IP Capital Wins $5M Judgment Against Fort Lauderdale Tenant

Southeastern Management, a logistic company based in Casper, Wyoming, signed an 11-year lease for nearly 10,000 square feet in a downtown Fort Lauderdale office building — and then ghosted the landlord. The firm never moved in or paid rent, according to court documents. 

Now Southeastern is on the hook for a $5.4 million judgment in favor of the landlord, a joint venture between IP Capital Partners and Gem Realty Capital, according to a court order issued last month by Broward County Circuit Court Judge David Haimes.

Boca Raton-based IP Capital and Chicago-based Gem Realty own the 30-story 110 Tower at 110 Southeast Sixth Street. Southeastern was set to occupy four suites on the 14th floor, with a starting monthly rent of $31 a square foot, according to a lawsuit the joint venture filed in December, and a copy of the executed August 2022 lease. 

However, Southeastern failed to take possession of the space, and failed to pay a security deposit of $57,929 and an initial rent payment of $42,070, the lawsuit states. Haimes granted final judgment for IP Capital and Gem Realty because Southeastern failed to file a defense, the order states. 

The judgment entails the security deposit, the initial rent payment and $5.3 million in future rent payments between last month and 2034, when the lease was set to expire, the order states. 

Representatives for Southeastern did not respond to a voice message and email seeking comment. Jason Issacson, IP Capital’s president, declined comment. 

Gem Realty is led by co-founders Norman Geller, Michael Elrad and Barry Malkin. A representative for the real estate investment firm did not respond to an email request for comment. 

In 2016, IP Capital and Gem Realty paid $112.9 million for 110 Tower, records show. The 777,248-square-foot building was completed in 1987. 

In 2019, IP Capital sold Wells Fargo Plaza, a two-building office complex in Boca Raton, to Gem Realty for $23.1 million.