Market Insights

Who’s Lending in Miami Amid Signs of Lower Risk Appetite?


The loan-to-value ratio for commercial real estate has been declining in Miami-Dade County since 2015, signaling a lower appetite for risk as the commercial real estate industry seeks to reduce its exposure.

LTV for Miami-Dade County dropped from 63% in 2015 to 57% as of June 30 this year, CrediFi found in an analysis of a county loan sample driven by commercial mortgage-backed securities.

Hurricanes, of course, are one source of risk, with damage affecting commercial properties as well as residential ones. For instance, Property Markets Group’s 300 Biscayne Blvd., which received $80 million in financing from Arkansas-based Centennial Bank last year, was hit by a crane during Hurricane Irma in September while undergoing redevelopment as a luxury apartment tower.

There’s also the nationwide risk posed by the widespread closures and bankruptcies sweeping through the retail segment.

Florida is among the states where chains including Sears, Macy’s, J.C. Penney, Teavana and HHGregg have been shutting down stores. Yet there is some good retail news in Miami too.

Take the $150 million loan originated last year by Switzerland’s UBS and Goldman Sachs for the open-air shopping, dining and entertainment center The Falls, a Simon mall at 8888 SW 136th St. that features covered walkways surrounded by a waterscape and tropical foliage. The loan has since been securitized.

And there are several new retail and restaurant locations coming to Miami’s Coconut Grove neighborhood, including a Le Pain Quotidien bakery-restaurant at 3425 Main Highway, which was financed by a $25 million loan originated by Bank of America in Q1 of this year. New York-based insurance provider American Home Assurance, meanwhile, originated a $27 million for an IHOP at 12755 SW 88th St. early this year.

Office loans included a $109 million origination in Q2 by MetLife for 1221 Brickell Ave., the home of companies including the U.S. division of Brazilian bank Banco do Brasil, which signed a deal this year to move its headquarters to the Brickell Avenue office tower.

Multifamily financing in the first six months of this year was provided by lenders including Prudential, which originated a $41 million loan for Milagro Coral Gable Apartments at 2263 SW 37th Ave./Douglas Rd. and commercial real estate finance company Walker & Dunlop, which originated a $31 million Fannie Mae loan for Sunset Gardens Apartments at 7400 SW 107th Ave.

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