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| Brickell CityCentre rendering |
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| Jorge Perez |
MIAMI, FL -- In the same month that his development company
paid $32 million for a condo site located a block south of the proposed Brickell
CityCentre mixed-use complex in Greater Downtown Miami, highrise developer Jorge
Perez of the Related Group revealed his Miami-based firm is requiring up to
100 percent buyer deposits for presale units in its proposed condo towers,
according to a new report from CondoVultures.com.
Perez told CNBC's Squawk Box that the Related Group - which
reportedly "probably lost about $3 billion in different projects"
during the last real estate boom-and-bust cycle - is limiting its risk in this
newest South Florida condo boom by collecting deposits that are significantly
higher than the standard 20 percent amount required during the last building
boom that began in 2003.
"The difference now is that we're much more cautious in
how we take deposits," Perez told CNBC. "For all of our condominiums,
people that want to buy from us have to pay between 50 percent and 100 percent
during the construction period of their purchase so financing really has been
done by the purchaser. We are not taking the risk that we took in the previous
boom."
Overall in South Florida, developers are proposing at least
140 new towers with more than 18,560 units in the tri-county coastal region of
Miami-Dade, Broward, and Palm Beach some as of June 28, 2013, according to the
Cranespotters.com Pre-construction Condo Projects Database™ compiled by the
licensed Florida brokerage CVR Realty™.
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| Mary Brickell Village rendering |
Perez added another notable step being taken to limit the
Related Group's risk this time around is the implementation of a presale condo
strategy that specifies the process that is to be followed if buyers once again
refuse to purchase their units at the contracted price upon completion of
construction.
"If there was something to happen, we do not have to
give back that money to the purchaser," Perez told CNBC. "All we have
is an obligation to resell their unit for them at market. We have greatly
reduced the level of risk."
As the developer risk has been limited so has the pool of
prospective buyers - with a heavy concentration on foreign investors.
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| 1100 Millecento Residences rendering |
"Right now, the demand is extremely strong...from both
Latin America and Europe," Perez said, "And starting again from the
Northeastern United States as the economy in the U.S. rebounds."
In anticipation of the stronger demand, a Related
Group-controlled entity paid $32 million - an average of $533 per square foot - for a nearly
1.4-acre-vacant site located at 850 S. Miami Ave. between the Shops At Mary
Brickell Village and the proposed Brickell CityCentre complex in
Greater Downtown Miami, according to the Miami Daily Business Review.
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| Premier Towers rendering |
The development site - originally proposed to be the Premiere
Towers complex during the last condo boom - was purchased at the heart of
the real estate crash for $9 million, or $150 per square foot, in December
2008, according to the press report.
The Premiere Towers site has a 2013 assessed land value of
$12 million, or $200 per square foot, according to the Miami-Dade County
Property Appraiser.
The Related Group has not yet determined what it plans to do
with the Premiere Towers site, according to the press report.
Overall, the Related Group is already proposing at least 13
South Florida condo towers - including six projects with nearly 1,400 units
that are already under construction - with more than 2,300 units in projects, including
the proposed One Ocean and Marea in the South Beach market; the SLS Hotel &
Residences and an unnamed project on the former Element condo site in Greater
Downtown Miami; and the ICON Palm Beach north of Downtown West Palm Beach,
according to the Cranespotters.com Pre-construction Condo Projects Database™.
Additionally, the Related Group is currently constructing
the 1100 Millecento Residences, ICON Bay, and MyBrickell projects in Greater
Downtown Miami; the Baltus House in the Morningside area of Miami; and the
Apogee Beach and Beachwalk towers in the Hollywood / Hallandale Beach market in
Southeast Broward County, according to Cranespotters.com.
Some six years after the South Florida real estate crash
began in 2007, one new condo tower has already been completed in the tricounty
region and 24 other highrises - Aventura's Bellini At Williams Island; Greater
Downtown Miami's 1100 Millecento Residences, Brickell Citycentre (two towers),
BrickellHouse, Habitat II, ICON Bay, and MyBrickell projects; Hallandale
Beach's Beachwalk;
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| My Brickell condo rendering |
Hollywood's Apogee Beach and Costa Hollywood (two towers);
Key Biscayne's Oceana (two towers); Miami's Baltus House in the Morningside
area and Grove At Grand Bay (two towers) in the Coconut Grove are ; Miami
Beach's Faena House Saxony and Residences At Miami Beach Edition;
Palm Beach
County's 4001 North Ocean project; and Sunny Isles Beach's Chateau Beach,
Mansions At Acqualina, Porsche Design Tower, and Regalia - are under
construction as the post-crash development era gains momentum, according to a
CondoVultures.com report.
The push for new condo construction comes as the boom-era
unit inventory is dwindling in South Florida.
Fueled by investors primarily from overseas, about 2,130 new
condo units remain unsold from a supply of nearly 49,000 units created since
2003 in South Florida’s seven largest coastal markets of Greater Downtown
Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown
Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West
Palm Beach and Palm Beach Island as of March 31, 2013, according to a new
CondoVultures.com report.
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| Baltus House rendering |
The total number of unsold new condos does not include any
of the more than 8,000 units that were purchased in bulk transactions by
investment groups that plan to one day resell the units at a premium, according
to the Condo Vultures® Bulk Deals Database™.
A number of the newly proposed condo units are not expected
to be completed until 2014 when the unsold developer inventory from South
Florida's last real estate boom and bust is projected to be sold.
For a complete copy of the company’s news release, please
contact:
Condo Vultures® LLC
225 Midtown Building
225 NE 34th St.,
Suite 209B,
Downtown Miami, Florida, 33137.
800-750-0517.
