Il Villagio Penthouse – $17,750,000 – A Look at an Ultra-Luxury Condo
Many of you may have wondered, at some time or another, what a $15M+ condo looks like in South Beach. So, let’s take a look at the two-story penthouse condo at Il Villaggio that is listed for $17,750,000. It has an amazing 5,700 square feet with 3 bedrooms, 4 full baths, 2 half baths, a 12-camera security system, private rooftop terrace with pool and Jacuzzi, 4 parking spaces and much, much more. Il Villagio is located on one of the most well-known streets in South Beach, Ocean Drive, at 1455 Ocean Drive. Two words came to mind when I saw this condo: “bad ass”! Make sure to take a look at the MLS listing for more information.
Il Villaggio condos for sale
Il Villaggio condo rentals
Miami Condo Index – South Beach – July 2007
I realize that South Beach is not located within the Miami city boundaries. South Beach resides in the city of Miami Beach, which in itself is a separate city from Miami. I felt compelled, however, to include a South Beach condo index due to much interest in condominiums located in South Beach, and because I conduct a significant portion of my business in South Beach. Besides…if I didn’t provide this information then who would?
It was much more difficult to create a South Beach condo index than it was for Brickell or Brickell Key. There are so many more buildings to consider in South Beach. I didn’t want to only include the luxury buildings residing in South Beach but also didn’t want to include each and every small development located in the 33139 zip code either. I wanted to create a South Beach condo index that encompassed all of South Beach. To a nonlocal person, I wanted to provide a transparent look into the South Beach real estate market. Like I said though, I didn’t want to include each and every small development throughout all of South Beach either. The overall average price per square foot in South Beach would be significantly less than the figures below if one were to include every condo building in South Beach.
I instead chose to include those developments that are the most well known to South Beach locals. I realize that I’ve omitted a few but after much consideration, I decided on the following 19 buildings found below. The condo units at Flamingo South Beach will be considered at a future date once the entire development has been converted into condominiums and more resales are available. Other new developments may also be considered once additional resale information can be obtained. That being said, the following have made the South Beach graduating class of July 2007. Alongside each development, you will find the average price per square foot of units currently available for sale on the MLS.
Overall, the numbers did not surprise me too much. The only one that shocked me was Meridian Lofts but there’s a unit listed there for $4,000,000, or $1,140.25 per square foot. That increased the overall average. To someone unfamiliar with the South Beach real estate market the numbers above might seem ridiculous, but to those familiar with the local market, these numbers shouldn’t come as a surprise. The average price per square foot for condos currently listed in South Beach using the 19 buildings above came out to $913.19. The weight-adjust average came out to $793.99. The weight-adjusted average is significantly less due to the fact that Mirador 1000 and Mirador 1200 represent almost 18 percent of the overall units used in the index. It also has the lowest average price per square foot of all the buildings included in the index which helped to provide a better representation of the overall South Beach condo market. Although the average price per square foot in South Beach was almost one and a half times that of Brickell, the numbers in the June 2007 Brickell index were much more shocking to me.
The numbers below will show the average price per square foot in these buildings based on closed sales of condos in each building over the last six months.
- 1500 Ocean Drive – 1500 Ocean Dr | 33139 | $879.20
- Bentley Bay – 520 & 540 West Ave | 33139 | $627.70
- Bentley Beach – 101 Ocean Dr | 33139 | $1,254.49
- Continuum South Tower – 100 S Pointe Dr | 33139 | $1,021.55
- Cosmopolitan – 110 Washington Ave | 33139 | $546.89
- Courts at South Beach – 140 Jefferson Ave | 33139 | $472.21
- Decoplage – 100 Lincoln Rd | 33139 | $566.95
- Floridian – 650 West Ave | 33139 | $540.72
- Grand Venetian – 10 Venetian Wy | 33139 | $465.92
- Icon – 450 Alton Rd | 33139 | $767.72
- Il Villagio – 1455 Ocean Dr | 33139 | $1,129.88
- Meridian Lofts – 2001 Meridian Ave | 33139 | $437.49
- Mirador 1000 & 1200 – 1000 & 1200 West Ave | 33139 | $438.60
- Murano at Portofino – 1000 S Pointe Dr | 33139 | $962.09
- Murano Grande – 400 Alton Rd | 33139 | $771.10
- Portofino Tower – 300 S Pointe Dr | 33139 | $919.28
- Setai – 101 20 St | 33139 | $1,733.20
- Waverly at South Beach – 1330 West Ave | 33139 | $474.57
- Yacht Club at Portofino – 90 Alton Rd | 33139 | $665.19
Overall, the price per square foot of units sold in these buildings over the last six months was $772.36, or $686.73 when weight-adjusted. I was surprised to see that the average price per square foot for condos sold over the last six months at Grand Venetian was under $500. I would have expected this to be significantly higher. I also thought that 1500 Ocean Drive and Icon would have been higher as well. It is amazing to see The Setai at $1,733.20 per square foot but it wasn’t particularly surprising. The Setai is known to be the ultra-luxury building of South Beach. I think we’ll see the average price per square foot at The Floridian and The Cosmopolitan come down some as both buildings have a number of preforeclosures and foreclosures in them.
