The priciest new listing to hit the market is a four-bedroom, five-bathroom single-family home at 240 Harbor Drive in Key Biscayne that’s listed for $8.8 million, according to Condo Vultures. The home, which was built in 1995, has ocean and city views and three levels of living space. Brigitte Nachtigall of Great Properties International has the listing. (Data includes condos and single-family listings in the main metropolitan areas of Miami, Fort Lauderdale, and West Palm Beach, as well as Monroe County that are newly listed. Listings are taken from the South Florida MLS.) — Alexander Britell
The city of Coral Gables and the Biltmore hotel have reached a deal in principle in which the hotel would repay much of its overdue rent and golf fees, according to the Miami Herald. The hotel is owned by the city, and the row over delinquent rent has lasted since 2009. As part of the plan, the hotel’s operator, Seaway, would resume paying rent to the city, with base rent at about $800,000 per month, and it would also pay back about $650,000 in unpaid golf management fees. Seaway has argued that the city should reinvest much of the money it receives in rent, but that has continued to prove an issue between the two sides.
The Florida Retail Federation has come out against proposed casino resorts in Florida, arguing that retailers would lose sales growth in areas where the new casinos would exist, according to the South Florida Business Journal. The organization’s board, whose members include Walmart, Disney and the Seminole Tribe’s Hard Rock International, said casino resorts tend to “cannibalize” existing activity, according to research. “Florida has a healthy and vibrant retail economy that is driven by residents and visitors alike,” said Retail Federation President and CEO Rick McAllister. “We don’t believe new resort casinos will help our state’s retail economy grow.”
Summer was hardly a vacation for those in the business of selling Miami real estate.
“I didn’t go to St. Tropez because of this,” says developer Gil Dezer, whose Sunny Isles Beach condo projects include the 384-unit Trump Royale and the three-building, 813-unit Trump Towers.
Dezer reports that he sold more than $100 million in Trump units during June, July and August ($50 million alone in August, including a $29 million, 34-unit bulk deal). He’s closed more than $1 billion in Trump condos overall and has only about 75 units left.
Recent Trump sales have been priced at about $525 per square foot. That’s significantly less than the $1,000-per-square-foot contracts buyers walked away from in 2009 after the financial crisis hit, but Dezer, who’s paid off the construction loans for all four buildings, seems satisfied. (Donald Trump participated in a ceremonial Trump Royale mortgage-burning ritual, lighting the document on fire himself, in January.)
The downturn “made the job challenging,” Dezer says. “Every day was a battle. But when you’re winning, it’s fun.”
Winning could also be used to describe the situation at Icon Brickell. That nearly 1,800-unit downtown colossus, built by the Related Group with designs by Philippe Starck, seemed to be in peril not long ago, and two of its three towers were deeded back to its lenders in May 2010. But Icon Brickell’s now nearly sold out, with more than 1,500 units closing for a total of more than $700 million. When you factor in units in contract, only about 30 condos remain.
“I think the market has consumed the inventory in a much more rapid way than I and probably everybody thought,” says Related Group chairman and CEO Jorge Perez, who adds that most buyers have been foreign. “The Latin American economy has been strong.”
“The forecast was that we would sell all the units in three years at an average price of $350 per square foot,” says Edgardo Defortuna, president of Fortune International Realty, which started selling Icon Brickell in June 2010.
Less than a year and half later, Fortune is almost done and seeing prices at about $400 per square foot.
Demand has been so strong that Perez is now building another downtown development. The 192-unit MyBrickell is a couple years away from completion, but Related’s received “over 60 reservations” for condos before officially launching sales. Unlike Icon Brickell, MyBrickell isn’t on the water, and Perez is “passing on the cheaper construction costs and the deal we got on the land” to offer units, with interiors by Karim Rashid, for about $300 per square foot.
Defortuna, meanwhile, is now selling downtown’s Paramount Bay, a 346-unit building resurrected out of foreclosure by owners iStar Residential and ST Residential. Musician Lenny Kravitz’s Kravitz Design firm is working on the building, where prices are about $400 per square foot.
South Beach, with significantly pricier properties, is seeing lots of action, too.
“The summer was uncharacteristically busy,” says Vanessa Grout, president of Douglas Elliman Florida, which has three South Beach offices. “We certainly didn’t take a vacation.”
According to Douglas Elliman’s latest Miami market report, South Beach condos sold for an average of $515 per square foot during the third quarter. But this factors in distressed properties, including units bought out of foreclosure.
At the market’s top end, the W South Beach Hotel & Residences has closed about $260 million in condos at an average of $1,700-plus per square foot, developer David Edelstein says. The W sold more than $50 million during the summer.
“One penthouse went for $7.7 million, north of $3,000 per square foot,” Edelstein says.
As with much of Miami, foreign buyers have been key at the W. (Douglas Elliman translated its market report into Spanish and Portuguese to spur international interest.) From May through September, about 65 percent of Edelstein’s purchasers were foreign, and about half of those were from Brazil.
