Michael Shvo, the once-high-flying New York developer, crashed to Earth on glam South Beach, Miami, boulevard Collins Avenue.
Shvo was forced to unload the iconic Raleigh Hotel to Nahla Capital for $270 million this month, Bloomberg first reported. The project was beset by slow condo sales, stalled construction and a looming, $190 million mortgage payment.
Shvo and his partners bought the site for $219 million in 2019, planning to spend $1 billion including the purchase price to restore the Raleigh to its original splendor and convert rooms to luxury condos. But the landmark property has been a derelict eyesore in the midst of Collins Avenue’s row of glamorous Art Deco hotels for years.
Manhattan-based Nahla’s portfolio includes the Rosewood Residents in Beverly Hills, 152 Elizabeth St. in NoLiTa and 1122 Madison Ave. The last is a ground-up condo tower at East 84th Street with 26 luxury units.
Shvo’s spokesman said he had “no comment at this time.”
Shvo has been a polarizing figure for decades. The dashing, Israeli-born entrepreneur was a rising star at residential brokerage Douglas Elliman in the early aughts, but a vicious feud with rival superbroker Dolly Lenz earned him the moniker of “the most loathed broker in New York” in New York Magazine. (Shvo later left the company).
Shvo’s charismatic personality charmed lenders but sometimes overwhelmed others. At a 2007 forum at Avery Fisher Hall, sponsored by the Real Deal, the moderator, who was this reporter, struggled to keep Shvo from talking over other participants such as Related Companies founder Stephen M. Ross and City Planning Commissioner Amanda Burden.
His career hit bottom in 2018 when he pled guilty to second- and third-degree criminal tax fraud charges involving art purchases and paid a $3.5 million fine to avoid prison time.
He later mounted an impressive comeback as a developer, though he’s been stung by one setback after another in recent years.
His embattled company, called SHVO, sold off an office-development site on South Beach’s Alton Road earlier this year to avoid foreclosure.
He and a partner, German pension fund BVK, are duking it out in court over numerous issues even as BVK is under scrutiny in its home country over its investments with Shvo.
He’s reportedly trying to sell off units at the Mandarin Oriental Residences Fifth Avenue, where only 19 of 65 apartments have been sold. One buyer sued Shvo over alleged construction defects in a $6 million unit and for allegedly using the rooftop pool as his “personal fiefdom.”
Last winter, he lost the Mandarin Oriental Residences in Beverly Hills to Centurion Investment Partners when he defaulted on a $200 million loan.
In September, he took a hit in his bitter feud with Core Club founders Jennie and Dangene Enterprise when a Manhattan judge ruled that he could not evict the swanky club at 711 Fifth Ave. Shvo claimed the Enterprises were in default on rent payments, while they earlier accused him of a “sinister and fraudulent scheme” to renege on a promised investment and of botching the club’s Fifth Avenue launch.
Shvo can claim at least one current success: the Transamerica Pyramid in San Francisco, which his company bought for $650 million in 2020 and spent another $400 to repair and modernize. The project lured law firm Morgan Lewis, among other prestigious tenants from nearby buildings.
“I think over the next 12 months, this building will be totally full,” he told the San Francisco Standard.
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