Terra-Led JV Lands $507M Construction Loan for 1250 West Avenue in Miami Beach

TYKO Capital is funding a 28-story South Beach condo tower before a single unit has been sold.

A joint venture led by Terra has closed a $507 million construction loan for 1250 West Avenue, a planned 28-story condo tower on the western waterfront of South Beach facing Biscayne Bay. Commercial Observer and Multi-Housing News reported the financing on Oct. 8 and 9.

The lender is TYKO Capital, led by Adi Chugh. Commercial Observer reports that TYKO's debt platform is backed by Elliott Management.

The team

Terra, the Miami developer led by David Martin, heads the partnership. The partners are:

• RG Development Group, led by Rafi Gibly

• GV Development, the firm of Gianluca Vacchi

• LORE Development Group, a Miami partnership of Leste Group and the Brazilian fund Opportunity Fundo de Investimento Imobiliário

The tower

The plan calls for a 330-foot, 28-story building with 106 residences that average about 3,500 square feet. Multi-Housing News reports two penthouses with private rooftop pools and 2,685 square feet of ground-floor retail. ODP Architecture and Design is the architect of record.

Amenities include rooftop pools, underground parking, a padel court, spa and wellness spaces, a private lounge, and a juice bar and cafe.

The tower replaces a 15-story, 238-unit condo building that was completed in 1964. The new building will have 106 homes, fewer than half the old count, but much larger ones. The loan comes to about $4.8 million of debt per residence.

Public improvements

Under the overlay zoning agreement the city approved, the developers will improve the Baywalk along the property to widen public waterfront access. Commercial Observer reports that the team also bought and demolished the Bikini Hostel across the street, and plans a public park on that site.

Why it matters

Presales have not started. Sales are expected to begin in 2027. That is unusual. Commercial Observer notes that construction lenders on South Florida luxury condos typically require a certain level of presales before they fund.

Private credit is filling that gap. Funds like TYKO are writing nine-figure checks on projects that banks would want more presales behind. Lenders like this can move faster and take on more risk than banks, usually at a higher price.

Terra has done this before. It completed Five Park, a 48-story condo tower, in 2024 with a $345 million construction loan. It is also building an 800-room hotel next to the Miami Beach Convention Center, financed with a $392 million TYKO loan.

What's unclear

Reports differ on the 2025 purchase of the site. Some coverage says Terra bought it, while other reports describe a different developer buying the site and later leaving the project. Sellout value, pricing per square foot, the completion date and the loan's rate and maturity have not been disclosed.

The question

Smart bet on South Beach, or too much condo risk? Tell us on Instagram at @commercial_real_estate.

Sources: Commercial Observer, Multi-Housing News, Connect CRE. Rendering via Connect CRE, credited to Terra Group.

Not investment advice.

Interstate Equities Buys The Dylan in Hercules, CA, for $83.5M

A five-year-old waterfront apartment community on San Pablo Bay trades for about $360K a unit, backed by Freddie Mac debt.

Interstate Equities Corporation has bought The Dylan, a 232-unit apartment community at 2200 John Muir Parkway in Hercules, California, for $83.5 million. The seller was Hercules Development Partners. JLL Capital Markets announced the sale on Oct. 9.

That works out to about $360,000 per unit.

The property

The Dylan sits on the San Pablo Bay waterfront and was completed in 2022. The five-story building has 217 market-rate units and 15 below-market-rate units. The mix is studios, one-bedroom and two-bedroom apartments, which average 804 square feet.

Residents get a lounge with a community kitchen, a sports lounge with darts, billiards and foosball, a fitness center, a courtyard with BBQ and fire pit areas, and bike storage with a repair station.

The location is a big part of the pitch. The property has quick access to Interstate 80. JLL puts Oakland and Walnut Creek about 25 minutes away and San Francisco about 35 minutes away.

The financing

The buyer financed the purchase with a $54.275 million, five-year acquisition loan through Freddie Mac. That covers about 65% of the purchase price. JLL describes the debt as long-term and fixed-rate.

JLL's Debt Advisory team, led by Executive Managing Director Charles Halladay, arranged the loan for the buyer. On the sale side, JLL represented the seller with Senior Managing Directors Ryan Wagner, Brandon Geraldo and Matt Kroger and Director Fatai Alashe.

Why it matters

New Bay Area apartments still draw buyers at real prices, and agency lenders are still writing loans for them.

Wagner pointed to three things pulling investors to the East Bay: it costs less than the core Bay Area markets, income growth is expected to be strong, and there is little new supply. JLL said no new projects are under construction in Hercules right now, which makes a newer building with no direct competition more valuable.

The Freddie Mac loan matters too. Agency debt gives buyers fixed-rate financing on newer, stabilized properties. Halladay said the strength of the asset and the market helped lock in competitive terms.

For Interstate Equities, which has invested in and managed apartments in California and the Seattle area since 1981, the deal adds a newer waterfront property in a submarket with little new competition.

What wasn't disclosed

Occupancy, rents, net operating income and the cap rate were not made public.

The question

Would you pay about $360K a door for new East Bay apartments? Tell us on Instagram at @commercial_real_estate.

Sources: JLL, Connect CRE, Yield PRO, IREI, Commercial Property Executive. Photo via Connect CRE.

Not investment advice.