The Raleigh Miami Beach: How a $103 Million Trophy Became Somebody Else’s $1 Billion Project

In 2023, Michael Shvo told the market his Raleigh condominiums were trading at $12,000 a square foot and that he “probably” had “the most expensive product in Miami Beach.” In October 2025 he sold the site. He held a right of first refusal on the offer that took it and did not match it. The buyer, Nahla Capital, paid $270 million, is now pushing a $1 billion redevelopment through Miami Beach, and in January sued the seller’s entity for $10 million over whether it ever had the right to hand over the architect’s drawings.

The project is going ahead. It is simply going ahead without the person who spent six years telling everyone it was his.

What was promised

The pitch was genuinely good, which is worth saying before the rest of it. The 1940 Raleigh is one of the most photographed buildings in Miami Beach — the L. Murray Dixon pool has appeared in more fashion editorials than most models — and the plan was a faithful restoration paired with a new 17-storey residential tower behind it. Roughly 40 to 44 residences. A 60-key hotel operated by Rosewood. A private members club. Michelin-starred dining. Peter Marino designing. Delivery in 2026.

Three acres, 220 linear feet of oceanfront, assembled across 1751, 1757 and 1775 Collins. On paper it was the best development site on Miami Beach and the plan matched the site.

It is now August 2026. Nothing has been delivered. The tower is not built. The hotel is not open.

What actually happened

The failure was not architectural and it was not entitlement. The historic preservation board approved the underground garage modifications back in 2022. The design was never the obstacle.

The obstacle was that the residences did not sell fast enough to service $190 million of construction debt on a schedule the lender would accept.

Two things are worth separating here, because they are usually conflated. Pricing at $12,000 a foot was not, in itself, delusional — Miami Beach has since printed numbers in that territory. The problem was pricing at $12,000 a foot on a site where the absorption assumption had to hold precisely, with a construction loan maturity attached to it, in a preconstruction market that had begun to slow. When presales lagged, there was no slack in the structure. There rarely is.

The sales effort compounded it. The Alexander brothers — Oren and Tal — were appointed as the project’s brokerage, and the relationship was severed after the rape allegations against them became public. Losing your sales team mid-launch, in circumstances that attach the project’s name to a scandal in every search result, is not a recoverable position for a listing that needed momentum.

By October 2025 BH3’s extension had run out. Nahla Capital had already bid $275 million in July. Shvo held a right of first refusal — the contractual right to keep the site by matching the offer — and did not use it. That is the most legible fact in the entire sequence. A developer who believes in an asset and has access to capital matches. He did not match.

Bisnow noted at the time that it was Shvo’s second Miami development site sale in two months.

The $10 million argument over a set of drawings

The most revealing episode came after the closing. In January 2026, Nahla Raleigh LLC filed a complaint in New York against BSD Raleigh Trustee LLC, the seller entity, seeking $10 million held in escrow.

The claim, as reported, is that the seller “repeatedly emphasized” its partnership with Peter Marino during negotiations, and that funds were placed in escrow pending an agreement to assign a licence for Marino’s designs to the buyer. The parties agreed the architect’s consent would be “substantially” in an agreed certificate form, subject to any “reasonable modifications” Marino requested.

What Marino’s attorneys then produced included conditions that his firm “was not the architect of record” and that the buyer use the designs “at its own risk.” Nahla characterised those terms as “materially more restrictive” than what had been agreed. The seller’s position is that Marino’s conditions were reasonable and that the escrow agent should return the $10 million. Neither Shvo nor Marino responded substantively to the allegations in the reporting.

Set aside who is right — that is what the New York court is for. Look at what the dispute reveals about the structure of the deal.

A buyer paid $270 million partly on the strength of a starchitect’s involvement, and it emerged after closing that the extent to which that involvement was transferable had not been nailed down. Ten million dollars was parked in escrow precisely because someone anticipated the problem, and the escrow did not resolve it.

