ISG World Miami Report Feb. 2013

2 | ISG MIAMI REPORT

TABLE OF CONTENTS

Welcome Letter

Standing Inventory

MLS Inventory

New Construction Inventory

The Myth Debunked

Report From the Ground

South American Market Report

In The News

In Their Words...

3

5

12

16

20

22

23

24

25

MIAMI REPORTFEBRUARY 2013

ISG MIAMI REPORT | 3ISGWORLD.COM

FROM THE ISG PRINCIPALSFEBRUARY 2013

Welcome to the 4 Year Anniversary Edition of ISG’s Miami Report. From inception, our goal has been to deliver accurate and interesting data regarding the state of The South Florida Real Estate Marketplace. We have monitored the “oversupply” of inventory that remained from the last development boom. We have debunked the myth of gloom and doom while identifying opportunities for the ambitious and entrepreneurial.

Business, as we knew it, is not the same. That is reason to rejoice. The old business model was not sustainable. We needed to create a NEW PARADIGM while selling the remaining condo units of standing inventory. We needed to establish a method of doing business that would allow the introduction of new construction in the absence of conventional financing.

The ISG Miami Report has always told the story in a clear and concise manner. Today we discuss THE NEW PARADIGM.

With the Related Group, ISG sold out the first new construction project to lead our industry into the new future. We successfully introduced the “Latin Sales Model” which requires the buyers to pay a substantial portion of the purchase price during actual period of construction. In our first endeavors, we secured 80% of the price during construction. Now the formula has settled at between 50% to 60%.

This NEW PARADIGM is how business will be done going forward: only the strongest and most trustworthy developers will be selected to do business this way. Many will try but who will succeed?

Today’s market is a “Brave New World” inhabited by the best and the brightest. ISG will continue to chronicle the evolution of The New Miami.

Thank you for the outpouring of interest and support in our Report.

“BUSINESS, AS WE KNEW IT, IS

NOT THE SAME. THAT IS REASON

TO REJOICE.”

Craig Studnicky & Philip SpiegelmanISG Principals


While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this report and expressly disclaims liability for errors and omissions in its contents.

May 2005

AS OF NOW: ONLY 794 CONDO UNITS REMAIN

AS OF MAY 2005:62,000 condo units

were proposed to be built in Downtown Miami and Brickell.

IN REALITY:Only 17,502 condo units were built and finished.

ISGWORLD.COM ISG MIAMI REPORT | 5

standing inventoryAS OF DECEMBER 2012

ISGWORLD.COM


1. 500 Brickell East − 500 Brickell Ave2. 500 Brickell West − 55 SE 6 St3. 1060 Brickell −1050 Brickell Ave4. 1050 Brickell −1060 Brickell Ave5. Asia Brickell Key − 900 Brickell Key Blvd6. Axis South − 79 SW 12 St7. Axis North −1111 SW 1st Ave8. Brickell on the River North − 31 SE 5th St9. Brickell on the River South − 41 SE 5th St10. Brickell Station Villas − 100 SW 10th St11. Brickell View West − 1723 Sw 2nd Ave12. Habitat One − 1701 SW 2nd Ave13. Icon Brickell Tower I − 465 & 475 Brickell Ave

14. Icon Brickell Tower II −495 Brickell Ave15. Infinity on Brickell Condo − 60 SW 13th St16. Latitude on the River − 185 SW 7th St17. Lofts on Brickell I −1528 Brickell Ave18. Lofts on Brickell II − 1650 Biscayne Blvd19. Los Suenos De Brickell − 145 SW 11th St20. Neo Vertika − 690 SW 1st Ct21. One Plaza West Brickell − 145 SW 11th St22. Park View Tower − 115 SW 11 St23. Plaza on Brickell North − 950 Brickell Bay Dr24. Plaza on Brickell South − 951 Brickell Bay Ave25. Solaris Condo Brickell Miami − 186 SE 12th Ter26. The Emerald Condo Brickell − 218 SE 14th St 27. The Sail on Brickell − 170 SE 14th St 28. Viceroy Icon Brickell − 485 Brickell Ave

29. 50 Biscayne − 50 Biscayne Blvd30. Capital Lofts − 117 NE 2nd St31. Epic West − 200 Biscayne Way32. Vizcayne South −253 NE 2nd St33. Vizcayne North − 244 Biscayne Blvd34. Flagler First Condo − 101 E Flagler St35. Ivy Miami Condo − 90 SW 3rd St36. Met One Condo − 300 S Biscayne Blvd37. Mint Condo − 92 SW 3rd St 38. The Loft Downtown II − 133 NE 2nd Ave39. Wind by Neo − 350 S Miami Ave40. City 24 − 350 NE 24th St

brickell central business district

13

9

17

2625

203 4

18

29

21 22

15

6 737

34

23

5 36

24

27

32 33

16

30

19

101112

35

39

38

81

312814

2

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009. While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.


