Developers clear first hurdle in massive casino redevelopment, FPL fuels up with Homestead farmland for natural gas facility: Daily digest

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to [email protected]

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Rendering of the project (Credit: Point Publications)

Rendering of the project

Cordish Companies and partner plan redevelopment of casino and horse racing track in Pompano Beach. Pompano Beach city commissioners granted the first approval to a land-use change that would more than triple the maximum number of residential units on the Isle Casino Racing Pompano Park. [TRD]

FPL buys 109 acres near Homestead for natural gas facility. Florida Power and Light bought 109 acres near Homestead for $9.8 million where its affiliate natural gas company plans to build a nitrogen gas plant. [TRD]

Turnberry Ocean Club condo tower scored a $460 million refinance. Jeffrey Soffer’s Fontainebleau Development secured a massive refinance of its Turnberry Ocean Club, a 54-story condo tower under construction in Sunny Isles Beach. JPMorgan Chase and Mack Real Estate Credit Strategies are the lenders. [TRD]

Forever 21 is planning to file for bankruptcy as soon as Sunday. The retail chain could close as many as 700 stores in such an event, bringing an end to months of hemorrhaging money while it struggled to secure a loan. [WSJ]

Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson Development scoops up Toys “R” Us property in Doral. The University Park, Florida-based real estate investment company purchased the parcel to a Toys “R” Us and Babies “R” Us in Doral for $5.3 million from Pacific Equities Capital Management. [TRD]

Billionaire Ken Griffin’s massive Palm Beach holdings now total $350M. Hedge funder Ken Griffin’s recent $99 million purchase of a Palm Beach estate highlighted his insatiable appetite for ultra-luxury homes, but it also added to his growing collection of properties in one of South Florida’s glitziest towns. [TRD]

Amid growing demand for university housing, Adam America buys a multifamily complex near FIU. Developers are increasingly seeking to build new upscale student living next to Florida International University as demand for that kind of housing grows. [TRD]

Adam Neumann (technically) lost $10 billion. The WeWork founder’s 22 percent stake was reportedly pegged as high as $14 billion earlier this year. But after a rocky path to the company’s IPO, its valuation has plummeted, and Neumann’s stake is now worth closer to $3 billion. [Bloomberg]

Low rates are increasing loan enthusiasm. Mortgage applications jumped 2 percent last week, compared with the previous week, and remained 69 percent higher than the same week last year. Interest rates are also down slightly; the average contract interest rate for a 30-year fixed rate mortgage with conforming loan balances dropped to 3.82 percent from 3.87 percent over the week. [CNBC]

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

A fraudulent deed complicated Anbang’s $6 billion hotel sale. Anbang has sold its U.S. hotel portfolio to the highest bidder at a price north of $5.8 billion, but a last-minute wrench was thrown into the deal when the Chinese insurance conglomerate discovered six of the properties’ deeds were fraudulently transferred to limited liability companies, the Wall Street Journal reported. [TRD]

The Wynwood property and David Edelstein

The Wynwood property and David Edelstein

The owner of W South Beach buys up more land for Wynwood residential project. TriStar Capital’s David Edelstein paid $6.5 million to add a chunk of land to his growing assemblage along a booming stretch of Wynwood. He plans to develop the site into a residential building with about 365,000 square feet of space and up to 370 units. [TRD]

SoftBank is looking to use its leverage to call off WeWork’s planned IPO. SoftBank is urging WeWork’s parent company to shelve its IPO plans as the Japanese conglomerate tries to raise $108 billion for a second Vision Fund. It could struggle to attract major investors if the firm’s initial $100 billion Vision Fund is hurt by a poor performing investment in WeWork. [TRD]

Palm Beach condos shut off power as Hurricane Dorian approached. Some Palm Beach condominium buildings turned off their power after an evacuation was issued from Hurricane Doraine, leaving residents to endure miserably hot conditions. [Palm Beach Daily News]

Compiled by Keith Larsen

Bizarre case of deed fraud complicated Anbang’s $5.8B hotel portfolio deal

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

It might have been one of the biggest heists of all time.

Anbang has sold its U.S. hotel portfolio to the highest bidder at a price north of $5.8 billion, but a last-minute wrench was thrown into the deal when the Chinese insurance conglomerate discovered six of the properties’ deeds were fraudulently transferred to limited liability companies, the Wall Street Journal reported.

The deal with the buyer, South Korea’s Mirae Asset Global Investments, was due to close last month but was delayed due to fake deeds that transferred the ownership of six of the properties to unidentified limited liability companies. (One was reportedly called Andy Bang LLC.)

The fraudulent transfers were discovered as part of a routine search and sources told the Journal that Anbang had no knowledge of the transactions. The six properties found with fake deeds were all located in California.

