Quantum on the Bay Celebrates Settlement with Terra Group for Faulty Construction, Throws a Party
Quantum on the Bay
According to a notice posted in their elevator, the Margaret Pace Park-fronting condominium tower Quantum on the Bay has reached a settlement with developer Terra Group over faulty construction, and to celebrate is throwing a party. Meanwhile, 900 Biscayne Bay, also built by Terra, has entered into similar litigation against the developer, and is still working their way through that. Both buildings were completed in 2008, as the Great Recession was setting in and the last real estate boom was crashing hard.
According to a nice chap in the management office at Quantum who identified himself as ‘David,’ the litigation was in regards to faulty construction on the building’s facade. When asked “So, what about the facade David? Balconies, windows?” David’s reply was “both of those.” Well, that’s scary. Anywho David wasn’t willing to spill the size of the elevator sign settlement, but it could be quite large considering the building is throwing a party for all of its residents, this Friday at 6:30 pm, with a champagne toast, to celebrate (open to building residents and any broker who RSVPs, which means it’s totally crashable). That’s developer money.
Quantum on the Bay Party
Related Group Construction Update
The Related Group is looking to start 2016 ahead of schedule. This morning Carlos Rosso, President of Related’s condo division, shared these construction photos of SLS Lux, Brickell Heights, SLS Brickell and the Paraiso mega-development.
Above, you can see Brickell Heights and SLS Lux. Brickell Heights is the two towers under construction in the center of the photo. The tower to the right is Brickell Heights tower 1. This phase is sold out except for a few penthouse opportunities, Brickell Heights 02 is 85% sold out with select residences and penthouses remaining for purchase. This project is scheduled for completion in late 2016.
SLS Lux is the shorter tower to the right of Brickell Heights. The construction began more recently than Brickell Heights and it is scheduled for completion in the fall of 2017. This project is nearly sold out as well with roughly 20 residences remaining and penthouses. Upon completion, SLS Lux will be 57 floors and Brickell Heights will have 49 floors in each tower.
Above, you can see SLS Brickell. This one is topped off just in time for the new year and has been sold out for some time with the exception of a couple of penthouse opportunities. The construction schedule shows SLS Brickell being completed in the spring of 2016.
Below is a great angle to see the impressive size of the Paraiso Bay mega development in Edgewater. This project features 4 towers on 4.6 acres that will begin to be delivered in late 2016. The four towers are Paraiso Bay, Gran Paraiso, One Paraiso and Paraiso Bayviews.
Bravo to Related for pushing the projects & heading toward the finish ahead of schedule! We can’t wait to see the neighborhoods continue to grow. We are happy to help should you be interested in any of the remaining opportunities in the projects.
DEAL ALERT: Developers Offering Attractive Close-Out Pricing on Existing Condos
While the market is buzzing with attractive pre-construction investment deals, not many people think to inquire about the buildings that are existing and still have a bit of inventory. For some investors, these existing buildings can bring a better investment than the speculative development deals that others are flocking to. The close-out phase of an existing building is actually one of my favorite times to sell in a project for a few reasons:
Mitigated Risk
The investor can see the actual building and apartment they are buying, so much of the risk of the design and construction phase has gone by. Since the apartment exists already, the buyer knows exactly what they will receive, not a photo of a building that they hope comes to fruition the way it is shown in the rendering.
Faster Return
If you buy existing inventory for purposes of a rental investment, you can lease the property immediately. You will be able to see your money work for you straight away while other investors wait to see how their investments will perform after the building is completed.
Financing
Mortgages become far easier after half of the apartments in a development have closed. Since the lender can also see the building, they know what their risk is and are more willing to lend money with lower down payments. This is true for both local and international investors.
Flexibility
Developers are investors too, and when they are in the close-out phase they are almost finished with their project. I don’t care how many people say that there is no emotion in business, that is wrong. There is something emotional about being close to the finish line and that makes developers more eager to sell those last apartments to get to their goal. Many times we see developers offering HOA credits, discounted prices and special leaseback programs to entice buyers into helping them reach their goal. If buyers can reach their goals by helping developer reach their goals, isn’t that a perfect scenario? I think so…
With these points in mind, I have a prime example of a building that is currently in this situation.
City24 is a boutique luxury building in Edgewater with 119 apartments. It was originally built in 2008 and has all of the amenities and finishes that residents of the neighborhood have come to expect. There is a 24 hour doorman, gym, pool & jacuzzi, secured garage parking, the apartments have stainless appliances and quartz countertops with tile or wood floors, washer/dryers in the apartment, pretty views, easy accessibility to restaurants and fun events… the things we look for in the Downtown Miami area.
