SLS Lux Reduces Prices On Final Inventory Of Penthouses
I have long said that the best time to buy in a new development is either in the very beginning or at the very end of the sales cycle. That is when the buyer gets the best deal.
In the beginning, the developer offers lower pricing in exchange for being among the first to participate in the project. You don’t receive a tour of the building and many times the sales center isn’t even completed yet. At the end of the project, the developer has a handful of units remaining and is eager to move on to their next project, so are less likely to hold on to top dollar for those last few purchase opportunities.
My personal favorite time to sell an apartment is at the very end of the sales cycle. At that point, the buyer can have a tour of the project, they know that it will actually happen because they can see it, and many times they can still choose their finishes. Some people think that the last few units remaining are the dog apartments of the building, but that is not what my experience has shown. It is typically penthouses because they are so unique.
So, here we are at SLS Lux. After opening sales in the summer of 2014, the partnership between Related Group and The Allen Morris Company is now on the home stretch to Sold Out status. They have five remaining units, all penthouses. In an effort to close out the building as quickly as possible and reflect the new market, they have repriced the last inventory. Here are the new prices:
Penthouse 04
This one has northern exposure, looking over Brickell City Centre to see Downtown Miami and the Biscayne Bay. It has 2,777 square feet and 3 bedrooms, 4 bathrooms and a den. There are three of these remaining.
Lower Penthouse 04 has been reduced to $2,599,900 from $2,999,900.
Middle Penthouse 04 has been reduced to $2,649,900 from $3,149,900.
Upper Penthouse 04 has been reduced to $2,699,900 from $3,199,900.
The 01 penthouses have 1,888 square feet with 3 bedrooms, 3 baths and a den. They are on the northwest corner of the building, looking over Brickell City Centre into Downtown Miami. Two of these remain, both priced at $1,599,900. The previous price was $1,999,900.
In addition to the amenities and standard finishes in SLS Lux, the penthouses will have upgraded kitchens, 12 foot ceilings, summer kitchens on the terraces and 2 assigned parking spaces. Completion is expected late this year. Here is a preview of the views from the various penthouses.
Brickell Heights is 100% Sold Out, Closings Beginning in the Spring
Just ahead of their opening day, Brickell Heights has sold the last of their pre-construction condos. The building is preparing to open on schedule in late April or early May of this year, according to the developer’s representative who we work with, Yenny Hanley.
Of the project’s 690 units, the last to sell were the penthouses, but this is a common occurrence in new projects. Because they are so customized, the penthouses typically take longer to sell. SLS Brickell still has a penthouse available, as does SLS Lux and ECHO Brickell. Back when Infinity at Brickell was doing their initial sell-off, the penthouses were in the last handful of apartments to sell as well. Brickell Heights has been a very successful project, with all of the units being sold for around $500/square foot.
The closings are expected to begin in late April or early May, depending upon the permit process. Equinox is already hard at work signing up new members for their 30,000 square foot location within the project. SoulCycle is also expected to open alongside the residential portion of the project.
It is so exciting to see our new neighborhood coming together!
Brickell Flatiron’s Foundation Pour Is Tonight
Image courtesy of CMC Group
The foundation pour for Ugo Colombo’s Brickell Flatiron is scheduled to begin tonight! When completed in 2018, the building will reach 750 feet into the skyline and have 65 floors.
This will be the largest pour to-date for Moss Construction, the contractor for the project. Since the building is so tall, the foundation will be 12,500 cubic yards and use 1,300 truckloads of concrete. This will take place over a span of 24 hours, according to The Next Miami. In order to ensure the strength of the foundation, the concrete must be poured continuously until it is complete.
Of the 552 total units, around 60% are currently sold, a representative from the developer reported. Prices on remaining inventory start at $465k. If you would like to view the pour, the 10th Street Metromover Station offers a bird’s eye view. Concrete starts flowing at 10pm and the developer will be hosting an event on Saturday to commemorate the milestone.
Miami’s Rental Market Is In Decline, About To Be Flooded. What Does This Mean For You?
