They finish one another’s sentences. At times, they yuck it up like frat brothers. And in the strongest testament of their bond, after 20 years in the brutal business of marketing and selling pre-construction condominiums, Philip J. Spiegelman and Craig S. Studnicky are still standing.
“Frankly, I think we are doing better than most marriages in the United States,” said Spiegelman, co-founder and principal of ISG, an Aventura-based real estate brokerage that is among a handful in Miami specialized in marketing and selling pre-construction condominiums for developers. “We came out of the recession with the simple philosophy of having a few quality clients with like mind.”
Twenty years may not be all that long, as corporate milestones go, but given the tumultuous history of Miami’s condominium sector over recent years, survival has been a feat.
When the condo bubble burst and Miami became the global poster child for speculation and overbuilding, ISG was besieged on all sides: As prices tanked, unit buyers reneged on pre-construction condo contracts, looking to ISG to get back their 20 percent deposits. Developers, choked with unsold units, chimed in with demands that advances on commissions paid to ISG agents had to be returned because the deals fell through.
“Buyers asked us to protect their deposits and brokers asked us to protect their commissions. We weren’t able to do either,” said Studnicky, also co-founder and principal. After extensive negotiations, Studnicky said, the company was able to “mitigate” the situation and work out differences.
This time around, Spiegelman and Studnicky said, they are confident Miami real estate is on firmer ground. One key reason: Developers have been financing projects largely with big deposits from unit buyers — a practice that deters most speculators and keeps the pace of construction in step with demand. It is an argument repeated often by developers and brokers in South Florida these days, as one new project after another is proposed.
As South Florida’s latest condo cycle has hit its stride, business has brightened for ISG.
In 2011, after the recession, Spiegelman and Studnicky formed a joint venture with Miami mega-developer Jorge Pérez — Related ISG International Realty — to market several new Related Group projects.
Related ISG was tasked with handling sales and marketing for Apogee Beach, a 22-story, 49-unit luxury condominium in Hollywood Beach, and MyBrickell, a 28-story, 192-unit condominium in downtown Miami. Related recently closed on the units in Apogee Beach and expects to begin turning over units of MyBrickell any day.
Those projects — the first two condominiums Related launched after the crash — were early examples of the buyer-deposit model that has been driving the current boom.
Under that approach, condo buyers — mostly cash-rich foreigners looking for an investment or a second home — pony up big deposits on pre-construction units, typically upwards of 50 percent of the purchase price. (For Apogee Beach and MyBrickell, buyers agreed to pay a whopping 80 percent of the purchase price in a series of payments before closing.) Developers generally can use the buyers’ deposits to finance construction, except for 10 percent that is escrowed.