Developer hopes to expand boom to Little Havana
The Real Deal
By Eric Kalis
Peter Torres and rendering of InTown in Little Havana
The Astor Cos. is hoping to lure young professionals priced out of trendier locales to Little Havana, a Miami neighborhood where other developers could not gain traction during the real estate bust.
Astor is getting set to build the 320-unit InTown condo project on 2.5 acres the Miami-based company assembled during South Florida’s real estate downturn about three years ago.
Peter Torres, Astor’s vice president, told The Real Deal the strategy depended on the belief that rental rates in Brickell and downtown Miami would rise so high, many renters would seek more affordable options near their workplaces.
Little Havana is “primarily a rental market,” he said.
Astor executives see their primary market as condo investors seeking steady rental income. The company launched unit presales for the 1900 Southwest Eighth Street development on Jan. 13. About 10 percent of InTown’s condos are already reserved.
Prices range from $190,000 to more than $300,000.
“The first wave has primarily been investors,” Torres said. He said some are picking up multiple units — he expects several groups could purchase 10 to 20 units as rentals.
Astor plans to apply for a building permit by the end of the month. The company hopes to start construction on the 14-story, two-tower development by September and complete the project by early 2016.
Torres said he is in talks with lenders about construction financing. He declined to disclose the loan amount the company is pursuing.
Astor made a previous foray into Little Havana during the last real estate boom, completing condo building Brickell Vista in 2005. The company successfully sold out that project before the real estate bust.
Subsequent attempts from other developers to build high-end condos in Little Havana were unsuccessful. The most notable failure during the downturn was Morrison, a two-tower complex with 395 condos planned by Canyon-Johnson Urban Funds and mFm Construction on Flagler Street and Southwest Seventh Avenue.
“What was planned for that area before the bust never got off the ground,” real estate attorney Louis Archambault told The Real Deal. A partner at Miami-based Pathman Lewis, Archambault represents numerous developers. He is not involved with InTown or Astor.
“Is this any different from those concepts?” Archambault asked, “or is it exactly the same and the developer is hoping the market conditions are different?”
Miami’s condo market is dramatically different from the last cycle. Buyers must hand over substantial deposits when going under contract now, leading them to be much more discerning about design features and project amenities.
“The buyer base is an investor pool,” Torres said. “The deposit structure makes it more difficult for an end user to come in and make that commitment to sit and wait. We are dealing with a 50 percent deposit [requirement] that is not readily available in many buyer’s bank accounts.”
While Astor has a lengthy track record in South Florida, the project is planned in a “secondary location” that might not generate the same level of investor interest as Miami’s Central Business District, according to Archambault.
“When I looked at that location,” he said, “the first thing I thought was ‘Who is your buyer?’ Everyone has a vision of rich South Americans coming here and dropping large amounts of cash with no issues. That’s great if you have a grade A location.”
To add some marketing heft, Astor has hired prominent designer Steven G. to decorate certain fully-furnished units available to buyers. Amenities include a 14,000-square-foot open-air pool deck, swimming pool, club room with billiards tables and theater room.
At Brickell Vista, “the interiors were nice but certainly not at a Steven G. level,” Torres said. “We wanted access to a different buyer for this product.”
InTown plans also include 18,000 square feet of ground-floor retail and restaurant space.
“We are focused on making the ground floor very restaurant oriented to compliment a lot of the cool restaurants right around us,” he said.
Little Havana has a reputation as a place for older residents, he said, “But it has started to blossom over the last seven, eight years.”
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