Charles Penan and Howard Taft (handout)
Dealmakers:Howard Taft and Charles Penan
The Deal: Aztec Group Inc. senior managing director Howard Taft and director Charles Penan secured an interest-only, 18-month, $36.5 million loan from Miami Beach-based commercial real estate lender BridgeInvest LLC to help a landowner satisfy loans due to three creditors.
Details: The timing couldn’t have been worse when Taft and Penan embarked on the task of finding financing for a client facing foreclosure from three lenders on nine properties in two counties.
It was right around the holidays in December, and the clock was ticking to complete the deal and save their client from foreclosure, mounting fees, higher interest rates and daily penalties.
“This was a very challenging and highly structured transaction where we carefully arranged terms that fit our client’s needs,” Taft said.
In a rigorous, complicated transaction exacerbated by the time crunch, Taft and Penan needed to negotiate multiple notes, mortgages and loan terms with BridgeInvest—but only after they’d gained clear title from the existing lenders on the loans at various stages of foreclosure.
Before they could advance talks with BridgeInvest, the brokers had to obtain letters detailing exact payoff amounts and interest charges from Wells Fargo, City National Bank and a private investment group.
“Essentially it was three deal closings at once,” Penan said. “During Christmas and New Year it’s very hard to get the right people at the bank to communicate with us.”
In what would prove an exercise in efficiency, the brokers needed to coordinate a loan closing and bring multiple lenders to the table when most businesses operate with skeleton staff.
Taft and Penan began their systematic approach analyzing every step necessary to close the deal, including identifying long-lead assignments and getting updated surveys. They created a master checklist of more than 100 tasks and set priorities. Throughout December the men scheduled weekly—sometimes daily—conference calls with lawyers and borrowers to keep the deal’s multiple parts moving and shrink tohe to-do list.
By Jan. 3, Taft and Penan accomplished their goal, wrapping up a deal that took 30 days to close. They got their client an 18-month loan at an undisclosed fixed rate with multiple properties serving as collateral.
The land used to secure the loan belongs to multiple companies, including Hillsboro Mile Properties LLC and Enclave at Hillsboro LLC, linked to John Kennelly, according to public records.
The sites include Enclave at Hillsboro, 11.3 oceanfront acres at 1174-1185 Hillsboro Mile in Hillsboro Beach, zoned for up to 168 residential units or 12 luxury single-family homes. Another parcel, the Hillsboro Mile Estate, has three residential home lots at 1103, 1105 and 1107 Hillsboro Mile, stretching from the ocean to the Intracoastal Waterway. The third parcel, in Boynton Beach, is Fountains East, with 16 acres and an approved site plan for a 160,000-square-foot retail shopping center.
Each site is in a prime location, either on the water or near established retail developments. But with no presales to guarantee income in the short- to long-term, Taft and Penan faced another obstacle.
“The universe of lenders who will lend on raw land without an immediate development plan is small,” Taft said.
BridgeInvest was drawn to the prime locations, and its attorney, Akerman real estate partner Brenda Goerks in Miami, worked over the Christmas and New Year holidays to complete the deal.
Quote: “We kept deleting away each task. Every day we had to make that checklist smaller,” Taft said.
Background:Taft has about 40 years of real estate financing and sales experience. He was managing director at Cohen Financial in Miami, senior managing director at Miami-based Holliday Fenoglio Fowler LP and senior vice president at Continental Real Estate Cos. in Miami. Penan previously spent five years as senior analyst at Cohen Financial’s Miami office and was an associate with Legg Mason Real Estate Services/Northmarq Capital LLC in Boca Raton.