A $507 Million Condo Loan Before a Single Sale: What Your Books Have to Prove Without Presales

By Douglas Kohn, MBA, CPA

A Terra-led partnership just landed a $507 million construction loan for a 28-story, 106-unit condo tower at 1250 West Avenue in Miami Beach, and it did it before launching sales. Commercial Observer called that "an unusual move" for a South Florida luxury condo, because lenders typically want a project to hit a presale threshold before they fund construction. The loan comes from Tyko Capital, whose debt platform is backed by Elliott Management, and sales aren't expected to start until 2027.

Compare that with 29 Indian Creek, a 16-residence boutique project farther up Miami Beach. Its developer, Trinity Southern, closed a $19.5 million construction loan from S3 Capital this month with sales already past 70 percent, according to Florida YIMBY.

Two Miami Beach condo deals, two very different ways of getting a lender comfortable. When presales aren't carrying the underwriting, the lender leans on something else: sponsor equity, the budget, the cost-to-complete, and the quality of the reporting. That last one is an accounting problem, and it's where a lot of mid-size developers come up short.

What a lender looks at when there are no presales

Presales are proof of demand and a source of cash. Take them away and the lender's attention shifts to whether the developer can show, every month, that the money is going where the budget says it should. In practice that means a draw package that ties out: a line-item budget against actual cost, contingency used and remaining, retainage held, lien waivers collected, and the interest reserve balance. If your job cost ledger and your draw requests are two different spreadsheets that someone reconciles by hand, a no-presale lender is going to notice.

Once sales launch, the accounting gets harder, not easier

Florida's condo statute, section 718.202, sets strict rules for buyer deposits on a building that isn't finished. The first 10 percent of the sale price has to sit in escrow with an independent escrow agent. Anything above 10 percent goes into a special escrow account, and the developer can only pull it out once construction has started, only if the purchase contract says so in a required bold legend, and only for actual construction and development costs.

The statute is specific about what doesn't count. Deposit money above 10 percent can't be used for salespeople's salaries or commissions, advertising and marketing, loan fees, principal and interest, attorney fees, accounting fees, or insurance. A willful failure to follow the escrow rules is a third-degree felony.

That means your chart of accounts has to do real work. Every disbursement funded with released deposit money needs to map to a cost code that qualifies under the statute, and you need a per-buyer record of what's held under the 10 percent rule, what's in the special account, and what has been released.

The concrete accounting checklist

Here's what I'd want in place on any Florida condo project, presales or not:

1. Book deposits as liabilities, not revenue. Buyer deposits are customer deposits or contract liabilities. For most Florida condo sales, revenue under ASC 606 is recognized at closing, when control of the unit passes to the buyer, not while the tower is going up.

2. Keep a deposit subledger by buyer. Track the 10 percent escrow, the excess-over-10 percent special escrow, interest earned, and any releases. Reconcile it to the escrow agent's statements monthly.

3. Tag every cost by funding source. Lender draws, equity, and released deposits should each be traceable to the costs they paid for. That's what proves deposit money only went to qualifying construction costs.

4. Capitalize interest correctly. Under ASC 835-20, interest incurred while the building is actively under construction is generally capitalized into the cost of the project. Document when capitalization starts and when it stops, and make sure the interest reserve rolls forward cleanly.

5. Defer the sales commissions. Commissions paid to win a unit contract are usually incremental costs of obtaining a contract under ASC 340-40, so they're capitalized and expensed when the unit closes, not when the broker gets paid.

6. Keep partner capital accounts current. Big condo deals are often joint ventures. The 1250 West project has four development partners. Contributions, preferred returns, and the waterfall need to be tracked monthly, not rebuilt at year-end.

Why this is fractional CFO work

None of this is exotic, but it's a lot to ask of a project accountant who's also processing AP and chasing lien waivers. A fractional CFO or controller builds the structure once: the cost codes, the deposit subledger, the draw package template, the capitalization memo, and the partner reporting. Then your team runs it every month. That's how a developer earns the kind of lender confidence that gets a loan closed on the strength of the numbers.

If you're financing a condo or mixed-use project and want your draw packages, escrow tracking, and job cost to tell one consistent story, that's exactly the work we do at Ultramar (https://www.ultramarrealestate.com), where I serve as a fractional CFO and controller for real estate and construction companies. For South Florida businesses and nonprofits outside real estate, SoFla Prime Consulting provides fractional CFO, controller, and accounting support.

For more on lender-facing reporting, see my recent posts on CRE loan extension accounting (https://www.ultramarrealestate.com/post/cre-loan-extension-accounting-rate-caps-reserves-2026) and re-forecasting jobs after steel and diesel price jumps (https://www.ultramarrealestate.com/post/steel-up-27-6-diesel-doubled-re-forecast-your-jobs-now).

Sources

Commercial Observer, "Terra-Led JV Lands $507M Construction Loan for South Beach Condo Before Pre-Sales," Oct. 8, 2026: https://commercialobserver.com/2026/10/terra-1250-west-miami-south-beach-tyko-gianluca-vacchi/

Florida YIMBY, "Terra And Partners Secure $507 Million Construction Loan For 28-Story Condominium At 1250 West Avenue In Miami Beach," Oct. 21, 2026: https://floridayimby.com/2026/10/terra-and-partners-secure-507-million-construction-loan-for-28-story-condominium-at-1250-west-avenue-in-miami-beach.html

Florida YIMBY, "Trinity Southern Secures $19.5 Million Construction Loan For 29 Indian Creek In Miami Beach," Oct. 15, 2026: https://floridayimby.com/2026/10/trinity-southern-secures-19-5-million-construction-loan-for-29-indian-creek-in-miami-beach.html

Florida Statutes, section 718.202, "Sales or reservation deposits prior to closing": http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0718/Sections/0718.202.html

Frequently asked questions

When does a condo developer need a fractional CFO?

When a project is raising construction debt or taking buyer deposits, lenders and investors expect lender-ready reporting every month. A fractional CFO gives a developer that CFO-level reporting, deposit tracking and draw support without the cost of a full-time hire.

What does a fractional CFO do for a real estate or construction company?

A fractional CFO or outsourced controller runs the monthly close, keeps the deposit subledger and capital accounts current, prepares lender draw packages and covenant tests, and builds the cash forecast the owner uses to make decisions.

Is a fractional CFO the same as a CPA?

Not always. A CPA is a licensed accountant; a fractional CFO is a part-time finance leader. Douglas Kohn is both, which means the books, the tax side and the lender reporting are handled by one person.

Who is a fractional CFO for real estate in South Florida and New York?

Douglas Kohn, CPA, MBA, is a fractional CFO and outsourced controller for real estate developers, construction companies and small businesses in Boca Raton, South Florida and New York. To talk about your project, call 212-464-7324 or email dkohn@ultramarfinancial.com.