Brickell and Miami Downtown Real Estate
THE DAVID SIDDONS GROUP www.luxlifemiamiblog.com
2013
INVESTORS GUIDE
An Investors Guide
T
his market report looks back at 2012 exploring the growth of the Brickell and Downtown Miami real estate market.
From boom to bust to boom, the purpose of this report is to provide the reader with a better understanding of market prices, values and puchase opportunities. I would like to thank the DDA, EWM, and the Florida Real Estate Association for providing me with much of the information that went into this report.
What is covered? 1. What happened in Brickell and Downtown in 2012 2. What’s new in Brickell and Downtown Miami 3. What to Consider when investing in Miami Condos 4. Infrastructural and social developments in Brickell and Downtown 5. Brickell and Downtown Condos in detail 6. Appendix and references
Asia corner unit. Asia is currently trading at $855 per sqft. 2
INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
What happened in Brickell/ Miami downtown in 2012? Of
key
Brickell
Importance, and
property
Downtown
prices
dramatically.
increased 1
bed
in
units
increased on average: 27.9%, 2 bedrooms: 24.5%,
Prices increased by
17-27%
3 bedrooms: 27.3% and 4 bedroom units 17.6%. Visit: www.luxlifemiamiblog.com/condomarket or go to the appendix for the complete table of data
The rental market increased significantly as the population grew but the inventory of available units for the most
Rental Market prices increased up to
8.3%
A superb 3 bed unit at Epic. This building is currently trading at an average of $778 per sqft.
2011
2012
22.5%
PRICES PER SQUARE FOOT
$600
which in turn pushed rental prices up. Visit: www.luxlifemiamiblog.com/rentalmarket or go to the appendix for the complete table of data
The speed at which properties sold also increased. As demand increased over 2012 so properties sold on average 35 days faster than sales of the year before. We expect this trend to continue through 2013. Visit: www.luxlifemiamiblog.com/condomarket or go to the
594
$500
appendix for the complete table of data
517 Decrease in inventory for 2 bed units by
$400 $300 $200
Time on the Market decreased by
popular 1 and 2 bed units decreased by on average 14%.
332
312 241
262
31%
323
As we saw the rate of buying increase we saw inventory drop drastically. Inventory is quite possibly the most telling factor in a market’s future success. If inventory falls below a critical point then prices can only further increase. In Brickell inventory currently sits below a
247
level that maintains market balance and prices can only increase through 2013.
$100 $0
1 Bedroom units
2 Bedroom units
3 Bedroom units
4 Bedroom units
Information derived from Florida MLS data. 3
INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
1. Midtown and Design District Prices went from just $232 to $315 per sq.ft. in less than 1 year. There is a significant commercial development going on in the area. Tuttle Causeway
2. Downtown Prices rose on average from $297 to $365 per sq.ft.
Midtown & Design District
Brickell is divided into 3 areas: Brickell Key, Financial District, and Old Brickell 3. Brickell Key
NE 15 St.
There are no more condos to be built on the island. Over 2012,
thur Causew MacAr a
there was a 15% price increase per sq.ft.
y
N Miami Ave.
New condos being developed are: MyBrickell, 1100 Millecento,
Financial District
e. Av
.
ve iA
4
5. Old Brickell Starting with sq.ft. prices in $200 range, these older condominiums can offer excellent entry-level value.
Miami, “The new global city” as called by the Wall street Journal, is home to:
10%
5%
• 60 International banks • 29 consulates
Old Brickell
S
15%
iam
M
INVESTORS GUIDE 2013
useway
Rickenbacker Ca
• 26 Foreign Trade Offices • 9 International Trade organizations • 8 International Chambers of Commerce
0%
Downtown Miami
Brickell Key
Brickell House and the SLS Hotel and Residences in Brickell.
Brickell Key
Brick
ell Av e.
SW 8 St.
3
20%
Over 2012 prices per sq.ft jumped from $338 to $395, up 18%.
Downtown Miami
SW
25%
Financial District
NW 5 St.
4. Financial District
30%
Old Brickell
NW 7 Ave.
N Miami Ave.
NE 2 Ave. Biscayne Blvd.
NW 29 St.
