With $36.5M Loan, Landowner Has 18 months To Sell Or Develop Broward Oceanfront Land
A $36.5 million loan from Miami-based commercial real estate lender BridgeInvest helped a South Florida landowner satisfy three mature loans.
The bridge loan provided short-term financing to pay off debts to Bank of America Corp., City National Bank of Florida and another private lender, buying the owner time to sell the portfolio of oceanfront residential and retail land in Broward and Palm Beach counties.
"Doing any land loan in today's market is challenging, and refinancing loans that mature are an additional challenge," said Howard Taft, senior managing director of Miami-based Aztec Group Inc., which specializes in real estate acquisition and financing for offshore clients, institutional investors, entrepreneurs and commercial developers. "The universe of lenders that will lend on raw land without an immediate development plan is limited. This is a harder type of transaction to close."
Without a development plan or the option for early revenue from presales, lenders find it hard to see their exit strategy and potential for income. In this case, the properties' best points were their prime locations and potential for unique construction projects.
One site, Enclave at Hillsboro, is 11.3 acres of oceanfront land at 1174-1185 Hillsboro Mile in Hillsboro Beach, zoned for up to 168 residential units or 12 single-family homes. Another, the Hillsboro Mile Estate, has three residential lots at 1103, 1105 and 1107 Hillsboro Mile, facing the Atlantic Ocean. The third parcel in Boynton Beach is Fountains East, with 16 acres and an approved site plan for a 160,000-square-foot retail shopping center.
The land belongs to multiple companies, including Hillsboro Mile Properties LLC and Enclave at Hillsboro LLC, linked to John Kennelly, according to public records.
The deal with BridgeInvest was in the works for about 45 days, said Taft, who represented the landowner. It was an 18-month loan with an undisclosed fixed interest rate.
"This was a very challenging and highly structured transaction where we carefully arranged terms that fit our client's needs," Taft said. "Both our client and the lender were looking to form a mutually beneficial, long-term relationship with this deal."