The first closings at Paraiso are scheduled to begin this summer, so how is construction coming along? Let’s check…
Paraiso Bay – This will be the first tower to open and closings are scheduled in July. It is currently sold out and on the home-stretch to completion.
Paraiso Bay Homes – Around the time that Paraiso Bay opens, the 8 Paraiso Bay Homes will also be complete. They are located in front of Paraiso Bay and Gran Paraiso, underneath the pool deck. There are still a few available. There is a 3 bedroom plus a study that is $1,910,900 and a couple of 4 bedrooms that also have a study. Those are $2,190,900 and $2,400,900.
Gran Paraiso – Paraiso Bay’s sister tower has reached the 38th floor of vertical construction. The railings and glazing are also inching their way up. We expect to see completion next spring and there are still units that are 2 bedroom up to 4 bedroom layouts starting at $968,000.
Paraiso Bayviews – The most affordable tower in the complex topped off last month and the rooftop pool deck is currently being constructed. We’re hoping to see this tower delivered at the end of 2017 and the close-out inventory starts at $420,000.
One Paraiso – Standing up front on the edge of the bay, One Paraiso has reached the 53rd level of vertical construction. We are also expecting to see this one completed later this year and there are two penthouses remaining, starting at $2.8 million.
The Paraiso Beach Club is also coming along nicely. It should be ready to open in time for the first residents to move-in this summer.
Here are some additional shots of the complex, for those who love a photo bonanza!
The Smoking Ban In Condos Movement Lights Up Again
A movement to ban smoking in condos is heating up again. Fort Lauderdale developer, Dennis Eisinger does not allow smoking in the common areas of his buildings nor in the parking garage, balconies or inside the units themselves, according to the Daily Business Review. The movement is spreading South as well… we noticed this week that Biscayne Beach will also be a 100% smoke-free building.
Here is the section of the Biscayne Beach Rules & Regulations that deals with smoking:
Under Mr. Eisinger’s plan, condo developers retain the right to prohibit smoking in the buildings they sell, and existing buildings have an opportunity to decide for themselves to go smoke-free. A 75% condo board agreement would change the building bylaws and deem lighting up a violation. “Smokers are not a protected class,” Mr. Eisinger told the Daily Business Review, referring to the federal Fair Housing Act.
Why This Is An Amazing Idea
To be honest, Biscayne Beach’s choice to prohibit makes a lot of sense. Below all of the units is the restaurant and beach club. I highly doubt the patrons of the restaurant and the beach club members would appreciate being hit with a stray cigarette while they enjoy their fruity drinks by the pool. I certainly wouldn’t.
In addition, every single building manager I have spoken with has complained at one point or another about cigarettes ruining the pool furniture and starting fires on balconies below. In Infinity, there was actually a fire a couple of years back on a balcony when a cigarette butt hit a patio cushion and it burned. I was also hit in the head recently while swimming with my baby in the pool. Thank goodness it was my hair that got singed and not the baby’s. Scary.
Smoking inside the apartments causes its own form of damage. Smoke smell is not a selling feature. I’ve routinely seen tenants and buyers alike dismiss a property because of the smell. Speaking also from the standpoint of a landlord’s representative, the smell is nearly impossible to get out. The apartments always have to be repainted, the air conditioner units deep cleaned and sometimes the flooring and window shades even need to be changed. This cost quickly adds up and exceeds the security deposit that landlords hold. Not a great investment.
Aside from the inconvenience to others, affect on market values and danger of burns, I think the CDC has appropriately made their point and convinced everyone that smoking is hazardous to your health and to the health of those around you.
But Are The Buildings Overstepping Their Power?
Despite the reasons why buildings SHOULD go smoke-free, can the condo association really dictate what people do inside of the properties that they own? Or is that an example of association over-control?
Also, how could it really be enforced? Would there be a cigarette-gestapo to make sure that people follow the rules? I would love to find out who threw that cigarette off the balcony and hit me in the head, but I recognize that I will never know.
