New Miami Condos – Closing Rates for February 2008
This month, I decided to make two separate graphs to show the percentage of total units that each development has closed since closings began. The first graph, found immediately below, reveals the closing rates for Miami condos which had their first closing prior to November 1 2007. The condo developments are also now ordered according to when closings began, with the first to the left.
Below you will find the date that each condo development in the graph above began closings:
Not much has changed with this group of condos since the last update was provided in January. Ten Museum Park and Latitude on the River inched up about 2-3 percentage points. Star Lofts on the Bay remained the exact same and Onyx on the Bay was able to close one additional condo. The Loft Downtown 2 moved up a little over 5 percentage points and 50 Biscayne moved up almost 7 percentage points. A few different sources have told me that there have been about 200 defaulted condos at 50 Biscayne. This is in line with the 239 condos that are currently unaccounted for according to public records. Several people have left comments here stating that the developer has chosen to lease many of the defaulted condos and ride out the storm rather than sell to a bulk buyer. I’m sure other developers will follow suit, which will decrease the expected inventory levels for a few years.
Below you will find the date that each condo development in the graph above began closings:
The graph above includes a group of condos which began closings within the past three months. I was surprised to see that 1800 Club has fared the best, although it should be noted that it did begin closings first amongst this group. Brickell on the River 2 has made much progress since the end of January when closed condos represented about 4 1/2 percent. Quantum on the Bay has done well considering that it has only received a TCO on the first of its two towers. Driving by a few times within the last couple of weeks, I did notice more lights on at night than one would expect from a condo development that just started closings about a month and a half ago. Same goes with 1800 Club. With a closing rate of about 20 percent, Apogee South Beach is off to a good start. Prices there start at about $2.5M. Plaza on Brickell has also only received a TCO on the first of its two towers. We should see much improvement from most of the condo buildings in the above group within the next month or two.
You may have noticed that One Bal Harbour and Midtown 2 are not found in this month’s update. I chose not to include One Bal Harbour because the Regent condo-hotel units have now begun closings and I did not want to intermingle the two. I do know, however, that WCI Communities has been quite successful in closing units at One Bal Harbour. They’ve closed around 150-155 condos out of a total of 185. I also know that several have been reassigned and are currently under contract. I expect WCI to have only a couple developer units left at One Bal Harbour by the end of March.
I didn’t include 2 Midtown because I noticed that a bunch of deeds have been re-recorded there. It would have taken me forever to sort through that mess. The following was written along the left-hand side of the re-recorded deeds: “This deed is being re-recorded to correct vesting on title”.
Disclaimer: The above closing rate information was derived from public County records. There can be a 2-3 week delay from the time that a closing occurs and the time that the closing gets recorded.
Miami Picture of the Day
Assessing the Neighborhoods and Condo Buildings of Miami
A great comment was made this morning asking me for my take on the various neighborhoods in Miami. Excellent topic and one that I’m sure my non-local readers would appreciate.
The map above is a portion of a larger map that was created by the Miami Downtown Development Authority. It is a great resource for people to see where various condo buildings throughout Miami are located. I realize that it is very difficult to view the above image. I do, however, have a PDF of the map on my file sharing page. Click on the file called “Miami Developments Map Aug07”. You may also want to view the file called “Miami Developments Report Aug07”. There you will find profile pages for several condo developments in Miami.
The map does not encompass all of Miami, however. It basically covers just those neighborhoods in Miami that had the most condo development during our recent boom. It also doesn’t show every condo development on the map. I’m not sure how far back it goes but my guess is that it only includes developments built since 2004.
The Neighborhoods of Miami
- Brickell – Brickell is also known as the financial district of Miami. A lot of large international banks are located in Brickell. Also, the majority of Miami’s condos are located in Brickell. When you see a picture of the Miami skyline you are most likely looking at the various condo buildings in Brickell.This is considered by most to be an affluent neighborhood. There are some very high-end condo buildings located in this neighborhood such as Four Seasons Residences and Santa Maria.However, there is a large supply of condos that has recently begun to hit the market in Brickell. Buyers will definitely have good opportunities and a lot of options within the next couple of years. You really need to research these buildings considerably if you intend to buy. There are some condo developments in Brickell that I feel are overpriced and will likely come down over the next 2-3 years. There are others that I feel are appealing to end-users. I also wanted to note that there is only one waterfront lot left in Brickell.
- Brickell Key – Many would say that Brickell Key is viewed as an exclusive neighborhood with its gated entry into the neighborhood and its paved brick roads. There isn’t much new inventory in Brickell Key that will hit the market within the next year. In fact, only 123 new condos will hit the market once Asia closes its units. Other than the small piece of land behind the Mandarin Oriental Hotel, there is no room left to build in Brickell Key which means that there probably won’t be any new supply there for many years. Many might argue that the large supply of condos in Brickell will have an effect on prices of condos located in Brickell Key. However, some would tell you that they only want to live in Brickell Key.
