South Beach Condos Blog

I remember when I got into the real estate business about 15 years ago that agents who primarily sold condos were considered second-class brokers. How times have changed.

Word on the street (or in my ear) is that the penthouse at Setai South Beach, located at 101 20^th Street in Miami Beach, is under contract. Penthouse Villa B encompasses the entire 40^th floor of the high rise and is 6,200 interior sq. ft. with a 4,000 sq. ft. roof terrace and private pool.

While this rumored sale would be newsworthy on its own, the magnitude of this potential sale is staggering. If the unit closes at or above $22.5M (which I heard…), here’s what it would mean:

Real Estate Records Broken in Miami-Dade & Broward Counties

It would be the second highest-priced residential property (condo or single family home/land) ever to be recorded in Miami-Dade and Broward Counties.

If the closed price is at $22.5M, or above, that would mean a price of $3,624 p.s.f., which would beat the previously-reported pre-construction sale at the nearby W South Beach of a one-bedroom direct oceanfront bungalow at $3,348 p.s.f .

The Setai penthouse was purchased in May 2004 for $9.5M and is owned by Andrew and Elyse Barroway of Philadelphia. They seem to have a knack for picking winners when it comes to real estate.

Luxury Miami Beach & Fisher Island Condos Continue to Break Real Estate Records

Despite weaker market conditions for “regular” condominiums, 2007 has been a very good year for luxury condos in Miami Beach and Fisher Island.

Right now, I’m listening to Frank Sinatra sing “It was a very good year.” Indeed it has been so far.

Today I went to a presentation by the Canyon Ranch Miami developer. To give you a little background on me and my history of this project, I have been a fan of this project since BEFORE the project was launched over three years ago. The project consists of three towers on OVER 6 acres of oceanfront property which encompasses 1100 linear feet of prime Miami Beach ocean frontage. The 21 story south tower, which are condo residences only, has 143 units, the 16-story center tower, which is the historic Carillon building, has 151 condo-hotel units (floors 2-10) and 80 condo residences (floors 11-16). The north tower, which is the tallest building at 35 storys, has 207 units including 7 direct oceanfront townhomes

Canyon Ranch: More Than Just Real Estate

Since the inception of this project, my focus has been on the real estate side of the project for the obvious reasons. After today’s presentation, I am even more excited about this project and what it brings to Miami Beach because it is SO much more than just another condo or condo-hotel. Canyon Ranch Living Miami Beach, which is dubbed “where the wealthy get healthy”, is more about the amenities and healthy lifestyle than the real estate.

The “Power of Possibility” is their slogan and today I learned exactly what it means. Many people come to “The Ranch” to change their lifestyle, to de-stress, get in shape and learn healthy living habits. I saw this incredibly interesting video where a 54 year-old man went to Canyon Ranch in Tucson, AZ and Lenox, MA for four months. They tested him at the beginning of his stay and determined that two of his arteries were 70% clogged, he had numerous ailments and he said he was taking about 17 Advil a day! The doctors estimated that this 54 year-old man had the body of an 84 year-old. After his four month stay at Canyon Ranch, his arteries showed NO SIGNS of blockage, lost 30 lbs. and doctors estimated that the 54 year-old NOW had the body of a 52 year-old man. Fascinating!

Update: Closings to Begin in Late July

The south tower (condo residences) is estimated to begin closings in late July. The center (Carillon) tower closings are estimated to start in September. The hotel and spa will have a soft opening by year’s end.

Back to Business

The reason why I continue to like this project so much is because throughout Miami and Miami Beach the branded projects like Setai, ICON and W South Beach continue to do well even in today’s market. Comparing other branded projects to Canyon Ranch is not fair because Canyon is so much more than just a brand it is a destination! The south and center (Carillon) towers have been SOLD OUT for about two years! There are re-sales available in south & center towers and the developer has great buys on the remaining units in the north tower. Prices in the north tower are about $1000-$1100 p.s.f. for western exposure, and $1100-$1200 p.s.f. for oceanfront units, which is a very fair buy for direct oceanfront luxury property.

Recently I had a conversation with a client with regard to a condo-hotel unit that he purchased, pre-construction, at a resort which is nearing completion.

The reason for his call, being an investor, was to basically get my opinion on what he should do with his unit. It was clear that his first thought was to put the unit up for re-sale when it closed. As our conversation progressed, I offered him some other options to consider with regard to his investment.

Some of his options are:

1. Price the unit VERY aggressively and to try to line up a buyer prior to closing. Since what he owns is basically an option to purchase, and he has owned that option for more than two years, the profits would be taxed on a long-term capital gains basis. That would allow my client to sell quickly, for a lower price, and limit his exposure and holding costs.
2. Knowing that he has an extremely desirable unit, close on the unit, wait a specified time period (less than one year) and then sell at a much higher price. Since he now took title to the asset, his profit would be taxed on a short-term capital gain basis.
3. Close on the unit, sign a management contract with the hotel operator and put the unit in the hotel pool and sell at a later date, past the one-year period of owning the asset. His profit would then be taxed on a long-term capital gain basis. There are some draw-backs to this option:

a. When he sells the unit, the management contract stays in effect with the unit, so if the new buyer is NOT an investor and doesn’t want the unit in the hotel pool, that unit would not be an option for the new buyer.

b. The hotel operator has the right of first refusal on the unit when the owner decides to sell.

After we went through all of the above, and he was processing the information, he paused and said ‘you know, Kevin you are really acting more as an advisor, and not like a typical salesman, and I’m really impressed’. I responded by saying that I don’t think or operate like a salesman, and it wouldn’t be my objective to ‘set you up’ for a quick commission. My goal is always to serve the client, and being compensated, now or much later when the time is BEST for the client, is the reward for a job well done.

I appreciated his remarks very much. It’s just how I am. But it’s nice when someone notices.

In Miami, Buyers and Sellers Will Have To Rethink Their Strategies. [Miami Herald]

Miami’s Building an Instant City Downtown, will it backfire? [Miami Herald]

Florida lawmakers release tax cut details [Miami Herald]

Maps, Charts & Graphs [PDF] [Miami Herald]