Mack Real Estate Lends $90M on Florida Luxury Condos
Mack Real Estate Credit Strategies has provided a $90 million mortgage to Fisher Island Investments for Palazzo Del Sol and Palazzo Della Luna—two adjacent luxury residential condominium properties on Miami’s Fisher Island, Commercial Observer can first report.
The 18-month bridge loan will finance the sellout of the 15 remaining units at the 43-unit, 10-story Palazzo Del Sol and complete construction of the 50-unit Palazzo Della Luna. Fisher Island Investments has $400 million in equity in the project.
With density restrictions and high barriers to entry, the Kobi Karp-designed palazzos are two of only three properties to be developed on Fisher Island in the past decade. Their amenities include a butler-staffed bar and lounge, valet parking, a fitness center, a private massage room, hair salons, movie theater, a business center and a children’s playroom.
“At 20 percent loan to value we’re very protected. There’s very high barrier to entry and only room to build 120 more homes on the island,” Peter Sotoloff, a managing partner and the chief investment officer of Mack Real Estate, told CO. “It’s a very high quality development with a great local sponsor.”
Created in 1906 and mostly developed between 1970 and 2000, Fisher Island is three miles off the shore of Miami and accessible only by ferry or boat. Over the years, the 192-acre island’s residents have included Oprah Winfrey and Mel Brooks.
The project isn’t Mack’s first foray into the South Florida market. In October last year, the lender provided $315 million in financing for the construction and recapitalization of Penn-Florida Companies’ Via Mizner, a 2-million-square-foot mixed use project in Boca Raton, Fla., as first reported by CO.
“With the new tax code, Florida may become more attractive, given the issues with SALT deductions,” Sotoloff said of the pull to the Sunshine State. “We’ve been very selective and have only been doing high-end projects. Here we have a very committed sponsor with $400 million of subordinate equity—one who controls the development rights—and a very low basis in some of the finest real estate in the area.”
Mack’s deal volume for 2017 was approximately $4 billion, Sotoloff said, including over $2 billion in New York. The lender is targeting $5 billion for 2018 in New York and other gateway markets nationwide.
Officials at Fisher Island Investments couldn’t immediately be reached for comment.