The lender that foreclosed on the Hillsboro Beach Resort has taken control of the property, winning it at auction with a $40,100 credit bid.
Emerald Creek Capital acquired the oceanfront resort at 1159 Hillsboro Mile in a July 16 foreclosure sale, months after suing the ownership entities controlled by BH3 Management principals Daniel Lebensohn and Gregory Freedman. The hotel was previously operated by collapsed short-term rental startup Sonder.
A Broward County judge entered a $40 million final foreclosure judgment in April after the borrowers defaulted on a $26 million loan from an Emerald Creek affiliate, according to court records and Vizzda. The judgment included accrued interest, fees and other costs.
Emerald Creek originated the loan in 2022. According to the lawsuit, the borrowers defaulted in March 2024 by failing to pay property taxes, prompting the lender to advance about $731,000 and later another $2.2 million to cover the tax bills.
The loan matured in August without repayment, the lawsuit alleges. A forbearance agreement expired on Jan. 1, leaving the debt at $321,000 per key.
Completed in 2021, the six-story resort has 81 rooms spanning 70,800 square feet on nearly an acre. Amenities include a pool, fitness center, beach access and a restaurant.
Lebensohn and Freedman developed the resort through entities affiliated with BH3 Management, though BH3 is not part of the foreclosure case.
A BH3 representative previously told The Real Deal that “the matter has been amicably resolved and the parties are precluded from discussing the terms of the confidential settlement agreement.”
The resort is one of several South Florida hotels tied to Sonder’s downfall. The startup’s failure disrupted hospitality markets across the country, including Miami, Orlando, Boca Raton, Palm Springs and New Orleans, where it affected 32 properties, according to TRD Data. Sonder filed for Chapter 7 liquidation after years of financial struggles and a brief partnership with Marriott.
The Hillsboro Beach Resort isn’t the only South Florida hotel that a lender has taken back via foreclosure.
Earlier this month, CIM Group acquired South Beach’s Goodtime Hotel with a $100 credit bid after securing a $204.7 million foreclosure judgment in May.
Both the Hillsboro Beach Resort and the Goodtime Hotel remain open.
BH3’s other South Florida projects include an 844-unit, two-tower apartment development in Fort Lauderdale’s Flagler Village and a 250-unit Hallandale Beach condo conversion with Ari Pearl’s PPG Development.
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