A few weeks ago, our very own Tadd Schwartz accompanied Bloomberg writer Oshrat Carmiel on a tour of Miami. Carmiel, visiting from New York, was blown away — by the City’s cultural awakening, the sheer volume of high-quality projects, the affordability compared with her hometown, and the apparent depth of the buyer pool.
So, what’s driving Miami’s current boom?
Carmiel noted in her story for Bloomberg Businessweek that about 21,430 condos are either proposed or under construction in Miami-Dade County, and concluded that it’s mostly thanks to cash deposits.
By relying on buyers providing cash deposits to build a project, developers can “sleep at night,” says Diego Ojeda of Rilea Group, the developers behind The Bond on Brickell. Unlike the previous construction cycle, which relied on construction loans to build projects, developers have taken a different approach to secure funding this time around, ensuring that new projects won’t suffer should the market slow down.
Carlos and Martin Melo say it’s common practice in their native Argentina. The brothers are currently developing several projects in East Edgewater, including Bay House Miami. They were the first to start building again in 2008, funding a condo tower entirely on cash deposits. While the last construction cycle saw institutional lenders provide $11 billion to finance projects, only about $2.7 billion has been loaned throughout this cycle.
As the Miami market continues to heat up, condos are taking to new lengths to please their customers, including amenities such as helipads, wrap around balconies, and specialized garages for collectors.
You can read the full story on Bloomberg Businessweek.
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