Fueled in large part by speculators, the recent real estate frenzy in South Florida more than doubled housing prices seemingly overnight. Now that the buying fever has cooled, builders in Downtown Miami are trying to move product by shifting to more affordable housing that “real” people can afford.
Developers are creating smaller apartments with leaner and more efficient layouts, and are in the process of applying innovations in design to maximize space that will likely change the face of apartment living across South Florida.
At the Boulevard, a 16-story condominium on Biscayne Boulevard and 33rd Street, the units are made to feel more spacious with the inclusion of I/O (indoor/outdoor) rooms, fully-covered terraces that are deep enough to place furniture and serve as an extension of the interior space.
The 127-unit condominium, designed by architect Bernard Zyscovich with interiors by Alison Spear, has apartments starting at just 442 square feet, with prices ranging from $351,000 to $1.75 million for the penthouse. Most units float between $400,000 and $500,000, the sweet spot in a market with precious few buyers for anything between half a million and $1 million in the current slowdown.
The Related Group, headed by Jorge Perez, was one of the first developers to go small in a big way.
Enlisting the cutting-edge Miami-based design firm Arquitectonica to create ultra-efficient layouts, Related launched the two-tower, 896-unit One Miami with apartments as small as 507 square feet.
It followed up with the 22-story, 196-unit Loft Downtown, which has a preponderance of one-bedroom apartments from 620 square feet, which is petite for Miami.
“The prices were insanely affordable,” says Nury Enamorado, purchaser of a 712-square-foot one-bedroom at Loft Downtown for $112,000 in August 2003. “I didn’t think twice,” she recalls. “At that price I purchased for under $250 a square foot and the standard project in Miami started at $300 to $350, even at that time.” Enamorado moved in this past January. “Everyone is jealous,” she says.
Now Related is about to break ground on a higher-end condominium offering luxury product with smaller layouts, the Oasis on the Bay on North Bay Island. The new complex is located near the 79th Street Causeway that connects the city of Miami with Miami Beach.
With one-bedrooms starting from $290,000, says Eric Fordin, Related Group Project Director, “it has the look and feel of some of our Trump projects [Related partnered with Trump on the Miami Trump Towers project], but with smaller units, so the absolute price will be less expensive.” The Oasis will have two 20-story towers with 475 apartments, mostly one-bedrooms from 721 square feet, modest for luxury product. The average price for the first phase is $440 per square foot.
“Bigger isn’t always better,” says Alicia Cervera Lamadrid, head of Related Cervera Realty Services, the marketing agent for Related. “People are willing to abdicate square footage for more interesting architecture and unique finishes. You don’t have to have a humongous walk-in closet that you can’t use half of anyway.”
According to architect Bernardo Fort-Brescia, one of the founders of Arquitectonica, “One of the most important things today is to have a workplace or den in the unit, because a lot of people work from home. We try to do that in the same space in which we once would have done a 700-square-foot one-bedroom, even if it means sacrificing some of the bedroom. It’s an important part of a new age layout.”
Fort-Brescia conserves space by totally eliminating circulation, including all hallways, and designing bathrooms with two doors, one to the bedroom and one to the small den, which can serve as a guest room.
“There’s been a movement toward smaller apartments for at least a couple of decades in Europe,” says Fort-Brescia, “particularly in France, England and Germany, where prices are high, and in Hong Kong, Japan and Singapore.” The most innovative layouts are in Japan, San Francisco and Miami, he says.
Broker Paolo Scattarreggia, principal of Miami Lodge Realty, notes that while apartment prices and construction costs have each doubled in the last five years, construction costs shot up more steeply in a shorter period, escalating in the last year and a half from approximately $100 per square foot to $200 per square foot.
“Apartment prices went up because of the increase in construction costs,” Scattarreggia notes. “Developers haven’t really increased their profits over the last five years.”
When Related opened the Loft Downtown in 2003, it offered pre-construction one-bedroom apartments in the low $100,000s. “But with costs the way they are now,” says Scattarreggia, “it’s impossible to have a one-bedroom in a new building for less than $320,000.”
To take advantage of every buildable square foot on the sites they purchase, he says, “developers started to conceive buildings where there is no wasted space, with no big corridors and halls and reduced spaces in the units.” The key was to make the absolute price point of the unit affordable even while price per square foot went up.
Fort-Brescia notes that a handful of affordable, though very small, apartments come up in South Beach occasionally — condo conversions of art deco buildings with 500-square-foot studios going for around $250,000.
But the real action, he says, is Downtown. “There are an unbelievable number of new projects in the Downtown core, which didn’t exist three years ago,” says Fort-Brescia. “A real new city is being created there.”