Separate Sunny Isles Projects Score Construction Loans

by Daily Business Review

Two Sunny Isles Beach developments secured blockbuster construction loans in a sign of lender's confidence in the future of the ultra-luxury enclave, which could help boost the 11 other pre-construction projects in the oceanfront city.

The latest condominium to receive a loan was the 192-unit Jade Signature at 16901 Collins Ave. Developer Fortune International Group closed Thursday on a $284 million loan from HSBC, the Daily Business Review learned. It is the third Jade-branded project HSBC has financed. Over 80 percent of the new units are under contract, according to Fortune.

Eduardo Imery, Fortune's chief financial officer, described the deal for the financing as straightforward.

"It was just a pretty simple loan for a conservative amount, even though 284 million is a large number," Imery said. "The capital structure for these projects has changed substantially from the last cycle, which means the loan is very small as compared to the old days, and likely you won't draw the full amount."

Earlier in the week, the 68-unit Muse condo project at 17141 Collins Ave. closed on its own construction loan of $167.6 million arranged by Cohen Financial. The lender was Delaware Life Holdings LLC, a life insurance company owned by shareholders of New York-based Guggenheim Partners LLC.

That project has sold 50 percent of its unit, a spokeswoman said. Most current pre-construction condo projects have waited until they get commitments on 60 percent to 70 percent of units before landing a construction loan. The fact the Muse project was significantly below that mark is a sign of an increasingly loose lending environment as well as lender confidence in beachfront luxury projects. "Muse is already demonstrating success in sales, and we can't wait to see what it looks like when completed," Kevin O'Grady, senior managing director at Cohen Financial, said in a statement.

A broker who specializes in Sunny Isles Beach residential real estate said that in spite of the pipeline of projects adding to the supply, condo prices in the city are not being watered down.

"Sunny Isles is becoming the most expensive city," said ONE Sotheby's International Realty's Lana Bell, who has been in the market since 2002. "People are asking for more high end, they're asking for bigger units and of course more amenities." "You basically sell a dream," she said.