Boca Raton's unfinished Mandarin Oriental faces a $418 million foreclosure as buyers want their deposits back

The lender wants the tower, and the buyers want out

Via Mizner Lender 1, a lending company in the same corporate family as New York lender Madison Realty Capital, is suing to foreclose on the unfinished Boca Raton condo tower. It shows the risk of a deposit on an unbuilt condo: if the lender wins, it is paid before the buyers.

Why it matters: Buyers of at least 20 condos want their deposits back, The New York Times reports. Florida law let the developer, Penn-Florida of Boca Raton, led by Mark Gensheimer, spend part of that money on building the tower.

The story so far: Penn-Florida, whose chief executive is Gensheimer, announced the hotel and condos in 2015 and said they would be done in late 2017. Its company that borrowed the money stopped paying interest in June 2024, the lender's suit says. The loan came due in September 2025 and was not repaid, the suit says.

Penn-Florida's companies have sued the lender in New York for more than $500 million, saying Madison created those defaults. Their suit says Madison took over jobs usually left to the developer, such as running construction, and refused basic funding. Construction has stopped, The New York Times reports.

Madison led more than $300 million of financing for the developer in 2023, the real estate news site The Real Deal reports. The tower carries the Mandarin Oriental luxury hotel name. Penn-Florida says nearly $1 billion has gone into the project, which also includes rental apartments, the only part that is open.

Recent buyers who sued here generally put down $1 million to $2 million each, The Coastal Star reports. If the foreclosure goes ahead, buyers should be able to get back the 10% of their deposits that is still held, unspent, in escrow, The Real Deal says. Getting back the rest, which went into the building, would likely be much harder, it says.

What the lender says

The suit was filed in Palm Beach County circuit court by Via Mizner Lender 1 LLC, agent for a group of lenders, The Coastal Star reports. It seeks $417.7 million to repay a $270 million loan from August 2023, plus interest, advances and fees.

The Real Deal says the total includes $24.6 million the lenders advanced for project costs. It describes the lending group as tied to Apollo Global Management; The New York Times and The Real Deal also call the lender a Madison affiliate.

The suit says Penn-Florida stopped paying interest in June 2024 and did not repay the loan when it came due in September 2025, The Coastal Star reports. It also says the developer missed a February 2025 completion deadline and let the hotel's management deal be ended, according to The Real Deal.

The suit names contractors that filed liens and buyers with units under contract. It argues the mortgage comes ahead of their claims, calling it "a lien superior in dignity" to any other right arising from the borrower.

If a judge lets the foreclosure go ahead, the lender will be first in line to collect, the Times reports, and there may be nothing left when it is through. The mortgage lender gets paid before construction lien holders and most other creditors, The Real Deal says.

The developer sued back for more than $500 million

Two Penn-Florida companies sued the lender in New York state court, seeking more than $500 million. The suit, led by Penn-Florida chief executive Mark Gensheimer, says Madison "created the defaults" it is using to foreclose, The Real Deal reports.

The developer's suit says Madison took over jobs usually left to the developer, such as running construction, the Times reports. It says the lender refused basic funding, even for temporary utilities and elevator inspections. Unpaid security guards walked off, and work stopped, the suit says.

A New York judge, Justice Andrew Borrok, temporarily blocked a scheduled foreclosure auction and set a hearing for Oct. 1. We found no report of how that hearing came out.

Madison declined to comment to the Times.

What the buyers paid, and what they can get back

At least 69 condos have been sold, legal filings show, the Times reports. The buyers of at least 20 units say they are tired of waiting and want their money back.

Recent buyers who sued put down deposits that generally ran $1 million to $2 million, The Coastal Star reports. One couple paid a $1.65 million deposit in 2022 on a four-bedroom unit priced at $5.5 million. An arbitrator this year told the developer to return it with interest, but the developer said part had been spent on construction, which Florida law allows.

The couple later settled and are to be paid by Jan. 7, or within 30 days of new financing for the condos, The Coastal Star reports. If neither happens, they can get a consent judgment. Eight other buyers settled on confidential terms.

Thirteen buyers have sued, The Real Deal reports. One won a $1.98 million judgment and another settled for $2.1 million. A Palm Beach County judge ruled June 29 that a couple can demand their $1.98 million deposit from the title companies holding it, and the developer asked for a rehearing July 9.

James Ferrara, a lawyer for nearly a dozen buyers, calls it "a shell of a building for almost eight years." If it is no longer a Mandarin Oriental, he told the Times, "I think we're going to get more people trying to get out of their contracts." The tower's sales office is still open.

The hotel and the brand

Penn-Florida's 2015 plan was a 164-room Mandarin Oriental hotel and 85 condos joined by a skybridge, plus 366 rental apartments, the Times reports. Only the apartments are open.

The hotel companies filed for Chapter 11 bankruptcy on Dec. 23, 2025, after failing to repay about $210 million at maturity, The Coastal Star reported. The federal docket shows the case still open, with filings as recent as Oct. 21. The hotel's senior lender made a $140 million loan in 2021 that went into default at its 2023 maturity, The Real Deal reports.

Last year the Mandarin Oriental hotel company sent Penn-Florida a termination notice, the Times reports. It said the developer failed to repay $675,000 in expenses and did not send monthly sales reports regularly or an annual statement. The company said the project "did not progress in accordance with the development milestones originally agreed." Penn-Florida says the agreement is still in place.

The tower's construction manager, Strategic Group Builders, has sued for $24.1 million it says it was not paid, and it stopped work on the condos before May 6, The Coastal Star reports.

Their side

Penn-Florida said: "With nearly $1 billion invested to date, Via Mizner has persevered through unprecedented pandemic, construction, financing and capital-market challenges." It said the project was hit by hurricanes, the pandemic, rising costs, supply problems and spiking interest rates. The $1 billion is the developer's own figure.

Albert Piazza, Penn-Florida's executive vice president of development, said most condo buyers have not tried to break their contracts. He said some condos could be ready in as little as nine months once work can resume. "The reality is always somewhere in the middle," he told the Times.

In court filings, Penn-Florida's lawyer, Robert Sweetapple, argues a unit's completion date is an estimate, not a promise, and could be pushed back by the pandemic and by hurricanes Ian and Nicole, The Coastal Star reports.

What comes next

No foreclosure ruling has been reported. The settled buyers' payment date is Jan. 7. The hotel's bankruptcy case remains open.

Sources we read

Sun Sentinel, Oct. 21, reprinting The New York Times. The Coastal Star, July 29, June 3 and Dec. 31, 2025. The Real Deal, July 23, Aug. 17 and Feb. 9. Notice Registry record of the Palm Beach County filing. CourtListener dockets for the hotel companies' Chapter 11 cases, U.S. Bankruptcy Court, Southern District of Florida.