New Condo Construction Closing Rates
November 10, 2007 by Lucas Lechuga
The chart above will show you the percentage of total units that each development has closed since closings began. They are in no particular order.
Below, you will find the date that the first closing in each development occurred:
Latitude on the River - July 27, 2007
Star Lofts on the Bay - June 20, 2007
Onyx on the Bay - July 31, 2007
Ten Museum Park - June 14, 2007
Midtown 2 - April 30, 2007
50 Biscayne - October 1, 2007
Star Lofts on the Bay and Onyx on the Bay haven't had any new closings in quite some time. I think they are pretty much done. Midtown 2 has maybe one or two new closings every couple of weeks. Might as well put a fork in them as well.
Latitude on the River has done comparatively well but it seems as if closings have plateaued. I think it will be difficult for them to reach the 80 percent mark within the next couple of months unless a bulk buyer steps in to buy the defaulted condos.
Ten Museum Park has been struggling but I know that an individual has stepped in to buy over ten units there within the past couple of weeks and is still looking to buy more. Only about half of these closings have been recorded. Rumor has it that a separate bulk buyer has a strong interest in buying the remaining units that come back to the developer of Ten Museum Park after all closings have been completed. I think by January we'll see the percentage of closings at Ten Museum Park top 90 percent.
50 Biscayne began closings on October 1, 2007 and is doing quite well. Most closings get recorded within the first week but there can be a two to three week delay so some condos that have closed within the past two weeks may not be reflected in the numbers above. It will be interesting to see how high the percentage of closings at 50 Biscayne rises by the end of the year.
Lucas, I really enjoy and appreciate your blog. Keep up the good work. I was recently told that Onyx on the Bay had reached 62 closings. How did you get your information and when was the last recorded closing according to your source? I heard this from an investor looking to buy 15 of the units.
Grant,
I use County public records to see how many closings have been recorded. Closings are usually recorded within the first week but it can take up to 2-3 weeks. The last closing at Onyx on the Bay was October 31, 2007. There were a total of 7 closings in October. There is a possibility that someone purchased a chunk of units within the past 10 days which haven’t been recorded yet.
Lucas,
It is my impression that the only advantage in having a bulk buyer step in is that the condo fee will be paid. Won’t these bulk sales lower other values when they are used as comps? Maybe another advantage is that these units will rent for less because acquisition cost is less? Have I missed something?
Thank you for all the great information.
Excellent post Lucas.
I good company can usually do 6-7 closing per day for a building, so you can easily see how far these buildings are off the pace.
Lucas, this is great information. Keep it coming!
Lucas i also talk with the main investor at ONYX ON THE BAY, and he is telling me that a the last sale was done in the last day of October.
No bulk sale is schedule at all.
Lucas,good job !!!!!!!. Your recording in ONYX ON THE BAY,is perfect.
Lucas this is a quality blog, your info sets you apart. Thanks and keep it up!
Lucas, Do you have a view on which of these buildings is the best to buy multiple numbers of units? Are the remaining 10 Museum units in the poorer lines? Thanks!
I am currently an owner in the Latitude, and noticed that it has the highest percentage, but ur statement says that it has basically settled. From what I have read in other articles, is this percentage a positive outlook on the building or does it reveal there may be finacial issues down the road due to foreclosures and 25+% of condos still left unclosed. As well, with the high rate of closings compared to the other buildings, is this more attractive to bulk buyers? And would love to hear any other feedback, positive or negative on the Latitude you have… Read more »
John,
I am no expert on this and look forward to seeing Lucas’s perspective, but I have a few thoughts. The high sales rate is a positive for the building but how many of the closed units are owner occupied? This would add a stable base to any building. Also, Ed Fish has an excellent track record and is very well regarded here in Boston. You are fortunate to be dealing with a developer of such high integrity.
Grant,
I would stay away from Star Lofts on the Bay, Onyx on the Bay and 2 Midtown unless you can get a significant discount on multiple units. If I had to choose from these I would probably buy multiple units in Ten Museum Park or 50 Biscayne.
The are only 1-2 east-facing units available at Ten Museum Park that were defaulted. Someone is buying a lot of 05 line units for some reason. The buyer recently closed on 10-12 of these units. The small 2 bedroom is the floor plan that is most available.
John,
It really depends on the bulk buyer’s objective. I’ve been getting phone calls from various investment funds that want to buy 51 percent of the units in a building because they want a controlling stake in the building. In that situation, Latitude wouldn’t work for them. In most cases, however, I think having a high closing rate is a big positive. It shows that there is less of a chance of the building having major issues such as it being under-maintained
And why would an investment fund call you instead of calling the developer directly?
Independance and unbiased views?
Laurent,
Most of the times they don’t know which development or developments are the best prospects to contact to make a bulk purchase. Other times they call me just to make an introduction so that I will call them first when and if I hear of an opportunity that meets their criteria becomes available.