The Goodtime Hotel, the 266-room South Beach property once hyped by Pharrell Williams and David Grutman, now belongs to its lender after a foreclosure auction July 1.

Los Angeles-based CIM Group won the seven-story hotel at 601 Washington Ave. with a $100 credit bid, according to Miami-Dade County court records reported by The Real Deal. The buyer is listed as 601 Washington Ave (FL) Owner LLC, an entity tied to CIM.

A credit bid that low is standard when no other bidders show up. It lets the lender take the asset while minimizing transfer taxes.

The seizure caps a yearslong financial spiral for developers Eric Birnbaum and Michael Fascitelli, whose Imperial Companies opened the hotel in April 2021 with a celebrity-packed pool party attended by Kim Kardashian and the Beckhams. The pair took a $152 million mortgage from a CIM affiliate at opening to refinance the construction loan.

By spring 2023, Birnbaum and Fascitelli acknowledged in court filings that the property "was not performing as expected." They offered to hand it over to CIM that summer, but no deal materialized.

Missed Payments and a Court Judgment Sealed the Hotel's Fate

CIM alleged the borrowers violated a 2023 forbearance agreement, stopped paying interest and failed to pay off the debt when the loan matured in 2024. In January, CIM subsidiary CMMT filed a foreclosure action in Miami-Dade Circuit Court, represented by Greenspoon Marder partner Jeffrey Gilbert.

Miami-Dade Circuit Judge Thomas Rebull ruled in May that CIM could foreclose to collect a $204.7 million judgment. CIM also sued Birnbaum and Fascitelli personally in New York state Supreme Court for at least $40 million in personal guarantees.

According to the Miami Herald, CIM's subsidiary had been covering payroll, delinquent Florida sales taxes and other expenses because the hotel was operating in the red.

Hotel operator Highgate exited the property, and staff were laid off, the South Florida Business Journal reported April 2. The number of affected workers was not disclosed.

A Bet on Reviving Washington Avenue That Never Paid Off

Developers pitched the Goodtime as a catalyst for Washington Avenue's turnaround. The corridor spent the decade before 2021 plagued by vacant storefronts, and Miami Beach zoning incentives let the project rise to 75 feet, up from the standard 50-foot limit, because it occupied enough street frontage.

The bet hasn't paid off on the ground. Virtually all of the historic Art Deco storefronts incorporated into the hotel have remained empty since opening, the Miami Herald reported. Broader Miami Beach hotel occupancy held roughly steady in 2025 at 71.4%, according to CoStar data, suggesting the Goodtime's collapse was project-specific rather than market-driven.

"The goal was to bring in more retail. Goodtime ended up going the way of the party scene," said Daniel Ciraldo, former longtime executive director of the Miami Design Preservation League.

Williams and Grutman, who ran the hotel's dining and entertainment program, have not been involved with the property since 2024, according to a Grutman spokesperson.

CIM's Next Move — Renovate, Rebrand or Sell — Remains Unknown

CIM has not publicly stated whether it will renovate, rebrand or sell the hotel. The firm recently merged with its nontraded REIT, CIM Real Estate Finance Trust, creating a combined entity with $30 billion in assets that is preparing for a public listing. CIM is also a partner in the $6 billion Miami Worldcenter development downtown.

Miami Beach officials are considering rezoning Washington Avenue to incentivize residential development instead of hotel and retail uses. No public hearing date has been announced.