The Marlin Hotel in South Beach has secured $8.415 million in financing to fund the renovation and expansion of the property into a 32-room luxury boutique hotel, The Real Deal has learned.
Grandbridge Real Estate Capital’s Adam Lipkin arranged the loan for MRK Investments, which paid $9.5 million for the 14-room property in April.
MRK plans to add 18 rooms to the historic hotel, and said it is now close to finishing the first phase of improvements. That includes opening a new Asian restaurant, BaZi, to be operated by the team behind Macchialina Taverna Rustica restaurant in Miami Beach, according to a release.
The Art Deco hotel, at 1200 Collins Avenue, was built in 1939 and has roots in the music industry. It was the first hotel owned by Chris Blackwell, who founded Island Records — the label that signed Bob Marley. It also was previously home to a recording studio, where Aerosmith, Jay Z and Pharrell Williams, among others, have recorded their music.
The building was designed by Miami Beach architect L. Murray Dixon, who also worked on The Temple House in South Beach.
Lipkin declined to name the new lender, but said the seven-year loan’s terms include an interest rate of LIBOR plus 2.75 percent with a 3.25 percent floating-rate floor and option for 4.5 percent fixed rate. The loan has a 36-month interest-only period followed by a 25-year amortization over the remaining four years, according to a release.
MRK had received $4.75 million in seller financing when it acquired the hotel. The new loan allows MRK to pay off the seller financing at a discount and refinance the property. It also enables MRK to recoup more than $1 million the company invested on hotel improvements within a few months of the loan closing, according to the release.
“There are still value opportunities in the Miami Beach hospitality market,” Lipkin said in a statement. “A wide gap exists between the current rates offered at high-end boutique hotels compared with the older Art Deco product.”
The project is scheduled for completion in November 2016.