A new pronounced risk emerged last week for preconstruction buyers who purchase presale units in proposed South Florida condo towers that aim to bear the names of some of the world’s most recognizable luxury brands in fashion, resorts and sports cars.
In a move that has always been theoretically possible, but never really seemed probable, the naming rights for a luxury brand hotel and spa have been dropped from a Miami Beach oceanfront condo complex that was reportedly sold at a premium price to preconstruction buyers during the last South Florida boom.
The Real Deal reported on Jan. 12 that the three-tower complex with a combined 580 condo and condo-hotel units plus a multi-level spa, located in the 6800 block of Collins Avenue, would “very soon” lose its affiliation with the Canyon Ranch health resort brand, which it did two days later.
As of Monday, the hotel’s front desk now answers the phone as the Carillon Hotel & Spa and a website is offering online booking access for rooms in the former Canyon Ranch complex.
Canyon Ranch’s departure from Miami Beach comes less than two months after the Chicago-based private equity firm Z Capital Partners “won bankruptcy court approval” in November 2014 to take ownership of “13 unsold units, the hotel’s common area, spa, pools, retail spaces and gym.”
Despite opposition from unit owners, the name of the complex was changed to the Carillon Hotel & Spa in a reference to the former hotel that once operated on the site.
Although marketing literature and Realtor listings still continue to promote the project as Canyon Ranch, the three towers in the Miami Beach complex have always been legally known as the Central, North and South Carillon Beach Condominium associations, Miami-Dade County property records show.
It is unclear what the loss of the Canyon Ranch brand name will mean for unit owners in the condo complex.
Nearly 55 condo units are listed for resale at an average asking price of $1,005 per square foot in the former Canyon Ranch project as of Monday, according to the Southeast Florida MLXchange.
In 2014, buyers purchased three dozen units in the former Canyon Ranch complex at an average price of $875 per square foot, according to the data.
By comparison, at least 70 condos – excluding the units in the former Canyon Ranch – that are located in nearby oceanfront buildings are on the market at an average asking price of less than $630 per square foot in the North Beach neighborhood of Miami Beach, according to the data.
Last year, buyers purchased about 116 condo units at an average asking price of less than $500 per square foot in nearby oceanfront building in North Beach, the data shows.
Brand name affiliations for preconstruction condo projects are growing in popularity in this current South Florida real estate boom.
Developers are increasingly aligning their proposed projects with international luxury brands in hopes of gaining a competitive advantage in attracting preconstruction buyers in a South Florida market, where nearly 325 new condo towers with more than 41,400 units have been announced since 2011, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)
The unanswered question going forward is whether preconstruction condo buyers will attach the same exclusively in the future to new South Florida towers that heavily market their luxury brand affiliations as a strong selling point.
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.