Case Study: Determining the Value-added for Having High Ceilings
A high ceiling is a feature which is typically associated with a penthouse. It can be difficult in these situations, however, to ascertain the value that is attributed solely to having higher ceilings. This is because a penthouse typically also has other value-added features such as one or more of the following:
an upgraded master bathroom
an upgraded kitchen
the best view in the building
an unusually large floor plan in relation to other floor plans in the building
additional parking spaces
Most importantly, a penthouse is rare and therefore commands a higher premium than the rest of the floor plans in the building that are in greater supply.
What if, however, we could hold all else constant in order to better determine the added value that is associated with having high ceilings? In this regard, Icon Brickell presents itself as an interesting case study. The penthouses at Icon Brickell do NOT have higher ceilings than the rest of the units. However, certain floors do have higher ceilings. In Tower 1 of Icon Brickell, floors 14, 15, 22, 28 and 41 have 16-foot ceilings. In Tower 2, floors 14, 15, 22 and 41 have 16-foot ceilings. The rest of the floors, including the penthouse levels, have 9-foot ceilings. As a result, it is very possible, and highly likely, that a unit located on the 41st floor will sell at a premium to a comparable unit that is located on the 42nd floor. Furthermore, the situation also presents the possibility that a unit located on the 41st floor will sell at a higher price per square foot than one located on the penthouse level.
Due to the lack of resales, there is no evidence to validate my assumption but I think we can all agree that a high ceiling is a feature that should indeed command a premium. Of course, there are going to be those who would argue that they would never pay a premium for having higher ceilings due to the higher energy costs that would be associated but, then again, those are the type of people who likely wouldn’t pay a premium for just about anything. I’m not here to provide everyone with an all-knowing answer as to what that premium should be. The answer will be provided to us by way of our free market economy. However, it makes for an interesting story to follow.
Which would you rather have, a penthouse located on the 57th floor with a 9-foot ceiling or a unit located on the 41st floor with a 16-foot ceiling?
Brickell Condo Market Expected to Remain Strong Throughout 2013 and 2014
As of late, little has been said about the fact that myBrickell and 1100 Millecento are completely out of inventory. With the exception of two very large penthouses, the same goes for BrickellHouse. Take a moment to digest that piece of news. Of the 948 combined units that these three developments represent, only two remain available. That speaks volumes about the strength of this real estate market in Miami. 192 units at myBrickell are scheduled for delivery towards the end of this year and the balance of condos from the two other developments are not expected until the end of 2014. In the meantime, demand remains high so existing condo inventory should continue to dwindle. There isn’t much help on the way in near term either. We know that there will be a residential aspect to the highly anticipated Brickell Citicentre, which is currently under construction, but no sales information has been released as of yet. Regardless, completion of those condominiums would not be expected until 2015 at the earliest. We also know that Related Group recently purchased the Infinity II site located at 1300 S Miami Avenue. It is highly likely that sales for condominiums in that project will be announced sometime during the first half of this year. The site is approved for a 65-story tower with 556 total units so don’t expect those units to be delivered any earlier than mid-2015 unless the project is massively scaled back. Lastly, there has also been mention of Panorama Tower and Villa Magna but both projects will be rather massive so inventory in either wouldn’t be expected until late-2015. In summary, I think it is relatively safe to say that, barring any global economic meltdown, prices for condominiums in Brickell should enjoy a steady rise throughout 2013 and 2014 given the lack of inventory that will exist over the course of that time period.
By the way, the two remaining penthouses at BrickellHouse are priced at $2,396,000 for 3,500 interior square feet and $5,200,000 for 7,500 interior square feet. No matter how you slice it, sub-$700 per square foot for a penthouse in a building of this caliber is an amazing deal.
Brickell Condos and Neighborhood Guide
We have officially launched our revised and updated Brickell condos page. It went live earlier this week but a few minor kinks had to be worked out before I wanted to make the announcement. Around 90% of our business comes from non-locals so, first and foremost, I wanted to create a page which catered to those who are unfamiliar with the area. Our new neighborhood page is loaded with fresh content. I included a brief description, geographic and demographic information, as well as a short history lesson about Brickell. It also has a video/picture slideshow which contains over 150 pictures of the neighborhood. A Yelp widget was included as well to give people a sense for the quality of restaurants and other types of businesses throughout Brickell.
Towards the middle of the page, we have highlighted the five most recent resident reviews for condo buildings in Brickell. We hope that people who currently reside or have resided in one or more of the buildings in the neighborhood will share their experience and assessment with those looking for an unbiased opinion when shopping for a new condo in Brickell.
For those who are used to the old version of the page and wish to skip to the Brickell condos section, click on the “jump to Brickell condos” link found at the top of the page. We have, however, modified the way this section is organized. Now, not only can you get a quick glance at the inventory counts for each building but you can also see how many short sales and REOs are currently available for sale on the MLS. As you will see, a majority of the condo buildings in Brickell do not have any short sales or REOs on the market for sale. In fact, excluding the three pre-construction condo developments, two-thirds of them (20/30) do not have any distressed sales at all. That is pretty remarkable given how bad things were just a few years ago.
