$53M Refinancing for Mayfair in the Grove Follows Revamp to Creative Office Space

The owner of the three-building Mayfair in the Grove in Miami’s Coconut Grove’s has secured a $53.1 million loan in the second refinancing closed by a Delray Beach broker on the property .

The 281,066-square-foot property is dominated by offices but also has some retail, six apartments and underground parking. Two buildings are on one of the Grove’s main streets, Grand Avenue, west of Mary Street, and the other is a block away on the northwest corner of Florida Avenue and Rice Street.

Owner Whalou Properties bought the property in 2010 for $37.8 million, according to the Miami-Dade County Property Appraiser’s office.

A West Palm Beach property management company took out an acquisition loan and reached out to Dockerty Romer & Co.’s Craig Romer when it refinanced the mortgage a few years later.

The owner turned to Romer again to refinance the loan. Romer, who is principal of the commercial mortgage brokerage, worked with director Chris Romer to close the latest loan April 11. The Romers are cousins.

“They paid off an existing mortgage,” Craig Romer said. “Then they returned a portion of the investors’ equity.”

Guggenheim Partners, a New York-based global investment and advisory company, issued the 10-year, fixed-rate loan at an undisclosed rate.

“It’s not really a loan that’s being done for the purpose of a whole big renovation,” he said. “That’s been an ongoing thing for really the last several years since the current ownership acquired the property.”

The Mayfair in the Grove has a storied past that includes ups and downs, and it was Whalou that pulled the property out of a recent low when both the occupancy and foot traffic were dwindling. The property was developed in phases from 1977 to 1982.

“Originally when the Mayfair was designed and developed, it was really kind of primarily an entertainment and retail center — movie theater, bars, nightclubs, retail tenants. Since Whalou has taken control and ownership of it, they have really converted those uses into an office use,” Romer said.

The owner has upped occupancy from the mid-60s to the current 94% by abandoning the original emphasis on retail and converting many shops to offices.

“There was probably a pent-up demand for that type of space in that market, and they capitalized on the demand in the market,” Romer said.

The Mayfair offers outside-the-box office spaces that give tenants an alternative to the traditional office tower in downtown Miami or a suburban office complex.

In a way, Whalou capitalized on the Grove’s hip, artistic vibe, recreating with creative interiors preferred by creative companies.

Digital marketing company Sapient Technologies is one of the tenants.

“You go in their space, and it’s kind of cool and retro and appeals to a certain type of user,” Romer said. “Same thing with the Sony Music space. That’s their headquarters for their Latin America division. So you go in that space and … you wouldn’t find that type of a tenant and that type of a use in just a typical suburban office building.”

Other office tenants include General Electric and Regus Office Suites.

The alternative office space posed some challenges for the Romers.

“Several lenders just weren’t comfortable with what I would call ‘the asset class,’ that type of an office project. So that presented a challenge,” Craig Romer said.

The pool of lenders was smaller because of this, he added.

The property still has some retail left, such as restaurants and cafes, but it’s doing much better as primarily office space.

“They’ve really transitioned it from sort of that original entertainment and retail-type use to more of an alternative office use. They have done very well and created significant value,” Romer said. ”It’s much more dominant as an office use and, over time, that will continue to trend this way, away from any retail use and more to an office use.”