LEM Originates Subordinate Loan On Miami Beach Condominium Conversion

LEM Mezzanine, a direct lender and investor in high-leverage mezzanine debt and preferred equity, has, through its fund affiliates, closed an $11 million subordinate loan on Byron Hall, an existing apartment building that will be converted to condominiums. The property is located in Miami Beach, Florida and will be fully renovated prior to conversion. Sovereign Bank provided the underlying first mortgage.

LEM's loan has a term of 18-months and an all-in interest rate in the low double digits. The leverage was at 90% and provided funding for the construction and renovation of the property. "The borrower has a tremendous opportunity to renovate and convert a well located apartment building to condominiums, but needed creative financing in order to do so. The condo market is very active in south Florida and there is tremendous upside for the sponsor in this transaction" said Herb Miller a partner in the Fund.

LEM structures its investments in a variety of different ways including mezzanine loans, preferred equity and A/B notes and specializes in providing financing in transactions where there is existing first mortgage debt. LEM has worked with a number of different servicers and special servicers to develop structures that either comply with existing loan covenants or can be approved quickly. LEM also has relationships with many first mortgage lenders to provide additional proceeds behind new originations and often partners with senior lenders to provide the entire capital structure in a combination of first mortgages and mezzanine loans.

LEM, a $200 million, focuses on multifamily, office, retail and industrial properties nationwide, generally valued in the $10 million to $60 million range, and makes mezzanine investments of between $2 million and $10 million per property. It provides financing up to 85% to 90% of the capital structure. LEM's principals include Ira Lubert, Jay Eisner and Herb Miller. The Company's objective is to invest $75 million to $100 million per year.