IPA Capital Markets Arranges $75.1M Faena District Recap

IPA Capital Markets, a division of Marcus & Millichap, has arranged a $75.1 million mid-construction recapitalization for The Monroe Hotel, an 89-key luxury boutique hotel under redevelopment at 3010 Collins Ave. in Miami Beach’s Faena District. Managing director Bobby Werhane led the transaction with support from senior director Scott Raasch, both based in the firm’s Charlotte office.

Why it matters

The story here is the capital stack, not the hotel. A conventional single-lender construction loan increasingly cannot clear underwriting for a ground-up or gut-renovation hotel in Miami once costs run past nine figures, so sponsors are stitching together specialty and bank capital instead. The Monroe pairs C-PACE, which finances energy and resiliency upgrades against the property rather than the borrower, with senior bank construction debt, a bridge loan to cover the gap while permanent financing settles, and historic tax credit equity tied to the building’s redevelopment. Werhane called it “a complex, multisource recapitalization that required creativity and strong relationships across the capital stack.” Other South Florida hotel conversions and historic-building redevelopments now have a working template for closing a deal a single lender would not touch.

The numbers

The $75.1 million recapitalization breaks into three disclosed pieces that sum to the total: $44 million in C-PACE financing from Nuveen Green Capital, $24.8 million in construction debt from City National Bank, and $6.3 million in bridge financing from Midland States Bank. PNC Bank separately arranged historic tax credit equity financing for the project; its dollar amount was not disclosed. The Monroe’s total project cost is $125.5 million. The hotel will have 15 suites ranging from 488-square-foot junior suites to a 1,257-square-foot presidential suite, a 5,000-square-foot restaurant and bar, a rooftop bar and event venue, a recording studio, a pool deck, a spa and a private beach service.

What’s next

The Monroe is scheduled to open in 2027. The remaining question is how much of the $50.4 million gap between the $75.1 million recap and the $125.5 million total project cost is covered by the undisclosed PNC historic tax credit equity versus sponsor equity already in place, a figure IPA and Marcus & Millichap have not broken out.