Ocean Land Investments, a Boca Raton, Fla.-based developer, has recruited United Capital Markets to underwrite and arrange a construction loan, possibly as much as $5 billion, to redevelop a 43-acre parcel of oceanfront land in Florida.
The development, yet unnamed, is expected to yield up to five million square feet of multifamily housing and generate between $4 billion and $5 billion in condominium sales. Plans for the upscale oceanfront project also call for a world-class hotel, a marina with more than 100 yacht slips, restaurants and high-end retail, which will be developed in phases over 10 to 15 years.
A syndicate of large bank loans usually finances large-scale mixed-use projects such as this. Although United Capital Markets is still working out a firm plan for the financing, initial plans include a revolving CMBS structure to finance the construction of several condominium towers on the site. Deposits collected from the presale of condo units could secure the construction loans, and be used to repay institutional investors. Over the life of the revolving deal, United Capital Markets could end up arranging $5 billion in financing for the project, said company officials.
"Through the United Capital Family of Companies, including our real estate and asset management affiliates, and our Wall Street partners, we bring a full suite of solutions to the table," said Devaney.
Also, United Real Estate Ventures, a sister company of United Capital Markets, holds a substantial equity stake in the project; another portion of the financing could be backed by appreciated property value as well as future residential and commercial unit sales, said officials at United Capital Markets.
"UREV is a significant equity partner in the development company," said John Devaney, founder and CEO of United Capital Markets. "It only made sense that my broker dealer would have handled a lot of the underwriting."
Other equity partners include Catalfumo Construction and Development, Trump Hollywood, of Hollywood, Fla., and The Related Group of Florida, whose New York-based affiliate, The Related Cos., developed the Time Warner Center, midtown Manhattan's famed mixed-use project.
Currently, about 500 mobile home owners occupy the area known as Briny Breezes. It is the only such park on beachfront property in Florida and lies between the Atlantic Ocean and the Intercoastal Waterway. Established in 1963, the private community's 488 shareholders recently voted to approve a $510 million buyout offer from Ocean Land Investments, Inc., the largest transaction on record with the Palm Beach County's appraiser's office, according to published reports. The deal also turned out to be a profitable one for Briny Breezes residents, each of whom will receive an average of $1 million from the sale proceeds, according to the PalmBeachPost.com.
Ocean Land Investments expects to close on the land sale by mid-2009, Devaney said.
Before United Capital Markets hashes out all of its plans to finance the Briny Breezes redevelopment, the company plans to close on a $50 million working capital facility for the project by midyear. The proceeds from that will pay for heavy architectural site work prior to construction.
The Briny Breezes transaction marks a significant milestone for the United Capital companies. Over the last four months, it has purchased about 735 acres of land in Florida's Martin County and Palm Beach County for more than $100 million.
"This will be our first real estate syndicate deal," Devaney said.
Aside from its most recent real estate ventures, the United Capital companies recently launched United Capital Asset Management, a firm that manages hedge funds with $600 million in assets.
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