Out of the 119 original apartments, the developer needs to sell only 6 more in order to be finished. We have toured the remaining 6 and have not seen a reason that these specific apartments remain unsold. The developer is offering the full inventory for $2.5M, which works out to roughly $385/square foot. Naturally, if one investor were to purchase all 6 apartments, a lower price or additional perks would be considered.
At the offered price, the remaining apartments would equate to a pre-tax return of 5% when rented for full market value. The typical investment apartment in the area today brings a 3% return, so the buying investor would start off with an advantage on this package. Additional parking spaces, HOA credits or price negotiations would help the both the buyer and the seller while making good use of the property.
If you would like more information on specific apartment numbers, sizes, prices or packages, don’t hesitate to reach out. We can work together to present a package that meets your investment goals on this or similar projects.
Developers Offering Year-End Incentives to Close Out Projects
In an effort to hold the attention of buyers and sell as many apartments as possible before the end of 2015, developers are coming out with attractive incentives packages to help buyers decide to act now and close out their projects. Here are some of our favorite incentives from buildings that are currently under construction and selling pre-construction residences:
Brickell Heights – Related has lowered the down payment requirement to 30% from the original 50%. Prices of remaining inventory start in the $400,000’s.
SLS Lux – All of the condo/hotel apartments are currently under contract, but the developer is offering upgraded kitchens on the remaining condo residences and 30% down payment. The penthouse collection has recently been released and sales are almost finished. Prices start in the $600,000’s for the remaining units.
Paraiso Bayviews – All four towers of the Paraiso development are currently under construction and Paraiso Bayviews is 95% sold. For select apartments, the developer is offering a finishes package with porcelain flooring throughout. The prices currently start in the mid $500,000’s up to the high $600,000’s and penthouses are priced between $639,900 to $1.75MM. The developer has not officially offered deposit flexibility but has indicated that it is possible on a case-by-case basis.
Hyde Midtown – The construction of Hyde Midtown has only just started in recent months, but close out is fast approaching. Prices on remaining inventory start in the $400,000’s and the sales team has offered some flexibility on the 30% down payment on a case by case basis.
We were very happy to see these flexible down payment options, as it will make new condo purchases more accessible to those who hope to live in the apartments. The incentives also help to allow for the possibility of financing the condo purchases, which many people have inquired about yet been unable to easily attain until now.
Let us know if you or someone you know is interested in more information on these or other developments. We will have team members in Miami during all of the holidays and until the end of the year to help visitors by appointment.
The Crimson in Edgewater Gains Fannie Mae Approval; Prepares to Start Closings
Placed between IconBay and Bay House in Miami’s Edgewater neighborhood, The Crimson is preparing to begin closings this month. The Crimson is a boutique property of only 90 apartments in 20 floors and will offer a more private lifestyle than some of the larger projects on either side.
One of the aspects of The Crimson that we love is its status of being silver LEED certified – meaning that the project has earned 50-59 points toward ultimate energy efficiency. Builders can earn LEED certification points through building design, quality of materials, efficiency of appliances and even for designing low-maintenance projects.
To prepare for the opening, the developer has also announced that the project is Fannie Mae approved. This is particularly exciting for local residents who are interested in purchasing an apartment as their primary residence. The sad reality is that many projects in the area are not attainable for local buyers due to the fact that mortgage funds are not typically available to buyers of new projects. Buyers can now purchase a brand-new condo in The Crimson with as little as 20% down payment. There are only 5 buildings in the greater Downtown area that have this Fannie Mae approval.
There are still a few opportunities to purchase prior to the building opening with prices ranging from $455,000 up to $1,579,000.
Related Group Closes Out IconBay; Inventory Concerns Loom For Investors
As reported a few days ago by South Florida Business Journal, Related Group has closed on all 300 units at IconBay. Without question, that is a tremendous milestone for what is considered the first luxury condo development to be completed in Edgewater during Miami’s most recent construction boom. However, not all is sunshine and rainbows for IconBay and, in particular, for its investors; inventory continues to mount and owners are finding it increasingly difficult to sell and/or rent their units.
Let’s first examine the rentals at IconBay. Currently, a total of 68 units are on the market for rent. That represents a whopping 23 percent of the development’s 300 total units. More concerning, however, is the lack of rental activity. According to the MLS, since June, when initial units first began to hit the market for rent, there have been 15 closed rentals, an average of just 3 units rented per month. As a result, and as one might expect, asking prices have fallen along the way; in some cases, the drop has been significant. For example, in late June, when the first 1 bedroom + den unit at IconBay hit the market, it was priced at $4,000 per month. That unit – unit 2102 – ultimately ended up renting for $2,700 per month. Since then, a unit located in the exact same line but four floors higher and with a similar build-out – unit 2502 – rented for $2,500 per month. And prices are still trying to find a bottom. Unit 2802 – another unit of the exact same floor plan that is currently listed for rent – is asking $2,500 per month. And the 2 bedroom + den units at IconBay haven’t fared much better. They have rented for as low as $3,000 per month (in fact, three separate 2 bedroom + den units have rented at that price). In other words, 2 bedroom units are renting for 25 percent less than where the initial 1 bedroom unit was priced.
