MIAMI-Madison Capital Management LLC has acquired a $45-million "B-note" loan from Hypo Real Estate Capital Corp. that is secured by the W South Beach Hotel & Residences, now under construction at 2201 Collins Ave. The project is scheduled to open early next year.
Madison Capital, which specializes in buying fractionalized distressed real estate assets, classifies W South Beach as a performing situation because it remains active, according to Brett Ellen, the firm's vice president in Denver. The 419-unit project will operate as a hotel with owners being allowed to rent out their units. Bungalow and penthouse units, from studios to three bedrooms, are priced from $700,000 to more than $5 million.
"We look for opportunities that we find attractive and look for the need to sell a position," Ellen tells GlobeSt.com. "Banks are looking to pare down exposure to a particular asset in a geographic area."
The W South Beach loan acquisition is called a B note because it is lined up behind senior or "A" financing, Ellen says. While Madison Capital doesn't make purchases based solely on geography, he says the firm believes the project is a good credit risk because of its luxury amenities and the strong international appeal of its location.
Elsewhere in Florida, Madison Capital acquired a $7.9-million senior secured construction loan for the Towers of Channelside condo project in Downtown Tampa. The firm closed on the loan in early summer, Ellen says, and the developer of the 257-unit project emerged from Chapter 11 bankruptcy earlier this month.
Madison Capital claims investments of more than $925 million in capital and currently manages at least $500 million in assets. It has offices in New York City, Denver and Kansas City, as well as a European office in Luxembourg.
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