41. Opera Tower − 1750 N Bayshore Dr42. 900 Biscayne − 900 Biscayne Blvd

43. Marina Blue − 888 Biscayne Blvd44. Marquis Condo − 1100 Biscayne Blvd45. Ten Museum Park − 1040 Biscayne Blvd

media & entertainment

parkwest

wynwood - edgewater

46. Cynergi − 2700 N Miami Ave47. Edgewater Lofts − 2200 NE 4th Ave48. Gallery Art − 333 NE 25th St49. Midblock −3250 NE 1st St

50. Midtown II (Mid-rise) −3451 NE 1st Ave51. Midtown II (Mews) − 3449 NE 1st Ave52. Midtown II (High-rise) − 3470 E Coast Ave53. Midtown IV − 3301 NE 1st Ave54. Moon bay − 520 NE 29th St55. New Wave − 725 NE 22nd St56. Onyx on the Bay − 665 NE 25th St57. Palermo − 425 NE 30th St58. Paramount Bay − 2066 N Bayshore Dr59. Platinum − 480 NE 30 St60. Quantum on the Bay − 1900 N Bayshore Dr61. Star Lofts on the Bay 712 NE 25th St62. The 1800 Club − 1800 Bayshore Dr

DOWNTOWN MIAMI & BRICKELL BUILDING BY BUILDING

THE REALITY IS: 62 BUILDINGS. 96% SOLD. ONLY 794 UNITS REMAIN.

43

44

4740 41

51 52 54

60 61

62

48

55

46

57

53

58

50

56 59

49

42

45

UNDER 49% SOLD OUT

RENTAL

100% SOLD OUT

75-99% SOLD OUT

50- 74% SOLD OUT

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009. While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.


REMAININGAS OF JANUARY

2012


2009

TOTALINVENTORY BUILT

SINCE 2005 REMAININGAS OF JANUARY

2013

Total Available Developer Inventory for New Condos Built From 2005-2010

I N T R O D U C I N G

eaSt paLm BeaChEAST PALM BEACH 2,938

2,076

687389

3,899

1,681

950

352



I N T R O D U C I N G

eaSt paLm BeaChEAST PALM BEACHDAYTONA BEACH Total Available Developer Inventory for New Condos Built From 2004-2010

2,938

2,076

687389


2012


2009


SINCE 2004


2013

GREATER FORT LAUDERDALE

5,135

1,681

142


2012


2009


SINCE 2005


2013

SOLD OUT




Standing inventory

SUmmary

THE MIAMI BEACHESTotal Available Developer Inventory for New

Condos Built From 2005-2010


2012


2009


SINCE 2005


2013

10,001

5,009

1,020234

17,502

10,130

2,497794


2012


2009


SINCE 2005


2013

DOWNTOWN MIAMI & BRICKELL





2012


2009


SINCE 2005


2013

Total Available Developer Inventory for New Condos Built From 2005-2010 (Downtown Miami/ Brickell, The Miami Beaches, Greater Fort Lauderdale and East Palm Beach)

Standing inventory

SUmmary

36,537

18,501

4,6091,380



mls Shadow inventory

AS OF DECEMBER 2012



mls Shadow inventory

THE MIAMI BEACHES

DOWNTOWN MIAMI & BRICKELL

New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active

ISG MIAMI REPORT | 13

$0

$125

$250

$375

$500

18 Months Ago 12 Months Ago 6 Months Ago Currently Active0

325

650

975

1,300

1,235 1,161 1,058 728

Price PSF Active Listings

$340 $352 $387$428


$0

$200

$400

$600

$800


1,000

2,000

3,000

4,000

3,154 2,112 991 733


$618 $641 $657$781

ISGWORLD.COM


EAST PALM BEACH

GREATER FORT LAUDERDALE New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active

