Market Stat Monday: The Bond On Brickell
This week, we are going to take an in-depth look at another recently-opened development, Rilea Group’s Bond On Brickell. Around the same time last year, we were treated to a sneak peek just days before the project began closings, and it has come a long way since!
After digging into the numbers, I’m really starting to see some solid trends among these new buildings. The developer made off flush, closing on all but a handful of the units for an average of $587/square foot, or $183 million as reported by The Real Deal. Nearly 80% (77% to be exact) of the pre-construction buyers are now either trying to sell or lease their properties, and nobody has claimed their homestead exemption.
RESALES
Looking at the resale market, the outlook is pretty grim (but don’t get worked up, the rental market is better, just scroll down if you’re looking for rosy news). There are currently 68 active listings for sale, and only 2 have sold on the resale market so far. The MLS shows 6 total sales, but 4 of them were developer sales. If you figure the months of inventory based upon all closed sales combined, there are 91 months of inventory. If you only consider the true resales, that number jumps to 272 months of inventory! Either way you figure it, that is far more inventory than we’ve seen so far.
Of the apartments that did sell, again we are seeing that the sellers are not budging far in their negotiations. The developer sold their 4 listed apartments at an average discount of 4% and garnered $595/square foot. Open-market resales received 94% of their listing price with an average of $499/square foot. Although both investors garnered far less for their units than the developer, that’s not to say they both lost money.
Apartment 2508
– Originally purchased in September 2016 for $742,900. If you figure a 1.5% developer fee, that nets a $754,000 buy-in.
– The property resold in April 2017 for$620,000. If you figure the seller paid the standard 6% commission, they netted $582,800 in the sale.
– The overall investment lost the investor $171,200 (unless there are hidden factors that we can’t pull from the MLS and tax roll).
Apartment 2101
– Originally purchased in August of 2016 for $527,900, netting $535,800 after assuming the 1.5% developer fee.
– The property sold in May of 2017 for $595,000. Assuming the 6% commission, the net sale was $559,300.
– This transaction left the investor a $23,500 gain, or a little more than 4%.
Final Thoughts
Am I saying that purchasing in The Bond on Brickell is a bad idea? Absolutely not. The building turned out very nicely, with high quality finishes and thoughtfully chosen amenities. Rilea Group was also smart to purchase the air rights over the small office building next door. I see it as SLS Brickell’s not-so-garish cousin. If that is your taste, then it is a great time to get a great deal and a lovely home for years to come, just don’t buy in thinking you can flip the property for a hefty profit, because you will be disappointed.
The current price ranges are:
Studios – $268,000-$389,000
1 Bedroom – $359,000-$680,000
2 Bedroom – $667,000-$850,000
3 Bedroom – $1,050,000-$1,650,000
RENTALS
Now it is time for the good news. The rental market is very stable, with only 20 active listings currently. The building has been leasing up at an average of 18 units per month (142 for the year so far), leaving just over 1 month of inventory for tenants to choose from.
Despite the low inventory today, the average days on market is listed as 64 days. It is common to see new buildings offer a glut of inventory shortly after the investors close on their units. Everyone wants to find a tenant and fast. The lease prices drop for awhile until the majority of that inventory is absorbed and then the prices and days on market stabilize.
This trend is evident in the rental history of The Bond over the last year. Studios have leased for as little as $1,350/month during times of high inventory, but now command between $1,900-$2,350/month. One bedrooms have been as low as $1,800/month, but now are leasing between $2,300-$3,250. Two bedrooms were as low as $2,400/month but now are $3,300-$4,500. Three bedrooms were once $4,200/month, but the only one available today is $6,500.
This is not the time for opportunistic tenants to try and over-negotiate lease prices. There is very little on the market and the landlords are only negotiating to 94% of their asking price… not a huge drop.
So, while the resale market is pretty bleak, the landlords and owner/occupants in The Bond are poised for success!
Resales At 1010 Brickell Hit The Market As Opening Day Approaches
The amenity-rich, Fannie-Mae approved and much anticipated 1010 Brickell is finally preparing to open, bringing 387 new neighbors to Brickell. Although the closing letters have been sent out with anticipated closing dates in August, we have been informed by the developers office that those dates could be delayed into September if the TCO does not arrive this week or next.
As was to be expected after what we have seen in other buildings that opened over recent months, resale listings have already started to appear on the market. There are currently 10 active listings, priced between $571,000 for a 932 square foot 1 bedroom on the 31st floor, up to $1.8 million for the 3 bedroom penthouse. Almost half of the available resales are in the 01 line, the big northeast corner plan with 3 bedrooms, a den, 3 baths and over 2,100 square feet. They are listed for between $1,479,000-$1,639,000. You can compare all of the floor plans here.
Another thing that grabbed my attention is the pricing of these listings compared with the price list that we happened to save when the building opened sales in 2013. Many of these sellers are offering their units far less than they were offered from the developer, which leads me to wonder whether they REALLY need to sell, or whether the developer gave them a REALLY great deal.
