New Construction Update

We want to take a different approach to our new construction updates as the market is shifting rapidly day to day. In our prior posts, our focus was on how many new projects have been proposed in Bay Harbor Islands and the number of residential units new construction is adding. In contrast, we want to discuss the projects that are already in pre-sales and those that were proposed but have put on the brakes in the fickle market we are currently in. We are also going to dive deeper into those projects that have been completed and track how successful they have been.

In our last post regarding new construction, there was a total of 22 projects that were showing some signs of progression. As of February 2017, we currently have 4 new projects fully completed: The Club on 92nd Street, Harbour Park on East Bay Harbor Drive, 9900 Town Homes on East Bay Harbor Drive, and Bay Breeze on 99th Street. An additional 11 projects are under construction: 9 condo buildings/townhome projects and 2 hotels with an additional 6 developments in pre-sales. This means our Islands are committed to absorbing at least an addition of  15 condo buildings and 2 hotels during this real estate cycle with at least a half dozen more looking to achieve that same goal.

Of the four completed buildings we have to ask ourselves, were they successful? Let’s take a deeper look into the first building completed…

The Club was the first building completed, which is located at 1025 92 Street. Closings occurred between June-September of 2015. No units have successfully changed hands since completion, but some have tried to sell. 5 out of the 43 unit owners have tried to sell, all unsuccessfully. Currently there are two listings on the MLS, unit 704 and 403. Unit 704 has been listed 3 times, each subsequent time at a lower price than the original offering. They started at $610,000, then attempted at $565,000, and at their most recent attempt have started at $525,000. They paid $420,000 for the unit so they still have a buffer to negotiate without losing money. However, it is strongly unlikely they will be turning a profit that was worth tying up their funds for 2-3 years.

Rentals are a happier story and have successfully rented in the range of $2500-$3300/month. 21 out of the 43 unit owners have successfully rented their units. It is worth noting that units don’t fetch premium rents as the floors go higher, rather it all has to do with which line the unit is on and which side of the building your unit looks out over. If you look out on the North or East side, you look directly into the neighboring building’s units or overtop the neighbor’s flat roof. This is my biggest concern when touring these new construction projects. It is the most unpleasant view looking overtop someone’s water stained, AC compressor laden flat roof. Moving forward, I think our Town needs to come up with a creative way to make our roof’s prettier. This will enhance our future residents’ views and these new units will be much easier to sell. Let’s find a way to spruce our roofs!

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