Anbang, which has been selling off its holdings in the U.S. since its former chairman was sent to prison last year, began accepting bids for its hotel portfolio earlier this spring. Other bidders included Brookfield Asset Management, Fortress Investment Group and Blackstone Group. The Waldorf Astoria in New York, which is also owned by the insurer and is partly being converted into condos, was not included in the sale. [WSJ] — Erin Hudson

Starwood mystified by Anbang withdrawal: report

From left: Starwood’s Thomas Mangas, the W Hotel and Anbang’s Wu Xiaohui
From the New York website: Wu Xiaohui could have at least taken Thomas Mangas out for dinner: Anbang Insurance Group reportedly withdrew its $14 billion bid for Starwood Hotels & Resorts by email and without explanation Thursday. 
The move caught Starwood by surprise because Anbang had already moved the money to buy the hotel company out of China and agreed to pay a large termination fee should Chinese regulators block the deal, according to an anonymous source cited by Bloomberg.
“It’s quite a surprise that they withdrew the offer,” Sigrid Zialcita, managing director of Asia-Pacific research at Cushman & Wakefield, told the news site. “They bit off more than they can chew.”
Anbang, known for its opaque ownership and aggressive expansion over the past two years, launched a bidding war for Starwood with an unsolicited $13.2 billion offer two weeks ago. Marriott had agreed to buy the rival hotel company last year, but the deal hasn’t closed yet.
Starwood accepted Anbang’s offer, but last week Marriott responded with a new bid worth $13.6 billion. On Monday, Anbang again raised its offer, this time to $14 billion, before withdrawing its bid Thursday.  [Bloomberg] — Konrad Putzier

Source: The Real Deal Miami

Out with a bang: Anbang reportedly ends bid for Starwood

The W South Beach is one of Starwood’s South Florida hotels
From the New York website: Anbang Insurance Group is reportedly giving up on its bid to take over Starwood Hotels & Resorts. The move likely ends a two-week bidding war with Marriott International that grabbed headlines around the world.
The Wall Street Journal broke the news late Thursday afternoon.
The decision to end the deal comes a week after Chinese news site Caixin reported that China’s insurance regulator could reject a takeover, citing rules that limit insurance companies to invest no more than 15 percent of their assets abroad. The New York Times also recently questioned the deal’s feasibility, arguing that Starwood would have few options to enforce it.
Starwood has yet to confirm that Anbang is withdrawing its bid. The Wall Street Journal report cited unnamed sources close to the talks.
Anbang, known for its opaque ownership and aggressive expansion over the past two years, launched a bidding war for Starwood with an unsolicited $13.2 billion offer two weeks ago. Marriott had agreed to buy the rival hotel company last year, but the deal hasn’t closed yet.
Starwood accepted Anbang’s offer, but last week Marriott responded with a new bid worth $13.6 billion. On Monday, Anbang again raised its offer, this time to $14 billion, before withdrawing its bid Thursday.
Despite its Starwood ambitions falling through, Anbang won’t end March empty-handed. Earlier this month, the firm agreed to buy 16 U.S. hotels, including the Essex House on Central Park South, from Blackstone Group for $6.5 billion. Anbang already owns the Waldorf Astoria hotel, which it bought from Blackstone for $1.95 billion last year. — Konrad Putzier

Source: The Real Deal Miami

Starwood would face problems closing a deal with Anbang

From left: Starwood’s Thomas Mangas, the W Hotel and Anbang’s Wu Xiaohui
From the New York website: If Anbang Insurance Group wins its bidding war for Starwood Hotels & Resorts, the hospitality firm would still have a lot of work to do to ensure the deal closes. 
When financing or other issues arise, parties generally enforce purchase agreements through the courts, but there are myriad difficulties in suing a firm such Anbang – with most of its assets based in China – for the colossal $14 billion sum that Anbang has offered, the New York Times reported.
The rule of law is notoriously weak in China, and it’s not clear that a Chinese court would enforce a judgement against Anbang. But Starwood still has options.
Many companies doing business internationally – especially in other weak-rule-of-law countries such as Russia – have included contract provisions mandating binding arbitration to settle disputes, instead of the courts.
About 24 national governments around the world, including China’s, have signed on to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention.
But still, it’s widely believed even this sort of decision doesn’t amount to a guarantee in the case of China, the Times reported. And even if Chinese courts went along, the process would likely take years, far longer than Starwood can afford.
Another avenue for Starwood is demanding that Anbang put up collateral. The problem is that Anbang’s combined assets outside of China – the largest of those being the Waldorf Astoria Hotel, which it bought for $1.95 billion in 2014, and the Strategic Hotels and Resorts portfolio it recently bought from Blackstone for $6.5 billion – don’t add up to the value of its $14 billion bid.
Starwood’s lawyers would likely seek a deposit or letter of credit as collateral, the Times reported. Anbang’s opaque ownership structure makes collecting deposits from shareholders unlikely, but the firms could follow the lead of Shuanghui International Holdings, who placed a $275 million termination fee in escrow when it bought Smithfield Foods in 2013, about 5 percent of the purchase price.
Starwood may seek a larger escrow deposit, largely composed of letters of credit and financing letters rather than cash.
There are also likely to be problems with regulatory permission and financing for the purchase, the Times reported.
All these factors suggest Marriott International’s $13.6 billion bid may be relatively more attractive than Anbang’s, despite being lower. [NYT] – Ariel Stulberg

Source: The Real Deal Miami