Michael Dell’s MSD Capital Nearing $1B CMBS Refi for Boca Raton Resort & Club
By Julia Echikson August 6, 2024 11:51 am
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Michael Dell’s MSD Capital is closing on $1 billion to refinance the Boca Raton Resort & Club, a luxury 1,047-room property in South Florida, according to credit ratings agencies.
The bulk of the two-year commercial mortgage-backed securities loan — $900 million — will be used to pay the existing debt. The remaining $64.6 million will go toward returning equity to the borrower, and $35.4 million will pay estimated closing costs, according to press releases from ratings agencies. The transaction is expected to close on Aug. 22.
Citigroup (C) will originate the floating-rate, interest-only loan, which has three one-year extensions. KeyBank National Association will serve as the master servicer and Situs Holdings as the special servicer.
Fitch Ratings applied a 9.75 percent cap rate to the 165-acre property and estimated its stressed net cash flow at $100.3 million.
In 2019, MSD Capital, Dell’s family office, paid $875 million for the resort, located along Lake Boca Raton at 501 East Camino Real. Since the acquisition, the New York-based investor has spent about $278 million on renovating the property, which was first built in 1926, according to Morningstar DBRS‘ credit rating. Another $102 million in upgrades is planned.
The complex is now home to 120,000 square feet of indoor and outdoor event space, approximately 30,000 square feet of retail space, 15 food and beverage outlets, an 18-hole championship golf course, two fitness centers, 16 tennis courts, four pickleball courts, a 50,000-square-foot luxury spa and a 32-slip marina. The country club has 4,000 active memberships.
The news of Boca Raton Resort’s imminent loan comes about two months after the Diplomat Beach Resort in Hollywood, another 1,000-room property, refinanced with a $575 million package.
Representatives for MSD Capital did not immediately respond to a request for comment.
Julia Echikson can be reached at jechikson@commercialobserver.com.
