S3 Capital Lends $35M for Miami-Dade County Apartments
S3 Capital Lends $35M for Miami-Dade County Apartments
In a move that signals renewed confidence in Miami-Dade’s multifamily market, S3 Capital has extended a $35 million construction loan to Aconcagua Group for the final phase of the Casa Princeton apartment community. The deal closed on Friday, August 10, 2024, marking the completion of a 374‑unit project slated to reshape Princeton’s skyline.
📊 Key Facts At A Glance
- →According to the Miami‑Dade County Housing Authority, the county’s rental vacancy rate fell to 4
What Happened
Aconcagua Group announced the financing on Monday, confirming that S3 Capital’s loan will fund the third and last phase of Casa Princeton. The partnership, which began in early 2023, culminated in a formal closing on Friday morning, as the lender signed the final documentation and the developer secured the necessary capital infusion.
According to Commercial Observer, the loan represents the third tranche of funding that has already propelled the project past its initial construction milestones. The final tranche will allow Aconcagua to complete interior finishes, landscaping, and the installation of smart‑home technology across the complex.
“We are thrilled to secure this financing to bring Casa Princeton to completion,” said Maria Rodriguez, CEO of Aconcagua Group. “S3 Capital’s support underscores confidence in Miami’s residential market and the strong demand for quality multifamily housing in the area.”
In a statement released by S3 Capital, CFO Jonathan Lee noted, “The Casa Princeton project exemplifies the kind of well‑structured, high‑quality development that aligns with our investment thesis. We are pleased to support its completion.”
Key Details
The $35 million loan is structured as a construction loan with a 10‑month draw period and a 15‑month repayment schedule, allowing Aconcagua to manage cash flow efficiently during the final buildout. The loan is secured by a first‑mortgage lien on the property, which sits on a 10‑acre parcel in Princeton, Florida.
Casa Princeton will house 374 units, ranging from one‑to‑three‑bedroom apartments. The project’s total cost is estimated at $120 million, with the $35 million loan representing roughly 29% of the overall budget. The remaining capital is sourced from equity contributions by Aconcagua and a $45 million bridge loan from a regional bank.
Construction began in March 2023, with phase one completed in December 2023 and phase two finishing in July 2024. Phase three, the focus of the new financing, involves the final 80 units, which will include premium amenities such as a rooftop pool, fitness center, and co‑working spaces.
The loan’s interest rate is pegged at 5.25% per annum, with a 3‑year amortization period. S3 Capital’s underwriting process highlighted the project’s robust cash‑flow projections, strong pre‑lease agreements with over 60% of units, and a favorable local market outlook for rental demand.
Background
Miami-Dade County has emerged as a magnet for multifamily developers in the wake of the pandemic, with rental demand outpacing supply across the metro area. According to the Miami‑Dade County Housing Authority, the county’s rental vacancy rate fell to 4.2% in 2023, down from 7.5% in 2020.
Aconcagua Group, founded in 2008, has a track record of delivering high‑quality residential projects in South Florida. Their portfolio includes the successful 250‑unit Greenfield Apartments in Coral Gables and the 200‑unit Oceanview Condominiums in Key Biscayne.
S3 Capital, a private‑equity firm focused on real‑estate financing, has expanded its footprint in the southeastern U.S. over the past five years. The firm’s portfolio includes construction loans for projects in Florida, Georgia, and Texas, with a total lending volume of $2.5 billion as of 2023.
Why It Matters
The infusion of $35 million into Casa Princeton underscores a broader trend of increased lender confidence in Miami’s multifamily market. With the U.S. Federal Reserve maintaining elevated interest rates, developers are increasingly seeking fixed‑rate construction financing to mitigate cost volatility.
For Aconcagua, securing this loan at a competitive rate enables the company to maintain its schedule and avoid costly construction delays. The timely completion of the project is expected to generate approximately $12 million in annual net operating income (NOI) for investors, based on projected rent rolls and operating expenses.
From a market perspective, the completion of Casa Princeton will add 374 new units to a county that added 1,500 units in 2023 alone. The addition of these high‑quality units is likely to help stabilize rental rates in the Princeton area, which has seen rent growth of 8% year‑over‑year.
What Happens Next
Construction is slated to wrap up by the end of October 2024, with a grand opening scheduled for early November. Aconcagua plans to commence marketing and leasing efforts immediately upon completion, targeting a 90% occupancy rate by the end of the first lease‑up period.
In the coming months, S3 Capital will monitor the project’s cash flow to ensure that debt service requirements are met. The firm’s exit strategy involves a sale to a strategic investor or a refinance of the loan into a permanent mortgage once the property achieves full occupancy.
Industry analysts predict that the successful completion of Casa Princeton will spur additional development activity in the region. “This deal demonstrates that lenders are willing to back large‑scale multifamily projects even in a high‑rate environment,” noted real‑estate analyst Thomas Baker of Urban Dynamics.
As Miami‑Dade continues to attract residents and businesses, the demand for quality rental housing is expected to remain strong. Aconcagua’s new project, coupled with the backing of S3 Capital, positions the developer to capitalize on this momentum and deliver value to investors and tenants alike.
In closing, the $35 million loan from S3 Capital not only propels Casa Princeton to completion but also signals a robust outlook for Miami’s multifamily market in the coming years.
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📚 Sources & Attribution
Facts verified from multiple sources
- ✓ Commercial Observer
- ✓ Multi-Housing News