- April 15, 2024
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Commercial real estate financing has been harder to obtain since COVID-19 wreaked havoc on the U.S., but some projects have found a way to prevail despite the underwriting complexities brought about 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 obtained a $92 million construction loan for the 17-story residential building late last year from Bank OZK, with help of multifamily finance specialist Walker & Dunlop.
The loan represents one of the largest construction commitments in the Tampa Bay area for a residential project in the past five years. It also marked the first time BTI had obtained financing from Bank OZK.
“The lender realized the demand for the luxury product by the water we’re delivering, coupled with the influx of people from the North and Midwest that are coming to Florida, where one of their main destinations is Tampa,” says Scott Andersen, a BTI vice president who is overseeing Marina Pointe’s development.
But work on the 120-unit tower, which is being constructed along with 78 slips of a 150-slip deep water marina and 32,150 square feet of retail space, has been fraught with challenges.
It took more than a year to close the Bank OZK deal, for instance, the result of COVID-19. BTI declined to provide specific terms of the loan.
Between when it began site work in late 2019 and December 2020, when the bank loan closed, BTI funded the project exclusively from its equity — a highly unusual move for a developer.
Construction schedules dragged out, too. Originally, BTI expected to complete the first Marina Pointe tower — in all, three buildings containing 227 residences are planned — late this year.
Now, however, construction manager Plaza Construction isn’t expected to deliver the units until August 2022.
That’s because BTI, the master developer of the 52-acre Westshore Marina District, decided to halt construction when the virus took root.
“It was a difficult decision for us, and we struggled somewhat against other condo towers in the Tampa Bay area that did not stop building, but we felt it was the right thing to do,” Andersen says.
“We went from having a groundbreaking on Feb. 27 to shutting down two-and-a-half weeks later.”
The site remained dormant until August, when BTI and joint venture partner Westport Capital Partners of Connecticut gave the go-ahead to resume work.
To date, more than seven floors of the building have been completed.
“Marina Pointe embodies the high standards Bank OZK consistently seeks in its project financings — marquee real estate, strong market fundamentals and top-tier sponsorship,” says Bank OZK Real Estate Specialties Group Managing Director Greg Newman, in a statement.
BTI may be fortunate that it was able to connect with a lender at all.
James Million, vice chair of debt and structured finance at commercial real estate brokerage CBRE Group, notes in a recent firm podcast that many lenders are stepping away from construction projects entirely because of the ongoing impact of the deadly virus.
As such, capital for certain projects and sectors is considerably more expensive than it was prior to the onslaught of COVID-19.
Andersen notes that frequent communication with Marina Pointe’s contract holders — including monthly update videos — kept the roughly 60 buyers engaged.
“There’s a level of confidence now that we’re out of the ground and well underway,” he says of buyers, whose units are being priced at roughly $800,000 to just under $3 million.
When completed, Marina Pointe’s units will range from 1,750 square feet to over 4,500 square feet. The building also will include amenities such as a 24-hour doorman/concierge, a fitness center, amenity deck and a resident club.
Andersen says the community — which also contains upscale apartment offerings from Related Group, Bainbridge and townhomes by WCI Communities — also will likely benefit from pending retail openings.
BTI Partners’ Marina Landings shopping complex, which will feature boutique grocer Duckweed Urban Market, wine bar Cru Cellars, Crave Spa and Salon Color Bar, Sand Surf Co., DRNK coffee + tea and QWENCH juice bar, will debut during the second quarter.
Like the construction of the residences, the retail timeline was disrupted by the pandemic. Many of the retailers that had been slated to open in early 2020 are doing tenant improvement work now.
“Getting those businesses open will be huge for us,” Andersen says.
Eventually, Paloma, a two-level, boat-up restaurant and bar occupying 1.6 acres, also will open.
In all, the waterfront South Tampa project at build out will contain more than 1,100 residences and 1.5 miles of walking trails, along with the private marina and retail space.
“There are very few places in Florida with the kind of water views and boat access that our condo owners, retail tenants and customers will have at Westshore Marina District,” says BTI Partners’ CEO Noah Breakstone, in a statement.
