Holiday inn

Downtown Miami Holiday Inn files for Chapter 11 bankruptcy

The Holiday Inn at 340 Biscayne Boulevard in Miami and lawyer Linda Worton Jackson

The owner of a Holiday Inn in downtown Miami has filed for Chapter 11 bankruptcy, with a plan to attract investors to redevelop the site.

Thanks to its proximity to PortMiami, Bayside Marketplace and the luxury Waldorf Astoria Miami tower project, lawyer for hotel owner Linda Worton Jackson said the 10-story building at 340 Biscayne Boulevard attracts interest of potential investors. The property could be redeveloped into a mixed-use project with a hotel component.

“The site is ready for development,” said Worton Jackson. “It’s in a fabulous location with a lot of investors eyeing it for redevelopment.”

The hotel is owned by 340 Biscayne Owner LLC which is linked to Brazilian developer Gilberto Bomeny. The same company sold the land under the Holiday Inn to Kawa Capital Management in 2016 as part of a sale-leaseback agreement. The site consists of three contiguous plots of a combined 39,982 square feet, which have been occupied since 1950 by a 200-room hotel currently under Holiday Inn management.

On Monday, the owner filed his petition in federal bankruptcy court in Miami, listing $ 100 million to $ 500 million in assets and $ 10 million to $ 50 million in liabilities. According to the hotel’s top 20 list of creditors, the largest creditor is 340 Biscayne Lendco, who has a secured debt of approximately $ 37 million. First Bank of Puerto Rico has the largest unsecured claim on a PPP loan of $ 989,219.

Worton Jackson said his client expects to refinance the $ 37 million loan, retain post-petition debt and pay all creditors in full. By filing for Chapter 11 bankruptcy, the Holiday Inn owner will be able to restructure existing loans and bring in new equity to improve operations, Worton Jackson said. Daily operations will not be affected, she added.

The 200-room Holiday Inn relied heavily on cruise ship passengers leaving PortMiami, Worton Jackson said. They accounted for 70% of hotel bookings on Thursday, Friday, Saturday and Sunday, before the pandemic, according to a press release from the company. In 2019, more than a third of hotel bookings came from contractual agreements related to the cruise industry.

The hotel, which also has 2,000 square feet of on-site meeting and dining space, regularly operated at over 90% occupancy and generated more than $ 10 million in annual operating revenue, the hotel said. Press release. Businesses plunged when their operations were curtailed due to emergency orders issued by local governments to curb the spread of the coronavirus. In April last year, the Holiday Inn temporarily laid off 73 people, according to a WARN notice filed with the state.

“During the pandemic, there were many days when the hotel operated at single digits,” Worton Jackson said. “They kept it open for essential workers, including airline crews. Almost all employees [who were laid off] were rehired.

According to the press release, the Holiday Inn’s occupancy rate increased significantly in January to an average of 80%, and its first-quarter performance exceeded hospitality industry expectations. As a result, the owner of the Holiday Inn has reached the breakeven point of his hotel business while remaining aware of almost all of his obligations. Once the cruise industry rebounds, the hotel expects to return to profitability, the press release said.

Rich Lillis, Collier International’s executive general manager for hotels in the United States, said the leisure segment is driving a resurgence in the hospitality industry. Lillis said occupancy in Miami-Dade was 72% in the second quarter, up from 76% in the same period of 2019. But the average daily room rate improved 26%, a- he declared.

“Investors are clamoring for Miami,” Lillis said. “I think we will see a significant number of transactions with new capital invested in the Miami market.”


Source link