South Florida’s Construction Loan Rush: Condos Lead, Other Projects Lag

Published Date: January 22, 2024

South Florida developers have recently secured over $1 billion in construction financing, primarily for condo towers and mixed-use projects. Another $1 billion-plus in condo construction loans is expected to close soon. Despite rising insurance, materials, and labor costs, Bank OZK has emerged as a central lender, backing two-thirds of the most significant loans since November.

Amid the prevailing pessimism in real estate, South Florida appears resilient. The projects securing substantial loans boast strong presales, reputable sponsors, and prime locations. Condo developers face pressure to proceed promptly to avoid nullifying presale contracts.

However, the construction financing market is only sometimes favorable. Ben Jacobson of Forman Capital anticipates ongoing challenges, particularly for hotel, office, and luxury rental developments. Industrial and select multifamily projects find it comparatively easier to secure funding. Yet, lenders are now more cautious, demanding multiple contributors to capital stacks and increased equity.

Suzanne Amaducci, a prominent real estate attorney, underscores the current difficulty in closing deals, citing a challenging hotel refinance despite its seemingly straightforward nature.

This narrative parallels housing market expert Jonathan Miller’s outlook for 2024—a year of gradual improvement amid previous disappointments. Similarly, construction lending reflects a trend toward incremental positivity.

Meanwhile, concerns arise in Bal Harbour regarding lobbyist Ron Book’s dual representation of the village and Whitman Family Development, raising questions about potential conflicts of interest among his various developer and municipal clients.

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Original Article by Katherine Kallergis- The Real Deal

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