FTX’s asset liquidator PwC in the Bahamas is expected to start selling its 34 luxury properties, including the Orchid Penthouse purchased by SBF for $30 million, later this summer. However, there are concerns about whether the current value of these properties can exceed the amount spent by the SBF team initially.
Plan to auction FTX’s 34 luxury properties in the Bahamas
SBF spent $30 million on the Orchid Penthouse
Concerns about property value
Asset sales imminent
The bankrupt cryptocurrency exchange FTX recently announced its latest repayment plan, estimating the owed amount to be around $11.2 billion. However, after the sale of assets, they will have approximately $14.5 billion to $16.3 billion in cash available for compensation. As a result, full refunds will be possible, and the majority of users (those with funds below $50,000) will receive approximately 118% cash compensation.
However, it is important to clarify that the loss compensation is calculated based on the platform funds of FTX exercised on the day of its bankruptcy filing under Chapter 11 of the bankruptcy law. Therefore, unless the assets held by users on FTX are stablecoins, they will still suffer significant losses (BTC was only $17,000 at that time)…
According to Bloomberg, the FTX Bahamas liquidator plans to sell its 34 luxury properties in the Bahamas, including the Orchid Penthouse purchased by SBF for $30 million, in the coming months.
The liquidation documents show that just before the collapse of FTX, former CEO Ryan Salame and other executives spent $255 million to purchase 52 apartments, offices, and land on New Providence Island (where the capital Nassau is located) in the Bahamas. Most of these properties are located in luxury developments such as Albany, a 600-acre luxury castle project at the western end of the island (with golfers Tiger Woods and singer Justin Timberlake among the investors).
FTX’s empire in the Bahamas features private swimming pools, squash courts, and restaurants, and is greeted by a rare 3.5-ton Charging Bull sculpture, which has been a symbol of the New York financial district since the late 1980s and is located at the entrance to the pier.
Over the past year, the SBF team spent $140 million on 15 apartments and a villa in Albany, which were named Cube, Gemini, Tetris, and Orchid—the iconic luxury residence purchased personally by SBF. According to court records of the purchase, it cost $30 million.
However, there are concerns about whether these properties can achieve a balanced budget. Although the luxury property market in the Bahamas grew by 15% last year, the price growth in the Albany area exceeded this percentage. However, there are still doubts about whether the expected prices can be achieved. For example, a similar full-floor apartment in Albany, with a interior design resembling a yacht, has a market price of $29 million, slightly lower than the $30 million cost of the Orchid Penthouse.
Even if the Orchid Penthouse is sold for $30 million, it is expected that approximately 20% of the sales amount will be consumed by taxes and other expenses.
In addition, the nearby Honeycomb apartment, which was purchased with Alameda’s funds for $8.8 million, is now estimated to be worth only $5.9 million, a decrease of approximately $3 million from the original purchase price.
Earlier this year, PwC, the asset liquidator for FTX in the Bahamas, requested real estate agents to submit proposals for the sale of the 34 properties purchased by the SBF team on New Providence Island, most of which are apartments located on the powdery white beaches. These assets are expected to be sold later this summer, with the sales progress depending on market reaction and investor interest.