Miami Condo Investments Welcomes Ryan Davis

After more than a year of success as one of our agent partners, we are happy to welcome Ryan Davis as a member of the Miami Condo Investments team.

Ryan is joining us from Douglas Elliman with two years of experience in the Downtown area market that includes Brickell, Downtown, Omni, Edgewater and Midtown Miami. At Douglas Elliman, Ryan was the top performing member of the sales team led by Sarah Elles Boggs. He is especially talented in the art of quickly introducing new residents to a neighborhood and finding the ideal space for them without being pushy even when time is limited. Clients have repeatedly commented on his “above and beyond” attitude and level of service.

We are very pleased to have Ryan on board and are looking forward to a bright future for Ryan, for Miami Condo Investments and especially for the clients who will benefit from his talents.

Related Group Closes Out IconBay; Inventory Concerns Loom For Investors

As reported a few days ago by South Florida Business Journal, Related Group has closed on all 300 units at IconBay. Without question, that is a tremendous milestone for what is considered the first luxury condo development to be completed in Edgewater during Miami’s most recent construction boom. However, not all is sunshine and rainbows for IconBay and, in particular, for its investors; inventory continues to mount and owners are finding it increasingly difficult to sell and/or rent their units.

Let’s first examine the rentals at IconBay. Currently, a total of 68 units are on the market for rent. That represents a whopping 23 percent of the development’s 300 total units. More concerning, however, is the lack of rental activity. According to the MLS, since June, when initial units first began to hit the market for rent, there have been 15 closed rentals, an average of just 3 units rented per month. As a result, and as one might expect, asking prices have fallen along the way; in some cases, the drop has been significant. For example, in late June, when the first 1 bedroom + den unit at IconBay hit the market, it was priced at $4,000 per month. That unit – unit 2102 – ultimately ended up renting for $2,700 per month. Since then, a unit located in the exact same line but four floors higher and with a similar build-out – unit 2502 – rented for $2,500 per month. And prices are still trying to find a bottom. Unit 2802 – another unit of the exact same floor plan that is currently listed for rent – is asking $2,500 per month. And the 2 bedroom + den units at IconBay haven’t fared much better. They have rented for as low as $3,000 per month (in fact, three separate 2 bedroom + den units have rented at that price). In other words, 2 bedroom units are renting for 25 percent less than where the initial 1 bedroom unit was priced.

In regards to resales at IconBay, currently, there are 72 units listed for sale on the MLS. That represents a staggering 24 percent of IconBay’s total number of units. Post-closing, just 4 units have exchanged hands:

• Unit 2401 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $810,000 on October 1st ($564 per square foot)
• Unit 2601 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $800,000 on October 16th ($557 per square foot)
• Unit 2901 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $810,000 on October 27th ($564 per square foot
• Unit 307 – a 2 bed + den/2 bath condo with 1,003 interior square feet sold “decorator-ready” for $540,000 on October 28th ($538 per square foot)

According the MLS, no units have closed this month. Additionally, not one single unit at IconBay is under contract (pending sale). As with rentals, it appears that prices are still trying to find a bottom. For example, unit 3101, which is located on a higher floor than any of the aforementioned 01 units that recently exchanged hands, is currently listed for sale with an asking price of $780,000 ($544 per square foot). Unit 3101 has been listed at that price for 79 days, yet no takers. (I am scratching my head trying to figure out why on earth a buyer would choose to pay $20,000 to $30,000 more for a unit located two to seven floors lower.)

So what gives? Why does there appear to be a lack of interest for units at IconBay? Well, the complaint that I keep hearing, from clients and real estate agents alike, is the size of their floor plans, or, rather, their lack of size. The corner units aren’t so bad, but the interior units are unexpectedly small, especially the non-corner 2 bedroom + den units (lines 03, 04, 05, and 07) which range in size from 1,173 to 1,208 interior square feet. Another common complaint I hear is the neighborhood. People argue that it’s just not there yet, at least not at current asking prices. Edgewater is a work in progress. It’s unreasonable for investors to expect their units there to compete head-to-head with condos located in neighborhoods such as Brickell and Park West. Finally, the third gripe I keep hearing from people about IconBay has to do with their own expectations. With a name like “Icon”, one comes to expect a certain level of luxury, as what is found with its sister projects Icon South Beach and Icon Brickell, both considered outstanding and highly popular condo developments. Oftentimes, people who have visited Icon South Beach and/or Icon Brickell visit IconBay with very high expectations, only to walk away sorely disappointed. It’s like the first time you watched the movie Terminator 3: Rise of the Machines. You couldn’t wait for it to be released in theaters, because you just knew it was going to be amazing, just like the first two parts; yet, in the end, you walked out of the theater asking yourself, What was that crap?. Had you walked into the theater with different expectations, or, better yet, with zero expectations, perhaps you could have enjoyed the movie (actually, no, that was a horrible movie no matter how you slice it).