- Downtown Miami – In my opinion, Downtown Miami needs more infrastructure before it can become a great neighborhood. It’ll take some time but will eventually become a great place to live. My opinion is that until this becomes a realization current prices will be difficult to justify. Long-term though, I think Downtown Miami will be a very happening place to live.
- Park West – Park West is a small area of Miami that is located directly south of the MacArthur Causeway. It is currently comprised of four buildings. I’ve said it before and I’ll say it again, I believe this neighborhood has the greatest long-term potential for various reasons that I’ve mentioned in other posts. In the short-run, however, I feel that prices won’t go up until grocery stores, pharmacies, coffee shops, etc. become available in Park West. I’ve heard from various people that Gardener’s Market is negotiating a lease to open a store at the base of 900 Biscayne. Park West needs more of this.
- Arts District and Edgewater – The Arts District is a fairly large area. I typically regard it as beginning at the Carnival Center for the Performing Arts and ending on NE 36 Street, although everyone has their own definition. In my opinion, this will be the last neighborhood to turn around. There is still a lot of room to build on waterfront lots because there are a lot of run-down buildings that could easily be knocked down. It does have Margaret Pace Park though which is a fantastic park. I think opportunities for investors to buy in bulk will become available in some of the new buildings in the Arts District. I currently know of one.
I’d love to hear everyone’s thoughts and input.
Opera Tower, LLC & Tibor Hollo Sues Me for $25M
As some of you may already know, my employment at EWM Realtors was terminated this afternoon. The Miami Herald published a story this evening on their website revealing that developer Tibor Hollo of Opera Tower has sued EWM, and myself, for $25M.
The interesting thing about this case is that I did not have my license hung with EWM when I wrote that post. In my opinion, Tibor Hollo and Opera Tower, LLC are coming after EWM because their parent company is owned by Warren Buffett’s Berkshire Hathaway. I have no ill feelings against EWM. I fully understand their position on the situation, given that they are owned by a much larger entity.
The reason why I wrote the post is because I was receiving a lot of phone calls from contract holders at Opera Tower telling me that they had no intention on closing on their condos. In my opinion, a blog is a vehicle to share opinions, thoughts and concerns. I was merely sharing these concerns with potential buyers and contract holders. About three weeks ago, a local newspaper disclosed a story about a class-action lawsuit against the developer filed by contract holders wanting to get out. This topic was an area of concern, and one that I felt needed to be addressed to my readers.
I had no malicious intent against Tibor Hollo nor the condo development. I was merely sharing my opinion with the readers of my Miami real estate blog and the concerns of current contract holders. I see myself as a real estate agent on the street that is sharing the concerns and opinions of others.
New Miami Condos – Closings Rates for January 2008
The chart below will show you the percentage of total units that each development has closed since closings began. Click on the following links to view the updates in November and December:
Below you will find the date that each development began closings:
Before anybody says it, I realize that One Bal Harbour is not a “Miami Condo”. I didn’t want to change the title of the post just to reflect the fact that One Bal Harbour is located in Bal Harbour. I also didn’t want to exclude it from the list because there is much interest in One Bal Harbour, and besides, One Bal Harbour owners would criticize me for not providing an update when the closing rate has jumped since the last update.
The closing rate at One Bal Harbour has hit the 70 percent mark. This is a significant increase since last month’s update. The stock price of WCI surged about 15 percent in the regular session on Wall Street and another 19 percent in after-hours trading on Wednesday after it reported that it has successfully been able to amend its credit and loan agreements. The news story was not publicly disclosed until after the bell. There are currently 55 condo units that have not closed, according to public records. The news reveals that WCI now has a considerable amount of time to sell these last remaining condos.
Ten Museum Park has had about a 7 percent increase in its closing rate while 50 Biscayne has had about an 18 percent increase, since the December update. With the exception of One Bal Harbour, Ten Museum Park and 50 Biscayne, none of the other developments have had an increase of over 5 percent. The two new entries to this month’s update are Loft Downtown 2 and Quantum on the Bay. Loft Downtown 2 should have been included in the November update since closings began in September but it simply slipped my mind. Sporting a 74 percent closing rate, however, makes Loft Downtown 2 appear quite successful in comparison to the other Miami condos. The Grand Opening Party for Loft Downtown 2 is scheduled for Thursday evening.
