Earlier today, the South Florida Business Journal published an article entitled “Related Considering Fund to Buy-up Condos“. It reveals that Miami condo developer, Jorge Perez, is considering to create a fund to buy condos throughout Miami at a discount. The article states that a source disclosed that the funding would come from Latin America.
Much of the The Related Group’s condo inventory is located in Brickell and Downtown Miami. Jorge Perez, CEO of The Related Group, recently stated on NBC6 that his only regret is not buying more land around his first condo development, One Miami. While many condo developers in Miami are now regretting ever getting into the mix, Jorge Perez regrets not buying and developing more land.
As the article points out, I think there will be a [huge] conflict of interest if Jorge Perez’s fund acts to buy defaulted condos that arise at Related developments throughout Brickell and Downtown Miami. I don’t think the banks that loaned the money to The Related Group will find the situation too appealing. I, for one, would feel a bit suckered. Additionally, buyers who do close on condos in Related developments might feel a bit suckered as well if they later hear that the developer himself acted as a principal to buy defaulted condos at much lower prices.
There’s Never Been a Better Time to Throw a Party
Three years ago, it seemed like every week that there would be a party thrown to commemorate the launch of sales for a new pre-construction condominium project. The parties were grand – open bar, all-you-can-eat buffets, firework shows, flamingos walking around, synchronized swimmers, half-naked cocktail servers, the finest wines, talking parrots – you name it and it was there.
Nowadays, it seems like hardly any developers want to throw a party and I personally think that this is the best time to throw a party. Three years ago, parties were thrown because it was expected (even though people would have signed contracts regardless if there was a party or not). These people signed contracts based on developer reputation, architectural renderings, and merely because the market was hot! It’s no secret that the market has cooled considerably since that time.
Why not stand behind your development and launch a party to show the public that you’re delivering a great product? Get potential buyers inside the building and let them reminisce about the party and how great your building is to other potential buyers. In my eyes, it sends a strong message to the consumer that you feel that you are delivering a great development to the public and that you are confident that they will feel the same way.
Even the best condo developments will have at least a 15% default rate in this market. Once this becomes a reality, why not hold a weekly open house to showcase your building and available units to the general public? I’ll even personally do it for you if you don’t have anyone on staff to do it.
The Related Group of Florida is the only developer that I know of that is throwing grand-opening parties for their developments. As I said before, this shows me that they stand behind their product. In fact, their latest development, Apogee South Beach, is having a grand-opening party on December 19. Unfortunately, I won’t be in town to catch the party, but the fact that they are having one shows me that they are confident that they will be delivering a spectacular product.
Plaza on Brickell – 1 Bedroom/1 Bath – $282,000
The above picture of the progress at Plaza on Brickell was taken this afternoon. The weather was just perfect today, as it has been for the past four days. 80 degrees, no humidity and clear skies! What more can you ask for in November?
Plaza on Brickell is scheduled to begin closings in January of 2008. I’m a fan of this development for two reasons: price and location. Well, actually three. I also like the commercial aspect of the development on the ground floor along Brickell Avenue. I’ve been told that these spaces have already been accounted for and that a few fantastic restaurants and cafes will open there. It will nicely compliment the shops and restaurants at Mary Brickell Village which are only a few short blocks away. City living is finally beginning to transform Miami.
Someone contacted me a few weeks ago who has a 1 bedroom/1 bath condo under contract at Plaza on Brickell. He went to contract on the unit the first day that sales began. The condo has 838 square feet of interior space and a 130 square foot balcony. The unit is located on the northwest corner of the 851 tower, which is the taller of the two towers, and is situated above the 20th floor. The floor plan of the available condo is below:
The contract holder of this condo at Plaza on Brickell is looking to sell it for $282,000, or $337 per square foot. Units at Plaza on Brickell come move-in ready. Contact me with any questions or if you have an interest in acquiring this condo.
A Picture & Video Tour of 50 Biscayne in Downtown Miami
I had walked into 50 Biscayne a few times prior to today but didn’t have my camcorder on me each time. I wanted to share with everyone what a great job The Related Group of Florida did with this development so I decided to go back to 50 Biscayne today with the objective of sharing some pictures and video of the common areas with my readers.
