Pebb Capital has received a $223 million loan for the refinancing of Sundy Village, a seven-acre mixed-use campus under development in downtown Delray Beach, a coastal city in South Florida's Palm Beach County. The transaction matters because it signals continued lender appetite for well-located, mixed-use projects in South Florida even as broader commercial real estate capital markets remain selective. The refinancing replaces the project's existing construction loan while providing additional capital for tenant improvements, suggesting the sponsor is positioning the asset for longer-term stabilization rather than a near-term exit.
The financing mechanics are straightforward but notable. J.P. Morgan and Hudson Bay Capital provided construction financing for Phase II, replacing the existing construction loan. J.P. Morgan also provided the original construction financing for Phase I of the project, along with Monroe Capital. Sean Reimer, Aaron Appel, Jonathan Schwartz, Keith Kurland, Adam Schwartz and Dustin Stolly of Walker & Dunlop arranged the financing. The continuity of J.P. Morgan across both phases is a material fact: it indicates the original lender had sufficient confidence in the project's performance to participate in the refinancing rather than stepping away.
The underlying asset has a defined physical footprint. Phase I of Sundy Village delivered 100,000 square feet of office space, 30,000 square feet of retail and dining, landscaped courtyards, indoor-outdoor gathering spaces, and 268 parking spaces. Tenants include Vertical Bridge, Industrious, Barcelona Wine Bar, Van Leeuwen Ice Cream, Double Knot, Drinking Pig BBQ, Maman, Dragonfly MRI, JTC and Fairstead Development, among others. Phase II will add a 79,141-square-foot standalone office building, a 165-space parking garage and 3,400 square feet of ground-floor retail. The tenant mix spans flexible office, food and beverage, medical imaging, and financial services, which reduces single-tenant concentration risk.
The evidence base is corroborated across two independent secondary sources. Shopping Center Business and RE Business Online both report the same loan amount, lender group, arranger team, and project specifications. Neither source discloses the loan's interest rate, term, loan-to-cost ratio, or debt yield, which are standard omissions in initial refinancing announcements. The absence of those terms means the financing's relative cost cannot be assessed against comparable South Florida transactions. The sources also do not state whether the refinancing includes any paydown of the original Phase I construction loan or whether Hudson Bay Capital's participation represents new equity-like credit exposure.
For the South Florida commercial real estate market, the transaction reinforces Delray Beach's position as a submarket where mixed-use development continues to attract institutional construction capital. The presence of J.P. Morgan and Hudson Bay Capital, both institutional lenders, suggests the project's Phase I leasing performance was sufficient to support a refinancing despite office-sector headwinds nationally. However, the dossier does not provide occupancy rates, rental rates, or lease terms for the Phase I office component, so the strength of that leasing performance cannot be independently verified. What to watch next is whether Phase II's 79,141-square-foot office building secures anchor tenants before delivery, and whether future reporting discloses the loan's pricing and structure.