Closings at Quantum on the Bay began earlier this month and as I’ve stated many times before, closings can take up to 2-3 weeks before they are recorded with the county (however, I have heard that as of January 1, 2008, this is no longer the case. A reliable source told me that a step that sometimes delays the process is no longer required. Closings should now be recorded within 1-2 days after the condo has closed. Can a title agent elaborate on this for me?). Don’t take too much away from the low closing rate at Quantum on the Bay. I mainly included it to act as a stepping stone for next month’s update and let everyone know that it is now on my radar.
Rumor Mill on the Streets of Manhattan
I arrived at La Guardia Airport in New York City on Tuesday afternoon. The good news was that the weather was fantastic. It was in the high 60s, which was unprecedented in New York City for the month of January. The weather was just what I needed after arriving in Chicago last week on the coldest day of the Winter season (I think it was something like 15 degrees below zero with wind chill). Brrrrr!!! In fact, the first thing I did when arriving in Chicago was to go to Target and buy some long underwear. It was that freakin’ cold! I used to live in downtown Chicago for 4 years so I should know cold, but that day was damn cold! Maybe living in Miami for so long has made my blood thin out a bit or something.
My arrival in New York City, however, soon turned sour after learning that my luggage was lost by American Airlines. Regardless, I checked into my hotel and tried to make the best of my trip. My luggage did finally arrive at 3am that night (the next morning).
Last week, I wrote a post mentioning that I would be in New York City from January 8-11 for the Real Estate Connect NYC 2008 Conference. I was contacted by one hedge fund analyst and two investment groups that wanted to meet me while I stayed in New York City. They each had an interest in the Miami condo market.
Today, I attended the first day of the Real Estate Connect Conference and listened to a few industry leaders speak about the market. I also picked up some great information in conversations with people in the hallways as well as the hedge fund analyst that I met with later in the evening.
Okay…enough with the boring stuff. Let’s get to the goods! The following is the rumor mill that was revealed to me throughout the day. This is just what I’ve heard. I am in no way saying that the rumors are true (although these rumors came from accredited sources).
- WCI will declare bankruptcy within the next two weeks. Shares of WCI, the developer of One Bal Harbour, dropped 52.98% today on worries that WCI will declare bankruptcy. Standard & Poor affirmed WCI’s junk rating status and provided a negative outlook for the company. (Can you say “Pink Sheet”?) WCI was provided an extension until January 16, 2008. That’s a very short extension. My source disclosed to me tonight that the bank is probably finally realizing that it is in their best interest to pursue bankruptcy proceedings rather than delay the inevitable. The mathematics makes sense for the bank to do so. Most banks loaned about 65 percent of the total construction costs. As of right now, according to public records, WCI has closed 50.3 percent of the condo units at One Bal Harbour. If I were the bank holding onto the construction loan for One Bal Harbour, I would foreclose on this development immediately. The lender could at least offset their other losses with the gains they may realize with the sale of the defaulted units at One Bal Harbour. They know that it’s a strong development…I know that it’s a strong development. Until the investment funds step in, however, there’s still a lot of risk.
- Marina Blue closings have been pushed back 2 months and possibly even longer. I heard this rumor when I was in Miami on Monday but I didn’t accept it until tonight. I’ve heard that Marina Blue has no clue when closings will begin. Somebody please tell me that I’m wrong! I’ve heard this one from multiple sources though.
- Opera Tower is delaying closings another month. I’ve heard this one from multiple sources as well. What the hell is going on with this development? It keeps delaying its closings. Weren’t closings supposed to realistically begin around September? I was recently misquoted about Opera Tower in the papers. I was quoted as saying something along the lines that Opera Tower will have a 50 percent default rate. I actually said that Opera Tower will have at least a 50 percent default rate. Just my opinion though. Also, just my opinion is that this development is doomed. There’s a large lawsuit against the developer of Opera Tower. You may think I’m crazy but I think in six months my 50 percent default rate for Opera Tower will be considered an overzealous prediction.
- Here’s the big one. Countrywide Financial Corporation is going to declare bankruptcy within the next three weeks. Countrywide has lost about 44 percent of its value within the past 5 days. Rumors around Wall Street are that this turkey is just about roasted and ready to be eaten. We should see this one fall soon…and it’ll make a huge thud on the Street when it does.
- This one isn’t so much a rumor. Quantum on the Bay began closings and the development isn’t even close to being completed. (From what I’ve heard) TCO was granted in order to avoid a lawsuit pertaining to how long the development took to be completed. My guess (and only my guess) is that some money (maybe a lot) was transferred between the developer and city to get the TCO done to avoid lawsuits against the developer.
A Year in Review for the Miami Condo Investments Blog
As a year-end post, I decided to go through all of the posts that I’ve written about the Miami condo market in 2007 to highlight my five favorite posts. This blog was born on May 12, 2007, so it’s really a 7 1/2-month review. It’s amazing that I’ve been able to find the time to write 180 posts since that time. The following five posts weren’t necessarily the most popular, although a few were, but rather just my own personal favorites. These are the blog posts that I felt were both insightful and well written. Is there a Miami Blogging Pulitzer Prize in existence yet?
