South Florida, September 3, 2025
News Summary
A regional lender maintained a conservative underwriting approach while financing several major South Florida developments. The bank led a $475 million senior construction tranche in a $600 million West Palm Beach condo package, provided a $181 million loan for a mixed‑use tower in Miami’s Edgewater, and extended a $65.3 million senior loan for a Wynwood multifamily project paired with a $24 million mezzanine. Management emphasizes low loan‑to‑cost targets around 50–55% and prefers experienced sponsors. Deals are often structured with third‑party mezzanine or whole‑loan debt to bridge scarce equity in the current market.
Bank OZK sticks to low‑leverage construction lending while financing major South Florida projects
A regional lender continued a conservative construction lending strategy while providing major financing for several high‑profile South Florida developments this year. The bank led a $475 million senior loan within a $600 million financing package for a luxury condominium complex in West Palm Beach, supplied a $65.3 million senior construction loan (plus a separate $24 million mezzanine) for a big Wynwood apartment project, and closed a $181 million construction loan for a large mixed‑use tower in Miami’s Edgewater neighborhood.
Toplines: large loans but cautious underwriting
The lender’s real estate group remains focused on low leverage, typically targeting loan‑to‑cost ratios around 50 percent. That conservative posture reflects lessons from past downturns and a strategy to work with experienced sponsors and repeat partners rather than first‑time developers. The bank has a regional origination team based in the Southeast that is active across Florida, Georgia, and the Carolinas and has been a leading source of construction debt for condominium, multifamily and industrial projects in the region.
Three notable South Florida financings
The largest package involved senior financing of $475 million for a two‑tower luxury condominium on South Flagler Drive in West Palm Beach. That senior piece sat inside a roughly $600 million capital stack that included a mezzanine tranche to reach total project funding. The development is a high‑end condo project with just over one hundred units across two 28‑story towers; units range from large two‑bedrooms up to very large full‑floor penthouses. Construction is underway with topping off planned this year and completion targeted in 2027.
In Miami’s Wynwood neighborhood, a 12‑story residential project secured a $65.3 million construction loan from the bank and a $24 million mezzanine provided by a major debt investor, bringing total financing for the site to roughly $89 million. The Wynwood building will contain 310 apartments, ground‑floor retail totaling about 12,500 square feet, and more than 300 parking spaces. The site was acquired privately a few years ago and this marks the developer’s second local project in the area.
A separate $181 million construction loan financed a new mixed‑use tower in Edgewater. That tower will deliver nearly 400 rental residences alongside roughly 187,000 square feet of office and retail space, with offices occupying the lower floors and residences rising above. The office portion was more than half pre‑leased before construction began, making it one of the most pre‑leased new office buildings in the market in recent memory. The project site occupies an entire city block with bay views, extensive amenity programming for both office and residential tenants, and sustainability goals tied to national green building standards.
Why the bank remains cautious
The bank’s origination team cites several ongoing headwinds for construction lending: elevated construction costs that rose sharply after the pandemic and have largely plateaued rather than declined; tariff uncertainty and fluctuating interest rate expectations; and a constrained limited partner equity market that has left some sponsors scrambling for equity commitments. In response, developers are taking varied approaches: pausing projects, layering mezzanine capital to supplement conservative senior loans, or turning to whole‑loan debt funds to increase leverage when necessary.
The lender is described as mezzanine‑friendly and often allows sponsors to select mezzanine partners, while typically evaluating transactions based on the bank’s senior position. Even with a willingness to work alongside mezzanine providers, the bank prefers to underwrite senior loans to top‑tier, repeat sponsors and will decline opportunities where sponsor experience or location are concerns.
Regional footprint and growth
The Southeast region has been a strong contributor to the bank’s real estate specialties portfolio. The group has grown through a combination of organic deposit and loan growth plus strategic acquisitions that expanded the institution’s capital base and maximum single‑loan capacity. What was once considered a very large deal at under $100 million now routinely contemplates much larger loan sizes, though internal limits have been set for very large construction commitments.
Lending activity spans multifamily, condominiums, office and industrial projects across markets such as Miami, West Palm Beach, Tampa, Atlanta and Nashville. Tampa continues to be highlighted for its growth and relative affordability. The lender emphasizes consistency through cycles and aims to provide certainty of execution to experienced sponsors during unsettled markets.
What this means for South Florida development
These financings demonstrate that sizable construction capital remains available for projects that meet conservative underwriting standards: experienced sponsors, strong pre‑leasing or presales, and manageable loan‑to‑cost ratios. However, the limited partner equity environment and macroeconomic uncertainty are shaping deal structures, pushing some projects to layer mezzanine debt or seek alternative financing to bridge equity shortfalls. Market participants expect that if interest rates ease, construction activity could accelerate as developers re‑engage previously paused deals.
FAQ
Which major loans did the bank close in South Florida?
The lender provided a $475 million senior loan within a $600 million financing for a luxury condominium in West Palm Beach, a $65.3 million senior plus $24 million mezzanine for a 12‑story Wynwood apartment project, and a $181 million construction loan for a large mixed‑use tower in Edgewater.
What underwriting approach is the bank using?
The bank favors low‑leverage construction loans, generally targeting loan‑to‑cost levels near 50 percent and lending to established, repeat sponsors rather than first‑time developers.
Are construction costs affecting lending?
Construction costs rose after the pandemic and have mostly leveled off; the change has not eliminated elevated costs. Tariffs and rate uncertainty add to complexity, but the bank’s conservative underwriting approach has not changed.
How are developers coping with limited equity?
Developers are pausing projects, combining conservative senior loans with mezzanine capital, or using higher‑leverage whole loans from debt funds to bridge equity gaps.
What kinds of projects is the bank focusing on?
Primary focuses include condominium projects in Florida and multifamily and industrial deals across the Southeast.
Key project features
| Project | Location | Loan(s) | Size / Uses | Notable features |
|---|---|---|---|---|
| South Flagler House | West Palm Beach | $475M senior (part of $600M total) | 105 luxury condos; two 28‑story towers | High‑end pricing; waterfront location; construction ongoing; completion ~2027 |
| 2000 Wynwood | Wynwood, Miami | $65.3M senior + $24M mezzanine | 12 stories; 310 apartments; 12,500 sq ft retail; 308 parking spaces | Developer’s second Wynwood project; site bought in 2022 |
| 2600 Biscayne | Edgewater, Miami | $181M construction loan | 399 rental units; 187,000 sq ft office/retail; full‑block site | Significant pre‑leasing for office; sustainability targets; major amenity package |
Note: Details reflect recent transactional activity and market commentary on lending strategy, underwriting focus and regional development trends.
Deeper Dive: News & Info About This Topic
Additional Resources
- Commercial Observer: Bank OZK, Clearline Wynwood (Aug 2025)
- Wikipedia: Bank OZK
- Financial Times: Bank OZK / regional lending coverage
- Google Search: Bank OZK South Florida construction lending
- CoStar: Related Ross scores $600M financing for Florida condo
- Google Scholar: Related Ross 600 million Florida condominium
- ProfileMiami: Related Group & GTIS secure $328M construction loan (Baccarat Residences)
- Encyclopedia Britannica: Related Group (search)
- BusinessWire: Oak Row Equities closes $181M construction loan for 2600 Biscayne
- Google News: 2600 Biscayne construction loan Bank OZK
