Major Coral Gables Commercial Sale: $29M Distressed Asset Deal Prevents Foreclosure at Miracle Mile

In a significant development for the Coral Gables commercial real estate market, a distressed asset transaction worth $28.5 million has successfully prevented what could have been another high-profile foreclosure case. This strategic sale highlights the current challenges and opportunities within South Florida's commercial property landscape, particularly as market conditions continue to evolve in 2025.

The transaction involved 65 commercial units within the Ten Aragon Condominium development at 55 Miracle Mile, representing a complex mix of retail and office spaces across the building's first three floors. This deal not only demonstrates the resilience of strategic investors in the current market but also underscores the ongoing pressures facing commercial real estate owners in premium locations.

Understanding the Ten Aragon Commercial Transaction

Miami Beach-based Elysee Investments, under the leadership of CEO Haim Yehezkel, emerged as the strategic buyer in this complex distressed asset acquisition. The purchase encompassed not only the 65 commercial units but also included an impressive 419 parking spaces, a particularly valuable asset in the parking-constrained Coral Gables market.

The seller, CGI Merchant Group led by Raoul Thomas, utilized the majority of the sale proceeds to resolve a delinquent $24.2 million loan that had triggered foreclosure proceedings in February. Wilmington Trust, serving as trustee for a commercial mortgage-backed securities trust, had initiated legal action against the CGI Merchant entity, alleging mortgage default. The successful completion of this sale enabled both parties to file a joint motion to dismiss the lawsuit, effectively resolving the dispute.

Morgan Stanley provided the financing structure for Elysee Investments, though specific loan amounts were not disclosed. This institutional backing demonstrates confidence in both the buyer's capabilities and the underlying asset value, despite its distressed origins.

Market Context and Strategic Positioning

The broader Coral Gables real estate market has shown remarkable resilience, with residential properties experiencing a 29.7% increase in median prices over the past year. This growth trajectory provides important context for understanding why investors remain attracted to commercial opportunities in this premium Miami suburb.

The commercial real estate sector nationwide faces significant challenges, with Bloomberg reporting $218.1 billion in potential distressed commercial real estate, including $82.8 billion in true outstanding distress. Against this backdrop, the successful resolution of the Ten Aragon situation represents a positive outcome in an otherwise challenging market environment.

The strategic importance of the Miracle Mile location cannot be overstated. As one of Coral Gables' premier commercial corridors, properties in this area typically command premium valuations due to high foot traffic, established retail presence, and proximity to key business districts. The inclusion of 419 parking spaces adds substantial value, addressing one of the most significant challenges facing commercial properties in dense urban environments.

Investment Strategy and Market Dynamics

Elysee Investments' acquisition strategy appears focused on value-oriented opportunities with strong fundamentals. CEO Haim Yehezkel emphasized the "first class location" and the critical importance of abundant parking in South Florida markets. This perspective aligns with current commercial real estate investment trends that prioritize assets with strong operational characteristics over purely speculative plays.

Miami-Dade County's commercial real estate market showed signs of recovery in Q1 2024, with core asset sales rising 15% year-over-year to $880 million, suggesting that strategic buyers are finding opportunities despite broader market challenges.

The transaction also highlights the importance of execution capability in distressed asset situations. According to sources familiar with the deal, CGI Merchant Group received higher offers but prioritized working with a buyer who demonstrated both financial capacity and operational expertise to complete the transaction successfully.

CGI Merchant Group's Portfolio Challenges

This Ten Aragon sale represents part of a broader pattern of asset dispositions for CGI Merchant Group. The company has faced multiple foreclosure situations across its portfolio, including the loss of Gabriel-branded and Waldorf Astoria hotels through separate Uniform Commercial Code foreclosure auctions in August.

The most significant loss came in January when CGI Merchant forfeited its five-story office headquarters in Miami's Coconut Grove through another UCC foreclosure auction. Coconut Grove-based Torose Equities, led by Scott Sherman, acquired the property by assuming a $32.5 million mortgage from New York-based Madison Realty Capital.