$0

$125

$250

$375

$500


200

400

600

800

768 484 288 160


$256 $289$356

$420



$0

$75

$150

$225

$300


125

250

375

500

408 339 179 91


$188 $189 $204

$263


dayS on marKet(dom)

MLS ANALYSIS FOR CLOSED SALES IN 2011 & 2012

0 75 150 225 300

Downtown Miami & Brickell

The Miami Beaches

Greater Fort Lauderdale

East Palm Beach

2011 Avg DOM 2012 Avg DOM

0 75 150 225 300

Downtown Miami & Brickell

The Miami Beaches

Greater Fort Lauderdale

East Palm Beach

2011 Avg DOM 2012 Avg DOM

180

112

174

147

35

55

42

30


new construction inventory

AS OF DECEMBER 2012



DOWNTOWN MIAMI & BRICKELL TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE

new construction inventory

AVENTURA

DOWNTOWN MIAMI

DOWNTOWN MIAMI

BRICKELL

BRICKELL

BRICKELL

96 UNITS

300 UNITS

374 UNITS

382 UNITS

192 UNITS

1,344 UNITS TOTAL - 99% SOLD

100% SOLD

95% SOLD

99% SOLD

100% SOLD

100% SOLD

260 UNITS TOTAL - 49% SOLD

70 UNITS

190 UNITS

51% SOLD

48% SOLD

Developer Units Sold Developer Units Unsold

TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE

*The Villages- Currently Being Redesigned

THE MIAMI BEACHESTOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE

MIAMI BEACH

MIAMI BEACH

SUNNY ISLES

SUNNY ISLES

MIAMI BEACH

SUNNY ISLES

SUNNY ISLES

SUNNY ISLES

HOLLYWOOD BEACH

HOLLYWOOD BEACH

79 UNITS

132 UNITS

230 UNITS

49 UNITS

24 UNITS

48% SOLD

90% SOLD

56% SOLD

70% SOLD

87% SOLD

21 UNITS

50 UNITS

114 UNITS

84 UNITS

39 UNITS

50% SOLD

80% SOLD

59% SOLD

100% SOLD

25% SOLD

Developer Units Sold Developer Units Unsold




NORTH MIAMI, KEY BISCAYNE & COCONUT GROVE

TOTAL NEW CONSTRUCTION CONDO UNITS TO BE BUILT, SOLD AND CURRENTLY AVAILABLE FOR SALE IN DOWNTOWN MIAMI/BRICKELL, THE MIAMI BEACHES, AVENTURA, NORTH MIAMI & COCONUT GROVE/KEY BISCAYNE

NEW CONSTRUCTION SUMMARY

230 UNITS

TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE


234 UNITS

154 UNITS

95 UNITS

NORTH MIAMI

KEY BISCAYNE

COCONUT GROVE

36% SOLD

96% SOLD

80% SOLD

*Marina Palms - Tower I Only [Tower II Currently Unavailable]


Developer Units Sold

Developer Units Unsold

Project Units [Total]

2,909

2,338

571

SALES MADE IN THE LAST 18 MONTHS

ISGWORLD.COM

THE MYTH:DEBUNKED

Recent rumors and articles are comparing Miami today to Miami in 2005, sighting another boom and a slate of new inventory entering the market…but the numbers are telling another story.


ISGWORLD.COM

MYTH: SUPPLY IS ON THE RISE

THE REALITY:

Number of new condo units built in Downtown/Brickell, the Miami Beaches, Greater Fort Lauderdale and East Palm Beach from 2005-2008: 36,537 condo units

Number of condo units remaining for sale from the above boom: 1,380 condo units

Number of new construction condo units in Downtown/Brickell, the Miami Beaches, Greater Fort Lauderdale and East Palm Beach currently listed for sale today: 2,909 condo units

Number of condo units from the above sub-markets remaining for sale: 571 condo units

VV


Total number of condo units remaining for sale from previous boom + total number of new construction condo units for sale today: 1,951 condo units

CONCLUSION: THERE IS NO CURRENT THREAT OF OVER SUPPLY

ISGWORLD.COM

MIAM

I REPORT | TH

E MYTH

DEBU

NK

ED

22 | ISG MIAMI REPORT FEBRUARY 2013

Report from the GroundTHE NEW PARAD IGM

From the General Realty point of view, what is The New Paradigm?