We will be watching the closings very closely and scheduling a tour as quickly as possible so that we can figure out which it is! In the meantime, check out this amenity list! Wow!
1010 Brickell Brochure by Sarah Elles Boggs on Scribd
Nearly 80% Of Buyers At Reach Purchased As Investment
One year ago, we noticed a shocking yet not unexpected trend at Brickell City Centre’s Reach Tower. At that point, 277 of the building’s 390 residences had closed, and 30% of those had already come back to the market as rentals. We knew that a significant number of buyers had purchased as rental investments, but had not seen the exact figures. It was intriguing, and we have followed the numbers as the building continues to fill up.
And here we are. A year has passed and according to the tax rolls, 351 units have closed. Of those, 34 have come back to the market as resales, 191 as rentals, and 55 owners put their units up for sale and for lease. That leaves only 71 units to be used by the owners. According to the tax rolls, none of the owners had filed for the Homestead Exemption, so it appears that those 71 owners are part-time residents.
Over the coming days, we are going to be calculating the same figures for other buildings that recently opened. Do you think we will see the same trend throughout the marketplace, or is Brickell City Centre an exception?
ECHO Brickell Gets Its Sign
Construction is moving right along at PMG’s super-luxury tower, ECHO Brickell this week, and the sign has now been installed. The logo is reminiscent of the building’s signature shape, filled with black glass tile and surrounded by slate. The awnings and lighting features are also being installed.
Construction began on the Carlos Ott designed tower at the end of 2014, and is expected to be completed at the end of this year. Earlier this year, we were lucky to receive a hard hat tour of the progress & the views, including the $42 million Carlos Ott Penthouse. Prices of available residences range from $1.9 million to $19.7 million including a handful of one-of-a-kind custom designed floor plans.
Market Stat Monday: Brickell Sales Statistics By Country Of Buyer’s Origin
Since this is such a patriotic week and it is no secret that our friends from abroad play a big role in the Brickell real estate market, I thought it would be interesting to see which countries are producing the most buyers of condos. The Miami MLS has a new-ish feature that reports the country of origin for the buyers after they close on a listed condo. We still have to rely upon the word of developers in order to report buyer origins of new condos, but resales can now be statistically found.
Out of the 414 total sales that have happened in Brickell since the beginning of the year, about half of the agents have reported the country of origin of their buyers. This represents just under $100 million of Brickell inventory sold out of the $198 million that was sold in total.
Here are our findings:
If you look at the total sales volume of all of the sale transactions in the neighborhood during 2017 so far, you can see that the United States is responsible for the overwhelming majority, followed by Brazil, Venezuela, Colombia, and Argentina.
Despite reports of their sales activity in the area, China and Mexico did not spend nearly as much as other countries, and Russia was not even on the list.
The number of transactions was skewed even farther in the United States’ favor, with Venezuela, Argentina, Colombia and Brazil following behind.
For those who prefer a chart rather than a graph, here are the actual figures for each country.
Are you surprised by the findings?
The 8th Street Metromover Station Is Officially Renamed “Brickell City Centre Station”
Photo via Jami Reyes Facebook
The Miami Metromover’s 8th Street Station was formally renamed the “Brickell City Centre Station” this morning in a ribbon cutting celebration with Mayor Gimenez.
During the construction phase of the $1.05 billion mega project, Swire also upgraded the city-owned transit stop and integrated it directly into the third level of the shopping mall, allowing shoppers and residents the ability to come and go from the development without being exposed to the summer showers that Miami is famous for.
For those who are new to the area, the Miami Metromover is a 4.4 mile electrically powered train system that shuttles people around the Greater Downtown area for free. It is automated and air-conditioned, and can drop people in the Brickell Financial District, Miami-Dade College, Bayfront Park, The Frost Museum and PAMM, Omni Mall and now Brickell City Centre.
There are also transfer stations in Downtown and Brickell that allows people to transfer to the Metrorail, accessing the University of Miami, the Jackson Medical Center hospital district, the Miami International Airport and more. “The Mover,” as it is commonly called, is extremely convenient to people in the Downtown area, and even more now that we can access Brickell City Centre directly.
Bravo, Swire!
Inside SLS Lux: June 2017 Construction Update
It has now been 6 months since we got to preview the views from the penthouses at SLS Lux with Carlos Rosso. Since then, they have been hard at work on the finishes and amenities in preparation for the big grand opening later this year.
Here is an update of their progress from Carlos’s Facebook.
This is a bath/shower of one of the suites.
An architectural accent in a hotel suite.
Katsuya and S Bar on the retail level.
Building the form set for the pool on the amenity level.
Brickell Heights’ Retail Space Hits the Market for Rent or Sale
Now that Brickell Heights has opened its doors and Equinox has announced its opening date, let’s talk about the last remaining opportunity in the streetscape of Brickell’s newest project. There is one remaining commercial unit on the South side of the building under the West tower that is available for lease or purchase.
