101 Via Mizner Bankruptcy Analysis

101 Via Mizner is a 14-story, 366-unit luxury multifamily building in downtown Boca Raton, Florida. In July 2025, an investor group led by Grant Cardone acquired the property out of bankruptcy for $235 million. The business plan involves converting the apartments into condos and acquiring $100 million worth of Bitcoin (BTC).

A bankruptcy filing provides a treasury trove of information. I was able to review many of the key documents, such as the Purchase and Sale Agreement, Operating Agreement, CBRE property valuation, and the monthly reporting packages. Throughout this deal analysis, I included key sections of the documents so you can see them for yourself.

Before diving into the deal, it is important to understand the company behind the entity that filed for bankruptcy, Penn Florida Companies.

Penn Florida’s Distress and the Via Mizner Opportunity

Penn Florida Companies, a Boca Raton-based real estate investment and development firm, was (still is?) a prominent player in South Florida commercial real estate. Financial troubles started to brew in 2023 and eventually became full-blown legal issues in 2024. Several of Penn Florida’s properties faced foreclosure.

Let’s start with two office buildings near 101 Via Mizner: 101 North Federal Highway and 1 North Federal Highway. Palm Beach County records show City National Bank (CNB) was the original lender on both properties. Shortly after the loans matured in September 2024, CNB sold the loans to Kore Capital, which quickly filed a foreclosure complaint. Here are two sections of the 101 North Federal complaint:

While the foreclosure case was dismissed in May 2025, it resulted in a change of control. Florida Secretary of State records show Penn Florida’s CEO, Mark Gensheimer, was replaced as manager of the owning entities by local investor James Batmasian. This suggests Batmasian stepped in (likely injecting capital) to take majority control and prevent the office buildings from being lost. Here is the Notice of Dismissal:

and the Manager change:

Other Penn Florida holdings were similarly distressed. The company’s property at the Santa Lucia River Club (a golf club in Port St. Lucie) had a foreclosure complaint filed by CNB in October 2024 (still ongoing).

The company’s prime land parcel at 422 E Royal Palm Road (adjacent to the Boca Raton Resort golf course) also faces foreclosure after its loan was sold to Safe Harbor Equity.

While fighting these foreclosures, Penn Florida must have been attempting to refinance the debt on 101 Via Mizner. An affiliate of Blackstone was the lender. The loan was set to mature in December 2024, and $195 million had to be repaid. As I will show later, a significant paydown would have been required. This is likely why they were unable to refinance. Plus, Penn Florida’s other legal issues made it nearly impossible.

When Penn Florida failed to pay off the loan at maturity, Blackstone moved to enforce its rights. Instead of pursuing a traditional real property foreclosure (which in Florida can be lengthy), Blackstone initiated a UCC foreclosure on the equity interests of the owning entity, Via Mizner Owner I LLC. This was a savvy move by Blackstone and must have put tremendous pressure on Penn Florida.

In response, Via Mizner Owner I LLC filed for Chapter 11 bankruptcy protection in January 2025, which paused the UCC foreclosure via the automatic stay. The bankruptcy was essentially a defensive move to buy time, but it also opened the door for a court-supervised sale of 101 Via Mizner.

Bankruptcy Auction and Cardone’s Acquisition

Grant Cardone, via Cardone Capital, quickly emerged as the stalking-horse bidder in early 2025. For those unfamiliar, the stalking-horse bid sets the initial purchase offer to beat. Per the bankruptcy filings, Cardone’s opening bid was $230 million with a $20 million deposit.

It appears that the only other bidder was Crescent Heights (CH), which offered $236.5 million. However, the bid was eventually withdrawn. The bankruptcy filings had a draft PSA and emails from CH’s attorney. The emails seem to indicate that CH wanted a longer due diligence period and was willing to pay for it. CH is a very experienced developer. I believe they wanted more time to analyze the condo conversion process.

To secure the deal, Cardone increased its offer to $235 million. The bankruptcy court approved Cardone’s bid, and the sale closed on July 18, 2025.

While Cardone is best known for syndicating multifamily investments, this would not follow his typical playbook. Instead, the business plan was a condo conversion as outlined in the Operating Agreement.

Mizner 366 JV Operating Agreement

To acquire the property, Cardone formed a joint venture (JV) with Penn Florida named ‘Mizner 366 JV LLC’. After all its legal troubles, Penn Florida was able to retain a stake in the property. However, they were significantly diluted, owning just 7.4% of the entity (obviously better than zero). Cardone owned the other 92.6%.

