Midtown Miami sees the return of 97% financing
South Florida Business Journal
Write down Midtown Miami and March 20 as the day 97 percent financing returned to a condominium project in South Florida.
This announcement from the owners of Midtown Miami and their broker Fortune International Realty is another significant bellwether in the condo market, which has been fueled by cash in the new cycle.
The goal is to advance sales at the completed 33-story 4 Midtown tower, The Miami Herald reported.
Midtown Miami Owner Gold Krown Financial has been marketing units for sale at 4 Midtown for some time. Fortune was able to get approval for the low down payments, which could be as little as $8,300 for a $276,000 unit, through a program targeting emerging neighborhoods, George Fraguio, a financing expert at Fortune, told theHerald.
The last big real estate marker of an industry recovery was the $160 million financing of the ultra-luxury, 79-unit Mansions at Acqualina tower in February. The Midtown announcement and the financing of Acqualina are yet another sign that South Florida condo recovery is gaining traction in the eyes of lenders.
If that is the case, developers will follow.
So far, the focus from the development side has been on the high-end luxury condo projects because demand for the units, paid for in cash, seemed unquenchable.
Buyers from Latin America and elsewhere were putting down as much as 80 percent of the market value of the unit prior to the completion of the project, a deposit vehicle that acted as construction financing for developers.
This kind of individual financing for the purchase of mid- to entry-level condominiums, if other developers can leverage it, could open up the market to another wave of condo development. The previous wave transformed South Florida, and remade downtown Miami into a vibrant, residential draw for professionals.
However, small deposit-purchases also fed a frenzy, which spurred speculators to sign contracts for multiple units, many of which walked away from closings as projects were completed. Many developers, left with units with depreciating values, eventually defaulted on their construction loans, a trend that was realized throughout South Florida, especially Miami-Dade County, during the last decade and that helped lead to a financial meltdown of the economy.
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