MIAMI-The developer of the 292-unit luxury condominium indowntown Miami known as the Marquis Residences is trying tosell the remaining 227 units at the development in a unique way byoffering to fund mortgages for so-called non-conforming loans. The67-story tower, the tallest residential building in Miami as wellas Florida, is largely regarded as luxurious and comes with a hostof amenities, such as a five-star boutique hotel in the building,which boasts a spa and fitness center which owners can use, andpanoramic views of Biscayne Bay and Miami Beach.

|

But even those attributes are not always enough to close thedeal at a time when there are still too many condominiums around,albeit much fewer than a year ago, because of bulk condominiumsales. One prominent exception to the deflation in condominiumprices in Miami is the recent sale of the 7,800-square-footpenthouse unit at the Marquis, which sold for $4.2 million, whichthe developers say is the most expensive condominium ever sold inDowntown Miami's Biscayne corridor.

|

The aforementioned penthouse sale notwithstanding, Marquisdeveloper New York-based Africa-Israel USA has reduced its pricesby as much as 40% (units start at $375,000), which in today’smarket is just a starting point, but that is not all. Africa-Israel, in partnership with Americor Mortgage, based inBirmingham, Michigan a suburb of Detroit, has dedicated $50 millionto fund buyer mortgages.

|

Many of the Marquis’ buyers, if not most, are foreign, so theydo not quality for Fannie Mae or Freddie Mac loans, because they donot have green cards, says Bob Waun, CEO of Americor. In addition,there are condominium investors and buyers of so-called jumbomortgages, those over $417,000 in Miami, who also do not qualityfor Fannie Mae and Freddie Mac loans. These buyers are Americor’starget market.

|

“We closed our first loans at the Marquis last October,” saysWaun. Americor is a correspondent lender in the state of Florida,which has been in business since 1986, he says. “Our specialty isnew condominium projects, condo-hotels and resort properties,” saysWaun, who adds that while the mortgages are originated by Americor,post-closing they have a hybrid structure. “They are close to beingseller-financing, but not quite,” he says. “Although we make theloan, Africa-Israel stands behind each transaction, whichmeans that some of the money is theirs,” says Waun, declining tomore specific.

|

Ironically though, “Almost no one to whom we’ve given a mortgageneeds one,” says Waun. “Some foreign buyers think they have to paycash,” although when given a choice, they opt for a mortgage, hesays. Americor mortgages only go up to 50% loan-to-value, much lessthan conventional financing.

|

“Although there were some pre-sales which closed in October,”units at the Marquis were not available to the general public untilApril, says Lori Ordover, managing director for Africa-Israel USA.Since last fall, the Marquis sold 65 units, but most of those weresold between mid-March and mid-June, she says.

|

“We started marketing units a few months ago,” says Ordover.“Before that, we didn’t have a certificate of occupancy.” As forpre-construction buyers, who bought units starting in 2005 and2006, before the building was up, she says that only 20% of themactually closed, because of the financial crisis.

|

Because so many of Marquis’ buyers are foreign, “We worriedabout the euro taking a dive recently, but we still do have a lotof international buyers,” says Ordover. That’s partly becauseprices are still very low by historical standards, she says.

|

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.