Hunt Real Estate Capital Provides $71M Refi for Miami Beach Rental Property
A joint venture partnership between EDEN Multifamily, Hunt Companies and Florida Value Partners has nabbed $71.3 million in Freddie Mac-backed debt from Hunt Real Estate Capital to refinance the Lazul Apartments in North Miami Beach, Fla., according to information released by Hunt.
The 11-year, fixed-rate and interest-only loan from Freddie’s pre-stabilization program is on a 30-year amortization schedule and will be used to retire previous senior debt from J.P. Morgan Chase that was used to facilitate the project’s construction in 2018; Related Capital provided preferred equity in that deal as well. This refinance closed on April 17, Hunt Real Estate Capital director Marc Suarez told CO.
“Myself and a team out of the Miami office put together the capital stack on the front end, the equity, the debt and preferred equity, and we did this takeout, permanent financing,” Suarez said, adding that the deal was in the works prior to COVID-19 but Hunt and Freddie maintained its commitments to funding the deal.
Lazul Apartments is a mid-rise rental complex situated on nearly 2.6 acres at 2145 Northeast 164th Street in North Miami Beach, near two main roadway arteries in Biscayne Boulevard and Northeast 163rd Street and just a couple miles away from Sunny Isles Beach as well as the Aventura Mall, the state’s largest shopping mall and one of the more prominent mall assets that exists today.
Lazul comprises 356 studio, one-, two- and three-bedrooms units across a large eight-story structure; attached to the apartment building itself is an eight-story parking garage.
“The borrower developed the property in 2018 and rental units came online in October of the same year,” Suarez said in a statement. Suarez said that the property is currently 89 percent leased out and has had on average 22 new occupancies per month since it came online just under two years ago.
While the property is currently still in lease up mode, this Freddie pre-stabilization loan will help the sponsors reposition ground level space previously used for retail into seven “live-work,” loft-style units, which Suarez said is a rather smart and unique play given that the current circumstances around the pandemic have forced a surge in remote work — something many corporations have discovered has worked well beyond their expectations. The sponsors were able to obtain zoning modifications to allow them to transition it from retail to residential, Suarez said.
“What was interesting about this is they were at lease up and were able to convert the retail to live-work units, giving them an additional seven units from that, and the timing was impeccable,” Suarez said, adding that the sponsors haven’t yet began the repositioning efforts, which were floated prior to the pandemic. “The approvals [for the work] are in place… [and] there is a structure in place with us to draw on that capital to complete those units.”
Suarez said there is no concern about delays to construction due to Miami-Dade County having deemed construction an essential business.
“It’s basically a remodeling of an existing space,” he said. “For this type of work, I don’t envision any delays. I believe these units will be attractive in this environment.”
Monthly rents at the location range from just over $1,700 to around $3,200, according to listing information from Apartments.com.
Officials at EDEN Multifamily did not immediately respond to an emailed inquiry and an official at Florida Value Partners was not immediately available.