A sprawling mixed-use Pembroke Pines project secured a $45 million refinancing for its retail segment in spite of the coronavirus economic curveball that has slowed lending.
The 47-acre Pines City Center on the southwest corner of Pines Boulevard and Palm Avenue obtained the loan for the second half of its retail portion — 150,000 square feet out of a total of 300,000 square feet of retail.
Miami-based developer Terra, by the father-and-son team of Pedro and David Martin, closed on the loan from Miami’s FirstBank Florida on March 16 as many South Florida businesses were switching to work-from-home operations.
The second half of the retail portion is nearly complete and set to open by year-end. The space is 98% leased.
The new loan valued at $300 per square foot becomes permanent financing for a stabilized property that refinanced two earlier loans during construction.
The latest refinancing was completed as retail was being hit especially hard by the COVID-19 pandemic with South Florida mandating closures of all businesses except grocery stores, pharmacies and other essential businesses. Restaurants are limited to takeout and delivery. Lending has slowed as the lenders hold back and developers hold off on new projects amid the economic uncertainty.
Refinancing loans are continuing based on historically low interest rates. The Federal Reserve twice cut interest rates late last year before the pandemic and then cut them to near zero amid the coronavirus.
“Every part of the world is experiencing economic uncertainty right now, so the federal government has taken steps to sustain business activity by reducing interest rates close to all-time low levels,” said David Martin, Terra president. “Real estate companies whose assets have appreciated in value now have an opportunity to refinance loans.”
Refinancing deals will pump life into and sustain capital markets during the intense economic slowdown.
“While lending criteria has tightened, we’re seeing lenders continue to transact deals that benefit from strong income in place and well-capitalized sponsors,” Martin added.
The second half of the Pines City Center retail portion is to be anchored by Hobby Lobby and UFC Gym. Some of the other secured tenants are Space Coast Credit Union, CoreLife Eatery, Paradise Grills, AT&T, Chuy’s Tex Mex, McAlister’s Deli, Pinkberry, Colada Cuban Café, Walk-On’s Bistreaux & Bar, Style and Polish Blow Dry Bar, Legacy Fit, and Hiccups and Churroholic.
Terra already completed the first phase of retail, which is anchored by Publix. Real estate investor TA Realty, based in Boston, bought the initial segment from Terra for $80 million in December 2018.
Terra secured the recent refinancing through an affiliate, Terra City Center Investments II LLC.
“Our ability to close this significant loan reflects the retail demand we’ve experienced at Pines City Center as well as the strong relationship between Terra and FirstBank of Florida,” Martin said. “Our team created a master plan comprising of lifestyle-centered retail that is serving the everyday needs of surrounding residents.”
The rest of Pines City Center, which sprawls from Pines Boulevard south to Washington Street and from Palm Avenue west toward Hiatus Road, includes three completed multifamily communities.
The 387-unit Pines Garden garden-style complex with apartments and townhouses is the most recently completed community. It’s at 10400 SW City Center Blvd.
The other two are the 700-unit City Center on 7th on 27 acres and the 365-unit Town Pembroke Pines on 11 acres. All apartments are market-rate units.
Terra also envisioned hotels as part of the project.
Currently all Pines City Center stores except essential businesses such as the Publix are closed and will follow government guidelines on when they can reopen.
Pembroke Pines is a growing city with more than 170,700 residents. Next door to Pines City Center is the city’s new $60 million Charles F. Dodge City Center and Convention Hall with a 3,500-seat auditorium. It also has an art gallery and outdoor plaza.