The Real Deal Miami

Bulk buyers moving more quickly on condos

By Roger Drouin | August 05, 2009 02:16PM

“Timing, timing, timing” is becoming the new mantra for investors trying to pull off bulk purchases at the empty condo towers that are Brickell and South Florida’s oceanfront legacy of the building bubble.
 
Rodrigo Nino, founder and president of Prodigy International, is so sure of a recovery in the near future for Miami’s condo market that his investment group purchased 10 units in Brickell on the River — the last batch of developer-owned units at the twin towers — and another 33 developer-owned units in Bal Harbour’s oceanfront Harbour House.
 
Prodigy, which works in Florida, New York and the Caribbean, closes on both deals this month. Nino plans to rent the units at rates that would cover taxes and maintenance fees and sell for a profit in three years to international buyers.
 
“There is no need to place any bets,” Nino said. “We look for projects that are already stable and that have a global demand.”
 
From July 2008 to July 2009, bulk buyers purchased nearly 600 new condo units in South Florida, shelling out about $125 million in cash for more than 630,000 square feet of livable space, according to a report by Bal Harbour-based Condo Vultures, a real estate brokerage that specializes in bulk purchases.
 
The frequency of this type of deal should increase as investors with financial backing pull the trigger, motivated by fears that waiting too long will be a bigger risk.
 
Investors like Nino are banking on a strong rebound to Miami’s real estate market and what they see as a final chance to buy reduced-price units from developers.
 
“We believe the market has reached a bottom,” Nino said. He sees Latin America and Europe as the top pools of prospective buyers, he said. “There is a lot of pent up demand for properties in Miami and New York.”
 
Individual investors backing these bulk buyers are also putting the pressure on.
 
“Investors are saying, ‘Are we missing out?’” said Peter Zalewski, founder of Condo Vultures. “A lot of these groups have to prove they are real and trying to do something. If they can make a (bulk) purchase now, it legitimizes them. They can raise additional capital from investors because they are proving they are doing it.”
     
Although a recent national report listed Miami’s rental vacancy rates and foreclosures in the top six for large cities, investors see brighter prospects for newer buildings in places like Brickell, Sunny Isles and the beach.
     
Zalewski has a list of 430 different investment groups that are interested in buying a cluster of condos — most are interested in Brickell or Miami’s beaches.
 
“They all say they have $500 million, but even if 10 percent are solid investors, that is 50 investors who will be flooding the market,” Zalewski said.
 
Not everyone is buying at discount prices. Some buyers want their units now, even if they have to pay retail per-square-foot prices.
 
A bulk deal at 1060 Brickell is a case in point, said Zalewski.
 
Colombian real estate investor Carlos Mattos’ firm purchased 31 units there in mid-June for $6.1 million, or $203 per square foot. “He basically paid retail because he wanted to secure units in the project,” Zalewski said.
 
There are now buyers out there for newly constructed units, said Marci Trautenberg, a realtor with EWM Real Estate in Aventura.
 
The inventory of the once huge supply of developer-owned units at buildings like the Ocean Marine Yacht Club in Hallandale is shrinking.
 
“Six months ago there was 100-plus units for sale, and now they are down to 30 units,” Trautenberg said. “They are selling one a day.”