The Real Deal Miami

Condo flippers return to Greater Downtown Miami

MyBrickell units already hitting resale market
Peter Zalewski

Peter Zalewski

Initial results suggest condo flippers have returned to South Florida with the completion of the second new residential tower in Greater Downtown Miami since the devastating real estate crash.

Less than a month after the grand opening party of Related Group’s MyBrickell, the new owners of eight units in the 28-story tower have already listed their properties on the resale market at an average markup of nearly 80 percent above the original purchase price, according to an analysis of public and private records.

Following that mindset, an additional 20 unit owners have opted to list their new MyBrickell condos for rent on the Southeast Florida MLXchange.

As the developer continues to transact with original preconstruction buyers in the 192-unit MyBrickell, about half of the new units that have closed – and been recorded by Miami-Dade County – are already listed for resale or rent.

To date, none of MyBrickell units have been successfully resold or leased, but that is not stopping the owners from testing the Brickell market, which stretches from the Miami River south to the Rickenbacker Causeway and Biscayne Bay west to I-95.

The new owners at MyBrickell have listed their units for resale at an average price of nearly $512,000, or more than $575 per square foot.

These same MyBrickell units were purchased from the developer within the last 30 days at an average price of about $285,800, or less than $325 per square foot.

Overall, buyers have purchased at least 58 units in MyBrickell for an average of nearly $283,060, or an average of less than $345 per square foot, through Monday.

An additional five condo units that may have been purchased but are not yet been recorded by Miami-Dade County are currently on the resale market at an average price of about $369,600, or nearly $495 per square foot.

In total, 13 units at MyBrickell are currently on the resale market for an average price of about $457,050, or $502 per square foot.

Compare this to the current condo resale market in Brickell, where more than 860 units are up for resale at an average price of nearly $680,000, or about $504 per square foot.

Besides the MyBrickell condos already on the resale market, nearly 30 additional units are available on the rental market for a monthly average of $2,190, or about $2.64 per square foot.

The new owners of 21 MyBrickell condos have placed their units on the rental market for an average price of more than $2,150 monthly, or about $2.73 per square foot.

An additional seven units that have not yet been recorded with Miami-Dade County as sales are listed on the rental market for an average price of more than $2,275 monthly, or $2.40 per square foot.

By comparison, nearly 550 condos are on the rental market in Brickell at an average price of more than $2,900 monthly, or about $2.61 per square foot.

Given the strength of the current residential real estate market, it is difficult to assess the ratio of investors to primary users at MyBrickell during this latest construction boom. Only one other condo tower, 23 Biscayne Bay, has been built in Greater Downtown Miami since the crash.

At 23 Biscayne Bay, a supermajority of the 96 units transacted in the summer of 2012 for an average price of about $264,500, or about $251 per square foot, according to Miami-Dade County records.

Currently, a dozen condos at 23 Biscayne Bay are on the resale market at an average price of $406,000, or about $265 per square foot. An additional four units are on the rental market for an average of nearly $2,525 monthly, or $2.21 per square foot.

The unanswered question going forward is whether primary users or flip-oriented investors will make up the majority of the buyers of the nearly 50 new towers totaling more than 13,800 units proposed for Greater Downtown Miami during this latest boom.

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.