Posted on Fri, Jun. 04, 2010
BY INA PAIVA CORDLE,Â icordle@MiamiHerald.com
Condo developers have sky-high dreams for Brickell area
Isos Stamelos-Monroe, vice president of sales and managing broker of Skyline Equities Realty, stands on a balcony that faces the future site of a 35-story luxury condo, SkyPalace at Mary Brickell Village.
Picture a lobby adorned with Roman columns, statues and a Swarovski crystal chandelier. Eleven stories above, a pool deck offers panoramic views of Brickell Avenue skyscrapers.
Perching atop Publix at Mary Brickell Village, construction on SkyPalace, a new 35-story condominium tower, is slated to begin next month after three years of delay.
Pending financing, Miamiâs overheated condo market will get its latest infusion when the Mediterranean-style building is completed at the end of 2011. As the first residential building built in the Brickell corridor since the condo glut began, its developers hope it will pump new life into the areaâs real estate market.
âWe want to be one of the only products available in the market upon delivery thatâs new,â said Isos Stamelos-Monroe, 30, SkyPalaceâs vice president of sales. To date, buyers â mostly foreign investors and second-home purchasers â have put contracts on 190 of the 369 units, priced from $249,000 to $2.5 million, he said.
Thatâs a positive step for both the project and the market, said real estate analyst Michael Y. Cannon. âThis is a sign that if they are successful in getting presales, and the construction lender lends, hopefully the market has made its turn,â said Cannon, executive director of Integra Realty Resources-Miami.
Stamelos-Monroe is counting on existing condo inventory in the area to be absorbed and mortgages to be more readily available by the time buyers close on SkyPalace units.
A March report by Goodkin Consulting and Focus Real Estate Advisors shows that 22,079 new condos were delivered in Miamiâs downtown corridor, including Brickell, from 2003 through early 2010. More than 70 percent of that inventory has now been absorbed, leaving 7,500 new condos available in the downtown corridor.
`A TOUGH SELLâ
But Jack Winston, principal with Goodkin Consulting in Miami, said SkyPalace will have a âtough sell.â Since the recession began, condo sales have been sluggish and have only begun picking up this year due to bulk sales and sharp discounts. âIn this kind of environment, to absorb [7,500 condo units] is certainly going to take longer than the 18 months it will take to finish the building,â Winston said, adding that mortgages for end-buyers may still be hard to find.
Key to SkyPalaceâs sales, Cannon said, will be highly competitive pricing. So far, Stamelos-Monroe said, recent presales have averaged $320 per square foot. âThatâs about what market prices are for the rollback of prices of existing inventory of better buildings,â Cannon said. âSo it sounds like they are in the right price range.â
It has taken several years to get to this point.
Skyline Equities Realty initially bought a build-to-suit project for the tower above Publix in Mary Brickell Village from Fairfield Residential in 2004.
Due to delays in the construction of the village, Fairfield didnât begin construction in 2007, as planned. So Skyline Equities Realty negotiated a purchase of the air rights â the rights to build above the planned Publix â for less than $9 million, said Stamelos-Monroe.
Preconstruction sales of SkyPalace had already begun in 2004, continuing through 2006. But in early 2007, as construction continued to be delayed amid problems pulling permits and troubled real estate and financial markets, Skyline âneeded to buy time,â Stamelos-Monroe said.
So having added three years to the delivery date, Skyline reaffirmed 162 of its 240 sales contracts in July 2007, he said. Then it continued on hold, as the housing market tumbled.
Now, despite ongoing difficulties securing construction loans, Skyline expects to close on more than $85 million in construction financing from a Colorado-based hedge fund by the end of June. Construction will begin shortly afterward and continue for about 18 months, Stamelos-Monroe said. Since Fairfield had already started the lobby, foundation and parking garage at 2003-2004 costs, construction time and costs will be lower than they would have been had Skyline had to start from scratch, he said.
Publix spokeswoman Kim Jaeger declined to comment on the construction, saying the company is âstill evaluating the possible impacts to Publix and how best to handle them.â
SkyPalaceâs design is a Mediterranean village concept, with a modern twist, said Stylianos Vayanos, SkyPalaceâs vice president of public relations and international marketing. Buyers have the ability to customize units with four or five bedrooms, or buy duplexes, the equivalent of two side-by-side units.
Residents will have access to concierge services. Kitchens will have Italian cabinetry, granite counter tops and stainless steel appliances. And upper floor units will have an unobstructed view of the Bay.
The location on top of Mary Brickell Village should add to its marketability, Cannon said. âItâs right in the center of everything,â he said. âYouâve got the Metrorail next door, and the synergism is occurring because you have the day and night life activity going on there. You can work, play and live all in the same area.â
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