The party at the Goodtime Hotel is running headfirst into a massive foreclosure fight, with a lender affiliate of CIM Group going to court to collect roughly $149.3 million tied to the South Beach property.
The lender filed a foreclosure action in New York on Jan. 27, alleging the debtors owe exactly $149,256,306.73, plus additional interest and fees, and that the loan slipped into default in 2024. The filing ramps up an already public dispute over who should shoulder the hotel’s mounting operating losses.
The complaint, brought by a CIM affiliate, targets Washington Squared Owner LLC, an entity controlled by Dreamscape companies, as the borrower, according to The Miami Herald. That reporting notes the lenders first declared a default last year and says CIM and an affiliate claim they are owed $149,256,306.73. Attorneys for CIM are based in Greenspoon Marder’s Miami office, and the lender at times stepped in to cover payroll and delinquent Florida sales taxes while the hotel operated in the red, the Herald adds.
Owners Push Back In Court
On the other side of the table, developers Eric Birnbaum and Michael Fascitelli are not taking the claims lying down. They have filed counterclaims arguing that a drafting error in the loan documents left them on the hook for indefinite carrying costs. Their filings ask the court to undo or rewrite the guaranty language.
Reporting by Bisnow details the counterclaims and says the developers are facing demands for tens of millions of dollars under personal guarantees. The court papers accuse the lender of overreaching, stating that “CIM’s conduct smacks of dishonesty, unclean hands, and bad faith,” according to that coverage.
What The Goodtime Is
The Goodtime Hotel launched in 2021 and spans an entire South Beach block at 601 Washington Avenue, with 266 rooms, a restaurant lineup, and a large pool and entertainment deck. It was pitched as a design heavy, music focused hotspot that would lean into nightlife and events, helping push Washington Avenue back into the travel pages when it opened.
The property’s address and room count, as listed on its own website, line up with public records and industry coverage, according to The Goodtime Hotel.
Loan History And Lender Actions
Back in 2021, Walker & Dunlop arranged about $164 million in financing for the project. Court filings and later reporting show that structure was effectively reduced to roughly $152 million as the loan and guarantees were reworked, according to The Real Deal.
As cash flow lagged, the parties entered forbearance agreements that gave the owners breathing room while the hotel tried to stabilize. Lenders ultimately declared the loan in default in 2024, and CIM began moving to enforce its collection rights.
Washington Avenue Context
The foreclosure fight is playing out while Miami Beach officials debate how Washington Avenue should evolve. City leaders are considering zoning changes that would push future development along the corridor more toward residential uses and less toward hotels.
According to The Miami Herald, the city previously allowed hotels up to 75 feet tall on parts of Washington Avenue, and many nearby Art Deco storefronts remain largely vacant. A representative also told the Herald that Pharrell Williams and David Grutman have not been involved in hotel operations since sometime in mid or late 2024. Room rates at the Goodtime have generally ranged from roughly $240 to more than $400 at peak periods, the Herald reported.
What Happens Next
The foreclosure action sets up a range of possible outcomes, from a deed in lieu of foreclosure to a court supervised sale. Birnbaum and Fascitelli’s counterclaims, however, are focused on cutting back their personal exposure by asking a judge to correct or narrow the guarantee terms.
Industry coverage indicates the standoff could conclude with a handover of the property, a negotiated settlement that trims the personal guarantees, or a long legal slog that stretches on for months, according to Bisnow. For now, the Goodtime Hotel remains open, and its fate hinges on how quickly and cleanly the warring sides can sort out their competing claims in court.
