The Inside Scoop On The Ongoing Drama At Quantum On The Bay
A building that was once known for its sweeping bay views and convenient location is quickly becoming known for its incessant drama and infighting, and there are no signs of a slow down at Quantum on the Bay. In a letter to residents of the South Tower, Sue Nelson (the new South Tower board president), details her grievances with the way the building has been run and we have to admit that she has a point.
Two years ago, as a new member of the South Tower condo board, Sue was reviewing the “2014 Actual Expenses” spreadsheet and noticed two line items that seemed “off.”
1 – Water Expenses: While $1,000 was budgeted for the year, the actual amount paid was $13,480! After further investigation, it was discovered that the overage was for bottled water for the management office. That works out to over $1,000/month for bottled water, that’s a lot of water!
2 – Housekeeping Coverage: While the management company has 10 housekeepers on payroll for Quantum, whose salary expenses are passed to the owners of the building, there was still a $26,000 charge for “Housekeeping Coverage.” This was a fee that was paid to a separate housekeeping company to provide additional housekeepers on an “on-call” basis at a higher hourly rate than the full-time staff earns. To complicate matters further, it appears that the housekeeping company in question is owned by the partner of the former North Tower condo board president, who was in office at the time of the expense.
In an effort to remedy this double expense, Nelson proposes to outsource all of the housekeeping department to one company. According to an estimate she received, this would save the owners upwards of $100,000 per year, while providing better equipment.
Communication
As we saw in last month’s spat, the board members are also displeased with the Master Board’s insistence that they remain the sole source of communication between the boards and the residents. The South Tower Board has now regained the ability to send messages directly to its residents, but from what I understand, the North Tower has not.
Condition of the Building
Once everything is settled, the owners would ultimately like to see the building maintained more efficiently. They shared photos of the valet area, that once had shrubs and greenery in the planters along the entry, but are now filled with cement and rocks. The tiles are chipped and the ones that were replaced were not replaced by tiles of the same color, leaving a mix and match look as the first impression when visitors arrive at the building. They feel it looks cheap, and they are right.
Do you think the building owners and the Master Board will be able to settle their differences without (another) lawsuit?
Get Your Popcorn! Drama Is Going Down At Quantum on the Bay
There’s a battle brewing at Edgewater’s Quantum on the Bay, and the weapon of choice is the elevator bulletin. Apparently, the owners of units in the South tower saw that the sales prices in the building have gone down drastically, farther than competing buildings in the neighborhood and they are not impressed one bit.
Many feel that the condo association should take better care of the building. A better maintained building will better hold its value. That makes sense, right? Well, not to the management office. The owners are demanding a recall of the management company for the Master Association. (There is a management team for each residential tower of the complex, and then a third management team for the common areas/retail space/amenities that are shared between the towers.) They demand a new management team be put into place that will take better care of the property… and they have a point. The building could really use a fresh coat of paint and a good shining up.
While most people agree, condo management offices are not known for being fun to deal with, but the management office at Quantum really is a piece of work. They’re currently being targeted in a class-action suit for price gouging applicants in an effort to beef up the bank accounts, and it appears they also don’t treat their owners well either as evidenced by the next elevator bulletin.
Aside from the building not being properly maintained, the ongoing legal drama has affected sales prices as well. The building threw a party for the owners and residents in May of last year to celebrate the big win of their construction defect claim against the developer and we were hopeful that mortgages would be more attainable for prospective buyers. Just six months later in November, the class action suit began, making mortgages unattainable once more.
In my opinion, the legal drama hurts values even more than the need for paint, so they need to get their acts together one way or another. In the meantime, I’ll continue reading the elevator bulletins using my best Bruce Buffer voice.
Market Stat Monday: Quantum on the Bay
After the positive reviews of my Miami Riverfront Market Statistics article last week and similar feedback to previous market stat posts, I’ve decided to try something new and make it a regular thing. Monday is now Market Stat Monday on the Miami Condos Blog. Each week, I’ll take a look at a different neighborhood, area, or a building. If you have a building or area that you would like to see featured, just let me know. I’m happy to do it and enjoy digging in the numbers.
