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?
Market Stat Monday: Epic Residences
To answer a reader request, this week we are going to look into one of the Downtown area’s most luxurious and appropriately-named buildings… Epic Residences. For those who don’t know, Epic Residences and Hotel was built in 2008 by Ugo Colombo. It is known for level of service, fantastic layouts, luxurious finishes, Epic pool parties and the famous restaurants, Zuma and Area 31.
It is not uncommon to bump elbows with celebrities at the property on any given weekend. Some of the celebs who have dined or partied onsite include Kardashians, Madonna, Miami Heat players, Glenn Close, Kevin Spacey, Gwyneth Paltrow, Will Smith, Lenny Kravitz, David Beckham and a host of others. The food and cocktails are top notch as well. The decor and cuisine are sophisticated with views of the Miami River and docks large enough to house some of the largest yachts known to Miami. Mark Cuban is known to dock his 288 ft “Fountainhead” yacht here.
One of the things that I love about the design of Epic is that there are two entrances. One for the residences and a separate entrance for the hotel and restaurants. Residents receive all of the same service as the hotel guest, but don’t necessarily have to be bothered by the people coming and going. As a resident you are able to set up a charge account and order room service from either restaurant, or to go to the pool and enjoy cocktails and pool food. The Exhale Spa is also onsite, and is continually one of the top-rated spas in the area.
Despite the service and luxury, Epic is not without its problems. They are currently in the midst of a construction project that started as a standard repainting of the building, only to end up as a reinforcement of the balconies and a litigation claim against the developer. I personally interviewed the building manager after reading the claim (back to my real estate geekiness), and was reassured that the reinforcement does not reflect any danger to the residences, just that if they didn’t go ahead and do the work now, it would be a problem later on. They want the developer to pay for the repair, so made the lawsuit. Buildings are typically victorious in these types of claims, so I anticipate everyone will be just fine in no time. The repairs are a bit of a nuisance, since the balconies need to be partially covered for a few weeks, but the repairs are nearly complete.
Another tough pill to swallow for Epic residents is the new neighbor. It was recently announced that Aston Martin Residences, a 66 story behemoth of a tower will be built on the lot neighboring Epic to the East, distorting the views from some of the units. Ideal for Epic? No.
I’m going to go out on a limb here and say what I’m pretty sure everyone has been thinking about Aston Martin. It probably won’t happen anytime soon. This is the developer’s first go-round at building a Miami tower, the design of the tower is ambitious (with an underground parking garage on a bayfront lot) and the market is not very strong right now for pre-construction buildings that are still in the conceptual phase. Anyway, let’s stop talking about the neighbors.
Epic Residences Sales Statistics
When we look at these statistics, we are going to leave out the penthouse levels and riverfront townhomes, since those are considered outliers. As of today, there are 64 available sales listings, or 18% of the building. 20 of the available listings have a South view of the Biscayne Bay, Miami River and Brickell skyline. Those are listed at an average of $701/square foot. There are only 3 units available with a North view of Downtown Miami, listed at an average of $556/square foot. The East and West corners each have 2 listings, priced at $1,050/square foot and $905/square foot respectively.
The last 5 months have brought only 7 closed sales in the project, 2 of which were townhomes. That gives us 46 months of inventory, which is alarming. I feel like many people are in a panic over the new tower, because so many of the active listings have the water view and all of the non-outlier sales this year have had a North view. They are selling at an average of $456/square foot and the sellers who are finding buyers are accepting 93% of their asking price, on average.
Epic Residences Rental Statistics
The rental market at Epic is refreshingly healthy! There are only 18 active rentals as of today that are unfurnished and only 9 are not townhomes or penthouses. They average in price of $3.28/square foot.
We have additional good news for the Epic rental market. So far in 2017, there have been 18 closed unfurnished rental deals, 13 of them have been non-penthouse and non-townhome units. That means that there is only 3.5 months’ of inventory available on the market. This makes it a super healthy rental market! The overall rented price of the units that found tenants was $3.11/square foot and the owners only negotiated to 95% of what they were asking for.
Another interesting fact I noticed from the values of the rented apartments is that again we are seeing that the corner units are the least expensive per square foot in the building. the 9 South facing units averaged $3.52/square foot, the 11 North facing units averaged $3.17/square foot, the 2 East corner units averaged $2.96/square foot and the 1 West corner rented for $3.12/square foot.
As for the sales market, I anticipate an uptick of deals once the litigation is settled and financing is once again available. I can’t think of a new project that is under construction that would be in direct competition with Epic the way that some of the Brickell buildings compete against one another. Epic is Epic and that is that.
What are your thoughts?
Market Stat Monday: Which Brickell Buildings Are The Most Popular For Buyers?