In regards to resales at IconBay, currently, there are 72 units listed for sale on the MLS. That represents a staggering 24 percent of IconBay’s total number of units. Post-closing, just 4 units have exchanged hands:
Unit 2401 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $810,000 on October 1st ($564 per square foot)
Unit 2601 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $800,000 on October 16th ($557 per square foot)
Unit 2901 – a 2 bed + den/2 bath condo with 1,435 interior square feet sold “decorator-ready” for $810,000 on October 27th ($564 per square foot
Unit 307 – a 2 bed + den/2 bath condo with 1,003 interior square feet sold “decorator-ready” for $540,000 on October 28th ($538 per square foot)
According the MLS, no units have closed this month. Additionally, not one single unit at IconBay is under contract (pending sale). As with rentals, it appears that prices are still trying to find a bottom. For example, unit 3101, which is located on a higher floor than any of the aforementioned 01 units that recently exchanged hands, is currently listed for sale with an asking price of $780,000 ($544 per square foot). Unit 3101 has been listed at that price for 79 days, yet no takers. (I am scratching my head trying to figure out why on earth a buyer would choose to pay $20,000 to $30,000 more for a unit located two to seven floors lower.)
So what gives? Why does there appear to be a lack of interest for units at IconBay? Well, the complaint that I keep hearing, from clients and real estate agents alike, is the size of their floor plans, or, rather, their lack of size. The corner units aren’t so bad, but the interior units are unexpectedly small, especially the non-corner 2 bedroom + den units (lines 03, 04, 05, and 07) which range in size from 1,173 to 1,208 interior square feet. Another common complaint I hear is the neighborhood. People argue that it’s just not there yet, at least not at current asking prices. Edgewater is a work in progress. It’s unreasonable for investors to expect their units there to compete head-to-head with condos located in neighborhoods such as Brickell and Park West. Finally, the third gripe I keep hearing from people about IconBay has to do with their own expectations. With a name like “Icon”, one comes to expect a certain level of luxury, as what is found with its sister projects Icon South Beach and Icon Brickell, both considered outstanding and highly popular condo developments. Oftentimes, people who have visited Icon South Beach and/or Icon Brickell visit IconBay with very high expectations, only to walk away sorely disappointed. It’s like the first time you watched the movie Terminator 3: Rise of the Machines. You couldn’t wait for it to be released in theaters, because you just knew it was going to be amazing, just like the first two parts; yet, in the end, you walked out of the theater asking yourself, What was that crap?. Had you walked into the theater with different expectations, or, better yet, with zero expectations, perhaps you could have enjoyed the movie (actually, no, that was a horrible movie no matter how you slice it).
Of course, there are going to be those who say, Lucas is just being negative. Related Group was able to close all 300 of its units at IconBay. The development was a resounding success. Well, it depends from whose perspective you’re looking. For Related Group, without a doubt, it was an overwhelming success. For investors, not so much. In my opinion, it’s not surprising that all 300 units at IconBay closed. With 50 percent deposits on the line, contract holders weren’t left with much of a choice. (To me, walking away from such hefty deposit money doesn’t seem like much of an option.) If IconBay is such a resounding success, that success should translate into sizable profits for investors (not five or ten years from now, but right now), especially considering the fact that real estate prices in Miami have increased significantly since August 2012, when preconstruction sales launched for condos at IconBay. Recently, I read an article stating that the median sales price of existing condominiums in Miami-Dade County increased 52 of the last 53 months (a period spanning nearly four and a half years). Taking this fact into consideration, one could justifiably assume that initial investors of units at IconBay would have no problem locking in tidy profits post-closing. However, comparing the preconstruction price list dated September 6, 2012 for units at IconBay (shown below) with recent post-closing activity as reported on the MLS, that doesn’t seem to be the case at all. Take, for example, unit 2401 which, as mentioned earlier, closed for $810,000 on October 1st. After taking into account the developer’s fee, commission on the resale, and closing costs on both ends, that preconstruction buyer, by my estimation, likely broke even. And that’s for unit 2401. Units 2601 and 2901, two other units which closed last month and do not appear on the price list below, are located on higher floors; so one could assume that they presold at even higher prices. And let’s not forget about unit 3101, another unit I mentioned earlier in this post; it’s currently asking $780,000 and has been on the market for 79 days.
