As Prices Plummet, Condo Sales in Miami Perk Up
By TERRY PRISTIN
Despite a vast oversupply of new condos in downtown Miami, sales have been brisk lately at 1060 Brickell Avenue, a twin-tower development with 570 units in the heart of the upscale Brickell neighborhood. The reason? Prices have been cut in half, to about $200 a square foot.
“We reset the prices at a sharp discount, and the units are flying off the shelves,” said Gary Barnett, the president of the Extell Development Company, the New York-based developer of 1060 Brickell, which was completed last year. More than 200 units have closed since the discount program began in April, he said.
Mr. Barnett, who has developed several new condominium projects in Manhattan, including 535 West End Avenue and the Rushmore, acknowledged that he and his backers lost their entire investment in 1060 Brickell, which is situated at Southeast First Avenue. He said some, but not all, of the mezzanine financing was also wiped out. But because more than 40 percent of the units sold at full price, Mr. Barnett was able to repay his $153 million first mortgage from TD Bank and iStar, a troubled finance company that bet heavily on the South Florida condo market.
Since 2003, nearly 23,000 new condo units have been added to the downtown skyline, from Brickell Avenue up through the more modest Biscayne Corridor — far more than this city of 400,000 people could absorb. About 9,400 remained unsold at the end of June, according to Peter Zalewski, the owner of Condo Vultures Realty, a local brokerage.
But Miami real estate brokers, lawyers and developers say the overbuilt condo market has entered a new phase. “Things are starting to move through the system,” said Adam Cappel, the president of CondoReports.com, a Miami research service.
An occupancy report released Wednesday, commissioned by the 