Bankruptcy Watch Update: 340 Biscayne Boulevard (Downtown Miami)

In December 2024, the ownership entity behind the Holiday Inn Port of Miami-Downtown. 340 Biscayne Owner LLC voluntarily filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Florida (Case No. 1:24-bk-23025-LMI) to stop a lender foreclosure. The petition listed assets in the range of $100 million–$500 million and liabilities of $50 million–$100 million, with creditor claims due in February 2025, and the debtor operating the hotel as a debtor-in-possession while seeking to maximize value through a court-supervised sale. The Borrower believed the property to be worth $175 million.

Since our November analysis, the Chapter 11 process has moved from planning into execution. In late January 2026, a bankruptcy judge ordered a second auction for the property after procedural challenges rendered the first sale void. The secured creditor, Cirrus Real Estate Partners, emerged again as the winning bidder with a $95 million credit bid. This auction outcome illustrates how procedural rigor in bankruptcy sales can materially influence realizable value, even when asset fundamentals are unchanged.

Concurrently, the Holiday Inn Port of Miami-Downtown hotel is preparing to cease operations, and a layoff notice has been filed for its workforce, reflecting the operational transition that often accompanies these kinds of asset-level restructurings. As of this post, the hotel can still be booked for accommodations. 

The Real Lessons From the Auction Reset

The first auction happened in December 2024 with Cirrus winning the bid at $77 million with a credit bid, but the Borrower filed an objection to the process, highlighting the inability for people to communicate during the budding process. The second auction happened over a month later:

• The court’s decision to order a new auction underscores that bankruptcy sale procedures matter legally and financially, reinforcing confidence among bidders and stakeholders.

• The second auction improved the outcome, but there was only one additional bidder besides the credit bid.

• For sponsors, lenders, and advisors, this episode highlights that bankruptcy expertise and foresight must extend beyond capital structure into sale mechanics and procedural safeguards.

Structural Vulnerabilities Revisited

The core vulnerabilities identified in the original November article remain relevant:

• A floating-rate debt obligation in a rising interest rate environment left little margin for refinancing stress.

• Entitlements for an 82-story mixed-use redevelopment did not translate into tranched financial optionality while the legacy hotel operation continued.

• An earlier Chapter 11 in 2021, coupled with a reorganization in 2022, signaled structural stress that persisted into the current filing.

• Once bankruptcy became unavoidable, the entity structure and procedural design largely dictated control over timing, process, and strategic options.

Why the Entity Structure Still Matters

This case continues to demonstrate how entity and governance design affect outcomes long before Chapter 11 is filed:

• Entities insulated by well-defined bankruptcy-remote provisions tend to provide clearer paths through distress events.

• Provisions that anticipate enforcement and disposition mechanics can support better recoveries for secured creditors.

• Robust governance frameworks can help facilitate earlier intervention and resolution opportunities, reducing litigation and execution risk.

Such protections matter not only for creditors but also for borrowers navigating long-duration redevelopment projects.

A Broader Pattern the Market Should Note

Across commercial real estate, we are seeing court-supervised sales increasingly shaped by process challenges rather than asset quality alone. As redevelopment timelines extend and financing conditions tighten, the gap between “entitled on paper” and “executable in practice” continues to widen.

Projects conceived in a lower rate environment are now being tested on durability of structure, not merely on zoning potential or location. This case epitomizes that larger shift.

Final Thought

The bankruptcy delayed the lender from exercising its rights by approximately 25 months, but the outcome was ultimately the same: the lender took control of the asset, and substantial money was spent in the courtroom.

Building Resilient Structures

For sponsors and lenders working on complex redevelopment or transitional assets, early attention to SPE structuring, governance, and bankruptcy-remote protections can materially influence outcomes well before a filing is necessary.

Source: Bisnow.com/southflorida/news