A guy named Evan left a comment on this blog and dropped me an email over the weekend. He bought a 1 bedroom/1 bath (D floor plan) with 962 square feet of interior space and a 204 square foot balcony on the eighth floor at Cynergi. He went into contract on his unit in June of 2005 and is looking to find a buyer to take over his contract. The price that he locked into was $380,000 but he is willing to accept $360,000 to get out. His unit comes with a $10,000 upgrade package, a full granite backsplash, washer/dryer and one parking space. The following are the prices that the sales agent working for the Cynergi developer quoted him in March 2007 for other D units in the building:
2nd floor – $425,000
3rd floor – $430,000
6th floor – $450,000
7th floor – $460,000
8th floor – $470,000
My reaction was holy crap! Those are unrealistic prices! I dug through some of the old price lists that I still have for Cynergi to see what those units were listed for a year or two ago. I used to get regular pricing updates emailed to me by a few of the sales agents who worked for Cynergi. I found a price list dated February 6, 2006. It has D units priced from $395,000 (2nd floor) to $425,000 (8th floor). Looks like Evan did get in pretty early. I still think that the prices are high even at $360,000 but I figured that I would post his situation on here in case someone knows somebody out there who is looking to buy a unit at Cynergi. Maybe they can help each other out.
Also, I’ve heard rumors that the developer of Cynergi is thinking about downgrading the kitchens and bathrooms on the remaining unsold units to cut back on costs. Does anybody out there know if there is any truth to this? It makes sense to me since it will be nearly impossible for them to sell those one bedroom units priced in the $400K’s.
The picture slideshow below will show you the floor plan for a D unit. It will also show you the kitchen and bathroom as they should be delivered to contract holders. I took these pictures a while ago when the model showroom still existed.
If anyone else out there is looking to get out of their contract to purchase a Miami preconstruction condo before they close, feel free to send me an email or drop a comment describing your scenario. Later this week I’ll discuss 10 condo units that are up for grabs at Midtown 4 They were purchased by an investment group when sales first launched. The group is looking to sell the condos for exactly what they paid. I will post that story once I get all the details from a member of the investment group that I met this past weekend.
Update: Evan has reduced the price of his one bedroom unit at Cynergi to $345,000. He will consider all offers.
Ten Museum Park – More Opportunities as Closing Dates Approach
I met with a sales rep today who works for Ten Museum Park to go over pricing and availability for a few out-of-state clients who are interested in buying a condo unit there. I took in a lot of good information during my 30 minute meeting and want to share it with everyone. Ten Museum Park has received its TCO (temporary certificate of occupancy) and closings for units on the first 35 floors will begin shortly. I learned that the developer will grant one extension to people scheduled to close. Then, a letter will be sent out notifying the contract holder of a firm closing date. They will be charged for each day that they are unable to close at an 18 percent APR.
There are a lot of great deals currently available at Ten Museum Park. People holding contracts for condo units in the building were required to put down a total of 20% in deposit money. The first 10% was payable in January 2004. The second 10% was due in December 2004 when the building broke ground. Many of those people are currently looking for a purchaser to step in and close for them. In many cases they are willing to sell their unit at a price point that would allow them to break even or accept a small loss. This is an opportunity to get in at January 2004 pricing. The developer charges the contract holder a transfer fee of 3.75 percent and a co-broker fee of 3 percent. Most contract holders have factored in this cost to compute their break-even point. The worksheet below will show some of the deals that are available. The majority of these deals do not appear in the MLS. The data used to create this spreadsheet was provided by a sales agent working for Ten Museum Park.
The best deal in the building right now is unit 1607. As the worksheet reveals, it has a price per square foot of $363. That is remarkable for a building of this caliber!
Ten Museum Park is located in a Downtown Miami neighborhood now known as Park West. Besides Ten Museum Park, Park West will have three additions to the neighborhood in the next 12 months. These include the following:
There are a few things that I love about Ten Museum Park. One, is that it only has 200 units. I definitely wouldn’t call it a boutique building but it isn’t a monster development either. Two, the price per square foot is much lower than in these other buildings. The building was able to launch sales and begin construction in 2004, prior to when construction costs began to escalate. These other developments weren’t as fortunate and had to price their units in accordance with the higher construction costs that needed to be taken into consideration. I also love the open floor plans at Ten Museum Park. If you’re a fan of lofts then you’ll appreciate the layouts of the units at Ten Museum Park.
