The Next Wave
Boldly taking on the looming possibility of a bubble, developers are dotting the map with a whole new set of South Florida towers — rising in the shadow of condominium units that, a decade ago, were merely dreams.
A big reason for the new development is that, following the financial crisis, there’s simply greater demand for hard assets, according to Argentine developer Manuel Grosskopf, who is part of a development team with his father, Sergio. “People want to touch the investment,” Grosskopf said. “Now there are more real deals.”
Related’s Jorge Perez and Newgard Group’s Harvey Hernandez got things going at the end of 2011 with MyBrickell and BrickellHouse, respectively (along with another Perez project, Apogee Beach in Hollywood), and there’s been no slowing down.
Grosskopf, meanwhile, has two condo projects in the works, including the Chateau Beach on 174th and Collins in Sunny Isles and a second Chateau-branded property, Chateau Ocean, in Surfside. The land for the latter was acquired in a $50 million deal for three parcels announced in June.
Still, he cautioned that in response to charges of a new bubble, there are not nearly as many projects now as there were in the previous cycle that effectively began in 2003, when the planned number was on the heavy side of 15,000.
As you’ll learn in the story, “How Latin America saved Miami,” the new wave has been heavily influenced by the dominant Latin-American market, which has shifted the way South Florida developers market and build their condos — seeking larger initial deposits and more money over the course of construction.
“The way that they are financed, with the deposits from the buyers, it seems it’s more of a real underwriting from the point of view of the developers,” Grosskopf said. “It’s not so much leverage — that’s why I feel that a lot of people with a lot of cash are putting money in these kinds of properties.”
Perez, whose Related Group is also a key player in the multi-family boom of late, recently announced another new condo project, One Ocean, in the South of Fifth district on South Beach. That project comes on the heels of several other condo projects Perez has launched: the 1100 Millecento Residences on Brickell’s South Miami Avenue (one specifically targeted to South American buyers), the Icon Bay in downtown Miami and the Beachwalk Tower in Hallandale Beach.
So what else is being built? A lot. There were more than 70 new towers in some stage of development as this issue went to print, with more on the way, according to data provided by brokerage and consultancy Condo Vultures, additional reports and research by The Real Deal.
They range from small properties like the eight-unit Morabito project at 36th and Collins in Miami Beach to the massive 700-unit, 620-hotel-room One Bay front Tower by longtime South Florida developer Tibor Hollo.
Some are design-oriented, like Terra Group’s Grove at Grand Bay project in Coconut Grove, which is being designed by leading architectural firm Bjarke Ingels Group. Others are emphasizing technology, like the planned Porsche Design Tower in Sunny Isles, which will have its own robotic parking garage that gives residents the chance to drive into the building and ride in their cars on an elevator to whatever floor they live on.
Hong Kong’s Swire, which broke ground on the massive Brickell CitiCentre project over the summer, will be bringing in two 40-story towers totaling around 800 units.
Others are further north, like the proposed Icon Palm Beach at 4001 North Ocean Drive, while others are capitalizing on newly hot areas like Sunny Isles, which was a quiet outpost in northern Miami-Dade County just 10 years ago and is now perhaps in higher demand than any other submarket in South Florida.
And others are inching closer to the completion phase, like developer Martin Margulies’ Bellini Williams Island in Aventura, which also launched construction last year.
Lionheart Capital, which took over the former 2700 North Ocean project on Singer Island and rebranded it as Ritz-Carlton Residences, is planning a large-scale development on what is currently the site of the Miami Heart Institute.
And then there’s the Oceana project on Key Biscayne, the brainchild of another Argentina-based developer, Consultatio, marking the first major development in Key Biscayne in some time.
Miami Beach’s Collins Avenue is a hub of projects, with many new condos at some stage of development.
While it’s not yet clear if all the amped-up activity will become a bubble, South Florida’s condo market is clearly starting to boil.