Closings better than expected for new Miami high-rise condos
The number of closings at new downtown Miami condos has been better than many expected, a survey showed, but a big test still looms for the revitalizing urban center.
Construction cranes dot the skyline of Miami.
RICHARD SHEINWALD / BLOOMBERG NEWS
BY MATTHEW HAGGMAN
Miami's latest building boom is creating 22,000 condominium units in the city's urban core, more than double the number built in the last 40 years. But a long-standing question remains: How long will it take for all the condos to actually sell?
The answer: 70 percent have found a buyer, according to a new study by condovultures, a real estate consultancy. So far, 17,299 condos have been delivered with 12,169 closed at an average price of $405,966 per unit, according to the condovultures report. It amounts to a sales total of nearly $5 billion.
By year's end, 3,999 units are set to hit the market. Another 1,439 after that.
The sales have been better than many observers expected for a downtown area held out by some as ground zero for speculation and excess. And it underlines Miami's ongoing urban revitalization, fueled by people, builders and investors returning to the city center.
But it also comes with a big caveat: Nearly a quarter of new downtown condos produced by the boom are just being delivered and starting closings now, including many of the largest projects.
''South Florida developers have to be excited by the fact that more than two out of three downtown condo units have closed successfully,'' said Peter Zalewski, principal at condovultures.com in Bal Harbour. ``But the giants are coming.''
The massive projects include the three-tower, 1,800-unit Icon Brickell pinched between Biscayne Bay and Brickell Avenue, which starts closings this month. The 342-unit Epic Condo, rising along the Miami River, is poised to start closings. So too, 530-unit Mint at Riverfront, 459-unit Infinity at Brickell and 346-unit Paramount Bay.
''We are bullish,'' said Miroslav Mladenovic, vice president of Cabi Development, which started closings Thursday on its 848-unit Everglades on the Bay project along Biscayne Boulevard. ``Comparable projects to ours have fared well, we don't see why we can't fare the same.''
The new batch of condos are hitting the market as credit remains tight, consumers are increasingly cash-strapped and existing home prices continue to fall due to an outsized inventory of unsold homes throughout South Florida. Sales, however, have picked up in recent months.
Zalewski's report, culled from a review of property records ending Sept. 30, covers the greater downtown area between the Julia Tuttle and Rickenbacker causeways and Interstate 95 to Biscayne Bay.
The swath of land -- which includes the Brickell, central business district and Midtown neighborhoods -- has seen more development than any corner in Florida. The area is closely watched due to its significant construction and its implications for the broader housing market, but also because policy makers and many builders view redevelopment in the urban core as a key element to the region's overall economic success.
Meanwhile, the overall downtown closings have been solid so far, Zalewski said.
''We're like in the sixth or seventh inning of this,'' said the Bal Harbour analyst. ``We had a good starting pitcher, and some decent middle relievers, now the question is if it's going to be a blown save.''