Miami’s 1450 Brickell reaches 91 percent occupancy

Miami’s 1450 Brickell office tower has reached 91 percent occupancy, two years after opening its doors. The building reached the number following leases with accounting firm Morrison, Brown, Argiz and Farra, international shopping company Lyoness America and holding company Miami Holdings. Bilzin Sumberg, the tower’s first tenant, also signed an expansion. “1450 Brickell is quickly emerging as the go-to address for international tenants looking to establish a presence in Florida and the U.S.,” said Alan Ojeda, CEO of developer Rilea Group. Blanca Commercial Real Estate is the exclusive leasing agent for the property. — Alexander Britell

Miami metro area shows slight price increase: Case-Shiller index

The Miami metropolitan area showed a 2.5 percent increase in home values in March compared to the same period in 2011, according to the Standard & Poor’s/Case-Shiller Home Price Index. Miami’s metro area had an index of 140.76 in March, which was a 0.9 percent increase from February. Nationally, prices fell by 1.9 percent in the same period. “While there has been improvement in some regions, housing prices have not turned,” said David Blitzer, chairman of the Index Committee at S&P Indices. “This month’s report saw all three composites and five cities hit new lows.” Miami was one of seven cities in which annual rates of change had turned positive, according to Blitzer. “This is what we need for a sustained recovery; monthly increases coupled with improving annual rates of change,” he said. “Once we see this on a broader level, we will be able to say the market has turned around.” — Alexander Britell 

Related makes multi-family push as developers adapt to growing rental demand

May 23, 2012 11:15AM
By Alexander Britell

A rendering of Related's Fontainebleau Lakes in Miami

With dwindling condominium inventory — but growing rental demand — in South Florida, developers are shifting to multi-family projects. While Jorge Perez and Related Group have been part of the new wave of condo construction in the region with projects like Miami’s MyBrickell and Hallandale’s Apogee Beach, the company is also making a significant multi-family drive.
The demand is a result of a variety of factors: falling homeownership, the aftermath of the foreclosure crisis leaving many with battered credit and the so-called echo boomers reaching prime rental ages.
“It’s sort of a perfect storm,” said Steve Patterson, president and CEO of Related Development, who is spearheading the company’s apartment push. “Those things all come together to create built-in demand without any economic rebound, so that’s a nice start.”
The developer says it has almost 4,000 multi-family units in development across eight new projects.
“I think production is definitely going to ramp up in the next year or two, but we don’t have any concerns about that,” Patterson told The Real Deal. “I honestly believe that the fundamentals supporting the need for new multi-family housing are stronger now than they’ve been in any of the prior three cycles.”
The latest Related venture is the Veranda II, in Plantation, modeled on the nearby Veranda I condominiums. Those come alongside several other projects, including Fontainebleau Lakes in Miami and Flagler Village in Fort Lauderdale.
Those projects are part of a slew of new multi-family developments in the region, from Armando Codina’s partnership with AREA Property Partners in Doral to Adler’s 79th Street project in Miami.
With banks largely unwilling to finance new condominium projects, much of South Florida’s new condo inventory is being financed on the Latin American/European model — that is, where buyers pay much of the construction costs up front, along with high initial deposits, as The Real Deal previously reported.
But while banks are reluctant to fund condo projects, they are ready and willing to provide financing for new apartment projects, given the high level of rental demand in the tri-county area, according to Peter Zalewski, founder of brokerage and consultancy Condo Vultures.
And there’s a good reason for doing so.
“A developer who builds a rental tower today has to be thinking that, sometime in their future, their exit is to sell it off to a condo converter or to convert it himself into a condo,” he said.
As more projects rise, the line between multi-family and condominium is becoming ever so thin.
Indeed, many of the new rental projects are being developed on sites that would typically be associated with condominiums.
“Some rental towers going up are actually being developed on, not premier, but very attractive sites,” Zalewski said, pointing to Adler’s recently-announced venture. “The site where [Adler's] project is going up is more apt for a condo than it is for a rental project.”

Downtown Miami sales volume up 27 percent, condo prices rise 5 percent: report

Axis in Brickell

There were a total of 1,000 sales in the first quarter of 2012 in downtown Miami in the first quarter, a 27 percent increase compared to the same period in 2011, according to a report from the Miami Downtown Development Authority. The average price of a Miami condominium rose to $371,084 in a 12-month period ending March 31, a 5.2 percent increase over the previous year. Downtown Miami’s rental market is also performing well, with leasing volume up slightly in the same period. “When we first began tracking sales and leasing velocity for the area, we didn’t know what to expect,” said Alyce Robertson, executive director of the Miami DDA. “But with each report that comes out, we can be more confident in the health and viability of our market.” — Alexander Britell

Miami condo prices jump 30 percent

Miami’s residential prices showed strong increases for the fifth month in a row in April, with the median sales price of condominiums rising 30 percent compared to the same period in 2011, according to the Miami Association of Realtors. The median sales price of single-family homes rose 8.2 percent year-over-year. “Miami single-family home and condominium prices continue to trend upwards due to the record demand experienced last year,” said Martha Pomares, 2012 chairman of the board of the Miami Association of Realtors. “Price appreciation should continue due to limited supply and strong demand from both U.S. and international buyers and investors.” — Alexander Britell

Italian buyer pays record $25M for a Miami condo

A triplex penthouse at the Continuum in South Beach has sold for $25 million to an Italian buyer, according to the New York Times. The deal, which closed May 18, is a record for a Miami condominium. Alex Birkenstock, whose family controls the Birkenstock shoe company, was the seller. The previous record was $21.5 million for a penthouse at the Setai South Beach. That home was sold by Netscape founder Jim Clark.

