Pinnacle scored a $49.9 million construction loan for a 120-unit affordable housing building near Cutler Bay, as financing for below-market rate rental projects continues to flow.
Miami-based Pinnacle will develop the five-story building at 10455 Old Cutler Road in unincorporated Miami-Dade County, according to the developer’s news release. The project, called Old Cutler Village, is the second phase of a larger development by the same name.
Elevated interest rates and banks’ pullback on lending has created a nationwide financing slump and contributed to some South Florida developers pausing planned apartment construction. Affordable housing has remained untouched by this trend because projects are generally bankrolled by government loans and agency-backed loans that come at lower interest rates.
Also, demand for units is ensured in Florida’s affordable housing crisis. More than half the state’s renters are cost burdened, meaning they pay over 30 percent of their income on housing costs, according to a study from the Harvard Joint Center for Housing Studies.
Old Cutler Village Phase 2’s financing package consists of $32.2 million in tax credit equity from Bank of America, a $9.1 million Freddie Mac loan and a $6 million surtax loan from Miami-Dade, according to the release. The balance is covered by Pinnacle’s equity.
The project will consist of one- to three-bedroom apartments for households earning 30 percent, 60 percent and 70 percent of the area median income, the release says.
At Miami-Dade’s annual AMI of $79,400, a one-person household can’t earn more than $23,850 to qualify for a unit at the 30 percent income restriction, according to the Florida Housing Finance Corporation. A one-person household can’t earn more than $47,700 and $55,650 for the units restricted at 60 percent and 70 percent, respectively.
Construction is expected to be completed in October 2025, the release says.
The completed Old Cutler Village complex, which was finished in 2003, consists of 288 affordable units, according to Pinnacle’s website.
Pinnacle is led by Louis Wolfson III, David Deutch, Timothy Wheat, Coraly Rodriguez and Hugo Pacanins. Founded in 1997, the firm has a portfolio of nearly 10,000 units, including affordable and workforce housing in Sun Belt states, the firm’s website says.
Pinnacle and RAM Realty Advisors filed an application in February to expand their planned 15-story, 285-unit Aventana apartment building to 16 stories and 334 units. The building is planned for 19640 West Dixie Highway in Ojus.
In December, Pinnacle landed a $41 million construction financing package for the 110-unit affordable rental complex, Pinnacle at La Cabaña, for senior residents at 8911 Miramar Parkway in Miramar.
In other recent affordable housing loans, the 100-unit Provident Place apartment complex for low-income seniors at 1050 Northwest 18th Drive in Pompano Beach landed a $27.5 million construction loan package. The Housing Authority of Pompano Beach and Jacksonville-based apartment developer Vestcor are building the project.
Florida developers now also can rely on the Live Local Act, approved last year and tweaked this year. The state law gives developers wiggle room on sites’ zoning and height restrictions in exchange for designating at least 40 percent of a project’s units for households earning no more than 120 percent of the AMI. The units have to remain at below-market rents for at least 30 years.