Perhaps the greatest new addition to the Brickell condos page is the statistics box in the upper right-hand corner just above the video. Towards the middle of each month, we will begin posting various neighborhood statistics calculated using sales figures as of the last day from the previous month. The reason why we wait a few weeks is because real estate agents tend to forget to change the status of a property from pending to sold in the MLS after it closes. Only sales figures for condo developments in Brickell that are found on the page will be incorporated. Think of it as a mini Brickell Condo Index. Expect the first update to be released around the middle of September.
Considering my day-to-day responsibilities as a real estate agent and the amount of time I already put into the website, my hope is to roll out a new neighborhood page every 2-3 months. I would appreciate any feedback that you might have so that these neighborhood pages will continue to evolve and get better with time.
100 Montaditos Brickell Location Coming Soon
This past February, 100 Montaditos opened its first location in the United States. It chose Midtown Miami as the spot in which to introduce itself to America. The restaurant, known for its tapa-sized bread roll sandwiches, has since opened five other locations – all in South Florida – including one at the base of 50 BiscayneVizcayne in Downtown Miami. It now looks to expand once again by opening a seventh location – this time in Brickell – at the former site of Deli Lane. Admittedly, I have not had the chance to try 100 Montaditos for myself but I have heard great things and I’m sure its success speaks for itself.
1100 Millecento, BrickellHouse and myBrickell on the Brink of Selling Out
I realize that I run the risk of sounding like your typical salesman, but it must be said – “This market is hot!”. Over the past nine months in Brickell, three pre-construction condo developments – 1100 Millecento, BrickellHouse and myBrickell – were launched. I was made aware yesterday afternoon that only 20 units remain available for sale amongst these three developments combined! That represents 2.1% of their combined 948 total units. Only two units remain at 1100 Millecento, 8 at BrickellHouse and 10 at myBrickell. The first two projects haven’t even broken grounded yet. If that’s not hot then I don’t know what is. Before anyone starts to chime in with bubble talk, we need to keep in mind that all three pre-construction developments require a very large portion of the purchase price to be paid long before closing. In the case of 1100 Millecento the buyer will have already paid 50% of the purchase price by closing. BrickellHouse and myBrickell are virtually immune from default risk with the buyer required to pay 70% and 80% of the purchase price, respectively, by closing. Like I said – This market is hot!
We are in the process of revamping our neighborhood pages. It has been a project that I have kept on the back burner for about two years. The new neighborhood pages are geared towards non-locals and others unfamiliar with the various neighborhoods throughout South Florida. My intent is to provide quality content which will allow people to familiarize themselves with the area and get a sense for what each neighborhood has to offer.
One way in which I hope to educate these people is visually. The above video/picture slideshow is one such example. (I suggest changing the quality setting to 1080p HD and switching to full screen mode when viewing the video.) My goal when taking these pictures was to provide those unacquainted with the area the type of scenic tour one would receive if walking the neighborhood by foot. I also included some amazing shots that were taken from a boat that we rented as well as others that were taken from various high-rise buildings throughout Brickell. I thoroughly enjoyed working on this project and it made me fall in love with Brickell all over again. Brickell is truly a beautiful neighborhood and one which seems to keep getting better with time.
Creating the content for each neighborhood page is very time consuming so we are going to roll out each neighborhood one at a time starting with Brickell. We hope to have the Brickell neighborhood page launched early next week then move on from there. We are also working on a few other website enhancements which should go live later this week. I will discuss those at a later time.
MyBrickell Construction Update
I had a chance to walk by the myBrickell construction site this afternoon. 3 floors down, 25 more to go.
1101 Brickell Has Been Approved; Construction to Start by Year’s End
An 80-story condo development called 1101 Brickell has been approved by the City of Miami and will be spearheaded by Florida East Coast Realty. The announcement was made by President Tibor Hollo in an interview with Miami Today News. Hollo expects construction to begin by year’s end. 1101 Brickell, which will rise 849 feet, will become the tallest building in Miami, a title now held by the Four Seasons Residences. The development will have 724 residential units and is estimated to cost $500M-$600M.
Florida East Coast Realty is the development team behind several unforgettable residential towers in Miami such as Opera Tower, The Club at Brickell Bay, Bay Parc Plaza, Venetia Condo and The Grand. 1101 Brickell will no doubt be just as memorable.
For the second time this year, a condo development in Brickell has broken ground. A ceremony was held this morning at the development site of BrickellHouse to celebrate the start of construction. BrickellHouse will be a 46-story, luxury condo development located at 1300 Brickell Bay Drive, across the street from Jade at Brickell Bay. The amenities will include a rooftop pool on the 46th floor, a luxury health spa and fitness center and a fully-automated robotic parking garage. Prior to breaking ground, BrickellHouse already had over 95 percent of the 374 total units pre-sold. I was told by a sales associate that, as of yesterday, only 15 units remain. The available inventory includes a few penthouses as well as other units located on high floors. BrickellHouse is scheduled for completion in 2014.
