Construction for Related’s Auberge Miami could be on hold until 2018

Miami /
Aug.August 17, 2016 12:45 PM

Amid a market slowdown, the Related Group is likely delaying construction for its Auberge Residences & Spa Miami project until at least end-year 2018, sources told The Real Deal.

Auberge is slated to rise at 1440 Biscayne Boulevard, currently the site of a mid-rise office and retail building in Miami’s Arts & Entertainment District.

According to emails obtained by TRD, Blanca Commercial Real Estate — the brokerage handling leasing for Related’s development site — sent an offer to at least one tenant that would extend its lease until late August 2018, without a previously used development clause that would allow Related to terminate a lease ahead of demolition.

A copy of a lease at the building from 2015, obtained by TRD, had included a provision that Related could cancel the lease with a minimum of six month’s notice.

The Related Group declined to comment, as did Blanca.

However, during TRD’s tour of Auberge’s $2 million sales gallery in April, Related’s Jon Paul Perez said the project would break ground in 2017. Construction would take 30 months for the first tower.

“It’s not terribly surprising,” ISG Principal Craig Studnicky told TRD. “Preconstruction in Miami is not as robust as it was, and it’s due mostly to that high dollar.”

Studnicky, whose firm has a partnership with Related, said he wasn’t aware construction had been delayed for Auberge.

“Related will just keep pushing” until they hit the right sales number, he said.

As of April 2016, Auberge had reserved 20 percent of its 290 units, Perez told TRD. But according to a second-quarter report from ISG, sales for the project now stand at 15 percent.

Auberge, overall, will be a three-tower project developed on 2.8 acres along Biscayne Boulevard. Related’s plans call for about 1,400 units when the project is completely built, with prices for the first tower ranging from $350,000 to $3.9 million.

The project is meant to be 31-year-old Jon Paul Perez’s first foray into leading a development for Related. The vice president, who’s one of founder and CEO Jorge Perez’s four children, is being groomed to eventually take over the company alongside his younger brother Nick.

Auberge’s delay is yet another example of a slowing condo market in Miami. The velocity of preconstruction sales has taken a dive in the past year, which has led to the cancellation of at least two projects: Boulevard 57 in Miami’s Upper East Side, and Krystal Tower on the border of downtown and Overtown (though it’s since been revived by a new developer, according to The Next Miami).

Related, South Florida’s most prolific condo development company, has not been immune. Over the past 10 months, the company has raised agent commissions and slashed preconstruction deposits at two of its projects, Brickell Heights and SLS Brickell.


Related Articles

arrow_forward_ios
Don Peebles, Jorge Perez and Barry Sternlicht with the Clevelander hotel (Getty, iStock)
Alcohol rollback on Ocean Drive pits developers against business owners
Alcohol rollback on Ocean Drive pits developers against business owners
Related Group’s Jorge Pérez and his Apogee Beach penthouse. (Related, Douglas Elliman)
Jorge Pérez sells Hollywood penthouse for $6M
Jorge Pérez sells Hollywood penthouse for $6M
Rendering of Baccarat Miami (Credit: ArX Solutions)
Miami condo craze returns as developers look to seize the moment
Miami condo craze returns as developers look to seize the moment
Renderings of 1301 South Ocean Drive with Jorge Pérez and Jon Paul Pérez (Photos via Related/Arquitectonica)
Related wins approval to develop high-rise condo project in Hollywood
Related wins approval to develop high-rise condo project in Hollywood
Jorge and Jon Paul Perez with a rendering of the project (Getty, Related Group)
Related wins approval for another Wynwood mixed-use multifamily project
Related wins approval for another Wynwood mixed-use multifamily project
Jorge Perez and Jon Paul Perez and a rendering of the project (Getty, Quantum Space Studio)
Related scores $95M loan for two-tower luxury rental project in West Palm
Related scores $95M loan for two-tower luxury rental project in West Palm
From left: David Martin, Aby Rosen, Jorge Perez, Barry Sternlicht, Victor Ballestas and Russell Galbut (Getty)
Developers bet on long-term demand for Class A Miami Beach office space
Developers bet on long-term demand for Class A Miami Beach office space
Domio Wynwood, Gustavo Miculitzki, and Jon Paul Pérez (Credit: Alberto Tamargo/Getty Images)
Iconiq buys Related and Block Capital’s Wynwood apartments for $77M
Iconiq buys Related and Block Capital’s Wynwood apartments for $77M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...