Miami tops South Florida apartment market

May 21, 2012 09:45AM

Miami continues to be the strongest apartment market in South Florida, according to a second-quarter report from Marcus & Millichap. With plummeting vacancies and the “gradual restoration of rents to former peaks,” Miami-Dade County is leading the tri-county area, in large part due to increased tenant demand. Further expansion in service employment will help lead to a projected 60-basis-point decline in the vacancy rate this year to 4.1 percent. The county’s vacancy fell 100 basis points in 2011, according to the firm. Asking rents are projected to rise 3.6 percent to $1,114 per month, with effective rents projected to increase 4.3 percent to $1,063 per month this year. That follows 0.7 percent and 1.0 percent increases, respectively, in 2011. — Alexander Britell

Developer Codina, New York firm to partner on multi-family development projects

Armando Codina

Developer Armando Codina’s CC Residential is forming a strategic partnership with New York-based AREA Property Partners to develop apartment communities in South Florida, the companies announced today. The venture is currently developing the Signature at Doral, a 352-unit community in northwest Miami-Dade County. “We’re thrilled to expand our existing footprint in the South Florida residential market through this new development partnership,” said Richard Mack, North America CEO of AREA. The two companies are also partnering on the Signature at Davie, which will feature 350 apartment units on Davie Road between Southwest 31 and 29 streets. “It is a privilege to be working with the AREA Property Partners team on these two rental projects,” Codina said. — Alexander Britell

Low to mid-range sales drive Palm Beach market

Homes under $10M selling “like wildfire”

It’s been nearly a year since Palm Beach saw an ultra-high end residential transaction: the $25-million sale of 1472 Ocean Boulevard. And while the town’s $25-million-plus estates are beginning to see more activity, brokers said it’s the lower-priced Palm Beach properties that are keeping them busy.

“We haven’t had any really high-end sales for quite some time,” said Ava Van de Water, an executive vice president and broker at Brown Harris Stevens in Palm Beach. “But the market is on fire in the low-end and middle ranges.”

That’s borne out in newly released market data from Brown Harris Stevens. From October of 2011 to March of this year — Palm Beach’s peak season — there were only four single-family home sales in the tony Estate Section, which has the highest values on the island. That’s down from 13 in the same period of last year. By contrast, the town’s lower-priced North End and Midtown areas saw a total of 42 sales between them.

Midtown actually saw its median sales price jump 17 percent in the period covered by the report.

And the total number of single-family listings in Palm Beach fell by 15 percent from the same period 2011, according to the report.

The trend started last year, when homes priced from $1 to $2 million — the low end of the Palm Beach market — started selling “like wildfire,” Van de Water said, in part due to buyers finally beginning to move in off the sidelines.

As inventory at those prices ran out, buyers moved on to homes priced up to $10 million.

“We’re seeing it move up the chain,” she said.

The increased pace of sales is beginning to have an impact on prices, albeit at a slow pace, according to David Fite, principal at Fite Shavell & Associates in Palm Beach.

After three consecutive years of reductions in property values, Palm Beach’s market values are projected to rise by just under 1 percent this year, according to Palm Beach County Property Appraiser Gary Nikolits.

Broker Jeff Cloninger said he believes Palm Beach’s prices have already bottomed out.

“The trend seems to be that prices are stabilized,” he said.

Because of Palm Beach’s status as a second-home market, seasonal visitors — who flock to the area in the winter — are crucial to the residential sector.

Those potential buyers are showing interest in ways they hadn’t in previous years.

“I’ve got people now who say, ‘let’s make an offer before we leave this season, because this probably isn’t going to be here when we get back,’” Cloninger said. “For the last five years, people have left for the summer with the idea that whatever was here now would still be here next fall.”

Another byproduct of the continued sales activity is the return of a long-dormant sector in Palm Beach: spec homes.

Palm Beach’s Architectural Commission has seen a 12.5 percent increase in proposals for major residential projects since the beginning of the year, plus another 29 proposals for minor projects, according to ARCOM Chairman Bob Vila (of “This Old House” fame).

“Builders are definitely back in the market,” Van de Water said. “They haven’t been in the market since 2008 at least, and now they’re buying lots like crazy.”

As for Palm Beach’s ultra-luxury properties, brokers said there are signs of life that could materialize into sales, despite several so-called trophy properties receiving price cuts last month.

