Arnstein & Lehr Dealmakers Highlighted in Daily Business Review Article
Dealmakers: Luis Flores, Rebecca Sarelson, Anthony Kang, Joshua Atlas and Amanda Shear
The Deal: The Arnstein & Lehr team represented developer Property Markets Group in obtaining a $133.7 million senior construction loan for the 47-story Muse Residences luxury condo project at 17141 Collins Ave. in Sunny Isles Beach.
The lender is Los Angeles-based Canyon Partners Real Estate, which has made 14 loans in South Florida over the past five years. The Muse financing closed on Aug. 5, and groundbreaking took place the next day.
Details: Some of the attorneys involved in the deal have represented Property Markets Group since the Manhattan developer first entered the South Florida market about 10 years ago. At that time, they were with a Coral Gables boutique that merged with Arnstein & Lehr in 2009.
"Like most of the developer clients we represent, it evolved from condominium representation," said Luis Flores, who led the team. "Their first question is, who in the market delivers condominium projects from start to finish? That ends up being the opening for us as a law firm to be able to represent these developers in the full palate of what they need."
The Muse deal marks the second time PMG has obtained financing from Canyon. Last year, Canyon provided a $124 million senior construction loan for Echo Brickell, PMG's 180-unit tower at 1451 Brickell Ave.
"That turned out to be a very successful relationship," said Flores, who also represented PMG in that deal. "They decided to repeat that success."
Muse had obtained a $167.6 million construction loan from Guggenheim Commercial Real Estate Finance last year.
But PMG, whose joint venture partner in Muse is S2 Development, had not drawn down on the Guggenheim loan. That raised the question of whether they needed such a large amount and if they could get better terms, Flores said.
"What I am seeing now is some alliances are forming between developers and lenders once they have a successful experience together, and they see that the business culture for the lender matches the business culture for the developer," he said.
After the decision was made to work again with Canyon, the Arnstein & Lehr team swung into action. Their work included producing condominium documents, construction agreements with the contractor and subcontractors, and corporate documents.
In his role as team leader, "you have to make sure everybody on your team is meeting the lender's expectations and no one gets frustrated and it is a positive outcome for everyone because, at the end of the day, both parties really want to walk away from the table popping champagne," he said.
Their previous experience with Canyon helped streamline the process and shaved about a month off the time it took to complete the deal, he said.
But there were differences between Echo Brickell and Muse. Muse is on oceanfront property and in a different city.
"The challenge was proving to Canyon that this project, like Echo Brickell, would be a success even though you were changing markets from Brickell to Sunny Isles," he said.
It wasn't a tough sell. The Muse will have 68 units with unobstructed ocean views, and the two- to five-bedroom units will be move-in ready. Units will start at 2,360 square feet, and there will be two full-floor penthouses with service suits. Prices start at $1.9 million.
Purchase contracts require a 20 percent down payment on signing, 10 percent at groundbreaking, 10 percent one year later and 10 percent on the second anniversary of groundbreaking.
Other PMG projects in South Florida include 95th on the Ocean near the Bal Harbour Shops, the 190-unit Echo Aventura, 22-story Mei Miami Beach on Millionaires' Row and 24-unit Sage Beach in Hollywood.
PMG has another Miami project in the works. Working with Arnstein & Lehr attorneys, it purchased property at 300 Biscayne Blvd. for $80 million last year. Exact plans for it have not yet been announced.
Flores' long list of deals includes about a half dozen in Sunny Isles Beach. Besides Muse, they include St. Tropez Towers and Parque Towers.
Comment: "You go to lenders like Canyon because they can think like developers," Flores said. "That is why they were such a good fit" with PMG.
Background: Team leader Flores, chair of the firm's Florida commercial practice group, was real estate/corporate counsel for the deal. Rebecca Sarelson served as corporate counsel, Anthony Kang as real estate counsel, and Joshua Atlas as construction counsel. All three are partners in the firm. Associate Amanda Shear was condominium counsel. All except Atlas, who is in the firm's West Palm Beach office, practice in the Miami office.
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By Mary Hladky, Daily Business ReviewReprinted with permission from the //15 edition of the DAILY BUSINESS REVIEW Copyright 2015 ALM Media Properties, LLC.