Penn-Florida Companies has sold a 1.2-acre development site in Boca Raton for $30.1 million, resolving a pending foreclosure action. The transaction involves two adjacent parcels, one previously slated for an assisted living facility and the other approved for luxury residential units. The buyer, SobelCo, is a local real estate firm.
Key Takeaways
- Penn-Florida Companies sold 1.2 acres of Boca Raton land for $30.1 million.
- The sale resolves a $5.7 million foreclosure lawsuit filed by Safe Harbor Equity.
- SobelCo acquired the properties, one intended for an assisted living facility and the other for residential units.
- The deal highlights broader development challenges in South Florida due to rising costs and interest rates.
Foreclosure Resolution
Penn-Florida Companies, facing foreclosure on a $5.7 million loan, has successfully sold its development site at 375 East Royal Palm Road in Boca Raton. The loan, originally from City National Bank of Florida, was reassigned to an affiliate of distressed debt investor Safe Harbor Equity. Safe Harbor initiated foreclosure proceedings after Penn-Florida allegedly defaulted on the loan’s maturity date. Court filings indicate that a settlement has been reached between Safe Harbor, Penn-Florida, and its guarantor, Mark Gensheimer, leading to the dismissal of the foreclosure case.
Land Acquisition by SobelCo
Boca Raton-based real estate firm SobelCo, led by Jeffrey Sobel, purchased the 1-acre site at 375 East Royal Palm Road for $27 million. This parcel was originally intended for a 193-unit upscale assisted living facility, a project approved by the Boca Raton Planning and Zoning Board in 2017. Penn-Florida had acquired the property and adjacent sites in 2005 for $1.2 million. Additionally, SobelCo acquired the adjacent 0.2-acre vacant site at 343 East Royal Palm Road for $3.1 million. This smaller lot has approvals for a five-story, four-unit luxury residential building with a rooftop.
Broader Development Challenges
Penn-Florida Companies has encountered financial difficulties across several of its South Florida projects. These challenges are attributed to a combination of factors, including elevated interest rates, soaring insurance costs, and increased construction and labor expenses. Many developers are reportedly scaling back or selling sites as they struggle to meet debt obligations, particularly on floating-rate loans, and face difficulties refinancing. Banks have also become more cautious in their lending practices. This situation is exemplified by another foreclosure action against a Penn-Florida affiliate concerning a 366-unit apartment building in Boca Raton, though that property was later sold following a bankruptcy filing.
Sources
- Penn-Florida sells Boca Raton development site to Sobel Co, The Business Journals.
- Penn-Florida Sells ALF Boca Raton Dev Site to SobelCo, The Real Deal.