Miami developers launch three condo projects in one day (1)

Miami developers launch three condo projects in one day (1)

Jan 23, 2014 January 23, 2014

Marc Sarnoff played his part quickly Wednesday morning, shoveling some dirt on the ground of a Brickell Avenue construction site for a ceremonial groundbreaking. He didn’t linger after the photo op; there was another shovel awaiting him at another condo tower groundbreaking in just 25 minutes. And one more after lunch.

“We’ve never had a three-groundbreaking day in the history of Miami,’’ said Sarnoff, a Miami city commissioner. “I’ve done two, but never three.”

The back-to-back-to-back ceremonies within four hours and four miles of each other on Miami’s Brickell Avenue and in Edgewater offered fodder for both camps in Miami’s latest real estate divide.

On the one side, those who see a familiar pattern of over-confident developers rushing to create new condo towers in an over-heated market fueled by Latin American investors. On the other side, those who see more proof of a rebounding market so strong that it can launch three projects at once, thanks in part to a new finance model borne of the rubble from the last boom-and-bust cycle.

“It’s a much more serious buyer from Latin America. We never hear the word flip,’’ said Craig Studnicky, a founder of ISG, a brokerage that specialized in lining up Latin American investors during the housing boom of the last decade. “The conversations are not about, ‘Can I resell the unit, and how much can I sell it for when I resell it? It’s all about the rentability.’”

For sure, the real estate landscape hardly compares to the conditions buyers, sellers and financiers faced during the housing boom that ran from about 2003 to 2006 before a crash that hit bottom in 2011.

While banks then were eager to sell mortgages to buyers of modest means, financing is much harder to come by now. Then, a pre-sale condo contract required a 20 percent deposit; now the standard requirement is 50 percent.

The current crop of about 25,000 announced South Florida condo units east of I-95 are less than half of the roughly 50,000 built during the last boom, according to figures tracked by cranespotters.com and condovultures.com. This boom also lacks a wave of apartments being converted into condos like there was in the run up to the crash.

Still, the broad brushes of the last real estate boom are visible in this one, too. Developers are mostly chasing Latin American investors to sell condo contracts, and those investors don’t plan to live in their units. Prices once again are surging by double digits, and spiking almost as quickly as they did during the last boom. The frenzy has been strong enough to spark warnings about over-building and speculation, even as developers again point to the confidence that comes with strong pre-sales.

“There’s no question a gathering cloud is the number of projects that are planned,’’ said David Dabby, a real estate consultant in Coral Gables. “Whoever gets projects completed first in any cycle tends to win. It’s the ones completed somewhere between the second and fourth rounds that run into trouble.”

Jack McCabe, a Deerfield Beach consultant and one of the first to spot the pricing bubble before the crash, said he’s not nearly as concerned this time. “I don’t think we’re faced with the the same over-supply,’’ he said. But McCabe also cautioned against putting too much faith in the large deposits. “If prices get bolstered up high, and then prices drop... there’s a good chance they’ll walk away from those deposits just as the speculators did in the last decade.”

Wednesday’s streak of ceremonial shoveling (involving 25 shovels in all) began at 10 a.m. at the future of home The Bond, a 328-unit condo tower wedged between two existing buildings on the 1000 block of Brickell Avenue. Developer Alan Ojeda said about 70 percent of the units were already under contract, and that Latin Americans account for 80 percent of the sold units. Prices start at about $400,000 for the smallest units and run close to $2 million for the penthouse.

Those buyers agreed to pay 50 percent of the purchase price in advance, allowing Ojeda’s Rilea Group to start building without a construction loan. The advance payments have let developers circumvent a tight credit market by using their buyers’ cash to get a project going and then approaching banks for the final payments to contractors. “Other projects started looking for a construction loan when they were paving the 14th floor,’’ Ojeda said.

Ojeda’s staff delayed the start of the ceremony by about 30 minutes while waiting for dignitaries to arrive, which caused some watch-glancing from attendees planning to hit the next groundbreaking at 11.

“I’m going to try for three,’’ said Sonja Bogensperger, head of business development for Miami’s Downtown Development Authority. “I think it’s awesome.”

Around 11:30 a.m., Bogensperger was on a vacant waterfront lot on Edgewater’s NE 27th Street to watch Sarnoff and Miami Mayor Tomas Regalado congratulate developers Stephan Gietl and Fernando Levy Hara for launching their 90-unit condo project, The Crimson.

“This shows Miami has already come back,’’ Regalado said of the repeat ground breakings. “It’s not that Miami is coming back.”

Roughly three hours later, Regalado had circled back to downtown, about two blocks away from the day’s intial ceremony. This time, he was the guest of honor at a ground breaking by the Related Group, the Miami development firm at the center of the prior decade’s over-heated market.

Related Group CEO Jorge Pérez said Florida lends itself to boom and bust cycles, but he said the company learned lessons from the crash. He said the 453-unit SLS Brickell is almost completely sold out, with buyers agreeing to pay 50 percent of the purchase price before construction workers finish the top floor of the 52-story building.

“We are trying to reduce the chance,” he said, “that there will be a bust like the last time.”

