High-End High Times
Updated 21 hours ago
This South Beach condo recently sold for $25 million. In just the first six months of the year, 400 condos priced at $1 million or more sold.
Is Miami-Dade County already experiencing another condo boom — this time strictly in the luxury market?
During the first half of the year, some 400 condos worth at least $1 million each sold in just the resale market alone, according to CondoVultures.com.
That’s up 7.8% from the same time last year. Even more remarkably, the median per-square-foot price hit $699. Prices in the luxury market haven’t been near that number since 2007.
Eye-catching individual deals have accented the luxury boom, including the recent $25-million sale of a condo on South Beach and three sales of more than $10 million at the St. Regis Bal Harbour Residences.
Many buyers are foreign — from Latin America, Russia and Europe. For most, the units are investment properties or second homes.
“If I’m an investor, I can buy a new unit that was built during the boom … for a cheaper price than new construction,” says Peter Zalewski, principal of CondoVultures.com. He notes that there are 10 condo towers already under construction east of I-95 from Miami to northern Palm Beach County. Developers have proposed another 35, including one in South Beach with prices at about $1,500 per square foot.
Cash is king, too. Although Zalewski doesn’t have updated statistics, he says that a year ago, a CondoVultures study found some 80% of the condo transactions in the county were all cash. Plus, he notes, “there’s typically about a 15% to 20% premium that someone is likely to pay if their offer is based on financing.”
January-June Luxury Condo Resales (Miami-Dade)
|Year||Units Sold||% Change||Median Price Per Sq. Ft.||% Change|
Northeast, Latin American buyers drive 55 condo sales at Canyon Ranch in 2012
March 12, 2012 12:00PM
Canyon Ranch Living
Miami Beach’s Canyon Ranch Living has closed on 55 properties in 2012, following a total of 150 sales in 2011. About 90 percent of those residents are from the Northeast and Latin America, according to Michael Sadov, real estate sales director at the 580-unit property. The central and south towers at the property have sold out, along with half of the units at Canyon Ranch’s North Tower. “There are not that many new residences remaining in the North Tower,” he said. Last year, a wave of Canadian buyers contributed in large part to sales at the property. — Alexander Britell
No vacancy in Miami’s condo canyon
The latest report card on downtown Miami’s condo market shows almost all of the units built during the housing boom are full. That’s thanks to renters, who would be priced out if not for all of the cash purchase deals.
BY DOUGLAS HANKS
Miami’s infamous condo canyon is almost full, thanks largely to a steady flow of cash from Latin America.
The latest survey of downtown high-rises built during the housing boom shows more than 90 percent of the condos are occupied. After Latin American investors snapped up condos at distressed prices amid a wave of bankrupt high-rises, they turned to local renters to fill them. Four years into the buying spree, vacant units have almost disappeared.
“I always encourage my clients to bring their checkbook for the first month’s rent,’’ said Lauren Popham, an agent with Jeanne Baker Realty who specializes in rental units. “There is a lot more demand than there is supply.”
The study by Miami’s Downtown Development Authority found 93 percent of the nearly 23,000 condominiums built in downtown Miami after 2002 are occupied. Of that, only about a third are occupied by full-time by owners, with the majority serving as rental apartments.
Behind the statistics are a fundamental shift in real estate math allowing for downtown Miami to become one of South Florida’s hottest rental markets.
The boom prices, where top condos were selling for $600 or more a square foot, would require rents too pricey for all but the most affluent residents. Instead, investors who bought then hoped to flip their units for even more money to future buyers.
Even at the sharply discounted $200-a-foot purchase prices in the depths of the housing bust, many of the condos would be too expensive to generate enough rent to cover association fees and mortgages on the units, said Craig Werley, of Focus Real Estate Advisors and author of the DDA study. But with the vast majority of investors paying cash for their downtown condos, they require far less rental revenue each month to make the deals “pencil out” as reasonable investments, Werley said.
“Traditional financing wouldn’t have made these rentals viable,’’ said Werley, who conducted the study in a partnership with Goodkin Consulting. “If you had a mortgage on a half-million-dollar condo, the monthly costs would be way out of line with any reasonable rent you could generate.”
Not all condos being rented in Miami’s urban core depend on cash investments, and the DDA study only covers units built during the last decade. Other indicators point to a downtown that is an increasingly popular place to be. The bust didn’t stop a wave of new retail complexes from opening, including the Midtown Miami mall on northern side of downtown and the Mary Brickell Village mall to the south. Restaurant taxes have surged 77 percent within Miami city limits since 2005 compared to a 35 percent gain countywide.
