Miami Planning Board Speeds Along Massive Brickell Redevelopment Proposal - June 16, 2011

An ambitious mixed-use plan off Brickell Avenue sailed through Miami’s planning and zoning board.

BY ANDRES VIGLUCCI

aviglucci@MiamiHerald.com

After sailing through its first public hearing with no opposition, the most ballyhooed local redevelopment plan since Midtown Miami appears headed for speedy city approval, promising to transform a long-dead zone off Brickell Avenue into a new urban district characterized by cutting-edge design, pedestrian-friendly streets and novel environmental features.

After heaping praise on the mammoth Brickell CitiCentre proposal, the city’s planning and zoning board voted 7-0 Tuesday night to recommend approval to the city commission, which will take up the project next week in the first of two hearings. No one spoke in opposition, although two speakers raised relatively minor issues.

City officials, who are co-applicants along with the developer, Swire Properties, told board members the $700 million, mixed-use project will plug a gaping void in the city’s urban core. They said it would inject new life, jobs and commerce into the area, fill city coffers to the tune of $5 million annually in property taxes, and knit together the successful Mary Brickell Village redevelopment to its south with the Miami River and downtown Miami to the north.

Swire, which developed nearby Brickell Key, proposes to erect a residential tower, hotel, two mid-rise office buildings and extensive, street-fronting retail and restaurant space on three-and-a-half mostly vacant blocks straddling South Miami Avenue. Swire said construction could begin as soon as early 2012, would proceed in phases and be completed within four years of its start.

“It will have an immediate effect on our economy,’’ Miami Mayor Tomas Regalado said.

The project, designed in its entirely by Miami-based Arquitectonica, boasts a degree of pedestrian and transit friendliness new to Miami. It’s the first of its scale planned under the city’s new Miami 21 zoning code, designed to create denser and livelier urban streets.

It’s also among the first in the nation to conform to new “green’’ Leadership in Energy and Environmental Design, or LEED, standards that promote creation of sustainable neighborhoods -- dense districts easily navigated on foot, by public transit or by bike.

Swire promises wider sidewalks, hundreds of trees, storefronts open to the street, and a new traffic-calming circulation pattern on the existing streets, now hard to cross because of speeding cars and trucks. The project would also incorporate an existing People Mover station, which would be rebuilt to allow passengers to disembark directly into the development as well as the street below.

A new greenway under the mover guideway would connect to the Miami River. There would be hundreds of bike rack spaces, too.

The project also includes two large pedestrian bridges spanning South Miami Avenue and Southeast Seventh Street. Swire says they will be different from the stark pedestrian bridges erected in the ‘70s, which fell into disfavor because they sapped street life by keeping people inside self-enclosed projects.

CitiCentre’s bridges, Swire says, will have shops and restaurants and are part of a complex circulation plan meant to get people on foot from the People Mover station through the complex and down to ground level, where shops will open directly onto the sidewalks.

“They’re not void spaces,’’ said Arquitectonica principal Bernardo Fort-Brescia. “They will have life and activity.’’

Pedestrians would be shielded from the harsh Miami weather by a “climate ribbon’’ -- a translucent canopy that will snake through the entire project, filtering natural light down to the pedestrian bridges and the open-air shopping areas and gardens at ground level. The canopy, which will also have solar panels to feed energy to the complex, would create a cooling “micro-climate’’ beneath it without the use of air conditioning, Fort-Brescia said.

The project hardly stints motorists, however: It would boast two levels of underground parking throughout.

Read more: http://www.miamiherald.com/2011/06/16/2270598/miami-planning-board-speeds-along.html#ixzz1PYids3EL

Miami’s One-Time Icon of Crisis Becomes an Icon of the City’s Condo Turn-Around - June 16, 2011

Icon Brickell, downtown Miami’s largest condo complex, has swung from nearly empty to nearly sold out.

By TOLUSE OLORUNNIPA

tolorunnipa@MiamiHerald.com

A year ago, Miami’s Icon Brickell condo complex was a symbol of just about everything that had gone wrong during South Florida’s epic housing bust: Speculators had walked out on sales contracts, the towers were half-empty, and a group of lenders was making moves to foreclose.

Now, as Brazilians and Argentineans wage bidding wars for Icon’s bank-owned condos, the rapidly selling, 1,800-unit complex represents a few of the things that are going right in the region’s still-shaky housing market.

A little more than a year after a consortium of banks seized ownership of two of Icon Brickell’s three towers, more than 930 condos have sold, meaning the towers have gone from three-quarters empty to three-quarters sold. A third tower, which was not taken over by lenders, has sold 518 of its 520 units, according to data provided by Bal Harbour-based consultancy Condo Vultures.

Fortune International Realty, the marketing muscle brought on by Icon’s lenders to sell individual units, has focused its efforts on the bright spots of the troubled housing market: discounted prices, international appeal and the up-and-coming allure of downtown Miami.

“It’s beyond anybody’s expectation,” said Edgardo DeFortuna, president of Miami-based Fortune. “The bank expectation was it was going to be a three-year sellout. We’re going to sell out within 18 months, which is unbelievable.”

Fortune has moved some 527 units for a total of $244.5 million after beginning sales efforts last June, according to public records data provided by Condo Vultures.

In May, a Maryland company bought the 148-unit Viceroy Hotel in Icon’s third tower for $36.5 million, clearing out the last remaining inventory owned by Miami-based developer Related Group.

With the hotel sold and about 40 residential units selling each month, Icon’s road to health looks much clearer now than it did just 12 months ago.

DeFortuna predicts that the final 250 units will all be sold by the end of the year. Prices, which were slashed heavily to entice buyers last year, are even starting to rise again as inventory shrinks.

Icon’s turnaround highlights a number of trends in the overall housing market, which has seen condo sales soar despite record-high foreclosures, declining values and hard-to-obtain credit.

In Miami-Dade County, condo sales were up 94 percent in April, compared to a year earlier, a reflection of a growing international appetite to cash in on Miami’s condo bust while prices are low and the dollar is weak.

Projects like Icon Brickell have benefited immensely from international interest, with more than 70 percent of sales coming from foreign buyers who paid with cash.

“Ultimately the deciding factor of why Fortune was successful is that they had the [international] reach and they had the pricing,” said Peter Zalewski, principal at Condo Vultures. To market Icon, Fortune headed to South and Central America to meet with potential buyers and make its pitch.

“The first thing we did was to pack up and go to Argentina, Brazil and go to Mexico and educate people on this project,” said DeFortuna.

The company opened a sales center in Punta del Este, Uruguay, targeting wealthy South Americans as they visited the resort town.

Fortune also sought to rebrand and relaunch the turbulent Icon project locally, hosting parties on-site with abundant liquor and fur-wearing models, announcing price cuts in email blasts to brokers and launching an iPad application for the building.

Commercial real estate attorney Dan Mackler bought a two-bedroom unit in Tower 2 last year, drawn by the Brickell neighborhood and the off-peak prices.

“When I bought, I figured I was probably buying at the bottom of the market,” he said. “We didn’t buy it thinking it would be an investment, but we think it will prove to be a good investment.”

Another market-wide trend that has benefitted Icon: price-slashing.

To get buyers interested in the slow-moving project, Icon cut prices several times in 2010, shaving more than 40 percent off the pre-construction numbers.

Today, starting prices for Icon’s condos range from about $365,000 for a studio to $1.4 million for a penthouse, an average of about $440 per square foot. Agents say those prices are up double-digits in the last nine months.

During pre-construction sales in 2006, prices topped $600-per-square foot. A rash of speculators put down deposits on units the $1 billion luxury project with Philippe Starck decor, 100 Easter Island-style columns and a two-acre pool deck overlooking Biscayne Bay.

But as Related completed construction in 2008 and 2009, the real estate market plunged, and buyers walked away from their purchase contracts en masse.

The project was the largest of a handful of condos that Related struggled to sell, and eventually lost to foreclosure, during the housing collapse. Those projects cost the company about $1 billion, Related founder Jorge Perez said.

Still, Perez believes the development of downtown Miami, anchored by Icon Brickell, was worth the trouble and the costs, especially now that Icon is filling up with buyers and renters.

“In a year and a half, we’ve sold 1,500 units—in a depression. That’s an amazing number,” said Perez, who considers Icon his favorite project. “It is the most prominent building in the new downtown. Bar none.”

Public records show that there are about about 340 bank-owned units left to sell at Icon, although Fortune says many of those are pending sales just waiting to close and the number is actually closer to 230.

To find buyers for the final units, which are generally the most difficult to sell, the broker is shifting some of its marketing efforts to well-heeled New Yorkers and Europeans.

DeFortuna is already tuning up a new sales pitch, as the project gets closer to selling out.

“Now that the building’s stable, this is going to be a success,” he said. “You can never replicate this in the future because the prices are below replacement costs.”

Read more: http://www.miamiherald.com/2011/06/09/2270819_p2/miamis-one-time-icon-of-crisis.html#ixzz1PYgoy3nA

If you are looking to buy one of the last units available at Icon Brickell, call us today at 305-456-6456.

Renters are Next Victims of Housing Market - June 14, 2011

By Jane Hodges

msnbc.com contributor

Stephan Metelica, a 24-year old charter pilot, shares a two-bedroom apartment with a friend in Chicago’s Lincoln Park neighborhood. The duo split the $1,525 monthly rent, but they were surprised this month when their landlord lease came up for renewal and their landlord asked for a 5 percent increase, to $1,600.

