 ICON Brickell |
Miami condo developer Jorge Perez surprised at least one analyst with his decision to complete sales in a second tower of ICON Brickell, the troubled 1,800-unit waterfront project. Industry watchers expected Perez’ Related Group would roll the meager sales in the second, 560-unit tower into the 713-unit first tower, which is only 14 percent sold, according to CondoVulture’s Peter Zalewski.
By combining the sales into the first tower, Related would have been able to use tower two and a third tower with 501-units for rentals--or at least preserve the option if a hedge fund or investor wanted to buy the towers and use them for rentals.
"Institutional funds from Wall Street to Greenwich, Conn., Canada to the United Kingdom, have been looking for vacant residential towers to acquire and run as rental projects for the foreseeable future," Zalewski says in a report.
Closing sales in the second tower also meant Related Group acquired all the hassles of forming as a condominium association, “triggering extensive administrative requirements and additional costs including property taxes that are based on the assessed value of each particular unit rather than the overall project as is in the case with a rental building,” Zalewski notes.
"The flip side is, the Related Group and its lenders must be confident that the Greater Downtown Miami condo market is showing signs of a turnaround given their bold decision to move forward with closings in ICON Brickell Tower Two," Zalewski notes.
Four units closed in the second tower in the last month, with prices ranging from $279,000 to $838,000, averaging about $500 square foot, according to the data from Condo Vultures, a consultancy specializing in bulk deals. Related has sold 34 units in the first tower of ICON Brickell since Oct, when the Miami Herald reported that prices had been slashed by 30 percent.
Meanwhile the Miami Herald reports “Banks are circling Miami’s ICON Brickell.” Perez, Miami's condo king, is in “the final stage of negotiations with lenders” over the future of the property, and “no decision had been made” about who will own the project going forward.
CondoVultures also notes that Prodigy International's Rodrigo Nino, who recently discussed his plan to create a $500 million fund to buy distressed condos and sell them overseas, has, indeed, flipped at least a few Miami condos. Four months after acquiring 10 units in the Brickell on the River south tower, Nino’s Prodigy Capital Capital Investments resold five of the units for $51-a-square-foot more than it paid, CondoVultures reports.
