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"We have plenty of buyers," said Tibor Hollo, chairman of Florida East Coast Realty, who is developing Villa Magna, two towers on Brickell Avenue, which he said was the last available waterfront parcel. Since his first building opened for sale in February, Mr. Hollo said, 167 of the 787 units have sold, each at more than $1 million.

http://www.nytimes.com/2006/05/19/us/19miami.html
 

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mileageman said:
"We have plenty of buyers," said Tibor Hollo, chairman of Florida East Coast Realty, who is developing Villa Magna, two towers on Brickell Avenue, which he said was the last available waterfront parcel. Since his first building opened for sale in February, Mr. Hollo said, 167 of the 787 units have sold, each at more than $1 million.

http://www.nytimes.com/2006/05/19/us/19miami.html
This is bound to make on forumer I know very unhappy. And if this is true, it casts doubt on comments of other forumers about the project languishing.
 

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Dale :wave: , my friend :rock: ,
This Villa Magna is a go,
If Tibor Hollo :) lives another year,
His two towers here well be going vertical by then,
I've been to the sales center on 1200 brickell bay drive, and the Model of this project is a beauty itself :cheers2: , Its a go :eek:kay: , And I see it in my dreams of 2012, Completed, both towers at 57 floors !!! :applause:
 

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Is there a recent rendering of this?
 

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I really do not believe this project is going to fly. Even if 167 units have sold to date (and I doubt that), given today's market, I anticipate sales will bog down in the very near future, if not already....What type of presales gets them their construction financing?
 

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fairweatherfriend said:
I really do not believe this project is going to fly. Even if 167 units have sold to date (and I doubt that), given today's market, I anticipate sales will bog down in the very near future, if not already....What type of presales gets them their construction financing?
:speech:
My Fairweather " Friend " :rock: , your killing me :gunz: , but its the competition of your not liking Villa Magna :applause: Twin 57 floors towers which are up and completed in my dreams of 2012 :righton: , Nothing is going to stop the Grrrrrrrreat !!! Tibor Hollo :eek:ld: :eek:kay: , and they will start late this year on tower 1, and complete tower 1 in early to mid 2009, and Tower 2 should be completed by 2011 :cool: .

I saY IT AGAIN :soon: :dj: ,

Go Cranes My Fairweather " Friend " !!! :banana: :cheer: :pepper:
 

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usually 60 percent gets them a loan to construct the tower.

i recall there was about 700 or so units 800 to be safe in villa magna
so that would mean that they need about 420-480 units presold to get there loan...
 

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Most lenders are running at 70 to 75% pre-sales requirement these days. This loan is going to be fairly massive. As profit margins go down, the % goes up. The lenders want their loan covered by some margin w/ sales. So if it is a $300M loan they'd want some higher number than that in sales.

Rx727sfl2002 said:
usually 60 percent gets them a loan to construct the tower.

i recall there was about 700 or so units 800 to be safe in villa magna
so that would mean that they need about 420-480 units presold to get there loan...
 

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Then how is it that some developers, notably Novarre, break ground prior to sales ?

Maybe they finance in-house, I don't know. Related might be another example of a developer for whom this never seems an issue.
 

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If it is a large public company, projects can be financed internally through the company's debt. It's just a matter of treasury management. The financing is not based on the individual asset being financed, but the company as a whole w/ a certain debt to equity ratio (usually 2 to 1 up to 4 to 1).

All the projects I work on are single purpose entities and they are secured by the pre-sales, land and guarantees of the sponsors. Some projects are not guaranteed and the pre-sales are even more important.

Dale said:
Then how is it that some developers, notably Novarre, break ground prior to sales ?

Maybe they finance in-house, I don't know. Related might be another example of a developer for whom this never seems an issue.
 

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Dale said:
Then how is it that some developers, notably Novarre, break ground prior to sales ? Maybe they finance in-house, I don't know. Related might be another example of a developer for whom this never seems an issue.
That is it. Some developers, another notable is Intel Development (Avenue), will use internal financing to get the project rolling as they begin sales, they inevitably will use bank financing.
Although Related certainly could do this, I don't believe that they do. Like Fortune, Related would likely sell enough apartments with hard contracts to go to bank an negotiate great terms on a construction loan. Developers that use there own money take on significantly more risk, but may be able to negotiate better loan terms for doing so.
On classic story of a developer that tried to finance his own tower was the Green/Blue/White Diamond developer. The Blue and Green went up and he tried to take the money from B & G to finance the White without a bank. B & G's sales slowed to a halt and he got in trouble. Constuction on the White Diamond halted, the cranes left the site and the project sat for about 8 years until Merco bought the 6 story skeleton, renamed it Akoya and finished it off.
 

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Bingo.

People forget that this business has a significant amount of risk. You couldn't get 20 to 40% (or in some cases even more) returns without risk.

If you can wait longer to sell, lock in your costs w/ greater certainty and then sell when you really need to, you are going to make more profit. The risk is that the market softens, and you can't sell when you need to sell. The risk at pre-selling early is that your costs keep going up but your revenue is locked in, thus reducing profits.

Like i said... it's a risky game one way or the other, but the rewards are quite nice.

Roark said:
Developers that use there own money take on significantly more risk, but may be able to negotiate better loan terms for doing so.
 
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