No Comments

Gateway At Wynwood Gets $113 Million Refi

Berkadia has arranged a $113 million loan to refinance Gateway at Wynwood, a 220,000-square-foot, Class A office and retail project designed by Kobi Karp in Miami’s Wynwood District. Senior Managing Director Charles Foschini, Managing Director Christopher Apone and Associate Director Robert Iudice of Berkadia South Florida arranged the loan on behalf of New York-based Rose & Berg Realty Group LP (“R&B Realty”), a family-owned real estate management, leasing and construction company. The property is leased to a diverse tenant roster including BoConcept, OpenStore and Veru.

Berkadia also secured the original construction loan for the project in early 2020 through lender 3650 REIT.

This time, A10 Capital, a vertically integrated, full service commercial real estate lender, provided the three-year loan, with two, one-year extension options.

“The volatility in the lending environment made this office refi transaction challenging, but our relationships with the lending community and the strength of this asset helped us secure one of South Florida’s largest office refis in recent times,” said Foschini. “We are proud to have played a key role in helping our client move forward with its plans as it continues to attract strong office and retail tenants to the trophy property in the highly desired Wynwood area north of downtown Miami.”   

Designed by ‘starchitect’ Kobi Karp, Gateway at Wynwood is located at 2616 North Miami Avenue, in the epicenter of Miami’s Wynwood corridor, one of the most desirable 24-hour submarkets in the nation. It features approximately 220,000 square feet of Class A office space encompassing roughly 27,700 square feet of space on each of its floors. It features a private rooftop terrace with panoramic views, as well as 512 on-site parking spaces. The project also features 24,000 square feet of retail space and is centrally located at the convergence of the Midtown and Wynwood submarkets’ high-traffic retail corridor, with immediate access to thousands of new residential units.

Gateway at Wynwood is just minutes away from Miami’s Central Business District (CBD), Midtown, Edgewater, the Arts and Entertainment District, Brickell, Miami Beach, and a variety of mass transit options including I-195, the Miami Metrorail and the new Brightline commuter rail line connecting Miami to Fort Lauderdale and Palm Beach.


No Comments

Berkadia’s Charles Foschini On The Florida CRE Market

Berkadia’s active presence in Florida’s CRE debt scene owes no small part to Charles Foschini, who co-heads its originations in the state from the company’s office in downtown Miami. The University of Miami graduate, who spent nearly two decades at CBRE, has led some of Berkadia’s biggest Florida deals since he joined the company in 2016. Among them is a $121.5 million acquisition loan that helped Parkway Properties and Partners Group buy a set of six Tampa office buildings late last month. The firm has also been a key player in multifamily capital markets, putting it on the cutting edge of Florida’s changing demographics.

Foschini spoke with Commercial Observer by phone to discuss everything from the Sunshine State’s sunny skies to its business climate, transportation struggles and even its school system.

Commercial Observer: In a nutshell, what are your responsibilities at Berkadia?

Charles Foschini: I co-lead Florida operations in both a management and production role. I focus on a group of clients [for whom] I do a fair amount of their business … and that runs the gamut of any of their capital-market needs, from permanent loans to construction loans to bridge loans.

Florida’s shown a lot of momentum lately — throughout the state, but particularly around Miami. What do you see as some of the driving factors?

When I studied at the University of Miami, it wasn’t lost on me that the temperature was 78 degrees all the time. It’s a very enviable place to live, work and play. But you have to layer over that that our last two governors [Ron DeSantis and Rick Scott] have been very pro-business. We’ve had a lot of growth in the medical sector and a lot of employment growth. It’s not just a tourism economy anymore.

Berkadia has been a force behind some significant multifamily debt deals in the state this year. How is the state’s apartment market evolving?

We’re seeing unrelenting population growth and immigration to the state, and we’re seeing a continued evolution of employment. Some of the bigger submarkets have a lot of transportation challenges. Those factors have formed a confluence to create a need for multifamily near where people are going to work. That’s created a lot of new developments in suburban and urban markets. What’s more, the individual credit consumer has been harder to come by: Not as many people have been buying houses in this cycle. That has created a renewed demand for lifestyle residential, where people can get all the amenities that you couldn’t frankly afford or justify in your own home.

Reforms to Fannie Mae and Freddie Mac have been a never-ending discussion in Washington. Do you have any concerns?

Fannie and Freddie have been market leaders in multifamily finance, and they have very healthy allocations for 2020. I expect that to continue. But having said that, the economy and capital market side is extremely vibrant. You have CMBS lenders, banks, life companies and debt funds, all of which are available to a borrower in any given transactions. They’ll continue to have a significant market share in multifamily, too.

You mentioned some transportation challenges. Do you think the state’s urban areas need to become more commutable?

The demand for a live-work-play lifestyle is fueled both by millennials as well as those folks that are selling homes and moving back to the cities. They want to have everything in one place. The new Brightline train [which now connects Miami and West Palm Beach, Fla.] is so much more convenient than it was 20 years ago when you had to get in your car and commute. As South Florida and particularly Miami evolve as 24-hour cities, that means you have 24-hour traffic. Mass transit is a solution to that.

You mentioned that the state’s politicians have fostered a business-friendly reputation. How specifically has that helped drive new investment in the state?

One of Berkadia’s technology tools looks at IRS tax payments from one year to another. You can pick somewhere in the Northeast — anywhere in the Northeast — and look at the tax migration. For example, if you paid your taxes in 2018 in Connecticut and then in 2019, you paid your taxes in Florida, that net migration has been measured, potentially, in billions of dollars, and that’s continuing. In many cases, the Northeast is losing out to where it’s easier to live, easier to do business and where overall taxation on the same work dollar is lower. Florida is a huge beneficiary of that. Then there’s the fact that submarkets like Orlando and Tampa have very, very nice campus-style offices that rent for a lot less per square foot.