Of course, there are going to be those who say, Lucas is just being negative. Related Group was able to close all 300 of its units at IconBay. The development was a resounding success. Well, it depends from whose perspective you’re looking. For Related Group, without a doubt, it was an overwhelming success. For investors, not so much. In my opinion, it’s not surprising that all 300 units at IconBay closed. With 50 percent deposits on the line, contract holders weren’t left with much of a choice. (To me, walking away from such hefty deposit money doesn’t seem like much of an option.) If IconBay is such a resounding success, that success should translate into sizable profits for investors (not five or ten years from now, but right now), especially considering the fact that real estate prices in Miami have increased significantly since August 2012, when preconstruction sales launched for condos at IconBay. Recently, I read an article stating that the median sales price of existing condominiums in Miami-Dade County increased 52 of the last 53 months (a period spanning nearly four and a half years). Taking this fact into consideration, one could justifiably assume that initial investors of units at IconBay would have no problem locking in tidy profits post-closing. However, comparing the preconstruction price list dated September 6, 2012 for units at IconBay (shown below) with recent post-closing activity as reported on the MLS, that doesn’t seem to be the case at all. Take, for example, unit 2401 which, as mentioned earlier, closed for $810,000 on October 1st. After taking into account the developer’s fee, commission on the resale, and closing costs on both ends, that preconstruction buyer, by my estimation, likely broke even. And that’s for unit 2401. Units 2601 and 2901, two other units which closed last month and do not appear on the price list below, are located on higher floors; so one could assume that they presold at even higher prices. And let’s not forget about unit 3101, another unit I mentioned earlier in this post; it’s currently asking $780,000 and has been on the market for 79 days.

I leave you all with a thought of the day from Joe Biden. I hate to admit it, but perhaps Joe is finally onto something.

Venetian Islands Real Estate: November 2015 Market Report

Each week, Miami Beach Realtors host a progressive open house of listings in the area. This week’s focus was the Venetian Islands, with an impressive 23 properties on the tour! This is a great time for the Venetian Islands as the roads and infrastructure are in the last months of a $12.4 million restoration project. The Venetian Causeway is expected to reopen by the Spring of 2016, offering residents new roads as well as utilities. The construction project has not slowed the bustling real estate market in the neighborhood. Here are some highlights of the market as we draw an end to 2015:

There are currently 47 actively marketed homes for sale on the Venetian Islands in Miami and Miami Beach (comprised of Venetian Drive, San Marco Island, San Marino Island, Di Lido Island and Rivo Alto Island).

Highest Price Listing: 610 W Dilido Island
$15,500,000 for 5 bedrooms, 6 baths in a 5,210 square foot home on a waterfront lot.

Lowest Price Listing: 211 S Rivo Alto Drive
$1,595,000 for 4 bedrooms, 3 baths in a 2,194 square foot home on an interior lot.

Contracts Signed
There are 4 properties that are currently under contract, ranging in price from $5,900,000 down to $929,000.

Recent Closings
Over the last 3 months, we have seen 9 properties trade hands for $12,500,000 down to $1,525,000.  Waterfront properties averaged $1,450/square foot in price vs $811/square foot for interior lots.

Featured Property: 300 W Rivo Alto Drive
Of the actively marketed properties in the neighborhood, we made special note of the home at 300 W Rivo Alto Drive, offered at $12,750,000.

This Venetian Island home was built in 1938 on a waterfront lot, but recently remodeled beautifully. It offers 5 bedrooms, 5 1/2 baths and 90 feet of bayfront views with an infinity lounge pool and boat dock. There is an outdoor living room with summer kitchen, garden and even a koi pond with waterfall. The interior design is tasteful yet dramatic with zebrawood walls, calcutta gold marble, top of the line appliances and Crestron security system.

Here are some additional photos of 300 W Rivo Alto Drive:

And if that waterfront house doesn’t tickle your fancy, be sure to visit our real estate listings page for luxury houses for sale in Miami and Miami Beach.

Met Square Historical Complex & Movie Theater Begins Vertical Construction

After almost 10 years of delays, Met Square has finally begun vertical construction. The site plans have changed significantly after the delays, but are coming to life better than ever. The site was originally planned as a movie theater and hotel but has now switched the hotel for a residential rental tower and added a historical museum.

