Now is the time for a life-size statue to be erected in downtown Miami to recognize the contributions of South Florida mega-condo developer Jorge Pérez of the Related Group, now before the market’s invariable shift.
That Miami’s new art museum will bear the developer’s name – thanks to a $35 million donation – when it opens in December should not disqualify the statue idea since cultural buildings in Miami have changed their names before. (Remember the Adrienne Arsht Center for the Performing Arts was originally named after Carnival Cruise Lines.)
Under Pérez’s stewardship, the Related Group has arguably done more for the evolution of downtown Miami – and the livelihood of numerous attorneys, brokers, contractors, and property managers but far fewer lenders – than anyone since early settler Mary Brickell, for whom a statue was erected on Brickell Avenue in 1998.
Mary Brickell’s vision to plat out the city’s marquee boulevard on her family’s 640 acres of land on the south bank of the Miami River established the foundation on which Pérez would build thousands of condo units over the last dozen years.
Given Miami’s history of condo booms and busts, no time is better than the present — a period of perceived stability and optimism — to recognize the 63-year-old developer.
After all, thousands of new units units – nearly a third of which Related is proposing – have not yet hit the market.
Tight condo resale inventory is causing rental rates to spike, worrying some that a new bubble could be forming downtown.
As the unsold developer inventory from the last boom is absorbed, many developers – veteran and new to the market – are rushing in to construct condo projects as soon as possible, hoping to capitalize on the enthusiasm of investors participating in current the buying frenzy.
Consider that 39 new condo towers with nearly 12,000 units – more than half of the units developed during the last cycle – have already been proposed or planned, are under construction or have been completed in greater downtown Miami as of Sept. 12, according to an analysis of Condo Vultures’ preconstruction condo project website, CraneSpotters.com.
Pérez’s Related Group alone has 11 towers in the pipeline, with more than 3,700 units proposed, planned or under construction for downtown.
Here’s the breakdown: Three towers comprising nearly 900 units are under construction, six towers with 2,000 units are proposed, and two towers with more than 850 units are planned.
During the last South Florida condo boom that began in 2003, whose deleterious effects are still being felt, Pérez’s Related Group built more than 5,500 units in a dozen towers in greater downtown Miami, an analysis of government records shows.
When the condo market soured in 2007, the developer was forced to become a workout specialist by working with lenders, bulk investors and individual buyers to unload the units.
A signature moment of the crash occurred when Pérez’s Related Group turned over 870 condos in the Icon Brickell complex in May 2010 at a value of $346 per square foot to the lending consortium of lenders led by HSBC Bank USA.
Despite losing big during the bust, the Related Group is once again leading the charge with the most condo units proposed for downtown.
Whether the real estate community’s adulation of Pérez will continue if the current condo climate ends up taking a turn like it did in the last cycle remains to be seen, which is why that statue should go up now.
Peter Zalewski is a special columnist for The Real Deal who founded the real estate consultancy and publishing company Condo Vultures LLC in March 2006. His analytics firm Condo Ratings Agency operates CraneSpotters.com in conjunction with the Miami Association of Realtors.