The Real Deal Miami

Jade Signature developer scales down project

Units, parking spaces to be reduced at Sunny Isles Beach condo tower
Jade Signature rendering

Jade Signature rendering

As competition for buyers intensifies in Sunny Isles Beach, where 14 new condo towers are proposed, developer Edgardo Defortuna is reducing the number of units, square footage and parking spaces in his Jade Signature tower under construction in the city.

Citing “recent changes in the marketplace,” the developer – in a letter submitted by attorney Clifford A. Schulman of law firm Weiss Serota Helfman – filed a “major site plan modification” request seeking formal approval for the changes from Sunny Isles Beach commissioners. The application is on the agenda for Thursday’s commission meeting.

The Jade Signature modification request calls for the elimination of 31 condo units and seven parking spaces in the 56-story tower at 16901 Collins Avenue, which is immediately south of a pair of condo towers – Jade Ocean and Jade Beach – that were previously developed by Defortuna.

Jade Signature is selling at a starting price of more than $1,265 per square foot as of May 2, according to the latest monthly Developer Pricing Survey by the preconstruction condo projects website (For disclosure purposes, my firm operates the website.)

For context, Defortuna’s Jade Ocean is a 48-story condo tower with 254 units that was completed in 2009 at 17121 Collins Avenue. The project sold out in April 2012 for $377.9 million at an average of $713 per square foot, according to an analysis of Miami-Dade County records. Defortuna’s Jade Beach is a 49-story tower with 248 units that was completed in 2008. This tower sold out in September 2012 for $303.9 million at an average of $651 per square foot.

Even though Defortuna has trimmed the number of units to be built in Jade Signature, the veteran Sunny Isles developer minimally changed the amount of square footage that the new condo tower will have upon completion. Under the modification application, the overall floor-area ratio of the Jade Signature is slated to be reduced by less than 2,150 square feet for a revised total density of 645,597 square feet.

Fewer units combined with virtually the same square footage results in lower density and more space per residents at Jade Signature.

Under the original plans, the floor-area ratio represented an average of nearly 2,905 square feet per unit. The revised plans call for a floor-area ratio average of nearly 3,365 square feet per unit. This works out to an average increase in space of about 16 percent.

The decision to lower the density of the planned Jade Signature comes at a time when developers are proposing more than 1,800 units in the Sunny Isles market, which has a population of 21,500 and a land area of 1.02 square miles, according to the U.S. Census Bureau.

During the last South Florida condo boom that began in 2003, developers created 28 new condo towers with more than 6,350 units in Sunny Isles Beach, according to real estate consultancy Condo Vultures LLC. (For disclosure purposes, I am a principal of this firm.) Less than 60 developer units were unsold as of December 2013.

Defortuna acquired the 2.5-acre oceanfront Jade Signature site for $22 million – or about $203 per square foot – in April 2012 from Sunny Isles Property Holdings LLC, which is managed by Carlos Mattos and Richard Toledo, according to Miami-Dade County records.

Jade Signature is being developed by an entity – Sunny Isles Beach Associates LLC – that is ultimately comprised of two partners: Ivory Sparrow LLC, which has 80 percent of the corporate stock and SIBA Manager LLC, which has 20 percent of the stock, according to government records. SIBA Manager LLC is ultimately controlled by Defortuna, Carlos Carballo and Eduardo Imery.

It is unclear who is ultimately behind Ivory Sparrow LLC, as the entity was not a listed as a Florida corporation as of Tuesday.

There are about 480 condo units in oceanfront buildings on the market in Sunny Isles at an average asking price of nearly $810 per square foot, according to the Southeast Florida MLXchange. In the first four months of 2014, buyers acquired more than 130 condo units in oceanfront towers at an average price of less than $630 per square foot.

Based on an average of 33 condo resales in oceanfront towers per month in 2014, the Sunny Isles market has about 14.5 months of inventory. A healthy condo market is said to have six months of inventory available for resale. Less than six months of condo resale inventory suggests a seller’s market, while more than six months suggests a buyer’s market.

The unanswered question going forward is whether there are enough buyers willing to pay today’s prices for all of the proposed and existing condo units currently being marketed in the Sunny Isles area.

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, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.

  • TiredOfZalewski

    Peter, you write that “a healthy condo market is said to have six months of inventory available for resale.” Who is it that says this? I’m so exhausted by the fact that in every article you write, you just copy and paste the last 3 paragraphs. Your entire business model is based on fear. But if and when the market crashes, as you make certain everyone knows to be your prediction, you will suffer just as bad as all these developers you attempt to make look foolish.

  • mondocondo

    What a misleading headline (Editor?) – the article says the project has the SAME amount of square footage, so how is that “scaling down”? If anything, it means that larger units are being sold, which reflects positively on the project and the market.

    • Falafel

      It could also mean people want more bang for their buck, due to the hyper-competitive market.

  • Jake

    Stop calling everyone a Veteran Developer. He is a veteran at being a realtor not a developer.

    • Mondocodo

      Defortuna built Jade Brickell in 2004. Since then he’s built 5 condo towers containing over 2 million square feet with another 1 under construction and 1 on the drawing boards. That qualifies as Veteran to me. What’s your criteria?

  • Jade Signature

    This article implies a scenario that is inaccurate on many levels.

    To start, Jade Signature is and has been marketing 192 residences since the day it launched in Mid 2013, and is NOT reducing anything from the product that has been presented consistently throughout.

    The filings that a developer makes during the process with the city is often an evolution, and what is documented as a proposed detail for site plan approval in its earliest stages frequently is not the same technical detail that ultimately appears when all filings are concluded and official. In this case, Jade Signature originally
    filed for 200+ residences in order to give architects Herzog & de Meuron the maximum flexibility with their future unfolding design. Today there will be a filing solely to bring all records up to date, and is an administrative benign task. It has absolutely ZERO impact or reflection on the building that Fortune Development Sales has been selling all along. To substantiate this fact, the condo documents were recorded October 2013 and also reflect 192 residences.

    Jade Signature is enjoying tremendous success and is currently leading all Sunny Isles developments with sales pace. More units have been sold at Jade Signature over the last ten months than any other Sunny Isles project over the past two years.
    Over 70% of Jade Signature is sold, and at an average healthy $1400 per square
    foot. Additionally, the previous Jade projects in Sunny Isles, Jade Beach & Jade Ocean, are leading the re-sale market in absorption and pricing, further demonstrating the strong interest for Jade buildings.

    No one contacted Fortune International for participation in this Real Deal article, as we would have been happy to not only to explain to the reporter on what is quite normal administrative procedure, but we would have corrected the implications. Sunny Isles officials are as taken aback by the inaccuracies reported as we are. We
    all welcome the opportunity to assist in publishing a complete and accurate account of this situation, which again, is nothing but an administrative update.

    The Jade Signature team

  • Loes Franquinet

    For all the rendering as well as residence and amenity infomation, prices and floor plans go to this independent review


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