South Beach Condos Blog

Rumor has it that Villa Magna has decided NOT to move forward, and will be returning deposits.  Some say it’s because they decided not to build, others say it’s because there is a high-roller interested in the land.

Either way, I think the decision not to go forward in an already saturated Brickell condo market is an excellent decision.

One down, how many others not going up?

Villa Magna is/was being developed by Florida East Coast Realty.  The project was to have approximately 750 units in two 55 story towers located at 1201 Brickell Bay Drive.

Prodigy Network sent me an email recently, announcing “exciting news” about the “progress” of the Beach House Designed by Richard Meier in Surfside. My new concerns stem from the fact that during the last two years or so, this project has switched developers twice. In April of 2006 the original developer, Lynx Strategic Development, announced a new partner, Turnberry Developers, a well-known and well-respected residential and commercial developer. Fast forward to my email of last week, yet another TOTALLY different development team, Wavestone & Development Services Solutions is in place and “ready to bring to life the design of one of the masters of modern architecture”. So for me, this email did not offer “exciting news”. Quite the contrary; this email reinforced concerns I already HAD regarding this project, and raised some new ones on top of that.

1. Who are the new developers? What is their track record?

2. What happened to Turnberry? With all the resources available to Turnberry, did they not feel this project was worthwhile, and if so…WHY?

3. Why has it taken three developers to bring this project to where it is today? (two years behind schedule)

4. If pre-sales were so strong, why would it take so many development teams to get this project built?

Regarding #4 above, attached to the email was an inventory list of available units. What surprised me was the low number of units available, as I know this project well and remember in April, 2005 (coincidentally the pinnacle of the recent real estate boom in Miami) bringing clients to the project when it was first announced. Even back at the beginning, this project was, in my opinion, both chaotic and disorganized. So much so that my clients and I put The Beach House on the back burner. We just didn’t get a good feeling and decided not continuing to pursue purchasing at the Beach House. Sometimes you have to go with your gut, even when you can’t put your finger on the concern in a factual way.

I’m not saying that this is a bad or undesirable project, what I am saying is that the history of this project gives me cause for concern. In fact, I hope that “The Third Time’s A Charm”, and the Wavestone Group can deliver the unique design of Meier’s vision. But this situation with The Beach House, highlights the risks of preconstruction development I have addressed in the past. Even with a strong developer involved like Turnberry, markets change, construction costs vary, and projects may never be built. In Florida, it is likely that only the first 10% of the monies paid to the builder are placed in a protected escrow account. Any additional deposits, or pre-payments of upgrades, may be used by the developer for construction costs. If the developer shuts down, some portion of the buyer’s money could be at risk.

That said, even with all the uncertainty of the market and the development teams, Richard Meier’s name and design, combined with a prime oceanfront location, has created a lot of interest among the international elite. I wish them well and will take a fresh look at the project as it moves forward. Everyone is best served when a new construction project finds its way to a satisfactory resolution. I always hope for the best, as a bad market is bad for everyone. But this project will have to prove itself to me, and I will have ten times the questions I might normally have, given its history, before I could comfortably recommend it to my clients.

Stopped over at Apogee South Beach the other day to see how the building was coming along.  I overheard a buyer compaining to their agent that they didn’t like their unit, and wished they had picked a corner unit. Uh…DUH!  Of course the corner unit is better than the flow-through unit.

Flow through units have been “all the rage” in Miami Beach condo floor plans in the last four or five years.  I would describe these units as typically having exposure on the ‘prime’ side of the building and exposure on the street-side as well.  When a building goes up for sale in the pre-construction phase, these are usually the best selling units in the building for a couple of reasons:

1.  they are less expensive $ psf than compared to units which enjoy more exposure on the “prime” side of the building

2.  the developer “highlights” the fact that you have “both views”, thus making you feel like these units are steals compared to the corner units.

APOGEE SOUTH BEACH FLOOR PLATE

The problem with flow-through units is that they look great on paper, but in reality they are not.  Though they do have two exposures, the units tend to be narrow and dark.  Whenever one of my clients thinks something looks really great…on paper..I try to take them to a similar unit in an existing building.  This way they get a chance to see what I already know:  some things look a whole lot better on paper than they do when they are completed.

Lots to report on Miami Beach real estate, so I will get right to it! Surprisingly, there has been an abundance of real estate activity in ultra-high-end Miami Beach condos and Fisher Island this year.

I was a bit surprised to see how many of the $5M+ condo sales this year were on Fisher Island. Five units went for more than $5M; that is one a month! And if you think that’s pricey, then consider the $250K equity membership you must purchase just to use any of the Fisher Island’s amenities!

The Setai came in with the highest $ psf for non-pre-construction at just over $2300.

And get this—W South Beach sold a 2,700 sq. ft., south-facing PH for a cool $7.3M. Impressive, considering W South Beach just commenced construction and isn’t slated for completion until mid-2009!

Fontainebleau II sold an incredible PH for $6.4M. The view from this 4,500 sq. ft. residence with rooftop Jacuzzi is amazing.

SPECTACULAR MIAMI BEACH REAL ESTATE:

NEW TO MARKET

MIAMI BEACH PENTHOUSES

Il Villaggio - Spectacular PH in one of Miami Beach’s finest and most desirable buildings, Il Villaggio. $17,500,000. This Penthouse is a stellar piece of real estate. The unit has A LOT of millwork, so you better like wood-EVERYTHING!


1500 Ocean Drive- Largest condominium residence ever to hit the Miami Beach real estate market! 11,940 sq. ft. + 9,824 sq. ft. balcony/rooftop; 10 parking spaces (that’s right, 10!). Taxes: $107,246; monthly maintenance: $10,817. $18,500,000. 1500 Ocean Drive was built in 2000 and designed by architect Michael Graves.


Continuum- Tri- level, 40th floor Penthouse in SoFi’s exclusive Continuum I. Breathtaking direct ocean, South Beach and Fisher Island views! 7,400 sq. ft. with 6,000 sq. ft. of terrace with pool. Oh yeah, a paltry $25,000,000 for this pied-a-terre.  [Update: off market]


Continuum- While this is not a TRUE Penthouse, this one rates! This unit was in the BIG hit movie Miami Vice (joke). This condo is the epitome of over the top drama. It is basically a sexy bachelor pad. I love this unit– ALL FANTASY, NO REALITY! $18,000,000…chump change!  [Update: off market]

Setai-This isn’t the TRUE Penthouse in Setai, but it has received a lot of play by throwing that PH “thing” around. PH Villa B is a single-story unit in the uber-fab Setai, which basically is a deluxe hotel room which they “say” commands $25K per night. Madonna and Mariah have slept there; out of Britney’s and Lindsay’s league! I wonder if David Hasselhoff has dined on the master bathroom floor? Hmmmm….