35%
Midtown and Design District
J u lia
Price change per sq.ft. over 2012
Information derived from Florida MLS data. DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
Inventory and Sales Miami-Dade County 2002 - 2012
BURNING QUESTION 1:
25,000
“Is this just another Real Estate Bubble?”, “With prices increasing so rapidly, are we not destined to another Market Collapse?”
20,000
Answer: Real estate is a cyclical business and like any other industry or market, it goes through periods of contractions and expansions. As a realtor I cannot tell you what will happen in 5 years but I can give you some market facts that will give you more insight into the Real Estate cycle. Like any other market the real estate market is never in equilibrium and will fluctuate between excess inventory and shortfalls in inventory due to changes in demand and supply of real estate.
UNITS
15,000
10,000
5,000
0 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Condos For Sale on 12/31
Historic Condo Sales Prices/Sq.Ft
$500 $450
$462 $434
$400 $350
$303
$250
$338
$257
Q4 2005 Condos For Sale 12/31 Condo Sold Annually Months of Supply on 12/31
Low
Moderate/volatile
Short, Medium & Long Term
Low
Moderate
Short, Medium & Long Term
Volatile
Long Term
Volatile
Long Term
Q4 2008
Q4 2012
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6475 6260 5259 9643 19875 23517 22637 16169 15117 8651 7175 12204 12872 13897 15260 11932 7592 6731 10681 14161 17533 17361 5 5.9 12.8 18.2 40.4 37.2 20 7.6 4.5 5.8 6.4
Data taken from EWM Trendgraphics. Originally derived from the Florida tax rolls and MLS data combined. INVESTORS GUIDE 2013
Downtown Miami
Medium
TIMELINE
Midtown
Medium
Brickell
4 Downtown $0 5 Midtown & Design District
Short, Medium & Long Term
Midtown
Midtown
2 Financial District $100 3 Brickell Key $50
Low
RETURN $213 ON INVESTMENT Moderate
Brickell
1 Historic Brickell $150
Brickell
RISK
Downtown Miami
$200
5
Brickell and Downtown has not only attracted investors but big businesses as it becomes the ‘business hub’ for Latin America. As the population has boomed so rental rates have increased dramatically further fueling the demand for property that provides a much healthier return than other investment mechanisms.
$375
$344
$334
Downtown Miami
$300
2012
Condos Sold Annually
Demand for real estate in Miami in the last 2 years literally exploded. Originally it was buyers looking to take obvious advantage of units selling below construction cost. In the last year demand for real estate has continued as Miami Condos are still seen to provide excellent value to buyers from the America’s market: Brazil, Argentina, Mexico looking to invest in US property as well as many from mainland Europe and the rest of the US.
Interestingly as the mortgage market tightened its lending parameters, so a large majority of buyers have been all or mostly cash. New projects have required 40-50% down as opposed to the previous market conditions of 2004 - 2007 where buyers were heavily relying on large mortgages to make purchases. Combined with stronger infrastructural, social and businss developments in Brickell and Downtown this has resulted in a much more robust property market.
The importance of Inventory Market prices stabilize when inventory hold between 6 – 9 months of supply. Current inventory supplies are now just below 5 months. Such a current short fall of inventory can only result in an increase to residential property prices. DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
What’s new in Brickell/ Miami Downtown? 1
Icon Bay
J u lia
A 40 story, 300 unit development
Tuttle Causeway
6
with 1,2,3 bedrooms ranging
90% sold
95% sold NW 7 Ave.
N Miami Ave.
NE 2 Ave. Biscayne Blvd.
NW 29 St.
Resorts World Miami
The Genting Group $3 billion project which includes two residential towers with 1000 units. The plans to include a casino in the mega project have now been put on hold.
1
Midtown & Design District
innovative, urban-style residencesNW 5 St. including lofts, apartments and
and mixed-use development with a total of 800 units. Estimates ranging from 900- 2500 sq.ft and
2 thur Causew MacAr a
priced between $450,000 and $850,000.
8
penthouses. Set for completion in the first quarter of 2015.
5
1000 Museum The skyline changing new residential tower of World famous and prize winning architect Zaha
7
SW 8 St.
10
Brick
Penthouses at $30 million.
ell Av
Appendix and references
9
Under plan
Downtown Miami
9
3
low $400s per sq.ft. and will range from 600 sq.ft to 1600 sq.ft units.
