Michael Shvo Sells Miami's Raleigh Hotel for $103M After Foreclosure Threat

Developer Michael Shvo has sold Miami Beach's Raleigh Hotel to an undisclosed buyer for $103 million, exiting the Art Deco property eighteen months after his lender filed foreclosure proceedings. The transaction, confirmed through Miami-Dade County records last week, marks the second distressed asset sale in Shvo's portfolio since October and surfaces three months before $340 million in construction loans mature across his San Francisco and New York projects.

Shvo acquired the Raleigh in 2019 for $103 million with plans for a $50 million renovation converting the 1940 property into ultra-luxury residences. Construction never commenced. Lender Starwood Property Trust filed foreclosure in June 2023 after Shvo defaulted on $77 million in debt, court filings show. The sale price suggests Shvo extracted minimal equity after legal fees and accrued interest, though precise terms remain sealed. The hotel, which occupies a full block on Collins Avenue at 18th Street, operated intermittently during the dispute.

The Raleigh exit compounds pressure on Shvo's leveraged portfolio. In October, he sold a development site at 125 Greenwich Street in Manhattan for $60 million, half the $120 million he paid in 2019. That property also faced foreclosure proceedings from different lenders. Shvo currently carries approximately $1.8 billion in disclosed debt across eight properties, per regulatory filings analyzed by The Real Deal. His flagship 125 Greenwich tower—a $3.5 billion conversion of the old AT&T headquarters—faces a $250 million construction loan maturity in April with the luxury condo market absorbing inventory at half the pace Shvo projected in 2022.

Family offices and hospitality groups should track three dynamics. First, Shvo's lenders are forcing liquidations rather than restructuring, a shift from the extend-and-pretend posture dominant through mid-2023. That pattern suggests senior debt holders see better recovery in foreclosure sales than in funding additional carrying costs. Second, the Raleigh sold at basis despite Miami Beach hotel fundamentals improving—RevPAR in the luxury South Beach segment rose 11% year-over-year through Q4 2024, per STR data. The buyer likely acquired the property betting on Shvo's incomplete entitlements rather than current operations. Third, Shvo's next maturity wall hits in Q2 2025 with $340 million coming due on 333 West 57th Street in Manhattan and 50 Postum Street in San Francisco, both stalled conversions where construction paused in 2023.

The Raleigh buyer has not filed ownership documents, though Miami brokers familiar with the transaction told the *Post* the purchaser is a Latin American family office with existing South Florida hotel holdings. That profile suggests conversion to branded residences remains the highest-value path, though permit records show no new filings since the sale closed. Shvo declined to comment through his spokesperson. Starwood Property Trust, which holds $4.2 billion in real estate credit exposure across distressed borrowers, reported a 14% increase in non-performing loans during its February earnings call.

The Raleigh sale will not resolve Shvo's capital structure. His debt service obligations across the remaining portfolio exceed $180 million annually, while rental and sales revenue from operational properties generated approximately $90 million in 2024, according to estimates by Green Street Advisors. The gap requires either fresh equity—difficult to attract after two forced sales—or additional asset liquidations. Shvo's 711 Fifth Avenue retail condo in Manhattan, valued at approximately $200 million, represents his most liquid remaining holding. That property carries a $125 million mortgage maturing in November.