RFR refinances 100 Biscayne with $101M from Axonic, Derby Lane

RFR has closed a $101 million refinancing of 100 Biscayne, the Downtown Miami office building it bought for $90 million in January 2022 and has since repositioned, Commercial Observer first reported.

Derby Lane Partners and Axonic Capital provided the loan, which is $11 million larger than RFR's purchase price. The rate, term and leverage were not disclosed. Newmark arranged the transaction.

For allocators pricing office repositioning debt, $101 million across 317,000 square feet works out to about $319 per square foot against a purchase basis of about $284 per square foot. The underwriting question is rent, not occupancy: the building is close to full, so future debt capacity depends on where RFR's leases sit against market.

Since the January 2022 acquisition, RFR has leased roughly 248,000 square feet at the property, lifting occupancy from under 60% to around 90%, according to the company.

"When we acquired 100 Biscayne, our plan was to reposition the building into a true institutional-quality Class A boutique office building," Gaby Rosen, a principal at RFR, said in a statement. Rosen said the remaining opportunity is rent growth, including "capturing the upside of a significant portion of the building's tenants in place below market leases."

RFR describes the property, at 100 Biscayne Boulevard across from Bayfront Park, as the only Class A boutique waterfront office building in the city's central business district. Tenants include LVMH, Luxottica, Zyscovich and DeSimone, along with AT&T, Verizon, Windstream Communications, several data center companies and consulates, according to RFR.

Axonic comes to the deal with $10.0 billion in regulatory assets across 31 accounts and 74 employees, according to its Form ADV filing with the SEC dated March 30.

The refinancing is a data point for the split in office debt: a sponsor that took occupancy from under 60% to about 90% financed above its purchase basis, while weaker buildings still trade at deep discounts. Capstone bought a Garden City office loan at 54 cents on the dollar, as Private Wealth Daily previously reported. The lenders' cushion is the rent roll: tenants RFR says sit below market give mark-to-market protection that a building facing near-term roll would not have, and where those leases reset is the collateral case for the $101 million.