The figures below will show the sold-to-listed ratio as a percentage. For example, as you will see below, 1500 Ocean Drive had an average price per square foot of condo units sold that was 50.34% of the average price per square foot of condo units listed. You’ll notice that the figures for Bentley Beach and Portofino Tower are in parentheses. Both of these had a higher average price per square foot of units sold in the past six months than those that are currently listed.
- 1500 Ocean Drive – 1500 Ocean Dr | 33139 | 50.34%
- Bentley Bay – 520 & 540 West Ave | 33139 | 25.57%
- Bentley Beach – 101 Ocean Dr | 33139 | (9.56%)
- Continuum South Tower – 100 S Pointe Dr | 33139 | 22.16%
- Cosmopolitan – 110 Washington Ave | 33139 | 9.79%
- Courts at South Beach – 140 Jefferson Ave | 33139 | 16.18%
- Decoplage – 100 Lincoln Rd | 33139 | 20.82%
- Floridian – 650 West Ave | 33139 | 9.13%
- Grand Venetian – 10 Venetian Wy | 33139 | 26.36%
- Icon – 450 Alton Rd | 33139 | 20.70%
- Il Villagio – 1455 Ocean Dr | 33139 | 48.58%
- Meridian Lofts – 2001 Meridian Ave | 33139 | 30.25%
- Mirador 1000 & 1200 – 1000 & 1200 West Ave | 33139 | 0.55%
- Murano at Portofino – 1000 S Pointe Dr | 33139 | 26.92%
- Murano Grande – 400 Alton Rd | 33139 | 12.55%
- Portofino Tower – 300 S Pointe Dr | 33139 | (1.85%)
- Setai – 101 20 St | 33139 | 13.08%
- Waverly at South Beach – 1330 West Ave | 33139 | 12.23%
- Yacht Club at Portofino – 90 Alton Rd | 33139 | 12.04%
A few of the figures are a bit misleading. 1500 Ocean Drive, Il Villagio and Continuum have active listings that are priced at over $15M. These listings skewed the overall average price per square foot for units listed in those buildings which in turn through off the sold-to-listed percentages.
That concludes the South Beach condo index for July 2007. Next week I’ll return with another look at the condos in Brickell. It’ll be interesting to see how things have changed in a month’s time.
Flashback to 1983
Yesterday I was given the link to an interesting news article that was published in The New York Times on March 21, 1983 entitled, “Auctioneer’s Gavel Finally Moves Luxury Condominiums in Miami”. You can find that story below or by clicking the link above:
Three hundred people spent a sunny afternoon today in the shade of a big white tent listening to the patter of an auctioneer hawking luxury condominiums, many of which were sold at discounts of 30 to 45 cents on the dollar.
As the market for luxury condominiums remains soft, more developers are taking this route to dispose of their inventory to cut their losses.
About 60 units were sold for $125,000 to $190,000 in the first day of a four-day auction at Biscayne Cove, a luxury high-rise complex overlooking blue waters, nestled among other luxury dwellings in North Miami Beach.
“We decided to auction off and give the people a bargain,” said Morton Littlemen, a representative of the developers. “We want to give the people a condominium they can afford to own.”
One two-bedroom penthouse that was originally offered for $248,000 was sold for a high bid of $150,000. Condominium prices in the two-building complex range from $100,000 to $334,000.
Biscayne Cove is the fifth such auction that Martin Higgenbotham, an auctioneer, has handled in the last year for the developers, subsidiaries of Cadillac Fairview Corporation and Southeast Florida Properties. It is, Mr. Higgenbotham said, the largest single condominium auction in Florida: 225 units on the block at a value of $46 million. It is more than the total of 152 units sold at the other four complexes in Miami Beach and Hallandale.
The condominium auction business has been “heavy,” Mr. Higgenbotham said. In the last 12 months his company has sold about 1,000 condominiums at auction. Previously it handled 250 units in an average year.
The decision to auction the properties was not taken lightly, according to Lewis Goodkin, a real estate consultant whose firm conducted a marketing study for Biscayne Cove and recommended the auction for fast results. “The purpose is, let’s get out of this stuff and let’s get out of it fast,” he said. Normal advertising and deep discounting is “like a prolonged agony.”
Mr. Goodkin’s study concluded that, even under good conditions, it would take three years for the market to absorb existing inventory and that it did not pay for developers to hold onto the property. “We have in Miami today the most overbuilt luxury condominium market in the country,” Mr. Goodkin said.
He foresaw more auctions of this magnitude. “When the last recession hit us, we had a lot more inventory, but the inventory was more affordable,” he said. “A tremendous number of the public could respond. It could be absorbed. Today, our big invetory is in the luxury ranges where the market is not deep and you don’t have the response from the South American markets because their economy is weak or low.”
While the glut is most severe in Miami, it is not exclusive to this area, Mr. Goodkin said.
