Developer's Attorney: Landing $161M Apartment Loan Was Like Quarterbacking

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Developer PMG secured $161.5 million to build a 49-story downtown Miami apartment tower after its Saul Ewing Arnstein & Lehr attorneys worked through the deal’s complexities.

PMG, which has offices in Miami and New York, and equity partner Greybrook Realty Partners, based in Toronto, Canada, obtained the loan for the 646-unit 400 Biscayne apartment tower. The deal closed Sept. 11.

Centennial Bank, based in Conway, Arkansas, was the senior lender, and Square Mile Capital Management LLC, an investment management company based in New York, was the mezzanine lender.

The transaction was complicated mainly because it involved several groups with varying interests, said attorney Luis Flores, who led the legal team that closed the loan on behalf of the developers.

The parties involved were PMG, Greybrook, Centennial, Square Mile and First United Methodist Church of Miami Inc. The church is getting a 22,000-square-foot space in the tower under a sale agreement crafted when the church sold the 1.15-acre site to PMG.

“How do you satisfy all of these different parties that have expectations/? It’s almost like I am quarterbacking a football team,” said Flores, vice office managing partner in Miami. “I have these multiple players.”

Expanding on the football analogy, he said, “I’ve got wide receivers, running back, tight end, my different lenders, my equity partner, my fullback and everybody wants to touch the ball. Everybody wants to score a touchdown.”

First United Methodist sold the site to PMG and Greybrook in January 2018 for $55 million. The church, temporarily based at 245 NW Eighth St., is getting a three-story sanctuary, chapel, fellowship hall, classrooms, offices and basketball courts at 400 Biscayne. Its interest had to be reflected in loan agreements.

“They have a say in how this project evolves,” Flores said. “So they have to sign acknowledgement agreements to the lenders because they have a vested interest.”

The rest of the Saul Ewing team that worked on the deal is spread across the U.S. with associate Teo Victoria being the only other attorney based in Miami. Other attorneys involved were counsel Randall Kulat in Chicago, partner Richard Carroll in Wilmington, Delaware, partner Andrew Segall in Baltimore and associate Alex Ferraro in Pittsburgh.

Flores declined to disclose the loan interest rate and term, saying only that the the loan is through construction and an additional time until the project is stabilized. Completion is set for 2021.

The building will rise steps from PMG’s and Greybrook’s 464-unit X Miami apartment tower, which opened last year. The development duo is planning a third nearby project, a Waldorf Astoria hotel-condo at 300 Biscayne Blvd. that could reach 100 stories. They also are developing a 650-unit apartment tower in downtown Fort Lauderdale.

PMG’s recent wave of apartment projects is a switch from building luxury condominiums such as the 180-unit Echo Brickell at 1451 Brickell Ave.

It’s tapping into healthy demand for rentals and targeting millennials by adding outside-the-box amenities.

“They have really cornered a market that is extremely attractive to young professionals,” Flores said.

The new tower will have a public lobby lounge and restaurant, co-working spaces, gym, group fitness classes, pool deck, outdoor lounge and bike storage.

About 51,000 square feet will be commercial space, and about 20% of the units will be co-living units, meaning a resident rents a bedroom and shares a kitchen with others.

The Saul Ewing team has represented PMG in most aspects of its deals in the latest real estate cycle. Flores and others represented PMG in buying the church and hammering out an agreement with its leaders. He and others at the firm also worked on various aspects of X Miami.

Overall, Saul Ewing attorneys have represented PMG in land acquisitions, agreements with equity partners, financing, refinancing and condo sales.

“PMG’s business is my business,” Flores said. “That’s what it comes down to.”

Related stories: 

X Miami $106M Loan was ‘David Versus Goliath’ Battle for Developer’s Attorneys

Saul Ewing Closes $55 Million Downtown Miami Church Deal

Developer PMG Joins Residential Wave in Miami’s Wynwood Arts District