From multifamily demand to shifting lending discipline, here’s how developers can navigate one of the country’s most dynamic real estate markets.
South Florida’s commercial real estate market continues to attract national attention, from post-pandemic migration patterns to ongoing demand for multifamily housing. But behind the headlines, developers face critical decisions around financing, risk, and long-term strategy.
We spoke with John Olsen, Executive Vice President at First American Bank, about what’s driving the market, how lenders are evaluating deals, and what developers should keep in mind heading into 2026.
Q: How would you describe the financing environment for commercial real estate in South Florida right now?
John Olsen: In a word, robust. Optimism remains high. Despite national macro-economic concerns, strong local demand keeps South Florida projects well-financed and capital active.
Which sectors are seeing the strongest activity?
Multifamily remains the most active sector, with demand still strong despite some rent softening and additional supply. Industrial also shows significant upside, but scarce and expensive land in metro Miami is pushing developers north into Broward and beyond.
Pablo González, CEO of Continua Developments, underscored the growing opportunity in workforce housing: “Since our inception in South Florida, we have strongly believed in this market and in the solid fundamentals supporting workforce housing. To execute that vision the right way, we have focused on strengthening relationships with key partners and building the right team. With First American we not only share that vision but also value their professionalism and expertise, and we look forward to continuing to grow together."
How are migration patterns shaping development?
COVID-era migration sharply raised Miami-Dade prices, displacing many workers who couldn’t afford to stay. Recent development aims to restore local affordability while demand remains strong.
Have lending standards shifted in the past year?
Not materially. But as markets stay strong, competition among lenders increases, naturally driving down rates and pushing leverage higher. Historically, that’s where risk comes.
My advice to developers: stay disciplined. Don’t assume today’s optimism lasts forever.
Are banks taking on more risk than before?
Some are. We’re seeing rising delinquency rates nationwide in commercial real estate, including multifamily. That typically causes banks to pull back, but we haven’t seen a dramatic pullback yet.
The underlying issue is simple: in some cases, lenders got overly aggressive or financed projects with weak fundamentals.
Are you seeing more demand for alternative financing options?
When bank leverage is limited, mezzanine debt and preferred equity – often from institutional or private investors – can reduce developer equity to about 10% but increase overall risk.
What are the top factors banks consider when evaluating a deal?
Banks focus on sponsor strength, property type and location, and financial structure, since poor leverage or assumptions can derail even strong projects.
In overheated markets, some lenders forget steps one and two. That’s when questionable projects get built in questionable locations.
How important is preleasing or presales in securing financing today?
Preleasing requirements vary by asset type, with multifamily usually not requiring any, condos and industrial projects often needing 25–50% presold or preleased, retail typically needing 50–75%, and medical offices usually requiring a major anchor tenant. These ensure sufficient commitment before financing.
What trends do you expect to shape the next two years?
Developers can expect rental growth to moderate as supply and demand balance, though South Florida demand remains strong and affordability a challenge. Since Covid, apartment rents have spiked up to $4.00 to $5.00 per square foot. However, given the large number of projects currently under development, rental growth will necessarily slow down and that could impact many projects’ operating results.
Carlos M. Lopez-Cantera, Executive Vice-President of Pan American Companies, noted: “In 2026, developers should expect a more selective environment. The opportunities are here, but the margin for error is thinner. Teams that manage risk early, secure the right partners, and stay realistic on rents and timelines will be in the best position.”
How does First American Bank help clients navigate these market dynamics?
We bring a disciplined, relationship-focused approach. We help developers understand the realities of the market, what’s achievable, what’s risky, and how to structure a project for long-term success. Our goal isn’t merely providing financing, it’s to help clients think strategically about growth.
Curious how shifting market dynamics might affect your next project?
