Dream Downtown Converting Offices to Hotels

MIAMI—Dream Downtown Miami just secured a bridge loan to acquire the historic Dade-Commonwealth building. The $11.2-million, seven-story, office building sits in Downtown Miami.

Avison Young's NYC-based Debt, Joint Venture and Structured Capital team arranged $7.35 million bridge loan for Florida Redevelopment Project. Avison principal David Eyzenberg and director Amanda Saltzman secured the loan on behalf of the developer.

"While it was challenging that the property had not obtained a 40-year recertification, which precluded obtaining a clean title and left ambiguity on the scope of renovation that may be required by the local municipality, we were able to identify a non-recourse lender that is familiar with the location, having recently funded a bridge loan against a similar property in the area, and became comfortable with the borrower's vision for the project," says Eyzenberg. "Additionally, we were able to craft a creative recourse burn-off structure, coupled with flexible reserves, to box in the potential recertification risk."

Acquired predominantly vacant with remaining tenants on month-to-month leases, the property will be repositioned for a hotel conversion. The hotel conversion will include the addition of multiple stories on the nationally registered historic site.

In other Florida hotel news, a Holiday Inn conversion won capital. HFF arranged $8.2 million in acquisition financing for the hotel. But are there too many hotels coming online for the market to absorb?

"Miami-Dade County is leading Florida in new hotel development with approximately 6,000 rooms under construction or in final planning," Rich Lillis, an executive vice president with Colliers International South Florida who advises clients on hotel and resort investment sales, tells GlobeSt.com. "Fortunately, these new hotels are spread across submarkets such as Downtown Miami, Miami Beach, the airport and Aventura."