8
Selling now
e A5v
10
Old Brickell
residences which are expected to be
.
ve iA
completed in 2018.
Under plan S
M
iam
A Philippe Starck designed
units. Prices start in the
Financial District
One Bayfront Plaza The 80 story plaza will offer 700 luxury
SLS hotel
ing with 1,2 and 3 bedroom
Brickell Key
.
SW
95% sold
Hotel and Residential build-
6
e.
Hadid. Prices are estimated at $900/sq.ft. starting at 4 million,
Brickell House will range from 400 sq.ft studios to 1775 sq.ft
Under plan
Condos will cover half or the entire floor
Under construction
374 units and a robotic parking garage. Units
condominiums.
INVESTORS GUIDE 2013
A $1.05-billion urban shopping
NE 15 St.
3 4
N Miami Ave.
Miami World Center opment which will offer various
6
7
two 42-story condo towers with
Under plan
A nine block mix-used devel-
4
Brickell Citicentre
y
3
Set for completion November 2013, My Brickell is a 27 story boutique building with 192 units.
from 928 to 1530 sq.ft interior.
2
My Brickell
1100 Millecento Residences A 42 story and 382 unit condo inspired by designs of legendary Italian Automobile designer Pininfarina. Currently under con-
useway
Rickenbacker Ca
struction. Set for completion in the third quarter of 2014.
95% sold
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
What to consider when investing in Miami condos. There is a huge variety of Condos in Brickell
3. Maintenance Costs
4. Location and Views
and Downtown and the best deals are often
Please refer to page 10 and 11 to see the
Miami has always been about water views.
found not by generalizing a choice of one
current maintenance fees for any of the
As the city develops so these prices hold a
Condo over another, but in the specifics of
Brickell and Downtown Condos. Maintenance
premium but also weather economic change
a single unit. My role is to assist clients in
is calculated on a per sq.ft. basis.
much better than city view units.
looking for specific unit opportunities and to search for anomalies in the market that give light to potentially excellent deals or risky investments.
Understanding
key
factors
and spotting these anomalies is essential in choosing a wise investment.
1. Price per sq.ft Price per sq.ft. is of course of key importance. Buyers should be aware of the average price per sq.ft. not just in their neighborhood but in specific buildings. The chart on page 10 and 11 shows the average price per sqft for all buildings in Downtown and Brickell.
Bristol Towers is a good example of a building in excellent financial health. Unit 3302 is currently for sale for $1,749,000.
2. Financial stability Based on income levels and reserves held within a Condominium. This will affect changes in future maintenance costs and if reserves held are too low this can result
Carbonell Condo 2706 , 4/4.5, currently for sale for $1.8 million, has one of the lowest maintenance fees in Brickell. This is due to its strong and establlished financial situation.
in building assessments. Please call me for
All units at Paramount bay enjoys direct bay views where owners can enjoy the city lights of Miami beach and water views. Unit 1409 of Paramount is currently for sale for $699,000.
the 2012 financial summary reports for any specific Condo in Brickell or Downtown that
5. Amenities, Facilities and Services
you may be interested in.
Spa’s, state of art gyms, large lap pools, concierge,
restaurants
are
all
highly
attractive to owners and renters alike and make such buildings a top choice. However, high levels of amenities can also mean higher maintenance fees as the running costs of the building are usually higher. Unique and Boutique style features such as private elevators
Icon Brickell saw substancial increase in value from 2011-2012. This is inpart due to its enormous popularity with renters, and prices were still considered cheap in 2011 in comparison to other similar Condos.
can also help Condos appreciate well. In the same way ‘overly generic’ units and Condos can be far more vulnerable to market change Icon Brickell has the largest pool in North America! Epic is home to Zuma and 2 other award winning restaurants. Both have higher than average maintenance fees, but in return offer an exceptional level of services and facilities.
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INVESTORS GUIDE 2013
as there are hundreds of choices to potential buyers in the future.
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
6. Surrounding Developments
7. New developments
Values for units for sale in Midtown and
Buying a pre construction unit is certainly
Downtown (such as Paramount Bay and
more of an unknown quantity than buying
Icon Bay) have done very well on account
an established Condo but can offer excellent
of the upsurge in new commercial and retail
value as they can sell around 20% or more
developments within the Design district –
below the price of the finished value.
