As promised, we’re back with another market update of one of the submarkets in Miami’s Greater Downtown area! Today, we’re going to check in at the Miami Riverfront. This is a gated enclave of 3 condo towers, Mint at Riverfront, Ivy at Riverfront and Wind by Neo. Some people also consider Neo Vertika and Latitude on the River as a part of the Riverfront since they are technically on the river, but since they are outside of the gated enclave, I’m considering them a part of West Brickell for today. The gated enclave currently has 1,517 condo units. Mint has 530 units, Ivy has 498 and Wind has 489.
Let’s start with the scary part of the update and get that out of the way. This year has brought 18 closed sales between the three buildings. While some may think that is ok for the first quarter, there are also 189 active sales listings. That is a whopping 31 month supply!
Now that we have that cat out of the bag, let’s talk about some more positive aspects of my findings. The average list price of those 189 available units was $380/square foot. The average sold price of the 18 that did find buyers was $323/square foot. Also, there are 15 units that have found buyers but are awaiting closing. The average asking price of the pending sales was $365/square foot, and we’ll learn the sold price as soon as the closings are logged.
The highest price listing in the area was Ivy’s Penthouse 5, listed for $1.8 million. While I love to look at photos of this 3 bedroom triplex with an amazing rooftop terrace, we can’t really consider it in our statistics since it is such an outlier. Aside from the penthouse, the most expensive offering in the area was Ivy at Riverfront #4009. This one is a furnished 3 bedroom that is offered for $785,000, or $472/square foot. The seller is offering seller financing and the furniture is beautiful but I imagine we’ll see this one on the market for awhile still.
The lowest priced listing is also at the Ivy. Unit 1812 is am 816 square foot 1 bedroom corner unit. It is priced at $240,000, or $295/square foot. Looking at the history of the listing, it seems the seller is playing pricing see-saw. The price has been going up and down and the listing has been on and off the market several times in the last year. I feel like that if the seller can be reasonable, this one will not stay on the market for too long (I’m not sure what’s going on with that little pricing dance they’re doing though).
For buyers looking for two bedroom plans, the lowest prices are found at Wind. Unit 2114 is listed for $305,000 ($326/square foot), but despite being officially a two bedroom, I really consider this a one bedroom plus den. The second bedroom is very small and many times is open to the living area. For a full-on two bedroom with two enclosed bedrooms, the prices start at $325,000 for Wind #2606.
Is there better news in the rental market?
Yes! Despite the press that Miami has recently received, I’m finding that the rental market is still relatively healthy. Case in point: There are currently 84 rental listings in the Miami Riverfront and the last 3 months have brought us 71 closed rentals. That gives us a very healthy rental market.
Also, I have noticed that while the prices have fallen in the area, the landlords have less need to negotiate below their asking price in order to secure a tenant. The average asking price of the 71 rented condos last quarter was $2.36/square foot. They closed at an average of $2.30/square foot. That’s not a lot of wiggle room for an opportunistic tenant who wants to take advantage of a desperate landlord. The rentals are moving and they’re moving close to the listing price.
The highest price rental was that same Ivy penthouse with the amazing terrace. They have secured a tenant for $9,000/month after listing the property for $10,000/month. Outside of penthouses and townhouses (which I also consider outliers), studios are starting at $1,650/month at Wind, one bedrooms are starting at $1,750 at Ivy and you could get a three bedroom for as much as $4,300/month at Mint. Two bedrooms start at $2,400-$2,500 in all three buildings currently. To be fair, the $1,650 studio I mentioned is listed as a one bedroom, but has no separation between the bedroom and the common area so lives more like a studio.
Overall, I am pleasantly surprised to see how the market is holding up in the Riverfront area, just as I was pleasantly surprised by how well IconBrickell is doing during their massive renovation. How do you think the trend will continue? Are there any additional metrics that you would like to see?
Biscayne Beach Opens This Week
We knew this day was coming soon, and the developers are right on schedule. They had anticipated a late April opening for Biscayne Beach, and here we are. The first closing statements have been sent out for review and closings begin Friday, April 21. The TCO is expected on Thursday, so the developer is really not wasting any time beginning the closings. If the TCO does not arrive on time, the closings will be delayed but we do not anticipate any problems.
