Miami development loan adds to $1.27bn CMBS

Miami-based CGI Merchant Group (CGI) has secured a $23.4m loan from New York-based Rialto Group for the refinancing and upgrade of a prominent mixed-use property located at 55 Miracle Mile in Coral Gables, Florida that is to be packaged into a new CMBS. The loan is to be bundled into Wells Fargo’s $1.27bn WFRBS Commercial Mortgage Trust 2014-C22 […]

5Miami-based CGI Merchant Group (CGI) has secured a $23.4m loan from New York-based Rialto Group for the refinancing and upgrade of a prominent mixed-use property located at 55 Miracle Mile in Coral Gables, Florida that is to be packaged into a new CMBS.

The loan is to be bundled into Wells Fargo’s $1.27bn WFRBS Commercial Mortgage Trust 2014-C22 CMBS deal, which includes a number of other office plazas and portfolios in Los Angeles, New York, and Stamford, Connecticut.

The conduit’s top originators are Wells Fargo (44.4% of pool balance), Royal Bank of Scotland (20.9%) and Rialto Mortgage Finance (10.6%) and it received initial pricing on 5 Sept., with AAA pricing 84 basis points over swaps and AA- and A- bonds priced at 145 and 190 over swaps, respectively.

CGI’s slice comes in the form of a five-year, fixed rate loan at a roughly 70% loan-to-value ratio, Raoul Thomas, CEO of CGI Merchant Group, told Real Estate Capital. It refinances a nearly $18m acquisition loan provided by Karlin Real Estate Group last year and allows CGI to move forward with a second phase of capital improvements and tenant upgrades.

CGI purchased four floors of retail and office space – comprising 650,000 sq ft – in addition to a 402-space rooftop parking garage at the property in October 2013 for $26.75 million. Nearly 200 condos rest above and set back from CGI’s component (see image).

The firm’s focus has been to bring in a higher caliber tenancy, and Thomas characterized Miracle Mile as a historic, iconic strip with high-end boutique shops and a vibrant nightlife – like “the Rodeo Drive of the south,” he said.

“This is one of the most affluent sub-communities in Miami and the state of Florida,” he said. “It has a very high concentration of high net-worth individuals.”

CGI has already made capital improvements to the property, including cosmetic changes and upgrades to its exterior, main corridors, lighting system and offices. A second phase is under way to “make the building more of a destination.” Thomas said he has set asking rents at $36 per square foot on spaces previously pulling rents in the low $20 per sq ft range.

“We’ve proven our business plan in a strong way, and the market has also worked in our favor,” he said.

HSBC is the anchor office tenant in the building and holds portions of its retail space along with Ben & Jerry’s and Tarpon Bend restaurant, a local dining and nightlife hot spot. The office space is currently about 85% occupied.

 

 

 

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