The Real Deal Miami

68% of condos in MyBrickell are already up for resale or lease

Related Group’s tower in Miami's financial district was completed in January

November 18, 2014 02:45PM
By Peter Zalewski

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MyBrickell (inset: Peter Zalewski)

MyBrickell (inset: Peter Zalewski)

More than two-thirds of the units in the sold out MyBrickell condo tower in Greater Downtown Miami have already been listed for resale or lease since the project was completed less than 11 months ago.

Developed by the Related Group, MyBrickell is a 28-story condo tower with 192 units completed in January on a site located between Brickell Avenue and the new $1.05 billion Brickell City Centre mixed-use project being constructed.

In a nearly seven-month period that ended in July, buyers acquired every residential unit in the MyBrickell project for about $57 million, or an average price of $360 per square foot, according to Miami-Dade government records.

Almost immediately after each of the individual transactions occurred, a super majority of the new owners looked to unload or rent out their units rather than take occupancy themselves.

Today, nearly 30 condo units are on the resale market at an average asking price of $410 per square foot, according to data from the Southeast Florida MLXchange.

An additional four units with an average asking price of about $407 per square foot are under contract waiting to transact. To date, four units were resold at an average price of less than $385 per square foot.

On the rental front, 14 units are available for lease at a median asking price of $2.16 per square foot monthly as of Tuesday.

Currently, 10 units with a median asking price of $1.92 per square foot have a pending lease in place. Nearly 100 additional units have been leased out at a median price of $2.35 per square foot monthly, according to the data.
The amount of resale and leasing activity in the MyBrickell project is noteworthy as it suggests – albeit in only one new condo tower in Greater Downtown Miami – that speculators may, in fact, be playing a key role in this latest South Florida boom.

In an effort to avoid a repeat of the last South Florida boom-bust cycle, developers have repeatedly said publicly that they hope to limit the number of speculators participating this time around by requiring 50 percent deposits from preconstruction condo buyers.

To date, developers have announced plans to build nearly 70 new condo towers totaling about 18,400 units in Greater Downtown Miami, according to the preconstruction condo projects website CraneSpotters.com.

(For disclosure purposes, my firm operates the website.)

Overall, developers have announced plans to build 290 new condo towers totaling more than 39,700 units east of I-95 in the tri-county South Florida region of Miami-Dade, Broward and Palm Beach.

The unanswered question going forward is whether the volume of resale and rental activity in the MyBrickell project ends up being a one-time occurrence or instead the beginning of a trend for the South Florida preconstruction condo market.

Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.

  • Miamian owner

    A dumb article. Maybe people are listing their mybrickell condos precisely because the market is hot and they want to make a nice chunk of change. If the market was flat, they would just hold them and collect rents (which are sharply rising every year) everyone knew the mybrickell buyers were investors from the get go – the only question is when these investors want to exit and market conditions happen to be good now. It doesn’t mean anything close to overfroth. zalewski just wants to be the first to call the next crash (it’s his whole business model) so be prepared for several years more at least of his market bashing commentary so he can have his broken clock moment.

    • tired of his Sh*t

      So well said, Miamian owner. I’m the sort of person who virtually never comments on online articles, but Peter Zalewski repulses me so much that I find myself responding to too many of his “articles”. He is the master of copy and paste, as he quite literally uses the exact same phrases, data, and even entire paragraphs from article to article. Find me an article by him that doesn’t open one of the last paragraphs with “the unanswered question going forward” followed by some fear mongering line. Shocking revelation, Peter. How about, EVERYTHING going forward is obviously an unanswered question, you moron? And the sad thing is you’re right — this Cassandra will get his broken clock moment because it’s a cyclical industry. But the best (and one of the more ironic) aspects is that the very industry he loves to hate on, is the exact industry he entirely depends upon and wishes to be a part of. He likes to leave out that for a period of time, he was the exclusive sales agent on Crimson in Edgewater; however, he did such a terrible job that he was fired and ISG was brought in to replace him. Serves him right that for all his blabbering, he’s making no money and can’t pay for his own house.

      Anyway, as to the specifics of myBrickell, it is about as terrible of an indicator of this cycle as you could pick. It is a tiny building, with tiny inexpensive units that don’t even get parking within their own physical building. It is the exact type of building that you would expect to cater to speculators. When the real buildings going up right now are completed, then let’s talk.

  • Mondocondo

    Looks to me like condo rental is a legitimate investment model, with high rents and occupancy. The Brickell rental market has been a boon to landlords for some years now, and any new rental supply is much justified. I don’t understand Peter’s judgmentalism on what constitutes legitimate condo ownership. Cheers

  • 007 Man

    Typical investor activity in low priced Buildings. Only this time most of the Buyers are Cash. Not like 2006 when most of them financed their purchases.

  • gfgghjk

    When you are purchasing at 360/sf and renting at 1.92/sf then it is a legit 4-5 cap after taxes and expenses. However when your purchasing for 500-600/sf will rents increase to 3.0-4.0/sf that is the question going forward.