Source: miamiherald.com

Contact Sep Niakan
Founder, Condoblackbook.com & Owner/Broker, HB Roswell Realty
(786) 930-4220
contact@condoblackbook.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Recent Posts

The average Miami Preconstruction Condo buyer lost 14% in resales through Q3 2019
Real Estate News The average Miami Preconstruction Condo buyer lost 14% in resales through Q3 2019
This year, CondoBlackBook.com again teamed up with HB Roswell Realty to analyze the latest new construction resale data across Miami. We tracked new condo units built between 2017 and 2019 in Miami’s urban core and beach areas that have since been sold by the original owner in the first three quarters of 2019. What we found builds upon last year’s report and is surprising—most sellers lost money. On average, Miami new construction condo resales lost around 13.9% when factoring in costs (1.7% at purchase and 6.8% at sale).*  This follows our analysis conducted over the same period last year in which we found sellers lost 11% on average. Our team analyzed 116 new construction resales in Greater Downtown Miami, Coconut Grove, Miami Beaches and the surrounding islands (except Fisher Island and Key Biscayne) that closed in 2019 and found that 40 broke even or made a profit, while 76 resales lost money—nearly 65% of the owners in our study (compared to a similar figure of 63% in last...
Coral Gables and Coconut Grove Luxury Condo Market Report -- Q3 2019
Real Estate News Coral Gables and Coconut Grove Luxury Condo Market Report -- Q3 2019
The latest from CondoBlackBook.com’s Q3 2019 report for luxury condos in Miami shows some slight shifts from the previous quarter -- while overall sales and the median sales price increased, the median price per square foot dropped and a sustained inventory surplus means we’re still in a buyer’s market. This report breaks down how the combined Coral Gables and Coconut Grove fared in the third quarter. For the purpose of this luxury condo market report, we’ve only featured properties priced $1 million and above. Coral Gables and Coconut Grove Luxury Condo Market Q3 2019 Highlights: Sales slightly short of last year’s outstanding performance Positive sales trendline, showing sustained market momentum Price per sq. ft. is lower compared to Q3 2018 Overall inventory drops significantly Coral Gables and Coconut Grove Luxury Condo Market Summary - Fig. 1 Slight Slip in Overall Luxury Condo Sales YoY sales decline marginally, but are higher than 2017, 2016 and 2015 with positive...
Miami’s New and Pre-Construction Condo Update: October 2019
Real Estate News Miami’s New and Pre-Construction Condo Update: October 2019
Supertalls took over pre-construction news this Halloween month. The tallest in the city – Okan Tower won construction approvals. The fourth tallest in Miami, Brickell Flatiron celebrated its completion milestone. The Turnberry Ocean Club, one of the tallest on the Atlantic Coast, topped off. And, the tallest in Edgewater, Missoni Baia snagged a $243 million construction loan. Read on for details on these and other condo pre-construction updates for the month of October below:  Completed Brickell Flatiron - Brickell At 736 feet above ground, Brickell Flatiron now stands complete. It is the fourth tallest building in Miami, just behind Panorama Tower (868 feet above ground), Four Seasons (around 800 feet), and the Southeast Financial Center (764 feet). With closings beginning shortly, 95% of the tower is already sold out. The 64-story skyscraper is home to 527 ultra-luxury condo residences, offering high-end amenities such as a sky pool with lounge, rooftop gym and spa, urban...
Miami Beach Luxury Condo Market Report Q3 2019
Real Estate News Miami Beach Luxury Condo Market Report Q3 2019
In our overall Miami luxury condo market report for Q3 2019, we saw an increase in sales, a decline in median prices, and heavy inventory keeping things in favor of the buyer. This report breaks down how the neighborhoods in Miami Beach and the barrier islands reacted over the quarter individually, as well as against the market as a whole. For the purpose of this report, we’ve included the sub-neighborhoods of South Beach, Mid-Beach, Sunny Isles Beach, Surfside, and Bal Harbour as part of this Miami Beach grouping. Also, this luxury condo market report only features properties priced $1 million and above. Miami Beach Market at a Glance Miami Beach Luxury Condo Market Q3 2019 Highlights: Miami Beach sales almost match Q3 2018 Sales trendline positive for all neighborhoods Year-over-year sales improve in South Beach, Surfside & Bal Harbour  Miami Beach price per sq. ft. is same as Q3 last year Surfside & Bal Harbour report highest jump in quarter-over-quarter...
The Most Luxurious Condo Buildings in Coconut Grove
Real Estate News The Most Luxurious Condo Buildings in Coconut Grove
Coconut Grove is not just about rich foliage, but is also home to quite a few luxury condo residences. To get a taste of this historic neighborhood plus its plush properties, we’ve enlisted the 5 Most Expensive Condo Buildings in Coconut Grove and bonus pre-constructions that set the bar high for phenomenal living in the city. Why Choose Coconut Grove? Coconut Grove Main Highway. Photo courtesy of MiamiAndBeaches.com The partly coastal neighborhood of Coconut Grove is characterized by lush, tropical foliage and a relaxed Bohemian vibe. Its bouquet of rare boutiques, unique shops, colorful cafés, diverse restaurants, historical venues, lush parks, and easy access to water sports plus a nautical lifestyle make it a breezy neighborhood to live in. The Best of the Best Condos in Coconut Grove  Ritz-Carlton Coconut Grove – 3300, 3340, 3350 and 3400 SW 27th Avenue, Coconut Grove Avg. sales price $624 per sq ftBacked by the world-famous hospitality brand, this waterfront...
The Most Luxurious Condo Buildings in Brickell
Real Estate News The Most Luxurious Condo Buildings in Brickell
The Most Luxurious Condo Buildings in Brickell Brickell is where the business is – so it doesn’t come as a huge surprise that the neighborhood would house some of the finest residences to cater to a wide array of residents, spanning from globetrotting professionals to business moguls plus their families. Curious about the kind of high-end residences available for such global citizens? We’ve ranked the 5 most expensive, thus luxurious, condo buildings in Brickell below: Why Choose Brickell? Brickell is not only the second-largest banking hub in the States, but also home to several consulates, businesses and a majority of the offices in Miami. It is also serviced by all major public transportation systems in the city, giving it one of the highest transit scores of 98. It further ranks second on our most walkable neighborhoods in Miami study, with a near-perfect walkscore of 98, meaning most hotspots and conveniences can easily be reached on foot. In recent times, this financial...