This is how many new condos are left to sell in Miami
89% of nearly 20K units have been sold or presold but the pace has slowed
To gauge the start of Miami’s next condo cycle, you could look at the bulk of inventory that remains today.
Developers currently have 2,101 new development units left to sell in Miami from this cycle, according to ISG Miami’s latest report. Of those, 587 units have been delivered, 1,331 are under construction and 183 are in the preconstruction phase.
The current cycle began in 2012, and the pipeline of new units excludes projects that have been shelved over the past seven years. The report also does not include units available on the MLS.
“We’re calling this the supply shock,” said Craig Studnicky, CEO of ISG World, which authored the report.
Out of the nearly 20,000 units in the pipeline this cycle, from Coconut Grove to Fort Lauderdale and east of I-95, 89 percent have been presold, Studnicky said, citing sales reports individual developments. That ‘s an average of 1,340 units sold each year during the last three years.
Still, sales have been slow in Miami and developers have taken notice. “We couldn’t find one developer that is bragging about a groundbreaking in 2020,” Studnicky said.
Groundbreakings peaked in 2014 at 23, and have been falling on an annual basis, down to 18 in 2015, 14 in 2016, 11 in 2017 and just four last year. Developers have also been quiet on when they plan to launch new projects, with experts and industry insiders predicting a 2020, 2021 or 2022 start to a new cycle.
Una Residences, a 135-unit luxury condo building planned for 175 Southeast 25th Road in Brickell, launched sales roughly a year ago and is 45 percent presold, according to the report. It’s expected to break ground either this year or next. Russian billionaire Vlad Doronin’s OKO Group and investment firm Cain International are developing the project.
Brickell Flatiron, Ugo Colombo’s luxury tower under construction at 1001 South Miami Avenue, is 90 percent sold. The 64-story, 527-unit building began selling in April 2014, and recently lowered its deposit requirements after it received conditional Fannie Mae approval.
In downtown Miami, projects that have yet to break ground – and which began sales later in the cycle – have fewer sales. Aston Martin Residences is 48 percent presold of 390 units; and Okan Tower is 56 percent sold of 149 units. YotelPad Miami, which broke ground earlier this year, is 74 percent sold.
In the Beaches market, which ISG defines as Miami Beach, Bay Harbor Islands, Surfside, Bal Harbour, Sunny Isles Beach, Hallandale Beach and Hollywood, projects like 57 Ocean (18 percent sold) and 2000 Ocean (15 percent sold) reported lower sales totals than their competitors. Multiplan Real Estate Management, led by Brazilian billionaire Jose Isaac Péres, launched sales of 57 Ocean in December and Shahab Karmely of KAR Properties unveiled 2000 Ocean over the summer of 2018.
Of the 1,355 units in Fort Lauderdale’s pipeline, east of I-95, about 1,005 or 74 percent have been sold. Kolter Group’s 100 Las Olas is the only building with less than 50 percent of its condos sold. The 113-unit tower is 40 percent sold, according to ISG. The W Residences Fort Lauderdale, a project that the Related Companies took over from a failed developer, is still only 65 percent sold of 171 units. Earlier this year, Related added a third year to its previous two-year leaseback offer to potential buyers as it tries to sell out the project.
Developers have been offering an array of incentives to unload their unsold inventory and move onto new projects, Studnicky said.
Next-cycle developments include Property Markets Group and its partners’ plan for to build the Waldorf Astoria Hotel & Residences Miami, a 98-story luxury hotel and condo tower at 300 Biscayne Boulevard. In December, PMG scored a $33 million pre-development loan for the site.
Studnicky added that in addition to buyers from high-tax states migrating to South Florida, South American buyers have also returned to the new development scene, with sales coming from Mexico.
“To make a long story short, [President Andres Obrador] is scaring the money out of Mexico,” from Colombia, Brazil and Argentina,” Studnicky said. “We didn’t have an international market a year ago.”