(From L to R) Katz Barron founding member Michael Katz, shareholders Erica English and Howard Friedberg, and senior associate Erin Auble. Courtesy photos

The luxury Bal Harbour Shops secured a $550 million loan to pay for expansion adding over 340,000 square feet to one of the nation's top-grossing malls based on size.

Florida's first flagship Barneys New York luxury department store will be added. The store will be different from the company's outlet location at Sawgrass Mills in Sunrise.

The Whitman family, which owns the high-end retail destination through its Whitman Family Development, secured the loan from MetLife Investment Management, the institutional asset manager for New York-based insurance holding corporation MetLife Inc.

Whitman Family Development, led by Randy Whitman and Matthew Lazenby, got final approval for expansion from the Bal Harbour Village Council in 2017.

The $550 million provides $400 million for the expansion project and $150 million to pay off an existing mortgage.

The Whitman family initially had secured the $150 million mortgage from SunTrust Banks Inc. to help pay for expansion but changed course.

“They needed to and wanted to finance the expansion, and it was not possible to keep the SunTrust loan in place and also obtain these additional funds,” said Erica English, who was part of the Katz Barron legal team that secured the loan. “The loan market just doesn't have an appetite for this sort of a structure. This is typical” and not unique to Bal Harbour Shops.

English, a Katz Barron shareholder, worked with founding member Michael Katz and shareholder Howard Friedberg as well as senior associate Erin Auble to close the loan on behalf of the Whitman family.

The Coral Gables law firm has been representing the Whitman family in mall-related business since at least the 1980s when patriarch Stanley Whitman reached out to Katz to help with a tenant issue.

The legal team worked through obstacles to close the latest loan. It put the ownership of the mall under a single-purpose company because of the high value of the financing, and it also obtained estoppels and subordinations required by the lender, according to a Katz Barron news release.

In recent years, the retail market has been abuzz about how brick-and-mortar retail would fare against growing e-commerce. Retail has been reinventing itself in part by offering experiential uses that shoppers can't find with online shopping.

Bal Harbour Shops, which has been open since 1965, has remained immune to changes in the retail market.

“In an environment where some doubt the future of brick-and-mortar retail, Bal Harbour Shops, as a destination property, demonstrates that location and performance will distinguish an exceptional property from those that are not,” Katz said in the release. “This loan and the expansion it enables set the course for sustaining Bal Harbour Shops' dominant position in luxury retail.”

Site preparations for construction have started, according to English.

The mall additions, including a garage, will open in 2023, although some new stores could open before then.