8 January 19-25, 2023 miaminewtimes.com | browardpalmbeach.com New Times | music | cafe | culture | Night+Day | news | letters | coNteNts | miaminewtimes.com MIAMI NEW TIMES | MUSIC | CAFE | FILM | ART | STAGE | NIGHT+DAY | METRO | RIPTIDE | LETTERS | CONTENTS | BON VOYAGE! Crypto firm FTX’s Miami lease deals axed in bankruptcy court. BY IZZY KAPNICK S am Bankman-Fried’s cryptocur- rency exchange FTX was gear- ing up to move its headquarters to Miami less than two weeks before the company’s collapse late last year. On October 26, West Realm Shires, operator of FTX’s U.S. exchange, executed a lease for office space in a Brickell Avenue commercial skyscraper with sprawling views of Biscayne Bay — a deal that would’ve made the 35-story glass-lined building a new home for FTX and a hub for the cryptocurrency industry. By November 7, FTX was on the brink of implosion. After Changpeng Zhao, head of rival ex- change Binance, announced the liquidation of its FTX tokens amid media reports ques- tioning FTX’s financial stability, investors went scrambling for the hills. The price of the company’s token plummeted more than 75 percent in a single day, wiping out billions of dollars in market value while FTX struggled to honor customer withdrawals. FTX is now in bankruptcy, and its founder Bankman-Fried on house arrest, charged with a slew of fraud and conspiracy counts. Federal prosecutors claim he and his cohorts illegally diverted customer assets to fund his trading firm Alameda Research, which was run in part by his Bahamas penthouse room- mate Caroline Ellison. Though the bankruptcy proceedings are in the early stages, Miami landlords have swiftly negoti- ated the termi- nation of their contracts with FTX in a bid to cut their losses and move on. Yesterday, the Delaware bank- ruptcy court approved the wind-down of two of FTX’s high-priced Miami office leases, bringing a formal end to the onetime crypto giant’s stint on Brickell Avenue. First up was FTX’s lease for a space in the Sabadell Financial building at 1111 Brickell, part of real estate group Parkway Properties’ portfolio. The building is a 30-story tower with an upgraded lobby and “an expansive rooftop amenity deck with greenspace for yoga and other programmed fitness classes,” according to a Parkway profile. FTX, via West Realm Shires, had been renting a suite in the building since October 2021, prior to FTX unveiling its grander plan to set up headquarters in the Magic City. The contract, set to expire in 2027, was inked about six months after FTX acquired the naming rights to the Miami Heat arena. Under a court-approved deal with FTX, the landlord, Brickell Owner LLC, agreed to cap its claim for damages under the lease at $211,000, which will be reduced by any base rent re- ceived for the suite through June 30. The land- lord is entitled to keep West Realm Shires’ $32,000 security deposit and will be granted a $19,000 administrative expense claim. The bigger lease — the one tied to FTX’s planned relocation of its headquarters from Chicago to Miami — was likewise nullified under the bankruptcy court’s January 9 or- der. The lease would have entailed West Realm Shires renting premium space in a 35-story office building at 1450 Brickell. Completed in 2010 by developer Rilea Group, the 500-foot tall building counts JPMorgan Chase and City National Bank as its tenants. In a joint stipulation, the landlord, 1450 Brickell LLC, agreed to accept a $1.3 million claim for damages in connection with the FTX-linked lease. (As with the 1111 Brickell deal, that sum will be offset by any rent the landlord receives on the space through June 30.) 1450 Brickell LLC is entitled to a $98,000 administrative expense claim — and it’s keep- ing an $820,000 security deposit paid by West Realm Shires. The landlords negotiated with FTX to ter- minate the Brickell Avenue contracts after FTX asked the bankruptcy court to cut off several leases across the globe, stretching from Miami to San Francisco to Singapore. FTX’s attorneys argued that voiding the leases would reduce leftover expenses and fi- nancially benefit FTX and its creditors. The FTX relocation would have brought the crypto exchange into the ranks of several high-profile firms that jumped onboard a COVID-era Miami-bound tech exodus, including venture capital group Founders Fund, market-maker and hedge fund juggernaut Citadel, SoftBank, and crypto exchange Blockchain.com. Miami Mayor Francis Suarez, who promoted the city as a global cryptocurrency beacon, had welcomed FTX with open arms, calling Bankman-Fried one of the most “innovative technologists” in the world. Since FTX went belly up, the bankruptcy court has been fielding dozens of filings per week as FTX creditors and counter-parties line up in hopes of some resolution. In November, Miami-Dade County asked the presiding judge to put the kibosh on the $135-million naming-rights contract that plastered FTX’s logo all over the Miami Heat arena. As the proceedings play out, the Depart- ment of Justice has been raiding assets tied to Bankman-Fried, including last week’s seizure of more than $460 million worth of shares in trading platform Robinhood and $20 million in cash. Ellison and FTX cofounder Gary Wang have pleaded guilty to multiple federal fraud charges in the Southern District of New York in the alleged scheme to divert customer funds. Both are reportedly cooperating with prosecutors. [email protected] FTX founder Sam Bankman-Fried leaving Manhattan Federal Court after his arraignment hearing on December 22, 2022. Photo by David Dee Delgado/Getty Images | METRO | LANDLORDS HAVE SWIFTLY NEGOTIATED THE TERMINATION OF THEIR CONTRACTS WITH FTX IN A BID TO CUT THEIR LOSSES.
