Pebb Capital obtained a $173 million construction loan for the Sundy Village mixed-use and historical preservation project in Delray Beach.
Monroe Capital and JPMorgan Chase Bank provided the mortgage to Boca Raton-based Pebb Capital for the seven-acre site at 22 W. Atlantic Ave., on the southwest corner of Swinton Avenue. Ackman-Ziff brokered the loan.
Sundy Village broke ground in February and the first buildings should be delivered in summer 2024.
The project is slated for 180,000 square feet of offices, 28,000 square feet of retail, and an underground parking garage. It will also include the preservation of six historic homes, including the Sundy House, which is on the National Register of Historic Places
Pebb Capital said it's signed about 141,000 square feet at Sundy Village. That includes a 38,474-square-foot headquarters lease for communication infrastructure company Vertical Bridge, sushi restaurant Double Knot, and the Barcelona Wine Bar. Pebb Capital also will move its offices into the project.
There were very few office construction loans awarded across the U.S. this year. Many office markets are struggling with high vacancy rates and low worker usage as many companies continue allowing remote work. However, South Florida’s office market has seen higher occupancy rates and record-high rents are companies relocate to the area. Delray Beach’s Atlantic Avenue is a popular shopping and dining destination, and it leads directly to the beach.
“We appreciate the collaboration with Monroe Capital and J.P. Morgan and the advice of Ackman-Ziff, helping us close one of the few office construction loans in the country this year,” Pebb Capital Managing Principal Todd Rosenberg stated. “The financing is a testament to the strength of this project and adds to our momentum toward delivering a placemaking project next year that will greatly serve Delray and the broader South Florida community.”
He added that the overall project would cost $240 million.
Gensler and RLC Architects designed the project. Bluewater Builders is the general contractor.
The developer is working with CBRE’s Joe Freitas and John Criddle on office leasing, and Sara Wolfe of Vertical Real Estate leasing the retail space.