I leave you all with a thought of the day from Joe Biden. I hate to admit it, but perhaps Joe is finally onto something.
Elysee Sales Launch a Success: Prices, Plans and Penthouse
After a two month whisper campaign, Elysee officially launched sales last night with a cocktail party and unveiling at their sales center in Edgewater. Guests were treated to live music, food and drinks, plenty of mingling as well as details of the upcoming project. At launch, the building was 20% reserved with an average of $750/square foot thanks to the whisper campaign, representatives of the project reported.
The 57 story tower will be home to 100 total residences, all half-floor or full-floor layouts of 2,660 square feet up to 4,000+ square feet and 3+ bedrooms. Each apartment will feature east and west views with 8- or 10-foot deep terraces, private elevators and modern design by Jean-Louis Denoit. Three levels of amenities are offered for all residences.
In addition to releasing the floor plans and brochures, representatives also shared initial details about the 9,000 square foot upper penthouse. This one-of-a-kind residence will be built to suit the owner and encompass the entire 57th floor. It will also include a full-floor rooftop terrace for 360-degree views from above the building. The developers have not officially disclosed the price, but it is expected to be released at around $15 million.
Construction is scheduled to begin in the Spring of 2016. Contact us for additional details.
Each and every condo at Elysee will offer breathtaking views of the Atlantic Ocean and/or Biscayne Bay. Below is a video which showcases those direct, unobstructed views of the water:
Just Listed – Stunning 2 Bed/2 Bath Condo at Paramount Bay w/ Storage Room Included
I’m pleased to announce our newest listing – a stunning 2 bed/2 bath condo at Paramount Bay with 1,128 interior square feet, an 8-foot deep terrace totaling 242 square feet, white porcelain tiled flooring throughout, private elevator, 10-foot high ceilings with floor-to-ceiling glass windows, large walk-in closet with built-in cabinets, stone kitchen countertops, and stainless steel appliances by Wolf and Sub-Zero. Most importantly, this residence features sweeping, breathtaking views of Biscayne Bay from the kitchen, master bedroom, and master bathroom, including from within the glass-enclosed shower. Price includes a 150 square foot storage room located directly across the hallway from this unit.
The property is currently tenant-occupied but the tenant is scheduled to vacate by December 15th. Priced to sell quickly. Asking $789,000. Last November, unit 1008 (exact same floor plan but located 9 floors lower on the 10th floor) sold fully furnished for $790,000. In my opinion, those 9 floors make a world of difference and more than make up for the fact that this property is being offered unfurnished.
Paramount Bay condos is located at 2020 North Bayshore Drive in Edgewater – Miami’s hottest, emerging neighborhood. Amenities include: east and west swimming pools; hot tub; BBQ; 24-hour concierge; 24-hour valet parking; 6,000 square foot spa and fitness center with sauna, steam and private treatments rooms; business lounge; and separate teen and children’s playrooms. Paramount Bay is a pet-friendly condo development.
If you or someone you know would like to receive additional information and/or to request a showing, please call or text me at 786-247-6332. I can also be reached via email at [email protected].
Elysee Prepares to Launch: a Superluxury Boutique Condo for Edgwater
Two Roads Development (the Miami-based firm who recently brought us Biscayne Beach) is following up their success by introducing Elysee, Edgewater’s first super-luxury boutique residences. The official launch will take place Wednesday, November 11 and construction is slated to begin early in 2016.
The 57 story bayfront tower will be located on 23rd Street, just north of the Adrienne Arscht Center and conveniently between the MacArthur and Julia Tuttle Causeways. We are most excited to see that the tower will have only 100 residences and all will be half-floor or full floor layouts. Every apartment will have a direct view of the Biscayne Bay as well as a sweeping sunset view. All of the layouts are expansive, ranging from 2,660 square feet up to 4,000 square feet and the developer is honoring the option to combine apartments for additional full-floor options as well as duplex residences. All of the apartments have private elevators & foyers as well as service elevators. Many apartments will also have staff quarters included in the layout.
Within the tower, there are three floors dedicated to common areas with services such as a blow dry bar, summer kitchen, 75 foot resort pool and a ground floor sunrise pool. The fitness center will include a yoga studio, reception desk, and spa with a separate play area for children. On the 30th level, residents will enjoy a grand dining room for up to 30 guests, business center, library, theater, and wine storage. Each apartment will include 2 parking spaces and a storage area.
Elysee was inspired by the French design and is being finished by Jean-Louis Denoit, the famed interior designer who was recently dubbed the “Modern Master of French Interiors” by Forbes Magazine. With prices averaging at $750/foot, and starting at $1.67M, we expect to see Elysee as another success story for Two Roads Development and also for residents of the area.
