Day & Night – Miami River Condos
Just wanted to share some day and night photos that I shot earlier today of various newly constructed condo buildings along the Miami River while showing some units at Brickell on the River North.
Daytime shot of Epic. Closings at Epic began in November 2008.
Nighttime shot of Epic:
Daytime shot of Wind. Closings at Wind began in February 2008 and has residents living there.
Daytime shot of The Ivy at Riverfront. Closing at The Ivy at Riverfront began in June 2008 and also has residents inhabiting the condo building.
Daytime shot of The Mint at Riverfront. As far as I know, The Mint at Riverfront has not obtained its certificate of occupancy yet. From the looks of the picture below, it appears that the pool deck has not been completed. Expect closings to begin within the next 2-4 months.
Daytime shot of The Mint at Riverfront, The Ivy at Riverfront and Wind.
Nighttime shot of The Mint at Riverfront, The Ivy at Riverfront and Wind.
The following is not a building located on the Miami River but I wanted to share this great shot that I took of the Bank of America building from the pool deck of Brickell on the River North.
Bulk Sale Opportunities Emerge in the Miami Condo Market
For the past couple of years, vultures have been circling the skies of Miami waiting for the right moment to swoop in for the kill. Their day of reckoning seems to have finally arrived. I am now familiar with over 30 condo developments in Miami and Miami Beach with units available to be purchased in bulk. The list consists of partial and entire condo developments, including a few with Section 8 potential. Ballpark prices for these bulk sale opportunities range from $3M-$60M.
Throughout much of 2008, there seemed to be a stalemate between developers and vulture funds about price. However, market conditions have worsened considerably within the past six months, due in large part to ever-tightening lending practices. Even for creditworthy individuals, it has become extremely difficult to obtain financing for condominiums in Miami. As a result of the new Fannie Mae guidelines, financing has become especially restrictive for condos in recently completed buildings. Lately, it has been individual buyers strapped with cash, for the most part, who have been the ones pecking away at the remaining inventory in these new condo developments. Facing the realities of the market, developers – and their lenders – have begun to turn to vulture funds as a quick, easy way to part with unclosed condos.
Recently, two major arms-length bulk sales have closed in Miami-Dade County: the 60-unit bulk sale in the Downtown Miami high-rise called Marina Blue and the 101-unit bulk sale at Harbour House, a beachfront condo-conversion located in Bal Harbour. Both deals closed in December 2008. The 60 units at Marina Blue sold for $200 per square foot while the 101 condos at Harbour House sold for approximately $277 per square foot.
There are some who negatively portray vulture funds as entities who feast upon the misery of others. Personally, I feel that vulture funds are a necessity to a real estate market such as Miami and do more good than harm. Bulks sales provide instantaneous feedback as to where the intermediate level of pricing resides for condos in the given development, as well as those in the surrounding area. Bulk sales also provide stability to a condo building which would otherwise have many uncertainties concerning its financial condition. One can assume that the vulture fund will have the capital resources to pay monthly homeowners association fees on time. It also has a vested interest to ensure that the condo development is well managed. The greatest benefit, however, is that thousands of unoccupied condos in Miami will be filled with residents much faster.
Most of the vulture funds that I’ve come into contact with over the past year have plans to buy condos in bulk, lease them over a period of 5-10 years and resell them for a profit on the back-end once market conditions have improved.
Please feel free to contact me if you have an interest in the bulk sale opportunities that are now available in Miami and Miami Beach. Investment packets complete with estimated operating budgets, a rental and sale market analysis, neighborhood demographics and projected cash flow statements are available to serious buyers for most of the bulk sale opportunities.
Can the Current Financial Crisis Be a Blessing in Disguise for Condo Contract Holders Scheduled to Close?
Last Friday, I had the pleasure of having lunch with Jared Beck and Elizabeth Lee Beck of the business litigation law firm, Beck & Lee. Jared Beck, who pens The Magic City Harvard Lawyer blog, raised an interesting question: Can contract holders of condos in Miami scheduled to close in the coming months use the current financial crisis and inability to acquire financing as a valid argument for nonperformance of their contractual obligation?
I know, I know…preconstruction condo contracts clearly state that performance is not contingent upon financing. However, a recent federal ruling in Hoosier Energy Rural Electric Cooperative, Inc. v. John Hancock Life Insurance Co., contains language that may assist condo contract holders who are scheduled to close in the near future.
