Business Monday

Ahead Of The Deal: 8,000 new units in pipeline east of Biscayne Boulevard in North Miami area

Peter Zalewski
Peter Zalewski .

Nearly 8,000 new condo and rental units are in the planning and presale phase of development for a long-overlooked stretch of Biscayne Boulevard connecting Greater Downtown Miami to Aventura on the mainland in Northeast Miami-Dade County.

Some of South Florida’s most active condo developers including Dezer Properties, Key International and a joint venture between Aventura’s Turnberry Associates with Jeffrey Soffer and New York’s LeFrak Properties with Richard LeFrak have already made investments and announced plans to build thousands of new residential units on sites located west of the Intracoastal Waterway between the 10500 block north to the 17500 block of Biscayne Boulevard.

At a time when the number of new residential projects and average asking prices is surging in established areas near the coast of Northeast Miami-Dade, developers increasingly are focused on securing opportunities east of Biscayne Boulevard in the underdeveloped markets of North Miami and North Miami Beach.

The development strategy is fairly straightforward: Developers are hoping to utilize cheaper land prices in the North Miami-North Miami Beach area to build more reasonably priced units that appeal to local and out-of-town buyers, alike, who do not necessarily need to live in buildings fronting the water.

Aside from attractive pricing, the North Miami-North Miami Beach area looks to be a direct benefactor from the growing efforts to restore passenger rail service to the Florida East Coast Railway tracks between Downtown Miami and West Palm Beach.

The east leg of the proposed Tri-Rail Coastal Link passenger service — which could begin as early as 2018 — is envisioned to have two of its proposed 28 stops at 125th Street and 163rd Street in the North Miami-North Miami Beach area when, and if, a new commuter line begins operating on the existing tracks, according to an April 2013 report from the South Florida Regional Transportation Authority.

A passenger rail service could create an opportunity for residents to live in more moderately priced residential units in areas such as the North Miami-North Miami Beach stretch and work in the downtowns of Miami, Fort Lauderdale and even West Palm Beach.

The biggest project in the pipeline for the North Miami-North Miami Beach area is the planned $4 billion SoLeMia project — an abbreviation of the Soffers, LeFraks and Miami — that would feature a dozen residential towers with nearly 4,400 units on a 183-acre site owned by the city of North Miami that was once a landfill in the 15000 block of Biscayne Boulevard.

The planned SoLeMia residential units are slated to be a combination of condominiums and rental apartments based on market demand at the time of construction.

To the northeast of the SoLeMia project, Dezer Properties — an active condo developer in Sunny Isles Beach — has plans to build about 2,100 residential units on the Intracoastal Mall in the 3700 block of Northeast 163rd Street in North Miami Beach, according to The Real Deal.

Situated between the SoLeMia project and the Dezer Properties site, at least three different developers have announced plans — or already started construction — to build at least six new condo towers with nearly 1,200 units at the Northeast corner of 163rd Street and Biscayne Boulevard, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)

The development wave near the intersection of 163rd Street and Biscayne Boulevard is largely a result of zoning changes in the city of North Miami Beach.

In March the North Miami Beach City Council voted for a “major overhaul of the city comprehensive planning and zoning codes” to better compete with nearby cities for new developments, according to the Miami Herald.

Reinforcing the revitalization trend in underdeveloped areas of coastal Northeast Miami-Dade County, a Miami development group announced in August plans to build 240 residential units and 90 hotel rooms on a 13-acre site in the 11100 block of Biscayne Boulevard near the three-tower Jockey Club condominium and marina complex that was once a top destination, according to the South Florida Business Journal.

Optimism about the wave of new residential construction planned for the North Miami-North Miami Beach area has not yet surfaced in the condo resale market.

Buyers purchased about 305 condo units at an average price of $157 per square foot east of Biscayne Boulevard in the North Miami-North Miami Beach area in the first nine months of this year, according to the Southeast Florida MLXchange.

The transaction activity on a year-over-year basis is down 15 percent from 357 transactions in 2014 but transaction prices are up 11 percent from an average of $141 per square foot last year, according to the data.

Condo resale prices in the North Miami-North Miami Beach area have come back about 87 percent from the last South Florida real estate cycle when the average transaction amount was $84 per square foot in the first nine months of 2009.

As impressive as the rebound has been for the North Miami-North Miami Beach area, today’s condo resale prices are still down 39 percent from the peak of the last cycle in 2006 when the average transaction closed at $259 per square foot in the first nine months of that year, according to the data.

The unanswered question going forward is whether the North Miami-North Miami Beach area will be able to benefit from the new construction wave during this current South Florida real estate cycle that began in 2011 given that signs of a slowdown are emerging.

Peter Zalewski is a principal with the Miami real estate consultancy Condo Vultures. Zalewski also runs the preconstruction condo project website CraneSpotters.com in conjunction with the Miami Association of Realtors.

Condo resale prices in North Miami-North Miami Beach

This shows how condo resale prices have jumped in the North Miami-North Miami Beach Area of Northeast Miami-Dade for the first nine months of each year. The area’s boundaries are defined as Biscayne Boulevard east to the Intracoastal Waterway, and the 10500 block north to the 17500 block of Biscayne Boulevard.

Year (January-

September)

Condo resale

transactions

Year-over-year

change

Average transaction

price per square foot

Year-over-year

change

2015

305

-15%

$157

11%

2014

357

1%

$141

11%

2013

352

12%

$127

21%

2012

313

-3%

$105

28%

2011

323

30%

$82

-6%

2010

249

34%

$87

4%

2009

186

158%

$84

-32%

2008

72

-37%

$124

-44%

2007

115

-34%

$222

-14%

2006

174

$259

Source: CraneSpotters.com created this chart based on data from the Southeast Florida MLXchange.

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