A New Developer Banks on South Florida Real Estate Boom

This a great time for buyers looking for a Florida home loan in the southern part of the state. For new developers to join the construction fray in Miami, however? That’s not as clear.

Hence, the consternation over Jeremy Green. As someone who has never constructed a building before, Green, 32, is paying $46.5 million for the two-acre parking lot just west of Miami’s Bank of America Tower at International Place. It’s nearly double the price paid less than two years ago for the property - and serves as the perfect example of preconstruction efforts in the are.

The goal is to turn the lot into office towers, all part of a development spree by Green that includes four condominium projects in Miami’s Design District and two recently purchased downtown Miami properties for future office projects.

The move represents a significant - and risky - foray into Miami’s crowded and pricey real estate market at a time when many experienced developers are buckling down to build existing projects rather than branching out into new ones.

Real estate analyst Michael Cannon is scratching his head over the $46.5 million deal, which has not closed.

”To my knowledge, if the sale goes through, it would represent the highest price on a per square foot land basis of any property that I know of sold in South Florida,” Cannon said. “I don’t get it.”

Green, who founded Nexus Development Group just last year, is hardly the first new developer to jump head first into South Florida’s market. Pedro Martin agreed to pay $190 million for 10 acres of parking lots surrounding the headquarters of The Miami Herald with only a 6-story condo in Miami Beach to his credit.

Delving into a challenging market

Construction and building costs are up. The labor market is tight. There are regulations in place for banks and commercial lending. And some inexperienced builders have jumped into the red-hot market only to learn development is not so easy, ultimately canceling their projects. Meanwhile, buyer demand for residential condos has cooled from the frenzy a year ago.

But Green is betting he sees things others have missed. He’s zooming in on residential development in Miami’s Design District because the new construction there so far has been largely commercial. He’s keen on downtown Miami office development because construction there is largely condos, shops and restaurants.

”We are strategically bullish,” said Green. “We are focused on the long term in neighborhoods which are poised for growth. We are not focused on Miami broadly speaking.”

”Jeremy’s plans are very positive,” said developer Craig Robins, president of Dacra and the Design District’s biggest landowner. “We want more residents to come in and make it a 24-hour neighborhood.”

Financial Banking

Green asserts his financial backers - Eli Weinstein and Michael Gindi of a New Jersey-based real estate investment firm, Pine Projects - are in it for the long haul. And the young builder says he’s making up for his inexperience by hiring veteran managers.

William Tripodi, for instance, joined Nexus to become its vice president of construction, Green said. Tripodi formerly worked for Miami Beach-based Dacra Development and oversaw building of AQUA, a recently completed condo and town-home development on Miami Beach’s Allison Island.

Also, his chief financial officer is Veronique Damseau, who formerly worked at Florida’s biggest condo developer, Related Group of Florida.
projects.

Green’s $46.5 million deal comes with architectural plans, approved by the city, for an office, condo and hotel project called Lynx. Green’s buying from an investor group led by real estate broker Rodrigo Nino. Illustrating how land prices have soared, Nino’s group agreed to buy it for $24 million in 2004. In 2003, it sold for $8.8 million.

As other investors debate between Florida real estate and stocks these days, Green obviously favors the former. Only time will tell if this strategy pays off.