Red Oak delivered $4,162,500 to refinance and renovate a retail strip center in the southwest suburbs of Miami, FL. The property at 8934-8948 SW 40th St. contains 6,925 square feet of retail space, divided into six storefronts. The site is within a high commercial traffic area and currently houses diverse business such as an insurance company, travel agency, and beauty. The building is in the process of extensive rehabilitation for the new national franchises of Nathans Famous Hot Dogs, and Churned Creamery, which will occupy approximately 4,500 square feet of the building.
The borrower purchased the building in 1998 for $900,000 and has operated it since then. The asset operated at full capacity until 2018, when the owner entered into a franchise agreement with Nathans and Churned Creamery for the exclusive rights to operate at that location. He has also been awarded developer rights for any additional franchises in Florida for both companies.
The property underwent regular renovations in 2006, but the current renovations will completely update all systems, facades, structure, and interiors. Borrower has invested approximately $700,000 into the renovation to date, which is roughly 70% complete. Due to the current renovation, and tenants not placed yet, conventional financing is not available. The exit strategy is for the borrower to obtain conventional financing after the rehabilitation and stabilization is completed, in approximately 6-8 months. In addition to delivering high visibility and complementary properties, the property has upside potential with two new national franchises.