New supermarkets, designer stores, and over a dozen top level new restaurants. 1000 Museum on Biscayne will be designed by Zaha Ahid, considered the worlds most famous Architect. Heralded to have units selling from $4 million upwards, and set to redefine the luxury Condo market in Downtown. Information on this project and all other new developments can be found on my Blog site: http://www.luxlifemiamiblog.com. Search Categories: Brickell and Downtown New Condos.
New Designer shops in the design district has helped boost sales in Midtown2 and the new Icon Bay Condo as seen here.
The new SLS in Brickell will follow the same format as the new SLS in South Beach and is currently selling pre construction with an average price of $500 per sq.ft. This price is expected to rise to $600 once the project is physically completed.
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INVESTORS GUIDE 2013
Bay House - Midtown / Edgewater Hot on the heels of the sold out Icon Bay project in Downtown is Bay House. This newest project from the Melo Group will consist of 38 floors and 164 exclusive residences. Read the full report on this new project on my Blog site. http://www.luxlifemiamiblog.com.
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
Infrastructural and Social Developments within Brickell and Downtown that will affect future sales and rentals. Rental Increase per sq.ft. over 2012 9% 8% 7%
8.3%
6% 5% 4% 3% 2%
4.4% 2.0%
1% 0%
1.4%
1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom units units units units Information derived from Florida MLS data.
Information derived from DDA Miami.
One of the most significant reasons why we
dollars
have seen such an increase in population
Over
in
infrastructural
within Downtown and Brickell (population
midtown and downtown has in some cases
grew from 71,800 to 78,000 between 2011-
increased in value by over 30% as so many
2012) is that these neighborhoods have
businesses move into the ‘business hub of
become a much better place to live:
Latin America’.
Better transportation:
Infrastructure:
The metro mover has extended from Brickell
A new cinema and a new wholefoods in
directly to the airport, the Brickell Trolley a
Downtown. The building of the new Art
free trolley service around the neighborhood
Museum and History Musem (the biggest
started last year and has been incredibly
in the whole of the US) also in Downtown.
popular.
New supermarkets in the Midtown area. 30
2012
Commercial
development. property
in
new restaurants in Downtown, Midtown and
Commercial development:
Brickell have all opened in the last 12 months.
Significant amounts of Commercial buy up
The new Brickell City Center with a host of
have occurred in Brickell and Downtown with
new retail stores as well the new designer
18 million sq.ft. of class A and B office space
stores in midtown will continue to make this a
and 2.5 million sq.ft. of retail space. The Port
highly desirable neighborhood and add value
of Miami is chartering more than $2 billion
to the surrounding Condos.
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INVESTORS GUIDE 2013
Mary Brickell Village - seen as the center of Brickell will soon be joined by Brickell City Center which will further expand the number of restaurant, shops and services to a neighborhood which is currently growing in population by a staggering 10% a year. DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
BURNING QUESTION 2:
Brickell and Downtown Condos in Detail Here you will find key information for ALL Condos in Brickell and
“Should I buy pre-construction?”
Downtown. We reveal changes in price per sq.ft. in the 12 months from the end of 2011 to the end of 2012. This information has
Answer: Those investors who were willing to take
been sourced directly from the South Florida MLS. We also reveal
a greater risk and invest in a pre-construction
current maintenance fee rates which is extremely important and
project over the last year have yielded significant
the health Grade of the buildings as provided by Condoreports.com.
financial returns on their investments, far in excess of returns they would have otherwise yielded on buying into an already established Condo. Investors must be aware of a Developers track record, financial stability, their payment structure and the unique selling points of that project that will enable it to stand out from the crowd. My Blogsite: www.luxlifemiamiblog.com details ALL the new Condo construction projects in the whole of Miami Dade with prices, floorplans as well as how that project compares to other existing Condos. The golden rule I use is: ‘If it existed today how would it compare in price to the competition?’ If an equal quality unit sells at $600 per sq.ft. today and you can buy pre construction at $450 per sq.ft. for the same product or better you will see a significant appreciation.
