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South Florida

Miami developers weigh demanding big deposits for new construction

In an effort to limit their exposure to another real estate crash, some Miami developers are testing to see whether they can demand 50 percent deposits for unit purchase contracts, Bilzin Sumberg real estate partner Jim Shindell said in an interview with GlobeSt.com. That will help them secure construction financing, but could isolate the American buyer that has become accustomed to highly leveraged purchases, he noted.

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Shindell also said the speed of the boom-and-bust cycle has taken even developers by surprise, as the absorption of all but 2,500 of the 23,000 condominium units introduced to downtown Miami during the boom period has developers pummeled by the recession back in building mode.

As a result, Shindell doesn’t think the lessons of the last bust we’ll be learned, and overbuilding will continue. “I expect overbuilding because real estate lessons are never fully learned and the pull of profit is strong,” he said. [GlobeSt]

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