You have to start on the ground floor, right?
"For these condos in S. Florida, the deal is 50% down" by John Gittelsohn | Bloomberg News November 03, 2014
NEW YORK — Jorge Perez crashed along with the real estate market, then regained his crown as Florida’s ‘‘Condo King’’ by building projects with 50 percent deposits from foreign buyers. Now, he’s looking to wealthy Americans.
In December, he will begin marketing the Auberge Beach Residences and Spa Fort Lauderdale, a $500 million oceanfront project. He expects as many as two-thirds of the buyers to come from the United States or Canada. All future owners must pay hefty deposits to finance construction by Perez’s Related Group, Fortune International Group, and Fairwinds Group — a partnership announced last week.
The 171 units at the Auberge Beach will range in price from $1.5 million to $8 million, or about $1,000 a square foot.
Related: Menino Will Haunt Boston
Also see: For displaced homeless women, no refuge from misery
Poverty rate in Mass. highest since 1960
"But it could be worse?"
How can that be in the most liberal state in the nation?
‘‘The US buyers have made up an increasing share of luxury beachfront condominiums and, like our foreign buyers, they have shown little resistance to larger deposits,’’ Perez said in an e-mail. ‘‘Most feel that if they can’t put a 50 percent down payment, they probably should not be buying.’’
South Florida condo builders are turning to US clients as development moves north from Miami, a city attractive to Latin American buyers, whose purchasing power has weakened as their currencies sag against the dollar.
But even as the US economy strengthens, those who come south for the winter from Northern states and Canada are a harder sell, because they’re accustomed to smaller down payments and may worry that Florida’s condo market will crash again, said Peter Zalewski, principal of Condo Vultures LLC, a Miami real estate consulting firm.
‘‘A 50 percent deposit is something domestic buyers and especially Canadians aren’t comfortable with,’’ Zalewski said. ‘‘The biggest challenge isn’t the product. It’s not the pricing. It’s the risk of your money being used to construct this tower and something goes wrong.’’
Buyers from Latin America and other regions abroad have been purchasing about three-quarters of the condos sold in top Miami-area locations like South Beach, where oceanfront units command $3,000 a square foot, or as much as what luxury Manhattan real estate costs, according to Zalewski. Overseas clients are willing to put cash up front because they can’t get US financing or want to move money to a haven safe from social, political, and economic instability, he said.
It could be drug cash, it could be anything.
‘‘Miami is all Latin American flight capital,’’ said Jack McCabe, a real estate consultant in Deerfield Beach, Fla. The projects being built north of the city are of less interest to Latin American buyers, he said. ‘‘They really want to be in Miami. They don’t want to be 35 or 40 minutes away. It’s a different world.’’
Which reminds me that this is not written for me.
************
South Florida’s recovery began in 2010, fueled by money from Latin American countries such as Brazil, with buyers seeing US real estate as inexpensive, compared with properties in Rio de Janeiro or Sao Paulo. Those deals are now gone....
So am I.
--more--"
Related: Surfing on Silicon Beach
You will love the foam.
NEXT DAY UPDATES:
As winter approaches, Boston must replace homeless shelter
City vetting sites for displaced homeless
