Developers are planning to build about 150 new condo towers, offering a cumulative 20,200 units, in coastal South Florida.
Some 35 of these projects have secured nearly $900 million in loans, according to Peter Zalewski, head of the Condo Vultures condo consultancy. Developers’ and lenders’ appetite for new condos has surged with all but 2,000 of the nearly 49,000 developer units built on the coast during the last cycle sold off.
The biggest lender in South Florida is Alabama’s Regions Bank, with $250 million in loans, followed by New York-based NorthStar Realty Finance with $120 million and Deutsche Bank Trust Company Americas with $50 million, Zalewski said in a column for the Miami Herald, citing Miami-Dade County records.
In the absence of lending, South Florida developers have financed projects through the so-called South American model, where buyers plunk down as much as 50 percent of a unit’s purchase price as an upfront deposit.
The new influx of loans could reduce the prevalence of the model and permit more buyers to come to the table, Zalewski said. [Miami Herald] — Emily Schmall