The Weekly Dirt: Short-term rental-friendly condos eating up more of Miami’s housing pie

A recent report found that just over half of the pipeline of new condos planned or under construction consists of short-term, rental-friendly projects.

The ISG report, which tracks new projects from Miami’s Coconut Grove to Hillsboro Beach that are east of I-95, stated that of the more than 20,600 condos in the works, 50.1 percent of those units will be able to be rented out with few to no restrictions, like an Airbnb-type of condo. 

We have said this before, but it’s true. Developers are flocking to this trend because of strong buyer demand. More sales means construction lenders are more likely to provide loans, which means developers can get these projects built and sold. That’s a great proposition, especially when it’s so hard to build other property types, like multifamily. 

So why am I pointing this out?

For many end-user buyers, single-family homes are now unattainable because of the huge gains in home prices. That means condos offer buyers the greatest range in price and size. But the vast majority of existing condo resale inventory as of March 31 is 30 years or older, according to the report. 

Though older condos may be less expensive to buy, they’re typically harder to finance and increasingly more expensive to maintain in the wake of the deadly Surfside condo collapse. 

Craid Studnicky, CEO of ISG World, told me he is sick of talking about short-term rentals. These types of projects “never appreciate in value because the income people expect is never realized,” he said. 

He wants developers to build traditional condos, and a lot of them. It also doesn’t help that many of the traditional new condos planned or under construction are more expensive to purchase than units at the short-term rental condo projects. 

Last week, at the ribbon cutting for the Aston Martin Residences, a condo tower in downtown Miami that was in the works for a decade, Miami Mayor Francis Suarez praised the Coto family, the developer of the luxury project. 

“With your help we will end homelessness in a major city in America,” he said. 

This was a head-scratcher for me, as unit prices go up to $59 million for the penthouse, the only unit remaining. 

Politicians often praise developers building housing. We are experiencing a shortage of affordable housing, after all. But the type of housing being built is just as important.

What we’re thinking about: Formula One’s Miami Grand Prix is this weekend. Brokers, developers and others in the industry are using it to make a sale. Did you? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Developer Bruce Malasky sold the non-waterfront spec mansion at 205 Via Tortuga in Palm Beach to a hidden buyer for $43.7 million.The 11,000-square-foot mansion, completed this year, has seven bedrooms, nine bathrooms, two half-bathrooms, a pool and a guest house. 

Commercial: Steve Ross’ Related Companies sold the W Fort Lauderdale hotel at 401 North Fort Lauderdale Beach Boulevard to an affiliate of New York-based Blackstone for $97.7 million. The 346-key oceanfront hotel sold for about $282,000 per room. Related owned the property for more than a decade. 

NEW TO THE MARKET 

A waterfront mansion on Hibiscus Island in Miami Beach listed for $70 million, which marks the second most expensive single-family home on the market in the city. Lino Morejon with Mayfair Real Estate Advisors has the listing for the nearly 11,000-square-foot estate at 428 South Hibiscus Drive, which includes eight bedrooms, eight bathrooms, three half-baths, a private dock, beach area, and a rooftop with a kitchen, Jacuzzi and outdoor shower. 

A thing we’ve learned 

The 2024 hurricane season is predicted to be “extremely active” with an estimated 11 hurricanes, five of which could be major, according to researchers at the University of Arizona, as reported by Wired magazine. (I was knocking on wood while I wrote this.) 

Elsewhere in Florida 

• Florida’s ban on abortions after six weeks of pregnancy went into effect last week. The ban, one of the strictest in the country, will drastically limit abortion care in the Southeast. More than 9,300 people traveled to Florida last year for abortion care, NBC News reports. 
• Authorities have identified “several” people who dumped large buckets of trash in the ocean in Boca Raton in late April, seen in a video that’s gone viral. Anyone found illegally dumping more than 15 pounds of waste into a waterway could face a first degree misdemeanor in Florida. 
• The Florida Supreme Court denied GL Homes’ appeal tied to a lawsuit over the developer’s controversial plans to build a 550-home development on a former golf course in the Calusa neighborhood, an area that’s home to critically endangered species.