The rental market in the Downtown Miami area is in for a jolt, according to an inventory report from the Downtown Development Authority. Many people expected that rental prices would begin to decline in 2017 as the new luxury condo buildings begin to open. As of the third quarter of 2016, the prices were already beginning to decline after buildings such as The Bond at Brickell and SLS Brickell began to open, flooding the market with new options for prospective tenants.
What many people did not see was the influx of new rental buildings that are going to start being delivered in 2017. A few have already come to market, but 2017 promises a whole new array of choices for tenants. Landlords are fervently trying to keep their tenants if leases are coming up for renewal, but many of the options are too good to pass up. In 2016, we saw 3,748 new condo units come to the market and 1,038 additional units in rental-only buildings. 2017 will flip that number, with 2,774 new condo options and 3,575 new units in rental-only buildings.
What to do if you are a tenant?
Don’t be greedy. While the market is in decline, the condos for rent in Miami are not going to rent for fire-sale prices. Yes, you may have more leeway in negotiation than once before with condo units, rental-only buildings typically do not negotiate their prices. Rather, they are pre-set at the beginning of each day based upon an algorithm in their computer software.
A quick move-in is worth a lot. If you can offer to move-in as quickly as possible, you will have more negotiation power than if you are shopping several months in advance. I always say that the sweet spot between the contract date and the move-in date is 3 weeks. That gives everyone enough time to get their paperwork together and applications completed. Building applications commonly take 2 full weeks in condo developments. Rental-only developments are commonly quicker, so are a good option if you get in a pinch and need to move even more quickly.
Have ONE agent to represent you. Make sure that person is someone who is well-informed about the market and what is available. That will prevent you from drowning yourself in options and becoming frustrated. Be open with your agent about what features you like and what features you are disinterested in. Let your agent take you to rental developments as well. Many times, we know ahead of time what the availability and rough price ranges are at the rental developments.
What to do if you are a landlord?
If you currently have a good tenant, entice them to stay and treat them well.
Don’t panic, but understand the monetary value of each month of vacancy. Price your available rental on the market as quickly as possible and with a firm that will give you the most exposure.
When reviewing offers, consider reductions based upon the risk of a full month of vacancy rather than holding onto the idea that your condo will earn as much this year as it did in years past. It won’t. If you have a unit that was previously earning $3,000/month and you receive a quick-move in offer for $2,750/month, it would be a good business decision to accept. Otherwise, you could be stuck accepting far less in contract value on top of the $3,000 expense of having the unit vacant for a month.
Negotiate with people who lowball. Run your numbers and decide what is the lowest price you can accept based upon available options for the tenant and the amount of vacancy that you are already into. Not that you will always have to accept that lowest price, but you know how much room you really have for negotiation.
Remember that just like market storms that we have weathered in the past, this one will blow over. The condos will still be beautiful and in-demand afterward. If you need to sell, then sell. Otherwise just be patient until the inventory is absorbed.
How Much Should The Owners Of Brickell Harbour Expect From Their Buyout?
Earlier this month, we reported that the owners of Brickell Harbour are being solicited for a buyout by a mystery developer. Well, the offers have come in and unfortunately (yet expected), we cannot talk about what has been offered because they are bound under a tight confidentiality clause. What we can talk about is how much the sale is likely to garner for the owners if a good deal is made.
It is common in condo buyout deals for the developer to hold the owners under a contingency stating that the sale will only take place if 90% of the residents agree to sell. Otherwise, it makes no sense for the developer to own the building since they would not be able to develop. There are always those last few owners who hold out for the most money and sometimes it works, but sometimes it just ends up throwing a wrench in the entire deal. So, how much is a realistic number for Brickell Harbour as a development site?
First, let’s look at the most recent comparable sale. The development site at 25 NE 25th Road is just over 1 acre of waterfront land with 155 linear feet of bay frontage. It is around 300 feet deep. Once you break down the final purchase price of $48 million, that works out to just over $1,000/ft of land. The units combined are comprised of 76,291 square feet of livable space or $629/square foot ($800,000 per unit for the 61 units).