The space is bordered on one side by SoulCycle, which is slated to open toward the end of 2017 (once their interior build-out is complete). It encompasses a total of 8,015 square feet, but is divisible into two units as shown in the floor plan in the property brochure below. Just across the street is Mary Brickell Village, with restaurants, shopping and Publix as the grocery anchor.
Due to its size and location, I foresee a nice restaurant or lounge for the space. It could also be successful for a daycare or preschool concept. The seller is represented by Fabio Faerman from Fortune, who informed us that the asking price is $85/square foot for a 10 year lease, or $10.5 million for purchase.
What concepts do you think would be most successful for the space? To set up a tour for your concept, contact us here.
Brickell Heights Retail Space by Sarah Elles Boggs on Scribd
Market Stat Monday: The Plaza on Brickell
Happy Monday! We’re back! After a two week hiatus for Memorial Day and the opening of Brickell Heights, we are resuming #MarketStatMonday with one of Related Group’s top projects from the last building cycle (2004-2008), The Plaza on Brickell. Typically, when I run a market statistics report for a project with more than one tower, I would separate them into two reports. Since The Plaza on Brickell East and The Plaza on Brickell West are largely similar, I’m going to combine them into one overall project report today.
Between the two towers, The Plaza on Brickell has 1,000 apartments that share a common amenity space above the parking garage. It is pet-friendly and family-friendly. While it is not as trendy or flashy as many other buildings in the area, it is very well-kept, has all of the amenities people ask for in the area, the layouts are nice and it remains a popular choice for our clients.
One thing that we have to watch for at Plaza is that the majority of the apartments were delivered with carpet and the majority of original buyers were investors. At this point, most people have changed the carpet, but we still see the occasional listing pop up with the original 9 year old berber rug that nobody wants. Even though it’s an easy fix, we can see a direct effect in the transaction value on those listings, both for rentals and for sales.
Sales Market
So far in 2017, there have been 15 closed sales that were unfurnished non-penthouse apartments. For those who are new to Market Stat Monday, I leave out the “outliers” on our market report. That would be penthouses, town homes, or apartments that have been combined. Buyers are paying on average $438/square foot for their Plaza condos and sellers are negotiating to 95% of their asking price.
One bedrooms sold for between $278,000-$357,000 and two bedrooms sold for between $400,000-$487,000. Yes, the least expensive units sold with carpet. The lowest priced sale of an apartment with hard flooring (tile, wood, laminate) sold for $320,000…. so there you go.
Looking at what is available, there are 83 active listings of non-penthouse/non-townhouse/non-combined units. The average listing price is $497/square foot. Given the fact that sellers are negotiating on average 95% of their asking price, it looks like eager sellers need to amend their price in order to see results.
The part that I once saw as alarming but now come to expect is that at the current rate of sales, we have 33 months’ of inventory waiting to be sold at Plaza. They don’t have any internal drama or litigation that I have heard of. Their HOA dues are lower than the competing buildings in the area, and the design isn’t so trendy that it alienates a portion of the market… quite the contrary. That brings us back to price. If people want to sell, there is a tremendous competition right now for buyers. The apartments need to be shined up, professionally photographed in their Sunday best, and priced properly. No more 9 year old carpet. That doesn’t fly in this market.
As of today, one bedrooms start at $285,000 for a unit with a Brickell Avenue view and original carpet. We are offering a one bedroom with wood laminate floors and a view of the meditation area near the pool for $330,000. If you’re looking for a two bedroom plan, options start at $399,000 for a carpeted unit with a view of Brickell.
I also saw a two bedroom plan with carpeted floors and a South partial-bay view that was listed for $389,452. It was The Plaza East 950 Brickell Bay Drive #2507. Just when I was writing about what a great deal that was for a buyer, the status changed to pending. Congratulations to that buyer!
Rental Market
As we have seen in other buildings during recent weeks, the rental market is much healthier than the sales market. With 30 active unfurnished listings and 99 closed rentals this year, we have almost 2 months’ of inventory in the market right now.
Although the rental market is healthier, the marketing time is on average 78 days, including the time a prospective tenant undergoes their background checks. The apartments that found tenants accepted 96% of their asking price, so again… this is not a fire sale opportunity for tenants who are interested in over-negotiating.
Just like in the sales market, we are seeing the lowest priced listings still have that original 2008 berber carpet that has seen as many as 10 tenants. Even with shampoo, nine year old carpet is beyond its’ intended life span and should be changed. One bedrooms rented between $1,700-$2,200 per month and two bedrooms garner between $2,400-$3,616 per month, with the more expensive rentals being larger plans with hard floors and superior views.
My biggest takeaway for today’s look into The Plaza is that if you are looking to increase your return, whether it be on the rental or the sales market, the first thing you should do is CHANGE THE CARPET! What is your biggest takeaway from The Plaza?
