A Brightline-affiliated entity that owns the retail space at MiamiCentral station was hit with a $65 million foreclosure lawsuit, as the separately owned passenger rail operator grapples with its own debt and profitability troubles.
U.S. Bank represented two lender groups in suing Brightline Investment Holdings, one of its subsidiaries and property manager FECI Realty over the 124,000 square feet of retail at 600 Northwest First Avenue, the South Florida Business Journal reported. The suit doesn’t involve the transit portion of the station or the rail company itself.
The office buildings, which Blackstone-managed funds bought in 2021 for $230 million, are not involved nor impacted, and the retail and train station are still open.
The property was financed with a $128.5 million loan in 2022 that was split into two portions. The senior $65 million portion is owned by XYQ Cayman Ltd., which the lawsuit identifies as an affiliate of Boston-based Bracebridge Capital. The remaining $63 million is owned by four EB-5 investment funds created for foreign nationals seeking U.S. green cards.
The senior loan has repayment priority over the other, and the foreclosure lawsuit pertains only to that senior portion of the debt.
The borrower allegedly defaulted by failing to make required principal payments of $16 million by Dec. 26, 2025, and another $6 million by March 15, as well as missing quarterly interest payments beginning in December 2025 and continuing into this year. The lawsuit says the full $65 million owed under the senior loan is now due.
The lender is seeking to foreclose on the retail property, enforce guarantees from Brightline Investment Holdings and its subsidiary, and have a receiver appointed to oversee the property.
The retail section is 65 percent leased with 41,000 square feet of space available for rent, according to an online listing. National tenants include AT&T, Starbucks and Chick-fil-A, and popular local favorites Rosetta Bakery, Joe & The Juice and Wolf of Tacos.
The foreclosure case comes as Brightline’s Florida rail operations face financial headwinds and fatal pedestrian accidents. The passenger rail system, Brightline Trains Florida, had its bonds downgraded by Fitch in July, with the rating agency citing a “very high probability” it will be unable to make upcoming debt-service payments.
Despite its $2 billion debt struggles, Brightline Trains Florida has continued to gain riders and grow revenue. The company reported $61.2 million in first-quarter revenue, up 12 percent year over year, while ridership increased 13.5 percent to more than 900,000 passengers. It still posted a $54 million quarterly net loss and has yet to turn a profit as it works to restructure and pay down its debt.
Posting a net loss is not unusual for passenger rail operators, where high operating and infrastructure costs often delay profitability. But for Brightline, those challenges are compounded by its debt.
—Eman Elshahawy
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