25 Bay Tower Development Site
Now let’s look at Brickell Harbour. In comparison to 25 Bay Tower, Brickell Harbour is a far superior development site. Its location at the south end of Brickell Bay drive is closer to the hustle and bustle of Brickell’s city vibe, yet secluded enough to offer peace and quiet along the bay. The site offers 275 feet of linear bay frontage and half an acre more of developable space. Both sites are in the same zone for height restrictions, allowing up to 600 feet of building height. Variances can be given, but this is where we are today.
Another feature of the site at Brickell Harbour that sticks out as a big upside is the marina. Building new marinas is extremely tedious from a permitting standpoint due to the environmental impact they cause, making them nearly impossible to add. Given all of these factors, I estimate that a final sales price of Brickell Harbour would be far north of the $1,000/square foot of land that 25 Bay Tower received.
Now that we’ve looked at the comparable and determined why Brickell Harbour is worth more, let’s get down to the numbers. Using the same price per square foot of developable land as OKO Group’s purchase would amount to a $70 million purchase for Brickell Harbour. That breaks down to an average of $380,000 per unit at Brickell Harbour, or an average of $512/square foot of livable space. Add in the increased desirability of the lot size, location and added marina, we could see a purchase of $80 million!
How much do you think the owners will end up garnering at the end of the negotiation? Do you think it will go through?
SLS Lux Tops Off At 58 Stories – Here Is A Preview
Carlos Rosso Demonstrates The Front Desk.
The 58-story SLS Lux has topped off on schedule and to celebrate, the folks over at Related Group invited us for a construction tour to preview the project. We were able to go up to the 55th floor for a candid tour of the views and then to some of the lower floors to have a peek at the finishes and the layouts.
We started in the construction elevator, which offered a thorough preview of the views from each floor. From this vantage point, I was also pleased to see that the views were turning out true to the renderings shown on the sales material with the deep and curved terraces overlooking the city and bay.
When we reached the top, the support beams were still installed for reinforcement and we were able to see the views from all around while discussing the project with Carlos Rosso, President of Related Group’s Condo Division and Allen Morris, CEO of the Allen Morris Company and co-developer of the project. We learned that it takes over 500 workers to construct the project and they expect completion around this time next year.
The project has been a big success for both developers, with only a handful of apartments remaining priced at around $1,100/square foot (the remaining opportunities are all penthouses). The penthouses include upgraded kitchens, 2 assigned parking spaces, 12 foot ceilings and summer kitchens in addition to the standard features.
Rosso joked that he is planning to surround Stephen Owen’s “fort” (Brickell City Centre), once One Brickell is ultimately launched. That project is on hold for now but they hope to relaunch it in 2017 after seeing the success of Aston Martin Residences and Tibor Hollo’s planned ultra-luxury tower at 1201 Brickell Bay Drive.
Morris reminisced of his beginnings in Brickell, back when his company built the first office tower, 1000 Brickell Avenue. He enjoyed being a part of the transformation of the neighborhood into what it is today and I have to say that I agree – even though my time here only dates back to 2008.
Here is a sample of the views:
SLS Lux East View
SLS Lux East View – Brickell Key
SLS Lux – South View
Next we went down to preview some of the apartments and condo/hotel suites. There are 450 units in SLS Lux as well as 78 condo hotel suites. The bathrooms and kitchens were being installed already, so there was a lot of dust but here was the view from the condo hotel suites.
Afterward we walked through the amenities and lobby area. The ground floor restaurant, Katsuya is beginning its $22 million finish out. On the amenity deck, the form sets for the swimming pools were being poured and then the rock climbing wall, tennis courts and outdoor theater will go in. All in all, SLS Lux is shaping up to be a fine addition to our skyline. It will be exciting to see it this time next year once all of the dust has settled and everything is shiny and new!