One of our social media followers suggested that I take a look at what’s going on in Quantum on the Bay. I haven’t written about Quantum in awhile, so agree that it a good place to start. For those who don’t know, Quantum on the Bay was developed by Terra back in 2008. It is located across the street from Margaret Pace Park and is situated in a way that most every apartment has at least a partial bay view, but many have a big, open view of the bay. Because of the park, it used to be a very popular place for people with pets, but the condo association stopped allowing pets for tenants. Owners may have pets, but not tenants (unless you have a support animal). The building has 2 towers and 698 residences.
Despite the beautiful views and convenient location, Quantum has not been free from drama. They had to sue the developer in order to be repaid for the repair of some construction defects. They won that lawsuit and threw a party. The party was barely cleaned up before a tenant slapped the association with a lawsuit for price gouging on move-in fees. I was really wondering how long it was going to take for that to happen somewhere. Almost all of the buildings do it and the tenants always complain but nobody has gotten mad enough to actually sue over a few hundred dollars.
SALES MARKET
So, let’s see how the building is doing. There are currently 86 active sales listings in Quantum. That’s just over 12% of the building, which isn’t so bad. But with only 7 closed sales this year, that’s 43 months of inventory. On the bright side, the units that did sell received 96% of their asking price, so at least it’s not a bloodbath. There is just a lot of competition for buyers, who are more scarce.
The units that closed did so for an average of $357/square foot. The least expensive was a 1 bedroom on the 36th floor for $250,000. In an interesting turn of events, a 3 bedroom with 1,620 square feet sold for $535,000, less than a two bedroom with a direct bay view. The two bedroom sold for $540,000 on the 27th floor and another for $570,000 on the 39th floor. That’s interesting to see how a direct bay view does affect the price of an apartment more so than an additional bedroom. 1,620 square feet is really an enormous apartment in this area. There are 8 contracts waiting to close.
For the buyers who are still looking, there are studios available with partial bay views starting at $220,000, a one bedroom on the 40th floor with a partial bay view is offered starting at $257,000 and two bedrooms with partial bay views start at $380,000. Three bedrooms start at $524,000 or $350/square foot and there is a 3 bedroom penthouse available for $950,000. These prices are relatively the same as they were two years ago (when I last had an active buyer in the building). I’ll save the trends for a future post.
RENTAL MARKET
Just like at the Miami Riverfront, Quantum on the Bay’s rental market is also far healthier than the sales market. There have been 54 rentals this year so far at 98% of the asking price. The average price of a closed rental is $2.37/square foot. The individual prices were:
Studios: As low as $1,500/month.
One bedrooms: Starting at $1,675 for a 35th floor apartment with 663 square feet and a little bit of a water view.
Two bedrooms: There was one rental at $2,250 for a two bedroom, but I have a feeling this one is an outlier. The remarks said that the property had to be taken “as-is”, so I imagine it was either filthy, needed painting or had something else wrong with it. The next least expensive unit was 2711, which rented for $2,300/month with a partial bay view.
Three bedrooms: as low as $3,100/month.
There are 38 available rentals listed, so just under 3 months of inventory for tenants. There are 18 units that have a contract signed and are waiting for move-in day.
All in all, it looks like things are picking up for Quantum. I feel like that once the association straightens up and the lawsuit over their application fees settles, the sales market will pick up also. Litigation makes things very difficult for sellers, since most banks will not finance transactions in buildings with legal drama.
We’ll see you next week with another report! Which building or area should we dig into next week?
Tenant Sues Condo Association For Price Gouging On Application Fees
Quantum on the Bay
A tenant at Quantum on the Bay in the Omni district finally did something about the high application fees that are being charged to prospective tenants, according to the Miami Herald. He is suing them because their application fees are in excess of the $100 cap that the Florida statute issues.
