Related Group has slashed deposits on a second Brickell area project, in a move to spur sales on remaining units as the condominium tower approaches sell-out.
Miami-based Related, the dominant developer in South Florida’s preconstruction condominium market, cut deposits on units at SLS Lux to 30 percent. It’s a sizable reduction from the 50 percent requirement that has become standard this cycle.
“It’s so we can dismantle the sales center in the back and finish construction,” Carlos Rosso, president of Related’s condominium division, told The Real Deal. He said only 24 units remain at SLS Lux, out of a total of 535.
“When the jobs get to the last units, we lower deposits,” Rosso said. “We already have the loans.”
Last month, Related, which is developing about 20 percent of all condo projects proposed or under construction in coastal South Florida, cut deposits at Brickell Heights 02 from 50 percent to 30 percent.
Related and Fortune International Group’s sales agents have sent out fliers offering lower deposit requirements on preconstruction units at both properties, most recently for SLS Lux on Thursday.
In September, Related secured $166.1 million in financing for SLS Lux. The tower, on South Miami Avenue and Southeast Eighth Street, is slated for completion in 2017.
Other developers have also cut their deposit requirements. Swire Properties announced earlier this year that it was lowering down payments for a condo at one of its Brickell City Centre residential towers, Rise, to 35 percent. And Property Markets Group also offered some foreign buyers deals that allow them to pay 50 percent deposits in installments prior to closing for units at Echo Brickell, Echo Aventura, Muse in Sunny Isles Beach, and Sage Beach in Hollywood.
Rosso and CMC Group founder Ugo Colombo, both panelists at an Urban Land Institute conference earlier this week, said the move is to spur sales particularly to local buyers, including those seeking mortgages.
Top developers on the panel said Miami’s preconstruction condo market is still forging ahead despite lower deposits, canceled projects and foreign buyers downsizing purchases. Amid a weakening of foreign currencies, such buyers have downscaled their purchases: while they previously bought five or six units, they now buy one, Rosso said. Yet, as long as they can rent the unit and cover their costs, they prefer to park their money in South Florida real estate, rather than place it in a bank, he said.
Rosso said he remains “super bullish” on the South Florida market. “This is a marathon, not a 100-meter dash,” he said during the panel. “This is a long-term market.”