Miami Real Estate Market Puts Premium On Closing Quickly
A clichéd adage of real estate maintains there are only three things that matter: location, location, location.
In Miami's new real estate boom as far as dealmakers are concerned, only three things seem to matter: speed, speed, speed.
The ability to execute a deal quickly and without contingencies is being valued at a premium by Miami's real estate closers, according to attorneys, bankers, brokers and investors in the sector who spoke to the Daily Business Review. In competitive deals, partners with offers to close transactions immediately are beating out others whose offers might include more attractive deal terms or higher dollar amounts—but longer timelines.
Time is not only money in Miami dealmaking, real estate players said. Time is being given a higher value than money.
Lucia Dougherty, co-chair of the land use practice at Greenberg Traurig in Miami, said developers are pushing a fast pace on deal terms, sometimes taking up comparatively less attractive agreements to close quickly.
"They're trying to compete with other developers, and whoever gets to close first gets to sell first," Dougherty said. "We have a client, who will rename nameless, who will not buy a piece of property he can't have under construction in a year. In other words, he's fearful of the boom busting. It's almost like musical chairs, where whoever is standing loses out. If you're left with a building that's almost finished but not sold, you're hurting, and [the developers] don't want to be in that position."
At competitor Bilzin Sumberg, James Shindell, who leads the real estate practic group, mostly agreed with that assesment.
"For well-located projects with strong sponsor groups, we're seeing competition by lenders to close that business," Shindell said. "Part of the competition includes getting to a quick closing."
Less robust projects, with lesser-experienced developers or sub-prime locations, are also adding to the sense of urgency, Shindell said, as for those developments "a bird in the hand may very well be better than two in the bush."
"For some of the infill land parcels, there's a feeling that land values might be high, so holder of land that meet that description might be inclined to take a purchaser right now."