Charles Penan and Howard Taft (handout)
Dealmakers: Howard Taft and Charles Penan
The Deal: A two-part transaction including $19.57 million in joint-venture equity and a $30 million nonrecourse construction loan and mortgage to develop the Shoppes at Civica in Miami.
Details: The executives of Aztec Group Inc. spent nearly a year negotiating and structuring a deal for investors of varying risk tolerance. After nine months, they secured nearly $50 million in financing from two vastly different lenders—a conservative bank and a global entrepreneurial real estate investment fund open to gambling on a multimillion-dollar project in Miami’s health district.
The pair worked the higher-stakes portion first, closing in May on a waterfall-structured land deal with Boston-based institutional investor Rockpoint Group LLC to develop the Shoppes at Civica, a 50,000-square-foot retail project.
Rockpoint closed on the joint-venture deal after the property was more than half pre-leased and a signed termsheet was in hand from Sabadell United Bank for the construction loan.
Taft and Penan targeted multiple nonrecourse lenders to secure the construction funding. In December, the pair closed with Sabadell on a five-year, 3.75 percent fixed-interest construction loan that converts to a permanent loan when the property receives its certificate of occupancy. The deal presented the lender with a built-in exit strategy with five years to increase net operating income, grow or sell the project.
“Everything was buttoned up when Sabadell came in,” said Penan, an Aztec director.
Developer Swerdlow Group now had a green light for a project that had been years in the making for the 1.85-acre former Days Inn site at 1050 NW 14th St. It originally envisioned a high-rise office building to serve area medical centers but reconsidered after four years of delays for state approval.
Last March, Swerdlow changed direction and redesigned the site for a two-part project. Phase one would create the Shoppes at Civica, a two-story mixed-used complex with about 50,000 square feet of retail and entertainment space targeting national operators. The shops would open in mid-2015, serving a medical community that draws 50,000 visitors per day, according to Penan.
“For many years, the health district has remained an important employment hub for Miami-Dade County but one that has been underserved and underdeveloped,” said Michael Swerdlow, managing partner of the Swerdlow Group. “The developer’s vision with this project is to revitalize the neighborhood with a mixed-use development that will bring much-needed services to the area’s strong workforce.”
A second stage of the project, still in early planning, could create up to 450,000 square feet of mixed-used multifamily or office development.
Quote: “The hard assignment was bringing in Sabadell early,” Taft said.
Background: Taft, senior managing director at Aztec, has about 40 years of real estate financing and sales experience. Before joining Aztec, Taft 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 has participated in more than $750 million worth of transactions including acquisitions. He previously spent five years with Cohen Financial and was an associate with Legg Mason Real Estate Services/Northmarq Capital LLC.