Tyler Tejeda commutes almost an hour each way in order to spend weekends in Miami. The 24-year-old recruiter for a Fort Lauderdale firm moved into a Brickell Avenue apartment in August, despite having a job nearly an hour away. “I could move to Fort Lauderdale if I really wanted to,’’ Tejeda said. “But I’d rather be in Brickell on the weekends. It bothers me less to have to commute on weekdays than have to come down to Miami on the weekends.”
Paul Riemer could afford to buy a condo of his own, but the young insurance executive instead pays upwards of $2,000 a month for a one-bedroom apartment at the Icon, a posh condo complex on Brickell Avenue.
“I’m not ready to make a big purchase yet,’’ the 23-year-old said. He cites a gap in what he can afford to rent and what he can afford to buy. Why move out of a luxury apartment to purchase his own condo somewhere else with a large mortgage?
“I have the money to comfortably rent,’’ Riemer said. “I don’t know if I’d be able to comfortably buy.”
The 93 percent occupancy rate in the latest DDA condo survey identifies little more than 1,000 vacants units in a condo market that came to symbolize the excess of Florida real estate. And it marks a big improvement over the 65 percent occupancy rate in the first DDA survey taken four years ago — a number that at the time seemed surprisingly high.
That was in 2008, at a time when South Florida real estate sales were just beginning to show a rebound. But prices were heading the other way, accelerating into a decline that has so far last five years, according to the Case-Shiller housing index. At the time, the DDA wasn’t sure it wanted to know how many people were living downtown.
“We were hearing from everybody driving down the road: Hey the condos are empty,’’ said DDA director Alyce Robertson. “You never know what the numbers are going to say. What if they really were all empty?”
With a hot rental market, downtown Miami has become a more expensive place to live. Mark McCann, owner of the Miami Apartment Locators brokerage, said a one-bedroom apartment in the downtown area went for about $1,300 a month several years ago. “Now that’s almost impossible,’’ he said. “Now it’s closer to $1,500 or $1,600. There is a lot of competition for the units. There was more supply before the recession.”
The rental market has helped usher in a new crop of condo projects downtown, a revival many thought might have to wait at least a decade after the big crash. Harvey Hernandez runs the company selling units in Brickell House, a 46-story building planned for 1300 Brickell Bay Drive. His sales staff runs weekly reports on the rental market — statistics that can help close a sale for a $400-per-square-foot unit at Brickell House.
“The rental market influences the buyer a lot. It is a great option,’’ Hernandez said. Miami “has about half the inventory available for rent we had four months ago. And four months ago, it was at least half of what it was four months prior.”
From: World Property Channel
By: Michael Gerrity
February 15, 2012
(MIAMI, FL) — Despite a national U.S. housing crisis still in play, the Miami condo boom is back with a vengeance On February 14, 2012, another groundbreaking ceremony was held for the newly announced Oceana, the first U.S. real estate development of Argentina-based developer Consultatio.
Oceana will be an exclusive 142 condominium development with 12 luxury Villas adjacent, located on the last oceanfront site available on Key Biscayne. This will be a state of the art project; Units will range from 1800 SF to 7500 SF, with a very low density (154 units on a 10.3 acres site).
The new twin-tower Key Biscayne condo project is being touted by some local real estate brokers as the most exclusive new residential project in Miami since the condo boom five years prior.
Oceana is going to be built on the site of the former Sonesta Hotel, which was one of the first hotels in Key Biscayne. The 10.3 acre oceanfront site was acquired by Consultatio in September 2009 for $80 million, and the estimated total project cost will be over $250 million USD.
Due to the lack of land availability on Key Biscayne, there has not been any new real state development in the past 12 years.
Consultatio has hired Coastal Construction as their contractor, and continues working with their architectural firm Arquitectonica on finalizing project construction drawings. The developer plans to start selling the 154 condo units in the months ahead and is currently working on setting up their in-house sales team.
Key Biscayne is considered one of the most exclusive areas in Miami and has one of the highest incomes per capita in the United States.
Key Biscayne is also home to many internationally prominent residents, including A-list actor Andy Garcia, Miami Dolphin football great Nick Buoniconti and Latin American television celebrity El Gordo of El Gordo y La Flaca.
Eduardo Costantini, President of Consultatio said, “We are very excited with the excellent reception that Oceana has within the Key Biscayne community. The fact that we have government and community support is a very important reinforcement and also a commitment for the project to have the highest quality standards, respecting Consultatio’s philosophy.”
Consultatio is an experienced real estate developer from Argentina, with 30 years of experience developing large-scale master planned communities, commercial properties, and residential towers in high end international markets like Nordelta, Puertos del Lago, Las Garzas (Uruguay). The company is under the direction of its’ major share holder, president and CEO Eduardo F. Costantini, a prominent Argentinean businessman.