- Will History Repeat Itself in Miami? – October 28, 2007
- Advice to Miami Condo Sellers – July 26, 2007
- Miami Condo Auction a Big Disappointment – September 21, 2007
- An Analytical Analysis of Analyzing Condominiums – June 15, 2007
- Sunday Afternoon Bicycle Ride Through Brickell and Downtown Miami – October 14, 2007
The following was the runner-up:
- Crisis Looming in the Arts District of Miami? – May 29, 2007
I’d love to hear which Miami condo post was your favorite of 2007.
New Construction Condo Deals in the Arts District, Brickell, Downtown Miami, and South Beach
As closing dates for some of South Florida’s newest condo developments quickly approaches, the motivation from contract holders to sell is becoming increasingly apparent. I’ve been receiving a lot of phone calls and emails from contract holders, within the past couple of weeks, who are looking for me to help them find a replacement buyer.
In some cases the contract holders are willing to accept a loss on their contract price in order to retain a portion of the deposit that was made 3-4 years ago. Below you will find some of the better deals that I’ve come across:
Edgewater
- The 1800 Club
- Unit 2×04 – 1 bedroom/1 bath – 842 SF – $235,000
- Unit 3×06 – 1 bedroom/1 bath – 822 SF – $240,000
- Unit 3×03 – 2 bedroom/2 bath with direct bay view – 1,142 SF – $418,000
- Unit 4×03 – 2 bedroom/2 bath with direct bay view – 1,142 SF – $428,000
- Quantum on the Bay
- Unit 15+ floor B (south tower) – 1 bedroom/1 bath – 651 SF – $198,000
- Unit 35+ floor D (south tower) – 1 bedroom/1.5 bath – 780 SF – $212,000
- Unit 40+ floor B (south tower) – 1 bedroom/1 bath – 651 SF – $252,350
- Unit 40+ floor J (south tower) – 2 bedroom/2 bath – 1,239 SF – $399,000
- Unit 40+ floor J (south tower) – 2 bedroom/2 bath – 1,239 Sf – $409,000 obo
- Unit 10+ floor L (north tower) – 2 bedroom + den/2.5 bath – 1,460 SF -$550,000
Brickell
- 1060 Brickell
- LF Loft – 1 bedroom/2 bath – 972 SF – $360,000
- 30th Floor (K floor plan) -866 SF – $290,000
- Unit 3×07 – 2 bedroom/2 bath – 1,103 SF – $467,000
- Axis
- 1x04S (C1 floor plan) – 2 bedroom/2 bath – 1,076 SF – $340,000
- Plaza on Brickell
- Unit 2×09 (901 tower) – 1 bedroom/1 bath – 683 SF – $250,000
- Unit 2×05 (901 tower) – 2 bedroom/2 bath – 1,185 SF – $339,000
Downtown Miami
- Marina Blue
- Unit 4×04 – 2 bedroom/2 bath – 1,208 SF – $470,000
South Beach
- Continuum South Beach North Tower
- Unit ??? – 2 bedroom/2.5 bath NW corner unit – 1,491 SF – $1.86M
- Unit ??? – 2 bedroom/2.5 bath NW corner unit – 1,922SF – $3.35M
- Unit ??? – 3 bedroom/3.5 bath NE corner – 3,497 SF (4 balconies) – $4.2M
If you’re a contract holder and you’re motivated to sell then feel free to email me details of your condo and the price that you are willing to accept. Most developer contracts do not allow you to market your unit outside the sales center, so I will post general information here on the blog to see if a buyer emerges.
I’ll match buyers and sellers together. The sales centers are in some cases charging higher than normal sales commissions and transfer fees which make it virtually impossible for contract holders to get their units into the hands of end-users. I’m hoping that this blog will help contract holders to get some of their money back, end-users to find a great deal and developers to have less defaulted units. The way I see it is a win-win-win situation for everyone involved.
By the way, I’ve added a link to this post on my “Deals” page and will be adding to the list above intermittently.
Incredible Buy on a 1 Bedroom at The Grand – $299K
I just came across a one bedroom/one bath listing at The Grand that looks to be incredibly well priced. It has 1,180 square feet of interior space. It is listed for $299,000, or $253 per square foot. There are a few other one bedrooms in the building that are listed for slightly less but none of them come even close to having the level of quality that was put into this unit.
This is a perfect condo for somebody in search of a spacious one bedroom that is in impeccable condition for under $300K. You won’t find this type of space in a one bedroom in most of the new buildings.
Take a look at the MLS listing for more information and pictures. You can call me for additional details as well or if you’d like me to schedule you a showing.
