August 14, 2013
Major lenders are joining the biggest names in the retail fashion industry and buying into the future of Miami’s Design District.
In the largest private construction financing in South Florida since the recession, a partnership behind the retail transformation of the district has obtained two loans totaling more than $300 million.
Companies owned by Miami Design District Associates LLC on July 29 received the loans, which are a combination of refinanced debt and fresh financing, according to Miami-Dade County records. Miami Design is a partnership between Dacra Corp. and L Real Estate Advisors.
In a $251 million transaction provided by HSBC Bank USA N.A. and Credit Agricole S.A., the companies consolidated existing notes totaling about $119 million and received a future advance of more than $132 million. In the second transaction, the companies obtained a $50 million loan from Breds II Loan Holdings LLC, managed by New York-based Blackstone Mortgage Trust Inc.
The financing represents a “relatively smaller percentage” of the total project costs, according to Dacra founder Craig Robins. A majority of the project is being funded through equity.
As approved, the retail center would consist of about 140,000 square feet of new department store space and about 400,000 square feet of renovated retail buildings. The venture already has attracted ultra-luxury fashion retailer Hermès and French designer Louis Vuitton.
In addition to retail space, the project would include 53 hotel rooms and about 100 residential units. It also would provide 2,571 parking spaces in underground and above-ground facilities. Construction began last fall.
“The project continues to be phenomenally successful,” Robins said. “We’re executing leases almost every week. The next major phase currently under construction is scheduled to be delivered to tenants by May.”
Other luxury tenants attracted by the venture include Cartier, Christian Dior and Prada. Robins said about 40 brands are expected to open stores at the project by fall 2014.
Miami Design has “established the neighborhood as an emerging destination, not only for great furniture, design, art and food, but also an important place for fashion,” he said.
The next major step for the project is securing a department store anchor, an achievement that’s being watched very closely.