Wells Fargo refinances repositioned Doral office campus

Commercial Observer reported that Wells Fargo has provided $53.5 million to refinance Doral Center, the 290,000-square-foot Doral office campus Banyan Street Capital and Independencia Asset Management have been repositioning since buying it in 2020. The complex, two buildings of six and seven stories at 3750 Northwest 87th Avenue and 8750 Northwest 36th Street built between 1985 and 1990, is about 85 percent leased, according to CBRE, whose Amy Julian and Andrew Chilgren brokered the debt. Quest Workspaces takes roughly 38,000 square feet of that occupancy.

The venture paid $43 million for the asset in 2020, roughly $4.3 million below its prior trade four years earlier, and has since put $15.5 million into the repositioning. After selling about three acres to residential developer ROVR Development for $6 million in January, the sponsors' net outlay comes to roughly $52.5 million. The new loan works out to roughly $184 a square foot, against $148 a foot at purchase, and nearly returns that entire number. This is the office clearing price in practice.

As this publication has argued, office pricing has shifted from mark-to-market to trade-to-trade, and here the debt side is catching up: Wells Fargo is underwriting the repositioned rent roll, not the 1980s shell. The deal is also one more sign that the refinancing wall is being dismantled loan by loan, with lenders meeting maturities on the strength of sponsor equity rather than waiting for distress sales.