I learned today that when the real estate market was red hot, a few of the “04” units sold as high as $1.3M during resales. Those people are pretty screwed. Fortunately, the lender, Mellon Financial Corporation, only allowed the unit to be resold a maximum of one time. It may seem logical for some of these buyers to walk away from their deposits seeing that comparable units are now on the market at a 38% discount to what they paid. If one of the resale buyers walks away from their deposit then the initial buyer is on the hook to close. I learned, however, that if this scenario were to occur, the 20% deposit forfeited by the second buyer would be applied to the initial purchase price of the first buyer. That is a pretty sweet deal! An instant 20 percent in equity just like that.
I’ve scheduled to have a tour of Ten Museum Park late next week. I’ll be sure to take lots of pictures and shoot as much video as I can. I’m looking forward to seeing the penthouse unit with the 1,298 square foot rooftop terrace and vitality pool.
Neo Vertika – Living in a War Zone (pictures)
If the building, Neo Vertika, were a stock, I’d be selling it short all day long! This is a follow-up to a previous entry that I wrote on May 21, 2007 entitled, “Shoddy Construction at Neo Vertika?“. Now, there is no question about it.
When I wrote that piece, I had heard about all kinds of problems from residents including three major water leakages, the sprinkler system needing to be replaced in the entire building and each individual unit, and the air conditioning system being unusually loud. I didn’t realize just how bad it was until today. A client of mine, who is renting a Penthouse unit at Neo Vertika, sent me some pictures of the present condition of his condo unit. He began his lease at the very end of April and still has not been able to move his belongings into the unit. It goes without saying that he is looking to break his lease and get his money back. After seeing the following pictures I don’t blame him one bit. Work to replace the sprinkler system in his unit began last week, and he was told that it would take a total of 2-3 weeks. This is occurring in each and every condo unit in the entire building! Neo Vertika is not even one year old yet.
Imagine how high the cost of insurance will be for the building after all the work has been completed. I’m predicting that within the next six months, the association will increase maintenance fees and/or declare a special assessment. If that happens, which I feel is inevitable, prices at Neo Vertika will surely continue to head south.
When the Levee Breaks – Miami Condo Market Springs a Leak
The famous song, “When the Levee Breaks”, was originally written by Kansas Joe McCoy and Memphis Minnie in 1929, then re-worked and re-released by Led Zepplin in 1971. It was a song that focused on the Great Mississippi Flood of 1927. Eighty years later Miami, Florida has a different kind of flood…a flood of new condominium units looking to wreak havoc on the Miami real estate market. Two new condo developments, Midtown 2 and Platinum Condominium, recently began closings. These are the most recent of 8,000+ condo units to come to market throughout Miami-Dade County in 2007.
The pictures below will show exterior shots of both developments. I will follow this post up with an in depth analysis of each building, complete with interior pictures and videos. Each entry will analyze the rental and sales markets for each building and provide my professional insight as to whether these buildings are priced accurately and if any good deals are available.
This may be the first of several leaks before the levee breaks and the Miami condo market becomes flooded as Opera Tower, Latitude on the River and Ten Museum Park are due to open within the next couple of months. The balance of 8,000+ units will close later in the year . I will leave you with an excerpt of the lyrics from the song “When the Levee Breaks”:
Cryin’ won’t help you, prayin’ won’t do you no good, Now, cryin’ won’t help you, prayin’ won’t do you no good, When the levee breaks, mama, you got to move.
Short-Sale @ Neo Vertika in Brickell
A short-sale at Neo Vertika just came 0nto my radar yesterday. It is a one bedroom flat with 638 square feet of living space. It has parquet wood floors and is currently tenant-occupied. This condo unit, located on the 10th floor, faces south and overlooks the swimming pool and amenity deck. At a list price of $260,000, it is currently the third best priced unit in the building, but still has room for a few more price reductions before it is snagged by an investor. The great thing about a short-sale is that you are dealing with a bank. Banks hate having bad loans on their books and risk having the property go to auction where they could lose a large portion of the outstanding loan. With foreclosures on the rise, banks have become more open to accepting significant discounts on properties so they can write off the bad debt and avoid foreclosure. It wouldn’t surprise me if this one goes for around $200,000.
The maintenance on this condo unit is $322 per month. I’m trying to find out how much the current tenant is paying but units of this size tend to get anywhere from $1,250 to $1,450 per month in rent. I am going to try to see this condo in the next couple of days to take some pictures and a quick video so I can post it for everyone to see.
