Dive Brief:

• Miami Worldcenter officials announced the issuance of $74 million in bonds, the proceeds from which will pay for the luxury development's necessary infrastructure improvements, according to The Real Deal. 

• The bonds are backed by a special assessment on property within the 27-acre Miami Worldcenter Community Development District and will finance upgrades to a nearby Metromover station, street lights, sidewalks, water and sewer systems, electrical capacity and landscaping.

• When construction is complete, the $1.7 billion Worldcenter complex will include 450,000 square feet of retail space, a 429-unit apartment building, a 1,700-room Marriott Marquis hotel and a high-rise condominium.      

Dive Insight:

Developers have said the retail and apartment portions of the project should be complete late next year, with an expected opening in early 2019. In December, two of the project's developers, CIM Group and Falcone Group, announced that they had secured an $89 million loan, which would help finance the apartment tower. Project officials partially attributed their ability to get financing in a tough credit environment to the project's access to transportation, much like the transit-oriented developments that put a premium on high-density development.

In February 2016, developers announced they had awarded CoastalTishman — a joint venture between Miami's Coastal Construction and New York-based AECOM subsidiary Tishman Construction — the contract for the WorldCenter project.

Although only a portion of the project, Worldcenter developers are optimistic about their ability to sell upscale condominiums at a time when the market is considered to be slightly saturated. In August, the Related Group postponed construction on its Auberge Residences & Spa Miami project because presales hit only 15%, short of the two-thirds required for the company to move forward with construction. Related cited a lack of foreign buyers as one of the reasons for poor sales, but company officials also said it was likely beneficial in the long run to allow the market to cool off a bit.

The large supply of luxury housing on the market also has pushed the Federal Reserve into rethinking how high future interest rate hikes will be. Officials reportedly fear a bubble in the market and want to potentially force some restraint in development. The Fed has also expressed concern about a 2.4% increase in commercial mortgage delinquencies for the first time in several years. In the wake of these conditions, the board has issued guidance to commercial lenders encouraging them to evaluate potential loans more stringently.