A10 Capital last week originated a new $113 million Miami refinancing package for a class A office and retail project in the city’s trending Wynwood neighborhood.
The Boise, Idaho-based manager supplied the non-recourse, three-year bridge loan to New York-based Rose & Berg Realty on February 22. New York-based brokerage Berkadia arranged the refinancing.
Despite slowed origination momentum across the real estate debt market, Miami has continued to be a fixture for new acquisition, construction and refinancing activity. Jerry Dunn, co-founder and president of A10 Capital, said his company has been actively funding loans when some other lenders have been on the sidelines in a less-than-favorable market environment.
Dunn said the market’s lack of stability stems from the rising interest rates, which has left uncertainty about the cost of capital and the impact on cap rates. “The reason we were able to get it done is the combination of our capabilities, but also the high quality of the building,” he said, adding that the deal fits in the company’s structured solution strategy focusing on selective larger loans.
Charles Foschini, senior managing director of Berkadia, said the transaction was a creative single-asset single-borrower loan. “Although generally reserved for deals in excess of $400 million, the lender created a synthetic single-asset securitization bond to put the loan together,” he said.
The property, Gateway, spans 224,880 square feet and is located at the epicenter of Miami’s Wynwood corridor. Lying between the I-195 North Miami Avenue exit and the future Wynwood Brightline station, the district is dotted with residential areas, fashion shops, restaurants and creative elements such as landmark wall paintings.
“There’s only a handful of other transactions or buildings that have the institutional quality nature of it, but none of them had the ability to access Miami to the south, or north of Fort Lauderdale, or west over to Miami Beach,” said Tommy Mello, executive vice-president at A10.
In addition, Miami stands out among the southeast markets, with lenders holding a positive outlook on the region’s future development. “Miami is benefiting from the significant migration from the northeast and has experienced significant population growth and relocation of businesses,” Dunn said. “Within the Miami market, Wynwood is one of the top two submarkets, particularly attractive to tech, advertising, and media companies.”
The property is currently 57 percent leased, and the bridge loan contains $11 million in facilities to cover tenant improvement and leasing commission costs on the remaining vacant space, according to A10 Capital. Berkadia secured the original construction loan for the project in early 2020 through 3650 REIT.