People often speak of talent pools as one of the deepest strengths of gateway cities like New York and L.A. How is Florida doing on that front?

I would say it’s evolving, and not fast enough. Our private school systems are exceptional. The Florida state schools are getting better. Five years ago, most of them didn’t have real estate programs, but now they all do. But the public school systems here for primary grades are not evolving fast enough. As our population grows, they’re not evolving at a pace to support that population. So that’s a challenge that municipalities continue to address.


Source:  Commercial Observer

No Comments

Finding Opportunities In Miami’s Multifamily Market

Employment and population growth continue to fuel Miami’s multifamily market across all segments.

With more than $3 billion in originations in South Florida and 146 loans granted in 2018, Berkadia is one of the region’s largest commercial mortgage lenders.

As part of its expansion in Florida, Berkadia hired Charles Foschini as senior managing director back in 2016. In an interview with Multi-Housing News, Foschini talks about Miami’s current multifamily investment trends and how new supply will impact the market. He also shares his predictions for the metro’s multifamily landscape for the next 12 months.

Foschini: Miami’s market is incredibly vibrant, but it’s also unlike most other major metro markets in that we have so much wealth imported here from other parts of the country and flight capital from around the world. That said, there are three distinct changes we’ve seen in the past two years.

First, there’s extraordinary demand for multifamily product not only as a result of strong job and population growth but also due to the limited inventory of affordably priced single-family homes. A shortfall of homes priced at $250,000 or below has prolonged renting for many would-be first-time homebuyers and those who lost their homes during the housing market collapse of 2008. At the same time, more people across the age and income spectrum—from Millennials to retirees—are renting by choice. They like the choice amenities many new developments offer and the worry-free lifestyle of renting.

Lastly, there has been an extraordinary amount of urban infill development in this cycle, not just in Miami’s downtown, although that’s practically unrecognizable from just five years ago but also in other urban submarkets. We’ve seen an incredible amount of new multifamily development directly on or adjacent to mass transit rail lines. In a city with incredible traffic congestion, walkability is a huge draw.

Construction is expected to mark a new cycle high with more than 16,000 units delivered by year’s end, according to Yardi Matrix. How will the new supply impact the Miami market?

Foschini: The new supply will be absorbed. Demand is still incredibly strong.  More than 900 people are moving to Florida every day and our population is expected to soar to 22 million over the next three years. Absorption continues to outpace deliveries by about two to one in South Florida at large. The reality is that Miami is really a confined space, a peninsula. There are only 13 miles between the Everglades to Biscayne Bay and that’s all the land there is.

There is a need for new rental product in just about every submarket to lower the impact of the car and lessen commutes. In some areas like the Central Business District, Brickell and Miami Beach, you have all the elements of a true live-work-play environment already in place, but in emerging areas of the city that don’t have a direct tie to our rail lines, the easiest way to do that is to add high-quality residential communities near centers of employment—in submarkets like Doral or North Miami for example.

Which Miami submarkets are most attractive for investors and developers? Why?

Foschini: Miami is so dense that any area can be successful. The key is finding land at a value where you can hit your return on cost and make a profit. With that in mind, developers are finding some interesting deals in neighborhoods that are still technically in the city, but west of Interstate 95—neighborhoods like Allapatah, Opa-Locka and even Hialeah.

How is investment in the metro responding to the current economic environment?

Foschini: It’s extremely healthy—our commercial sectors are really thriving. In fact, ownership in the CBD has become increasingly institutional and the level of long-term investment in Miami from institutional and global capital is impressive. There are several high-profile, long-term infrastructure projects that are going to create new jobs and demand for housing. Absorption may slow as a result of all the new deliveries, but projects are filling up over time and most are hitting their rent and investment objectives.

What can you tell us about financing multifamily projects in Miami? How has the process changed in the past few years?

Foschini; In this cycle, lenders have maintained their discipline and seasoned developers have come to the table with more equity and more patient capital than we’ve seen in the past. That has allowed for more projects to get off the ground and have the breathing room to lease up. The market has no shortage of capital in both a recourse and non-recourse format. Banks, life companies and—on larger deals—debt funds have all stepped in to bring projects out of the ground.

As developable land in South Florida becomes scarcer, how do you see construction activity going forward? What about the cost of construction financing?

Foschin: Land is scarcer, that’s true, but there is no shortage of opportunity. As the highest and best use of land evolves, we will see more existing projects such as shopping centers and small offices come down to make way for redevelopment as multifamily. It is my belief that lenders’ spreads have been higher than in previous cycles and they were able to get away with it because the baseline indexes were so low. I believe that if the indexes trend up, competition will push spreads down and the environment, at least on the debt side, will remain favorable.

What are your overall market predictions for the next 12 months?

Foschini: Existing projects will continue to lease up and new projects that are well thought out and have well-capitalized and experienced operators, will get funded. Investment sales activity will be slower—that’s a given since a lot of product has been picked over and traded in this cycle—but there will still be activity from developers and investors who are creative and capitalize on things like access to mass transit, Opportunity Zone incentives etc. Overall, the demand from the investment community for product in Miami and South Florida as a whole will remain strong.


Source:  Multihousing News

© 2023 FIP Commercial. All rights reserved. | Site Designed by CRE-sources, Inc.