JLL senior director Scott Wadler and director Jesse Wright, both in Miami. Courtesy photos

A mammoth $300 million construction loan for the 830 Brickell office tower — likely the biggest financing of its kind statewide over the past decade — was landed after JLL brokers overcame challenges to the deal.

The 56-story tower will be a 1 million-square-foot Class A trophy high-rise in Miami's financial district with 615,000 square feet of rentable space due in the first quarter 2022.

The four-year, floating-rate construction loan was secured through investment adviser MSD Partners LP. MSD was founded by partners in Dell Technologies founder Michael Dell's MSD Capital LP, which manages his capital.

A JLL team based in Miami and New York closed the loan on behalf of the developers July 30. Leading the deal locally were senior director Scott Wadler and director Jesse Wright. They worked with managing director Scott Aiese and associate Alex Staikos in New York.

The JLL team essentially had to get lenders comfortable with the project's novelties. The development team is new to market. Brickell hasn't seen a new office tower come online for eight years. And there were other unusual aspects.

The developers are Miami-based OKO Group LLC, led by chairman and CEO Vladislav Doronin, and real estate investor Cain International, with offices in London, New York and Los Angeles.

Doronin previously led Moscow-based real estate company Capital Group with a portfolio of 71 high-end residential and commercial projects, and he also led international luxury resorts company Aman Resorts. Cain International has real estate investments in the U.S. and Europe.

Their U.S. projects are the high-end 57-story, 249-unit Missoni Baia condominium in Miami's Edgewater neighborhood and the 47-story, 135-unit Una Residences tower in Brickell. Both are under construction.

"They are a very qualified development team, but they had experience building overseas. That was one of the challenges we were able to overcome," Wadler said.

Another obstacle JLL overcame is the perception of the Brickell market. It's a growing residential market so the team had to demonstrate pent-up demand for office space.

"The job market is an entirely separate item," Wadler said. "The job market and the market for employers here is totally separate."

This meant JLL had to convince lenders that there's enough demand to fill 830 Brickell, which is somewhat of a misnomer. 830 Brickell is under construction at 830 SE First Ave., which is a block west of Brickell Avenue and south of Tamiami Trail.

"Making the argument that there's economic demand for an additional 615,000 rentable square feet and that there are major tenants that are looking for that type of space is making the argument that Miami has added to the pie economically in Brickell and downtown," Wadler said.

830 Brickell is the first spec office tower in the financial district since the completion of 600 Brickell in 2011. The smaller Two and Three Brickell City Centre offices opened in 2016, but they were pre-leased before construction.

That means the market for big loans has been idle, Wright noted.

"There haven't been a lot of major office construction loan requests in Brickell or downtown over the last, call it 10 years," he said. JLL had to "reacquaint lenders with the office market with the idea of the pent-up demand. This was not necessarily a challenge, but it was part of the process."

Another deal aspect that wasn't truly a challenge but was still "part of the process": 830 Brickell will be a tall, skinny tower on just under an acre.

This came up in conversations with lenders since the smaller sites raise construction costs, Wadler said.

"I don't think it poses a danger from a construction perspective, but it's harder to develop in terms of staging the site, and overall construction costs tend to be higher for a tight site. These tall skinny towers that are getting built in Central Park South and projects like Echo Brickell that are built on less than acre, they tend to cost a little bit more than if there was an acre and a half to two acres," he said.

Other Records

Beyond the record-setting loan size, the construction cost also is setting a record, according to JLL.

"You could say this office tower is the most expensive office tower ever to be developed in Miami. Period," Wadler said. "Because construction costs back in 2009 and 2010 — hard costs and overall construction costs — were nowhere near where they are today. Obviously that's partly inflation."

The working estimate is $450 million, although JLL wasn't privy to the final figure.

The team marketed the loan for three months and took four months to close the deal after meeting with banks and alternative lenders like MSD.

The deal is an HFF legacy transaction that originated at HFF, which was acquired by JLL in July.

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56-Story Office Tower in Miami's Brickell District Gets $300M Construction Loan