$12,800,000 Mixed-Use, Miami, FL

Overview

Commercial Lending Solutions arranged $12,800,000 in bridge financing for a mixed-use property in Miami's Wynwood Arts District. The asset combined ground-floor retail with upper-floor creative office space, and the deal presented a layered underwriting challenge that conventional balance sheet lenders were not equipped to handle on a compressed timeline. Finding the right capital source required knowing which lenders actually understood adaptive reuse fundamentals and which ones were still pattern-matching Wynwood to the CBD office distress narrative playing out in other markets.

The Deal

The sponsor was acquiring a mixed-use building in Wynwood with warehouse-era bones that had been repositioned to serve two distinct tenant bases: ground-floor retail catering to the neighborhood's restaurant, gallery, and nightlife corridor, and upper-floor creative office space occupied by media, marketing, and design tenants. The property was not yet fully stabilized at close. The sponsor needed proceeds sized off a blended stabilized value, not the in-place income, and needed an interest reserve structured into the loan to carry the asset through lease-up. The timeline was dictated by the seller, not the financing market, which ruled out a drawn-out lender education process.

The Challenge

The file had three distinct friction points, and any one of them alone would have slowed a conventional lender down. Together, they eliminated most of the obvious capital sources before the first call was made.

First, the rent roll was a blended story. Retail and office income don't underwrite the same way, and most lenders want one clean box to put a deal in. Ground-floor Wynwood retail exposed to restaurants and galleries reads as hospitality-adjacent to a conservative credit committee, while the upper-floor tenants, design shops and marketing agencies rather than law firms or financial services users, don't fit the office credit profile that regional banks and insurance companies are set up to underwrite. The result was a blended income stream that didn't map cleanly onto any single lender's existing framework.

Second, the office component arrived at exactly the wrong moment in the credit cycle. Regional banks that might have been reasonable candidates had pulled back from anything with "office" on the rent roll, a reaction to national headlines about CBD vacancy and loan distress that had almost nothing to do with how creative loft space in an arts district actually performs. Wynwood is not downtown San Francisco. But getting a credit officer to make that distinction on a fast timeline, with a partially leased building, was not a realistic path.

Third, the Phase I environmental report flagged the building's industrial history, which is not unusual for a warehouse conversion in a corridor that spent decades as a light manufacturing zone. Most balance sheet lenders doing their first look at a deal like this treat that flag as a reason to pass rather than a detail to work through. It added an underwriting layer that compressed the pool of viable lenders further.

Sizing was the other core issue. An in-place cap rate on a partially leased building would have produced proceeds that forced the sponsor to bring in dilutive preferred equity to close the gap. That was not acceptable given the business plan and the return structure already in place.

The Solution

The loan was placed with a bridge lender that had a genuine track record in adaptive reuse and arts district repositioning, not a lender that could be talked into stretching its box, but one where this kind of deal fit the core mandate. The distinction matters. A lender that is talked into something prices the discomfort into the structure in ways that show up later. A lender that actually wants the deal prices the risk correctly and executes.

Proceeds were sized off a blended stabilized value that reflected the property's income potential across both components at full occupancy, producing a loan-to-value in the range of 70 to 75 percent on a stabilized basis. The rate was floating, reflecting the bridge nature of the loan and the lease-up risk, with the lender pricing tenant concentration and remaining vacancy into the spread rather than declining the file on those grounds. The term was structured with extension options tied to leasing milestones, giving the sponsor a realistic runway without locking in long-term debt on an asset still in transition. An interest reserve was built into the loan structure to carry debt service through the lease-up period, removing the cash flow pressure that would otherwise have complicated the business plan during the most critical months of the hold.

The Phase I was worked through with the lender's environmental counsel rather than used as a reason to exit, which kept the timeline intact.

The Outcome

The loan closed on a schedule that worked for the seller, which was the constraint that made everything else either possible or irrelevant. The sponsor closed with proceeds that reflected the asset's actual potential, avoided bringing in outside equity at dilutive terms, and entered the hold period with a debt structure that gave the business plan room to execute. The deal got done because the lender understood what it was buying, and because the placement process was built around finding that lender rather than submitting broadly and hoping.