Signs of the Miami Real Estate Bottom? Good news from the media about Miami Real Estate? Pinch me please, this can’t be true!
Check out this article by none other than Bloomberg: Florida Real Estate Bottom Signaled by Sale of Distressed Condo
What I find fascinating is the creativity behind these bulk purchases. Jorge Perez from The Related Group has been very heavily criticized, but you be the judge:
Perez made the bulk purchase, the largest in condo-glutted downtown Miami, in the 50 Biscayne Blvd. tower with Lubert-Adler Partners LP, a private equity firm headed by Dean Adler. The two firms raised $1 billion to buy condos, mortgages and land in Florida, according to a Feb. 13 news release. The price was $30.3 million, about half the cost of individually sold units.
Perez’s partnership bought the condos from his own development company and a partner, Atlanta-based Cousins Properties Inc., which built the 54-story tower.
In an earlier bulk purchase at 50 Biscayne, Perez and Cousins sold 26 units in May to 50 Biscayne Suites LLC for $6.1 million. Perez and Cousins paid off their construction loan with LaSalle Bank with the proceeds, according to Zalewski of Condo Vultures.
Paying off the loan allowed Perez to do the recent 120-unit bulk transaction at below-market prices, said Bruce B. Baldwin, a partner with the Miami-based Mase & Lara PA law firm who was not involved in the deal.
Construction lenders require developers to sell condos at a minimum price, he said. Once the developer’s debt to the bank is paid, the developer can discount the units, he said.
Perez may follow a similar strategy at the Plaza on Brickell development, two downtown towers with a total of 1,000 units, and other developers may too, Zalewski said.
Rumors in The Miami Luxury Condo Market don’t stop there though, just last week I heard that the Royal Family of Dubai had purchased Midtown Miami. Although it is only a rumor and I have not been able to confirm it, it leaves you thinking that if big dogs are investing in Miami Real Estate…..there may be an end to the madness after all.