Carbonell 10
INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
Brickell and Downtown Condominium Information on www.luxlifemiami.com Details of all the buildings can be found on my website: www.luxlifemiami.com under the tab “Featured Condos�. I feature all of the major Miami condominiums and present the reader with pictures, videos, floorplans and information on amenities.
Source: MLS data, www.condoreport.com for Healthgrades. The building health grade ranks from 0-100 and measures price trends and condo association stability. Generally speaking, buildings with higher index readings are more stable than buildings with lower readings
1450 Brickell, an all-office skyscraper on Brickell Avenue 11
INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
APPENDIX: Sales Analysis of 1,2,3,4 bedroom units in Brickell and Downtown Miami. We analyzed the Brickell and Downtown area
Not only did properties increase in value they
by comparing the 4th quarter of 2011 sales
were also less days on the market (15.1%-
information with the 4th quarter of 2012 sales
26.9%) before being sold.
information. We made a general analysis for the greater Brickell/Downtown Area and a
As can be seen from the availability of units,
more specific analysis focusing specifically
the months of inventory in the last quarter of
on Downtown Miami, Wynwood/Art District,
2012 for 1, 2 and 3 bedroom units went down
Brickell Financial District, Brickell Key and the
by respectively 4.9%, 31.3% and 12.7%.
Historic Brickell.
Applying the supply and demand theory on these units, we can conclude that demand
In order to be more accurate for budget and
for these units is still high as the inventory is
investment purposes we analyzed 1,2,3 and
down and prices are increasing.
4 bedroom units separately. Only for 4 bedroom units the months of inventory did increase by 30% to 13 months. Market Analysis Brickell/Downtown Miami
A 6-9 month inventory is considered normal.
When comparing the 4th quarter of 2011
Given that the inventory is higher than 6-9 months we are still finding ourselves in a buyers
with the 4th quarter of 2012 it can be seen
market. The 1 and 2 bedroom unit market
that the amount of closed sales for 2 and 3
is close to becoming a sellers market (low
bedroom units increased with a significant
months of inventory and decreasing levels
percentage. The (more scarce) 4 bedroom
of available units) whereas 3 and 4 bedroom
units had the same amount of sold units in Q4
2011
compared
to
Q4
2012
units are still in a buyers market with higher
and
levels of inventory and more units for sale.
1 bedroom units sold 8.1% less than during last
quarter
in
2011.
This
doesn’t
automatically mean there is less demand for these units. Sales prices went up by 17.6% to 27.9% (27% for 1 bedroom units) and the average price per sq.ft, increased with a minimum of 14.9% for 4 bedroom units and with a maximum of 31% for 3 bedroom units.
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INVESTORS GUIDE 2013
Information derived from Florida MLS and EWM Trendgraphics
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
APPENDIX: Rental Market Analysis of 1,2,3,4 bedroom units in Brickell and Downtown Miami. From the table above it can be seen that the price per sq.ft. increased for all types of rental units in the Brickell and Downtown Market over 2012. In general it can be said that all units did better than the year before regarding an increased price of sq.ft. The months of inventory decreased drastically for almost all type of units to a level below 3 months. Investors who would like to rent their investment properties out this analysis will only become truly interesting when we include the rental prices into the equator. It can be concluded that the Brickell/Downtown Miami Market is growing significantly with inventory levels decreasing for almost all types of units to a level below 3 months and resulting in price increases over short periods of time. From the table above it can be seen that the price per sq.ft increased for all types of rental units in the Brickell and Downtown Market over 2012. The buying demand for units in Brickell/Downtown Miami will be stimulated by the increasing number of new residents coming to Miami, the new economical and demographical boost that will be given to the city by projects such as Resorts World and Brickell CitiCentre and the economical and political instabilities in Europe and South America help fuel the opinion that the purchase of the Miami condo units often make for a safe and profitable investment.
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INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
APPENDIX: Sales Market Analysis of 1,2,3,4 bedroom units Brickell Key Condos
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INVESTORS GUIDE 2013
Financial Distric Condos
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
APPENDIX: Sales Market Analysis of 1,2,3,4 bedroom units Downtown Condos
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INVESTORS GUIDE 2013
Wynwood/Design Districts
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL
APPENDIX: Sales Market Analysis of 1,2,3,4 bedroom units Old Brickell Condos
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INVESTORS GUIDE 2013
DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL