Martin Margulies is so driven to wrap up his latest condominium project before Miami’s next crash that he is doing something extraordinary – and extremely personal.
The hardened developer is putting up pieces of his estimated $800 million art collection – including works by Mark Rothko, Jackson Pollock and Cy Twombly, among others – as collateral to secure an $80 million personal loan from U.S. Trust, which he hopes will instill confidence in buyers.
Unlike many of South Florida’s biggest developers, Margulies is adverse to the model of financing construction through hefty cash deposits from foreign buyers.
“The danger of that is the developer uses the money, except for the first 10 percent, and if he uses the money, and the construction costs escalate, he better have the money to cover those costs because the buyer is out there. We felt that by using our own money to build a building, that would encourage people to have confidence in us and the project,” Margulies told The Real Deal at the sales center for his current project, Bellini Williams Island, Thursday.
Whether Margulies’ unorthodox bet will paid off could be known in October, when construction of the 24-story condo tower in Aventura is scheduled to complete. Margulies will not specify sales data, only saying that he is able to service the debt on the loan without difficulty.
Bellini Williams Island, the first condo development to break ground following South Florida’s real estate crash, could be the 74-year-old developer’s final project – that is, of course, unless another great site opens.
“There’s a huge amount of people coming out of the woodwork. I think some of them will fall by the wayside, and maybe something will come my way,” he said.