A Brickell-based investment group purchased a trio of prospective residential development sites in the Town of Bay Harbor Islands, where condo builders have already announced 20 new projects totaling 725 units.
The Miami company called 9770 E Bay Harbor Properties LLC, with managers Herve Barbera and Nathaniel Fraiberger, paid nearly $5.2 million – an average of $86 per square foot – for three lots with a combined 60,000 square feet of land at the intersection of 98th Street and East Bay Harbor Drive on June 20, according to Miami-Dade County and Florida Division of Corporation records.
Presently, three 1950s-era apartment buildings with a combined 39 units are located on the newly acquired lots. The three properties have a combined 2013 land value of nearly $3 million for an average of $49 per square foot, according to the Miami-Dade County Property Appraiser.
The seller – Delaware-based Bay Harbor Holdings LLC with authorized representative Arnaud Karsenti – originally acquired the three properties in January 2013 as part of a $15.3 million acquisition of a 10-property portfolio of low-rise rental buildings constructed between 1947 and 1957 on or around East Bay Harbor Drive in Bay Harbor Islands.
Bay Harbor Holdings purchased the 10 properties totaling nearly 4.5 combined acres for an average land cost of nearly $79 per square foot from an entity called The Palms of Bay Harbor LLC, with manager Scott Herrick of Arlington, Va. Bay Harbor Holdings is also proposing to develop five condo buildings – dubbed Sereno Residences East, Sereno Residences West and the Villas At Sereno – totaling 107 units on four of its other lots in the town, according to the preconstruction condo projects website CraneSpotters.com.
(For disclosure purposes, my firm operates the website.)
It is unclear what Bay Harbor Holdings plans to do with its last three remaining sites of the 10-property portfolio.
The Bay Harbor Islands market is one of the most active areas for new condo development in South Florida due in part to a combination of the availability of developable land on the barrier islands and close proximity to its wealthier neighbors to the east in Bal Harbour and Surfside.
The 2013 sellout of the St. Regis Bal Harbour Residences for a combined $1.05 billion – an average of more than $1,200 per square foot – attracted a lot of attention from condo developers.
Overall, developers are proposing more than 30 new condo towers with nearly 1,350 units in the market of Bal Harbour-Surfside-Bay Harbor Islands. Based on new units announced, the Bal Harbour-Surfside-Bay Harbor Islands market ranks seventh behind Miami Beach during this latest South Florida condo construction boom, according to CraneSpotters.com.
Given the St. Regis Bal Harbour Residences sales and price success, it is no surprise that developers have announced seven new condo towers with more than 600 units fronting the Atlantic Ocean in Bal Harbour and Surfside. Prices for units in these oceanfront projects start at $1,350 per square foot. By comparison, preconstruction condo units in Bay Harbor Islands start at less than $400 per square foot.
The unanswered question going forward is whether enough buyers will come forward to purchase new condo units at preconstruction prices in Bay Harbor Islands, given the average resale price for existing units in the town transacted at $230 per square foot during the first six months 2014, according to the Southeast Florida MLXchange.
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.