The allure of the W has helped nearby condo buildings lure in buyers, including those from New York.
Fashion designer Irina Shabayeva, who won season six of “Project Runway,” owns a one-bedroom with a balcony at the 52-unit Boulan South Beach development just south of the W, but on the other side of Collins Avenue.
“I like the Boulan because it was so new, really fresh and modern,” says Shabayeva, who primarily lives in the East Village. “And it’s across the street from the beach and the W.”
Shabayeva says she enjoys the New Yorker-friendly amenities at the W, which include a Warren Tricomi salon and a Mr. Chow restaurant. And Edelstein says that the Dutch, an outpost of Andrew Carmellini’s SoHo restaurant, will open in the W by Thanksgiving.
Boulan, which has sold 22 condos and has one-bedrooms on the market for upward of $600 per square foot, is busy filling its own retail spaces, as well. An art gallery should open in time for December’s Art Basel festival. A Mexican/Asian fusion restaurant and a nightclub are also in the works.
Neighborhoods all over Miami are getting big residential and retail makeovers. The 56-acre Midtown Miami development’s second phase, which will start next year, will include a boutique hotel, a movie theater and 100,000 square feet of retail.
“We’ll definitely have a fashion component,” says developer Jack Cayre.
And the nearby Design District is getting a Louis Vuitton store.
“There was probably a point in time here someone said, ‘What’s Chelsea?’ or ‘What’s Meatpacking?’ — and eventually, they became a place because New York was ready to have another place,” says Greg Masin, senior director at commercial real estate firm Cushman & Wakefield. “When we look at the Design District and at Midtown, what we see is the evolution of the next place in Miami.”
Plus, the downtown Metropolitan Miami development’s third phase will include rental apartments and a Whole Foods Market. Plans for downtown’s eight-block Miami Worldcenter site include residences, restaurants and retailers. And the Genting Group, an Asian casino operator, has unveiled plans for its $3.8 billion Resorts World Miami mixed-use complex. But the scope of the latter two projects will depend on approval for casino gaming, something that’s the object of much speculation and uncertainty all over Miami.
Dezer says he has been talking to major Las Vegas casino operators about land he owns in Sunny Isles (13 1/2 acres on the beach and 6 1/2 acres “directly across the street that hits the intracoastal waterway”) that could accommodate a gaming resort with more than 2,000 rooms and 3 million square feet.
“They’re both good real estate,” Masin says of the Genting and Dezer sites. “If they both had a casino, they’d both be successful.”
Whatever happens, Dezer has options.
“We originally bought [the land] to build condos,” he says. “We could build five condo buildings.”
That idea would have seemed ridiculous in 2009, but now it’s more plausible.
Defortuna has sold out the 256-unit Jade Beach condo building in Sunny Isles Beach and has just three apartments left (for about $700 per square foot) at its 252-unit Jade Ocean sister property.
“In terms of quality inventory, oceanfront,” he says, “you can make a strong argument that you need to start building now.”
Wynwood has been picking up steam lately in its process of rejuvination. In the past two months it picked up two hip coffee houses, Panther Coffee, located at 2390 NW second ave, and Lester’s, located at 2519 NW 2nd Ave. Most people from Midtown or Edgewater can check them out during the highly popular Wynwood Art Walks but it will likely take some time before business is booming at these locations but eventually it will if the owners have the patience.
One recent important development in the area is that the new Charlie’s Angels TV series will set up home-base right in the heart of Wynwood. We already have seen some movies such as The Rock of Love being shot there as well as many other artistic endeavors but the fact that there will be a running TV show the caliber of Charlies Angels will have a much bigger impact on the local economy. If anything, the chance to spot some hot celeb’s at these coffee houses might bring some more attention to these currently low-key establishments.
The residential areas immediately around the NW 2nd Ave epicenter of Wynwood are still in bad shape and I have not seen much construction activity that would indicate immediate change is on the horizon. However, I can see that this continue improvement of this unique retail strip can create the type of fascinating embryo that will attract residential developers immediately next to it and then spread onward. The buzz is still going strong.
There has not been much commercial real estate activity on the selling side. I believe because many real estate owners are either underwater on their mortgages and the banks are not moving much to write off commercial loans just yet to allow for significant numbers of short sales, and also because owners see what is happening in the area and would not want to sell at depressed prices if they don’t have to. There is certainly upside potential but anyone that needs to sell now would have to contend with the reality of the market today.
Home remodeling is big these days, even in a sour economy. Or maybe because of it.
The BuildFax Remodeling Index released this week showed that August had the highest amount of remodeling since the index started in 2004, and it was the 22nd consecutive month with an increase.
BuildFax estimates that more than 3.3 million home remodeling projects in the U.S. will be completed this year. The company, based in Texas, says it tracks construction records on millions of properties from cities and counties nationwide.
