Miami Condo Index – Brickell – June 2007

Last week I mentioned that I was planning to create a Miami Condo Index to provide pricing insight to homebuyers in various neighborhoods in Miami and Miami Beach. This week I decided to kick things off with Brickell.

It was difficult to come up with a final list of buildings that should be included in the Brickell index. For example, is Neo Vertika in Brickell or should it be in a different category like West Brickell? Is One Miami part of downtown or should it be grouped with Brickell buildings? After much thought, I decided to include both. There simply aren’t enough buildings of interest in West Brickell or downtown to necessitate a separate neighborhood index for West Brickell and downtown. Eventually, One Miami will be grouped with downtown buildings as more developments are completed north of the Miami River. Another question remained as to whether buildings in Brickell Key should be grouped with buildings in Brickell to create a Brickell/Brickell Key index or should a separate index be created for each? I decided on the latter.

Earlier today, I finished crunching the numbers and evaluated my findings. Much of it was quite shocking. I took 18 prominent buildings in Brickell and created two separate spreadsheets. The first spreadsheet calculated the average price per square foot of units currently listed in the 18 buildings in Brickell. The second calculated the average price per square foot of units that have sold in those 18 buildings in the past six months. I also weighted each building according to how many units they had when compared to the sum of the units of all 18 buildings. This helped to arrive at a more accurate representation of the typical Brickell condo.

First I’m going to show you the average price per square foot of the units currently listed on the market:

• Atlantis on Brickell – 2025 Brickell Ave | 33129 | $337.58
• Brickell on the River North – 31 SE 5 St | 33131 | $461.23
• Bristol Tower – 2127 Brickell Ave | 33129 | $488.09
• Emerald at Brickell – 218 SE 14 St | 33131 | $528.19
• Four Seasons Residences – 1425 Brickell Ave | 33131 | $911.38
• Imperial at Brickell – 1627 Brickell Ave | 33129 | $390.89
• Jade at Brickell – 1331 Brickell Bay Dr | 33131 | $869.51
• Neo Vertika – 690 SW 1 Ct | 33130 | $409.13
• One Miami -325 & 335 S Biscayne Blvd | 33131 | $471.98
• Sail on Brickell – 170 SE 14 St | 33131 | $488.42
• Santa Maria – 1643 Brickell Ave | 33129 | $768.63
• Skyline on Brickell – 2101 Brickell Ave | 33129 | $496.20
• Solaris at Brickell – 186 SE 12 Ter | 33131 | $506.38
• The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | $657.19
• The Mark on Brickell – 1155 Brickelly Bay Dr | 33131 | $520.88
• The Palace – 1541 Brickell Ave | 33129 | $385.93
• Villa Regina – 1581 Brickell Ave | 33129 | $410.56
• Vue at Brickell – 1250 S Miami Ave | 33131 | $550.82

Some of those averages shocked the hell out of me. How can condo units at The Club at Brickell Bay have an average list price of over $650 per square foot? (I’ve heard reports of mortgage fraud in that building as well as at Jade and Vue at Brickell.) The average price per square foot for condos currently listed in Brickell using these 18 buildings came out to $536.28. The weight-adjusted average came out to $547.06. The Club at Brickell Bay, with 642 total units, skewed the weight-adjusted average higher than the regular average.

Next we’ll take a look at the average price per square foot in these buildings based on closed sales. Keep in mind that this is the average price per square foot. Condos that have a better view or are on a higher floor than the average condo in the building will obviously have a higher price per square foot. These figures were equally shocking.

