Tibor Hollo and one of his investment partners could soon find out how strong the resurgent Brickell condominium market truly is.
Hollo’s Florida East Coast Realty, at the behest of New York-based partner Corigin Real Estate Group, is putting 2.5 acres of vacant bayfront land at 1201 Brickell Bay Drive up for sale. Before the recession, Florida East Coast and Corigin, which each owns 50 percent of the property, planned to build the two-tower Villa Magna condo project on the site.
In an interview this week, Hollo told the Daily Business Review he would have preferred to keep the property, which has existing approvals to build 787 condos, 1,500 parking spaces and waterfront restaurant and retail space. But Corigin executives wanted out.
Corigin “decided they don’t want to develop it,” Hollo said. “They felt they wanted to concentrate more on New York.”
Telephone messages seeking comment from Corigin were not returned.
The companies appear to have picked an opportune time to sell what one expert says is the last “clean” waterfront development site in Miami’s financial district. Condo absorption in Brickell and downtown Miami has shattered previous expectations, and several residential builders have started a new wave of projects.
Only 174 condos of the nearly 7,000 units built in the Brickell area since 2006 were unsold through the end of the summer of 2012, according to the research arm of real estate firm CBRE.
“There has been a complete transformation from five years ago to now,” in Brickell, according to Gerard Yetming, senior vice president at CBRE. Yetming and CBRE executive vice president Robert Given of the firm’s multi-housing group are marketing 1201 Brickell Bay Drive for sale. Tom Duke, vice president of the firm’s Retail Services Group, is assisting the brokers.
The former Villa Magna property presents “a blank canvas for a revisionary developer to come in and create something iconic,” Yetming said.
Extensive marketing efforts are scheduled to begin this week, but the brokers have already received numerous unsolicited calls from interested developers, Given said.
“There are a number of local developers who had an eye on the piece of property for a long time,” he said.
The brokers are not setting an asking price. They prefer to let the market determine what the land is worth.
“We anticipate it will be a structured offering,” Given said. “We do not believe we need to be in the market very long, given the interest level in the project already.”
Under the city’s Miami 21 zoning code, the next owner could obtain additional approvals to build an 80-story condo building that would be the tallest south of Manhattan if completed.
Hollo’s company has a head start in the race to 80 stories with a nearby rental project.
Earlier this year Hollo announced the revival of 1101 Brickell, a proposed 80-story rental tower with a 2,300-space parking garage behind the two-tower office complex Florida East Coast owns.
Hollo said the company has approvals in place to move forward and has begun utility work on the site.
High-rise rental construction is also coming back to the Brickell area.
Last month, a partnership between New York-based BlackRock Realty Advisors, LYND Development and LNR Property announced plans to build EnV Brickell, a 35-story tower with 390 apartments in Mary Brickell Village.
“I’m very confident” in the viability of the 1101 Brickell project, Hollo said.
“The rental market is just extraordinary,” Hollo said. “Many people don’t want to buy; they want to rent. So we’re catering to that market.”
That said, Hollo would have been content to carry out his plans for the Villa Magna condo towers if Corigin didn’t want to sell the site.
“It’s the only waterfront parcel left, not only on Brickell, but in the entire city,” Hollo said. “It will fare pretty well.”
A few properties in or near Brickell have the potential for bayfront condo development, but 1201 Brickell Bay Drive is the only “clean” site in the area, according to Peter Zalewski, a principal with Condo Vultures, a Bal Harbour-based real estate consulting firm.
“From Tibor’s perspective it is a brilliant time to sell,” Zalewski said. “There is huge growing momentum for pre-construction. It’s the perfect time to see what you can get in the marketplace.”
South Florida has 72 proposed new condo projects totaling nearly 10,500 units, according to Condo Vultures. Zalewski described that statistic as “shocking.”
The company had projected 10,000 proposed units by the end of 2012. Within the next year, the number of proposed units in the region could increase to 20,000.
“Everyone is dusting off old plans and trying to move dirt so they can fly in under old approvals,” he said. “Anything approved previously is in play and getting premiums.”
The challenge for a potential buyer of 1201 Brickell Bay Drive, Zalewski said, is coming up with a development scheme that justifies paying a comparable price to oceanfront land in markets like Sunny Isles Beach.
“The only question remains,” he said, “if a premium is paid on the dirt, what do you need to achieve on the resales for it to make sense?”
“Is a [unit] buyer likely to come and pay $750 a square foot on Brickell when you can pay that in Miami Beach and Sunny Isles? That’s where the numbers get interesting.”