Neo Vertika was built in 2006 and has a fabulous lobby and amenities. There have been some construction issues that have tainted the building in the past 6 months but it is currently one of the best priced buildings in Brickell for sales and rentals. It is located along the Miami River and southwest 1st Court. Many of the condo units at Neo Vertika offer great views of Biscayne Bay and the Miami River. Neo Vertika is considered a loft building, with both flat-level and split-level floor plans which have 10-foot and 20-foot ceilings, respectively.
The video below will show you the common areas and amenities at Neo Vertika.
I took a drive through the Performing Arts District today and noticed the progress being made on the development known as Filling Station Lofts. This will be the second loft development of The Intrepid Real Estate Company in Miami, and I, for one, am looking forward to it.
With the exception of a few overpriced units being left until the end of construction, Filling Station Lofts has been sold out for over a year. The Intrepid Real Estate Company, under the direction of developer Henry Harper, first brought the New-York-style industrial loft to Miami with their first development known as Parc Lofts, located catty-corner to the development site of Filling Station Lofts. The bold and unique marketing pieces of The Intrepid Real Estate Company caught people’s eyes over a year ago. This one, entitled “BubbleProof”, provided words of wisdom to those looking to purchase one of their loft units during a frenzied real estate market. Simply put, their message was that a person’s love for owning a unique space, such as a loft, should be the motivating factor behind making such a purchase, and not that person’s love for money, nor the expectation thereof.
The industrial loft concept is truly unique to Miami. I often get people from cities such as Chicago and New York who contact me looking for a large, raw, open space and the only building that comes to mind is Parc Lofts. They can’t understand how there aren’t other industrial loft buildings throughout Miami. Simply put…Miami didn’t undergo the Industrial Revolution like many of the major cities in the North. We, therefore, lack the large abandoned warehouses found in the North which were later converted into lofts. Miami has had to rely on developer’s, such as Henry Harper, to build these loft buildings from the ground up.
There are a few industrial-style loft buildings in South Beach, but none that offer the type of space like Parc Lofts. With loft sizes that reach a mind-boggling 5,436 square feet, Parc Lofts was built with SIZE in mind. Market forces have created a large premium built into those units at Parc Lofts with over 2,000 square feet. If someone needs a space of that size then Parc Lofts is the only building in Miami that can offer it. Zoned as a live/work building, there are many potential ways that a space of this size can be used. Most who own these units at Parc Lofts are fully aware of the premium that their units fetch. While the number of potential buyers out there for this type of size may be scarce, the number of lofts of this size in Miami is even scarcer.
This has been a blog topic that has been on the back of my mind for the past couple of months. I kept brushing it off as nothing more than residents griping out loud, but after delving deeper into the issues, I now realize that there are major questions to the quality of construction that was put into the development of Neo Vertika. Neo Vertika resides in the neighborhood of Miami known as Brickell, or West Brickell to some. It was completed in August of 2006 and has had nothing but problems since its inception. There have been three major water leakages, two of which resulted in entire floors being flooded; the building sprinkler system has needed replacement, requiring worker-access to each and every unit; and the air conditioning system is unusually loud. I have personally spoken to a few condo owners at Neo Vertika who received hefty insurance checks after having their units flooded, which had destroyed their recently laid hardwood floors. While these payments might be justifiable to the afflicted parties, they will inevitably be paid for by current and future condo owners of that building, either directly or indirectly. My guess is that a major increase in association fees is just around the corner for condo owners at Neo Vertika.
Prices at Neo Vertika have dipped in the last six months. The various problems with the building, such as the ones mentioned here, will likely pour salt in an open wound and make matters worse. I have also heard similiar construction complaints about the first Neo LLC development known as Neo Lofts. This makes me wonder how sound the other two developments currently under construction by Neo LLC, known as Wind and Cima, can be. Maybe Coastal Construction Group, the construction company used to build Neo Vertika, can get it right this time with Wind and Cima.
In other news at Neo Vertika, the pool-side bar is now complete. While Miami has the reputation of being a 24/7 party, this type of action is unheard of for a condo building in Miami. Prior to the installation of the pool-side bar, I have had several clients complain that the building has turned into a fraternity house. While this might be an ideal situation for some, most condo owners there will suffer. I’m guessing that the opening of the pool-side bar, and the money that will be made from it, is management’s answer to the ensuing insurance hike that will inevitably occur. Anything not tackled by the profit of the pool-side bar will eventually be passed along to condo owners in higher association fees.
At least the construction of the bar looks good. Take a look at the pictures above and the video below to see it for yourself. Cheers!
