Aby Rosen to Sell Distressed Lincoln Road Building for $13.6M, 33.7% Discount

Key Takeaway

• Aby Rosen is selling his distressed Lincoln Road retail building for $13.6M, a 33.7% discount from its 2019 purchase price.
• The sale to Tricera Capital aims to resolve Rosen's debt issues, with the property currently half-vacant and under foreclosure.
• South Florida's commercial real estate market faces rising foreclosures, with unpaid debt hitting $226.3M this year, up 108% from late last year.

Aby Rosen's Distressed Sale on Lincoln Road

Aby Rosen, a prominent real estate mogul, is under contract to sell his distressed retail building on Miami Beach’s Lincoln Road for $13.6 million. The buyer, Ben Mandell’s Tricera Capital, along with undisclosed partners, aims to resolve Rosen’s debt issues on the half-vacant property. This sale comes amidst a backdrop of financial troubles for Rosen, who has faced multiple foreclosure filings and defaults on significant loans.

Financial Struggles and Foreclosure Filings

Rosen's entity defaulted on a $17 million mortgage, leading Wilmington Trust to file a foreclosure suit in January. The building, which is only 49.7 percent leased, includes tenants like Mr. Jones nightclub and Sweet Life Gelato. The $13.6 million sale price represents a 33.7 percent discount from the $20.5 million Rosen paid five years ago, and it falls short of the $15.1 million owed to the lender. This shortfall raises questions about how the remaining debt will be covered.

Broader Market Dynamics

The sale of Rosen’s Lincoln Road property is indicative of broader trends in the commercial real estate market, particularly in South Florida. Elevated interest rates, skyrocketing insurance costs, and cautious lenders have led to a cooling of the market. According to Vizzda, the dollar volume of allegedly unpaid commercial real estate debt subject to foreclosure in South Florida has surged to $226.3 million this year, a 108 percent increase from the second half of last year.

Rosen's Expanding Debt Issues

Rosen's financial troubles extend beyond Miami. In New York, Credit Suisse affiliate Column Financial filed to foreclose on Rosen’s 522 Fifth Avenue, citing a failure to pay off a $224 million mortgage. Additionally, Rosen defaulted on an $80 million mortgage for a development site in Gowanus and a $15 million mortgage for another Miami Beach property. These defaults highlight the challenges faced by real estate investors in managing debt amidst rising interest rates and market volatility.

Market Implications and Future Outlook

The distressed sale of Rosen’s Lincoln Road property underscores the challenges in the commercial real estate sector, particularly for high-profile investors. The significant discount on the sale price reflects the broader market conditions where owners are increasingly opting to sell at a loss rather than face prolonged financial distress. This trend is not isolated to Rosen; other prominent landlords, such as Related Companies, have also sold properties at substantial discounts.