Developers land $74.5M loan for condo construction project at Ocean Reef Club

New York-based ACRES Capital made a two-year loan for construction of the 48-unit Residences at Ocean Reef

July 13, 2019 03:00PM

John Grunow Jr. and Ocean Reef Club

The developers of a condominium at the Ocean Reef Club near Key Largo borrowed $74.5 million to finance construction of the 48-unit project.

Long Island, New York-based ACRES Capital provided the construction loan for the condo project, called Residence Club at Ocean Reef.

The borrowers include John Grunow III and John Grunow Jr. of The Grunow Group and former Trammel Crow Residential executive Ronald Terwillger. Their partners in the project include Martin Levine of Redwood Real Estate Group.

Residence Club at Ocean Reef is designed as a three-building complex spanning 103,700 square feet at 1 Golf Village Drive at the Ocean Reef Club, a gated, 2,500-acre community just north of Key Largo.

Owners of the one-, two- and three-bedroom condo units will have access to the 18,000-square-foot private clubhouse at Ocean Reef Club and the community’s golf course and marina.

The developers have advanced the Residence Club at Ocean Reef, which would be built on the site of a 1970s condominium, despite initial opposition from eight owners of homes in the Ocean Reef Club community. [Commercial Observer]Mike Seemuth

Blackstone-backed mortgage lender Stearns files for bankruptcy

Blackstone-backed mortgage lender Stearns files for bankruptcy

Restructuring deal will wipe out $184 million in bond debt

July 09, 2019 11:30AM
Blackstone President and COO Jonathan Gray and Stearns Lending CEO David Schneider (Credit: Getty Images)

Blackstone President and COO Jonathan Gray and Stearns Lending CEO David Schneider (Credit: Getty Images)

Stearns Holdings, the parent company of residential mortgage lender Stearns Lending, filed for Chapter 11 protection Tuesday morning after agreeing on a debt-restructuring plan with majority owner Blackstone Group.

The restructuring will erase $184 million in outstanding bond debt from the California-based firm’s balance sheet, the Wall Street Journal reported. Stearns is also seeking court authorization to continue normal business operations during the bankruptcy process, including the payment of suppliers and vendors, and salaries and benefits for about 2,700 employees.

Blackstone acquired a majority stake Stearns Holdings in 2015. The financial firm is providing $60 million in new money for the restructuring, as well as a bankruptcy loan of up to $35 million to help the lender continue operations. Warehouse lenders have committed $1.5 billion to the plan.

Stearns’ $184 million in outstanding bonds are due to mature next August. The company paid down some of its bond debt last year by selling off most of its mortgage-servicing rights. In its Chapter 11 filing, it listed assets and liabilities each between $1 billion and $10 billion.

Mortgage rates tumbled in recent months after the Fed held off on raising interest rates further. A preceding period of rising rates had cut into Stearns’ lending business. [WSJ] — Kevin Sun

Waning appetite? World’s largest institutional investors may slow their real estate acquisitions

Waning appetite? World’s largest institutional investors may slow their real estate acquisitions

IRE Real Assets reported that many leading institutional investors are nearing their portfolio-allocation targets for real estate assets

May 19, 2019 09:00AM
(Credit: iStock)

(Credit: iStock)

Many of the world’s largest institutional investors are moving closer to their portfolio allocations for real estate assets, which may slow the pace of their property acquisitions, according to a new report.

Survey data and interviews from IPE Real Assets show that 53 percent of top institutional investors expect to be net buyers of real estate assets in 2019 and 32 percent neither net sellers nor net buyers.

“There is no necessity to either actively increase or reduce real estate exposure,” said Rutger van der Lubbe, head of global real estate investment strategy at APG, which manages investments for pension funds in the Netherlands. “Our clients’ real estate exposures are currently within their targeted weightings.”

Johan Temse, real estate investment manager at Swedish pension fund AP1, says the fund is within its target allocation of 13 to 14 percent for real estate, so its property acquisitions are “limited” and “selective.”

“We’ve been very active through 2015 to 2018 but are looking at a slightly active year for real estate equity in 2019,” said Mikko Antila, head of international real estate at Finnish pension insurer Ilmarinen. “We anticipate to be quite active in real estate debt, however.”

The largest pension fund manager in Germany, Bayerische Versorgungskammer (BVK), expects to actively push its portfolio allocation to real estate above 20 percent. The regulatory limit in Germany is 25 percent. “While we are today at approximately 21 percent, we’re still having room to grow,” said Rainer Komenda, head of real estate funds at BVK.

But Komenda also said BVK this year will be “investing a little bit slower and continuing to be very selective,” with a new focus on “value creation themes.”

Allianz Real Estate, which handles the property investments by the Allianz group of insurance companies, also is shifting its attention to the value-add side of the real estate market and away from core assets, its historical focus. https://therealdeal.com/new-research/topics/company/allianz-real-estate-of-america/

The biggest institutional investors in real estate assets, as ranked by IPE, were Allianz Real Estate ($72.4 billion), China Investment Corporation ($52.9 billion), Abu Dhabi Investment Authority ($51.2 billion), APG in the Netherlands ($48.38 billion) and TIAA ($47 billion).

