial difficulties compounded, leading to the legal action that has now resulted in the upcoming auction.
In addition to the foreclosure lawsuit, the 50 Biscayne Condo Association has also filed a separate lawsuit against AZB I for allegedly failing to pay its association dues, further complicating the situation.
The Retail Space at 50 Biscayne
Located in the heart of downtown Miami, the retail units at 50 Biscayne represent a valuable opportunity for businesses looking to establish a presence in one of the city's most bustling areas. The building, which houses 547 residential units, provides built-in foot traffic, while its proximity to Bayfront Park, the AmericanAirlines Arena, and numerous other downtown attractions adds to the commercial potential of the space.
According to a recent listing by Fortune International Group, all of the commercial space in 50 Biscayne is currently available for lease, with asking prices of $95 per square foot. The space includes a 2,500-square-foot mezzanine and an additional 4,600 square feet of outdoor space, making it an attractive option for retailers, restaurants, or service providers looking for prime downtown real estate.
While the majority of the commercial space is currently vacant, the high-profile location and flexible layout make it a promising investment for businesses aiming to tap into Miami’s thriving downtown market. The foreclosure auction on October 30 presents an opportunity for investors to acquire this valuable property at a potentially discounted price.
Legal Challenges and Next Steps
As is often the case with foreclosures, legal disputes and financial challenges have complicated the process for all parties involved. AZB I LLC initially fought the foreclosure, with its attorney, Michael J. Alterman, filing an answer to the complaint denying the allegations. Despite this, the court ultimately ruled in favor of Fuse 10, pushing the property toward auction.
The case also highlights the complexities of commercial real estate deals, particularly when multiple lenders are involved. The second mortgage held by TTN Holdings LLC and the third mortgage from Karan Investment Trust complicate the foreclosure process, as both entities stand to lose their stakes if the property sells for less than the combined debt owed.
The legal and financial wrangling in this case serves as a reminder of the risks involved in commercial real estate investments, especially in a market as dynamic and competitive as Miami. With rising interest rates, inflation, and other economic pressures, more commercial property owners may find themselves facing similar challenges in the months ahead.
What This Means for Miami’s Real Estate Market
The foreclosure of the 50 Biscayne retail space is part of a larger trend in South Florida’s commercial real estate market, where rising interest rates and economic uncertainty have led to an increase in defaults and foreclosure filings. While the residential market in Miami continues to thrive, the commercial sector is facing headwinds, particularly for properties that struggle to attract tenants.
However, this foreclosure auction could also present an opportunity for investors looking to acquire commercial real estate at a discounted price. With the retail space at 50 Biscayne offering a prime downtown location and a versatile layout, the property could become a valuable asset for businesses or investors who are able to secure it at auction.
Looking Forward
As the October 30 auction date approaches, all eyes will be on the fate of 50 Biscayne’s retail units. Whether the property is sold to a new owner or restructured through additional legal actions, the outcome will have significant implications for the stakeholders involved, including AZB I LLC, its creditors, and potential investors.
Contact the Mastropieri Group for Your South Florida Real Estate Needs
If you’re interested in investing in South Florida’s dynamic commercial real estate market, the Mastropieri Group is here to help. Our team of experienced real estate professionals has the knowledge and expertise to guide you through the complexities of buying or selling commercial properties in Miami and beyond.
For more information on available properties or to schedule a consultation, call the Mastropieri Group today at 561-544-7000. We look forward to helping you navigate the South Florida real estate landscape with confidence.
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