Because the TCO has not yet been delivered, we have been unable to preview the finishes and views, but are very excited to do so on Friday when we walk through a unit that we are closing on. This apartment is going to come back to market as a resale and I expect that it will not last long. It is a lovely 2,103 square foot corner apartment on a high floor. There are 3 bedrooms, a den, 4 full baths and is a corner unit. The southeast corner offers south views of the skyline as well as east views of the bay and Miami Beach (the best view offered). You can see the floor plan and more information about the apartment here.
Biscayne Beach was an enormous success for the developers and sold very quickly. I am sure that the buyers will be impressed with how it turns out. We have started a list of buyers and tenants who are interested in the units as they come to the resale and rental market. If you would like to be notified of a particular plan listed for sale or for rent, just reach out.
Cinemex Finally Releases Grand Opening Date!
At last! Brickell City Centre’s Cinemex has released a grand opening date! Granted, the opening day is a private event and not open to the public, but we know that the public opening will come soon thereafter. One of our readers kindly tipped us off that the people working inside the theater claimed they will “definitely” be open by May 5, the release day for “Guardians Of The Galaxy 2.” The private grand opening will take place April 27 with a “Great Gatsby” theme.
The wait for Brickell’s first movie theater has been dramatic. We had received so many opening dates that were later pushed back, we just stopped asking. The theater does not yet show up on Cinemex’s website or Fandango, but we’re checking daily. Eager patrons have swarmed their Google page with 1 star reviews due to the delay. We are confident that once we are able to attend a movie there, the experience will be amazing and those 1 star reviews will be balanced out by even more 5 star reviews.
In the meantime, check out our Miami condos movie that will air before each movie there. We’ll see you at Cinemex!
**** UPDATE: We have YET ANOTHER opening date. I have never seen a company with so many different opening dates. At any rate, Cinemex’s Instagram has announced that the theater in fact opens tomorrow.
What Happens If A Buyer Cannot Close On Their Preconstruction Condo?
The spring and summer of 2017 are going to be an interesting time for Miami in a real estate sense. We are going to see a flurry of new condo developments opening, bringing thousands of new closings (and probably hundreds of new resale and rental listings).
Brickell Heights 01 and Brickell Heights 02 are set to open within the next month, 1010 Brickell will follow shortly thereafter (or maybe they will open before… the two projects are neck and neck). Up in Edgewater, Biscayne Beach is slated to open its doors any day now, followed by the first tower of the Paraiso District, Paraiso Bay. The four projects together total over 1,800 new condos that are set for completion this summer. The fall and winter will bring another flurry, but for now let’s concentrate on the openings that are closer. These projects are all effectively sold-out. They are a wild success for the developers! But, what happens if one of the buyers is unable to come up with the remaining funds to close?
During the sales cycle of these four towers, the developers were requiring staggered deposit schedules that totaled a 50% down payment prior to closing and the remaining 50% due at closing. Remember that the majority of these condo sold in 2014-2015. A lot of things can happen in 3 years that can change the financial situation of the buyers. There could be an argument between partners in a condo, divorce, death, health issues. There could be political problems, currency exchange rate troubles, economic hardship. A dictator could be elected. We all know that these things are going on around the globe and they are all very sad. But what happens if one of these factors affects a buyer’s ability to close? It isn’t as dire as some may fear. The buyers do have choices.
They can walk from their deposit
Everyone knows this one. If you put a deposit down on a contract and don’t complete the contract, you will lose your deposit. It is very straightforward, and it stings. These condos sold around $500-$600/square foot. If you figure Related Group’s signature 2 bedroom layout that is almost always 1,200 square feet, give or take, the sale amount would be around $700,000. That’s a $350,000 loss, and that is not ideal for anyone… but it’s an option.
They can close with a mortgage
Although condo financing isn’t easy in brand-new developments, there are banks that will finance preconstruction purchases at the time of closing. The challenge is that many of the buyers in these developments are foreign nationals, and those mortgages are more difficult. Some banks refuse to lend to buyers from countries that have political turmoil (looking at you, Venezuela). It’s not a racist thing, the banks are worried about the political climate and their ability to recoup the mortgage. If you have questions about which banks can finance buyers from different countries, let us know. We have a resource that can help.
They can close with a private mortgage
If traditional financing just isn’t a possibility, buyers could visit a private lender. These mortgages typically require very little documentation and are able to close very quickly because the lender is familiar with the local market, the project, and bases the approval on that. The downside of these mortgages is that they are extremely expensive. Expect to pay 3-4 points to the lender at closing as a fee plus astronomical interest rates. I’ve seen interest rates as high as 13-14%. If a buyer was attempting to close the signature 2 bedroom unit that we discussed previously, that would amount to $10,500 – $14,000 just as a closing fee. Then you could expect around $4,000 per month to go just toward interest. Again, not ideal but also better than losing $350,000 right out of the gate.
