Why condos are breaking ground with financing while multifamily has slowed
If you’ve been tracking development activity across South Florida lately, you may have noticed something surprising: condo towers seem to be breaking ground (or so they’ve announced) at a faster pace than new apartment communities. In a region that just delivered a historic wave of multifamily units, the momentum appears to be shifting, but many condo projects were at a standstill post pandemic.
So what’s driving the surge in condo groundbreakings while apartment starts slow down?
The answer isn’t about demand disappearing. It’s about capital, timing, and risk. With lenders favoring projects backed by strong pre-sales (that’s been years in the making some 5+), construction financing tightening for rental deals, and a recent influx of apartment deliveries softening fundamentals, developers are feeling the effects of long anticipated movement.
Meanwhile, certain condo segments (particularly luxury and presale-driven projects) are finding enough construction loans to FINALLY move forward.
Why are we seeing more condo groundbreakings in 2026?
1. Developers Are Chasing Condo Pre-Sales & Big Loans
In the past year, the largest construction loans in South Florida have mostly gone to condominium projects (especially luxury and branded residences). Four of the five biggest construction loans were for condos, showing capital is currently flowing more toward condos than rentals.
Why this matters: Construction starts often follow where big money and presales are concentrated. When a condo project presells a good portion of units before breaking ground, lenders are more comfortable financing it.
2. Financing Apartments Is Harder Right Now
Apartment developers nationally and in South Florida are facing a more challenging financing environment:
- Elevated construction costs, interest rates, and a glut of recently completed apartments have made lenders more cautious on new apartment groundbreakings.
- A big wave of apartments has been delivered recently and vacancies have risen, so the urgency to build more has moderated.
The result is many multifamily sites that were approved are being postponed or sold rather than built immediately.
3. Condo Projects Often Come With Pre-Sales and Cash Buyers
Unlike apartments, condos are sold unit by unit before construction, sometimes securing a large portion of sales before groundbreaking. This helps developers secure financing and justify starting projects sooner.
Even though overall condo sales have cooled compared to the pandemic boom, certain condo segments like luxury units and properties with strong presales are moving forward quickly
3. Rental Market Fundamentals Are Softening
South Florida saw a huge wave of apartment deliveries over the past few years (e.g., tens of thousands of units completed in 2024), and absorption hasn’t kept pace. This has softened rent growth and increased vacancies, which reduces the incentive to start new apartment construction immediately.
In Summary
You’re seeing more condo groundbreakings than apartment starts in South Florida this year (2026) because:
- Construction capital is favoring condos due to higher presales and bigger loans.
- Apartment starts are slowing due to recent oversupply, softer rents, and tougher lending.
- Condos can secure financing via unit pre-sales, making groundbreakings easier to commit to.
- Some condo niches remain attractive (e.g., luxury and international buyers).
