Luxury Condo Markets Sprout in Downtowns
Published on 12.13.2019
It takes the perfect blend of colorful history, superb location, iconic architecture and an elite, sophisticated citizenry to create an international destination – a place where every moment is a celebration. This is the essence of Via Mizner, an exclusive, landmark address in the heart of a beloved community, perfectly crafted for world-class lifestyles.
As one of a select few locations worldwide with a residential property bearing the Mandarin Oriental name, The Residences is truly a signature address. Upon arriving at the private entrance lobby, the cascading water element and grand staircase only hint at the striking design and details that abound throughout. Incomparable sophistication is imbued into each of the ninety-two, light-filled homes that celebrate the Boca Raton lifestyle with absolute comfort and complete security.
For over fifty years, Mandarin Oriental Hotel Group’s reputation for impeccable service, distinctive designs and renowned, holistic spas has been key to its rapid expansion across the globe. Today, the company operates thirty-two hotels and seven Residences at Mandarin Oriental in 23 countries and territories. A dedication to the highest levels of customer satisfaction year after year has garnered Mandarin Oriental Hotel Group a most enviable ranking as a recognized leader in worldwide luxury hospitality.
Click here to view PDF of our highlight in the South Florida Business Journal.
South Florida beaches were once the prime domain for luxury condo units listing for $1 million or more. But bustling downtowns and neighboring communities have become strong players in the market.
The influx of high-priced units has attracted more wealthy residents near the urban cores of Miami, Fort Lauderdale, Boca Raton and West Palm Beach. And those spending $1 million or more for a condo are likelier to live there – even if part time – as opposed to renting them out for investment purposes. That means a greater stream of deep-pocketed spenders frequenting local businesses.
But despite the boon to the local economy, some experts warn of an imminent slowdown in luxury condo sales – especially in Miami – due to an oversaturated market. The current inventory of units on the market could take years to sell off, even as new luxury buildings near completion.
With so many units on the market in Miami, those who bought at the beginning of the cycle would likely end up selling their condos at a loss, said Peter Zalewski, a principal with Miami-based Condo Vultures. Many developers are reluctant to start new projects now because they can’t price units at the premium levels reached a few years ago, he added.
Despite that, the majority of the units in many of the latest luxury buildings delivered in downtown areas have sold.
New standard for downtown Miami
The One Thousand Museum condominium, designed by late architect Zaha Hadid, set a new standard for luxury condo sales in downtown Miami, especially on Biscayne Boulevard. (That part of downtown was far from a high-end market two decades ago.) Co-developer Louis Birdman said the average sale price at One Thousand Museum is over $5 million. But some units have closed for over $10 million – a price tag more common in Miami Beach.
Although the One Thousand Museum site was zoned for up to 500 units, the developers decided to set themselves apart from the competition with an 84-unit building featuring larger spaces with high-end finishes.
“Most of the units in the downtown market were small,” Birdman said. “We noticed some of the larger units, like over 3,000 square feet and three bedrooms, were selling at a premium to the market.”
Still, it’s what was done with the large spaces that would make One Thousand Museum stand out.
The developers hired Hadid for her first and only condo in South Florida, and her innovative design helped attract buyers from over 20 countries. Birdman said there’s also been an increase in domestic buyers, including people moving from the beaches to downtown.
World-class shopping and dining, including at Brickell City Centre, and art and cultural attractions have made downtown Miami an ideal market for luxury condo residents, said German Coto, CEO of G&G Business Developments, which is building Aston Martin Residences on the Miami River. That helped raise the status of the city’s growing economic and international financial center for wealthy condo buyers.
“Miami has continued to evolve as a complete city. It’s not just a resort town anymore,” said Alicia Cervera Lamadrid, managing principal of Cervera Real Estate. “In the past, people thought ‘beach, beach, beach.’ Now they are thinking of fine dining and museums and business.”
Too much at once
While luxury condos in downtown Miami are selling, sales aren’t fast enough to deplete the huge amount of inventory on the market, Zalewski said.
Comparing sales volume to the listings for units priced at $1 million and up, he estimates it would take five years to burn through the current supply.
“The prices they are trading at, while it might seem high, it’s not reflecting the original asking price,” Zalewski said. “So if you want to sell, you must slash your prices.”
While the high level of inventory is concerning, there is still room for new luxury buildings in downtown Miami, said Jay Phillip Parker, CEO of Douglas Elliman’s Florida brokerage. That’s because some people want the newest top-tier buildings with condos designed for families, he said.
“If you are moving from a 5,000-square-foot home and want to live in downtown Miami, your options are limited,” Parker said.
New heights in Fort Lauderdale
Not one to be left behind, downtown Fort Lauderdale is also emerging as a luxury condo market.
For example, 100 Las Olas – planned as the tallest building in the city – will be one of the priciest condos downtown. Units are listed from the mid-$800,000s up to $5 million.
One of the key markets for the project is baby boomers looking to move from the suburbs, said Ed Jahn, senior VP of developer Kolter Urban.
“Baby boomers are looking for locations that have extreme walkability,” he said. “They want to be able to come home and park the car and walk to dinner, the theater or the museum. Other locations on the beach or the suburbs don’t offer as many things to do.”
Many wealthy people who move to downtown Fort Lauderdale are renters because the development trend there has primarily been apartments, Parker said. Once there are more luxury projects, those new residents will decide to stay and high-end condo sales will pick up.
Brand name in Boca Raton
While downtown Boca Raton has less density than Fort Lauderdale and Miami, it has a robust luxury condo sector.
