By ANDY WANG
Last Updated: 5:18 PM, December 3, 2009
Posted: 11:59 PM, December 2, 2009
The Miami winter social season starts in earnest this week as Art Basel, Art Miami and dozens of satellite events take over much of the city’s prime real estate. But when it comes to selling ultra-pricey Miami condos, it looks like the party has already begun.
According to developer David Edelstein, the W South Beach hotel-condo building that opened in June has recently closed sales at some staggering prices. Edelstein mentions a 2,700-square-foot unit that closed two weeks ago for $7.25 million — a sky-high $2,685 per square foot. In October, a deal closed on a 2,965-square-foot unit for $8.1 million — an even more exorbitant $2,732 per square foot.
And with a slew of high-profile Art Basel events at W South Beach — including tonight’s dinner and after-party hosted by Aby Rosen (part of the building’s development team) and a Saturday performance by Glen Matlock of the Sex Pistols — Edelstein expects to lure more buyers to his 408-unit building at 22nd Street and Collins Avenue.
“We think it will be a huge year for Art Basel,” says Edelstein, who notes that his hotel, with rooms from $659 to $7,200, is sold out all week. “And one of the greatest sources [of condo sales] are the hotel guests.”
While W South Beach (designed by architecture firm Nichols Brosch Wurst Wolfe & Associates) is no doubt making a huge splash, its ultimate success and what it means for the Miami market remain to be seen. Edelstein says he has signed deals for about $500 million worth of W South Beach condos. He has closed about $100 million.
“We have not had enough time to see [W South Beach]’s impact over the long term,” says Miami broker Mark Zilbert of Zilbert Realty Group, who specializes in the condo market. “But it’s a very popular spot.”
W South Beach — where prices start around $1,400 per square foot for smaller units — looks like the newest, priciest kid on the block, but other prominent South Beach buildings are also fetching NYC-level prices. And bottom-fishing buyers looking for crazy beach deals are probably going to be disappointed.
“Everybody wants a balcony over the beach at 50 cents on the dollar,” Zilbert says. “The problem is that when you look at prime oceanfront property in a new building, there’s still sticker shock.”
Numerous hotel-condo units at the Setai, just south of W South Beach, are listed for around $1,200 to $1,400 per square foot. And over at Continuum, located at the southern tip of South Beach, the price range for many condos is around $950 to $1,200 per square foot. While Miami prices overall, Zilbert says, are down 30 to 40 percent from their peak, they haven’t really changed since the spring. The difference now, he says, is that people are actually buying.
“When the market was really at its worst, it was hard to sell anything over a million dollars,” Zilbert says. “After last October to about June or July, it was a very, very dark period. I ran my half-year numbers around June, and we were at about half of what we were the year before. People were just afraid to buy anything.”
But rich buyers seem to be on the prowl again. Zilbert says he’s seeing more traffic from New York-based buyers now than he has in the last three years combined.
“There is a clearly a market for five-star oceanfront,” Zilbert says. “And these buyers don’t shop around a lot. They want what they want.”
A market largely powered by this kind of buyer can be hard to get a handle on, of course. It’s a market that seems to change from building to building. And there’s no question that Miami is overbuilt and subpar projects are in uncertain waters. Gansevoort South, located just north of W South Beach, has halted its condo sales effort, for example.
And for those who can’t afford $1,000 square per foot in Miami, there are many brand-name choices if they’re willing to look beyond South Beach. Canyon Ranch, about 4 miles north of South Beach, has some units priced around $500 per square foot. Word is that a team from New York brokerage firm Brown Harris Stevens is about to take over sales there.
Condos for $500 per square foot or less are even easier to find in downtown Miami, where thousands of unoccupied units seem to indicate a market in peril. Although high-profile developments such as Icon Brickell and Marquis Miami have glammed up the area, Zilbert notes that “on an individual-buyer basis, there’s great resistance into putting money in downtown condos. There are issues with empty buildings, foreclosures, people not paying their maintenance.”
Zilbert adds that “a lot of people downtown are renting. There will be a very strong rental market probably for five years.”
However, some well-priced developments off the beach seem to be thriving. The gargantuan, 56-acre Midtown Miami mixed-use complex, adjacent to the Design District, has three residential towers that are 97 percent occupied, according to a project spokesperson. Prices start at $1,500 for one-bedroom rentals (812 to 937 square feet) and $375 per square foot for condos.
And one advantage of being off South Beach is having much more room and infrastructure for huge events. Art Miami, celebrating its 20th anniversary, is taking up 85,000 square feet of space at Midtown Miami.
“There’s great parking directly across the street, sidewalks, palm trees,” says Nick Korniloff, Art Miami’s show director/partner. “There’s a lot of open space. It allows us to have big outdoor sculptures, outdoor areas, cafes. It’s a much easier location than the beach.”
Of course, there are shuttle buses from Midtown to South Beach for all those art collectors, party people and potential real estate buyers in town this week. And this is all the beginning of a busy season that includes numerous holiday galas in December, the Pro Bowl in January, and the Super Bowl, Miami International Boat Show and South Beach Wine & Food Festival in February.
Over at W South Beach, everything up to this point has “been spring training,” Edelstein says. “The real season starts now.”
And as Zilbert points out, this season should be bigger than the last winter season.
“Art Basel last year was not too long after the Wall Street meltdown,” he says. “It’s much more exciting this year. We have many, many clients who have mentioned they will be in town. We’ll be very busy. We expect to write a lot of contracts.”