South Beach condo units set for auction
January 26, 2012 12:00PM
A total of 48 condominium units in South Beach will be heading to auction in the next 30 days, with a number from high-profile projects like the Setai, Portofino and the Murano Grande, according to a report from Condo Vultures. The units hold a total of $14.5 million in final foreclosure judgements. A unit at the Setai is the highest-priced foreclosure judgment set for auction, at $2.5 million. The next-highest foreclosure judgment is on a unit at the Bentley Bay condo complex in South Beach. In December, a unit at the Setai sold for $21.5 million, one of the largest sales of 2011. — Alexander Britell
Posted on Fri, Dec. 16, 2011
Brazil’s economy slows
BY MIMI WHITEFIELD
Brazil still might be the darling of foreign investors and Miami real-estate agents but as the year draws to a close, its once booming economy is slowing.Fueled by a commodities boom, a growing middle class, and mineral wealth, Brazil’s economy hummed along with a 7.5 percent growth rate in 2010. But now most economists are pegging gross domestic product growth at 3 to 3.5 percent this year — and in its most recent forecast, Fitch Ratings said the Brazilian economy would grow only 2.8 percent.“Brazil is slowing down; it’s been slowing down since the second quarter,’’ said Guilherme Da Nobrega, senior economist at Sao Paulo-based Banco Itaú, during a recent visit to Miami. His estimate has been revised down from 3.6 percent to 3 percent growth.
The Brazilian economy, he said, “was growing too fast at the end of last year.’’ Inflation also was rising.
That economic exuberance — coupled with a strong real and depressed local real-estate prices — drove Brazilians to Miami in 2011 to buy everything from ocean-view condominiums to sports gear, iPads, and fashion.
The Brazilian economy also is closely watched in South Florida because Brazil is the region’s top trading partner, and earlier this year a group of nearly 200 Floridians traveled to Brazil on a trade mission led by Gov. Rick Scott.
To cool things down, the Brazilian government adopted tighter economic policies at the beginning of 2011; its central bank also raised rates. The government also held back on public spending for infrastructure projects, such as bridges, said Da Nobrega, who spoke at the Americas Society/Council of the Americas Latin American Predictors Forum in Coral Gables earlier this month.
“That did the trick,’’ said Da Nobrega.
But Brazilian industrial production began to slump in the third quarter and was down 2.2 percent in October compared to the previous year. Twenty out of 27 sectors contracted during the month, according to Barclays Capital.
Though it is still considered strong, the Brazilian currency also began to bounce around this fall — a change that has affected some Miami real-estate purchases. The real has fallen 8.1 percent against the dollar in the past three months.
With the economy weakening, Brazil’s central bank began cutting rates in August.
And to counteract the potential impact of a widening European financial crisis, it took several measures Dec. 1 to stimulate and strengthen the economy. They included tax cuts on financial operations, tax credits of up to 3 percent on 8,500 manufactured products destined for export sales, and increased home-value eligibilityfor developer tax breaks under the My Home My Life program.
To encourage the inflow of long-term foreign investment capital, for example, the taxes on foreign investment in stocks and venture capital were cut from 2 percent to 0.
The tax on so-called white goods — stoves, refrigerators, washing machines, and the like — also was cut to encourage the consumption of durable goods.
Da Nobrega said he anticipates “another couple of months of negative numbers” before the economy begins to pick up again. With the tax cuts, he said, the Brazilian economy should be growing by the second quarter and he predicts growth of about 3.5 percent in 2012.
“We are happy with that number,’’ he said. With current policies, he said, there’s a little more risk for higher inflation but a bit less risk of slow growth.
But Da Nobrega said Brazil will have to continue to watch the European situation closely.
Meanwhile, with the approach of the 2014 World Cup in several Brazilian cities and the 2016 Olympic Games in Rio de Janeiro, Brazil is in the midst of an investment boom. “We don’t run any risk of over-investment in Brazil,’’ Da Nobrega said. “As long as there is financing at all in the world, Brazil is going to take an important chunk of it.’’
Figures released by Brazil’s central bank Thursday showed that the United States wasstill Brazil’s biggest foreign investor with $105 billion in investments, excluding inter-company loans, at the end of 2010. And although China has replaced the United States as Brazil’s top trading partner, Chinese investments totaled just $8 billion, putting it in 16th place among foreign investors in Brazil.
Overall, foreign investment increased from $163 billion in 2005 to $580 billion in 2010, according to the central bank report.
Other analysts also say that 2012 seems to be shaping up as a better year for Latin America’s largest economy.
“The recent depreciation of the Brazilian currency plus the slowdown in inflation and the drop in interest rates will be very helpful for improving the health of the Brazilian economy,” Eugenio J. Aléman, senior economist at Wells Fargo Securities, said in a report released last week.