The Lebron Effect on Downtown Miami Real Estate Prices
It has been a long and winding road but the Miami Heat accomplished Thursday night what they had set out to do in July 2010 – to win an NBA championship. The Miami Heat defeated the Oklahoma City Thunder 4-1 in the NBA Finals to become the 2012 NBA champions. In all honestly, the Miami Heat obliterated the OKC Thunder and made a mockery of them – but we won’t go there. Few would refute that LeBron James, the Most Valuable Player of the 2011-2012 season, was the most contributing factor which allowed the Miami Heat to raise the NBA trophy Thursday night for only the second time in franchise history. LeBron James’ decision in July 2010 to take his talents to South Beach single-handedly changed the landscape of the league and set forth in motion an inevitability that no one outside of Miami wanted to see.
James’ arrival in the summer of 2010 was celebrated not only by die-hard Heat fans but also anyone with any type of business or property interest in the city. His announcement was seen as a godsend to the hotel and tourism, restaurant and real estate industries throughout Miami. The area most positively impacted by LeBron James’ decision to join the Heat was most certainly Downtown Miami, the neighborhood immediately surrounding the Miami Heat arena. Prior to James’ arrival, property values in Downtown Miami had endured several years of double digit price declines. Furthermore, retail spaces and hundreds of condominiums within walking distance of the arena sat completely empty. However, that was all about to change.
Within days of James’ announcement, there were reports of buyers snatching up condos in the area in a flurry of excitement. As a result, developer inventory began to dwindle and Miami real estate prices started to recover over the subsequent months. Since LeBron James’ decision in 2010, real estate values in Downtown Miami have increased over 20 percent. Additionally, across the street from the arena, several new businesses – such as a pizza restaurant, wine bar, Chinese restaurant and sports bar – have opened their doors. One could argue that James’ arrival played an instrumental role in the real estate recovery seen in Downtown Miami in recent years.
Camillus House to be Demolished Monday
Demolition of Camillus House is expected to begin Monday, as reported yesterday by The Miami Herald. The last residents of the homeless shelter will be relocated to its new campus the same day. Camillus House, located in Downtown Miami at 726 NE 1 Ave, has served the community since 1960. In recent years, however, with the continued urbanization and growth of Downtown Miami, Camillus House has been considered a neighborhood blight. With multi-million dollar condominiums just a few short blocks away, the removal of the shelter makes logical sense. It will allow for a safer environment conducive to the type of growth that Downtown Miami has seen within recent years. The move has been heralded by condo and business owners in the area in expectation that property values and business opportunities will improve as an immediate result.
Below is a map showing the Camillus House location that will be demolished on Monday along with various condominium developments in Park West Miami that will be positively affected the most:
Investment Group Sells Last of 60 Units at Marina Blue
In early 2011, after failing to solicit a suitable offer for the 60 units in a package deal, the investment group decided to sell each unit individually in hopes to arrive at an average sales price of around $310 per square foot. They did just that. The last of their 60 units at Marina Blue sold last month. The investment group did not allow any financing contingencies in their sales contracts and required the buyers to pay the seller’s closing costs. The units, which already had tenants in place, were well suited for individual investors with “rental-grade” build-outs. Each of the units had either carpeting or laminate wood flooring throughout, vertical blinds and no built-in closets.
Now that the last of the 60 units has sold, the good deals at Marina Blue are relatively scarce. There are currently 24 units available for sale at Marina Blue on the MLS. The average asking price of the 24 units is $443 per square foot. That is quite a far cry from the $310 per square foot that the 60 units fetched. Nonetheless, there are still a few units available for sale that buyers should have their eyes on:
Unit 1603 – 1 bed + den/1.5 bath – $285,000 ($302 per square foot) – this is a short sale
Unit 2103 – 1 bedroom + den/1.5 bath – $320,000 ($339 per square foot) – REO
Unit 2310 – 1 bed/1.5 bath – $298,000 ($353 per square foot) – regular sale
Impeccably Decorated 3 Bedroom Condo For Sale at Marquis Residences
A few weeks ago, I had the pleasure of viewing one of the most impeccably decorated condos for sale at Marquis Residences. The custom designed unit was absolutely stunning. The 3 bedroom/3.5 bath condo has 2,393 interior square feet, 10-foot ceilings and comes fully furnished as you see in the pictures below. A private elevator opens to the 22nd floor residence which includes 2 master suites, 17×43 porcelain tiled floors, a laundry room, 3D LCD TVs, custom bar, Euro kitchen, security system with cameras, linear diffusers and covered ceilings with fiber-optic lighting. A Crestron system is also included to control the audio/video, lighting, air conditioning and window treatments. To top it all off the Park West Miami condo offers spectacular, 180-degree views of Biscayne Bay. Asking price of this remarkably beautiful property is $1,695,000.