Units at the Residences at Mandarin Oriental are priced well above the market, even for the affluent city. They range from $2 million to $20 million, said Frank Weed, VP of development and construction for Penn-Florida Cos.
By allowing more density downtown and factoring in the dining, retail and entertainment attractions at Mizner Park, Boca Raton has created an urban environment that residents don’t have to leave, Weed said. That, combined with the limited land available for residential development on the nearby beaches, has driven people downtown.
The Mandarin Oriental is part of Penn-Florida’s Via Mizner, which will include restaurants, high-end retail, a hotel, and a member’s-only club with golf and dining.
“We are building an urban resort right in the middle of Boca,” Weed said.
Palm Beach prices move west
Another area, the waterfront of West Palm Beach, has suddenly become golden for condo developers.
The Bristol Palm Beach smashed the city’s sales record when a unit there closed for $42.6 million.
Located along the Intracoastal Waterway just south of downtown, the Bristol has closed 66 of its 69 units for about $750 million in total sales volume, said Al Adelson, co-developer of the project.
“It has changed the whole market,” he said. “People from Palm Beach moved off the island to be here.”
Adelson said his project succeeded because of the location – with ocean views and neighboring bridge to Palm Beach – and luxurious finishes and amenities. By comparison, most condos in Palm Beach were built in the 1980s, so they don’t have the high ceilings, floor-to-ceiling windows and expansive balconies of modern luxury buildings.
Now, other developers are building condo units with water views in West Palm Beach priced at $1 million and up. Parker, who represents the La Clara, said being near Palm Beach without the expensive living costs, provides a desirable lifestyle. The enhancements to the rebranded Rosemary Square also make living near downtown more attractive, he added.
“These centralized living locations present a different lifestyle than living at the beach,” Parker said. “People are more interested in being part of communities, [not] baking on the beach all year round.”
We are pledged to the letter and spirit of the U.S. Policy for achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising, marketing and sales program which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin. The sketches, renderings, pictures, photos, and designs depicted or described herein are conceptual in nature and are not to scale, are based upon preliminary development plans, may depict options, upgrades, features or views not available in all model types and are subject to change without notice in the manner provided in the applicable purchase agreement. No guarantees or representations whatsoever are made that any features, amenities or other facilities will be provided or, if provided, will be of the same type, size, location or nature as depicted or described herein. Any view from a unit or from other portions of the property may in the future be limited or eliminated by future development or forces of nature.Nearby golf courses, open spaces and other areas are not owned or operated by the Developer and there is no guarantee they will be operated or maintained for any particular purpose or in any particular manner. Many of the facilities within the project will not be located within the Residences. Certain facilities or services described herein will be provided by the hotel or club operators or others and may be subject to additional charges. Membership in the Club will be mandatory for unit owners and will require payment of additional dues, fees and costs. A substantial number of Club memberships will be available to non-residents. Business establishments may be sold to third parties, may be used for different purposes, and may change or discontinue operation at any time.
An offering is made only by the prospectus for the condominium and no statement should be relied upon if not made in the prospectus or in the applicable purchase agreement. Douglas Elliman is the Developer’s exclusive broker for this project. No solicitation, offer or sale of a unit in the Residences will be made in NY, NJ, or in any other jurisdiction in which such activity would be unlawful.Via Mizner Owner III, LLC (“Developer”) is a newly-formed entity, which is the sole offeror of the units being offered for sale as The Residences at Mandarin Oriental, Boca Raton (“Residences”). Penn-Florida Capital Corp. and the other “Penn-Florida Companies” are affiliated with the Developer but are not the developer of the Residences. All statements and any representations herein shall be deemed to have been made solely by Developer. An affiliate of the Developer is developing the adjacent proposed Mandarin Oriental, Boca Raton hotel (“Hotel”) and the rental programs, if any, offered to unit owners in the Residences. Neither Mandarin Oriental Hotel Group nor any of its affiliates, nor their respective Officers, Directors, Agents or Employees (collectively, “MOHG”), are in any way owners, offerors, promoters, issuers or underwriters of, or responsible or liable for, or are making any representations or warranties with respect to, the Developer, construction of the Residences, any offering for sale of the real property constituting the Residences, or any increase or return on related investment. MOHG has not assumed and has no liability or responsibility for any financial statements, projections or other financial information contained in any sales and marketing materials, prospectus or similar written or oral statements relating to the Residences. Developer has the sole right and responsibility for the manner and means by which the Residences are sold, and for all representations in relation to the Residences. Developer has obtained rights to use the “Mandarin Oriental” name and trademarks (“MOHG Marks”) in connection with the Residences and the Hotel subject to the terms and conditions of non-exclusive license agreements which may be terminated at any time upon certain occurrences. The right to use the MOHG Marks in connection with the Residences is thus not guaranteed and no such right is included in the Residence being acquired by any purchaser. If any of the relevant agreements are terminated, or Mandarin Oriental ceases to manage the Hotel or Residences for any reason, use of the MOHG Marks in connection with the Hotel and Residences may be terminated at MOHG’s discretion.
The Residences at Mandarin Oriental, Boca Raton (The Residences) are not developed, sponsored, owned, offered or sold by Mandarin Oriental Hotel Group or any affiliate thereof (MOHG), and MOHG makes no representation, warranty or guaranty of any kind regarding The Residences. The developers and owners of The Residences use the Mandarin Oriental name and trademarks subject to the terms of revocable licenses from MOHG which may expire or be terminated.
Photographs and artwork are lifestyle photographs and conceptual artist renderings.