Market Stat Monday: Centro in Downtown Miami
Welcome back to a new week! We’re going to continue our Market Stat Monday series in Downtown Miami’s Centro building. This building made a splash when it was announced because it was the first new tower in the neighborhood to be constructed without parking. It is located in the Central Business District at 151 SE 1st Street, very close to MDC and Bayside Park, so the area is quite walkable.
Another interesting quality of Centro is that all 352 units are loft-style. They’re not duplex loft style (two story layouts), but they are New York style lofts in that there are no walls between the living areas and the bedrooms. This can be a positive or a drawback, depending upon your style of living. It is urban, chic and cool, but the lack of privacy could make things difficult for people living in a roommate situation.
Since there is really nothing different about the penthouses at Centro other than the fact that they’re on the highest floor, I am going to factor them into the statistics search today. Furnished units are factored out. Also, since I’m in the mood for good news, I’m going to look first at the rental market.
Centro Rentals
Because of it’s proximity to MDC and the price, this building was really hot for a few months on the rental market. People could move into a brand-new condo for as low as $1,450/month! Those days have come and gone because there’s just not that much inventory right now. There is only one 1 bedroom layout available to rent as of today, and it is $1,920/month.
Overall, there are 10 active unfurnished listings on the market today. As I said above, the one bedroom is listed for $1,920/month with a partial bay view from the 36th floor. Two bedrooms are listed between $2,000-$2,650/month depending upon the view and size. Most all units in Centro have a city view, a few have a partial bay view.
This has been a very active year for Centro. It opened last summer, in 2017 we have seen 88 total unfurnished rentals. The prices ranged from $1,450/month up to $2,800/month and averaged $2.56 per square foot of living space.
The units that found tenants were marketed for an average of 66 days and accepted 96% of their asking price. Something else that sticks out to me in this report is that the lowest-priced rental stayed on the market for just 3 days. There was also a unit that closed for almost 10% above asking price! This demonstrates something that we tell our clients every day. There is a lot of competition for units that are at the entry point of the market (least expensive in the neighborhood). The rentals happen quickly and for very close to asking price, so if you love an apartment then it is best to make a move for it.
With just 10 units currently available and 88 rented so far this year, that works out to less than 1 month of available inventory! Amazing!
Centro Sales
Now it’s time to swallow our bitter pill. There are currently 55 people trying to sell their apartments in Centro, and 2017 has brought a paltry 5 closed sales. That gives us 66 months’ of inventory. Oof.
The active listings are asking $489/square foot on average, and those who did find buyers sold for $479/square foot, accepting 94% of their asking price. The building is one of the few in the area that is Fannie Mae approved, making financing easier, so what’s the problem?
It appears there are just WAY less buyers in the marketplace. Now more than ever, it is imperative that sellers who sincerely want to sell choose an agent that has access to buyers and a way to make the listing shine in a pack of similarly-priced and similarly-finished apartments. You need an agent who will make sure the property is available to be shown when the buyers request, meets them there to roll out the red carpet and give a tour of the building, answering their objections on the spot and increasing the likelihood that your apartment is the one they choose. I apologize for the lecture, but listing agents need to work harder than ever to make closings happen these days. Here’s a look at the scary stats.
I was amazed to see that even with Fannie Mae approval, there were so few transactions in the building. Only one sold at full-ask, and that seller threw in seller financing to make the deal work. They garnered $540/square foot, the highest price for a resale in the building ever.
To be clear, I’m not dogging Centro. It is very well positioned in the market, offering the lifestyle and finishes that residents of the Central Business District want. Hopefully the demand will pick up and these sale listings will start moving again. Until then, just keep them filled with tenants!
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?
