PPG Development and its partners have secured $235 million in financing to construct a 728-unit multifamily project in North Miami Beach. The funding includes a $205 million construction loan from BDT & MSD Partners and a $30 million preferred equity investment from Skylight Real Estate Partners and Meadow Partners, both based in New York.
Ari Pearl of PPG, Isaac Khabie of Ark Ventures, and Matt Press of EquiShares are leading the development of the Palm Aire complex. The project will be built on an 8-acre site at 1750 and 1775 Northeast 167th Street, formerly occupied by Nova Southeastern University. According to Miriam Ungar of PPG, the development will consist of five buildings: two three-story buildings, two six-story buildings, an eight-story building, and two garages. All units will be offered at market-rate rents.
“The project’s completion will be staggered to allow for newly finished apartments to lease-up before delivering additional units,” Ungar said. She also noted that Palm Aire will include a bodega in one of the buildings.
The developers purchased the site from Dezer Development for $31.1 million in 2022. Previously, Dezer had acquired it from Nova Southeastern University for $20 million in 2018. Nova Southeastern continued to occupy part of the property until its lease ended in summer 2023.
In 2023, city records show that the developers received approval from North Miami Beach authorities for Palm Aire.
Aaron Kurlansky of Sheridan Capital represented both the borrowers and BDT & MSD Partners in this transaction. Aaron Jungreis and Alex Fuchs of Rosewood Realty Group represented the borrowers as well as Skylight and Meadow.
The financing deal comes amid ongoing challenges for construction lending in South Florida due to high interest rates, rising insurance costs, tariffs, and other obstacles. Despite these issues, private lenders have become more active over the past three years as banks face tighter regulations stemming from the Great Recession. Banks have had to extend maturities or provide other forms of relief for some borrowers struggling with debt obligations because they cannot relax minimum capital requirements or overextend themselves. This has limited their ability to issue new loans while alternative lenders—who are less constrained—have filled the gap by offering higher loan-to-cost ratios and greater flexibility.
MSD & BDT Partners is among these alternative lenders stepping into the market after being formed through a merger between BDT & Company and MSD Partners in 2023 (https://www.bdtmsd.com/). Recently, they refinanced Steve Ross’ $242.5 million construction loan for One Flagler office tower in West Palm Beach and increased total debt by $97.5 million (https://therealdeal.com/miami/2024/07/11/msd-bdt-refinances-steve-ross-one-flagler-tower-with-242m-loan/).
Other recent multifamily projects financed by private lenders include Grover Corlew’s seven-story apartment building at Cypress Creek in Fort Lauderdale with a $92 million loan from Affinius Capital (https://therealdeal.com/miami/2024/06/27/grover-corlew-scores-92m-loan-for-cypress-creek-apartments/) and Baron Property Group’s Metro Parc North project in Hialeah backed by a $206 million construction loan from Post Road Group (https://therealdeal.com/miami/2024/03/28/baron-property-group-nabs-206m-loan-for-hialeah-multifamily-project/).
Several other developments are planned or underway in North Miami Beach as well. Trinsic Residential Group and Macken Companies are working on Aura—a proposed eight-story building with 373 units plus commercial space on West Dixie Highway.
As alternative lenders continue to play a larger role amid banking constraints, South Florida remains active with new multifamily developments moving forward despite economic headwinds.
