Commercial real estate finance has been harder to come by since COVID-19 wreaked havoc in the US, but some projects have caught on despite the underwriting complexities created by the pandemic.
BTI Partners’ Marina Pointe condominium tower in the developer’s Westshore Marina District is a striking example in the Tampa area.
The Fort Lauderdale-based developer received a $ 92 million construction loan for the 17-story residential building from bank OZK late last year with the help of multi-family finance specialists Walker & Dunlop.
The loan represents one of the largest residential construction commitments in the Tampa Bay area in the past five years. It was also the first time BTI had received funding from OZK bank.
“The lender has recognized the demand for the luxury product from the water we supply, coupled with the influx of people from the North and Midwest who are coming to Florida, where one of their main destinations is Tampa,” said Scott Andersen, a BTI- Vice President overseeing the development of Marina Pointe.
But the work on the 120-unit tower, which is being built together with 78 berths of a 150-slip deep-water port and 32,150 square meters of retail space, was associated with challenges.
The conclusion of the Bank OZK deal, for example due to COVID-19, took more than a year. BTI declined to disclose certain terms of the loan.
Between the start of the construction site work at the end of 2019 and the end of the bank loan in December 2020, BTI financed the project exclusively from its own equity – a highly unusual step for a developer.
The construction plans also dragged on. BTI had originally expected the first tower of Marina Pointe – a total of three buildings with 227 apartments are planned – to be completed by the end of this year.
Now, however, the site manager Plaza Construction is not expected to deliver the units until August 2022.
That’s because BTI, the lead developer of the 52-acre Westshore Marina District, decided to stop construction when the virus took root.
“It was a tough decision for us, and we struggled with other condominium towers in the Tampa Bay area that didn’t stop building, but we thought it was the right thing,” says Andersen.
“We went from breaking the first sod on February 27 to closing two and a half weeks later.”
The site remained inactive until August when BTI and Connecticut-based joint venture partner Westport Capital Partners gave the go-ahead to resume operations.
To date, more than seven floors of the building have been completed.
“Marina Pointe embodies the high standards that Bank OZK consistently strives for in its project financing – marquee properties, strong market fundamentals and first-class sponsorship,” says Greg Newman, Managing Director of Bank OZK Real Estate Specialties Group.
BTI is lucky to be able to get in touch with a lender in the first place.
James Million, vice chairman of debt and structured finance at commercial real estate broker CBRE Group, notes in a recent corporate podcast that many lenders are withdrawing entirely from construction projects due to the ongoing effects of the deadly virus.
Hence, capital for certain projects and sectors is significantly more expensive than it was before the onslaught of COVID-19.
Andersen notes that frequent communications with Marina Pointe contractholders, including monthly update videos, kept the 60 or so buyers busy.
“We have a certain amount of confidence now that we are out of the ground and well on our way,” he says of buyers whose units cost between $ 800,000 and just under $ 3 million.
Upon completion, Marina Pointe’s units will range from 1,750 square feet to over 4,500 square feet. The building will also include amenities such as a 24-hour porter / concierge, fitness center, amenity deck and resident club.
Andersen says the community – which also includes upscale housing offerings from Related Group, Bainbridge, and Townhomes from WCI Communities – is also likely to benefit from upcoming retail openings.
BTI Partners’ Marina Landings shopping complex with the boutique grocer Duckweed Urban Market, the wine bar Cru Cellars, the Crave Spa and Salon Color Bar, Sand Surf Co., DRNK Kaffee + Tee and the juice bar QWENCH will be presented in the second quarter.
Like the construction of the residences, the retail schedule was disrupted by the pandemic. Many of the retailers that were slated to open in early 2020 are now working on improving tenants.
“The opening of these stores will be huge for us,” says Andersen.
Eventually, Paloma will also open, a two-story boot-up restaurant and bar covering 1.6 acres.
In total, the South Tampa waterfront project will include more than 1,100 homes and 1.5 miles of hiking trails as well as the private marina and retail space when it is expanded.
“There are very few places in Florida with the kind of water views and boat access that our condo owners, retail renters and customers will have in the Westshore Marina District,” said Noah Breakstone, CEO of BTI Partners, in a statement.