    The numbers don’t lie, I don’t see bashing I see facts and figures. The buildings coming to conclusion where the developers are in for 50k a unit on the land and locked in the construction numbers in the low 100s will perform well as they can sell for 360/ sf and deliver a product that real people can afford and live in.

    However when land prices are 150k a door and construction are now in the low 200s and wages are flat financing is no existent. It doesn’t take a rocket scientist to predict the end of the story. Like all the experts says 2018 when these units are delivered to the market.

    If you dont like facts go back to reading fox news and dont open his article.

    • skdlf

      @ gfgghjk, I don’t think you’re fully in touch with either this cycle or Zalewski’s previous articles. I can agree that the level the market is at right now will eventually taper as any cyclical market will, but you seem to be suggesting that all of the buyers this time around are speculators. Using a building like myBrickell to prove that point is simply not a fair reflection of the market. Particularly when you start quoting the more expensive land and construction costs, you need to consider that those are typically associated with more boutique buildings with fewer, larger, and more expensive units (e.g., Echo Brickell/1000 Museum). When you have the buyers putting down 40-50% on units of those prices, they’re not walking away. And with that in mind, you’re not attracting speculators. Rather, you’re attracting high net worth individuals looking for wealth preservation from their unstable home countries. So if you are a frequent reader of Zalewski, you will see that those extremely critical of him are not a group of people who don’t like reading facts, we’re a group of people who are tired of seeing marginal facts repeatedly taken out of context to suggest a broad pending doomsday scenario. Zalewski clearly has an incentive in seeing the market crash as his entire business model depends on it. And that has a real effect on readers who are not as familiar with the market, but come to The Real Deal to learn.

  • Al Czervik

    Beginning of a trend?
    Can some kind do-gooder take a moment to teach Mr. Zalewski real estate?
    PRE-CONSTRUCTION real estate is most often purchased by investors (or, as someone with little knowledge about PRE-CONSTRUCTION real estate would call, speculators).
    People with a need for a residence for their use (end users) rarely buy entry level high – rise condos.
    Currently, there are 15% of the units in MyBrickell for sale, many of them ARE ALSO for lease. And many of them are being sold with tennants in place.
    That’s healthy.

  • gfgghjkK

    I can agree that the level the market is at right now will eventually taper as any cyclical market will. – THIS IS THE MESSAGE THAT ZALEWSKI IS GETTING BASHED ABOUT. EVERYONE AGREES ITS COMING HE IS REPORTING THE NUMBERS FROM FACTUAL PLACES.

    Using a building like myBrickell to prove that point is simply not a fair reflection
    of the market. I AGREE MYBRICKELL WILL BE A SUCCESSFUL PROJECT.

    When you have the buyers putting down 40-50% on units of those prices, they’re not
    walking away. I AGREE YOU WILL NOT WALK AWAY LIKE LAST TIME, YOU WILL FIGHT TOOTH AND NAIL TO GET YOUR MONEY BACK. THE LAWYERS WHO WAS SUCCESSFUL LAST TIME AROUND WILL HAVE A FIELD DAY. THE HARD MONEY LENDERS WHO HAVE ALL STARTED TO COME OUT OF THE WOOD WORK WILL ALSO HAVE A GREAT DAY. THIS IS THE TIME TO BE A HARD MONEY GUY.

    attracting high net worth individuals looking for wealth preservation from their unstable home countries. I AGREE, AN ARGENTINIAN WHO INVESTED 10,000,000 PESOS 24 MONTHS AGO GOT $2.1m TODAY 10M PESOS IS $1.2M. THEY PRESERVED THERE WEALTH, IN A DEPOSIT, YOU CAN NOT FIGHT THEM ECONOMICS. HOWEVER THEY STILL NEED TO PAY THE BALANCE
    LETS HOPE THEY TRANSFERRED ALL THERE MONEY OUT OF THE COUNTRY. NEW PROJECTS COMING ON LINE GOOD LUCK, THE DOLLAR IS THE STRONGEST ITS BEEN IN YEARS.

    are tired of seeing marginal facts repeatedly taken out of context to suggest a
    broad pending doomsday scenario. WHAT FACTS IS HE MISSING? THERE ARE A LOT OF DEVELOPERS QUOTES ON SALES AND NUMBERS. BUT THEY ARE HEAR SAY. I HAVE NOT HEARD OF ONE PERSON DEFAULTING ON A STAGE PAYMENT, YET. ITS NOT RECORDED ANYWHERE SO WE WHAT THEY WANT US TO HEAR.

    Zalewski clearly has an incentive in seeing the market crash as his entire business
    model depends on it. I THINK HE IS MAKING MORE MONEY TAKING PEOPLE ON TOURS THAN HE IS WRITING ARTICLES.

  • Shouldn’t it read the latest South Florida bubble?

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