The Real Deal Miami

As clock ticks on loans, developers deal in bulk

By Sara Polsky | August 14, 2009 04:06PM

Investors seeking bulk deals are now a recognized feature of the recession market. But bulk deals have benefits for developers, too, said Peter Zalewski, founder of Bal Harbour-based consultancy Condo Vultures.

Bulk sales “buy [developers] some time with the bank. They’re looking for something to provide some velocity.”

The clock is running down on many developers’ loans as an oversupply of inventory makes sales — and meeting loan deadlines — difficult.

Zalewski describes himself as a “mercenary” who markets bulk deals on behalf of developers to a list of 462 funds he knows are interested in bulk buys. Currently, he’s showing one 78-unit package in Miami for which the developer hopes to get $7.8 million, or about $162 per square foot. The bulk asking price is about 68 percent off the original listing price, Zalewski said.

About 30 percent of the units in the building have closed, and if a bulk sale goes through, that would take care of another 10 percent of the project, he said. He did not say exactly how many units in the project have sold.

Developers are “going week by week, month by month, and you’re doing anything you can to prolong your lifespan,” Zalewski said by phone from his car, on his way to meetings with three developers who he said are interested in having him market units in bulk.

Zalewski said he would not give the name or address of the Miami project for fear that prospective buyers would try to cut a deal directly with the developer.

Some potential buyers have approached him looking to do a smaller bulk deal, for 10 or 20 units, but he said it’s unlikely he’ll take their offers. There is “a big trading pit of real estate bulk,” and enough buyers are interested in large-scale bulk purchases, he said.