Note that the Camino Member is Penn Florida. They did not contribute $15 million in new cash to the deal.

While the JV was formed to acquire 101 Via Mizner, it would also acquire $100 million in BTC.

I was and still am skeptical of including BTC in a real estate transaction. If I want BTC exposure, I can easily buy it. I don’t need Cardone to buy BTC and charge me an AUM fee. It also adds volatility to an already risky real estate deal. That being said, Cardone structured it in a way that gives him a call option. More to come on this shortly. Here are the assets of Mizner 366 JV LLC:

With $335 million in assets and only $205.2 million in equity capital, how was the remainder financed? Arbor provided a $155 million bridge loan. This was outlined in the Operating Agreement:

The loan was also recorded in Palm Beach County:

Therefore, the final capital stack was:

As you’ll see, the overcapitalization was required as the property will operate at a loss and incur condo conversion costs. The risks in this deal are starting to emerge. Condo conversions are already difficult. Add in a 3-year bridge loan and a volatile asset like BTC, and the risk is amplified. Before moving to the property analysis, let’s analyze the special covenants that govern the condo conversion strategy and provide various options to both parties. Here is section 4 of the Operating Agreement:

• Camino Purchase Option:

  • This is Penn Florida’s purchase option. They can exercise the option anytime within the first 12 months of closing and buy 101 Via Mizner for $300 million.

  • Penn Florida must give Cardone at least 90 days’ notice and escrow $5 million. The escrow can be secured by Penn Florida’s membership interest instead of cash, and it would be credited to the purchase price at closing.

  • If Penn Florida fails to close, Carone keeps the deposit or reduces their ownership interest in the entity.

  • Commentary: I don’t see Penn Florida exercising this option. As you’ll see when we get into the numbers, you would have to be an extreme optimist to acquire the property for $300 million. The one caveat is the profit split on the condo sales. If the conversion takes place within 18 months, Penn Florida is entitled to 50% of the net sale proceeds over $300 million. If the conversion takes place after 18 months, the net sale proceeds are allocated by the membership interests. Penn Florida could exercise its option to force Cardone’s hand, but they are at risk of him declining his option and allowing Penn Florida to buy the property.

• Cardone Option

  • If Penn Florida exercises its purchase option, Cardone has a counter option available. By giving 30 days' notice after Penn Florida’s exercise, Cardone can reject Penn Florida’s purchase attempt and proceed with the condo conversion under the JV as originally planned.

  • If Cardone exercises this option, Penn Florida will be entitled to 50% of the net condo sales over $300 million, as this will all occur within 18 months.

  • Commentary: I think Cardone would welcome Penn Florida exercising its purchase option. Setting aside the BTC price, the profit on the real estate transaction would be over $60 million, and the return would be over 27%. I don’t know what his promote structure is with his investors, but this would be a homerun for him. If Penn Florida fails to perform, he dilutes them even more. Moreover, if Penn Florida doesn’t exercise its option, Cardone has little incentive to exercise his until month 19. That is when the profit split reverts to the ownership interests. Of course, this all comes with risk. The Arbor loan is only 36 months. If the Boca Raton condo market is struggling, it could be difficult to find new financing.

• BTC Investment and Call Option

  • If the property is sold in its entirety to Penn Florida under the buyback option (meaning the condo conversion doesn’t happen and Penn Florida takes the building), then Cardone has a call option to purchase Penn Florida’s entire interest in the JV’s remaining assets (i.e., its Bitcoin) for an amount equal to Penn Florida’s cost basis.

  • If Penn Florida does buy the property, the distribution of that sale’s proceeds is structured such that Penn Florida only gets distributions until it has recovered what it invested in BTC, after which any remaining sale proceeds all go to Cardone.

  • Commentary: Again, I still don’t like mixing BTC with a real estate transaction. However, this is clever. Cardone essentially takes all the upside if BTC appreciates. Penn Florida (and Cardone’s investors) takes the downside if BTC depreciates.

I have certainly been critical of Cardone and his social media retail fundraising, but credit where credit is due. This deal was structured strongly in his favor. I suspect he was aware of Penn Florida’s struggles beyond 101 Via Mizner, which he likely used to negotiate this deal. However, this is all irrelevant if the business plan fails.

