Related Companies affiliate bids $32M for Palm House Hotel bankruptcy auction amid EB‑5 fraud allegations

Palm House Hotel, Related Companies Stephen Ross600 An affiliate of the Related Companies has emerged as the initial bidder for the Palm House Hotel as the failed condo-hotel project heads to a bankruptcy auction. The stalking horse bidder, RREF H PALM HOUSE LLC, has the same address as Related Companies in New York and is led by Related Companies Managing Principal Justin Metz, according to a filing in U.S. Bankruptcy Court. The company is offering $32 million for the property, which will set the floor price for a bankruptcy auction scheduled for next month. Bids at the auction will start at $32.5 million. The 79-unit condo-hotel project on Palm Beach Island stalled in 2014 and its former developer now faces allegations of fraud by the Securities and Exchange Commission and a group of EB-5 investors. In August, the property filed for bankruptcy under its court appointed receiver with creditors claims totaling $115 million. Cushman & Wakefield’s Robert Given, Errol Blumer, Michael Mulkern and Robert Kaplan are the exclusive marketing advisers for the property. The auction is scheduled for 10 a.m. on November 16, 2018 in West Palm Beach. Given said he expects the property to sell for up to $40 million and it could be the last opportunity for a developer to own a hotel in the wealthy enclave of Palm Beach. He said the next owner will likely not redevelop the HOUSE_OVERSIGHT_027064