Mortgage Observer Weekly has learned that Property Markets Group has received a $22.5 million land loan that will allow it to develop its 166-unit Echo Brickell condo project in Miami, Fla., with joint venture partner JDS Development. The loan, arranged by Mission Capital Advisors, closed on Wednesday, July 17.
Month: July 2013
The Echo Aventura condo developer secured a $106 million construction loan to build the project, which is nearly 60 percent pre-sold. Mission Capital arranged the financing, which is about 50 percent of the project’s construction costs.
Aventura developer secures
$106 million construction loan
by Paola l uspa-Abbott
The Echo Aventura condo developer secured a $106 million construction loan
to build the project, which is nearly 60
The size of tl1e loan makes it a rarity when most traditional banks are reluc tant to lend large sums to for condomin
ium construction. The loan came from New York–based NorthStar Real Estate Income Trust, a real estate invesn11ent trust
The developer is a joint venture be
tween the Property MarketGroup and JDS Development Group in New York. Mission Capital Advisors in New York arranged the financing, which is about
50 percent of the project's construction cost, company managing director Jason
The deal for the $200 million con
do high–rise at 3250 NE l88tl1 St. in
Aventura closed July 28, but the mort
gage has yet to be reoorded. like most condo project.
oper icollecting 20 percent of the pur
chase price when purchase contract are signed, 20 percent at ground–breaking and 20 percent at tl1e building's top–off. So far, the developer has collected 40 percent, but the lender went allead and considered tl1e 60 percent to be on hand when making tl1e loan, Cohen said.
"Part of tl1e deal is tl1at we were able
to get the lender to recognize the last 20 percent deposits even tl1ough we hadn't received it,"he said."They gave us credit
The deal for the $200 mill
condo h igh-rise at 3250 NE
188th St.i n Aventura closed
for deposits we are going to be getting in tl1e future."
A traditional bank would give credit
only for deposits on hand, Cohen said.
By law, developers can use 90 percent
of the depositto help pay for the con
Between the deposits and tl1e loan, tl1e developer will have only 5 percent
cash equity in tl1e project, Cohen said.
'l11at percentage contrastsharply vith
traditional banks, which want to see
developers have signifir.ant skin in the
game before lending money.
"Banks are looking for the sponsor to
have a larger vested interest in tl1e deal equity vise;Cohen said.
Many nonbank lenders limit loans to
50 percent of the building cost, he said.
·n1e loan appears to be the sec ond largest condo construction loan in South Florida since the housing crash. Mansions of Acqualina in Sunny Isles Beach secured a $160 million construc tion loan earlier thiyear.The project is being built by an affiliate of the Trwnp Group led by Williams Island developers Eddie and JulesTrump.
Paola luspa–Abbottcan be reached at
Two New York Developers have secured a $106 million construction loan for Echo Aventura, a 190-unit luxury building planned for a waterfront site north of Miami. Mission Capital arranged the financing.
THE WAIL STREET JOURNAL.
July 9 , 2013, 10:26 p.m. ET
Slowly but surely, debt is trickling back into the Miami condo market.
Two New York developers, Property Markets Group and JDS Development Group, have secured a $106 million construction loan for Echo Aventura, a 190-unit luxury building planned for a waterfront site north of Miami.
Since the downturn, risk-averse banks have avoided making large loans to Miami condo builders, forcing them to shift to a model where they rely on their own cash or take big down payments from buyers and use that money to pay for construction.
But, in February, the lending freeze began to thaw when a family-run builder received $160 million in debt from an Alabama bank to build ultraluxury condos in nearby Sunny Isles Beach.
Now, Echo Aventura's financing marks what is likely the second-largest Miami condo loan since the downturn, with the money coming from NorthStar Real Estate Income Trust, a nontraded real-estate investment trust based in New York.
"Many of the banks got burned last cycle, and they're focusing on more stable markets like New York and D.C.," said Jordan Ray, managing director of Mission Capital Advisors, which arranged the Echo Aventura financing. "Non-conventional lenders are filling the gaps in Miami right now."
Of course, lenders are still being cautious with their money, charging high rates: The Aventura loan has a two-year term and an interest rate of nearly 8%.
A t•ersion of this article appeared July zo, 2013, on page ('bin the [ S edition ofThf T1 all
Strr:>r:>t Journal. with the headline. Plots & PloZJS.
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