A new downtown Miami rental tower will be sold as condos due to continued demand from buyers, The Real Deal has learned.
Property Markets Group, led by Ryan Shear, Kevin Maloney and Dan Kaplan, and its partner Greybrook, plan to launch sales soon of The Elser Hotel & Residences at 398 Northeast Fifth Street, Shear said. The 49-story building, previously planned as Society Biscayne, a mixed-use rental tower, is about to receive its temporary certificate of occupancy.
“We tested the market with reservations. We had pretty good success,” Shear said. “It was enough of an indicator to go for it.”
The Elser, named after a former pier that was completed in downtown Miami in 1917, has 646 residential units, more than 19,000 square feet of amenities, 32,000 square feet of office space and about 5,000 square feet of retail space. It was built on the same block as the planned Waldorf Astoria Residences Miami, and just north of the PMG-developed X Miami rental tower.
Units at the Elser will start in the $600,000s and are short-term rental friendly. PMG is handling sales and marketing in-house. Highgate will manage the short-term rentals, Shear said.
The lack of existing inventory that’s short-term rental friendly, and at that price point, prompted PMG and Greybrook to switch gears to condos.
“It’s a good product to have in Miami, and frankly I don’t think there’s enough,” Shear said. Closings at The Elser are expected to begin in the fall.
A number of short-term rental condo projects are in the pipeline in Greater Downtown Miami, but few have been completed. David Arditi’s Aria Development Group completed YotelPad downtown earlier this year, though unit owners said they were unable to rent their units out for fewer than 30 days due to an issue with the building’s certificate of occupancy.
More short-term rental condos than traditional units are now planned in Greater Downtown Miami, according to an ISG World Miami Report released this year.
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First United Methodist Church of Miami sold the property, which also fronts Biscayne Boulevard, to PMG for $55 million in 2018. As part of the deal, the new building includes a 22,000-square-foot church.
Sieger Suarez Architects designed the building with interiors by Cotofana Designs. Amenities include a double level amenity deck with a pool, co-working spaces, gyms, a lobby and cocktail bar from the Jaguar Sun owners, and a Cafe Domino coffee lounge, according to a press release.
The units range from 400-square-foot studios to 1,300-square-foot three-bedroom units.
Shear said that PMG’s other projects, including the Waldorf Astoria Residences and the two-tower E11even Hotel & Residences, are still “achieving good success,” with healthy sales.
PMG, which sold its Society Las Olas rentals in Fort Lauderdale and the X Miami apartments in downtown Miami, expects rent growth to slow and the buyer pool to grow as a result of record-setting rents in South Florida.
“The rent hikes were so crazy in the last 12 to 18 months,” Shear said. There is a relationship between renting and buying. When renting gets so high, [people buy].”
Correction: An earlier version of this story stated an incorrect number of units in the building.