Daily Business Review
'Smaller Condos Get a Boost as Sales Sag at Big Offerings'
31/05/17

Not all developers fled Miami's condominium scene when sales activity slacked off. While several switched to rentals, others simply thought small.

Construction work is set to begin this month for Aurora, a 61-unit boutique condo planned for Sunny Isles Beach. At 17 stories, the building is dwarfed by the luxury towers rising in downtown Miami.

Aurora is Verzasca Group's third boutique development. The first two — the 15-unit Pearl House and the 30-unit Le Jardin Residences in Bay Harbor Islands — did so well the developer decided to launch another.

"We really liked the feedback that we were getting from clients," said Verzasca's managing director Tim Lobanov. "We feel that clients are now preferring to live in buildings that don't have a lot of people living in them. It's just a better feel."

Boutique condo developers are betting on a different kind of buyer, not the home flipper or foreign investor. Instead, they're targeting owner occupants like empty nesters looking to leave a large suburban home, first-time buyers searching for that single- family home atmosphere in an urban setting or a snowbird who spends half the year in South Florida.

And the demand is there. Half of the units at Aurora, where prices start at $900,000, have gone under contract since sales launched last July, and Verzasca's first two boutique projects are nearly sold out.

While new groundbreakings are scarce for luxury condo towers with hundreds of units in Miami-Dade County, shovels continue to hit the ground for tony boutique developments.

The 41-unit Bijou Bay Harbour broke ground in May with 60 percent of its units sold. The Bay Harbor Islands project offers residences ranging from 900 to 2,000 square feet starting in the mid-$600,000s.

"We are a small project, so we've been blessed that market conditions for us have been steady," said Robert Morales, vice president of operations for Ability by Acierto, a company founded by storied Colombian developer Juan Carlos Gonzalez. "We're not really dealing with what's happening in Miami, the [slowing] of the market."

In Miami's Coconut Grove, the 52-unit Arbor development is marketed as a place where people will actually know their neighbors. Developers Urban Atlantic Group and Oak Ventures launched sales in mid-March with prices starting at $799,000.

A quarter of the building has sold mostly to locals who plan to use the condo as their main residence, said Nick Hamann, a principal of Urban Atlantic Group.

"It allows for what I think is lacking severely in our marketplace, the ability for one resident to really connect with another resident," he said. "It's really the scale that  allows for that to happen. If you have 400 units, it's very difficult to create a community- based theme in the building."

Boutique condos offer buyers several amenities beyond an expansive pool deck and fitness center.

Privacy is one of them. Morales said his project appeals to buyers looking for exclusivity and the convenience of a condo that still has "the feel of a single-family home."

"We don't get your typical investor or speculator, which is what's happening in big towers," he said.

Lobanov said living in a 300-unit building requires a lot of waiting — "You have to wait for your car in the valet for a while. There might be people waiting for an elevator. You have to wait to use certain amenities in the building."

But at Aurora, residents won't have to wait for an elevator because their unit comes with a private entry. Over 80 percent of the buyers are end users rather than investors, he said.

The boutique development wave has washed over Fort Lauderdale, too.

Ocean Land Investments delivered the 22-unit AquaVita near Las Olas Boulevard over a year ago, and four additional Aqua-branded projects followed.

"The beauty about the boutique condominium is it's much faster to do with much less risk," said Jean Francois Roy, president of Ocean Land Investments. "It's a little bit more labor intensive, but the construction usually [takes] about 12 months instead of 24 months."

Ocean Land has since completed the 16-unit AquaLuna and is now working on AquaMar, AquaBlu and AquaVue. The projects are collectively 85 percent to 90 percent sold.

"The people don't need to wait three years before the project is built to move in," Francois Roy said. "When construction is starting, they know within a year they will move in."