The real estate bust and subsequent financing changes resulted in an almost four year gap in new construction, creating a New Paradigm of inventory flow. We explain to our clients that in today’s market, you have to move fast—South Florida developer existing and new-construction inventory is much less than everyone realizes; in fact we may face a supply shortage.

Q:A:

We are mostly affected by the misconception of buyers believing that there is still an abundance of inventory and a plethora of new inventory on the way. However, the amount of South Florida’s developer existing inventory is smaller than everyone believes; it has nearly dried up completely.

How does this affect your clients and agents on a daily basis?

MARKET FACT:AVERAGE DAYS ON THE MARKET FOR LISTINGS 40 DAYS

Deborah GoldenManaging Director of Sales & OperationsRelatedISG International Realty We advise our sellers to take advantage of this prime moment

in real estate—now is the time to sell. We encourage our agents to always have a pipeline of well qualified buyers. Furthermore, agents simply must return to the basics of the real estate business; they need to rely less on technology and much more on the resources that they may not realize are right under their noses. Things like picking up the phone and having a meaningful conversation with someone, going through old client lists (remember the Rolodex?), and “hitting the pavement” to gather information that can’t necessarily be found on the internet are just a few resourceful ways to master our ever-changing market. It is imperative for any agent to be aware of what properties are available, pending and sold on a daily basis because that is how fast our market is changing.

How do you overcome the misconception that there is a surplus of inventory?

Q:A:

Q:A:

ISGWORLD.COM

Real Estate in Miami has dynamically changed in the last four years. This change allows us to predict the future in a much more exciting way than the recent past.

During the boom years, from 2002 to 2007, we saw an international market that was dominated by two countries. The two main sources of sales in the condominium sales business were Venezuela and Colombia. Mexico was also performing but in a distant third place.We didn’t find that Brazilians or Argentinians were buying, which was logical since they were recovering from a recession that started in Brazil in 1999 and another that started in Argentina in 2001. After 2009 as a result of political unrest and growing economic over heating, we started seeing changes in the behavior of the Latin market. Argentines, Brazilians and the traditional markets of Venezuela, Colombia and Mexico started buying again. In addition, markets that were not traditional such as Ecuador, Uruguay and Peru began entering the mix.

We can say today that this is the first time that all of the Latin American markets are performing at the same time. With housing prices skyrocketing above those of both disappearing standing inventory and new construction offerings in South Florida, it is no wonder that we are experiencing a resurgence of activity in the Paradise that we call home. When we analyze these new purchasers, we find that they are not speculators but instead are second-home buyers and long term investors that want to park their wealth in a city with a unique sophistication and want to be closer to home.

Along with excellent choices in architecture and location, new purchasers from Latin America find a city that is safe to enjoy their success and raise their families.

ISG reaches these markets and develops long-term relationships to maximize sales for its Developer clients.

SOUTH AMERICAN MARKET REPORTSERGIO PINTOSExecutive Vice President, Latin American Specialist - ISG World

“We can say today that this is the first time that all of the Latin American markets are performing at the same time.”


“The downtown area, of course, is the most unique recovery story given the fact that the majority of existing residential inventory was built during the last development cycle with recovery driven by an international buyer market unique to Miami and the corresponding availability of housing and urban lifestyle environment attracting young working-age households employed in the downtown area as well as college and graduate students.”

“A Look Ahead At Miami’s Residential Market” • Posted 12/11/2012, miamiherald.com

FORBES • 1/29/2013

Housing Recovery Firming, But Don’t

Expect A Return To Pre-Crisis Growth...

Miami Market Races into 2013

Miami Association of Realtors • 1/12/2013

Miami Pending Sales Rise 52 Percent In November

Miami Realtor Association | miamire.com • 1/14/2013

New York Times • 9/13/2012Argentines Turn Cash Into Condos in Miami


I N THE NEWS


Miami Association of Realtors • 1/12/2013

Miami Realtor Association | miamire.com • 1/14/2013

Argentines Turn Cash Into Condos in Miami

“Over the last year, Miami-Dade County has seen improvements in its economy. We have seen an increase in the

number of companies that have shown interest in Miami as a place of business. Recent expansion announcements include Univision and Sapient.

