Developer Brian Tuttle has faced financial challenges over the past two years as rising interest rates and reduced property appraisals have made it difficult to refinance debt on his Royal Palm Beach project, Mainstreet at Tuttle. “Banks were saying that due to interest rates, the appraisals had to be reduced significantly,” Tuttle told The Real Deal. “And with the appraisals being reduced significantly, you had to put more equity into the deals.”
Tuttle described his experience with potential investors: “they were all looking for a steal,” he said. “So when everyone is looking for a below-market deal, the fair market deals just get overlooked. It was very frustrating.”
After failing to secure new funding, Fort Lauderdale-based Fuse Group filed a foreclosure complaint against entities owned by Tuttle in July 2024. Despite meeting with over 200 groups in 14 months, Tuttle was unable to attract new investment and ultimately filed for Chapter 11 bankruptcy in September after Fuse Group obtained a $47.4 million judgment.
Tuttle’s situation reflects broader difficulties among developers in South Florida. Thirteen development sites across Miami-Dade, Broward, and Palm Beach counties are either facing foreclosure or have entered bankruptcy court proceedings. According to an analysis by The Real Deal (TRD), five sites encountered foreclosure actions in 2024.
The region experienced rapid growth during the pandemic as developers initiated numerous projects based on expectations of continued rent increases and favorable refinancing conditions. However, higher interest rates set by the Federal Reserve and increased construction costs—reportedly up about 30 percent—have made many previously viable projects unprofitable.
“Florida, and South Florida for sure, still has demand,” said Brett Forman of Forman Capital. “But you had explosive growth brought on by Covid… and there are developers that may have gotten over their skis, perhaps [got] too aggressive.” He noted that significant amounts of debt remain due through this year and into 2026.
Many troubled projects relied on short-term bridge loans intended to cover early development phases until longer-term financing could be secured or properties sold. With these loans now maturing amid unfavorable conditions, some developers are left unable to refinance or repay lenders as costs continue to rise.
“You rerun the math at a higher interest rate and building costs up 30 percent, and the numbers don’t make sense anymore,” Holly MacDonald‑Korth of KDM Financial said.
Legal disputes between lenders and borrowers have become common as some developers use bankruptcy filings or appeals as delay tactics while hoping for improved market conditions. In Aventura, Rok Lending acquired title to a medical office site after prevailing in foreclosure proceedings against developer Marlon Gomez despite multiple attempts by Gomez to postpone the sale through legal means.
On Miami River Cove’s planned townhome project—also tied to Gomez—a receiver is attempting to sell the site following allegations from Fiorentino Family Office regarding loan defaults and fraud claims; Gomez denies any wrongdoing but did not respond for comment.
Lenders are increasingly challenging such stalling efforts. Fuse Group requested that bankruptcy court dismiss Tuttle’s Chapter 11 petition related to Mainstreet at Tuttle, alleging it was intended solely as a delay tactic; an evidentiary hearing is scheduled for January.
Tuttle explained his rationale: “We filed a Chapter 11 to protect the unsecured creditors so that [Fuse Group] didn’t wipe them out,” he said. “And right now we’re working with the bank and the bankruptcy court to come up with the best plan to try and make it a win as much as possible.”
Even prominent developments like Legacy Hotel & Residences at Miami Worldcenter face trouble securing refinancing under current market conditions despite strong locations or branding appeal.
Attorney Josh Rubens highlighted challenges related particularly to default interest rates exceeding 20 percent: “There may be a large balance that another lender is apprehensive about getting involved in,” Rubens said. “These things just take time, and unfortunately, time sometimes really works against the developers when you have a high interest bridge loan that’s ticking away with interest.”
MacDonald‑Korth concluded that more defaults appear likely: “Everybody thought South Florida is exempt from all of these commercial real estate issues,” she said. “But it turns out, a year or two later, it’s not.”
