Refinancing in many cases can make sense for CRE firms. But every company may have distinct reasons for doing so. Particularly, refinancing is picking up in Florida — with luxury hotel Fontainebleau Miami Beach becoming the latest to join the party.
The property, majority owned by Jeffrey Soffer, plans to refinance $1.18 billion in past mezzanine and commercial mortgage-backed security debt, according to a report from Bloomberg. This includes a $75 million construction loan for the hotel's convention center facilities and $40 million in closing costs.
With the move, Fontainebleau Miami is planning to fund the refinancing with sales of a $975 million CMBS and a $225 million mezzanine loan. That would raise about $1.2 billion.
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But more activity has been picking up in Florida, with The Estate Companies grabbing a $75 million loan to refinance its multifamily asset in Dania Beach. It's an eight-story building that features 340 apartments. MonticelloAM recently provided an $87 million bridge loan for the refinancing of a skilled nursing portfolio in The Sunshine State. And going back to hotels, Loews Corporation secured a $305 million loan to refinance its 790-room Miami property in August. The bulk of the loan will be allocated towards refinancing existing debt, while just $5 million will support closing costs.
These types of deals come as the Federal Reserve has cut rates twice since the middle of September. The high rates have spooked CRE investment activity in the past year or so. But now that's starting to change and the moves open up various opportunities across the board in CRE.
On both transactions for Fontainebleau Miami Beach, Newmark's Jordan Roeschlaub, Jonathan Firestone, Nick Scribani, Tyler Dumon and John Caraviello were involved with securing the financing.
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