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 Backs Major South Florida Construction Projects While Sticking to Low‑Leverage Lending
A regional bank has taken the lead on several large South Florida construction financings this year while maintaining a conservative lending approach that favors low leverage and experienced sponsors. The bank provided the senior piece of a roughly $600 million condominium financing package in West Palm Beach, a combined senior and mezzanine stack near Wynwood totaling nearly $90 million, and a $181 million construction loan for a large mixed‑use tower in Miami’s Edgewater neighborhood.
Topline financings and project summaries
The largest commitment reported was $475 million in senior construction financing for a luxury condominium development in West Palm Beach, part of a total capital stack near $600 million that also included a mezzanine tranche. The West Palm Beach project consists of two 28‑story towers with about 105 luxury residences, high‑end interiors, and waterfront views; pricing starts in the multi‑million dollar range per unit and the project is expected to be completed within the next few years.
In Wynwood, the bank provided a $65.3 million construction loan to a local developer for a 12‑story, 310‑unit multifamily project with roughly 12,500 square feet of ground‑floor retail and about 308 parking spaces. That loan was paired with a $24 million mezzanine facility provided by a separate institutional lender, bringing total financing to nearly $90 million.
In Miami’s Edgewater, the bank closed a $181 million construction loan for a Class AAA mixed‑use tower that will include 399 rental residences and about 187,000 square feet of office and retail. The office floors were reported to be approximately half pre‑leased prior to construction, making the office component notably pre‑leased for a new build in the market.
Lending strategy: low leverage, tested sponsors
The bank’s construction lending group continues to emphasize senior‑secured loans with loan‑to‑cost ratios near the 50 percent range. That conservative stance reflects lessons from past market downturns when high leverage exposed lenders and sponsors to valuation swings. The lender typically provides 50 to 55 percent of project cost on construction loans and is open to working alongside mezzanine lenders when sponsors need additional leverage. The bank is also described as mezz‑friendly, generally evaluating the senior piece and allowing sponsors to choose complementary mezzanine partners.
Market focus and geographic reach
The bank’s regional originations team covers a broad swath of the Southeast, with a primary focus on Florida condominiums and multifamily and industrial transactions across the Southeast. South Florida remains the lender’s largest market and the primary source of recent growth in its real estate specialties portfolio. The lender spreads activity across market centers, including Miami, West Palm Beach, Tampa, Atlanta and Nashville, and has participated in past large district redevelopments and mixed‑use projects in Tampa.
Current headwinds for construction lending
Developers and lenders are navigating continued cost pressure and capital‑market constraints. Construction prices rose sharply after the pandemic because of supply chain problems and have since plateaued rather than decline. Tariff uncertainty and elevated interest rates have added to the hesitancy for some projects. A key challenge cited is a constrained limited partner equity market, which has made it harder for many developers to secure the equity tranche required for certain product types. As a result, some sponsors are pausing projects, combining senior and mezzanine capital, or turning to whole‑loan debt funds to achieve higher leverage.
Bank policy, capacity and deal sizes
The bank has a referenced internal cap on single construction commitments in the high hundreds of millions, although historical volume shows only a handful of deals above that threshold. Over the past decade plus the lender expanded its capacity through organic growth and acquisitions, increasing the size of deals that can be underwritten from levels that were once considered large at the firm to much higher maximums today. The real estate lending group reports an average portfolio loan‑to‑cost near 50 percent, reinforcing the conservative underwriting posture.
What this means for South Florida development
The combination of substantial senior construction loans for marquee projects and a conservative underwriting standard signals that financing remains available for well‑capitalized sponsors with proven track records. Projects that pair senior structures with mezzanine equity or that secure pre‑leasing for office components are finding pathways to close financing. Broader market activity may pick up further if interest rates ease and limited partner appetite for development equity returns.
Frequently Asked Questions
What are the largest loans highlighted in this report?
The largest commitments include a roughly $475 million senior construction loan (part of a near $600 million total stack) for a West Palm Beach condominium, a $65.3 million senior loan plus a $24 million mezzanine for a Wynwood multifamily project, and a $181 million construction loan for a mixed‑use tower in Edgewater, Miami.
What lending approach is the bank using?
The lender favors low‑leverage, senior‑secured construction financing, typically around 50 to 55 percent loan‑to‑cost, and prefers sponsors with established track records. The bank often allows sponsors to bring mezzanine partners when additional leverage is needed.
Which project types are being prioritized?
The primary focus is on condominiums in Florida, and on multifamily and industrial deals throughout the Southeast. Mixed‑use projects that combine residential and pre‑leased office or retail also continue to attract financing.
What market issues are affecting construction lending?
Key challenges include elevated construction costs, tariff uncertainty, interest‑rate pressure, and a tight limited partner equity market that makes raising development equity more difficult for some sponsors.
Key project and loan features
| Project | Location | OZK Senior Loan | Mezzanine | Units / Office sqft | Notes |
|---|---|---|---|---|---|
| South Flagler House | West Palm Beach | $475,000,000 | $125,000,000 (mezzanine) | 105 luxury residences | Two 28‑story towers; high price per unit; expected completion in coming years |
| 2000 Wynwood | Wynwood, Miami | $65,300,000 | $24,000,000 | 310 units; 12,500 sqft retail | 12‑story multifamily; site purchased in 2022 |
| 2600 Biscayne | Edgewater, Miami | $181,000,000 | — | 399 units; 187,000 sqft office/retail | Class AAA mixed‑use tower; roughly 50% office pre‑leased pre‑construction |
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
Author: Construction NY News
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