Shvo Scores $190M Loan for Historic Miami Beach Redevelopment
By Julia Echikson July 28, 2023 1:54 pm
reprints
Michael SHVO, in partnership with Deutsche Finance America and a group of German institutional pension funds, landed $190 million to redevelop the historic Raleigh property in Miami Beach.
The loan from BH3 Management’s Debt Opportunity Fund II will go toward adding a 17-story condo tower, designed by Peter Marino and Kobi Karp, and restoring the eight-story hotel, which was originally completed in 1940. In all, the oceanfront development will house 42 condo units and 60 hotel suites, managed by Rosewood Hotels & Resorts.
“This transaction underscores the reality that despite today’s challenging capital markets environment, liquidity remains readily available for proven sponsors determined to develop unique assets in established markets,” Aaron Appel, senior managing director and co-head of the New York capital markets team at Walker & Dunlop, who brokered the debt along with W&D’s Jonathan Schwartz, Keith Kurland and Adam Schwartz, said in a statement.
The mortgage, which closed last Wednesday, replaces $146.8 million in debt amassed since 2o19, said a spokesperson for the lender. Construction has been underway since 2022, and The Raleigh is expected to reopen in 2026.
Shvo’s financing comes shortly after Witkoff secured $430 million — likely South Florida’s largest construction loan — to complete a similar development. Witkoff is redeveloping the historic Shore Club just one block north of The Raleigh, in a similar fashion: restoring the existing property, which dates back to 1938, and adding a condo tower.
Shvo and Deutsche Finance America, the U.S. real estate private equity platform of Munich-based Deutsche Finance Group, acquired the property and two buildings just south of it, at 1751, 1757 and 1775 Collins Avenue, four years ago for a combined $220 million, property records show. Together, the parcels amount to 2.8 acres.
Besides The Raleigh project in Miami Beach, Shvo is developing a 250,000-square-foot office on Alton Road and redeveloping the clock tower building on Lincoln Road, both of which boast Norman Foster as the architect.
Outside Florida, the New York-based developer’s portfolio includes the iconic Transamerica Pyramid office building in San Francisco and the Mandarin Oriental Residences in Beverly Hills.
In addition to providing both debt and equity today, BH3 Management— led by Gregory Freedman and Daniel Lebensohn— is a prominent developer in South Florida. The Fort Lauderdale-based firm is the developer behind Privé at Island Estates in Aventura, and in April it purchased a 10-acre ground lease on Watson Island, a publicly owned enclave between Downtown Miami and South Beach, where it plans to build a mixed-use development in partnership with Merrimac Ventures. In New York, its projects include 125 Greenwich and Bloom on 45th.
Julia Echikson can be reached jechikson@commercialobserver.com.
Correction: The $190 million loan will replace, not add to the existing debt as previously reported.
