SoFla condo boom may signal overdevelopment, bust: experts

Miami /
Oct.October 30, 2013 10:00 AM

Experts on the South Florida real estate scene fear the spike in housing prices recalls a familiar sight: the recent bust.

Roughly 200 people attended a forum on the state of real estate at Miami’s Four Seasons Hotel yesterday. They pointed to the condominium projects backed by foreign investors paying in cash, lending plans based on the price jumps, and construction being greenlighted without the money to survive weak sales, the Miami Herald reported. During the bust, buyers forfeited their deposits instead of paying more units than they could be sold for. Prices fell hard and developers couldn’t afford to reimburse construction loans. Some are skeptical of the recent success.

“If we learned anything, we learned we didn’t learn much,” according to Russell Galbut, managing partner of Miami-based developer Crescent Heights. “What I see in the Miami market is a lot of people coming together at the same time to build. It think it could possibly bring about the same things that we had in the past, which is an overdevelopment of projects.”

In response, some panelists said this cycle will differ because lenders now demand cash deposits before investing in projects and tourists are increasingly affluent Europeans and Latin Americans.

“We have reinvented ourselves,” Alicia Cervera of Cervera Real Estate told the Herald. “One of the wonderful results of our building boom, the last one, is we in fact built a tremendous city. We have new neighborhoods, and concentrations of neighborhoods.” [Miami Herald]Mark Maurer


Related Articles

arrow_forward_ios
Montford Group' Sunju Patel and Opterra Capital Glenn Alba with 2940 Collins Avenue (Montford Group, Getty)
Montford, Opterra JV buys Hilton Garden Inn Miami Beach for $28M
Montford, Opterra JV buys Hilton Garden Inn Miami Beach for $28M
Joseph Chetrit and The Tides South Beach (Getty, The Tides South Beach)
Chetrit’s lender scores victory in South Beach hotel foreclosure
Chetrit’s lender scores victory in South Beach hotel foreclosure
100 Fairway Drive, Deerfield Beach with Ally Visram and Howard Wurzak (Wurzak Hotel Group, Google Maps)
Wurzak buys Deerfield Beach DoubleTree for $27M
Wurzak buys Deerfield Beach DoubleTree for $27M
Allied Partners' Eric Hadar and RH's Gary Friedman with the Savoy hotel (Allied Partners, Getty, Google Maps)
Inside RH’s plans for $100M renovation of Miami Beach hotel
Inside RH’s plans for $100M renovation of Miami Beach hotel
Moto Capital Group's Marcos Lima with 350 Ocean Drive (Loopnet, LinkedIn, Getty)
Toronto firm picks up Ocean Drive hotel for $39M
Toronto firm picks up Ocean Drive hotel for $39M
Red South Beach at 3010 Collins Avenue, Tom Assouline and August “Gussie” Busch (Instagram/gussiebusch, Google Maps, Getty)
Busch family partners with Assouline Capital to buy Red South Beach hotel
Busch family partners with Assouline Capital to buy Red South Beach hotel
Electra America's Joe Lubeck with rendering of Southplace City Center (Electra America)
Electra America JV plans $1B mixed-use redevelopment of Southland Mall
Electra America JV plans $1B mixed-use redevelopment of Southland Mall
Allied Partners founder Eric Hadar and The Savoy Hotel & Beach Club at 425 Ocean Drive (Google Maps, Getty)
Investor seeks $50M for allegedly botched Ocean Drive hotel repairs
Investor seeks $50M for allegedly botched Ocean Drive hotel repairs
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...