For those who are interested in buying a condo in South Florida, here is a very interesting article I came accross:
The South Florida real estate ride has been a harrowing one. Back in 2004
and 2005, when money was cheap and easy, condos changed hands as fast as
developers could conceive of them. Apartments were flipped again and again,
long before the buildings were even built. Prices hit inconceivable heights
- $1,000 per square foot for Miami?!
Of course, many of these units lost about half their value during the
downturn, and buildings struggled to stay afloat after buyers bailed on
their contracts. But now, after some major price adjustments, things are
looking sunnier - at least in one beach community.
Sunny Isles Beach - situated next to tiny Golden Beach on the north, Bal
Harbour on the south and Aventura on the west - is home to a three-building,
813-unit Trump Towers complex on Collins Avenue that has sold more than $100
million in condos this year. Even more important, more than $60 million of
these deals have actually closed.
Just north on Collins Avenue, the 256-residence Jade Ocean development has
sold about 10 units per month this year, with prices averaging $1.4 million.
Fifty-five percent of the building has closed.
Make no mistake, this is all happening at a big discount.
"We really set the floor for pricing in Miami," Gil Dezer, president of
Dezer Properties, says of Trump Towers. "Here we are in a Trump building,
selling at $450 a foot on the ocean. People are waiting for the bottom, and
I think we hit the floor."
Dezer is also in charge of the nearby Trump Grande, another three-tower
development on Collins Avenue. That complex includes the Trump International
hotel and two residential towers with 669 condos combined.
"We were averaging $1,000 a foot before [the downturn], and now we're
getting about $550 a foot; we're down literally 45 percent," Dezer says of
Trump Grande.
The story is similar over at Jade Ocean, which is fetching about $625 per
square foot, down from $840 per square foot at its peak.
"We sold [Jade Beach] at an average of $540 a square foot; the resales went
up to $750 a square foot," says Edgardo Defortuna, president and CEO of
Fortune International Development, which developed this 51-story sister
property of Jade Ocean. "But some of those buyers didn't close, and we ended
up taking those units back."
But in the last six months, Defortuna has managed to resell the remainder of
Jade Beach's 248 units - save one, which is available for $2.3 million.
Next door at Jade Beach, "We've been selling eight to 12 units per month
since late 2009," he says.
Over at Trump Grande, Dezer "started closings in January of 2009, right in
the middle of the whole mess. We were totally sold out, and then a lot of
people elected not to close because they couldn't get financing or their
situations had changed; I heard every situation in the book."
But he's managed to completely resell one Trump Grande building and is 65
percent through the other.
In January, Dezer Development decided to bet even bigger on Sunny Isles by
assuming a $265 million loan from a development partnership that included
the Related Group in order to take over sales of Trump Towers. Since then,
Dezer has sold about 285 apartments at Trump Towers at an average of around
$420 per square foot.
Part of this success is thanks to Sunny Isles' beach location surrounded by
wealthy enclaves. Golden Beach, full of multimillion-dollar mansions (Ricky
Martin has one), recently completed a $30 million civic improvement project
that included landscaping and an eco-friendly storm-water drainage system.
"The projects that typically felt the bust a little stronger or a little
more harshly were because the investors would make decisions based on the
numbers, but the emotional purchaser and the end user are always the
stronger buyers," says area broker Jodi Macken, president of Macken Realty.
"Thankfully, Golden Beach has sustained itself because it caters toward an
end user."
Nearby Bal Harbour is a shopping destination that rivals Madison Avenue or
Rodeo Drive. And Aventura is a quiet golf and beach destination favored by
Michael Jordan and a sharp set who can't stand the bustle of South Beach.
"People bring their friends, they go shopping at Bal Harbour," says
Defortuna. "The Sunny Isles market has become very attractive."
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