Miami real estate developer George Perez said an interest rate cut is “badly” needed to help builders manage rising costs.
Borrowing costs have risen in recent weeks due to stronger-than-expected economic data. Some developers who were expecting a more pronounced interest rate cut by the Federal Reserve have now reduced their expectations of quick relief.
Perez, founder and CEO of Related Group, said in an interview on Bloomberg Television that developers “desperately need those cuts” because many projects are financed at floating rates. “If you build a project and you borrow at 3%, and now you pay 8%, I don’t need to tell you what impact that has.”
“There are a lot of people who are waiting for interest rates to go down,” Perez said. Although he expects more cuts next year, “It’s going to be less pronounced, but I believe we will continue to see cuts and we will continue to see increased demand based on people being able to buy more real estate.” “Interest Rate Cost.”
Over the past few months, Related has secured financing to begin construction on several residential projects in the Miami area. The firm received a $527 million loan to build luxury condos in the city’s South Brickell neighborhood, and a $400 million loan for high-end condos on Fisher Island.
Pérez also expressed concern about President-elect Donald Trump’s comments on immigration.
“We need to calm this rhetoric and come to an understanding, because immigration has built this country and will continue to play a huge role in the development of this country,” Pérez said. “We rely heavily on immigration to drive our industry. “I think some of the more extreme opponents of immigration are going to calm down.”
With assistance from Sonali Basak and Matthew Miller.
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