The Weekly Dirt: South Florida office distress on the horizon

Trouble is on the horizon for office landlords in South Florida, unlike the glitzy skyscrapers found on Brickell Avenue and other popular office submarkets. 

Owners who secured loans at historically low rates are challenged by the current lending environment. And older buildings in suburban areas are already suffering as tenants abandon those properties when their leases are up, Lidia Dinkova reports in our November issue. 

In South Florida, $130 million of commercial mortgage-backed securities and collateralized loan obligations are set to mature by the end of the year, and half of that debt is watchlisted, according to Trepp. Nearly $382 million is set to mature next year, and $319 million in 2025.

With CMBS debt, borrowers have fixed interest rates that shield them from rate hikes. CLO debt is the opposite: Floating-rate loans leave owners exposed and in search of rate caps and swaps.

Roughly half of that CMBS and CLO debt mentioned above has a debt yield below the 10 percent minimum that lenders usually require. Debt yield typically shows how fast a lender can regain its money if it has to foreclose.

Borrowers and lenders are “just at the beginning of seeing where all of this shakes out,” said lender Holly MacDonald-Korth of KDM Financial. Distress will be concentrated on Class C buildings, according to Alex Horn, of Miami-based bridge lender BridgeInvest. 

What we’re thinking about: Did Miami Art Week result in any major sales? What caught your eye (the most)? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Greg Norman’s ex-wife Laura Andrassy sold her Palm Beach home at 167 Dunbar Road for $24.3 million. HousePoor LLC, a Delaware entity tied to David L. Picket, president of the New York-based developer Gotham Organization, bought the property. 

Commercial: Boston-based Longpoint Partners closed on a 25-building industrial portfolio totaling 1.4 million square feet in Miami-Dade and Broward counties. Pennsylvania-based Seagis Property Group sold the properties. So far, deeds for nine buildings in Davie, Deerfield Beach, Fort Lauderdale and Lauderhill have been recorded, totaling $115.6 million. 

— Research by Adam Farence

NEW TO THE MARKET 

Billionaire hedge fund manager Dan Loeb is listing his waterfront Miami Beach estate for $45 million. Loeb paid $20 million for the six-bedroom, 14,000-square-foot mansion nearly three years ago. Developer Peter Fine built the property, which was designed by Choeff Levy Fischman and includes a roof deck, wine cellar, two-bedroom guest wing, an infinity pool, dock and home theater. Danny Hertzberg of The Jills Zeder Group at Coldwell Banker has the listing, according to Realtor.com. 

A thing we’ve learned 

Laser technology is helping scientists calculate the biomass of forests around the world. The more biomass, the stronger the buffer against climate change, according to the New York Times.

Elsewhere in Florida 

• Kodak Black, whose real name is Bill Kapri, was arrested last week on charges of cocaine possession in Plantation, according to NBC News. The rapper has dabbled in real estate investing. He acquired a pair of commercial buildings in Pompano Beach earlier this year.
• The Seminole Tribe launched sports betting at the Hard Rock Casino in Hollywood, alongside craps and roulette table games. Former Miami Heat superstar Dwyane Wade, Gloria and Emilio Estefan and Rick Ross attended the launch. The revenue share will result in $650 million to the state of Florida per year, the Miami Herald reports. 

ICYMI, the newly released trailer for Grand Theft Auto VI is definitely set in Miami and Miami Beach. The Miami New Times breaks down the South Florida easter eggs, including scenes in Wynwood, the Port of Miami, the Venetian Causeway, and, obviously, Ocean Drive.