Flipping at Faena? Nearly $150M worth of condos on the market

Renderings of Faena House, Ken Griffin and Leon Black
Renderings of Faena House, Ken Griffin and Leon Black

For followers of Miami real estate, billionaire hedge funder Ken Griffin’s $60 million purchase of a double penthouse unit at Faena House was a head turner. And when he decided to re-list the units, which were never combined, for $55 million and $18 million, it sent shock waves through the luxury market.

Eloy Carmenate, executive director of sales and broker associate at Douglas Elliman, said that for Griffin, it was just a change of plans.

Alan Faena’s ultra high-end Faena House condos were snapped up by a Who’s Who of the financial world: Lloyd Blankfein, CEO and chairman of Goldman Sachs; Leon Black, founder of Apollo Global Management; and Craig Effron, co-founder of Scoggin Capital Management.

“At that economic level, they change their minds a lot,” Carmenate told The Real Deal.

So much so that $148 million worth of inventory is back on the market since the 18-story tower began recording closings in September, according to data from Condo.com. When investor Paul Cejas bought the last developer unit in May for $20 million, it brought the building’s sellout to more than $407 million.

Carmenate said that it’s typical for 10 to 20 percent of a building’s units to return to the market after a project is delivered. At Faena House, it’s currently 20 percent, or nine of 44 units. He said it’s garnered extra interest because it’s a high-profile building. Some of the nine units currently on the market have lingered on the Multiple Listing Service for nearly a year.

“I don’t think this is a flipper market,” Carmenate said.

Among the units on the market? Black, who paid $16.5 million for his 4,730-square-foot unit, put it on the market in May for $18.5 million. Negotiations were underway at that time but fell through, listing agent Oren Alexander told TRD.

Since then, Black cut the price for unit 9A to $16.5 million – the same price he paid. Finishes include white Venetian terrazzo flooring and Thassos marble countertops.

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“The price is in line with what we believe the current market is,” Alexander told TRD. He said he’s in talks with a Canadian buyer for either unit, 9A or 6A – Alexander is also the listing agent for Alex Blavatnik’s unit, 6A, which is on the market for $16 million. (His brother Len Blavatnik, whose net worth is more than $21 billion, was Alan Faena’s business partner on Faena House.)

“It’s only a matter of time when we’ll see one or two big purchases in the Miami market that will create a domino effect,” Alexander said.

The least expensive unit on the market is owned by Rhahime Bell, an executive at UBS. He paid $2.55 million for unit 7D, and is now asking $3.7 million.

Buyers at Faena House have also included art dealer Larry Gagosian, who paid nearly $13 million for a penthouse unit; billionaire hedge fund manager James G. Dinan, who paid $20 million for unit 14A; and Lions Gate Entertainment Chairman Mark Rachesky, who paid $13.5 million for unit 11BD.

Griffin, arguably the most high-profile, isn’t planning on lowering his asking prices, said Carmenate, who’s targeting buyers from the Northeast and London. Buildouts are underway for both units with an estimated completion date of February 2017.

“By far it’s the most exclusive and most coveted building that exists today in the Miami Beach market,” Alexander said.

Here’s a breakdown of what’s currently on the market at Faena House:

NAMEThe MarquandPRICE RANGEFrom $14,500,000 to $22,000,000
ADDRESS11 East 68th StreetSIZE RANGEFrom 3,837 Sq Ft to 4,595 Sq Ft
TYPEConversionAVG PPSF$4,283
BROKERDouglas EllimanFINISHED BY2015