Worldcenter developers bag $89M construction loan to build apartments
Rental tower is expected to open by fall 2018
December 23, 2016 11:30AMBy Sean Stewart-Muniz
Rendering of the Seventh Street Apartments (left tower is the first to be built) and Falcone Group CEO Art Falcone
Miami Worldcenter’s developers just closed on an $89 million loan from Fifth Third Bank and Santander Bank, allowing them to move forward with vertical construction of the project’s first apartment tower.
The loan will fund development of a 43-story rental tower at the corner of Northeast First Avenue and Northeast Seventh Street, one of two rental buildings in the planned Seventh Street Apartments complex by CIM Group and the Falcone Group. The towers are connected by a parking pedestal with 20,000 square feet of retail space, which will also be built as part of the first phase.
No brokers were involved in securing the loan, according to a source with knowledge of the deal. Construction financing has become increasingly difficult to come by in South Florida as regulators tighten rules for traditional lenders like banks. That trend also came into play for this project, the source said, as it didn’t have the luxury of relying on buyer deposits as is the case with condo developments.
The 444-unit tower broke ground in June and is expected to open by fall 2018. Nitin Motwani, a Miami Worldcenter principal, told The Real Deal that the apartments will have market-rate asking prices, though his team is holding off on releasing specifics for now.
Rental projects have become a hot commodity in South Florida over the past year, as developers bank on demand from millennials and home buyers pushed out of the housing market due to rising prices.
However, a record number of apartments are now in Miami-Dade County’s construction pipeline, leading some market watchers to feel rent growth could be stymied in the near future.
Motwani said Worldcenter’s apartments are being built right next to the upcoming MiamiCentral station, which should keep demand high. The 27-acre, mixed-use development’s rental offerings are also being built in pieces instead of all at once. Construction of the Seventh Street Apartments’ second tower with 413 units is expected to begin before the first building is opened, and Orlando multifamily builder ZOM has yet to break ground on its planned 429-unit rental building.
CIM, a California real estate firm, bought the land where it’s building the apartments from the project’s master entity Miami Worldcenter Associates for $28 million in May. The deal came with a clause that said if CIM sold the site before April 2023, Motwani’s group would be entitled to an undisclosed compensation.
Source: The Real Deal