Mansions at Acqualina - The First Large Construction Loan for the Miami Area

 

The Miami area suffered greatly after the real estate market crashed because lenders refused to grant loans for large construction projects. These types of loans were entirely too risky because the probability was high that developers would be unable to sell all of the units they have in their buildings. Since the market crashed, a lender has decided to take that risk, and Miami is benefiting from this important decision.
The Wall Street Journal reported that Alabama lender Regions Financial granted a $160 million loan to finance a construction project in Sunny Isles Beach.
      
The New Condominium Project in Miami
The result of this fantastic deal will be the Mansions at Acqualina. The building is going to have 47 floors that will, of course, have expansive views of the Atlantic Ocean and the beach. As can be determined by the name, this building is going to be a first-rate, upscale property that contains condominium homes with a beginning purchase price of $7.75 million. The Mansions at Acqualina pre-construction building is the type of project that developers have not been able to create for several years. Not enough people were in the market for luxury units, and banks were tightening their lending practices. It appears to be a very different story now.
The Loan
Developers, condominium owners and investors were affected when Lehman Brothers failed. Since then, anyone who needed a loan for more than $100 million would not receive it. Because of this, construction essentially stopped in the Miami area.
The Regions Financial construction loan means that the following three positive things are happening:
1. Lenders are no longer afraid to take large risks
2. They believe that there is a chance to earn a profit even though interest rates are currently low
3. The entire country appears to be recovering from the nationwide housing crash, and southern Florida is leading the pack
An increasing number of people are seeking luxury condominium properties, so more condominium homes are needed. The result is that developers are rising to the challenge and putting new tasks together to offer the community. The willingness to grant high-end loans means that even more development projects will be proposed this year. Evidence of this has already presented itself in Sunny Isles Beach. About a dozen new outlines have been submitted for approval in this area. If they are permitted to go forward, the developers will find that they will not have as many difficulties obtaining financing as they had in the past.
Some time has passed since people have obtained loans for more than $100 million, but the loan that Regions Financial granted to the developers of the Mansions at Acqualina in Sunny Isles Beach will be the first of many more to come. The real estate market is expected to continue to improve, so this will offer lenders even further encouragement to begin lending again. These lenders know that they can look forward to large profits in the long run.