Commercial Observer reported that a joint venture led by Terra secured a $507 million construction loan from Tyko Capital to finance a new luxury condominium development in Miami Beach. The financing package will fund the construction of a 28-story, 106-unit waterfront tower located at 1250 West Avenue along South Beach on Biscayne Bay.
Tyko Capital, led by Adi Chugh and backed by Elliott Management, issued the debt prior to the borrower launching condominium unit sales. In South Florida luxury condominium transactions, construction lenders generally require borrowers to hit specific pre-sale volume benchmarks before closing or advancing construction debt.
What happened
The planned 330-foot-tall tower replaces a 15-story condominium structure built in 1964. Terra, led by David Martin, previously bought out the 238-unit building for $120 million, Commercial Observer reported, citing The Real Deal. To secure municipal approvals from Miami Beach officials, the partnership also acquired and demolished the Bikini Hostel across the street to make room for a public park. The unbranded project will feature rooftop pools, an underground parking garage, a padel court, and ground-floor retail space.
Terra's development partners include GV Development, run by Gianluca Vacchi, along with Rafi Gibly's RG Development Group. The partnership also includes LORE Development Group, a Miami-based venture between Leste Group and Brazilian real estate fund Opportunity Fundo de Investimento Imobiliario. Tyko Capital also provided a $392 million loan to Terra for an 800-room hotel project adjacent to the Miami Beach Convention Center. In 2024, Terra completed Five Park, a 48-story luxury condominium tower situated near the entrance to the MacArthur Causeway.
What it changes for a closing
Securing construction financing ahead of public pre-sales alters standard closing conditions and milestones for the lending and legal teams. Because the lender cannot rely on executed purchase contracts, buyer earnest money deposits, or binding pre-sale thresholds as loan covenants, underwriting and loan documentation lean directly on sponsorship balance sheets and equity commitments.
Closing counsel and title officers working on such transactions face specific structuring demands. The transaction required resolving land use commitments tied to off-site parcels, including the acquisition and demolition of the neighboring hostel property dedicated for public park use. Deal teams closing waterfront construction facilities without sales absorption safeguards must also structure disbursement schedules and budget verifications around construction milestones rather than unit sales benchmarks.