Under the terms of the 50/50 joint venture, the apartment building and land was acquired for $110 million. The joint venture plans to spend $60 million in renovations. The venture will require an initial investment of $15 million from each partner. The project will receive $124 million to be provided by Eurohypo AG, New York branch, at a rate of Libor plus 300 basis points.

The 16-story property will be renovated and turned into 342 studio, one- and two-bedroom units and four penthouse suites. MHG chief investment officer Marc Gordon tells GlobeSt.com that construction has started on the project, which is expected to be completed by the end of 2007. MHG plans to sell some of the units, although the number that will be made available for sale has yet to be determined, Gordon says.

This will be the fourth Mondrian hotel, which is a brand of MHG. The other hotels are in Los Angeles, Scottsdale and a property under development in Las Vegas. The company also operates the Delano and Shore Club hotels in South Beach. "With our Miami Mondrian, we are expanding MHG's presence and the diversity of our brands in a market we know well and where we have had great success with Delano and the Shore Club," says MHG executive and CEO Ed Scheetz.

The property fronts Biscayne Bay and offers views of the Miami skyline, the Atlantic Ocean and South Beach. Hotel amenities will include a pool, spa, event and meeting space. It will also offer waterfront services including private VIP boat slips. "This transaction is consistent with our strategy of expanding our brands in major business and leisure travel markets by entering into long-term partnerships to develop and manage our brands," Scheetz says.