Mission Capital arranged a $19m loan for the acquisition and renovation of a mixed-use building in Miami Beach on behalf of a joint venture between Springhouse Partners and Forte Capital Management. Ladder Capital funded the loan.
Real Estate Finance & Investment
Mission Capital sees upside in
Miami Beach mixed-use
JUNE8,20 1 5
Mission Capital Advisors arranged a SJ 9m loan for the acquisition and renovation of a mlxed
use building in Miami Beach on behalf of a joint
'oenture between Springhouse Partners and f-orte Capital Management Ladder Capital funded the loan.
"[Ladder Capital) is a great lender for this type of deal because although they have [a focus on) CMBS, they are entre–
preneurial and will [take
The Variety Bull&ng was originally con structed in 1933 as the Ma)i!ower Hotel_ Its top Ooors were converted into studio apartments in the 1990s, but the sponsor plans on restoring the building to its original intent to meet the growing lodging demand in the area. The bulldlng's retail component is being prepared for re–leasing.
"Years ago. that part of the beach was ,·ery much a lower–rent, resi dential area. [Now), with
a little risk] on their bal ance sheet to make a little more yield.• said Jordan Ray. managing director in Mission Capitals debt and equity finance group.
The 70– unlt. mlxed–use
Variety Building is located at 1700 Alton Road. adja cent to the heart of l.1iaml Beach& historic Art Deoo
'THIS PART OF [MIAMI BEACH] IS CHANGING VERY QUICKLY… THERE IS OBVIOUSLY A LOT OF VALUE [THE SPONSOR) WILL HAVE TO HARVEST"
the fancy hotels on the beach, [there is a need forI lower price boutique hospitality products that are a little further west There is a lot of demand
for a subset of three–star (hospitality product] since that heavy four and flve-star demand is (already) met," explalned
District on Lincoln Road. Rents on this corridor can exceed S300 per square foot. ·This part of [MJamj Beach) is changing '-ery qu.ickly…there is obviously a lot of value (the sponsor) will harvest from retail," sald Ray, pointing to recent widen ing of Alton Road and the Introduction of a new Whole Foods in the area that is helping to push up demand and rents.
Ray. Springhouse Partners and Forte Capital Management have yet to decide on management or a brand for the new hotel component.
The renovation is slated for completion some time In 20!6, and theclient opted for a mid-single digit pricing for a non–recourse renovation loan. Reno'l!tlons will inclu&ng upgrades to the build ings fa ade.