Today, I was able to get shots of the lobby, swimming pool deck, fitness center and views to the east from the 10th floor pool deck at 50 Biscayne.
Below you will find a picture slideshow of each at 50 Biscayne:
The following will show you the video that I shot today of the lobby, swimming pool deck, fitness center and views to the east at 50 Biscayne:
I took a peak into the two club rooms but each was locked so I wasn’t able to shoot either of those. Both looked very well decorated, however, from the peaks I got through the doors of each. The valet drop-off area was also very impressive, with a cascading water feature along the wall. I forgot to get shots of the business center at 50 Biscayne located on the main floor.
Of the 529 total condos at 50 Biscayne, I’ve been able to find 33 recorded closings. There can be a 2-3 week delay in recording a closing. Hundreds more are likely to follow in the coming months. Closings began October 1, 2007. I’m expecting about an 18.7 percent default rate at 50 Biscayne. That’s just my estimation, however. Take it for what you want. Enjoy!
A contract holder of a condo unit at Trump Tower I, who got in at an excellent price via the “Friends and Family Discount,” contacted me last week to help him find a replacement buyer. He has a contract on a 2 bedroom + den/3 bath condo with 1,938 square feet of interior space and a 227 square foot balcony (C-Mod). The unit faces northeast and will have gorgeous direct views of the Atlantic Ocean from the living room, kitchen and both bedrooms. In order to remain partially anonymous to the developer, let’s just say that the unit is located on a high floor above the 25th floor.
Trump Tower I, II and III is a luxury beachfront development located in Sunny Isles Beach that was headed up by Dezer Development and The Related Group of Florida, with the world-renowned “Trump” name tagged to the development. Each tower rises 45 stories with 271 spacious residences which offer private elevator foyers. The residences also offer the following:
Wolf and Sub-Zero appliances
Italian cabinetry with granite or marble countertops in kitchens and bathrooms
Designer kitchen and bathroom fixtures
Expansive balconies with glass and aluminum railings
Elegant smooth ceilings rising to 10′ or 11′ clear
Floor-to-ceilings windows
Trump Tower I, II and III will also offer world-class amenities and common areas which include the following:
Exquisitely appointed three-story lobby
24-hour security and concierge services
Elegant porte-cochere entrance with 24-hour valet services
Elevated, lushly landscaped oceanfront terrace with heated swimming pool, spa and pool attendants
250 feet of sugar-sand Atlantic Ocean frontage
Beachfront cabanas
State-of-the-art fitness center and resident’s health spa
Multi-purpose clubroom
Mail and package receiving desk
Three levels of covered and secured garage parking
The contract holder who contacted me is looking to break-even on his purchase by offering this condo to an end-user for $1M, or $516 per square foot. That’s one helluva well-priced beachfront condo! Closings are scheduled to begin in December of this year but will likely be pushed back until the first quarter or first half of 2008.
Jorge of the Jungle
A few months ago I wrote a post entitled, “Advice to Miami Condo Sellers“. It was a highly read piece because of the inventory figures that were provided. I highly recommend that you read it if you recently discovered this blog and are curious about the developments that are scheduled to close within the next two years in Miami.
Of the 6,951 condos scheduled to be delivered within the next 17 months in Brickell, the new inventory represented by The Related Group of Florida roughly amounts to 50 percent. Matt Allen, chief operating officer and executive VP of The Related Group, indicated in yesterday’s Miami Herald article about the Platinum Condominium auction that The Related Group would never resort to utilizing the auction system to sell defaulted condo units.
This statement is neither inaccurate nor misleading for a number of reasons:
The Related Group is known to leave money on the table for investors. Their preconstruction prices are, for the most part, well below those that were offered at comparable developments in the area. Some developers sell their preconstruction inventory in batches, with each subsequent group of condos sold at a higher price per square foot than the preceding batch. The Related Group, however, sells out in one day and moves on to their next development.
The Related Group is a highly reputable developer. Reputation goes a long way in this business. Many investors made a lot of money by investing in developments that were tagged with The Related Group name. Thereafter, investors blindly endorsed deposit checks to them for preconstruction condo units solely based on their reputation. Their reputation would be highly damaged if they ever sold their unsold inventory via an auction.