• Atlantis – 2025 Brickell Ave | 33129 | $335.12
• Brickell on the River – 31 SE 5 St | 33131 | $411.79
• Bristol Tower – 2127 Brickell Ave | 33129 | $417.82
• Emerald at Brickell – 218 SE 14 St | 33131 | $519.72
• Four Seasons Residences – 1425 Brickell Ave | 33131 | $763.51
• Imperial at Brickell – 1627 Brickell Ave | 33129 | $319.56
• Jade – 1331 Brickell Bay Dr | 33131 | $668.23
• Neo Vertika – 690 SW 1 Ct | 33130 | $383.23
• One Miami -325 & 335 S Biscayne Blvd | 33131 | $458.56
• Sail on Brickell – 170 SE 14 St | 33131 | $335.05
• Santa Maria – 1643 Brickell Ave | 33129 | $606.44
• Skyline on Brickell – 2101 Brickell Ave | 33129 | $471.39
• Solaris at Brickell – 186 SE 12 Ter | 33131 | $436.21
• The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | $634.15
• The Mark on Brickell – 1155 Brickelly Bay Dr | 33131 | $506.81
• The Palace – 1541 Brickell Ave | 33129 | $350.88
• Villa Regina – 1581 Brickell Ave | 33129 | $316.62
• Vue at Brickell – 1250 S Miami Ave | 33131 | $556.59

Condo units at The Club at Brickell Bay had a higher average price per square foot than condos at Santa Maria when looking at closed sales. I had to double check my work once I saw that, but everything checked out.

I tried to eliminate any data that was irregular. For example, in the past six months Pharrell Williams purchased developer Ugo Colombo’s Penthouse unit at Bristol Tower for $13,950,000, or over $1,500 per square foot. I discarded it because it was deemed irregular.

The average price per square foot for these 18 buildings, based on closed sales, came out to $471.76. The weight-adjusted average came out to $495.13.

Using both data sets I also wanted to figure out how overpriced listings are in Brickell when compared to what they actually sell for, on average. I also was curious to find out which buildings were the most overpriced. Here is the data below:

• Atlantis – 2025 Brickell Ave | 33129 | 0.73%
• Brickell on the River – 31 SE 5 St | 33131 | 12.01%
• Bristol Tower – 2127 Brickell Ave | 33129 | 16.82%
• Emerald at Brickell – 218 SE 14 St | 33131 | 1.63%
• Four Seasons Residences – 1425 Brickell Ave | 33131 | 19.37%
• Imperial at Brickell – 1627 Brickell Ave | 33129 | 22.32%
• Jade – 1331 Brickell Bay Dr | 33131 | 30.12%
• Neo Vertika – 690 SW 1 Ct | 33130 | 6.76%
• One Miami -325 & 335 S Biscayne Blvd | 33131 | 2.93%
• Sail on Brickell – 170 SE 14 St | 33131 | 45.78%
• Santa Maria – 1643 Brickell Ave | 33129 | 26.74%
• Skyline on Brickell – 2101 Brickell Ave | 33129 | 5.26%
• Solaris at Brickell – 186 SE 12 Ter | 33131 | 16.09%
• The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | 3.63%
• The Mark on Brickell – 1155 Brickelly Bay Dr | 33131 | 2.78%
• The Palace – 1541 Brickell Ave | 33129 | 9.99%
• Villa Regina – 1581 Brickell Ave | 33129 | 29.67%
• Vue at Brickell – 1250 S Miami Ave | 33131 | -1.04%

On average, condo units at The Sail on Brickell have a list price that is 45.78% higher than the average sales price of units sold in the past six months. Either owners of units in that building have unrealistic expectations or agents conducting business there have not provided their clients with an accurate comparable market analysis.

On average, Brickell condo listings were priced 13.98% over the average sales price of units sold in the past six months in these 18 buildings. When using a weighted average, the typical Brickell condo is overpriced by 10.48%. The weighted average is lower because most of the large differences occur in smaller buildings such as The Sail on Brickell.

Keep in mind that statistical data is never perfect. It grows more accurate as additional data is incorporated. The same holds true for a major league baseball player. The first five at-bats in his major league career won’t dictate how the rest of his major league career will fair. The Miami Condo Index will shed more light as time goes on and patterns and trends begin to emerge in the data.

In the next two weeks I will reveal the findings for Brickell Key and South Beach. I will follow-up each neighborhood index report with a post highlighting any fantastic deals that I come across in the buildings covered.

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.

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.

Shoddy Construction at Neo Vertika?

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!

Neo Vertika condos for sale
Neo Vertika rentals