Despite high-interest rates fueling a tight lending environment, Kolter Urban recently secured a $182 million construction loan for Art House, a 42-story luxury condominium tower in downtown St. Petersburg.
Brian Van Slyke, regional president, credited the Palm Beach-based real estate development and investment firm’s reputation as an industry leader for its ability to close the financing deal. The 244-unit project at 235 1st Ave. S. is halfway to completion, and he expects it to open in the “second half” of 2025.
Miami-based Coastal Construction broke ground on the mixed-use development, initially estimated at $140 million, in June 2022. Condominium sales have since topped $250 million.
“Kolter’s financial strength and resources allow us to have access to a lot of debt and equity resources,” Van Slyke told the Catalyst. “It is a tough financing market, but we were able to choose a lender that fit our needs.”
Bank OZK provided the nine-figure construction loan, a rarity in Pinellas County. In January 2023, developer John Catsimatidis secured $252 million from the Arkansas-based financial institution to build the Residences at 400 Central.
Persistently high-interest rates and rising construction costs have hindered large-scale projects nationwide. However, Van Slyke noted that development lending is one of Bank OZK’s core business segments.
He lauded the bank’s “strength and ability to do these large loans” and explained the benefits for Kolter. “Even with high-interest rates, it’s still cheaper than equity,” Van Slyke said. “And it’s just part of our … financial strategy for delivering the product.
“This allows us to leverage our resources to do additional projects.”
Kolter Urban dedicated the ninth floor to building amenities.
Kolter Urban has a regional office in St. Petersburg. Van Slyke called the city one of the firm’s core markets.
The developer built the 41-story One St. Petersburg tower downtown and recently opened Saltaire, a 35-story upscale condominium building along the waterfront. Van Slyke said Kolter’s hospitality division would soon break ground on a hotel at the former Fit2Run site at 256 2nd St. N.
He also noted that the development firm is “always looking” for additional opportunities in the city. Van Slyke said St. Petersburg’s waterfront views, walkability, entertainment offerings and employment options attract everyone from retirees to young professionals.
Art House will feature two and three-bedroom units with various floor plans ranging from 1,380 to 2,637 square feet. Residences start at $1 million and feature floor-to-ceiling glass and terraces with views of the city’s skyline and Tampa Bay.
Van Slyke said about half of the tower’s 12 penthouses remain available, and one recently sold for $6.1 million. “It’s a tremendously amenitized building,” he added.
Brian Van Slyke, regional president of Kolter Urban, at a groundbreaking event for Art House in January 2022.
Cloud 9, an amenity area on the ninth floor, will feature a resort-style pool and spa, cabana space, gathering area, a private dining room, a fitness center and a theater. Over 6,000 square feet of commercial space fronting Central Avenue will house a restaurant. “We’ve been entertaining offers, but we haven’t selected anyone yet,” Van Slyk said.
He noted that the project will generate millions in local tax revenues. While Art House caters to wealthy buyers, Van Slyke said Kolter dedicated over $2 million to the city’s affordable housing fund.
Greg Newman, senior managing director of originations at Bank OZK, said in a prepared statement his company was “pleased” to facilitate construction. “Kolter Urban is developing a premier condominium development in St. Petersburg, boasting a prime location, standout assets and top-tier sponsorship that aligns perfectly with our commercial real estate lending strategy,” he said.