93% of All Newly Completed Condos in Downtown Miami Now Occupied
The Miami Downtown Development Authority recently released a study showing that of the 22,785 newly completed units in Downtown Miami, 93% of them were occupied as of December 2011. That number is up 7 percentage points from December 2010 in which 86% of the units were occupied. The study focused on those units completed after 2003 located within the Downtown Development Authority District and adjacent areas of influence as shown in the above map. A total of 77 newly completed condominium developments, as defined by the study, are located within these boundaries.
I read through the entire study and wanted to share a few highlights that I found to be rather enlightening:
84% of the newly completed units have closed. (The overall 93% occupancy rate in downtown area condominiums substantially exceeds the number of units sold as a result of developers’ rental of unsold units.)
In 2011, approximately 45% of total sales were first-time new unit sales in new buildings. On average about 140 sales per month were in new buildings in 2011.
Renters account for approximately 56% of occupied units. ( I figured that this would have been slightly higher.)
From 2010 to 2011, the average sales price of new units increased approximately 11.7% to about $420,000
The average price per square foot of new unit sales increased approximately 12.6% from 2010 to about $365 per square foot in 2011.
Mario Chalmers of the Miami Heat Purchases 5 Bedroom Condo at Marquis Residences from Drake
Miami Heat point guard Mario Chalmers will now have a short commute to work. The Miami Herald reported on Friday that he recently purchased a 5 bedroom/6 bath condo at Marquis Residences in Downtown Miami for $2.6M. Marquis Residences is located at 1100 Biscayne Blvd, just 5 short blocks away from the American Airlines Arena, home of the Miami Heat. The condo was previously owned by hip-hop/rap artist Drake who placed two side-by-side units at Marquis Residences under contract last September then later combined them.
Marquis Residences Honored with ‘Americas Property Award’
Marquis Residences, a 67-story luxury condominium development located in Downtown Miami was recently honored with the prestigious Americas Property Award in the Residential High-Rise Development category. The developer of Marquis Residences, Africa-Israel USA, will accept the prestigious award on December 12 at The International Property Awards to take place at The Savoy Hotel in London. Marquis Residences will then compete against category front-runners from the Asia Pacific, Europe, Africa, Arabia and the United Kingdom for the coveted title of “World’s Best”.
Marquis Residences was designed by the world-acclaimed architectural firm Arquitectonica. The 292-unit condominium high-rise was completed in 2009 and currently has limited developer inventory remaining. Prices range from $590,000 for a 1,477 square foot 2 bedroom/2.5 bath condo to $2.2M for a 3,017 square foot 2 bedroom/2.5 bath duplex penthouse.
Resorts World Miami to Put Miami on the Map
Genting and Arquitectonica held a press conference yesterday afternoon to unveil plans for a $3B mixed-use development known as Resorts World Miami. The development will reside on the 13.9-acre Miami Herald land which was purchased for $236M in May of this year. The 10 million square-foot bayfront resort will have a total of 5,200 hotel rooms distributed amongst four hotels, two condominium towers with 1,000 units, more than 50 restaurants and bars and a 250,000 square-foot luxury retail center. The development will also have 750,000 square feet of convention and meeting space, including a 200,000 square-foot ballroom which would be the largest of its kind in the nation. The focal point of the development will be 3.6-acre outdoor lagoon, the equivalent of 12 Olympic-size swimming pools, surrounded by natural sand beaches. The plan also includes space for a casino but Genting first needs the Florida Legislature to approve expanded gaming for that to come to fruition.
Resorts World Miami is estimated to create 15,000 direct and indirect construction jobs as well as 30,000 permanent positions once construction is completed. Development is expected to start as early as Spring 2012 and could be completed as early as Fall 2014.
There’s no doubt that Resorts World Miami will have a huge impact on the city of Miami. “This will put Miami on the map and make it a destination,” said Bernardo Fort-Brescia, co-founder of Arquitectonica, the design team behind Resorts World Miami. I couldn’t agree more with his assessment. The development will allow Miami to compete with the big boys which includes the likes of New York City, Chicago, Los Angeles and Las Vegas. It will turn Miami into a first-rate city almost overnight and have a profound effect on property values as a result. To put everything into perspective, Resorts World Miami is a game changer.
Here’s a video that discusses Resorts World Miami more in-depth:
A lot has been written about Resorts World Miami since the master plan was unveiled. Follow the analysis and commentary from the major local media outlets below.
Genting Group, a Malaysian developer which purchased 140 acres of waterfront land in Downtown Miami for $236M on May 27, has contracted the world-renowned architectural firm, Arquitectonica, to design a $3 billion gaming resort called Resorts World Miami. Genting Group has vast experience in the gaming industry. In fact, it is the third largest casino company in Asia. Currently, the Florida legislature has yet to approve a bill allowing full-based casinos to operate in the state but that has not stopped casinos from increasing the money they spend on lobbyists to push a bill through the Senate to change that.
What kind of impact do you think a Miami-based casino will have on the city? Will property values in Downtown Miami be positively or negatively affected?