Is this the fate of the luxury condo units that will come to market in the next 12-24 months in Miami? 20,000! That is the number that has been thrown around for the number of new condo units that will close in 2007 and 2008. It is difficult to imagine that a supply of that magnitude can be absorbed in such a short period of time. It will be interesting to see what percentage of people walk away from deposits rather than close. If a significant portion walk then developers will likely be forced to take immediate action which could recall memories of 1983.
An Analytical Analysis of Analyzing Condominiums
People often ask me why I chose to focus on condominiums rather than single family homes when I began my career in real estate. I guess the answer is mainly attributable to my formal education and the work experience I gained after graduating college.
As mentioned in the About Me section of this site, I graduated from the University of Illinois at Champaign-Urbana with a Bachelor of Science Degree in Finance with a specialization in Investments. After graduation, I worked as an equity options trader on the floor of the Chicago Board of Options Exchange for four years.
It became second nature for me to begin to analogize most aspects of my life in investment terms. Condominiums to me had similar homogeneous characteristics as that of a financial security than single family homes.
In my opinion, it is much easier to analyze the true market value of a condominium than it is for a single family home. A price per square foot analysis of condo units in a building, and even a neighborhood, reveals more truth than the price per square foot analysis of single family homes on a particular street or in a particular neighborhood.
A 2 bedroom condo in a particular building, in many instances, will have the same characteristics of another 2 bedroom condo in that same building, such as shared common areas, amenities, year built, square footage, appliances, floor plan, maintenance fees, view, parking spaces and so on. Any differentiations in the aforementioned qualities can be easily adjusted in the value of the subject property versus comparable properties.
It is much more difficult to assess the value of a single family home. It is common to see a small, outdated home situated right down the street from a large, recently built home. Of course there are ways to appraise the values of each by making adjustments for any differentiations in each home but it just isn’t the same, in my mind. A home buyer may fall in love with one home while he or she finds the home right down the street an eyesore.
It becomes much more expensive to turn a home down the street into your dream home than it is to turn a condo down the hallway into your ideal abode. The expense of replacing or changing the floors, paint job, window treatments, light fixtures and other elements of a condo can more easily be ascertained.
These thoughts guided me into the decision of choosing to specialize in condominiums over single family homes when I began my career in real estate. As the housing bubble talk began to escalate a few years ago, I began to think of how nice it would be conceive a way to hedge real estate investments for the average home purchaser or investor in case of a bubble-popping scenario.
I guess fellow Chicagoans at the Chicago Mercantile Exchange had similar thoughts. They created a tradable home market index based upon the Case-Shiller Home Price Index, which measures home prices based on recorded changes in home values and a repeat sales methodology.
The futures and options instruments that were enacted by the CME began trading in May of 2006. The purpose was to offer jittery homeowners a way to hedge the investment in their homes against future price declines. The CME also saw a large interest from investors to directly participate in the much-talked-about housing market.
While being a giant leap in the right direction, the CME’s housing index is far from perfect. They introduced tradable securities based upon large metropolitan areas which include the following: Miami, Chicago, Boston, Las Vegas, Los Angeles, New York, San Diego, San Francisco, Denver, Washington, as well as a weighted composite index.
However, it is difficult to adequately hedge the value of a condo in a building such as The Setai in South Beach from a condo in a boutique building in Hialeah using their index.
I have decided to create my own, localized, index. This index will be based upon market data derived from major condo buildings in Miami. I will create a graphical representation of a six-month price per square foot moving average using data of closed sales and a month-to-month price per square foot analysis of units currently on the market. I may include other relevant statistics in the future to provide more in-depth information relevant to the Miami condo market. I hope you guys trading the Miami housing index at the CME appreciate the information. I’d love to hear from you.
I plan to release an index update each week. At the outset, I will rotate Miami neighborhoods for a total of four neighborhoods (South Beach, Brickell, Arts & Design District and Miami Beach minus South Beach). In the future I plan to add Downtown Miami and Park West as its own index once the nearly constructed buildings in those areas are fully built.
I’ve decided to name my index the “Miami Condo Index”, or MCI for short. Obviously my index won’t be tradable as is the Chicago Mercantile Exchange’s housing index, but I hope that it will provide more insight to localized housing markets throughout Miami’s major neighborhoods.
The Miami Condo Index will launch next week with an in-depth look at Brickell.
I urge other Realtors throughout the country to create their own localized housing indices to fully encompass their own markets and provide market transparency to home buyers like no other.
Welcome to the Miami Condo Investments Blog!
The Miami Condo Investments blog aims to be the authoritative source for all news relating to Miami and Miami Beach real estate, with a specific focus on condominiums and lofts. We will provide investors with the best information relating to Miami and Miami Beach real estate investment opportunities. Preconstruction, foreclosure, pre-foreclosure, and short sale opportunities will be especially highlighted throughout this blog. We will also discuss various condominium developments in Miami and Miami Beach along with condos and lofts for sale that are good buying opportunities and/or are worth mentioning as well as comment on news articles that are relevant to the real estate industry and specifically to the condo markets in Miami and Miami Beach, Florida. We look forward to providing you with the best insight into the condominium markets in Miami and Miami Beach, Florida.
