The go-go days of Miami real estate development when more than 40 construction cranes crowded the downtown skyline to assist in constructing dozens of new condominium towers is rapidly coming to an end.
Fewer than 12 tower cranes stand today in the Greater Downtown Miami area with about one-third of the steel structures focused on constructing three new office buildings, not the residential skyscrapers of the last five years.
The remainder of the construction cranes are finishing up a handful of condominium projects such as the Icon Brickell and the Paramount Bay that are scheduled to be completed in the upcoming months. Many other buildings nearing completion have already removed their cranes as work has shifted to interior buildout.
Once the final cranes are gone by the end of the year (with the exception of one tower), developers estimate it could be at least five years before a new residential condominium construction project is justifiable again in the Greater Downtown Miami area.
Retail pricing would probably have to reach $525 per square foot before a developer –and a lender – would consider moving forward on a new condominium project in Greater Miami’s central business district, industry watchers said.
Retail condo pricing today for Miami condo investors in the Greater Downtown area on an individual unit basis ranges from $300 to $500 per square foot. Pricing on resale units is even less given the tremendous number of short sales, foreclosures, and Real-Estate Owned by banks. On a Bulk basis, pricing on new condominium construction product is between $190 to $350 per square foot.
“Florida’s newest endangered species is the construction crane,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®LLC. “The crane is going the way of the South Florida speculator, which became extinct in 2006. Once the construction cranes are taken down, packed up, and hauled off on flatbeds later this year, don’t expect to see a tower crane on a residential project in Downtown Miami again for a long as a generation.”
According to the Condo Vultures® Official Condo Buyers Guide to Miami – 2008™, there are 32 condo buildings in the Greater Downtown Miami area that are already or scheduled to be completed in 2008. An additional eight tower are scheduled to be delivered in 2009 with one more condominium coming online in 2010.
When these projects are finished, there will be a total of 157 condominium buildings – old and new - in a 60-plus block stretch of the Greater Downtown Miami area from the Rickenbacker Causeway north to the Julia Tuttle Causeway, and from I-95east to Biscayne Bay, according to the Official Condo Buyers Guide.
The tower cranes were critical for the developers to be able to construct 2,672 floors of condominium residences since 2003. When the new floors are included, the total inventory in Greater Downtown Miami is nearly 4,000 stories, according to the Official Condo Buyers Guide.
"The disappearance of the construction crane really is the symbolic end of Miami’s condo building boom era," Zalewski said.
Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report™.
Copyright © 2008, Condo Vultures® LLC
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