This is a very common failure mode in trophy development, and it is worth naming clearly: a designer’s name is marketing, not an asset, unless the licence says otherwise in writing. Branded architecture, branded interiors, branded residences — the value only survives a change of ownership to the extent the paperwork survives it. Buyers of preconstruction units in starchitect-branded projects should understand that the same principle applies one level down. The name on the rendering is attached to the sponsor, not to the building, unless the licence is drafted to run with the land.

What the new owner is building instead

Nahla Capital, led by co-founder Genghis Hadi, a former Carlyle Group executive, did not shelve the project. It made it bigger.

In May 2026 Nahla asked Miami Beach for comprehensive plan and code amendments raising the floor area ratio from 2.0 to 2.5 — roughly 66,000 additional square feet, delivered as two extra floors on the residential tower. On 7 July 2026 the planning board recommended approval 5–1, with Scott Needleman dissenting.

The scheme now stands at 52 condominiums and fewer than 80 hotel rooms in a 200-foot, roughly 17-storey tower, with Peter Marino and Kobi Karp Architecture & Interior Design as architects and total investment put at approximately $1 billion. Compass was appointed to lead sales in February.

It is not unopposed. Mitchell Cohen, owner of the neighbouring Shelborne, objected that the height is “out of scale” and “out of context” with the surrounding block. His attorney, Amanda Quirke Hand, described the request as “solving a private problem” — which is a precise and rather elegant way of saying the previous owner’s economics failed and the fix is being asked of the public realm. Whether that is a fair characterisation is a judgement about planning philosophy, not a factual dispute, and reasonable people in Miami Beach land firmly on both sides of it.

The amendments still need the Miami Beach City Commission and the city’s historic preservation board. Hadi’s own summary of the pressure he inherited was blunt: he described the calls he was getting as, in substance, “When the hell is this going to get built?”

The part that matters if you are buying preconstruction

The Raleigh is not an isolated story. It is the clearest recent illustration of a risk that preconstruction buyers in Miami routinely fail to price: the sponsor is not permanent. Sites change hands. Lenders foreclose or force sales. Brands walk. Architects’ licences turn out to be narrower than the rendering implied.

Florida law gives buyers real but partial protection, and it is worth knowing exactly where the line sits. Under Florida Statute 718.202, a developer must pay into escrow “all payments up to 10 percent of the sale price received by the developer from the buyer towards the sale price.” Deposits above that first 10 percent go into a separate special escrow account and “may not be used by the developer prior to closing the transaction,” except as the statute provides.

The critical exception is this: “the developer may withdraw escrow funds in excess of 10 percent of the purchase price…when the construction of improvements has begun.” Those funds can go to real construction costs — “demolition, site clearing, permit fees, impact fees, and utility reservation fees, as well as architectural, engineering, and surveying fees.” They cannot be used for “salaries, commissions, or expenses of salespersons; for advertising, marketing, or promotional purposes; or for loan fees and costs, principal and interest on loans, attorney fees, accounting fees, or insurance costs.”

Read that carefully and the structure becomes clear. Your first 10 percent is protected. Anything beyond it becomes exposed the moment construction begins, and it is spent on the project — which is exactly the money at risk if the project changes hands or stalls.

The honest summary

An excellent site with an excellent plan was lost to a capital structure that could not absorb a sales shortfall, aggravated by a sales scandal the sponsor did not cause but could not survive commercially. The right of first refusal went unexercised, which is the market’s own verdict and requires no editorialising.

The site did not sit idle. A better-capitalised owner bought it at a slight discount to the competing bid, kept the architect, hired a national brokerage, and is now asking the city for two more floors on a $1 billion scheme that the planning board has already backed 5–1. If the Commission and the preservation board agree, Miami Beach gets a restored 1940 landmark and 52 residences, several years later than promised and by a different hand.

The lesson for anyone writing a deposit cheque is narrower and more useful than the gossip: you are underwriting a sponsor’s balance sheet and loan maturity at least as much as you are underwriting a building. The renderings are the same either way. The outcomes are not.

If you are evaluating a preconstruction contract in Miami Beach and want the sponsor, the loan and the escrow terms read before you sign, that is the part of the process worth paying attention to. See South Beach, Miami Beach, the current new construction pipeline, or more reporting in The Miami Confidential.