A uniquely hands-on approach.
Project Financing
Madison has extensive experience both as a principal and agent in the development process.
In addition to managing the financing strategy and project presentation, our involvement can include analyzing the competitive market, project feasibility underwriting, and participating in other elements of the development process.
This hands-on approach allows us to optimize a project’s profitability by monitoring and adjusting in the context of the client’s overall goals. As compared to the permanent debt or stabilized asset sale markets, there is a significant inefficiency in development and value-add equity and debt markets. Supposedly comparable “market” structures can yield significantly different financial results to the developer.
We seek to bring efficiency to the financing process for the benefit of our clients.
CASE STUDY
Blue Luxury Condominiums
Summary of Property Data
Name of Property: Blue Luxury Condominiums
Type of Property: High-Rise Luxury Condominium
Location of Property: Miami, Florida
Number of Units: 330
Summary of Transaction Data
Transaction Type: Mezzanine and Construction
Pre-development Capitalization: $110 Million
Client: Hyperion Development Group
SUMMARY
Madison served as exclusive financial advisor for Hyperion Development Group, arranging construction and mezzanine development financing for Blue, a $110 million, 330-unit luxury high-rise condominium development. The project is located near the eastbound entrance to the Julia Tuttle Causeway, towering above Biscayne Bay in Miami, FL. The 36-story Arquitectonica designed tower enjoys Biscayne Bay frontage on an approximately two-acre parcel providing unobstructed panoramic views of the Bay and Miami Beach as well as the city skyline from each residence. The unique design creates a chic living environment through efficient floor plans in each of the 330 ultra-modern units. Unit owners will enjoy single loaded corridors, an excellent luxury finish package including European Style kitchens and GE Profile appliances and, appropriately, blue tinted floor-to-ceiling windows, doors and glass balconies. Community amenities include rooftop pools and gardens, a private spa and a waterside restaurant.
MADISON ADVANTAGE
The desired to close construction and mezzanine financing quickly, while minimizing cost of capital and eliminating personal recourse. Conversion of reservations to hard sales contracts had just begun and a general contractor had not yet been selected. Madison structured a nonrecourse loan with a single lender providing the mezzanine and construction loans in a single facility – without a syndication requirement. Early funding, simultaneous to the sales conversion process enabled the commencement of construction while the unit buyers’ sales contracts were finalized.
An aggressive blended interest rate and significant use of buyer second deposits provided for an exceptionally low overall cost of capital. Madison delivered the optimal project financing and execution for the high-profile condominium development, while minimizing execution time.