NYC Developer Gets Loan for Condo Project in Glutted Miami Area
(Bloomberg) -- A Jean Nouvel-designed condo project in Miami Beach, Florida, just got the area’s biggest residential construction loan in almost a year, putting the luxury tower on a path to completion in a market that’s saturated with others.
New York developer Michael Stern closed last week on $137 million in financing from Madison Realty Capital to build Monad Terrace, Stern said in an interview. It was the largest loan for housing construction in Miami-Dade County since June, according to property-research firm Real Capital Analytics Inc.
The financing isn’t contingent on meeting certain sales thresholds, said Josh Zegen, managing principal of New York-based Madison Realty. Contracts have been signed for 20 percent of the project’s 59 units, including a penthouse that sold at $2,700 a square foot.
“Traction, in terms of sales, would happen a lot quicker if buyers knew there was a fully committed construction loan,” Zegen said. “The buyer community knows this is really getting done.”
Cranes are crowding the skyline in Miami Beach as builders add more condos in a city that’s already working through a glut of them. There are 2,963 condos currently listed for sale in Miami Beach, and they have spent an average of 199 days on the market, according to data from CraneSpotters.com.
In the South Beach enclave, where Stern is building Monad Terrace, condo sales fell 11 percent in the first quarter from a year earlier to 242, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Buyers got discounts of 10.4 percent on average, the firms said.
Prices at Monad Terrace, where equity investors include Douglas Elliman Chairman Howard Lorber, range from $1.7 million for a two-bedroom unit to $12 million for a penthouse with more than 5,000 square feet (465 square meters), according to Stern’s company, JDS Development Group.
“It’s a good bellwether for the market,” Stern, who’s also building a condo tower on Manhattan’s Billionaires’ Row, said of the financing. “We expect it to have a huge impact on sales.”
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