“As mortgage rates hit record lows, it is apparent that millions of Americans are refinancing their homes and using some of their new monthly savings to reinvest in their homes with remodeling projects,” Joe Emison, a vice president at BuildFax, said in a statement.
Presumably, remodeling also is popular in places such as South Florida where people can’t sell their homes because their mortgages are “underwater.”
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South Florida home sales bounced upward in August, with the Miami-Dade condo market seeing the largest year-over-year gains, according to a report released Wednesday by the Florida Association of Realtors. There were 1,311 existing condo sales in Miami-Dade in August, up 51 percent from the same month last year and up 18 percent from July. Sales surged in the single-family market as well, as 951 homes traded hands, up 49 percent from last year and up 9 percent from July. In Broward, year-over-year condo sales rose 21 percent to 1,398 and single-family sales were up 19 percent to 1,185. Median prices also showed positive signs. Prices for Miami-Dade condos jumped 13 percent to $118,800, while single-family prices dipped 1 percent to $180,900. In Broward, median prices rose 6 percent to $79,500 for condos, and were up 5 percent to $191,800 for single-family homes.
What if the 30-year mortgage rate fell below 4% and few people cared?
We may not have to wonder much longer. The average 30-year mortgage dropped to 3.94% for the week ending Wednesday, according to Freddie Mac’s weekly rate survey released on Thursday.
Reflecting both tight credit standards and anemic demand, applications for mortgages actually fell last week, according to a separate report from the Mortgage Bankers Association on Wednesday. The MBA said overall mortgage application volume was down by a seasonally adjusted 4.3% from the prior week.
Many borrowers can’t refinance today because they don’t have enough equity or they can’t qualify under lending standards that are far tougher than when they initially obtained their mortgages.
Rates also haven’t fallen as much as might be expected, given recent drops in banks’ borrowing costs, because banks are short-staffed. To manage volumes, they’ll sometimes raise the spreads between their borrowing costs and the rates that are offered to consumers.
Refinance applications were down by 5.2% from the prior week, while home-purchase apps were down by 0.8%, according to the MBA.
More troubling for the housing market is the fact that home-purchase applications were down 12% from one year ago—a signal that worries about the economy and potential home price declines are keeping borrowers on the fence, even though mortgage rates have probably never been this low.
Freddie Mac says the rates are the lowest since its survey began in 1971, and academic research suggests that rates for 30-year mortgages were as low as 4%—but not any lower—under a loan program for war veterans in the mid-1940s. Eric Rosengren, president of the Federal Reserve Bank of Boston, spoke to the problem facing policy makers’ inability to help consumers benefit from low rates in a speech last week in Sweden. Falling home prices “have disrupted the transmission of monetary policy,” he said, resulting in “a situation where the availability of credit is more important in many cases than the cost of credit.”
Low rates could give more urgency to a recent push by the White House to fix an administration effort that allows homeowners to refinance their mortgages if they owe more than their loans are worth. The program is open to borrowers with loans backed by Fannie Mae and Freddie Mac.
“Clearly getting more money into the hands of homeowners who would spend it could help to fuel GDP growth,” said Mr. Rosengren.
Miami’s first new condo high-rise since the housing bust is set to begin construction next spring, developer Newgard Development Group announced Monday.
Called Brickell House, the $170 million project is part of a new wave of condo towers planned for downtown Miami, which saw development grind to a halt after the building frenzy that lasted from 2003 to 2008.
“Almost all of the [outstanding] inventory that we had has been absorbed in the last 18 months,” said Harvey Hernandez, managing partner and chairman of Newgard Group. “It could not be a better moment for us to launch a project.”
The 46-story tower is slated to have 374 residences, ranging from one bedrooms to penthouses. Specs include a rooftop sky deck, pool on the 46th floor and an automated robotic parking garage.
Buyers in large part will be charged with paying for the construction of the glossy tower under a financing model that will require purchasers to pay 70 percent of the asking price before construction is completed. That financing model — which is also being used for new condos recently pitched by Related Group — is more common in Latin America, where Brickell House will be heavily marketed. Prices start around $200,000.
“Let’s be realistic. The majority of buyers in Miami come from outside of the country,” Hernandez said. “Our buyers here, nobody has 70 percent. Nobody can afford that.”
Hernandez said he believes the housing market will have substantially rebounded by the time the project opens, with strong international demand and a more vibrant downtown.
Peter Zalewski, of Bal Harbour-based CondoVultures, said he’s not so sure. He said sales of new downtown condos have begun to slow down, and supply is set to increase dramatically as a slew of new projects begins to come online.
“There are too many [projects] that are suddenly all popping up at the same time,” he said. “At least from a promotional perspective, it’s starting to look like 2005 and 2006 again.”
Additionally, a condo tower called Villa Magna is approved to open on a nearby plot with more direct water views than the land-locked Brickell House site, potentially providing stiff competition.
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