In recent years, several South Florida developers have faced financial challenges as foreclosure actions threaten 13 development sites across the region. Developer Brian Tuttle is among those affected. In December 2023, Tuttle sought new lenders and equity partners to refinance $38.4 million in loans secured by his Royal Palm Beach project, Mainstreet at Tuttle. However, he found little support.
“Banks were saying that due to interest rates, the appraisals had to be reduced significantly,” Tuttle told The Real Deal. “And with the appraisals being reduced significantly, you had to put more equity into the deals.” He added about potential investors: “they were all looking for a steal… So when everyone is looking for a below-market deal, the fair market deals just get overlooked. It was very frustrating.”
By July 2024, Fort Lauderdale-based Fuse Group filed a foreclosure complaint against entities owning the Royal Palm Beach site after failed refinancing efforts. Tuttle stated in an email that he met with over 200 groups seeking investment without success. The entities later filed for Chapter 11 bankruptcy after Fuse Group won a $47.4 million judgment.
Tuttle’s situation reflects a broader trend affecting at least a dozen other developers in Miami-Dade, Broward, and Palm Beach counties. According to analysis by The Real Deal, five development sites faced foreclosure in 2024 alone.
The surge of real estate activity during the Covid-19 pandemic initially suggested South Florida might avoid broader commercial real estate troubles seen elsewhere in the country. Instead, higher interest rates and increased construction costs have led many projects into distress as equity investors grow cautious.
“There’s more in the pipeline,” said Josh Rubens of Kluger Kaplan law firm in Miami. “I think there have been some extensions over the last 12 to 24 months that you will be seeing headlines about in the next six to 12 months, as those maturities hit.”
Developers had moved quickly during and after the pandemic migration wave, banking on rising rents and property values while using short-term bridge loans expecting future refinancing options would remain available before debt reset at higher rates.
Brett Forman of Forman Capital explained: “Florida, and South Florida for sure, still has demand… but you had explosive growth brought on by Covid… and there are developers that may have gotten over their skis, perhaps [got] too aggressive.” He noted significant debt remains set to mature through this year and into 2026—much tied up in early-stage deals lacking full construction financing.
Many distressed properties share one factor: reliance on short-term bridge loans—typically ranging from one to three years—that have exhausted extension options as costs rise and borrowing becomes less viable.
“You rerun the math at a higher interest rate and building costs up 30 percent, and the numbers don’t make sense anymore,” said Holly MacDonald-Korth of KDM Financial.
Foreclosure proceedings now impact various Miami and Fort Lauderdale sites. For example, Forman Capital seeks foreclosure on a planned condo-hotel site in Miami’s Arts & Entertainment District due to default on an $8.3 million loan that matured in August.
Legal disputes are common as developers attempt last-minute bankruptcy filings or appeals against private lenders unwilling to wait longer for repayment or refinancing opportunities.
One case involved Rok Lending acquiring title at auction for an Aventura medical office site after winning a $19.9 million judgment linked to an unpaid $15 million loan issued in 2023; developer Marlon Gomez unsuccessfully tried multiple legal strategies to delay foreclosure.
On Miami River Cove’s planned townhome site—also connected to Gomez—a receiver is marketing it for sale amid ongoing litigation involving alleged loan defaults and claims of fraudulent documentation (which Gomez denies).
Forman characterized these borrower tactics as attempts at delay: “It’s a way of quasi delaying the inevitable.”
Lenders are challenging such delays; Fuse Group asked bankruptcy court to dismiss Tuttle’s Chapter 11 petition regarding Mainstreet at Tuttle on grounds it was used solely for postponement purposes—a hearing is scheduled for January 20-22.
Tuttle commented: “We filed a Chapter 11 to protect the unsecured creditors so that [Fuse Group] didn’t wipe them out… And right now we’re working with the bank and the bankruptcy court to come up with the best plan to try and make it a win as much as possible.”
High-profile developments are not immune; Monarch Alternative Capital has initiated foreclosure on Kodsi’s Legacy Hotel & Residences site within Miami Worldcenter after construction halted last year amid complex loan issues totaling approximately $340 million.
Rubens noted that large outstanding balances make new lenders hesitant: “There may be a large balance that another lender is apprehensive about getting involved in… These things just take time, and unfortunately, time sometimes really works against the developers when you have a high interest bridge loan that’s ticking away with interest.”
MacDonald-Korth concluded more defaults can be expected given aggressive lending practices during recent booms: “Everybody thought South Florida is exempt from all of these commercial real estate issues… But it turns out, a year or two later, it’s not.”