The average return expectations hovered around 7 percent, though Allianz generated a 10 percent return last year. It expects returns between 4 and 6 percent this year. [IRE Real Assets] – Mike Seemuth

Double play: A-Rod’s real estate firm closes multifamily fund and opens $50M fund

Former slugger’s Monument Capital Management will invest in workforce housing across the country

From left: Stuart Zook and Alex Rodriguez (Credit: Getty Images and iStock)

Retired Yankees slugger Alex Rodriguez’s real estate company just closed its first multifamily fund and is trying to score again with the opening of its fourth fund.

Miami-based Monument Capital Management said it closed its first multifamily fund with $21 million in equity. It’s now launching a $50 million fund focused on workforce Class B and C housing. The new investment fund will look at buying up existing apartments around the country, including in Houston, Texas and in Boise, Idaho, according to Stuart Zook, principal of Monument Capital Management.

Zook said the company already has a 167-unit townhome complex under contract in a western suburb of Chicago. The new fund will total about 12 real estate assets. He said the company often buys older properties and then renovates them and adds amenities.

The company is focusing on acquiring multifamily properties near large universities where demand for rentals is strong, according to Zook.

Rodriguez, a former Major League Baseball player and Coral Gables resident, started investing in real estate in 2004. Monument Capital Management has spent $700 million acquiring multifamily assets in 13 states, including in Florida, the Gulf Coast and Texas. Zook said the firm plans to open another fund in 12 to 18 months.

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Florida East Coast Realty’s $425M Panorama Tower refi is among city’s biggest

Florida East Coast Realty’s $425M Panorama Tower refi is among city’s biggest

Tibor Hollo’s firm financed construction of 85-story mixed-use tower with $340M loan

Jerry Hollo and Panorama Tower (Credit: Wikipedia)

UPDATED, Feb. 1, 9:45 p.m.: Florida East Coast Realty closed on a $425 million refinancing of Panorama Tower, one of the largest such loans in Miami in recent years.

Wells Fargo financed the new debt, which replaces the $340 million construction loan the bank provided on the 85-story tower in 2015. It was one of the largest construction loan in Miami-Dade at the time.

FECR, led by Tibor Hollo and his sons Jerry and Wayne Hollo, completed the 1.3 million-square-foot skyscraper last summer. Its TWJ 1101 LLC closed on the five-year, 42 percent loan-to-value loan on Thursday, a spokesperson said.

The law firm Rosenthal Rosenthal Rasco announced the refinancing. Founding partner Kerry Rosenthal represented the downtown Miami-based developer on both the construction loan and refinance.

The project, at 1101 Brickell Bay Drive, includes 821 luxury apartments with more than 45,000 square feet of residential amenities, a 208-room Hyatt Centric hotel, 70,500 square feet of office space, 47,360 square feet of retail space, a 2,000-space parking garage. The loan also covers two office buildings totaling about 272,000 square feet at 1101 Brickell Avenue.

It’s also one of the most expensive new rental buildings in Miami-Dade, with rents ranging from $2,500 a month for a one-bedroom to over $6,700 for a three-bedroom apartment. FECR hired Fortune Development Sales, one of Miami’s top condo sales and marketing firms, to handle leasing of the tower last year, and more than half its units are now leased out.

The Brickell tower is the tallest residential building south of New York on the East Coast. It is also part of a wave of new luxury apartment buildings in Miami-Dade and Fort Lauderdale that are creating competition for individual condo investors and putting pressure on the shadow rental market.

FECR is also planning at least two mixed-use projects in the Brickell area that would be taller than Panorama, including The Towers by Foster + Partners, a pair of connected high rises planned for 1201 Brickell Bay Drive. It’s partnering with Corigin Real Estate Group and McCourt Global Properties on that development.

Soaring costs threaten the Wave streetcar project in Fort Lauderdale

A streetcar in Kansas City similar to the type planned in Fort Lauderdale
Unexpected increases in estimated costs threaten the planned development of a streetcar system in Fort Lauderdale.
Contractors bidding to build the streetcar system, called the Wave, want more money than expected to build it, at least $74 million more.
That means the total cost of the system could top $270 million, or almost twice the $142 million originally estimated.
The Wave streetcar system would operate on a 2.8-mile route inding through and around downtown Fort Lauderdale.
Wave streetcars would be operated on tracks embedded in street lanes and would be connected to overhead electrical wires over most of the 2.8-mile route.
The project already had cost more than $23 million as of July 18. The partners in the streetcar project are Fort Lauderdale, the city’s Downtown Development Authority, and the Broward Metropolitan Planning Organization, plus the county, state and federal government.
Jenni Morejon, executive director of the Downtown Development Authority, told the Sun-Sentinel that soliciting bids for large projects more than once is one way to lower their cost.
Lowest among bids to design and build the streetcar system is a $188.7 million bid, which excludes a separate $31.4 million expense the county authorized to acquire five streetcars and spare parts.  [Sun-Sentinel] — Mike Seemuth

Source: The Real Deal Miami