MIAMI-Jones Lang LaSalle is marketing senior A bank notes secured by a first mortgage loan on Omni Center and Hilton Miami Downtown. The notes have a principal balance of $160 million.
JLL is working on behalf of Capmark Bank, a subsidiary of Capmark Financial Group, the Delaware-based bankrupt commercial lender. Capmark Financial Group filed for Chapter 11 bankruptcy in October 2009 with $21 billion in debt—but that filing did not include Capmark Bank.
The Omni Center and Hilton Miami Downtown is an office, retail and hotel mixed-use complex located at 1501,1645 and 1701 Biscayne Blvd. An Argent Ventures partnership has owned it since 2005. JLL Managing Directors Jubeen Vaghefi and Denny St. Romain, along with Jones Lang LaSalle Hotels Executive Vice President Gregory Rumpel, are leading the transaction.
“This property is institutional quality real estate in the heart of Miami that offers in-place cash flows,” says Vaghefi. “We expect to garner significant interest from investors all across the United States and in North and South America, who we believe will see its significant discount to replacement value.”
The Omni Center and Hilton Miami Downtown are located along Biscayne Boulevard, just north of Miami’s Central Business District. The large urban complex sits on 14 acres of land and offers about 1.5 million square feet of office, retail and hotel and a 2,700-space parking garage.
Since 2008, the property has seen about $66 million in capital improvements, including $26 million in the hotel and $40 million in the office. The total capital stack on the property included equity and an additional junior note position of $48.5 million, which is not included in this sale.
James Soble, a real estate attorney in the Tampa office of Ruden McClosky, tells GlobeSt.com Capmark has been active in note sales. He recently worked on a Capmark transaction that involved notes on a shopping center listed for about $100 million. The notes sold at market for about $25 million.
“There’s a lot of cash in the marketplace,” Soble says. “At the right price with the right property—and it has to be the right property—there’s a significant market out there for note sales. Potential buyers will look at the income streams of this property and see what that supports. That’s probably not $160 million in today’s market. I wouldn’t be surprised if this note sold for less than 50%.”
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