Overview
Commercial Lending Solutions arranged $52,000,000 in ground-up construction financing for a 220-unit luxury apartment tower in Miami's Brickell corridor. The deal closed with a construction-focused debt fund on a floating-rate, recourse-light structure at 60 percent loan-to-cost, with a negotiated path to a life company forward commitment as the permanent takeout. Getting there required rebuilding the underwrite from the budget up before a single lender conversation started.
The Deal
The sponsor came in with a shovel-ready site in Brickell, full entitlements, a general contractor under contract, and a well-capitalized equity stack. The project was designed to the upper end of the Miami luxury rental market: large average unit sizes, high-specification finishes, and amenity programming targeting the financial-sector and international tenant base that has driven Brickell's rental demand over the past several years. The ask was straightforward on paper. Fifty-two million dollars, 24-month construction term with extension options, floating rate, and the sponsor wanted to preserve optionality on the permanent financing rather than lock a takeout lender too early.
At $52 million and 60 percent loan-to-cost, this deal sits squarely in the range where national and regional bank construction groups, construction-focused debt funds, and select life company construction programs all theoretically compete. The sponsor knew that. They wanted the most competitive structure available, not just a closed loan.
The Challenge
The first thing any serious construction lender is going to do on a Miami high-rise is tear apart the hard cost budget and the insurance assumptions, in that order. Miami-Dade's High Velocity Hurricane Zone designation is not a footnote. It drives material specification requirements across the entire envelope: impact-rated glazing systems, reinforced concrete superstructure detailing, and elevated wind-load engineering standards that add real dollars per square foot compared to a comparable project in a non-HVHZ market. The sponsor's initial budget was not wrong, but it was built to the midpoint of the contractor's range, and construction lenders stress test to the high end. That gap had to be addressed with contingency sizing before the deal was presentable.
Florida's property insurance and builder's risk markets have repriced significantly since the 2022 and 2023 storm seasons. Builder's risk coverage for a reinforced concrete high-rise in Miami-Dade is available, but the premium lines in the original budget reflected pre-repricing quotes. Lenders doing their own insurance due diligence were going to find that number and flag it. We found it first, got updated brokerage indications, and recut the budget before opening lender conversations. That single step changed the quality of the process considerably.
The market story also needed reworking. Brickell has real fundamentals behind it: corporate relocations from the Northeast and Midwest, international capital and tenant inflows, a genuinely undersupplied high-quality rental product relative to for-sale pricing. But the pipeline is not thin. Several competing luxury towers are delivering in overlapping windows, and lenders who know the submarket well are not going to accept trailing rent comps as the lease-up basis. The absorption and concession assumptions in the original proforma were optimistic by roughly 90 days on stabilization timing and did not account for the first-year concession environment realistically. Underwriting to those numbers would have produced a loan that lenders declined or heavily conditioned.
Finally, the capital stack sequencing mattered. Agency programs and CMBS execution do not touch ground-up construction risk. The permanent takeout had to be either a bank mini-perm, a life company forward commitment, or a debt fund bridge-to-agency on the back end, and the sponsor needed to understand the implications of each path before choosing not to decide.
The Solution
Before running a formal process, the team worked with the sponsor's GC and insurance broker to recast the budget at a defensible stress case: hard cost contingency moved to 8 percent, builder's risk premiums updated to current market indications, and the soft cost carry was extended to match the revised stabilization timeline. The proforma absorption schedule was rebuilt using current lease-up comps from towers that had delivered within the prior 18 months in Brickell and Edgewater, with explicit concession assumptions in months one through six of lease-up.
With a clean package, the process was run across construction-focused debt funds and the construction programs at two regional banks. A private debt fund offering a floating-rate structure priced at SOFR plus 325, 60 percent loan-to-cost, with a 24-month initial term and two six-month extension options tied to completion and lease-up milestones, won the mandate. Recourse burned off at certificate of occupancy, which was the sponsor's structural priority.
Separately, a national life insurance company was engaged in a parallel conversation around a forward commitment for the permanent loan. The forward was structured to fund at 70 percent stabilized LTV on a 10-year fixed term with 30-year amortization, with a rate lock mechanism tied to the construction lender's extension option timeline. The sponsor retained the ability to let the forward expire if market conditions at stabilization supported better execution elsewhere.
The Outcome
The sponsor closed a $52,000,000 construction loan on terms that reflected the actual risk in the deal rather than the best-case version of it. The budget is defensible under stress. The permanent takeout path is secured without foreclosing other options. And the lender came in knowing exactly what they were underwriting, which means the relationship through the construction period starts from a credible foundation rather than a renegotiation waiting to happen.