This has been an ongoing problem for tenants in many of the Downtown area buildings for several years. Some condo associations use these elevated fees in order to avoid having to make a special assessment on the unit owners for repairs or upgrades. The association at Quantum once had a $400 application fee, but it was later reduced to $150 after so many potential tenants complained. In order to continue bringing the income that they once received from the application fees, they split it into the application fee plus the administrative fees. Some other buildings have ‘impact fees’ of $500, but Quantum is one of the highest priced buildings in the area for a tenant to apply for.
Even though it is not lawful for a building to charge these exorbitant fees to tenants, many still do. The tenants really have no choice but to accept the fees. Protesting only causes delay and added expenses. If they miss their move-in date, they would need to stay at a hotel until the issue is resolved and there is still no guarantee that it would be resolved in their favor without a lawsuit. The Government Affairs department of our Miami Association of Realtors has been lobbying in Tallahassee for some time already, trying to convince them to enforce the laws.
Now, most buildings also charge a security deposit for the common areas and for pets, but that is different. Security deposits are returned. We typically see a security deposit that is held through the duration of the lease in order to guarantee there will not be damage to the common areas, a smaller security deposit for the actual move to guarantee that the elevators and hallways are not damaged by the movers and/or a pet deposit to the building.
You can read more about the Florida Condominium Act here, so that you know your rights. While it seems that Quantum is being singled out, this is a large problem throughout the marketplace and something that we are striving to change. On a day to day basis, the best we can do is see that our clients get settled as peacefully and efficiently as possible. On a larger scale, we are very much a part of the efforts from the Miami Association of Realtors to bring change to this practice.
Quantum on the Bay Celebrates Settlement with Terra Group for Faulty Construction, Throws a Party
Quantum on the Bay
According to a notice posted in their elevator, the Margaret Pace Park-fronting condominium tower Quantum on the Bay has reached a settlement with developer Terra Group over faulty construction, and to celebrate is throwing a party. Meanwhile, 900 Biscayne Bay, also built by Terra, has entered into similar litigation against the developer, and is still working their way through that. Both buildings were completed in 2008, as the Great Recession was setting in and the last real estate boom was crashing hard.
According to a nice chap in the management office at Quantum who identified himself as ‘David,’ the litigation was in regards to faulty construction on the building’s facade. When asked “So, what about the facade David? Balconies, windows?” David’s reply was “both of those.” Well, that’s scary. Anywho David wasn’t willing to spill the size of the elevator sign settlement, but it could be quite large considering the building is throwing a party for all of its residents, this Friday at 6:30 pm, with a champagne toast, to celebrate (open to building residents and any broker who RSVPs, which means it’s totally crashable). That’s developer money.
Quantum on the Bay Party
Dog Park Coming Soon to Margaret Pace Park
Every dog has its day…a day at the dog park that is! At least that could be the case for your furry, four-legged friends once the new dog park opens in Edgewater at Margaret Pace Park.
This morning, while out showing property in the neighborhood, I spotted heavy machinery clearing the land to a fenced-in portion of the park. So, with camera phone in tow, I ran over to investigate. To my delight, I discovered a sign hanging, which read: Pardon our mess! A new dog park for your furry friends is coming soon! The sign also included the logo for Easy Grass – a company which produces safe, artificial grass – leading me to assume that Easy Grass will be laid within the designated dog park area.
A dog park in Greater Downtown Miami is something that has been long overdue for residents and their dogs. No more trekking it to Coconut Grove or South Beach in order to allow your dogs ample space to run and play with their friends without fear of being ticketed by the po-po.
The designated area will be located directly parallel to 1800 Club and catty-corner from Quantum on the Bay. Ironically, both of those building are not pet-friendly for tenants. No word yet on when the designated dog area is scheduled to open, but my guess would be within the next 1-2 weeks.
