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|Property Type||Retail,Land / Development Site|
THE INVESTMENT OPPORTUNITY
Jones Lang LaSalle (“JLL”) has been retained on an exclusive basis by the Lender to arrange the sale of a $23.0 million maturity defaulted senior Loan (the “Loan”). The Lender originated the Loan in June 2019 with an initial balance of $23.0 million to acquire a developable site in the Wynwood district of Miami, FL (the “Property” or “Collateral”). The situation provides an opportunity for an investor to acquire the recently defaulted Loan on a land site that has already been submitted for Design Review Committee. The opportunity would allow an investor optionality in either pursuing the Collateral or with a Loan workout.
LOAN & COLLATERAL
In June 2019, the Lender originated the interest-only Loan, which carried a LIBOR + 7.75% rate subject to a 2.50% LIBOR floor, for a 10.25% all-in rate compounding on an actual over 360-day basis. The Loan also featured a default rate of 8.00% above ordinary interest. The Loan had an initial maturity date of June 18, 2020, and featured three (3) six-month extensions. The Loan performed up until July 1, 2021, when the Borrower failed to extend the Loan and subsequently entered maturity default. The Loan is currently in default with an unpaid principal balance of $23,000,000. The Loan is secured by both a first-priority mortgage on the fee simple interest in the Property (the “Fee Collateral”) and a pledge of 100% equity interest in the Borrower (the “Equity Collateral”).
Collateral for the Loan consists of a first-lien mortgage on a 5-parcel developable site totaling 41,550 square feet of lot area. The current site plan includes building 108 residential units, 35 lodging units, and incorporating 9,508 SF of commercial retail space.
ACCELERATED PATH TO TITLE
The Sponsor’s pledge of equity will potentially give an investor an accelerated timeline into fee simple ownership by utilizing the UCC foreclosure process instead of a more traditional real estate foreclosure, saving time and money.
The Collateral is terrifically located steps away from Wynwood’s wealth of prominent demand drivers, including many hip restaurants, boutique retailers, breweries, cafes, and cultural amenities, making this offering a genuinely generational live, work, play destination for future residents in one of Miami’s hottest sub-markets.
INDIVIDUAL AND CORPORATION MIGRATION
The Miami metropolitan area has benefited greatly from macroeconomic trends pushing individuals and corporations out of high-tax states. Finance and Tech giants are entering the market due to Florida’s highly favorable tax rates and high quality of life.
BLANK SLATE DEVELOPMENT OPTIONALITY
The recently defaulted opportunity provides investors with the potential ability to step into the near-term developable site via a foreclosure or UCC sale. With construction having not yet commenced, Investors can execute a business plan that is favorable to their position.