These portfolio challenges stem from broader financing issues that began in 2021 when Madison Realty Capital provided $35.5 million in financing, including a $4.7 million mezzanine loan component. The mezzanine loan default triggered the series of foreclosure actions that ultimately led to multiple asset losses.

Current Commercial Real Estate Trends

Miami's commercial real estate market faces ongoing challenges, with some properties experiencing financial distress in 2024 due to higher refinancing costs, though the city remains better positioned than many markets due to pandemic-era business relocations. This dynamic creates both opportunities and risks for investors and property owners.

National commercial foreclosure activity surged 48% year-over-year in September 2024, indicating that distressed situations like the Ten Aragon case are becoming increasingly common across the country. However, successful resolutions through strategic sales rather than foreclosure completions suggest that motivated buyers and sellers can find mutually beneficial solutions.

The parking component of the Ten Aragon deal deserves particular attention. With 419 spaces included in the transaction, this represents approximately 6.4 parking spaces per commercial unit, well above typical ratios for urban commercial properties. This abundance of parking provides significant operational flexibility and revenue potential for the new ownership.

Future Implications and Market Outlook

The successful completion of the Ten Aragon transaction provides several important insights for the broader Coral Gables and Miami commercial real estate markets. First, it demonstrates that quality assets in prime locations can attract sophisticated capital even when originating from distressed situations. Second, it highlights the critical importance of parking availability in South Florida commercial investments.

Looking ahead to 2025, established commercial real estate trends including digital economy growth, work-from-home flexibility, sustainability initiatives, and retail space repurposing are expected to continue influencing investment decisions. The Ten Aragon property's mixed-use nature positions it well to benefit from these evolving trends.

For property owners facing similar challenges, the Ten Aragon case study suggests that proactive engagement with qualified buyers can produce better outcomes than allowing foreclosure proceedings to conclude. The ability to maintain some control over timing and buyer selection can preserve value that might otherwise be lost in distressed sale situations.

Professional Representation and Transaction Execution

The successful completion of this complex transaction required experienced professional representation on both sides. Christian Arrabal with Advisecre represented CGI Merchant Group as the seller, while Stefano Santoro with Disruptive Real Estate represented Elysee Investments as the buyer. This professional expertise proved crucial in navigating the complexities of a distressed asset sale while simultaneously resolving pending litigation.

The involvement of institutional lenders like Morgan Stanley in financing the acquisition also demonstrates the maturation of distressed asset investment strategies. Rather than relying solely on opportunistic capital, today's distressed commercial real estate transactions increasingly involve traditional institutional financing, suggesting greater market acceptance of these investment strategies.

Insights: Key Questions About This Transaction

What makes the Ten Aragon location particularly valuable for commercial investors?

The property's position on Miracle Mile in Coral Gables provides exceptional visibility and accessibility, while the included 419 parking spaces address one of the most significant operational challenges in dense urban commercial environments.

How does this sale compare to other recent Coral Gables commercial transactions?

While specific comparable sales data varies, the resolution through strategic sale rather than foreclosure completion represents a positive outcome that preserved value for both the distressed seller and provided opportunity for the strategic buyer.

What role did parking availability play in the investment decision?

CEO Haim Yehezkel specifically cited the large number of parking spaces as "very important in South Florida," indicating that parking availability was a key factor in Elysee Investments' acquisition decision.

How do current market conditions affect similar distressed commercial properties?

With commercial foreclosures up 48% nationally, distressed situations are becoming more common, but successful resolutions like Ten Aragon demonstrate that strategic buyers and sellers can still achieve mutually beneficial outcomes.

What lessons can other distressed property owners learn from this transaction?

The CGI Merchant Group's decision to prioritize buyer capability over maximum price suggests that execution certainty can be more valuable than marginal price improvements in distressed situations.

How does this transaction reflect broader South Florida commercial real estate trends?

The successful completion aligns with Miami-Dade County's commercial real estate market recovery, which showed 15% year-over-year growth in Q1 2024, indicating continued investor interest despite broader market challenges.