Related Ross has secured the largest construction loan in South Florida so far this year to finance the development of its first luxury condo project in West Palm Beach.
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The developer, led by billionaire Stephen Ross, owner of the Miami Dolphins, took out a $475M senior secured mortgage from prolific construction lender Bank OZK and $125M in mezzanine debt from GoldenTree Asset Management and TZ Capital, it announced Tuesday.
The debt package will be used to complete South Flagler House, two 28-story towers spanning 500K SF and 105 luxury condos. The project is expected to top out later this year and deliver in 2027.
The units, which are being sold by The Corcoran Group and Corcoran Sunshine Marketing Group, range from $7.9M to $73M. Designed by Robert A.M. Stern Architects with interiors by Pembrooke & Ives, it is one of the most expensive projects in West Palm Beach, where Ross plans to invest $10B to turn it into “Wall Street South.”
The first project to deliver under the Related Ross banner, which spun out from New York-based Related Cos. in 2024, was the 25-story One Flagler office building in February.
Among the building's tenants is GoldenTree, a credit investment firm led by Steven Tananbaum. Now the firm has a new connection with its landlord by providing mezzanine debt on the condo project.
The loan is evidence of GoldenTree's push into private credit and real estate lending.
It hired Sam Friedland last year as its head of real estate originations. Friedland had previously been at Related Fund Management, the asset management arm of Related Cos. launched while Ross was serving as chairman.
Tananbaum and Friedland both worked on the mezzanine loan to South Flagler House, alongside West Palm Beach-based TZ Capital co-founder Tyler Tananbaum, according to the release.
Related purchased the 3-acre site for South Flagler House in 2023 from Hines and Frisbie Group for $195M. The joint venture had paid Palm Beach Atlantic University $41.5M for it in 2022 after securing the entitlements to build the project.
The asset was included in the spinoff of the Related Southeast division into Related Ross, along with the rest of the company's Palm Beach portfolio.
Bank OZK has been the most active construction lender in South Florida and nationwide, and it was unapologetically bullish on its strategy until late last year, when it started to reduce its concentration in commercial real estate lending. It announced in October that it would cap its loan size at $500M going forward to avoid the scrutiny that comes with writing such big checks.
“We just decided that wasn’t worth the headache of having to deal with that sort of crap, honestly,” CEO George Gleason said at the time.
The Arkansas-based bank has faced scrutiny on some of its life sciences bets and had to foreclose on a major development site in Chicago earlier this year.
The deal with Ross signals that it is still confident lending to marquee projects and sponsors — it also lent $160M to Related Group and Merrimac Ventures last week for the Waldorf Astoria Residences Pompano Beach.
The $600M financing deal for South Flagler House eclipses Property Markets Group's $413M debt package for the One Twenty Brickell Residences in Miami from an Ares Management fund and Monarch Alternative Capital, as well as Savanna's $380M deal for Olara, a condo tower in downtown West Palm.
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