Bilzin Sumberg Attorney Closes $88.6 Million Loan
Dealmakers: Martin A. Schwartz, Partner in the Real Estate Group at Bilzin Sumberg
Transaction: Representation of the lender in restructuring an $80 million loan and providing an additional $8.6 million in financing for a condo/commercial property in downtown Miami
Borrowers: 1040 Biscayne Associates, Ltd. and Beautymed USA, Inc.
Lender: Mellon United National Bank
Total Loan Amount: $88.6 million
Closing Date: June 15, 2007
Details:
Bilzin Sumberg attorney Martin A. Schwartz represented the lender in the negotiation and structuring of an $88.6 million financing on property located at 1040 Biscayne Boulevard in downtown Miami. The property, known as Ten Museum Park, has a 50-story mixed use building containing 200 residential units and a commercial portion consisting of offices, a spa and retail.
The existing loan for $80 million on the entire project was bifurcated into a $79 million piece and a $1 million piece, each secured by a newly created severed mortgage. The commercial portion of the project was thereafter released from the $79 million mortgage and the residential portion was released from the $1 million mortgage. The net effect of this was to render the residential portion subject only to the $79 million mortgage and the commercial portion subject only to a $1 million mortgage. The commercial parcel was then transferred to a related entity, 1040 Biscayne Commercial LLC ("Commercial"), subject to the $1 million loan.
A second loan for $8.6 million, which was guaranteed by Commercial, was made to Beautymed USA, Inc., a corporate entity related to the principal borrower. Commercial secured its guaranty by placing a second mortgage on its property.
"Though the restructuring of the loan was rather complex, it ultimately makes more sense for all the parties involved," Mr. Schwartz explained. "Since the residential portion is a condominium and the commercial portion is not, the commercial portion will be retained by an affiliate of the developer and leased out but the residential portion will be sold off in individual sales of condominium units. The condominium developer has already commenced closings on residential unit sales which will finance the repayment of the $79 million residential loan in full, thereby satisfying the amount of the mortgage."
About the Borrower
A principal of 1040 Biscayne Associates, Ltd. is Gregg Covin.
About the Lender
Mellon United National Bank is a subsidiary of Pittsburg, Pennsylvania-based Mellon Financial Corporation.
About Bilzin Sumberg
Bilzin Sumberg is a commercial law firm based in Florida. The Firm’s core practices include Business Finance & Restructuring, Corporate, Environmental, International, Land Development & Government Relations, Litigation, Real Estate, and Tax. For more information, please visit bilzin.com.
