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Developer Snags $138M Construction Loan Even as Miami's Condo Market Sputters

Oversupply Could Lead to Price Declines, Analyst Says
August 22, 2018
Rendering of the 100-unit Elysee waterfront condominium tower in Miami.

A developer secured a $138 million loan to finance a 57-story waterfront condominium near downtown Miami, an impressive feat according to one analyst who says the city’s saturated condo market is well past its peak.

The financing from JPMorgan Chase Bank comes with the 100-unit Elysee nearly half sold and in the early stages of vertical construction. The project by Two Roads Development overlooks Biscayne Bay at 788 NE 23rd St. and is due to open in 2020, with prices ranging from $1.5 million to more than $10 million.

Two Roads said it's the largest condo construction loan of the year in Miami and the first one exceeding $100 million in the city's urban core in the past 18 months.

Peter Zalewski, principal of the database, said JPMorgan must be satisfied with the sales pace and potential for the project.

But he said he’s concerned about Elysee’s timing, noting that the buying peak for Miami condos was 2015, while pricing reached its apex a year later. As a result, lenders are pulling back amid a softening in the market, analysts say. data shows that Miami’s downtown luxury condo market ($1 million and above) has a 70-month supply of units, meaning it would take that long to sell every one if no more were listed for sale.

The market for all downtown Miami condos has a 25-month supply, the website reports.

“There’s way too much supply out there,” Zalewski said. “When you have too much supply and not enough buyers, it means the only way you can transact a unit is to reduce the price.”

Taylor Collins, a partner at Two Roads, doesn’t dispute Cranespotters’ numbers. But he said Elysee units range from 2,800 to 4,300 square feet -- bigger than the typical 1,100- to 1,400-square-foot condos that are flooding the market.

“There’s not a lot of options for residences of our size and level of finishes,” Collins said. “These units feel like you’re buying a house.”

The condos will have private elevators and foyers, 10- to 12-foot ceilings and large terraces. Building amenities include a lounge on the 30th floor with a salon and bar, dining room, library, a private theater and a wine room.

Architect Bernardo Fort-Brescia of Arquitectonica designed the building to provide direct 180-degree bay and city views from every unit.

Collins said the buyer pool so far is an even split of U.S. residents and foreigners.

Two Roads, based in West Palm Beach, Florida, is building Elysee in partnership with entities managed by New York-investment firm DW Partners.

Two Roads’ other downtown Miami condo project is Biscayne Beach, a 52-story tower that opened last year. The developer has only one of the 391 units left to sell, Collins said.

Paul Owers, South Florida Market Reporter  CoStar Group   
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