Here’s some background on the federal case, as provided by Jared Beck’s recent blog post entitled, “Federal Court Endorses Financial Crisis As Basis For Relief From Pre-Existing Contractual Duties; Could Real Estate Contracts Be Affected?”:
The background is somewhat complex but essentially involves the owner of an electrical generating plant in Indiana, Hoosier Energy, which in 2002 entered into a complex lease-back arrangement over some of its assets with an insurance company, John Hancock, aimed at creating a tax shelter for John Hancock. As part of the deal, Hoosier Energy was required to obtain what amounted to a line of credit from Ambac, a financial institution called a “swap provider.”
Until 2008, Hoosier Energy made all of its scheduled payments under the agreement. Then, global financial crisis ensued, and the credit rating of Hoosier Energy’s swap provider sunk like a stone. Hoosier Energy was unable to find another swap provider with a suitable credit rating who could be substituted in a timely manner. John Hancock declared Hoosier Energy to be in default and demanded a large termination payment, shortly after which Hoosier Energy filed suit, requesting a protective injunction.
Mr. Beck went on to say in his blog post that “Hoosier Energy argued that the extraordinary freeze in the global credit markets at least partially excused it from performing under the contract as an instance of ‘commercial impracticability,’ mitigating the default declared by John Hancock”. The court agreed with Hoosier Energy’s argument.
Mr. Beck concluded his post with the following:
How could this newly articulated doctrine be more broadly applied? One possibility rests with the large number of individuals who signed preconstruction real estate contracts several years ago, with the intention of obtaining mortgage financing once the project was finished. Now that many of those projects have been or will soon be competed, those buyers are unable to close because, owing to the global credit crunch, banks will no longer extend mortgage financing for certain new real estate construction at 2004 or 2005 prices.
While many of these purchase contracts were drafted with clauses stating that they were not contingent upon the buyer qualifying for a mortgage, it could be argued, on the basis of the reasoning set forth in Hoosier Energy, that the deals were signed under both parties’ reasonable assumption that financing would actually be available from somewhere once construction was completed. To quote the Southern District of Indiana in Hoosier Energy, “The crisis was not anticipated by the most senior economists in the country.” If that is true, why should the defense of commercial impracticability, based on the lack of accessible credit, be any less available to the individual real estate buyer seeking to mitigate the effect of a pre-existing contract then it would be to an electrical generating plant operator dealing at arms length with a multibillion dollar insurer? (To some degree, the question overlaps the analysis of whether “bailout” principles should apply equally to financial institutions and individual homeowners, both of whom are victims of their own inability to foresee the mortgage crisis).
The newly revised Fannie Mae guidelines, which went into effect on January 15, state that the government-controlled entity will no longer fund loans for new Florida condos if at least 70 percent of the total units in the development have not be conveyed or under a bona fide contract for purchase to either principal residence or second home purchasers. Contract holders who require financing and are scheduled to close in coming months are basically out of luck. It’ll be interesting to see how the courts handle this argument in 2009.
Brickell on the River South Closeout Sale
I received an email earlier this week about a developer closeout sale at Brickell on the River South. Prices of units include flooring and paint. The sale will open to the public January 14, 2009.
The ad states that they have “a limited amount of one bedrooms from $180,000 and two bedrooms from $213,000”.
Bank Approved Short-Sale at Parc Lofts – $220,000
I have a short-sale listing at Parc Lofts that just received lender approval this evening. The list price has just been reduced to $220,000 from the previous asking price of $250,000. Unfortunately, the person who submitted an offer canceled recently because they felt that the short-sale process was taking too long.
The unit has 1,267 square feet of living space, 15-foot ceilings, acid stained concrete floors, stainless steel appliances, De La Casa cabinets, washer/dryer and balcony. Parc Lofts is one of the few industrial-style lofts in South Florida. It has become home to many of Miami’s artists, videographers, photographers and others desiring a unique space. Amenities at Parc Lofts include: swimming pool, hot tub, concierge and fitness center.
Contact me if you have any questions or would like to view this loft in person.
Miami & Miami Beach Condo Trends – October 2008
Below, you will find the Miami-Dade County condo inventory and months of supply figures for October 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of September 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been most affected. The % change box will show you how the inventory levels have changed since my last update in May 2008.
The overall supply of condos listed in the MLS in Miami-Dade County has dropped from 25,461 to 24,788 since May 2008. On the flip side, the number of closed sales in the previous month has gone up from 474 to 527 creating a 12.51 percent drop in the years of inventory in Miami-Dade County since the last update. It’s once again surprising that inventory levels have dropped despite the thousands of new condos that have been completed and delivered in 2008.
