Jimmy Tate, CEO & President, Tate Capital

Invest: spoke with Jimmy Tate, CEO and president of Tate Capital, about the company’s milestones, as well as the trends and challenges in real estate development, with a particular focus on South Florida, highlighting innovative projects, market insights, and sustainable practices.

What were some significant milestones and achievements for Tate Capital over the past 12 to 18 months?

One of the most significant accomplishments over the past two years has been securing all the necessary final approvals for Bahia Mar, an internationally recognized waterfront hotel and marina, a massive multibillion-dollar redevelopment in Fort Lauderdale. It is currently the home to the Fort Lauderdale International Boat Show, the largest in-water boat and yacht show in the world. This is a project we’ve been working on for nearly a decade, so it’s a major milestone for us.

Just recently, we finalized an agreement with St. Regis to serve as the property’s luxury brand. They’ll manage and operate both the five-star resort hotel and the residential towers. This partnership is a game-changer, solidifying the development’s position as a premier luxury destination.

The project spans 40 acres of prime property bordered by the bay and intercoastal waterways on one side and the ocean on the other. It includes over 2,000 linear feet of oceanfront property and over 1.15 million square feet of sellable residential product. Beyond the residences, the project integrates a luxury hotel, waterside parks, boardwalks, commercial, waterfront restaurants, and extensive amenities to create a vibrant, self-contained community. We recently completed the Marina Village, which serves as a central hub within the development. In short, we are transforming the south beach area of Fort Lauderdale into an international paradise but equally important, we are developing a world class waterfront lifestyle community for our homeowners, who appreciate the luxuries and amenities we have to offer. 

Another significant achievement is our progress in North Miami, where we’ve secured approvals for two major mixed-use projects. One is a 360-unit multifamily development that we plan to break ground on in the summer of 2025. The other, approved just two weeks ago, will include 348 residential units, a high-rise complex, and a grocery store, all strategically located at 11th Avenue and 125th Street.

These developments reflect our vision for creating urban spaces that are not only luxurious but also functional and community-focused. We’re particularly excited about the potential of these developments to enhance the quality of life for residents while addressing broader urban development goals.

What is the importance of walkability in the design process?

During the planning phase, we sometimes encounter skepticism about mixed-use developments. People worry about potential traffic or other similar concerns. However, what we’ve tried to emphasize — and what the data supports — is that these kinds of intermodal developments actually reduce traffic by creating centralized, walkable hubs.

Take our North Miami development as an example. It will have 348 residential units and a full-service grocery store on the ground floor. Hence, neighboring apartment complexes and houses, as well as our tenants, can walk to the grocery store, thereby eliminating the need for cars when providing this basic service. The area is also adjacent to a large public elementary school. Our proposed development, combined with the new 360 luxury unit Garden’s apartment complex immediately adjacent to our north, will create a fun and safe environment for families. Together, these developments create a vibrant, interconnected community where residents can live, work, shop, walk their kids to school, and socialize without needing to drive.

By designing with planned mobility in mind, we’re creating spaces where people can leave their cars behind, reducing congestion and their carbon footprint, all while enhancing their overall quality of life. It’s a win-win for everyone involved.

That’s one of the reasons we’re so excited about North Miami. It’s a city with immense potential, offering families the chance to live within walking distance of schools, workplaces, and amenities. It’s rare to find a location that combines this level of convenience, comfort, and community spirit.

What trends or shifts have you observed in investor demand for multifamily residential and select commercial properties?

The success or failure of the South Florida multifamily market, like most commercial markets, is directly related to supply and demand. The issue with the multifamily market in South Florida is complex. The challenge lies in the high demand for rental properties, which, on the surface, seems positive—limited supply and high demand typically lead to higher rents. However, rent growth in South Florida has been capped due to affordability concerns. Exacerbating the affordability issue, commercial real estate in the region has also been impacted by rising interest rates, increasing insurance costs, and higher construction expenses. These additional factors, which are beyond developers’ control, are creating a serious conundrum in the multifamily sector. As a result, people are struggling to afford living in South Florida without getting creative.