Clockwise from right: 137 Peruvian Avenue, Jeff Cloninger, Ava Van de Water and David Fite

South Florida residential inventory

Compiled by Condo Vultures Realty using the South Florida Shared Multiple Listing Service. Active listings are properties where no current sale contract exists; pending sales are properties in which a contract for sale has been executed, but not yet closed. Listing brokers control the status of a property listing. — Christopher Cameron

Broward single-family prices rise 16 percent

May 10, 2012 10:30AM
The median sales price for single-family homes in Broward County rose to $180,000 in the first quarter, a 16 percent increase over the first three months of 2011, according to data from the Broward Council of the Miami Association of Realtors. Sales of existing single-family homes rose by 4.4 percent in the first quarter, while sales of existing condos dropped by 14 percent. The median sales prices for condos did rise as well, however, jumping 9 percent in the same period. “Broward County continues to see strong sales activity, which has resulted in consistent price appreciation over the last few months, including the first quarter of this year,” said Rick Burch, 2012 President of the Broward County Board of Governors of the Miami Association of Realtors. — Alexander Britell

Miami home prices jump 11 percent

May 08, 2012 09:45AM
Home prices in the Miami-Miami Beach-Kendall metropolitan area rose by 10.6 percent in March compared to the same period last year, according to a report from CoreLogic. Miami’s home price index, which includes distressed sales, also rose by 10.1 percent in February compared to February 2011. Nationally, the home price index fell by 0.6 percent last month. “While housing prices remain flat nationally, in many markets, tighter inventories are beginning to lift home prices,” said Anand Nallathambi, president and CEO of CoreLogic. Statewide, Florida had the fifth-highest appreciation in the country, with a 4.5 percent overall increase in prices. — Alexander Britell

W Fort Lauderdale reaches $19M in sales

The Residences at W Fort Lauderdale

May 07, 2012 10:30AM
The Residences at W Fort Lauderdale has reached $19.4 million in sales, according to the company. Since Y Group launched sales in late 2011, the project has sold 21 units, with a significant amount of interest from the Northeast and California. The W is being represented by MMD Realty, a brokerage in which former Miami Dolphins star Dan Marino is an equity partner. The project is launching man on-site sales center this month. — Alexander Britell

Miami metro foreclosures continue rapid climb in first quarter, could curtail home price gains

April 26, 2012 12:00AM

By Alexander Britell

Foreclosures in the Miami-Fort Lauderdale-Boynton Beach metropolitan area rose 37 percent in the first quarter compared to the same quarter in 2011, part of an upward trend that could dim recent gains in Miami’s residential pricing. There were a total of 25,883 properties with foreclosure filings in the first three months of this year, the second-highest total in the nation.
“We did expect some pretty significant increases in places like Miami because of the backlog of delayed foreclosures that was building up,” said Daren Blomquist, a spokesperson for foreclosure analysis firm RealtyTrac. “That is in line with what we were expecting in a market like Miami.”
While foreclosures have been climbing on a year-over-year basis for several months now, so have residential prices; but the latter is a trend that could be impacted as more distressed properties get processed.
A recent report from Douglas Elliman Florida shows Miami fragmented into two discrete markets — distressed and non-distressed.
The market share of distressed properties fell to 48.2 percent in the first quarter of 2012 from 64.7 percent in the first quarter of 2011, a development that came in large part due to the foreclosure freeze. It was that market shift that caused all price indicators in Miami to increase in the first quarter according to the Elliman report.
Data from the Miami Association of Realtors has also reported consistent gains in home prices in recent months, a number backed by positive growth in the latest Standard & Poor’s/Case-Shiller report released yesterday.
But those improvements could suffer a setback from the new surge in foreclosures, Blomquist said.
“I believe that the consequence of this whole pattern of the last year and half in Miami is that it’s going to take longer for the market to truly recover,” he said. “Miami did post an increase in home prices [in the Case-Shiller report], but the problem we have is as more foreclosures come on line and are sold, that’s going to stymie that home prices recovery we’ve seen because of the shortage of foreclosures.”
Although it’s hard to distinguish between homes that have price increases coming from natural appreciation as opposed to the absence of distressed properties on the market, the foreclosure freeze did have an impact, according to Douglas Elliman Florida CEO Vanessa Grout.
“The issue is that once the banks let go of a lot of this distressed inventory, you might see the proportion [of distressed sales] shift,” she told The Real Deal. “You might see more distressed inventory flooding the market, and you may see price declines.”
The number of new foreclosures may be limited, however. There was just one more foreclosure in the first quarter of 2012 in the Miami metro area than there were in the fourth quarter of 2011, the data indicate, suggesting a still-sizable foreclosure wave with a flatter curve.
“I think what that indicates is that we’re going to see foreclosures increase from the lows of last year, but there is still going to be a limit as to how many foreclosures the lenders and courts can handle in Florida,” Blomquist said.
Indeed, while it takes an average of 182 days to process a foreclosure even in hard-hit Arizona, it takes 861 in Florida’s system.
Nationally, foreclosure activity increased in 114 of the nation’s 212 metropolitan areas with a population of more than 200,000, according to RealtyTrac data. The Miami area, which saw one property with a foreclosure filing out of every 95 housing units in the first quarter of this year, ranked 13th in the country in that regard.