“I was pretty upset about it,” Metelica says of what would amount to nearly $40 more per month per person. “I thought a 5 percent increase was ridiculous.”

Renters, long happy to sidestep the drama homeowners have suffered in the roller-coaster housing market, are now facing their downside of the real estate market’s correction. With apartment and rental housing construction halved in recent years and a wave of former homeowners competing for apartment space with "echo boomers" and other renters, conditions have suddenly ripened for landlords to raise the rent.

Metelica persuaded his landlord to curb the increase, capping his new rent at $1,550. The roommates and landlord have a verbal agreement for that new rental rate, he says, with a new lease signing imminent. But his ability to talk his way out of a bigger rent increase makes him more of an exception than the rule this year, according to experts.

Last year the rental market quietly shifted from a tenants’ market to what is now decidedly a landlord’s market, said Chris Herbert, research director at Harvard’s Joint Center for Housing Studies. The supply of properties is tightening and vacancy rates are dropping, so landlords have been emboldened to raise the rent.

Nationally, rents are expected to rise 5 percent this year and another 5 percent in 2012, according to Greg Willett, vice president of research and analysis at MPF Research in Carrollton, Texas. The trend is not expected to moderate until 2013, when new multifamily housing construction adds to supply and the housing market stabilizes enough to attract new buyers.

“In California, landlords have to file a 60-day notice if they plan to raise rents by more than 10 percent,” Herbert says. “And in some markets, we’re once again seeing them issue those notices.”

Of course all rental markets are local, and the trend is more pronounced in the San Francisco Bay area, for example, than in Southern California where rents are little changed.

In its annual State of the Nation’s Housing report released last week, the Harvard center said rising rents and the rising cost of owning a home are forcing Americans across all income levels to pay a higher proportion of their income for housing. As of 2009, more than 19 million households paid more than half their incomes for housing, including more than 10 million renters, according to the study. Households in the $45,000 to $60,000 income range have faced a particularly sharp increase in the housing cost burden over the past decade.

No one likes seeing the rent rise — but for renters, increases are often a fact of life. And even with the current rent hikes, rental rates in most markets haven’t even returned to prior highs set in 2007 and 2008, according to Willett.

“I think consumers have been taught to think the rent goes up every year, and generally it does,” says Willett. “But it’s the degree of increase that can bother renters. You look at the increase and you make that decision whether or not to move every time the lease comes up. If you’re renting now and you’ve just renewed for 12 months, you’ve probably got one more round of increases before things stabilize.”

Considering that the government-sponsored mortgage buyers Fannie Mae and Freddie Mac are facing potential reforms that could tighten lending standards, and that there’s still a heavy supply of homes for sale, some say renters may not be swayed to move into the ownership market for many years — especially if many new renters tend to be younger.

Most first-time buyers are in their early 30s, according to data from the National Association of Realtors. Metelica, the 24-year old renter, says he’ll probably be at least 29 before he thinks about buying. That means he, and others in his age range, may suffer through a few rent increases before they move to ownership.

To hear landlords discuss the marketplace, the good times have returned.

National apartment operators have adjusted their 2011 forecasts in recent weeks, citing a strong market that is allowing above-average rent increases. Avalonbay Communities, which owns 187 apartment buildings in ten states and Washington, D.C., said this month that rental revenue is expected to increase from 5 to 5.75 percent this year, up from a prior estimate of 4 to 5.5 percent.

"At this point we don't anticipate a recovery in for-sale housing until at least 2013," Michael Schall, president and chief executive officer of Essex Property Trust, stated in an earnings conference call last month. "We are now confident that the apartment supply and demand equation is tipping toward housing shortage and thus both rents and occupancies are improving."

Essex, which owns properties mainly in coastal cities, stated that Northern California and Seattle markets are ahead of Southern California markets, seeing high occupancy (meaning: low vacancy) and a recovery ahead of other areas in the company portfolio.

Chicago-based Equity Residential, which owns about 440 apartment building in major markets such as New York, Boston and Phoenix, reported that it’s expecting net operating income (which includes rental revenue) to rise from 5 to 7.5 percent this year.

Tammy Kotula, spokeswoman for Apartments.com, an online guide to apartments, urges renters to negotiate with landlords, or if they know they’re staying awhile, get a multiyear lease that allows tenants to lock in a low rent.

“You can definitely talk to your landlord and ask to negotiate,” she says. “A two-year lease is a pretty popular option.”

Just don’t expect keeping your rent down to be the cake walk it once was.

“I had to put up a fight about it,” Metelica says.

Jane Hodges is a Seattle-based writer.