By Wallace Law– Business & Bankruptcy Attorneys Serving Palm Beach County and Beyond
Florida’s Real Estate Rollercoaster
For years, Florida’s property market has been on fire — fueled by cash buyers, low interest rates, and post-pandemic migration. But in 2025, the story is changing fast.
Rising interest rates, tighter lending, and a slowdown in commercial property demand are squeezing small developers, landlords, and contractors across the state.
The result? A surge in business bankruptcies and workouts — especially in South Florida’s overheated markets like Palm Beach, Boca Raton, and Miami-Dade.
1. The Perfect Storm for Financial Distress
Florida’s small real estate investors and construction firms are facing three major pressures:
- High borrowing costs: Commercial loans that were affordable in 2022 are now renewing at double-digit interest rates.
- Delayed payments: Developers are slowing payments to contractors, causing cash flow crises.
- Falling property values: Retail and office vacancies are rising, pushing investors underwater.
Together, these forces are driving a spike in Chapter 11 and Subchapter V filings among property-heavy businesses.
2. Why “Waiting It Out” Can Be Dangerous
Many business owners hesitate to call a bankruptcy attorney until it’s too late — often after default notices or lawsuits have been filed.
By then, options like negotiated workouts, forbearance agreements, or structured reorganizations may have evaporated.
➡️ Legal Tip: The earlier you consult a business bankruptcy attorney, the more control you have over your restructuring options and asset protection strategy.
3. Subchapter V: A Lifeline for Small Real Estate Businesses
Subchapter V of Chapter 11 Bankruptcy was designed to help small business owners reorganize quickly and affordably.
For Florida real estate developers, investors, or landlords with under $7.5 million in debt, Subchapter V offers:
- No creditors’ committee (saving thousands in fees)
- Faster confirmation process
- Ability to keep control of the business while restructuring
➡️ Case Example: A Boynton Beach property management company used Subchapter V to restructure $2.3M in secured debt and keep its rental portfolio intact. Within 12 months, it emerged debt-free and profitable.
4. The Rise of “Commercial Workouts”
Not every distressed business needs to file bankruptcy. Many can avoid court altogether through out-of-court workouts, which may include:
- Loan modifications or extensions
- Debt-for-equity swaps
- Forbearance agreements with lenders
- Asset sales or orderly wind-downs
➡️ Legal Tip: Your attorney can negotiate directly with creditors and lenders to restructure debts without public filings — preserving your reputation and business relationships.
5. Residential Builders Are Feeling the Heat
In Palm Beach County, construction costs remain high, but buyer demand has softened. Builders sitting on unsold inventory or delayed payments from developers are finding themselves overleveraged.
Some are using Chapter 11 bankruptcy to pause creditor actions while they reorganize or liquidate projects in an orderly fashion.
6. What This Means for Florida’s Market in 2025
While some see this as a correction, savvy investors and attorneys view it as a realignment.
Businesses that adapt — by restructuring debt, streamlining operations, and protecting assets — can emerge stronger when the market stabilizes.
7. How Wallace Law Helps Florida Businesses Navigate Financial Crisis
Our firm provides strategic bankruptcy and restructuring counsel tailored for the Florida real estate economy. Services include:
- Chapter 11 & Subchapter V filings
- Creditor negotiation and debt restructuring
- Asset protection and workout planning
- Commercial foreclosure defense
- Business dissolution and reorganization
We represent developers, landlords, contractors, and small business owners throughout Palm Beach County and South Florida.
8. The Takeaway
Economic downturns are survivable — but only for those who act early.
If your real estate business is struggling with debt, falling income, or lawsuits, you don’t have to go it alone.
At Wallace Law, we help business owners stabilize, restructure, and start fresh — without losing what they’ve built.
Contact Wallace Law📍 2500 Quantum Lakes Drive, Suite 203
Boynton Beach, FL 33426
📞 (561) 400-3896
🌐 www.wallacelawflorida.com