Rental potential drives South Beach condo-hotel sales

A heavily international buyer pool is increasingly looking to the
ultra-luxury condo-hotel units in South Beach, led most recently by the sale
of Penthouse B at the Setai last month for $15 million. These
sales are driven in some part by the still-strong rental potential of
properties with both hotel and condominium components.

Many of the sales like the Setai’s Penthouse B are actually resales,
according to realtor Diana Garchitorena of Setai Realty, the project’s
marketing and sales division, although Garchitorena is an independent
broker. She said sales have been strong this year, especially in the
late second and early third quarters, due in some degree to prices that
can go as high as nearly $2,400 per square foot.

“I’ve been
seeing a lot of foreign buyers — a lot of Europeans, and a lot of
South Americans [in the Setai],” she said. “The sales this year have
been great because the Setai used to be a bit more overpriced.”

Because
many buyers South Beach are foreign, and not typically full-time
residents, the sales have another common characteristic — they are
almost exclusively condo-hotels — which mean their owners can, if they
choose, rent them out when not in town.

“A lot of what is
happening is because of rental [potential],” she said. “There is a big
influx of rentals, and a lot of people will come and book for the
season and most of the apartments are already rented by September.”

Apartments at the Setai go from $10,000 per month for a standard two-bedroom to almost $20,000 per month for larger properties.

The
buyers of the penthouse, who did not wish disclose their names, were an
investment group from West Palm Beach, which, in keeping with the
foreign trend, had a mostly Scandinavian membership.

The
Penthouse B sale is one of several high-priced condo sales on the
island in the last few months, according to data from the Florida
Multiple Listing Service: they range from a $9 million sale at the
Fontainebleau II Penthouse that sold for $9 million to another
penthouse, Unit 2108 at One Bal Harbour, which sold for $8.7 million at
the end of May.

Another property, the Apogee, though it is not
a hotel, has seen three sales of $4.2 million or greater since the
beginning of the second quarter, with the highest being the sale of
unit 904, which sold for $6.5 million.