In Anticipation of an Eventual Sellout in Miami Some Developers Begin Preparations

In anticipation of an eventual sellout in Greater Downtown Miami, South Florida developers have recently filed applications with the Federal Aviation Administration — the governmental entity that governs airspace — to obtain approval to assemble construction cranes within the next 15 months to build a 713-foot-tall tower with at least 60 stories at 600 Biscayne Blvd., a 710-foot-tall tower with at least 60 stories at 700 Biscayne Blvd, and a 610-foot-tall tower with 55 stories at 24 SW 4th St. on the north bank of the Miami River.

Condo developers have been on a tear, proposing an average 1,000 new units per month since October 2012, Condo Vultures consultant Peter Zalewski wrote in the Miami Herald.The rush to build new projects comes as less than 2,150 new condos about 5% percent of the total developer inventory from the last South Florida real estate boom  were unsold as of March 31. At the current transaction pace, nearly all of the oversupply of the developer units from the 2003 boom — and subsequent bust of 2007 — could be sold by the second half of 2014.

The reduction in unsold developer units combined with a competitive cash-dominated condo resale market — where less than 18,400 units are for resale in all of South Florida — and strong rental rates are prompting many buyers to seriously consider purchasing condos during the preconstruction process that can take up to three years.

Since the fourth quarter of last year, developers have announced nearly 90 buildings representing a combined 9,500 new units. An additional 1,200 units are expected to be announced in coming weeks, according to the column. Since April 2011, 145 towers have been proposed, with the bulk — about 90 towers — to be constructed in Miami.

South Florida developers have recently filed applications with the Federal Aviation Administration — the governmental entity that governs airspace — to obtain approval to assemble construction cranes within the next 15 months for Chateau Group’s proposed  60-plus-story, 713-foot-tall tower at 600 Biscayne Blvd. and 710-foot-tall tower with at least 60 stories at 700 Biscayne Blvd; and Newmark Development Group’s planned 610-foot-tall tower with 55 stories at 24 SW 4th St. on the north bank of the Miami River, Zalewski wrote, adding that the total count is unclear with the developers still at the planning phase.

Unlike the previous boom, there is virtually no construction financing available, Zalewski wrote, with developers depending on deposits of about 50 percent to cover the building costs.* Sources: Miami Herald & The Real Deal

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