PPG Development and its partners have secured $235 million in financing to build a 728-unit multifamily project in North Miami Beach. The package 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.
The development, named Palm Aire, will be constructed on an 8-acre site at 1750 and 1775 Northeast 167th Street, which was formerly the campus of Nova Southeastern University. PPG is led by Ari Pearl, with Isaac Khabie of Ark Ventures and Matt Press of EquiShares also involved. According to Pearl and a statement from PPG, construction is expected to begin by the end of the month.
Aaron Kurlansky of Sheridan Capital represented both the borrowers and BDT & MSD. Aaron Jungreis and Alex Fuchs of Rosewood Realty Group represented the borrowers as well as Skylight and Meadow.
Miriam Ungar of PPG stated that Palm Aire will consist of two three-story buildings, two six-story buildings, one eight-story building, and two garages. All units are planned for 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 added that Palm Aire will include a bodega in one of the buildings.
PPG, Khabie, and Press acquired the site from Dezer Development for $31.1 million in 2022. Ark Ventures and EquiShares are both based in Miami. Dezer previously purchased the property for $20 million from Nova Southeastern University in 2018. When PPG and its partners bought it, Nova Southeastern still occupied part of the site; its lease ended in summer 2023.
In 2023, developers received city approval for Palm Aire according to North Miami Beach records.
Other projects are also underway in North Miami Beach. Trinsic Residential Group and Macken Companies are developing Aura, an eight-story building with 373 units at 16955-17071 West Dixie Highway that will include commercial space on the ground floor as well as exterior retail space.
Developers across South Florida have increasingly turned to private lenders over the past three years due to stricter regulations imposed on banks since the Great Recession. Banks face minimum capital requirements that limit their ability to provide new loans, especially amid higher interest rates. As a result, private lenders have filled this gap by offering higher loan-to-cost ratios and more flexibility for borrowers (https://therealdeal.com/miami/2024/07/15/private-lenders-fill-the-gap-as-banks-pull-back-on-real-estate-debt/).
MSD & BDT Partners emerged as one such lender after forming through a merger between merchant bank BDT & Company and MSD Partners in 2023 (https://www.bloomberg.com/news/articles/2023-01-03/msd-partners-bdt-close-merger-of-two-family-office-heavyweights). Last month they refinanced Steve Ross’ $242.5 million construction loan for One Flagler office tower in West Palm Beach—raising total debt by $97.5 million (https://therealdeal.com/miami/2024/07/10/msd-bdt-refinances-steve-ross-one-flagler-tower-in-west-palm-beach/).
Other recent examples include Grover Corlew securing $92 million from Affinius Capital for a seven-story apartment project in Fort Lauderdale’s Cypress Creek area (https://therealdeal.com/miami/2024/06/25/grover-corlew-scores-92m-loan-for-cypress-creek-apartment-project/) and Post Road Group providing Baron Property Group with a $206 million construction loan for Metro Parc North apartments in Hialeah (https://therealdeal.com/miami/2024/03/14/baron-property-group-scores-206m-loan-for-hialeah-multifamily-project/).
