The developer of a planned student housing condo tower near Florida International University is switching gears and turning the project into rentals, instead.
Unlike other developments that have been canceled or converted to rentals because of the weak condo market, University Bridge Residences had secured more than 200 buyers for the 492-unit, 20-story tower, according to Alicia Cervera Lamadrid, managing partner of Cervera Real Estate. Cervera was tapped to handle sales of the project in August.
University Developments, led by Global City Development principal Brian Pearl, said the decision to build multifamily was due to the strong rental market and changes in the tax law, which slashed the corporate tax rate to 21 percent from 35 percent. The partnership developing the project, which includes Podium Developments and Reichmann International, is planning to break ground in the spring and complete the building at 740 Southwest 109th Avenue for the 2020-to-2021 academic year.
The roughly 150 buyers who were under contract to purchase units will received their deposits back, and the developer is paying commissions on what would have been due now, Cervera Lamadrid said.
“We’re clearly disappointed it’s not moving forward as a condo,” she said, adding that “it was a very exciting product for us because it was a new asset class in our market. We did a lot of heavy lifting to introduce the product to the market.”
Units at University Bridge ranged from $190,000 to more than $600,000. Amenities will include a resort-style pool and sundeck, a rooftop with a sunset terrace, a yoga lawn and performance stage. A pedestrian bridge over Southwest Eighth Street will give residents access to FIU.
Cervera and her team are looking to reroute the buyers to other projects, including Smart Brickell, a mixed-use residential project with units that will be set aside for home sharing via Airbnb. Condos at Smart Brickell are priced from $318,000 to more than $400,000.
“Obviously a lot of time and effort has gone into [University Bridge],” Cervera Lamadrid said, referring to the more than 60 real estate agents who brought buyers to the project. “We’re trying to do everything possible to mitigate their losses.”
Property records show College Suites Associates LLC, a company affiliated with the developer, purchased the property for $16.6 million in 2016. Pearl said the development partnership is reviewing term sheets from lenders and expects to secure a roughly $130 million construction loan.