They could find someone to step in and close on their behalf
This is probably the most ideal situation for someone in a preconstruction condo bind. Developers typically frown upon contract flipping and there’s no guarantee they would approve it, but developers in today’s market are also not eager to hold inventory on a previously sold-out project. They want to take their money and go do something else until another build cycle opportunity presents itself.
We have already had several investors request opportunities to buy in the event that a preconstruction buyer cannot or will not close. If anyone is in a preconstruction condo bind, please contact us and hopefully we can work it out in a mutually beneficial way.
Eighty Seven Park Surpasses The 50% Sold Mark
In the same month that they plan to formally break ground, Renzo Piano’s Eighty Seven Park has surpassed the 50% sales mark. The 18 story tower will have 70 total residences and famous neighbors such as Michael Huffington, the Conde Nast family and the latest announcement, tennis star Novak Djokovic. He has reportedly purchased a 3 bedroom, 3.5 bathroom residence with a wraparound terrace for between $5.9 million and $8.9 million (the exact sales figure has not been disclosed, but that is the cost of available units with the floor plan he purchased).
Not to digress from the star factor, the residences will be quite nice. We were able to go for a preview last month, and the boutique building is impressive for those who love parks and have money. The tower is secluded between two parks. The 35 acre North Shore Park to the South is set to be redeveloped with money contributed by the developer. This park will be shared with the public, but a more secluded park will also be available only to residents. Each of the 70 apartments will come with a key to the door and a key to the park, much the way New Yorkers covet a key to Gramercy Park. The private key park will be built by the designers of the new New York Governor’s Island.
According to a representative of the developer and against Miami trends, 55% of the buyers are from the United States. I imagine most of them are from New York, since New Yorkers are most comfortable paying $1.7 million for a 1 bedroom, even if it does have over 1,000 square feet. Prices go all the way to $45 million for the penthouse. 30% of the buyers are from Europe and 15% are from other international markets. Buyers from Turkey and Asian countries have been more active in our market over the last few months, while the Latin American market has cooled.
Site work on the build site has already commenced, and we expect groundbreaking this month or early next month.
Jade Signature Posts $51 Million In Sales During Q1 2017; Updated Construction Photos
Photo courtesy of Suffolk Construction
Despite the cooling market, Jade Signature in Sunny Isles Beach has had a very busy sales season! They have closed out the first quarter of 2017 with an astonishing $51 million in sales.
The 57-story luxury tower unites world-class partners including Pritzker Prize-winning architecture firm and design consultants, Herzog & de Meuron, Parisian interior design firm PYR by Pierre-Yves Rochon and landscape architect Raymond Jungles. Buyers were quick to purchase residences from the newly released inventory called “The Collection,” which is comprised of the project’s largest, most expensive and last remaining listings. The overwhelming sales success points to the effectiveness of registering projects in New York City as well as Jade Signature’s attractiveness to the niche but global affluent design-savvy market.
“Now that Jade Signature is nearing completion, buyers can truly understand the high-quality work that our design team produces. They can tour the expansive spaces from their home in New York or on their vacation in Europe using our virtual reality app, and achieving that sense of place is key to our sales efforts,” said Edgardo Defortuna, President and CEO of Fortune International Group. “It’s important to us that buyers are able to imagine their lives in Miami, and I am proud to say that we are accomplishing just that.”
Sales from this quarter came from Brazil, Argentina, South Africa, Mexico and New York. Three residences, including two double-height Sky Villas listed at $14.2 million each, were sold to New Yorkers as result of Jade Signature’s presence in Manhattan, a lucrative market for second-home buyers. Jade Signature is slated for completion toward the end of the year with only a handful of residences left.
Currently available is a selection of three-to-five-bedroom residences as well as a few listings within “The Collection,” including two-story Sky Villas and the upper and lower Penthouses. Homes range from 1,378 to 11,661 square feet and are priced from $2.175 million to $32.9 million. They are selling at an average of $1,500/square foot and closings are expected to begin later this year.
Compare our drone video from last August to the recent construction update photos that we obtained from Suffolk Construction!