In 2012,The Beacon Council assisted about 27 companies who decided to expand or establish operations in Miami-Dade County, creating about 2,000 new jobs. Although many

employees will be hired locally, some of the international companies will bring staff to Miami, thus creating the

need for housing.”

JAAP DONATH, PH.D.Senior Vice PresidentResearch & Strategic PlanningThe Beacon Council

Q: When you came into your current position, downtown’s condos were ghost towers, and

real estate soothsayers predicted it would take years for them to fill. Now the place is buzzing. What caused the change?

A: “We owe our thanks to the private sector that had the foresight to build vertically and create the level of urban development we have today. More than $13 billion was invested in

housing and commercial development during the real estate boom. Many criticized Miami for its overbuilding but the old adage of ‘if you build it, they will come’ certainly rang true.... Today, [condo

occupancy] stands at more than 95 percent, with more new construction underway in the urban core

than anywhere else in South Florida.”

ALYCE ROBERTSONExecutive DirectorDowntown Miami Development Authority (DDA)

I N THE IR WORDS. . .IN THE NEWS

*Excerpt from the Miami Herald | DDA’s Alyce Robertson: Promoting downtown Miami


Celebrating4Years

miami report


2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com

miami report

MAY 2012

An in-depth AnAlysis of south fl oridA’s new developer Condominium inventory

u p d A t e d t h r o u g h A p r i l 3 o t h 2 0 1 2

Also: dAys on the mArKet fACts

SHaDoW A LOOK

At WHAt’S LEFt iNVeNtorY

MIAMI’S


miami report

JANUARY 2012

AN IN-DEPTH ANALYSIS OF SOUTH FL ORIDA’S NEW DEVELOPER CONDOMINIUM INVENTORY

U P D A T E D T H R O U G H D E C E M B E R 3 1 S T 2 0 1 1

ALSO: PRE-CONSTRUCTION SALES ARE BACK (PG 10)

HoW A LOOK AT HOW

MIAMI PRICES MEASURE UP DoeS it

Compare?SAO PAULO

BUENOSAIRES

TORONTO

MIAMI

RIO DE JANEIRO

BOGOTÁ

PRINT EDITION

MIAMI REPORT

®

The Real Estate Recovery

Quarterly Update, April 2010


miami report

JUNE 2011 | isgworld.com

An in-depth AnAlysis of south fl oridA’s new developer Condominium inventory

updAted through mAy 31 , 2011

the NeXt ChAPteR BeGINS

An in-depth analysis and presentation of facts, prepared by:

MYTH VS REALITYTHE SOUTH FLORIDA CONDO MARKET

AS OF SEPTEMBER 2010.


miami report

OCTOBER 2011

A n i n - d E p T h A n A lys i s O f s O u T h f l O R i dA’s n E w d E v E lO p E R CO n d O m i n i u m i n v E n TO Ry

miami 2020A l O O K A T T h E

f u T u R E O f

d O w n T O w n m i A m i

miami 2020

A L O O K A t t H E

F U t U R E O F

D O W N t O W N M I A M I

u p d A T E d T h R O u g h s E p T E m B E R 3 0 T h 2 0 1 1

i n T R O d u C i n g dAy TO n A B E AC h

Today at noon,

everyone downtown will be

looking up here.2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com

the isg miami report

JANUARY 2011 | ISGWORLD.COM

AN IN-DEPTH ANALYSIS OF SOUTH FLORIDA’S NEW DEVELOPER CONDOMINIUM INVENTORYUPDATED THROUGH DECEMBER 31, 2010

MiaMi RepoRt

The Real Estate Recovery

January 20102875 Ne 191st stReet, suite 200 | aveNtuRa, FL 33180 | 305.931.6511 | www.isgwoRLd.coM

ISG provides Miami’s most comprehensive and in-depth analysis of South Florida’s New Condominium Inventory

MiaMi RepoRt

perception vs. Reality

September 2009

2875 NE 191st strEEt, suitE 200 | AvENturA, FL 33180 | 305.931.6511 | www.isgworLd.com


2875 NE 191st Street, Suite 200 | Aventura, FL 33180 | 888.931.6511 | www.isgworld.com

ISG World Miami Report Feb. 2013

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