Is Vladislav Doronin About To Buy Brickell Harbour? Someone Is…
It appears that Brickell Harbour has been pegged as the next condo to be bought out and redeveloped. A letter has gone out to all 185 residents of the waterfront building at the end of Brickell Bay Drive from two brokers at Colliers International, declaring intent to purchase all units of the 1973-built development.
The letter states that the firm has successfully facilitated sales of this magnitude and we know that Mr. Doronin has been on a buying streak for waterfront parcels. His development firm, OKO Group’s latest purchase was the bayfront church on N 27th Street in Edgewater, where he will construct a 57 story building, branded by Missoni. The apartments at Missoni Baia will start at $2.25 million and break ground early in 2017. He has also purchased a development site within Brickell just east of SLS Lux, as well as one on 25th Street in South Brickell.
We also know that Mr. Doronin is not shy with his money. He paid $54 million for his Missoni Baia development site, as well as $48 million for Brickell’s 25 Bay Tower at 175 SE 25th Road. 25 Bay Tower has only 60 apartments, so his price tag amounted to an average of $800,000 per unit for apartments built in 1971. I don’t know about you, but I’m eager to hear what will be offered to the owners of Brickell Harbour. In my professional opinion, Brickell Harbour is in a far superior location than either of the development sites that OKO Group previously purchased.
Another interesting tidbit is that just before these letters of intent were delivered, the condo association of Brickell Harbour announced a special assessment that will last five years. That is an astronomical amount of time for a special assessment! Could it be that they’re already leaning toward the sale? It leaves me to wonder, after seeing previous special assessments in other buildings for 40 year re-certifications (which Brickell Harbour has already undergone) and full-blown overhauls of amenity decks that are settled up within 2 years. See below for a breakdown of the special assessment as well as the detail of what will be renovated.
According to the solicitation letter, the brokers will be delivering offers to unit owners in proper Miami form. They will be foregoing their conference room and instead handing out offers this week at Sega. Salud!
The Bond On Brickell Is Getting A Fancy New Starbucks
While passing by The Bond On Brickell this morning, we noticed that the sign has gone up on the fancy new Starbucks that is being built into the retail space on the first level. According to their construction permit, the build-out is budgeted to cost just under $100k. It is unclear whether this Starbucks will be replacing the location at Mary Brickell Village just 2 blocks away, but since the space is only 1,112 square feet, I imagine it will be an additional location.
The Bond On Brickell opened during the summer and was a success for the developers, Rilea Group. Current prices range from $319,000 for a studio to over a million for a three bedroom plan. Rentals range from $1,750 for studio to $4,000 for a two bedroom.
Related Group’s One Brickell On Hold For 5+ Years
One Brickell, Related Group’s riverfront mega-project in Brickell, appears to be on hold until at least 2022. The 1,400 unit waterfront project was slated to be developed in 3 towers at 444 Brickell Avenue, where Capital Grille currently stands along with a 10 story office tower. Previously, it was scheduled to break ground in 2016.
Since the news broke in late 2014 that the towers were on their way, the developer had stopped pushing for new tenants in the office building. They were still signing new leases, yet requiring a 6-month kick out clause, allowing Related to have a vacant building when it came time to begin construction. Since the kick out clause isn’t an ideal situation for tenants, not many offices complied.
As of today, Related is heavily marketing the office tower to tenants. They are pushing for the property to be leased up within 6 months, offering incentives for deals up to 10 years. The lease terms offered are between 2-10 years, with higher incentives for longer leases. New leases signed with a term of up to 5 years also do not have the kick out clause, meaning that Related cannot develop the land until those leases expire.
There has not yet been an official announcement made, but this isn’t the first tower to be put on hold. Auberge in the arts district has also been effectively placed on hold. They are still offering units for sale but have stopped marketing the project. In September, Jorge Perez said at the “State of the Market Conference” in Wynwood that he expects a market slowdown and that his company will not bring a project out of the ground if it is not at least 70% pre-sold with 50% deposits. Since One Brickell had not yet released pre-sales, it seems we have a confirmation after all.