Missoni Baia Releases Floor Plans And Prices Starting At $500k
Miami’s latest luxury branded condominium development, Missoni Baia, has released their preliminary floor plans and introductory prices. The project will bring 229 ultra-luxury residences to East Edgewater on a waterfront lot with 200 feet of bayfront in a 57 story tower. The sales brochures and renderings are still being finalized, but we were able to get a peek of the preliminary floor plans and first tier pricing.
As I have reported before, the best time to buy a new condo is either when the tower is first announced, or when the tower is completed and preparing to open. Of course, the first buyers have the best choice of floor plans and views. Without further adieu, the first tier prices and floor plans:
FLOOR 8-36 LINE 02
2 Bed / 3.5 Bath + Study
2,335 square feet interior
478 square feet terrace
Direct east center
Private elevators
Starting Price $1,690,000
A Solution Is Found For The BrickellHouse Parking Saga
At last! Two years after opening and more than 1 year without a functioning parking garage, the owners at BrickellHouse have found a solution to their motorized parking problem. For those who didn’t hear, the “state-of-the-art” automatic parking system that was touted as an amazing feature of the building turned out to be not-so-state-of-the-art. It didn’t even work. People were having to wait up to 45 minutes for their car to be delivered each morning! The association started a free coffee bar to make people feel better, but adding 45 minutes to your morning commute because your robo-valet doesn’t work is still annoying.
To complicate matters further, the company that designed and installed the system filed for bankruptcy and disappeared, leaving the 374 buyers in the building with lots of questions about where to put their cars. Lawsuits were going everywhere as the owners and association scrambled for a solution. Sales values took a huge hit, with values falling from $600/square foot down to $400/square foot the last time we published a market update. Typically when buildings go through issues like this, I say it is a great opportunity to buy. With no answer in sight, the BrickellHouse situation was still too scary for me to advise investors to buy. Now that there is a solution, I would feel better about recommending a purchase in the troubled building.
So, what is the building going to do???
The association and condo board have been hard at work interviewing motorized parking companies and have ultimately come to an agreement with Unitronics Automation Solutions, a fully bonded and insured company that has been around for almost 30 years. Hallelujah! We have a savior!
Unitronics is going to test their software system on the first two floors of parking. If all goes well, they will complete the remaining floors. If the solution does not work, they will part ways amicably and not charge the BrickellHouse owners. The downside is that the full repair could take 2-4 years to complete, they don’t really know yet. It is also super expensive, I don’t see how the repair can take place without a special assessment, but we don’t have any solid verification of that amount just yet. Once we find out, I will be sure to let everyone know. The good news is that buildings typically win their 558 claims against developers for structural defects, so the developer’s insurance policy will likely be the one to ultimately foot the bill, just someone has to pay for the solution and lawyers in the interim.
Once the repair is complete, Unitronics will continue to manage the garage.
What is going on with the sales and rental values?
The sales values are still pretty scary, but at least they’ve stopped the free fall. There were 4 closed sales in the first quarter of 2017 with an average price per square foot of $427 for finished and non-furnished sales. There was one that sold for $219,000, but that one was a decorator-ready studio. An upgraded and fully furnished 2 bedroom sold for $550,000. There are 3 deals pending, which we are anxious to see what they settle for. The alarming part is also that there are 62 active listings. This rate gives us 46 months of sales inventory. The available sales range from $230,000 for a studio up to the $6.9 million penthouse.
The rental market is still really healthy. The first quarter brought 37 new tenants and we currently see 41 active listings. The prices are holding firm also. Studios start at $1,750/month, one bedrooms for $1,900/month and up, and two bedrooms start at $3,000/month.
Hopefully the new solution will bring more life back to the sales market in the building! I’m sure it at least brings peace of mind to those affected.
The sales of the growing tower have remained strong as well, despite the market slowdown. In October the project was reported to be 70% sold, and the developer lowered the minimum deposit requirements from 50% to 35% on select units. When the project reached 74% in January of this year, they expanded the incentive, lowering the deposit requirements for all units. This is a pretty common strategy for developers who are at advanced stages of construction and have sold nearly all of their inventory. At 78% sold today, that leaves 142 purchase opportunities as of now. Since it appears that the project is selling 4% of their units every 3 months, it looks like they are selling just under 10 units per month. While that is not an amazing figure by Miami standards, it is certainly a nice figure considering that so many buildings have inventory today. At this rate, we should expect to hear a “sold out” announcement before the building opens later this year. Very nice, Aria!
Prices of the remaining inventory range from $400,000 to $1.8 million.
