Delray Beach Mixed-Use Project Lands $173M Loan

The 7-acre Sundy Village development’s total cost reaches $240 million. Rendering courtesy of Pebb Capital

Pebb Capital has secured a $173 million construction loan from Monroe Capital and J.P. Morgan for its $240 million Sundy Village office and retail development in the heart of downtown Delray Beach, Fla.

The mixed-use project broke ground in early 2023 at 22 W. Atlantic Ave., at the corner of Atlantic and Swinton avenues on a 7-acre site. Completion is slated for the summer of 2024.

The development, which will be the last remaining master-planned office project in Delray Beach, will feature 180,000 square feet of Class A office space and more than 28,000 square feet of experiential retail space.

The developers are preserving and restoring several buildings listed on the National Register of Historic Places for retail use, including Sundy House, one of the oldest houses in Delray Beach, as well as The Rectory and Cathcart House. Pebb Capital acquired Sundy House in October 2019 for $40 million from MGM Delray LLC, as part of a larger transaction that included the proposed Sundy Village development site.

Gensler and RLC Architects are in charge of designing the project that will include open-air courtyards and walkways, green spaces and indoor and outdoor dining spaces. Bluewater Builders is the general contractor.

Pebb Capital already preleased 141,400 square feet of the space. Tenants will include Barcelona Wine Bar, a tapas bar with Mediterranean, Spanish and South American influences, as well as Vertical Bridge, the world’s first carbon-neutral communications tower company. Double Knot, a Philadelphia-based restaurant concept from Chef Michael Schulson, will also be present at the site.

First Vice President Joe Freitas and Executive Vice President John Criddle of CBRE will oversee Sundy Village office leasing. Sara Wolfe of Vertical Real Estate is handling retail leasing.

Pebb Capital recent moves

Todd Rosenberg, founder & managing principal of Pebb Capital, said in a prepared statement the team’s vision for Sundy Village is to push boundaries beyond current market offerings and drive a positive economic impact for Delray Beach. Rosenberg added that the firm was advised on the financing package by Ackman-Ziff. Noting it was one of the few construction loans closed in the country this year, Rosenberg said the financing was a testament to the strength of the placemaking project.

Founded in 2014, Pebb Capital is a real estate and private equity firm with offices in New York and Boca Raton, Fla. The firm has a portfolio valued at more than $3 billion and includes retail, lending, hospitality and student housing holdings.

In September, Pebb Capital sold Ocean Walk, a 65,908-square-foot retail center in Singer Island, Fla., to Related Cos. for $19.2 million, according to CommercialEdge information. Pebb Capital had owned the property since 2017. Ocean Walk encompasses four buildings that were fully leased at the time of the sale.