Kevin M. O’Grady, Partner, Senior Managing Director, Cohen Financial (J. Albert Diaz)
Dealmakers: Kevin O’Grady, Daniel Sheehan, C. Gregory Newman and Eric McGlynn
The Deal: The Cohen Financial team helped secure a $38.2 million bridge loan for the 10-acre River Landing project in Miami.
Details: Getting from contract to closing can often be the trickiest part of getting a large real estate done. As a booming real estate market makes those disposing of land more likely to experience sellers’ remorse once a deal is inked, making sure financing is efficiently obtained is key for buyers.
Such was the case in a deal arranged by the Miami team of a national real estate capital services firm. O’Grady, senior managing director at the company, said his team was under the gun to help arrange financing for the deal to buy the land on the Miami River for a large mixed-use project.
“The property had been under contract for almost two years, and there’s been growing interest in that area,” O’Grady said. “We had a hard stop, so we needed to close.”
The bridge loan O’Grady helped secure funded the land acquisition and will finance predevelopment of the project, which would bring 428,542 square feet of retail space and 508 residential units to the former Mahi Shrine property southwest of the Richard E. Gerstein Justice Building.
Sheehan, Newman and McGlynn also helped close on the loan from New York-based North Star Realty Finance Corp. The borrower is River Landing Development LLC, led by Coralee Penabad and Andrew Hellinger, which purchased the property in April.
The need for bridge financing arises because institutional lenders will generally not provide funds for retail-focused projects unless they have more concrete than letters of intent in place for leasing agreements. O’Grady said River Landing is “about 65 percent preleased with big-box credit tenants.”
“We have a strong relationship with lenders that do this kind of stuff,” O’Grady said.
The loan includes options that would convert the debt to preferred equity.
Quote: “Bridge loans on land are always in demand,” O’Grady said. “However, as the market is maturing, the landowners are not necessarily going to allow people to sit on land under contract for a long time.”
Background: O’Grady is senior managing director at Cohen Financial. Sheehan, Newman and McGlynn are part of the equity practice.