The Arts District & Downtown Miami Closed Condo Sales – November 2009
Edgewater Miami Closed Condo Sales – November 2009 – There were 12 closed condo sales in the Edgewater Miami last month in the MLS. The average sales price of these condos was $177 per square foot.
Downtown Miami Closed Condo Sales – November 2009 – 18 condos in Downtown Miami closed in the MLS in November 2009. These sold at an average sales price per square foot of $318. It’s interesting to note that of the four neighborhoods in Miami, the condos in Downtown Miami sold at the highest price per square foot last month.
Fannie Mae Approved Condo Buildings in Florida
As of June 1, 2009, Fannie Mae updated their website to reflect the condo developments in Florida that are now approved for financing.
The following is a list of recent condo developments in South Florida that are now Fannie Mae approved:
View the full list of Fannie Mae approved condo developments in Florida.
New Miami Condos – Closing Rates for February 2009
It’s been a few months since my last Miami condo closing rate update. The percentage of closed units for 25 major condo developments are provided below, starting with the first development to begin closings. Four condo developments have been added: Icon Brickell, Everglades on the Bay, Infinity at Brickell and Epic. You’ll find these towards the bottom of this post.
Below, you will find the date that each condo development began closings followed by the number of closed units in each condo development:
With the exception of Onyx on the Bay and 50 Biscayne, the first group above has remained unchanged. Onyx on the Bay was able to close one additional condo while 50 Biscayne was able to close two.
Quantum on the Bay and Plaza on Brickell once again were able to show a decent improvement in their closing rate. Quantum on the Bay closed an additional 14 condos while Plaza on Brickell was able to close 21. 1800 Club did not have any new closings but I did find another deed that had been recorded twice. This is the reason why the total number of closed condos in this update is one less than the total stated in the December 2008 post for 1800 Club. It needs just 7 more closed condos to hit the all-important 70 percent mark.
As a result of the 60-unit bulk sale, Marina Blue showed the most improvement of the above five condo developments since the last update. I did, however, find re-recorded deeds for Marina Blue that I had previously missed. The developer of Marina Blue has now closed around 82% of the total number of units.
In my opinion, the five condo developments above are all likely candidates for some sort of bulk deal taking place in the future. Met 1 was able to close 7 additional units, Asia 2, 900 Biscayne Bay 13, 500 Brickell 17 and Axis 8. As a result of the new Fannie Mae guidelines, it is not likely that we’ll see significant improvement in any of the condo developments that haven’t thus far reached the 70 percent mark.
Above, you’ll find the four newly added condo developments which began closings within the past 3 months. Timing could not have been worse for these four. They’re going to need to find a plethora of cash buyers who are willing to pay dated prices. Ivy at Riverfront, which began closings back in June 2008, was able to close 14 additional condos since the December 2008 update.
The bright side is that the condo construction cranes of Miami are gone. The cranes that remain are for commercial developments. Marquis and Paramount Bay, which should begin closings within the next 3 months, will be the last of the newly constructed condos to hit the market in Miami. It does appear, however, that Met 3 has begun to lay its foundation. Hopefully, the condo market will reach some sort of equilibrium by the time that development has been completed.
Disclaimer: The above closing rate information was derived from public County records. There can be a 2-3 week delay from the time that a closing occurs and the time that the closing is recorded. The information above is not deemed 100 percent accurate as a result of delays in the recording of deeds and deeds being re-recorded.
100 Condos Under Contract at Quantum on the Bay to Israeli Investment Group
Yesterday, a rumor was circulating that 100 condos recently went under contract at Quantum on the Bay to an investment group from Israel in a bulk sale transaction. I was able to confirm today, from multiple sources, that the rumor is true. However, everyone is keeping quiet in regards to the details involved in the bulk sale transaction. It will be interesting to learn the price per square foot that the 100 condos sell for at Quantum on the Bay once the details are revealed.
(hat tip to Kevin at South Beach Real Estate Blog for the lead on the story)
