From left ,HFF executive managing director Manny de Zárraga, senior managing director Chris Drew, managing director Jim Dockerty and director Matthew McCormack, all based in Miami. From left ,HFF executive managing director Manny de Zárraga, senior managing director Chris Drew, managing director Jim Dockerty and director Matthew McCormack, all based in Miami. Courtesy photos

The mammoth $550 million financing package for Bal Harbour Shops was a challenge to obtain because the longtime mall owners wanted a single lender and not a syndicate.

Most big loans are issued by multiple investment banks to spread the risk. But an HFF team succeeded in meeting the Whitman family's needs.

“We were able to find the needle in this one and provide them with a really good execution,” HFF's Chris Drew said.

MetLife Investment Management, the institutional asset manager for New York-based insurance holding company MetLife Inc., issued the loan. But it took Drew and his Miami team a year to secure MetLife as the lender.  

“It's a long time. That's for sure,” he said, noting other complications extended the closing to July 2.

Drew, an HFF senior managing director, worked with executive managing director Manny de Zarraga, managing director Jim Dockerty and director Matthew McCormack on behalf of Whitman Family Development, working with the family for the first time.

Whitman Family Development was founded by the late Stanley Finch Whitman and is led by Randy Whitman and Matthew Lazenby. The company obtained final approval for expansion from the Bal Harbour Village Council in 2017.

Expansion

Bal Harbour Shops, which opened in 1965 on 17 acres at Collins Avenue and 97th Street, is among the most upscale malls in the U.S. and one of top grossing in the nation based on size.

It's anchored by Saks Fifth Avenue and Neiman Marcus and has over 100 luxury brands, including Chanel, Gucci, Van Cleef & Arpels, Tiffany & Co., Salvatore Ferragamo and Valentino.

The 463,114-square-foot mall will add over 340,000 square feet in stores and a garage slated for completion in 2023.

On tap is a 57,414-square-foot flagship Barneys New York luxury department store connected with the existing mall by a new three-story promenade. This Barneys is different from the existing outlet location at Sawgrass Mills in Sunrise.

“This is a true Barneys department store that the Southeast has never had,” Drew said.

A new entrance will be built on the northeast side of the property, and Neiman Marcus will grow by 20,000 square feet.

Loan Ins and Outs 

The loan paid off an existing $150 million expansion financing obtained from SunTrust Banks Inc. and spent on site preparation, Drew said. The remainder will pay for the $400 million construction cost.

This is an eight-year loan with a fixed interest rate for the $150 million tranche and a floating rate for the $400 million tranche.

Other complexities included the eight-year loan term, which compares with a typical three years for construction financing, and opposition from some Bal Harbour residents and at least one council member. The HFF team also had to structure draws.

“Just the structure of the loan, the length of time and the dollar size I think were all complications,” Drew said. “A lot of it hinged on approvals required from the village of Bal Harbour. That delayed the process a little bit. Additionally, there were complications to just structuring this loan. We had to finalize draw schedules. We had to finalize construction timelines. There were certain pieces as it relates to tenancy that the Whitmans had to work through. There were a lot of moving pieces.”

Arun Singh, MetLife Investment Management vice president for the Southeast U.S., and director Jay Gadsby originated the loan.

Whitman Family Development was represented by Katz Barron shareholders Erica English, Michael Katz and Howard Friedberg as well as senior associate Erin Auble.

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Bal Harbour Shops Mall Expansion Gets $550 Million Financing