While performing the site work on the property, the construction team discovered artifacts from several different eras of Miami’s history. It turns out that the land was once the site of an ancient Tequesta Native American tribe, one of the first residents of the area. As the city began to be settled, it was also home to a 19th Century US Army fort as well as Henry Flagler’s Royal Palm Hotel. During its heyday, the hotel gained fame as the first electric lights and elevators in the city. It was demolished in the great Miami hurricane of 1926.  In order to pay honor to the history of the site, the developers are dedicating the first floor of the building to a historical display of the artifacts.

Above the historical display, residents and visitors will enjoy restaurants, lounges and an 18 screen movie theater. ZOM residential will add 391 rental apartments in lieu of the hotel that will be called Avant at Met Square. No completion date has been announced at this time but we expect the historical display and movie theater to open in 2017.

Brickell Investor Opportunity: 2 Bedroom Under $500k

From time to time we like to talk about deals that we see that are particularly interesting for one reason or another, and this is a very interesting investment deal. Brickell condo investments typically see around a 3% return for existing purchases (after expenses such as taxes and homeowners fees are subtracted) and 2 bedroom properties under $500,000 are becoming more and more difficult to find.

This listing at the Vue at Brickell is a standout in our book at only $449,000 with two parking spaces, full renovations and fully furnished. The building is located at 1250 S Miami Avenue, so is walking distance to practically everything in Brickell, the “official walk score” by walkscore.com is listed as 97. Despite being able to walk almost everywhere, this apartment comes with 2 parking spaces rather than the typical single space. The building was built in 2005 and was recently renovated, offering a new lobby, refreshed gym and pool area. The condo management is in good standing, managing to keep the HOA fees at only $675/month, which is significantly lower than competing buildings in the neighborhood.

Inside the apartment, the kitchen and bathrooms have been updated and the apartment is being offered turnkey furnished (linens, artwork and electronics included). The kitchen offers new stainless appliances including a wine cooler as well as quartz countertops and new cabinets. Both bathrooms have new vanities, countertops, sinks and light fixtures. The balcony has a wonderful view of the city lights as well as the Biscayne Bay.

Considering this apartment were to be rented today, an investor could reasonably expect $2,800/month in income. If you reduce the real estate taxes and HOA fees, it would leave a return of 4.5% as soon as the tenant takes place! If you or someone you know is interested, just reach out and we are happy to set up a tour.

Starchitect Renzo Piano To Introduce Eighty Seven Park In Miami Beach

Miami Beach is getting another starchitect-designed condo building, this time by Pritzker Prize winning Renzo Piano. Eighty Seven Park will be the first project in South Florida to be designed by the famed architect and is located at 87th and Collins on the last piece of land north of North Shore Park at the limit of the city of Miami Beach. The 18-story glass tower will feature oblong floors and wraparound balconies with ocean views. In total, the building will offer 68 residences varying in size from 1,400 to 7,000 square feet.

“The idea behind the site is to enhance the presence of the green spaces in the park by extending trees to the northern limit of the city of Miami Beach,” said a statement from Renzo Piano Building Workshop. The building will be surrounded by a reflection pool and private gardens. Between the residences and the beach will be two swimming pools surrounded by sundecks and a walking path to the shoreline.

Interiors are being designed by Rena Dumas Architecture Interieure from Paris and will feature American oak and Italian stone fittings with orchids, Bonsai trees and cacti. An in-house botanist will maintain the year-round floral display, extending the serene natural feeling from the gardens indoors.

Renzo Piano will join Rem Koolhaas, Zaha Hadid, and Bjarke Ingels with their starchitect-designed projects over the upcoming years. In addition to being the first project for Mr. Piano in South Florida, Eighty Seven Park will also be his first residential building in the United States. Previously, the firm has completed the 95 story Shard, the tallest building in the European Union that is often referred to as London Bridge Tower as well as the 52 story New York Times Building in Midtown Manhattan.

IconBrickell Pool To Close For 12 to 14 Months

Residents of IconBrickell and the Viceroy Hotel (W Hotel) are in for a hot and dry summer, as their famed pool deck will be closed for renovations/repair. Our sources have confirmed that the Icon Brickell pool closing is expected to begin around February 2016 and the work is estimated to be completed in 12 to 14 months.

It has been reported that the Icon Brickell pool renovations will include re-tiling of the pool deck for safety reasons (because the tiles used by the developer are too slippery for use on a pool deck). Others have reported that leaks in the pool have caused damage to the spa and gym below; however, the management office has not cited at this time the exact reason for the closing.