The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):
The supply of condos in the MLS in Miami has dropped from 10,281 to 9,903 since May 2008. The number of closed sales in the previous month has gone up from 161 to 192 creating a 19.21 percent drop in years of inventory in Miami since the last update. As you can see, a large portion of these closed sales occurred in the $0-$249,999 price range. The inventory levels of the $500,000+ categories, however, have increased.
The following statistics encompass only those condos located throughout Miami Beach:
The supply of condos in the MLS in Miami Beach has dropped from 4,109 to 3,949 since May 2008. However, the number of closed sales in the previous month has also dropped from 113 to 98 creating a 10.82 percent increase in years of inventory for condos in Miami Beach since the last update. In fact, with the exception of the $500,000-$999,999 price range, the years of inventory has risen for each category.
The Sub-$100K Brickell Condo Hits the Market
Prices have continued to fall hard at Vue at Brickell for quite some time. It’s incredible to think that in May 2007 when I wrote the post entitled, “Vue at Brickell – Overpriced or Insanely Overpriced“, the average price per square foot of condos listed in the building was over $550!
Yesterday evening, a 1 bedroom foreclosure at Vue at Brickell hit the market for $125 per square foot. With a list price of $99,900, it was the first one bedroom condo for sale in Brickell, built after 2000, to fall below the $100K mark.
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Miami World Center
I’ve been on vacation for the past week but I have kept up with the comments that have been left about the Arts District and Park West. While both sides of the argument have valid points, I tend to side with AJ more than the others. I don’t consider the Arts District or Park West dangerous. It may have some shady characters at night but which neighborhood in a large city doesn’t? When I lived in Chicago, I lived in a neighborhood called the Gold Coast for a few years. It was, and still is, one of the best neighborhoods in Chicago. A mile away, however, was the housing project called Cabrini Green which had the reputation for being one of the worst neighborhoods in the NATION!
Cabrini Green has since been relocated to another area. My point is that large cities take time to transition. Park West and the Arts District of Miami are in their early stages of transitioning. There are several proposed city improvements for these two neighborhoods that will transform them. One of these proposed improvements is the Miami World Center. Take a look at their website to view various renderings of what the area behind 900 Biscayne Bay, Ten Museum Park and Marina Blue will look like once this plan is implemented. Again, it will take some time, however. The Miami World Center plan will probably not become a realization for another 5-7 years but when it does it will provide the infrastructure that is much needed in that area. My bet is that Edgewater and Park West will be among the best neighborhoods to live in about 10 years.
Update: The Mall at Miami Worldcenter is scheduled to break ground by the end of 2014. Reservations for condos at Paramount Miami Worldcenter will start on November 18, 2014.
900 Biscayne Bay Penthouse Condo – $1.9M
For the second time, I had the opportunity to view one of the penthouse condos at 900 Biscayne Bay. The building has five floors of penthouses, located from floors 59 to 63. The view in the picture above was taken from a penthouse condo located on the 60th floor at 900 Biscayne Bay.
The condo I saw was an “A” line penthouse that has 3 bedrooms, a den and 4.5 bathrooms with 3,493 square feet of interior space and an amazing 1,225 square feet of balcony space!!! The condo is located on the southern corner of 900 Biscayne Bay and offers 180-degree views to the west, south, and east.
The condo has a private elevator that opens to a private foyer. As you walk through the double doors you are greeted to a very spacious living room with views of Biscayne Bay, the Atlantic Ocean, the Miami Beach and Downtown Miami skylines and much more.
Another look at the spacious living room of this penthouse condo at 900 Biscayne Bay.
The penthouse kitchens at 900 Biscayne Bay have custom Italian cabinetry, stone countertops and high-end stainless steel appliances by Sub-Zero, Miele, and Bosch. The penthouse condos also include a cappuccino maker, mini-fridge, and wine cooler.
The breakfast area off the kitchen of this penthouse condo at 900 Biscayne Bay offers a gorgeous view to the west.
Here’s a look at just how deep some of the balconies are in the penthouse condos. This one is located off the kitchen and living room.
The master bathroom in the penthouse condos at 900 Biscayne Bay all come equipped with a Jacuzzi tub.
Here’s a look at the shower located in the master bath of the penthouse condos.
The view to the south from one of the balconies off the living room provides a spectacular view of Downtown Miami.
Condos For Sale at 900 Biscayne Bay
Condos For Rent at 900 Biscayne Bay
