Clara Homes Secures $80M Loan from Madison Realty Capital for 77 Unit Bay Harbor Islands Rental

Key Points

• Clara Homes landed an $80 million construction loan for a 77-unit luxury rental project
• Total development cost is $108 million, or about $1.4M per unit
• Completion is targeted for Q1 2028 in Bay Harbor Islands

What the $80M Construction Loan Signals About Multifamily Capital

Madison Realty Capital is backing a six-story, 77-unit apartment building at 10200 to 10290 East Bay Harbor Drive. The project will cost about $108 million to build, equating to roughly $1.4 million per unit. The debt amounts to about $1.04 million per unit, reflecting a sizable but disciplined leverage position in today’s tighter lending climate. Despite a regional supply overhang, lenders continue to finance well-located, boutique projects in affluent submarkets like Bay Harbor Islands.

What Demand Drivers Mean for Lease Up Risk

According to CEO James Curnin, demand is coming from two main groups. Out-of-state residents relocating to South Florida and local condo owners seeking temporary housing during major renovations. Following the 2021 Surfside condo collapse, stricter recertification and structural integrity rules have pushed many older coastal condos into expensive upgrades. That disruption is creating short to mid-term rental demand in nearby buildings. For investors, this is a unique demand pocket tied to regulatory change rather than pure job growth.

What This Project Says About Bay Harbor Islands' Positioning

This is Clara Homes’ third project in the town, totaling 150 units across three six-story buildings. A 28-unit building has already been completed, and a 45-unit project is set to deliver in August. Units average about 1,850 square feet, primarily two to four bedrooms, catering to young families rather than transient renters. Bay Harbor Islands has largely been a condo development hub. By focusing on luxury rentals, Clara Homes is carving out a niche in a for-sale-dominated market.

"Bay Harbor Islands is one of South Florida's most coveted submarkets, characterized by limited new multifamily supply and sustained demand. We're excited to establish a new relationship with Clara Homes and deliver a truly distinctive luxury rental community."
Josh Zegen, Co-Founder and Managing Principal of Madison Realty Capital

What This Means in a Softer Rent Environment

South Florida delivered a record 18,600 units in 2024, leading to slower lease-ups and more concessions. Average asking rents across the region recently hit $2,236, down 3.7 percent year over year. Developers starting projects today are betting that by 2028, supply will have been absorbed and rent growth will normalize. For landlords, the takeaway is clear. Capital is still flowing to high-barrier, waterfront submarkets with strong demographics. The projects getting financed are smaller, design-driven, and aimed at higher-income renters. In Bay Harbor Islands, Clara Homes is positioning itself ahead of the next cycle, not the current one.