Developers score $115M loan for Miami condo project
- A Related-led group of developers has secured a $115 million construction loan from a Guggenheim Partners affiliate to build a 41-story resort condominium project in Hollywood, FL, according to The Real Deal.
- Related launched presales for Hyde Beach House in 2015, and the project, which is also being developed by 13th Floor investments and Key International, reportedly has commitments for 70% of the 342 units. The development includes a beach club, pool and deck, restaurant, indoor racquetball court and outdoor theater.
- Hyde Beach House includes 265 resort condos, which owners can use up to 150 days a year. Owners of the 71 standard condos will have unlimited use of their units. Prices range from $593,000 to $1.3 million.
The search for funding outside the standard banking system is becoming more common as traditional lenders continue to shy away from the luxury condo market. Even with private lenders like Guggenheim, however, developers must still demonstrate that their projects are viable through solid presales and a desirable location to overcome the oversupply of units and the shrinking pool of foreign buyers.
In fact, Related had to scuttle one of its projects, the Auberge Residences & Spa Miami, earlier this year because of dismal presales of only 15%.
Another lender that has stepped in to fill the gap created by hesitant traditional banks is the U.K.-based Children's Investment Fund (CIF). In recent months, the fund has provided financing for a few high-profile U.S. residential projects, including $239 million for the $300 million Four Seasons Residences in Los Angeles, which is being developed by Genton Property Group. Before CIF made the loan, the property achieved $147 million in presales.
Last month, developer HFZ also snagged a $1.25 billion CIF loan for its $1.9 billion, Bjarke Ingels–designed Eleventh condominium project in New York City. HFZ had reportedly spent 18 months looking for a lender to finance construction on the 950,000-square-foot mixed-use project, which will take up a full block in the Chelsea neighborhood of Manhattan.
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