Private equity group Blackstone continues to grow its role in helping fund construction of South Florida’s new condo towers. A Blackstone fund loaned $102 million last week to a partnership led by Miami-based Related Group to develop Hyde Resort & Residences in Hollywood Beach, according to public records.
The 40-story high-rise will have a combination of condos and hotel rooms totaling 407 units at 4111 S. Ocean Drive, steps away from the Atlantic Ocean. The development, scheduled for completion in 2016, is estimated at $200 million.
Blackstone provided the financing through its Blackstone Real Estate Debt Strategies fund. The firm created BREDS in 2008 to fill a void left by traditional lenders, which were – and to some extent continue to be – reluctant to provide real estate debt.
Regulators limit how much banks can loan in condo construction financing and many conventional lenders have already reached their limit in South Florida, where more than 50 condo towers are currently under construction, financed by a combination of buyer’s deposits, developer’s equity and construction loans.
Blackstone appears bullish on South Florida’s booming condo market: In July, the private equity group made a $290 million construction loan to real estate investment group Fort Capital Management to turn the Surf Club into the luxurious Surf Club Four Seasons Private Residences and Hotel in Surfside.
In August, Blackstone loaned $120 million to a joint venture between Eastview Development and GTIS Partners to help fund construction of the 51-story Biscayne Beach on Biscayne Bay in Miami’s Edgewater.
Hyde Resort & Residences is one of Related Group’s latest developments in Hollywood Beach. Related is building the 1.3-acre project in partnership with Fortune International Group. Fortune sold the land to Related for $17 million in November 2013.
Related, as part of a partnership, also owns 2.4-acre at 4000 S. Ocean Drive., across the street from the Hyde site. Related plans to build another high-rise there. A few steps north of the Hyde site stands Apogee Beach, one of the first condo towers that Related developed coming out of the recession.