Biscayne Beach’s First Rentals Hit The Market; Restaurant Space Available
Renters and hopeful restaurateurs rejoice! Biscayne Beach’s first rental apartment has hit the market, as well as the much-anticipated restaurant space.
The restaurant space takes up 7,835 square feet of the second floor including the large terrace overlooking the beach club. It is offered at a very competitive rate in order to be filled as soon as possible. The previous restaurant concept had planned to open later in the year. We had heard that it was a Turkish or Mediterranean theme, but cannot confirm since the deal fell apart before the build-out started. Here is the floor plan of the restaurant, from the offering memorandum we received this morning.
Personally, I see a high-end restaurant with American cuisine and fresh seafood being most successful in this location. The restaurant would service the beach club (which will reportedly offer 250 public memberships for sale, 391 memberships to building residences as well as their guests) and the general public.
The first residential rental to be offered is unit 2905, which hit the market yesterday for $5,000/month. The property is currently still decorator-ready, but should be finished out and shined up by July 1. It has two bedrooms, a den off of the kitchen and 3 bathrooms. The pricing of rentals in a brand-new building is always an experiment since there is nothing to really compare the apartments to and we do anticipate a surge of availability once the closings draw to completion. I am excited to see what the market will bring to Biscayne Beach!
Let us know your thoughts on the restaurant concept and the rental values. What do you think we’ll see? In the meantime, here is a video tour of the restaurant space.
Inside Biscayne Beach
Today is the day! Biscayne Beach is officially open! They received their TCO on April 21, so were able to begin closings today. Here is a sneak peek from our tour as well as from the developer representative’s social media posts. How do you think it turned out?
The lobby.
The pool.
The Biscayne Beach Club.
There are 13 poolside cabanas.
The kitchens.
I was really impressed with these super hight floor-ceiling windows.
The units are being delivered decorator-ready, so the new owners can now choose their finishes.
Market Stat Monday: 1800 Club
Last week, we had the first official installment of the Market Stat Monday series. We checked in on Quantum on the Bay, which is in the process of overcoming some legal battles. One of our readers suggested that we skip next door this week and look into the less dramatic yet equally beautiful 1800 Club, so here we are.
For those who are new to 1800 Club, it was built in 2007 and has 469 apartments within 42 stories. It is a full-service building, pretty much standard to the area. The amenities include pools, gym, 24 hour doorman, valet, and a party room. The building is quite lovely and is also well-kept. It was actually one of the few buildings in the market to earn FHA approval, so FHA buyers could purchase there with low down payment loans. That approval is notoriously difficult for condo buildings, and sadly it expired for 1800 Club in 2014, but the fact that it was achieved speaks volumes of how the building is run. Today, the FHA certification has not been renewed, but there are conventional mortgage programs that allow up to 95% financing on purchases in the building.
There are currently 32 active listings for sale, so 7% of the total units are available for purchase. The average price per foot ranges more drastically than most buildings. The lowest-priced unit is listed for $295/square foot and the highest price per foot is $511/square foot. If you’re curious why the gap in pricing is so large, it is because the units in this building have a very different mix of layouts and views. Apartments on the east side of the building have direct bay views, apartments on the west side have sunset views and those located on the south side of the building have partial bay views but also look into the nearly-completed Aria on the Bay. Also, all of the one bedroom plans have either the west view or south view. There is one line that has two bedrooms and a west view, but most of the two bedrooms have south or east views. Because the layouts and views are so starkly different, I’ve decided to pull the statistics for each segment of the building.
WEST FACING UNITS
There are currently 7 units on the market that face west. These have beautiful sunset views and the asking price averages $380/square foot. The least expensive is apartment 2902, an 841 square foot 1 bedroom that is offered for $278,900 and includes a $2,000 credit toward new floors (the wood laminate that is now in the apartment is pretty damaged). The least expensive two bedroom is on the 31st floor and is offered for $429,900 with marble floors. The most expensive two bedroom is the same floor plan on the 36th floor for $525,000 that has been completely remodeled.
