The condo boom is back. South Florida developers have adopted the custom, common abroad, of collecting big deposits for residential investments before construction. One contractor says the use of this financing method could create a building boom that could become "unprecedented." More immediately, as this year's Top Starts ranking attests, Miami may become one of the nation's first major cities to enter a post-recessionary boom.
"It's unbelievable what's going on right now," says Thomas P. Murphy Jr., chairman and CEO of Miami-based Coastal Construction Group. The proof lies in the ranking, where Coastal started three condominium projects with a collective value of $650 million.
The boom has the potential to outpace the last one, he says. "As a town, we'll build more here in the next 10 years than we did in the last 15," Murphy predicts.
This year's Top Starts ranking includes several other non-condo contracts in South Florida, including four public-sector projects in Broward County that collectively total about $1.2 billion.
Even so, for the building markets at least, this boom remains narrow, says Eric Squilla, vice president of operations with general contractor James A. Cummings Inc., Fort Lauderdale. The firm, now a division of Tutor Perini, landed three projects on this year's ranking.
"While multifamily and hospitality definitely seem on the upswing, ongoing large government work has filled in some of the gaps, but not all," Squilla says. For instance, the higher education market is "very limited," he says.
The K-12 sector is "nonexistent," in Broward County and "limited" in Palm Beach County, he adds. However, thanks to a recently passed $1.25-billion school bond referendum for Miami-Dade County, some new projects could start coming out to bid by the third quarter, he adds.
Despite the beach-area boom, many contractors remain desperate for work, says Squilla. "Once this (Miami-Dade) bond program is implemented, we will probably see anywhere from 14 to 24 general contractors submit [bids, including] many that have never built a school."
Continuing TrendsThe resurgence of Miami condos as a major construction market is beginning to make national news. But Murphy says the condo comeback is just getting started. He expects Coastal to start another $750 million in new projects in 2013 and is conservatively estimating a figure of "well over $1 billion" for 2014.