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.
Panorama Begins Marketing For Their 821 Rental Units That Are Coming To Brickell
Panorama Pool Deck
Construction is well underway and Panorama Tower is rising quickly into the skyline, soon to surpass the Four Seasons as the tallest building in Miami. Although the building is not scheduled for completion until the end of the next year, the developer has begun marketing the rental units.
When it is finished, Panorama will reach 83 stories tall with 821 rental apartments. That’s an awful lot of inventory when we are also looking at the new condo developments coming to market in the area with their rental offerings.
One thing that I really love about the building is the size of the plans. The one-bedroom units are 1,150 square feet and there are 3 bedroom plans that are over 2,000 square feet. In a neighborhood where one-bedroom units are typically 700-800 square feet and two bedrooms are typically 1,100-1,200 square feet, the layouts at Panorama are very generous.
The building will have a pool deck with dining and bars on the 22nd level along with 3 private theaters, a pet boarding facility/doggie daycare and even a recording studio. For some reason, they’re also bringing in a cyber cafe. The cyber cafe seemed odd to me. I haven’t seen a cybercafe since the early 2000’s when people actually had to go dock up to a computer to surf the internet. Now we just surf the internet on our phones as we’re walking down the street. Hopefully, that will be switched to a kids’ playroom before opening day. I’ve heard a ton of people requesting playrooms lately, but not a cyber-cafe.
It is still far too early to be able to predict what the pricing will be for these apartments. A lot can happen over the course of a year and there is also a lot of inventory coming to market in the next few months. We’ll keep our eye on things and report back once we know more. Until then, renderings:
Lobby
Panorama Interiors
Panorama Interiors and Views
Panorama Doggie Daycare
Panorama Private Theater
Private Recording Studio
Club Room
Dining Room and Wine Lounge
Staffed Fitness Center With Classes
Cyber Cafe From Y2K That Should Be a Kids’ Playroom
UPDATED: SLS Brickell Rentals Becoming Available Starting At $1,900/Month
Closings are currently under way at SLS Brickell and the competition for qualified tenants is already picking up. We don’t yet have a solid date that the properties will be move-in ready as many were sold decorator-ready.
For those who are new to Miami real estate, decorator ready means that the condo is delivered without flooring, light fixtures, window treatments and the walls are delivered with primer, ready for the topcoat. These are all added after the closing takes place but before the first residents move in. The process of laying the floors and adding the fixtures typically takes around a month, depending upon scheduling and permitting.
As of today, there are three active rental listings in the building. They are all three 1 bedroom listings and range from $2,600-$2,950 per month. As closings continue, we certainly expect to see more inventory. There are also investors who are planning to offer units for as low as $1,900/month for 1 bedrooms or $2,600 for 2 bedrooms, according to the investor’s representative. These units will become available for showings starting next week, but move-in dates are based upon the closing and flooring schedule, so stay tuned.
If you would like to be notified when the apartments become available, please send us a message and we will be sure you are the first to know.
UPDATE: We heard back from the investor’s representative, who informed us that the closings are scheduled for late December and the properties will be available starting in January.
Preview the SLS Brickell Penthouse Views Via Drone
The hotel component of SLS Brickell has been open for about a month now, Fi’lia has begun serving hungry Brickellians and closings of the residences are underway. The developer still has 3 penthouse units available for sale with amazing views. Here is a preview from our latest drone video:
You can see that there is in fact a rooftop swimming pool for the residents, and the upper penthouses also have their own private pools. The three penthouses remaining are:
PH5203: 2,274 square feet interior with 3 bedrooms, a den and 3.5 bathrooms. $1,762,900.
PH5003: This one is the same floor plan 2 floors lower for $1,698,900.
PH5005: This apartment has direct southeast views with 4 bedrooms, 3.5 baths and 2,336 square feet. It is listed for $1,906,900.
If you’re interested in a smaller apartment, there are already resales available as well as options for yearly lease. I think that the building turned out beautifully, it is architecturally interesting during the day and the night and I am very excited to visit the restaurants and amenities. A win from Related Group! What do you think?
Congress Unanimously Agrees To Make FHA Financing Easier For Condo Buyers
In a rare moment of solidarity, Congress unanimously agreed to pass the proposed changes to the FHA approval guidelines for condo purchases, opening the way for middle-income buyers to participate in the condo market once more.
Over recent years, the FHA has imposed nearly impossible guidelines for condo purchases that have left a large segment of buyers out of the market, particularly first time homebuyers. The problem has been that in order to secure an FHA loan for a property, the buyers must qualify (relatively easy), AND the building must qualify (almost impossible). The approval process was expensive and the costs were not refunded in the event that the project was rejected. The approvals had to be renewed every couple of years as well. Most condo associations opted to forego the application and just not have FHA as an option for purchasers in the building. With the new guidelines, the projects no longer need to go through the approval process. Buyers can now apply for a spot-approval on individual units and the owner-occupant vs investor ratios have been lowered. Bravo!
This is going to be a big help for actual residents of the Downtown Miami area who are ready to buy a condo, but maybe don’t have the 20%-35% down payment that is currently required to buy a property. You can read more about the new guidelines here.
