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.