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 moves on large South Florida construction loans while keeping tight leverage rules
A regional bank headquartered in the Southeast provided several major construction loans across South Florida this year while maintaining a conservative lending posture focused on low‑leverage financing for experienced sponsors. The bank led a senior financing package for a luxury West Palm Beach condominium project, provided construction debt and worked with mezzanine lenders on a Wynwood rental development, and closed a significant mixed‑use loan in Miami’s Edgewater neighborhood.
Top-line financing moves
The bank served as the sole senior lender on a luxury condominium development in West Palm Beach with a $475 million senior commitment as part of a $600 million total financing package. In Miami’s Wynwood neighborhood, a 12‑story multifamily project secured a $65.3 million construction loan plus a $24 million mezzanine tranche, bringing total capital for that site to nearly $90 million. Separately, the bank provided a $181 million construction loan for a large mixed‑use tower in Edgewater that bundles office, retail and hundreds of rental units.
Why the bank is sticking to low leverage
The bank’s senior managing director for originations in the Southeast emphasized a long‑held approach that prioritizes construction loans with lower loan‑to‑cost ratios and experienced sponsors rather than first‑time developers. That stance is rooted in lessons learned during earlier industry cycles, when high leverage left lenders and developers vulnerable to sharp valuation declines. The bank’s real estate lending arm typically targets a loan‑to‑cost in the neighborhood of 50 percent, and it remains open to working with mezzanine partners to bridge equity gaps for well‑known sponsors.
Project details and market notes
The West Palm Beach project is a two‑tower luxury condominium development with 105 residences ranging from large family units to very large penthouses. The senior construction commitment from the bank, combined with mezzanine financing, is supporting vertical construction with an expected topping off this year and completion targeted in 2027.
The Wynwood project at 2000 North Miami Avenue is a 12‑story building with 310 apartments, roughly 12,500 square feet of ground‑floor retail and more than 300 parking stalls. The developer acquired the 1.2‑acre site in 2022 and structured the capital stack with the bank’s senior loan and a mezzanine lender to make the project feasible amid a tighter equity market.
The Edgewater tower sits on an entire city block with bay views and pairs about 187,000 square feet of office and retail with 399 rental residences. The office component was reported as roughly half pre‑leased before construction began, making it one of the more pre‑leased new office buildings in the Miami area. The development team designed the tower with high‑spec office floors, modern residential amenity spaces and sustainability targets, and it includes substantial parking and electric vehicle charging capacity.
Market strategy and geographic reach
The bank’s Southeast office covers Florida, Georgia and the Carolinas and has been a major contributor to growth in the bank’s real estate specialties group. Primary underwriting focus for the year has been condominium projects in Florida and multifamily and industrial deals throughout the Southeast. The bank also looks at opportunistic and large mixed‑use projects in growing markets such as Tampa and Atlanta.
Key challenges for construction lending
Lenders and developers face three main headwinds: higher construction costs since the pandemic, uncertainty from tariffs and interest‑rate volatility, and a constrained limited‑partner equity market. The bank’s approach has been to underwrite conservatively and allow sponsors to work with mezzanine lenders when equity is scarce. Some developers instead turn to whole loans from debt funds to reach higher leverage, while others pause projects until capital conditions improve.
Policy limits and capacity
The bank has set internal thresholds on single construction loan sizes, and while a nominal cap has been discussed, historically very few transactions exceed those big-ticket amounts. The lender has expanded its capacity over time through organic growth and acquisitions, enabling it to consider larger loans than were typical a decade ago. The bank’s real estate group describes itself as a construction lender that aims to stay active through market cycles and provide certainty of execution.
People and experience behind the deals
The bank’s senior originations team in the Southeast brings more than three decades of industry experience to the region. That history includes early loans in Miami dating back to the late 1980s and relationships with repeat sponsors. The team favors sponsors with a proven track record and tends to decline opportunities where sponsors lack a history of completed projects.
Frequently asked questions
What were the largest loans mentioned?
The bank led a $475 million senior construction loan as part of a $600 million total package for a luxury condominiums project, provided $65.3 million senior construction financing plus a $24 million mezzanine tranche for a Wynwood multifamily site, and closed a $181 million loan for a mixed‑use tower in Edgewater.
Why does the bank prefer low‑leverage deals?
The lender has emphasized conservative underwriting to protect against valuation swings and market downturns. A lower loan‑to‑cost ratio reduces risk for both the bank and the sponsor if construction costs rise or market values fall.
How does the bank handle equity shortfalls?
The bank is generally willing to work alongside mezzanine lenders and has frequently partnered with repeat mezz partners. Some developers choose debt funds for higher leverage when equity is hard to secure.
What are current headwinds for construction projects?
Developers face higher post‑pandemic construction costs, tariff‑related uncertainty, interest‑rate volatility, and a constrained limited‑partner equity market that has made raising JV capital more difficult.
Which markets is the bank active in?
Primary focus is South Florida, with active origination across the Southeast including Florida, Georgia, and the Carolinas, and select transactions in other growth markets.
Key deal features at a glance
| Project | Senior Loan | Mezzanine / Other | Program | Units / Office sqft | Location |
|---|---|---|---|---|---|
| South Flagler House | $475M senior | $125M mezzanine | Luxury condominiums, two towers | 105 units | West Palm Beach |
| 2000 Wynwood | $65.3M | $24M mezzanine | 12‑story multifamily with retail | 310 apartments, 12,500 sqft retail | Wynwood, Miami |
| 2600 Biscayne | $181M | N/A | Class AAA mixed‑use tower | 399 units, 187,000 sqft office/retail | Edgewater, Miami |
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
