50 percent buyer deposits are here to stay, developers say

Payment structure preventing rush of speculators that fueled last bust

TRD MIAMI /
May.May 15, 2015 03:45 PM

Even though his company loosened the time frame in which buyers can put money down on a new condo at Brickell City Centre, doesn’t mean he’s forsaken 50 percent deposits on units, Swire Properties President Stephen Owens told an audience in Coral Gables Friday morning.

“I think the 50 deposit model is likely to stay in place,” Owens said. “It is unique to Miami.”

At the Coral Gables Chamber of Commerce’s 8th Annual Commercial Real Estate Outlook breakfast panel at the Westin Colonnade Coral Gables, Owens joined developer and Vagabond Hotel owner Avra Jain, Allen Morris Chairman and CEO W. Allen Morris and Carlos Rosso, the Related Group’s condo division president, in a discussion about the current state of Miami’s real estate market.

In March, when Swire announced it had topped off Reach, the first residential tower at Brickell City Centre, and sales had begun on the second condominium, Rise, the company also stated that it had modified its deposit structure. Buyers would pay 20 percent at signing with a second deposit of 15 percent due 120 days after executing a contract. Another 15 percent would be due before closing.

The modification was necessary due to foreign investors from South America taking more time to shop other competing projects and the rising sales price of preconstruction condos, Owens said. “There’s no question sales have slowed down,” Owens said. “The market is at half the pace it was a year ago. Buyers are being more discerning. Those are indicators of a healthy market.”

Rosso and Morris echoed Owens. “We are trying to space out those down payments as much as possible,” Rosso said, adding that he tells potential buyers sales prices are not coming down. “We tell them it is going to cost more if you wait.”

Morris said maintaining the 50 percent deposit model will prevent the rush of speculators that fueled the last bust that led to the economic recession. “It’s good for the market, the developers, the banks and the buyers,” Morris said. “The buyer knows the project is going to get built, the developer knows he has the leverage for a construction loan and the bank knows there is a huge amount of equity in a project.”


Related Articles

arrow_forward_ios
Placeholder image

Miami board approves plans for Related, Crescent Heights towers and rejects Melo’s proposal

Miami board approves plans for Related, Crescent Heights towers and rejects Melo’s proposal
Jon Paul Perez and Russell Galbut with renderings of the projects

Related, Crescent Heights and Melo Group seek approval for Miami projects

Related, Crescent Heights and Melo Group seek approval for Miami projects
Domio Wynwood, Gustavo Miculitzki, and Jon Paul Pérez (Credit: Alberto Tamargo/Getty Images)

Related lists Domio Wynwood apartment-hotel for sale with whisper price of $90M

Related lists Domio Wynwood apartment-hotel for sale with whisper price of $90M
From left: Jorge Pérez, Stuart Miller, Craig Robins, Louise Sunshine, and Russell Galbut,(Credit: Patrick McMullan via Getty Images)

Here are the South Florida real estate players who donated to candidates in 2020

Here are the South Florida real estate players who donated to candidates in 2020
Mark M. Rubin & Howard M. Lorber

Movers & Shakers: Related taps Douglas Elliman for condo sales & more

Movers & Shakers: Related taps Douglas Elliman for condo sales & more
Jorge Perez, Mario Procida, and Lewis Swezy (Credit: Sergi Alexander/Getty Images)

Miami-Dade approves three affordable housing redevelopment projects for south Dade

Miami-Dade approves three affordable housing redevelopment projects for south Dade
Matthew B. Gorson and One Park Grove (Google Maps)

Greenberg Traurig chairman pays $7M for One Park Grove condo

Greenberg Traurig chairman pays $7M for One Park Grove condo
Jorge Perez and Apogee Beach

Jorge Pérez lists Apogee Beach penthouse for $7.6M

Jorge Pérez lists Apogee Beach penthouse for $7.6M
arrow_forward_ios

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

Loading...