Property Performance and Conversion Analysis

According to the bankruptcy filings, the building was only 84% leased as of February 2025. While historical financials were not included, monthly financial reports were required as part of bankruptcy proceedings. Here were the January to May 2025 operating results:

The annualized net operating income (NOI) was about $8.3 million. I believe the lender started sweeping the rents in April 2025, which is why the numbers are distorted. The bank accounts showed actual collections to be significantly less than booked revenue. NOI of $8.3 million equates to an in-place cap rate of 3.5% on the $235 million purchase price.

When factoring in the $155 million acquisition bridge loan, the property is cash flow negative. I don’t have loan terms, but I assumed the following:

This is one of the reasons the JV had to overcapitalize the deal. I built a pro forma to look at the potential NOI based on stabilized performance, which assumed 95% occupancy:

The unlevered yield on cost (UYOC) is still just 4.4%. This deal simply does not work as a multifamily property without a significant basis reset. Even Arbor’s $155 million loan doesn’t look great on pro forma NOI. The debt yield is just 6.7% and the DSC is 1.05. This is likely why the $15 million paydown was required. At $140 million, the debt yield is 7.4% and DSC is 1.15.

Finally, to illustrate why Penn Florida struggled to refinance the property, even the pro forma NOI couldn’t size the loan to reasonable proceeds.

DSC would have been an issue at this loan amount. Regardless, the Blackstone loan was $195 million. A significant paydown would have been required. The only option was the condo conversion play.

That brings us to the CBRE valuation from July 2025. CBRE valued the asset at $334.5 million, as shown here:

Bankruptcy filings show CBRE was paid a commission of $618,000. I’m not accusing CBRE of wrongdoing, but that certainly influences how an asset is valued. Remember, there were only two bidders, and both were under $240 million.

Let’s start by analyzing the retail pricing, which seems quite optimistic. As of July 2025, the retail space has a single tenant. Citibank occupies 30% of the retail SF, and the rest is vacant. The CBRE valuation contains the occupancy information:

The building is nearly 10 years old. This isn’t a lease-up story. It’s a lack of demand. The building, while in a great location for residential, is at the southern end of Boca’s downtown retail corridor, with less foot traffic than retail further north on Palmetto Park Road. Selling retail condo units is difficult. Investors and businesses are hesitant to buy condo-ownership of retail space in a residential building because the condo association (led by residential owners) can impose rules or fees that complicate operations. Moreover, there is limited dedicated parking for retail. This affects employees and customers. The probability that the units sell anywhere close to $24.5 million is very low. I’m willing to bet that if you ask Penn Florida why ground-floor retail was even included in the development, their answer would be that the City mandates it. Their preference would have been more residential units.

Moving on to the residential units, as this is what makes or breaks the deal. I’ve already established that the value isn’t there as a multifamily property. Without a significant basis reset, the property has to be converted to condos. Here was the CBRE analysis:

I’m not sure what CBRE was trying to imply. I assume it’s worth $761/SF or $310 million today, considering you can convert it to condos and sell them for $1,250/SF or $508.9 million. The sensitivity analysis also suggests that $761/SF was a reasonable price due to the spread between for-sale condos.

Say what you want about Cardone, but Crescent Heights is definitely a smart and experienced real estate investor and developer. Their max offer was under $240 million, and it included the retail component. That should tell you everything you need to know about this valuation. Before discussing my condo conversion financial analysis, we have to analyze the Boca Raton luxury condo market.

Boca Raton Luxury Condo Market Overview

The viability of the condo conversion rests heavily on the strength of the Boca luxury condo market. Boca is known for its affluent buyer pool and has seen high price points for new luxury condos in the past few years. Downtown Boca, in particular, has added several high-end residential projects that have pushed prices well into the thousand per SF range. However, there are signs the market has cooled from the Covid boom. Through June 2025, inventory of luxury condos in Boca rose by 50% YoY, and average days-on-market (DOM) now exceed 300 days for high-end units. Supply has been increasing, and buyers are taking longer to make purchases, suggesting a shift toward a more balanced or even buyer-favorable market.