IconBrickell opened in 2008 to rave reviews but few sales due to the economic downturn. The amenities in particular won awards and accolades for their grandiose, superb quality and design. Developed by Related Group, Arquitectonica was chosen as the architecture firm and Philippe Starck handled the interior design. IconBrickell was among the first condo developments to rebound from the economic downturn in Miami. Average sale prices for the second quarter of 2015 have been reported at $583 per square foot for the three towers or $796,000 and rentals have averaged $3,150 per month for the same period.

The pool closing at Icon Brickell has been well known among residents and the real estate community for several months. As such, listings at Icon Brickell have already begun to price in the negative impact that the pool closing is expected to have.

HUD Promises Easier FHA Financing for Condos

For years we have seen hopeful condo buyers, armed with pre-approval letters become frustrated with the financing process and give up or learn that their pre-approval letters are only valid in certain condo developments. The reality is that in order to purchase a condo, two approvals must happen.

First, the buyer must prove financially able to commit to the mortgage payment by submitting their credit and income details to the bank for review. Secondly, the condo development they wish to purchase in must also be approved by the financial institution.

FHA loans are very popular among buyers because of their less stringent qualification guidelines and because of the lower down payment requirements. In order for a building to become FHA approved, they must submit an application to the US Department of Housing and Urban Development (HUD), pay an application fee, and wait for 60-90 days for an answer. The application is long and cumbersome, the fee is high, and few buildings are approved. This has led to a diminishing number of buildings who are even willing to try for the approval.

For example, the current 95 page application has been submitted by 48 buildings in Miami Beach & Downtown Miami. Of those 48, only 2 buildings meet all of the criteria and have been awarded FHA approval.

If you are a buyer today with an FHA pre-approval, you would be able to purchase a condo in Brickell on the River North or Brickell on the River South. This remains to be the case no matter what your credit score is, how secure and high paying your job may be or how responsible you are. Those would be the two buildings you could choose from. You would be able to use the pre-approval letter to purchase a house, but those are the only two condo buildings that allow FHA mortgages currently.

At this year’s NAR conference in San Diego, an announcement was made by the Federal Housing Administration that changes are underway to the approval guidelines, making FHA mortgage more accessible to condo buyers going forward. Among these changes are restrictions on owner occupancy versus investor owners, commercial space percentage, FHA concentration and spot approvals. We commend NAR and HUD for their efforts in making home ownership more accessible and look forward to seeing the specifics of the changes.

In the meantime, if you are a condo buyer who prefers a lower down payment, there are loan programs in some buildings that allow for less than the standard 20% down payment and are happy to answer questions you may have about financing in condos.

Sarah Elles Boggs Joins Miami Condo Investments as Team Leader and Social Media Manager

I am pleased to announce the recent addition of Sarah Elles Boggs to the Miami Condo Investments team as Team Leader and Social Media Manager. Sarah Elles joins us from Douglas Elliman with 12 years of real estate experience under her belt and a proven track record of success. Among her many current and past achievements, Sarah Elles was honored as one of Brickell Magazine’s Top 20 Professionals under 40 in Miami, chosen to serve as a board member of the 2014-2016 Young Professional Council for the Miami Association of Realtors, and chosen as one of Florida Realtors’ State Directors for 2014-2016.

Sarah Elles also has a solid understanding of how to drive consumer sales through social media. Much of her success in real estate has been attributed to social media and knows all too well the importance it has in building and maintaining client-agent relationships. In 2013, Sarah Elles appeared on Realty Biz News’ list of “100 Must Follow Realtors on Twitter”.

I am delighted to have Sarah Elles as a member of the Miami Condo Investments team and am confident that she will play an integral role in its development and growth in years ahead.

Sarah Elles Boggs may be reached at [email protected].

Site Work Underway; VĪb Miami to Break Ground This Month

It appears that phase one of Richard Meruelo’s mixed-use development, to be located at the intersection of NE 2nd Ave and NE 17th Street in Miami’s Arts + Entertainment District, is moving forward as planned. While out showing properties this past Friday at 1800 Club, I spotted from a distance trucks clearing off the land to his 7.3 acre site.

As reported earlier this year, phase one of Meruelo’s project is to include a 10-story, 200-room hotel called Vīb – a new boutique hotel brand by Best Western. Groundbreaking for the hotel is expected to take place this month with completion slated for November or December of next year.

Meruelo’s site is zoned for up to 3 million square feet. Future phases are expected to include residential units, restaurants, retail, and nightlife – all of which will be welcomed additions to the neighborhood.