The Real Deal Miami

Building boom’s crowded legacy

By Roger Drouin | April 29, 2009 01:07PM

Investors and second-home buyers own 60 percent of the nearly 13,000 new condominiums sold in Downtown Miami since 2003, according to a report published last week by Condo Vultures, a real estate consultancy.

The 60-block stretch of Miami best known earlier in the decade for the plethora of construction cranes saw its condo count triple during the boom years. In a seven-year span, Downtown Miami got 161 new condo buildings, said Peter Zalewski, founder of Condo Vultures, which used its database to compile the report.

“During the boom time, the city and developers were talking about all these people that would be living here and using grocery stores and shops,” Zalewski said. “What we found is investors plunking down money for units. Many investors went out and were purchasing up to five units at a time.”

And the ratio of investors and second-home buyers to primary users could widen even more as developers try to sell 10,000 new units that are still not closed. The area stretches from the Julia Tuttle Causeway south to the Rickenbacker Causeway, Interstate 95 east to Biscayne Bay.

“We thought it was going to be high. But not this high,” Zalewski said. Due to new lending requirements, condo buildings that have too high a concentration of investors may prevent buyers there from qualifying for financing.

Three condo towers downtown — all within several blocks of each other — have the dubious distinction of being ranked in the top 10 condos in the tri-county area for foreclosures. The buildings include Jade Residences, on Brickell Bay Drive, the Club, on Brickell Bay Drive, and the Vue, on South Miami Avenue. “Investors wanted to flip them and couldn’t flip them or rent to cover costs, and ended up giving them back to the bank,” Zalewski said.