Patrick Harrington and Thomas D. Wood, Jr. (J. Albert Diaz)
Dealmakers:Thomas Wood Jr. and Patrick Harrington
The Deal: The commercial mortgage bankers helped arrange $73.1 million in financing for three Miami Beach hotel deals.
Details: In a market where lenders are jumping over each other for a chance to put cheap money into the hands of developers, it might seem difficult to explain why a go-between is still necessary to arrange such financing. One such middleman has a simple explanation for why his clients still call: They’re not just hiring him to negotiate a good deal; they’re hiring him in essence to be mean to bankers.
“There’s one thing that you need to understand about how this works: I’m the guy that’s hired to say no,” said Thomas Wood Jr., president of Coral Gables-based Thomas D. Wood and Co. The finance broker recently helped arrange $73 million in loans for two Miami Beach developers. Robert Finvarb Cos. is developing two hotels on Miami Beach’s Collins Avenue. Another, the owner of the Claremont Hotel at 1700 Collins Ave., is doing a full renovation hoping to go from an independent brand to flying the Hampton Inn flag.
“I’m the guy that’s saying no,” Wood explained of his recent dealings with several potential financing partners looking to lend money to Finvarb. He said some of those banks had long-running relationships with the developer, which would have made it somewhat harder for Finvarb to cold-eye potential deals.
“I started with 10 banks and narrowed it down to three. At the end of the day, I have to be the bad guy. I get paid for that so I don’t mind it, and Finvarb’s probably saving enough on the financing that my fee is basically free,” Wood said.
In arranging the first deal, a $29 million construction loan to build a 105-room Hyatt hotel at the intersection of Collins Avenue and 15 Street, Wood said he played the hardest line.
“Everybody and his brother wanted in so we went to the market,” he said. “BB&T got it based on dollars and cents, and we were really pushing on the leverage.”
Interest was not as overwhelming on the second deal to bring the AC Hotel flag to a parking lot at 2912 Collins Ave. Wood said he concentrated on selling the $32.1 million deal to banks that might be more familiar with the Spanish hotel brand, a Marriott property. The seven-story, 150-room hotel is scheduled to open next year.
A third deal, for a $12 million bridge loan to the owner-lessee of the Claremont Hotel, was handled by Thomas Wood vice president Patrick Harrington. The deal was complicated somewhat by the fact the loan was to the lessee and not the owner of the hotel at 1700 Collins Ave. But the lease was long enough to make the 27-year loan work.
“We made the case that in that period of time, they’re going to be able to get enough cash flow to pay off the loan.”
Quote: “At the end of the day, I have to be the bad guy. I get paid for that so I don’t mind it,” Wood said.
Background:Wood is president of independently owned Thomas D. Wood and Co., and Harrington is vice president.