The Related Group is well connected. They will never utilize the auction system because they have strong ties to the investment community. George can make one to two phone calls and have the excess inventory from his developments disappear at much higher prices than what can be obtained through the auction system. As Matt Allen stated in the Miami Herald article, “When you have an auction, the bottom feeders come out”.
My high school pitching coach taught me that pitching is just like real estate. It’s all about location, location, location. The Related Group has an uncanny knack of choosing the best locations upon which to develop.
It is inevitable that even a developer as highly regarded as The Related Group will have a high number of defaults. However, their excess inventory will likely be swallowed by investment groups looking to buy at a discount. It will happen so fast that the public won’t know about it until months after.
Opportunity to Own a 1 Bedroom in Tower 2 of the Luxurious Icon Brickell
A few days ago I received an email from a gentleman who holds a preconstruction contract for a 1 bedroom in Tower 2 of Icon Brickell. He prefers not to close on the unit and wanted me to find out if there’s any interest in his unit from someone looking to acquire a condo at Icon Brickell. Even though the market has slowed, I still think there will be interest due to the reputation that the “Icon” brand has created. The “Icon” brand has become synonymous with ultra-luxury living and the Icon Brickell development will be one of the finest in all of Brickell.
The gentleman was originally supposed to receive a contract for a 1 bedroom in Tower 1 of Icon Brickell but due to high demand that tower quickly sold out. The developer, The Related Group, did however give him a 1 bedroom in Tower 2 at the same price that he was promised a 1 bedroom unit in Tower 1. It is a G floor plan with 984 square feet of interior space and a 137 square foot terrace. The unit is located on a high floor above the 30th.
His price per square foot of $486 is pretty amazing given that units in that same line sold for slightly over $750 per square foot. I spoke with a sales representative at Icon Brickell today to get a feel for how pricing will be once resales begin. She notified me that The Related Group has no plans to launch a resale program for Icon Brickell. I asked her why and she said that resale programs are only launched for their projects when they feel that the market can absorb it. She continued to add that because the market is currently soft they don’t feel that this is the case at this time. Icon Brickell has been sold out of one bedroom units in Towers 1 and 2 for quite some time. I asked her if she could remember what a G line unit was selling for before they sold out. She told me that there was a G line unit on the 46th floor that sold for $750,000.
The gentleman who contacted me is looking to resell his 1 bedroom at Icon Brickell. His asking price is $599,000. A simultaneous closing would need to be done since the developer is not allowing contracts to be assigned at this time. Icon Brickell is scheduled to begin closings towards the end of 2008. If you or someone you know has an interest in acquiring this unit, please drop me an email or give me a call.
Check out the picture slideshow below for more renderings of the Icon Brickell project:
Icon Brickell – 2 Bedroom+Den/2 Bath Becomes Available
Word came to me today that an early contract holder at Icon Brickell has passed away and his contract is up for grabs. The contract has passed from his estate to the developer and The Related Group has it back on the market at the initial price offered when it was purchased in mid-2005. Icon Brickell sold out relatively fast in 2005 and availability is now limited to the condo-hotel units in the Viceroy tower. The Related Group is the most successful developer in Florida and has the reputation of selling out their buildings within the first week. They are known to price their units very well and to leave profit on the table for purchasers rather than squeeze every last penny out of a project. They price their units slightly below market, sell out and then move onto the next project. Great business plan, and it has worked quite well for them.
The condo unit that just came back on the market is unit 2703, located in tower one of the Icon Brickell development. It is floor plan B, which has a southeast view. The picture below will give you an idea of the view that you would have.
It is a 2 bedroom plus den/2 bath with 1,503 square feet of living space and has a 219 square foot balcony. It is priced at $916,000, or $607 per square foot.
Icon Brickell is the second development with the Icon name attached. Icon South Beach was the first and is one of the most well known buildings in South Beach. Icon Brickell is sure to be as spectacular as its South Beach counterpart. The picture slideshow below will show you some renderings of the building and amenities.
