Office Building in Miami's Wynwood Collects $76M Construction Loan

The Gateway at Wynwood, at least the third major office building on tap for Miami’s arts district, took two major steps by securing $76 million in construction financing and then holding a groundbreaking.

The loan was brokered by Berkadia Commercial Mortgage LLC. Senior managing director and Florida co-leader Charles Foschini and managing director Christopher Apone, both based in Miami, represented the developer firm in the transaction that closed Dec. 26.

Foschini and Apone succeeded in obtaining competitive loan terms, including a 75% loan-to-cost ratio and nonrecourse financing, even though these are unusual in the current office lending market.

Developer Rose & Berg Realty LP’s good standing, the location and Wynwood’s evolution helped secure these terms, Foschini said.

“The client is a family that I represented before, and they are a very astute real estate owner in the properties that they own, which are mostly in New York and Florida,” Foschni said of the Rosenberg family behind R&B Realty. “I was a huge believer in the Wynwood market. I’ve watched the evolution of that market. … There is a tremendous amount of excitement in the market.”

New York-based R&B Realty, which stresses infill opportunities in growing markets, is developing the 12-story office building on over an acre on the northwest corner of Miami Avenue and Northwest 29th Street.

The building at 2916 N. Miami Ave. will have 220,000 square feet of office space, 25,900 square feet of retail, onsite parking and a rooftop terrace. Groundbreaking for the Kobi Karp Architecture & Interior Design Inc.-designed building was held Friday.

3650 REIT, a balance sheet lender based in Miami, issued the three-year loan with extension options and a fixed interest rate.

3650 is affiliated with real estate investment and services firm Grass River Property LLC, which builds and redevelops South Florida properties.

“There was a short list of lenders that saw the opportunity the way the developer and I saw it. However, 3650 really distinguished themselves among that competitive field. No. 1, they are based in Coconut Grove and are seeing the same type of real-time dynamics we are,” Foschini said. “When they looked at our thesis and our cost basis and our design, they were as excited about it as we are. No. 3, as a lender they have a number of pools of capital that are extremely creative and opportunity-focused, and this fit one of those buckets of capital.”

The building is to rise in a redeveloping area that lacks an office base.

“This particular site sits between Midtown, which is already very established, and Wynwood, which is not too far from the Design District. None of those locations, enviable as they are to live and play, had a quality area to work,” Foschini said.

Mixed-use multifamily and retail developments have added some office components, but generally they were ancillary, he added.

Gateway is a speculative project, but it should lease up quickly as it would appeal to both creative and traditional office users, Foschini said.

Colliers International South Florida executive managing directors for office services Jonathan Kingsley in Fort Lauderdale and Stephen Rutchik in Miami will handle the office leasing.

“This loan is another sign that the Wynwood-Midtown area is rapidly becoming a new office submarket in its own right,” Stephen Rutchik, executive managing director for office services with Colliers International, said in a news release.

Others also are betting on Wynwood’s growth as an office market. Sterling Bay Cos. LLC, based in Chicago, is building the 10-story 545 Wyn at 545 NW 26th St. and New York-based RedSky Capital is building Cube Wynwd at 222 NW 24th St.

Gateway at Wynwood is to be completed in the second half of 2021.

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