Marc Rowan’s RWN Management, Mast Capital Refi Private Island Resort in Florida Keys
By Mack Burke January 12, 2021 12:23 pm
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Mast Capital and RWN Management, a single family office controlled by Apollo Global Management (APO) Co-founder Marc Rowan, have teamed up to provide $30.5 million in debt to refinance Little Palm Island Resort & Spa, a luxury resort located on a roughly 4.1-acre private island in the Florida Keys, Commercial Observer has learned.
The fee and leasehold mortgage retires an existing five-year, fixed-rate commercial mortgage-backed securities (CMBS) loan that was originated by Barclays (BCS) in April 2015 and had a securitized balance of over $30.9 million, according to information from research firm Trepp. The previous loan had been transferred to special servicing in the spring of 2020 due to imminent maturity default, as the sponsor had struggled with hurricane damage and procuring a refinance due to the pandemic.
The refinance, which closed in early December 2020, was provided to Kirkland, Wash.-based Noble House Hotels & Resorts, the registered owner and borrower in the transaction, as per mortgage records filed in Monroe County, Fla. Noble’s Chairman Patrick Colee and his wife, Diane Colee, signed for the mortgage behind the entity Little Palm Island Associates Ltd., under which is also their family trust, the recorded sponsor, according to county mortgage records and previous loan information from Trepp.
Beverly Hills, Calif.-based capital markets advisory firm Sonnenblick-Eichner Company sourced and arranged the debt financing from Coconut Grove, Fla.-based Mast Capital and RWN. The deal closed within 30 days of application, sources said.
RWN Management is a family office controlled by Apollo Global Management Co-founder and Senior Managing Director Rowan; he founded Apollo in 1990 alongside Co-founders Leon Black and Joshua Harris.
“The amount of lender interest in the financing opportunity demonstrates the large degree of liquidity in the market today for well-positioned assets,” Sonnenblick-Eichner Principal Patrick Brown said in a statement.
The resort, itself, has displayed remarkable resilience over the last few years, having suffered hurricane damage and the effects of COVID-19 all in the last three to four years.
In 2017, it was hit and heavily damaged by Hurricane Irma, which sparked a subsequent $45 million redevelopment by the owner, a project that wrapped in the first quarter of 2020, according to Mast Capital’s website and information from Trepp. Soon after, COVID-19 gripped the U.S. economy and sent hospitality assets reeling.
Even with the owner’s three-year effort to fix the hurricane damage, it was unable to procure a refinance due to the economic impact of COVID-19, which led to its previous CMBS debt being transferred to special servicing in late April 2020 due to imminent maturity default. The loan had an underwritten maturity date of May 6, 2020, and just over $28.4 million was left outstanding at maturity, as per Trepp. That previous Barclays loan had been securitized in 2015 as part of the then-roughly $984.5 billion JPMBB 2015-C29 CMBS conduit deal.
Special servicer commentary on the financing reads that the borrower requested an extension of the maturity date and relief from COVID-19 in the early summer of 2020 in order to “provide sufficient time to ramp up operations and refinance.” While Trepp’s servicer commentary doesn’t report an extension, other loan information from the firm shows that the loan was modified on May 15, 2020, and had been paid through July 2020.
Built in 1988, the renowned, 30-suite resort is located at 28500 Overseas Highway as part of Little Torch Key, Fla., one of 800 keys that stretch 180 miles and make up the Florida Keys.
To access the island, though, one must take a private yacht ferry three miles south from Little Torch Key, or fly in via a private chartered seaplane from mainland Florida or the Bahamas. How’s that for pandemic-friendly?
The full-service resort’s 30 suites are located within 15 “tiki hut”-style bungalows, according to details from Trepp. The property’s website details the bungalows as being inspired by a “British West Indies aesthetic.” The island also sports a marina with three docks capable of accommodating up to 120-foot yachts.
Other guest services and amenities include full-service dining at an oceanfront restaurant, private dining and in-room dining, a spa called SpaTerre, a fitness center, and a swimming pool and poolside bar. Activities offered at the resort include scuba diving and snorkeling excursions, facilitated by an on-site dive shop, as well as fishing, sailing, dolphin watching and encounters, aerial seaplane sightseeing and tours, and skydiving, among other offerings.
The resort’s popularity ranking among travel magazines has been growing since 2015. Last year, Condé Nast Traveler’s Readers’ Choice Awards ranked it as one of the top 50 resorts in the world, the seventh best resort in the U.S. and the second best resort in the Florida Keys.
“Little Palm Island is a one-of-a-kind resort,” Sonnenblick-Eichner Principal Elliot Eichner said in a statement. “We were able to generate multiple financing quotes given the property’s stellar performance in its ‘drive-to-leisure’ destination location, as well as the top-tier sponsorship. Mast Capital was able to deliver strong execution and close expeditiously.”
Mast Capital’s website described the opportunity to finance the resort as a chance “to generate attractive yield on an iconic, luxury resort in a high-barrier-to-entry market with one of the top RevPARs [revenue per available rooms] in the United States.”
RWN did not provide a comment or additional information before publication.
