Joint venture partners Miami-based MDM Development Group and MetLife Insurance Co. put a big dent in the debt market crisis late last month, securing a $250 million construction loan for a multi-phase, $1.5 billion mixed-use development?Miami Metropolitan?in downtown Miami.
Although financing was initially secured through Bank of America and Wachovia in 2007, the credit crunch necessitated syndication of the loan when the development team looked to tap into the funds earlier this year.
"It has been something else," says South Beach-based International Mortgage and Equity Advisors president Mel Roth, who secured the loan. "We have significant equity in the project so we did no need to close until recently, but in the interim, the credit markets went upside down. Syndication was finally accomplished with a lot of effort." HSBC Bank USA, RBC Bank, and Bank of Scotland will participate in the financing, along with the original lenders.
At stake was construction of the project's Met 2 Financial Center phase?750,000 square feet of Class A office space in a 47-story tower adjacent to a 42-story Marriot Marquis Hotel. Met 2 joins the existing 447-unit condo tower that has sold out and is currently being delivered to customers, Roth says.
Two additional phases will include a parking garage, 420 additional multifamily units, and a four-story entertainment and retail boutique shopping complex.
"I think the success of this project in today's environment was the ability to create something special in downtown Miami," Roth says. "From an ingress/egress position, it cannot be beat?great location, great property, and a developer with a tremendous track record."
According to Roth, the construction loan closed when pre-leasing of the office tower hit 40 percent. Miami-based Flagler Real Estate Services vice president Jack Lowell oversaw the lease-up but points directly to the development team for success in securing the financing. "If it were not for the strength of this group, this would not have happened, for sure," Lowell says.