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Miami Developers Close 2023 With A Flurry Of Construction Loans

Christmas came early for developers looking to break ground on new projects in Miami, with lenders gifting more than $125M in construction loans to five projects in late December.

The 60K SF office building called The Fifth Miami Beach is nearly 20% leased.

The largest deal was a $47.3M construction loan from Cain International for The Fifth Miami Beach, a 60K SF office building at 950 5th St. in South Beach. The project is a joint venture between Sumaida + Khurana and Bizzi + Bilgili, two international developers with U.S. headquarters in New York. 

Designed by Spanish architect Alberto Campo Baeza, The Fifth Miami Beach broke ground in May with its five stories nearly 20% leased. It’s slated to deliver in 2025.

Sumaida + Khurana, led by Saif Sumaida, has a $1.2B development portfolio across New York and Miami, according to a release. Bizzi + Bilgili is a partnership between Bizzi & Partners, the developer and investor behind the Eighty Seven Park condo tower in Surfside, and Turkish development firm Bilgili Holding. 

The financing is the second construction loan in as many months that London-based Cain International has provided for a Miami project. The real estate investment firm, which is also a partner in the under-construction 830 Brickell office tower, provided $240M to Related Group and Alta Developers in November to build Casa Bella Residences by B&B Italia in Miami’s arts and entertainment district. 

An 85K SF office building with a rooftop restaurant in Coral Gables from Miami-based firms The Boschetti Group and Constellation Group also secured $33M in construction financing. 

Miami-based Banesco USA and Spain’s Abanca provided the debt for the eight-story property with 5,900 SF of ground-floor retail at 4225 Ponce de Leon Blvd., according to a release. Construction on the Arquitectonica-designed project in the Merrick Park retail district is set to begin before December ends with delivery planned for 2025.

The Boschetti Group and Constellation Group secured $33M to build an 85K office building in Coral Gables.

Financing for a multifamily project a block away from the office building was also secured by MG Developer and Baron Property Group.

The joint venture locked in $21M to refinance a loan and begin pre-development for a project dubbed Merrick Parc, according to a release. The 1.9-acre development site at 3191 SW 39th Ave., which was acquired by Merrick Parc LLC last August for $16M, has entitlements for two 12-story apartment buildings with 316 total units. 

Post Road Group, a private investment firm out of Connecticut, provided the debt to Coral Gables-based MG Developer and New York-based Baron Property Group. Ayush Kapahi at HKS Real Estate Advisors and Dmitry Levkov and Jeffrey Donnelly at Colliers brokered the deal. 

A second apartment project in Hialeah landed a $34M construction loan, South Florida Business Journal reported. 1025 Hialeah Development LLC, managed by Francisco Alberto Espinosa, Oscar Javier Moreno, Jose Antonio Villegas Velez and Juan Felipe Jaramillo Uribe, secured the debt for a site near the Tri-Rail and Metrorail transfer station that’s been approved for 151 apartments and 12K SF of retail.

The mortgage from New York-based S3 RE 1025 E25 Funding LLC covers a 1-acre site at 1025 E. 25th St. that the developer acquired for $4.4M in 2021. The lender assumed a loan from 2021 and increased its total amount by just under $31M. 

In Brickell, Urban Network Capital Group and Vertical Developments locked in $24.5M to build Visions at Brickell Station, a condo-hotel that’s more than 50% pre-sold, according to a release. 

The wellness-focused project at 1136 SW 3rd Ave. is aiming to deliver 111 move-in-ready units in 2025. Owners of the studio and one-bedroom units, which start at $500K, can stay at the property for up to 30 nights per year. 

Aventura-based Rok Lending provided the construction loan to the joint venture. Urban Network Capital Group is based in Miami and Vertical Developments is a partnership between Peru’s V&V Group and Location3 Investments, a private equity and development firm with offices in Miami and Buenos Aires.    

The spate of year-end financing for midsized developments comes as investors, brokers and developers expect a slowdown in new development across South Florida in 2024. 

Office brokers told Bisnow that a limited pool of new office space is expected to blunt leasing volume from new-to-market tenants in 2024, and a wave of new apartment deliveries have blunted rent growth and made lenders less interested in funding new projects. 

“You can look like the smartest person if you deliver in 24 months, where it's really tough to finance today,” Ryan Shear, managing partner at PMG, told Bisnow earlier this month. “There will be a lot of deliveries over the next three years where people look very smart because of all the work they did today to try to muscle their way out of the ground.”