Blackstone Real Estate Debt Strategies (BREDS) has provided a $102m construction loan to Miami-based Related Group for the development of the Hyde Resort & Residences in Hollywood Beach.
The three year construction loan (with two one-year extension options) carries a 45% loan-to-cost ratio.
BREDS is bullish on condominium development in Florida, where deposits placed on presold condo units can be used as equity financing. About 85% of the Hyde’s condos have been presold.
“We like the presold real estate and deposit money coming in because it reduces our basis,” said Mike Nash, senior managing director of BREDS. “We just have to build the building on time and on budget, and that feels reasonably safe with a good sponsor, and it comes with reasonably good returns.”
The 40-story tower, scheduled for completion in 2016, will feature 407 condo and hotel units. Related purchased the 1.3-acre site for a reported $17m in 2013. The developer is said to be building another high-rise on a 2.4-acre site across the street and completed the nearby 22-story Apogee Beach in 2013.
In August BREDS provided a $290m construction loan to Fort Capital Management for the development of the Surf Club Four Seasons Private Residences and Hotel in Surfside, Florida, as well as a $120m to Eastview Development and GTIS Partners for the construction of the 51-story Biscayne Beach on Biscayne Bay in Miami.