Financially troubled Brightline, the higher speed railroad between South Florida and Orlando, is pursuing ways to raise $100 million for operations and has put up for sale the seven-story parking garage it owns next to the downtown Fort Lauderdale station.
The moves come as revenues and ridership showed improvement, according to Brightline monthly financial report for November. But the results are still not good enough to keep pace with the company’s burdensome cash needs to cover debts and day-to-day operations, according to ratings agencies that have downgraded the company’s bonds during the year.
“We think that switching riders from alternate modes, automotive in particular, is more challenging than originally forecast,” S&P Global Ratings said in its most recent note on Brightline’s financial state this month. ”Fares that have been drastically discounted to encourage new riders have proven particularly sticky, and we believe that [the rail line’s] projected growth in ticket revenue into 2026 is unlikely to materialize.”
“Looking ahead, we now project lower growth in ticket revenue of 15% in our base case in 2026, leading us to expect a higher probability of default by January 2027 for [the railroad] as liquidity available would be insufficient to meet debt service obligations,” the agency added.
S&P Global said it cut ratings of the railroad’s guaranteed $2.219 billion senior secured debt to ‘CCC’ from ‘BB-‘, while downgrading $1.1 billion of corporate notes by the parent company, Brightline East, to CCC from CCC+.
“We continue to expect Parent to default in January 2027, about 12 months away,” the agency added.
Brightline did not respond to emailed requests seeking comment this week.
Garage sale
The rail line is also reported to have retained the nationally prominent commercial real estate firm of Jones Lang LaSalle Americas Inc. to market Brightline’s Fort Lauderdale parking garage at 300 NW Second St., just steps away from the train station. JLL compiled an optimistic-sounding sales brochure touting the garage, which can house 571 vehicles.
“Today, Brightline operates a 235-mile high-speed rail system linking key Florida destinations and continues to ramp-up to stabilization with profitability expected to significantly increase in the years to come,” the brochure says.
On Dec. 4, Bloomberg reported the asking price was $20 million. According to the brochure, Brightline seeks to lease back the garage for its customers’ use over a 25-year period.
A southbound Brightline train eses out of the downtown Fort Lauderdale station at Broward Boulevard. The higher speed train line’s parking garage near the station was reportedly put for sale. (Mike Stocker/South Florida Sun Sentinel)
Quest for more cash
The garage initiative aside, Brightline indicated in its November financial report that it seeking support from key lenders who would need to greenlight a new round of debt amounting to $100 million.
In the November report, Brightline management said the net proceeds “would be expected to be used to provide liquidity for the company’s ongoing operating requirements as well as to provide additional liquidity in the event funds are needed to address potential outcomes of certain litigation.”
The report did not specify which litigation might require a payout.
Brightline earlier this year was sued by its rail corridor landlord, the Florida East Coast Railway, in Miami-Dade Circuit Court. The FEC alleges that Brightline violated an operating agreement that allows the passenger line to use the corridor by mapping plans for a new South Florida commuter line with the help of Miami-Dade, Broward and Palm Beach counties. The suit has been placed on hold pending meetings with an arbitrator.
Separately, Brightline and its parent, Fortress Investment Group LLC, were named as defendants in a lawsuit filed by a former train conductor in federal court who asserts he suffers from PTSD after witnessing multiple deaths of people killed by Brightline trains over a five-year period along the rail FEC corridor.
Uplifting November
In its November report, management outlined measures designed to improve train capacity for the long-haul trips between South Florida and Orlando, while adjusting the timing and pricing for South Florida commuters traveling among the cities of West Palm Beach, Boca Raton, Fort Lauderdale, Aventura and Miami.
The company said it took delivery of five new passenger cars this month in time for the peak of the holiday season. They were the final round of coaches Brightline had on order this year.
“We believe the change to fixed ‘peak’ and ‘off-peak’ pricing structure is attractive for frequent short distance customers who prefer consistency of pricing,” management wrote in the report to investors. “Long distance pricing will continue to be dynamic based on market demand and days to departure.”
Prices between Miami and Orlando averaged a little more than $80 in November, which lifted revenues on trips between South and Central Florida by 21% against the same month of 2024.
Ridership for the month hit 280,136 passengers, up 14% over November 2024. Three of Brightline’s “all-time ridership days” also came in November, the company said.
Marketing blitz
Throughout the year, the railroad’s marketing department has expanded its playbook to attract passengers, working up alliances with airlines, cruise lines and purveyors of entertainment, while deploying holiday and seasonal discounts.
It offered gift cards during Christmas and adult winter fares at 25% off between South Florida and Orlando.
Also for the holidays: Lindor chocolates by Lindt Master Chocolatiers, available in Brightline’s upscale premium lounges and coaches for a limited time only.