Is a Second Downtown Miami Condo Boom on the Horizon?
Those half-empty condo buildings that once haunted downtown Miami are slowly filling up, thanks in large part to foreign buyers taking advantage of the low prices and weak dollar. Though, you'd be hard pressed to find anyone who thinks that what the area needs right now are tons more condo buildings. Yet, that hasn't stopped developers from making ambitious moves that could spur something of a mini-building boom resurgence.
Earlier this week, The Wall Street Journal profiled Jorge Pérez (sorry, it's behind a paywall), the so-called former "Condo King of Miami." The man who fronts mega-developers the Related Group (a company he co-founded with Dolphins owner Stephen M. Ross) played no small part in fueling Miami's last condo boom, and he also suffered in no small part when it busted. Yet, he still made tons of money and apparently its burning a hole in his pocket.
He's buying up property in areas like Brickell and Omni with plans of breaking ground on yet more condo buildings.
Today, another Wall Street Journal article asks the pertinent question of why in the hell he would do that?
The uptick in sales recently in empty condos seems to be encouraging, and we assume the thought is that by the time new development are completed there will be demand for more inventory.
WSJ also points out that it's pretty cheap to build:
"This is basically the cheapest time to build," says Jay Massirman, a principal with Asentus Real Estate, a boutique real estate financing firm. Also, says Mr. Massirman and others, any projects that get going now will be ready by the time Miami's 5,000-condo glut is cleared. "If you put a shovel in the ground for a condo right now, by the time you're done, you'll be delivering that building five or six years after the last downturn."
When they put it that way, it starts to sound mighty nice, doesn't it?
Perez also claims he has tons of his own money ready to invest, and will require pre-construction buyers to put up more money before he starts building.
Of course Perez's projects, believed to be a building called My Brickell in, you guessed it, Brickell and another building behind the old Omni International Mall, aren't the only developments on the horizon.
There's also plans by other developers for that giant mixed-use megamall in the heart of downtown and a smattering of other condo projects scattered along the Biscayne corridor.
The question remains though whether the market will be back when these projects near completion? And can developers really continue to hedge their bets that foreign buyers will fuel a rebirth, and is that really what we want? And will city hall, now fronted by Mayor Tomas Regalado who ran against his predecessors seeming zeal for unrestrained development, allow it? I guess we'll take the influx of building-related jobs and money and hope for the best in the meantime.