On the west side, we have seen 3 closed sales since the beginning of the year. These have closed at an average of $323/square foot and the sellers have received an average of 96% of their asking price. The least expensive was unit 1602, which is a 1 bedroom that sold for $260,000. I found the listing photos of this unit to be very misleading. The agent took photos of the bay view from the pool deck but did not specify that they were not taken from the unit itself. An uneducated or underrepresented buyer could easily be led astray with photos like this. Tsk tsk.
There are not any sales listings that currently have pending contracts. I have a feeling we will see some price reductions from those who need to sell.
SOUTH FACING UNITS
The south side of the building is interesting because Aria on the Bay is being constructed next door, so many of the sellers purchased their units when the view was very much different. The view is still pretty, just the water view is not as expansive as it once was. There are currently 8 available sales at an average price per foot of $343. The only closed sale this year in this section of the building was unit 2212, which is a 1,374 square foot 2 bedroom layout that sold for $435,000 ($316/square foot).
Just a few floors up, unit 2712 is currently awaiting closing and was listed for $324/square foot. Since buyers are settling for 96% of the asking price, it looks like we’re due for some price reductions before things start to move.
EAST FACING UNITS
The east view at 1800 Club is really a money-maker. All of the plans on the east side are 2 bedroom layouts and 11 are currently available at an average price of $488/square foot. The actual listing prices are $489,000 up to $620,000.
Something interesting that I found is that the only closed sale on this side of the building was unit 1807, which closed for $545,000 ($445/square foot). The lowest price of the available units is unit 1403, a 2 bedroom with 1,142 square feet for $489,000 ($428/square foot). DEAL ALERT!!!
There are two 3 bedroom units available, but I really don’t have anything to compare them to. One is a furnished 01 line that is on the 8th floor (below the pool deck). The other is a 3,082 square foot duplex loft on the pool level. They are listed for $975,000 and $1.29 million, respectively.
Overall, the building is looking at 27 months of inventory based upon closed sales rates. While that’s not a great number, it is far healthier than some of the other buildings we’ve dug into over recent weeks. There have been a total of 6 closed sales in the overall building with an average price of $328/square foot. With 3 closings on the west side, one on the east side, one on the north side and one that was an outlier (it was on level 3 with a very different floor plan), the less expensive west side is the busier side currently. Since there is nothing pending over there at this point, it will be interesting to see what the summer brings us.
WHAT ABOUT RENTALS?
Just like the buildings we’ve seen over recent weeks, the rental market is still healthy at 1800 Club. There is just under 4 months of inventory on the market (20 active listings and 24 have rented since the beginning of the year). The listings are fetching 99% of their asking price and the listings are staying active for just under 60 days on average.
Now as an investor, you’re probably thinking that 60 days is a long marketing period but also consider that many of the listings are activated 30 days before the previous tenant vacates. The paperwork process of moving a new tenant into the building typically takes 3 weeks, so the 60 days on the market statistic isn’t really so bad.
One bedrooms are fetching $1,750/month and up right now, two bedrooms with west views are bringing $2,450/month. The only north facing unit that is available is an enormous 1,810 square foot 2 bedroom that is available for $3,500/month. East views are available for $2,800/month.
From an investment standpoint, I’m giving 1800 Club a gold star. Mortgages are available in the building, layouts are attractive to tenants (and owner/occupants), the building is well-run, the finishes are nice, the location is top notch and the views are beautiful. Pretending that we purchased that $260,000 one bedroom (the least expensive recent sale) and leased it for $1,750/month (the least expensive 1 bedroom recent rental), it would work out to a 4-5% return rate after expenses. Those are really great numbers for the area!
Which building should we look into next week???
The Biscayne Beach Club Could Offer Memberships To The Public
In anticipation of their opening day, I took the liberty of reading Biscayne Beach‘s 674 page prospectus that will be given to each of the 391 owners at closing. Nerdy? Probably, but I’m also a girl in the know. I learned some interesting tidbits including the cable service will be through Hotwire, valet parking will be through Park One, the building will be managed by First Service Residential, and the developer is retaining the rights to offer beach club memberships to the public.