Interest rates also play a huge role in determining what investors can afford to develop, based upon conservative underwriting practices, not just because of the added cost of money but as interest rates rise, cap rates also increase, which puts downward pressure on property values. The higher the cap rate, the lower the value of the asset. This has been a particular challenge for developers recently, even in what on the surface seems to be a thriving real estate market in South Florida.

In addition to rising interest rates, we’re dealing with high costs across the board — insurance, construction, and living expenses. These factors make new developments more expensive and drive up housing costs, exacerbating affordability issues. Even workforce housing, which is supposed to be more accessible, is becoming increasingly unattainable for many families, creating an issue on the demand side.
On the flip side, there is not enough affordable housing to meet the needs of the current workforce. South Florida could use approximately 50,000 more affordable residential units. As a result, we are also facing a housing supply shortage, which drives rents even higher.

Simply put, we don’t have enough housing, which continues to push prices upward. At the same time, wages aren’t keeping pace, forcing many families to work multiple jobs just to make ends meet. Therein lies the conundrum. 

On a corporate level, these challenges are impacting businesses as well. While many companies are attracted to South Florida for its tax benefits and lifestyle, their employees are struggling with housing affordability and access to quality schools. I recently spoke with someone at Citadel who mentioned they had to hire an education consultant to help place employees’ children in local schools. It’s a creative solution, but it highlights the systemic challenges we’re facing.

Despite these hurdles, I remain optimistic. South Florida’s economy is incredibly resilient, and I believe we’ll find innovative solutions to address these issues over time.

What opportunities do you see in the U.S. market moving forward?

Distressed debt is an interesting space, but I don’t think we’ll see the kind of widespread opportunities that emerged during the 2008 financial crisis or the 1998 S&L debacle. The key difference now is that banks have learned from past mistakes.

In the past, banks were quick to offload distressed assets to clear their books. However, they’ve realized that with a bit of patience and collaboration, they can achieve better outcomes. For example, if a developer’s project fundamentals are strong, with stable leasing, reasonable construction costs, and solid projections, but they’re struggling due to external factors like rising interest rates, or higher cost of construction or insurance, then the bank may opt to work with them rather than foreclose.

This approach benefits everyone involved and prevents a flood of distressed assets from hitting the market. That said, there will always be some level of distressed opportunities, such as real estate-owned (REO) properties from foreclosures, but I don’t foresee a dramatic increase in these opportunities unless there’s a significant economic shift or regulatory pressure on banks to offload assets.

In short, the distressed debt landscape has evolved, and while opportunities exist, they’re more nuanced and require a deeper understanding of the market.

What are Tate Capital’s top priorities over the next two to three years?

Our top priorities revolve around maintaining our reputation for excellence and creating a lasting legacy. Every project we undertake is approached with a long-term perspective, focusing on quality, community impact, and sustainability.

For example, in Fort Lauderdale, we’ve introduced an innovative trust fund initiative that allocates a portion of sales and resales to address critical issues within that community, such as homelessness, workforce housing, STEM in underprivileged areas, programming and environmental sustainability and resiliencies. By the time we complete the project, we estimate these trust funds will have around $5–$5.5 million to support the city causes referenced earlier.

Obviously, we want our developments to generate successful financial returns, but we equally desire for our developments to be transformational by design, thereby leaving a positive mark on the communities we serve. Whether it’s transforming an area like North Miami or enhancing Fort Lauderdale’s South Beach, we aim to create spaces that improve lives and set a new standard for responsible development.

Another priority is fostering collaboration across our projects, ensuring they reflect the values of resiliency, sustainability, and thoughtful planning. For us, it’s about more than just building structures, it’s about building a legacy that future generations can be proud of.