During our Market Stat Monday series, I’ve started to notice a trend that there is an increasing amount of competition between condo listings for a smaller amount of buyers in the market. This led me to become curious if there are any buildings in the that are more popular among the active buyers, and some of the results are surprising!
First, we have to acknowledge the harsh reality that we have seen only 175 closed sales in the neighborhood this year. With 1,413 active listings, that amounts to over 40 months of inventory on the market JUST in the Brickell resale market. When pulling my data, I only looked at resales, not developer inventory. If you add in the developer inventory, there will be even more months of inventory.
The sellers who were able to sell did so for a neighborhood average of $389/square foot.
I was pleasantly surprised to see that IconBrickell’s Tower 3 has been a stand-out so far this year. They have seen 13 closed sales despite losing their hotel program (which I think creates an opportunity for owners). Seven of those sales took place in April, telling me that the investors agree.
Another popular option has been The Club at Brickell Bay, who saw 12 closings with an average price per square foot of $299/square foot. I am not aware of anything out of the ordinary that would cause The Club to be such a good buy right now, aside from the fact that the layouts and location are good and the price is right.
1060 Brickell has also had a good year. There have been 11 total closed sales at a rate of $346/square foot. Our statistics page only reports 9 sales, but that is because we have separated the project into the east and west tower.
I was not surprised to see Icon Brickell’s Tower 1 on the list. Buyers nearly always ask about IconBrickell, despite fears regarding their pool construction. Also, Tower 1 is one of the densest towers in town, with 712 total apartments, so it makes sense that there should be more transactions.
Brickell on the River’s South tower made the list with 10 sales, and that sort of makes sense to me. The building is well-run and the loft-layouts are unique. I typically advise investors to purchase a 1 bedroom in the South tower, but if they are looking for a 2 bedroom, to buy in the North tower. This is because the 1 bedroom plans rent far easier in the South tower because of their loft layout, but the 2 bedroom loft layouts lose a lot of potential tenants because of the lack of privacy from the bedrooms. Since there is competition from newer buildings these days for tenants, you want your investment to appeal to as many people as possible and the 2 bedroom lofts don’t work well for roommate situations or families. The price is also right, averaging $297/square foot.
Speaking of loft layouts, Infinity at Brickell is also on the list with 8 sales at an average of $319/square foot. I remember back in the day when people would complain about the developer selling apartments at Infinity for $255/square foot. Those were the days. A lot of people are under the misconception that Infinity no longer has views because of the construction of SLS Brickell next door. While it is true that SLS blocked some views, most of the units still have at least some bay views and the 00 and 02 lines still have a lot of bay views. Infinity is still one of my favorite buildings, the staff is very friendly and professional, the layouts are nice and since the building is so well-maintained, it does not look like it is about to be 10 years old. At $319/square foot, that is a great bargain for what you get.
One building that really surprised me was BrickellHouse. It didn’t make it into the top 10, but there were 5 sales this year averaging $474/square foot! That is a lot lower than the $600/foot price the original buyers paid, but is still a great number for a building that is probably about to have a special assessment that will make you do a double take and recount those zeros. On the bright side, they did finally find a solution to their parking debacle, so at least we’re moving forward.
Here is the full top10 list of Brickell buildings by transaction count:
Icon Brickell Tower 3 – 13 sales – $412/square foot average
The Club at Brickell Bay – 12 sales – $299/square foot average
1060 Brickell – 11 sales – $346/square foot average
Icon Brickell Tower 1 – 10 sales – $517/square foot average
Brickell on the River South Tower – 10 sales – $297/square foot average
Infinity at Brickell – 8 sales – $319/square foot average
VUE at Brickell – 7 sales – $289/square foot average
Plaza at Brickell East – 6 sales – $462/square foot average
Plaza at Brickell West – 6 sales – $411/square foot average
Neo Vertika – 6 sales – $317/square foot average
Are you surprised by any of the findings?
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???
As The Miami Market ‘Adjusts,’ Downtown Condos Nosedive & Rents Hold Steady
Photo by Bill Dickinson, via Flickr.
After five straight years of property value gains, Downtown Miami condominium resale prices are down 4% so far this year. On the rental side, a just-as-impressive streak of lease inflation in the urban core that began back in 2012 has finally broken. Rents are staying flat these days, and showing some downward pressure, due to piles new apartment inventory churning away in the pipeline and just now coming to market. Both of these market shifts were reported in the mid-year report from the Miami Downtown Development Authority, released this week, and the implications could be big. The greater Downtown area has for years been the center of Miami’s rapid urbanization, seeing huge amounts of growth. It fueled big gains. Well, the gains have finally gone, and Downtown’s performance is a lead indicator for the rest of Miami. The boom has bellowed out.