According to the prospectus, the “Outside Members” will be capped at 250 at any given time and these members have to pay into the condominium association. It reads:
The Developer, during the period in which it is entitled to elect a majority of the Board, and thereafter the Condominium Association, each reserve the right, in their sole and absolute discretion, to sell memberships in the Beach Club to members of the general public who are not Unit Owners (“Outside Members”), upon such terms and conditions as the Developer or the Condominium Association, as applicable, may determine in their sole discretion, provided that the number of such memberships outstanding at any one time shall not exceed 250. All fees and other revenue by the Developer from the sale of such memberships shall be the sole property ofthe Developer, and shall not be considered revenue or income of the Condominium Association.
Notwithstanding the foregoing, each of the Outside Members shall also pay to the Condominium Association, periodic dues based on a proportionate share of the estimated operating costs of the Beach Club, as described in Section 20. The Common Elements of the Condominium, and any other portions of the Common Elements as the Condominium Association may, from time to time, elect to make available to Outside Members, shall be subject to various easements relating to the Beach Club, as described in Section 17.
The prospectus also went on to explain that the developer reserves the right to assign up to four of the 13 cabanas for exclusive use of the owner of that apartment. If the cabanas are not assigned, they are to be used by the Beach Club.
What we don’t know is whether the developer chose to exercise these rights, or what the cost of the Beach Club membership would be if they do decide to offer it. Personally, I love the idea. It would be like having The Standard on the mainland! What do you think?
VIDEO: Paraiso Bayviews Construction Tour
Today we were treated to a preview of the Paraiso district including a hard-hat tour of Paraiso Bayviews. I have to admit, while I’m excited to see the Paraiso district come to life, I’ve always been a bit skeptical about Bayviews because of its location to the west of the other towers. Would it actually have bay views? It does!
Inside the building, it is still too much of a construction site to be able to visualize the units and how the layouts will be. Hopefully we will be able to preview some finished options when the building is a little closer to being finished. It is scheduled to open later this year, so there’s time.
The views that we saw were from the 38th floor out of 43 total floors. There are still a few options for purchase, including a 40th floor 2/2 with 1,068 square feet and a west view, overlooking the tennis courts and sunset for just under $650,000. There are also six penthouses left, priced between $641,000 up to $1.6 milion.
After the residential tower, we also had a look at the Paraiso Beach Club, which is reserved for the residents only. The public will be welcomed in Michael Schwartz’s bayfront restaurant, but the upstairs club is residents only.
What do you think of the views?
Biscayne Beach Receives TCO But Pushes Back Closings
Image by Jennifer Behar Cervera
It has arrived! Biscayne Beach received its TCO (temporary certificate of occupancy) today, one day after it was expected, according to representatives of the developer. They were expecting the TCO to arrive yesterday, but hey… it arrived on “Miami time” and we are very happy to see this step in the right direction.
Due to disclosure guidelines, the closings are able to begin 10 days after completion. Instead of beginning today, they will now begin May 1. Since the initial TCO is for floors 7-35.
Ladies and gentlemen, it’s time! The first bulk sale is officially in contract at the newly constructed Crimson in Edgewater. Despite the building’s opening last year, the developer was still holding onto 20 units that were listed at an average of just over $600/square foot.
The package had been marketed with a 10% discount to an average of $558/square foot. That would make the value of the deal just over $13.5 million rather than the original $15 million. Once the deal closes, we will learn the final contract price and the amount of discount that the developer ultimately accepted. I expect it to be lower than $13.5 million since the Downtown Miami DDA’s report listed the average price per square foot in the building to be $545/square foot in their yearly report, but we shall see.
Crimson was developed by Aventura-based McKafka Development Group and has a total of 90 units. One of the biggest selling features (aside from the waterfront location) is the fact that the building is LEED Silver certified. There are currently 5 resales listed in the building, with an average price per square foot of $677.
I am very interested to see this one close and set the precedent for future deals. I’m sure that we will see additional bulk deals as more buildings open with remaining inventory. Which other buildings do you think we’ll see bulk sales in?
