Question: The Miami Design District is getting major institutional investment and luring luxury retailers to the area. What’s the viability of high-end condos in the area? How is The Related Group’s Baltus House doing from a sales standpoint?
The Miami Design District is a planned $1.4 billion mixed-use project anchored by the likes of Louis Vuitton, Hermes and Prada that is being developed by Dacra and LVMH just north of Greater Downtown Miami.
The multi-block project – which reportedly now includes minority partners General Growth Partners and Ashkenazy Acquisition Corp. – is envisioned as a combination of South Beach’s Lincoln Road meets Beverly Hills’ Rodeo Drive in its pursuit to become the premier luxury retail destination in South Florida.
The development stretches from 38th Street to 42nd Street on the east side of North Miami Avenue.
Upon its completion in about 14 months, the Miami Design District will house “over 120 luxury-brand stores, a boutique hotel, 15 to 20 restaurants, luxury residential condos and lofts, galleries, furniture showrooms and numerous large-scale public art, design and graphic art installations,” according to the Miami Herald.
Even though information about the retail portion of the project has been widely publicized, details about the planned condo units have been limited to date. One condo unit dubbed the Sweetbird South Residences at 92 NE 40th St. is reportedly in the works.
Regardless of whatever condo product is finally developed, expectations are high that residents could have a strong interest in living within close proximity to the Miami Design District project.
Besides the proposed Sweetbird South Residences, at least five new condo towers and an additional three rental towers have already been announced within about a 10-minute walk of the Miami Design District, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)
To date, the only residential tower currently under construction near the Miami Design District is the 15-story Baltus House with 167 units located at 4300 Biscayne Blvd., which is scheduled to be completed in the first quarter of 2015. As of Oct. 3, the project was offering 8-percent commissions to brokers who completed deals for the remaining five unsold developer units in the tower. Prices started at less than $445 per square foot, according to the latest CraneSpotters.com Developers Price Survey.
Currently, less than 75 condo units are on the resale market at an average asking price of $465 per square foot around the Miami Design District area, which stretches roughly from Northeast 43rd Street south to Northeast 29th Street, and Biscayne Boulevard west to Miami Avenue, according to data from the Southeast Florida MLXchange. In the first nine months of 2014, buyers acquired nearly 50 condo units at an average resale price of less than $400 per square foot, according to the data.
It is unclear how many units are still unsold in the recently converted Midblock Miami Condo project in nearby Midtown Miami.
The unanswered question going forward is whether the Miami Design District will have enough cache with preconstruction buyers at this moment in the cycle, when nearly 70 new condo towers have already been proposed in Greater Downtown Miami, to warrant the ultra-luxury prices that are expected to be achieved.
Thought Of The Week: 10 percent Of Newly Completed Oceana Key Biscayne Units On Resale Market
As the developer of the Oceana Key Biscayne works to close out the remaining unsold condos in the recently completed 154-unit oceanfront project, more than 10 percent of the condos are already on the resale market at an average asking price of more than $1,800 per square foot, according to the Southeast Florida MLXchange.
Prices for individual resale units in the Oceana Key Biscayne project currently range from less than $1,265 per square foot to nearly $2,800 per square foot as of the end of October, according to the data. To date, a pair of Oceana Key Biscayne units have resold at an average price of more than $1,650 per square foot.
Peter Zalewski is a real estate market consultant, non-practicing licensed real estate broker and columnist for The Real Deal who now answers reader questions about the South Florida real estate market in a new weekly Friday column. Questions and comments can be sent to [email protected] The TRD editors will choose which submissions will be addressed.