Let’s look at comps. Here were the comps CBRE used:

Here are my comps followed by commentary:

• Alina Residences

  • Built in 2024

  • Luxury condos in downtown Boca

  • Located on the Boca Raton Golf Course, with many units having golf views

  • Superior building to 101 Via Mizner

    • New construction

    • Significantly better amenities, including a rooftop pool with ocean views

  • 101 Via Mizner units won’t price close

• Tower 155

  • Built in 2020

  • Luxury condos in downtown Boca Raton

  • Super building to 101 Mizner

    • Newer construction

    • Better amenities

    • Arguably a better location

  • 18 units currently for sale

    • Units are taking over a year to sell

    • Units 822 and 919 have been on the market for over 16 months and are still asking over $1,00/SF

    • Units 618 and 1215 sold in March 2025 in the mid and low 900’s per SF

• 200 East

  • Built in 2009

  • Luxury condos in downtown Boca

  • Good comp for 101 Via Mizner

    • While 7 years older, the amenities were just fully renovated, including the lobby, fitness center, and clubhouse

    • Great location on Mizner and Palmetto (more noise, but central location)

  • Recent sales vary widely

    • Fully renovated units have sold up to $930/SF

    • Original units have traded closer to $700/SF

Based on the comps, for 101 Via Mizner, I have a ceiling price of $950/SF and a floor price of $700/SF. My base case is $850/SF, which equates to an average sales price of $850,000 per unit. I’m concerned about adding 366 units to the downtown Boca condo market. It is already slow, and this price point doesn’t appeal to ultra-high net worth buyers. While there will certainly be cash buyers, financing will play an important role. Therefore, the level of interest rates will affect transaction volume.

Condo Conversion Financial Analysis

Here are my base case assumptions and pro forma returns based on them:

While this seems feasible, it still feels a bit aggressive. If the market continues to slow, prices will eventually fall. Here are the unlevered and levered IRRs under different scenarios:

The top row represents the gross residential sales price per SF, and the left column represents the number of residential units sold per month. Notice that the levered IRR is less than the unlevered IRR in many scenarios, including the base case. Debt is not accretive if the sales price per SF and/or the number of units sold per month is too low. While the condo conversion cost and timeline could materially affect the deal, the residential sales price and volume will more than likely drive the results. In my opinion, hitting the downside is more likely than the upside (i.e., the top left quadrant is more likely than the bottom right quadrant).

Other Deal Risks

Converting 101 Via Mizner from apartments into condos will be a challenge. Along with the financial uncertainties, there will be legal and operational risks.

• Legal Conversion Process:

  • In Florida, creating a legal condominium out of an existing building involves preparing and filing a condominium declaration and plat, creating a condominium association, and obtaining approval from the state’s Division of Florida Condominiums. This obviously takes time and cost money.

  • After the 2021 Surfside condo collapse, Florida implemented more stringent condo laws around building safety inspections and reserve requirements. Although 101 Via Mizner is relatively new, it will be nearing 10 years old by the time it becomes a legal condo. This may trigger certain milestones, such as structural inspections.

  • Florida also mandates periodic inspections for condos and adequate reserves for structural elements. Cardone and Penn Florida will need to commission engineering inspections to ensure there are no latent defects or deferred maintenance issues. If any are found, they must be addressed upfront as part of the conversion.

• Capital Improvements

  • 101 Via Mizner was delivered as a luxury apartment in 2016, so its finishes and amenities are 9 years old. While the finishes may have been high-end for rentals, a luxury condo buyer may expect more in 2025. Interior upgrades may be required, and that’s not factored into the budget.

  • The same goes for the upgrades to the common areas and amenities. This is one of the reasons I think 200 East is a better comp than Tower 155.

• Operational Challenges

  • Running the property during the conversion process will be difficult. As units are designated for sale, the building will stop renewing leases. Over time, the rental occupancy will fall from 84% to zero, resulting in a loss of rental income and increased carrying costs before units are sold.

  • Ownership may target investors to buy the condos and try to sell them on a renter being in place. However, the in-place rents won’t support an owner's carrying costs.

  • Showing occupied units is possible but can upset tenants and result in a poor buyer experience, so it’s not ideal.

Conclusion

Buying a distressed asset does not always equate to acquiring it at a favorable basis. Based on my analysis, Cardone and Penn Florida did not get a steal. I suspect the market felt similarly, as evidenced by the lack of bidders above the stalking-horse bid. I wouldn’t invest in this deal. From a purely real estate investment standpoint (i.e., no consideration of the BTC investment), the risk of capital loss would be low without the Arbor loan. I do not like the use of debt. The business plan will take longer than 3 years, which means the debt will have to be refinanced. The structure of the loan adds unnecessary risk to the deal. Surely, there are better financing options available in the market.

There are better real estate investment opportunities with much less financial, operational, and legal risks.

And, I have no desire to pay Cardone a promote if BTC continues to appreciate.