What Are Miami Preconstruction Projects?
With a history of luxurious residences dating back over a century, Miami’s landscape and skyline continue to be recreated by the addition of new condominium residences.
Since the pre-construction stage of any multi-million dollar residential project offers unique opportunities for investors and homebuyers, we’ve researched and created this comprehensive guide for you.
This seven-minute read will provide you with the knowledge required to navigate the ever-evolving luxury market that’s unique to southern Florida.
You’ll learn about the processes involved in Miami pre-construction projects, from initial vision to move-in day.
Best of all, this guide can put you first in line for your chosen lifestyle and the surroundings you’ve been dreaming of. (Or, one of your best investment purchases.)
Let’s begin with a general definition.
What Are Preconstruction Projects?
Preconstruction projects refer to real estate developments, particularly condominiums, that are sold to buyers before construction is completed or begins.
In Miami's luxury market, these projects often represent the cutting edge of design and rare amenities.
Preconstruction offers personal and investment buyers the chance to be part of something truly extraordinary from the ground up.
There are several major advantages to buying one or more condo units during the preconstruction phase.
Generally, this provides you with the opportunity to review prices when they may be considerably lower than for the finished product.
Finalizing a purchase during preconstruction often comes with a considerable bonus, which is the option to customize the unit’s interiors and color scheme. Live within an environment that reflects your personality and tastes.
An early purchase often provides the potential for an investment to begin to appreciate in value before completion. In other words, you’ll have a head start on building equity.
Next, you’ll be taken through each stage of preconstruction for Miami real estate developments. Knowing these stages will help you negotiate real estate investments to your advantage.
The Preconstruction Process in Miami
In Miami, each preconstruction project begins with much more than a blueprint…it’s a journey that begins with a vision.
#1: Vision
Over the past few years, some of the world’s most prestigious names in the design, couture, and even automotive worlds have inspired new condominiums in Miami.
Perhaps the most famous: The Italian couturiers Domenico Dolce and Stefano Gabbana. Recently, they lent their imagination, design expertise, and names to the world-class residences at 888 Brickell in Miami.
Other famous names have already lent their looks and reputations to Miami developments. Buyers of units within the Aston Martin Residences will receive an Aston Martin vehicle to complement their experience, with the owner of the Residences’ penthouse enjoying the last of 24 limited edition Vulcans.
Developers will partner with world-renowned architects and designers to create a concept that will stand out in Miami's competitive luxury market and beyond.
#2: Feasibility
After an initial concept is conceived, the feasibility stage follows. During this stage, the size and scope of the project are studied to ensure they’re permissible within Miami’s zoning regulations.
One challenge for larger developments: Since Miami International Airport is less than seven miles from downtown Miami, all buildings must adhere to strict height standards. Since some buyers will insist on helipads, special permits are required.
Feasibility is also when a developer compares an initial budget with the costs estimated to complete the building in accordance with the architect’s and design consultant’s plans.
Each project must formally pass a feasibility analysis before proceeding to planning and documentation.
#3: Planning and Marketing
Planning starts when the developers, architects, and designers create the official construction documents. The commercial builder in charge of construction may also become involved at this stage.
These documents are required to secure the necessary building permits from the city of Miami and Dade County planners to begin construction. This stage must be completed before sales of the building’s units can begin.
At this time, the developer may anticipate interest from buyers by launching an informative marketing campaign. This may include press releases, a website, and even a mobile phone application.
If all permits are in place, the developer may also begin to offer units for sale at this time. This is how the term “preconstruction” came into use.
#4: Permits and Approvals
Miami is part of Dade County, an area with a dense population and high numbers of tourists.
This means that developers seeking zoning permits and the necessary approvals for a new luxury condominium will need to approach both county and city planners and zoning officials.
Planning and zoning are handled by separate entities.
A developer’s request for approval from a city or county planner may include details of the property that prove it will be pedestrian-friendly, complement the existing urban environment, provide open spaces for non-residents, and receive certification from Florida’s Green Building Coalition.
#5: Zoning
The City of Miami Zoning Code, also known as Miami 21, presents a holistic approach to land use and urban planning.
It seeks to preserve the city’s personality as being a vibrant home for all of its residents.
In addition to the basic zoning code, Miami 21 emphasizes historic preservation, parks and open spaces, economic development, transportation, and arts and culture.
Depending on a Miami preconstruction project’s scale and location, applying for and obtaining all zoning and city permits may take several months or even longer.
#6: Financing
Luxury condominiums in Miami require substantial, often complex financing, as several types of loans may be required.
Land development loans finance the steps required before construction begins. These may include installation of water and power utilities.
Acquisition and development loans may cover the cost of purchasing land, and any improvements needed for existing infrastructure.
Interim construction loans cover the costs of labor and materials before units are sold. These are usually structured as short-term loans.
Developers typically secure a combination of investor equity and bank loans.
The presale process is crucial here, as many financial backers require a certain percentage of units to be sold before fully funding the project.
#7: Presales and Marketing
This is where potential buyers (you, perhaps?) enter the picture. Developers create sales centers that reflect the lifestyles offered to those who occupy the units.
These often include a model unit for real-time previews.
In Miami's international market, marketing efforts extend globally to attract buyers from every continent.
#8: Design and Planning
As sales progress, the design is finalized. This stage involves detailed architectural plans, interior design concepts, and the selection of high-end finishes that Miami's luxury buyers expect.
#9: Groundbreaking and Construction
The physical construction begins, typically lasting 24 to 36 months for luxury high-rises in Miami.
Buyers receive regular updates, often through sophisticated apps or websites.
As the building nears completion, buyers are notified of their closing dates. In Miami, this process often involves working with international buyers an
d coordinating across time zones.
Now that you’re familiar with the entire preconstruction process, including what must happen before and after, here are some buyer considerations for the Miami market.
Research Topics for Buyer Consideration
Whether you prefer to do your own homework or choose to work with a trusted broker, the following situations are common within the Miami real estate market.
Both residential and commercial real estate can be volatile investments. Estimated prices may change significantly.
Delays often happen, particularly during the initial phases. If you’re not happy with delays, be ready to focus on different projects, so you won’t have to wait years for a move-in or purchase date.
Savvy investors want to know as much about a developer as possible, including their track record within the Miami condominium market.
Every purchase contract will have its own unique clauses. Be sure to have an attorney review all contracts, and make note of deposit structures and any contingencies.
Miami's preconstruction market is unique due to its international appeal, waterfront locations, and year-round desirable climate.
The city's status as a global destination drives continuous innovation in luxury living, making Miami preconstruction projects particularly exciting.
