Miami’s Park Avenue sees improvement

7/26/2011

By Alexander Britell

Six months after a rebranding and overhaul, the once-troubled Everglades on the Bay residential property, now called Vizcayne, is leading momentum for the downtown Miami strip some are calling Miami”s Park Avenue.

Newly-formed partnership Related ISG, which has been handling sales at the property since January, devised the idea to rebrand the site, a plan that started with Google.

“When we were analyzing our options, we went to Google and looked up Everglades on the Bay, the prior name, and there was negative context there from the difficulties the original developer [Cabi] had,” said Philip Spiegelman, co-principal at Related ISG. “We didn”t want to have to fight that negative connotation, while trying to reposition the property on the market. We felt that putting the new name — a new image on the property — meant we could start with an empty page.”

Vizcayne”s rebranding, he said, has been very successful so far, with more than 100 sales in the past 100 days.

According to Condo Vultures, the property has seen a drastic change from a dismal first quarter (when it sold just nine units), although its sales pace was in a range of a group of downtown properties.

“The infrastructure is in place,” said Peter Zalewkski, founder of Condo Vultures. “It”s starting to come along. When you first put it in place, it”s going to take a while to get going — it looks like Vizcayne is starting to gain some traction and it”s chugging along.”

The key, Zalewski said, was a price discount. In the first quarter, when only nine units sold, they were averaging approximately $303 per square foot, but in the second quarter, when it sold 58 units, that price fell to $297.

“I think the strategy for Vizcayne is probably to make money at the current pricing south of $300 per square foot, and to burn it slowly; as the market starts to come back, the prices should strengthen, and as they do it will represent an overall better return on investment,” he said.

He cautioned that several nearby properties, like Mint and Infinity, were selling more units per quarter.

Vizcayne”s aforementioned per square foot transaction price (approximately $297 per square foot) was close to a few nearby properties, including Mint, which was averaging $302 per square foot, and Infinity, which was at $260 per square foot.

Those towers are each located in the downtown Miami neighborhood that is beginning to show improvement. Would-be buyers are moving north from Brickell, which has seen success with buildings like Icon to the series of buildings beginning with 50 Biscayne downtown to the four-tower group across from the American Airlines Arena.

The latter block has been led by Marquis Miami, which, although developer Africa Israel has been struggling with its U.S. portfolio, has managed to sell 70 of its 290 units in the first year. Prices at Marquis, like adjacent towers Ten Museum Park, 900 Biscayne and Marina Blue, are more expensive than the Mint-Vizcayne-Infinity group.

“We kind of call that the Park Avenue or the Wacker Drive of Miami,” Spiegelman said. “It represents a contrast to Brickell Avenue, which has always been known as the financial district. The fact is there”s always definition between the two areas, even though they kind of link each other.”

The remaining units at the property were acquired by Rockwood Capital, in a partnership with Duncan Hillsley Capital and Fortune Capital Management, for $141 million in November 2010, when Everglades was in bankruptcy.

A Rockwood affiliate, RW 244 Biscayne RES, secured a $90 million loan on the 849-unit project in March.

According to Spielgelman, who, along with Jorge Perez predicted this spring a slew of new Miami construction projects, said the activity in this portion of downtown would continue.

“If you look at the trend going north,” he said, “from Biscayne, going up to the [Adrienne] Arsht, and Genting having bought the Herald property, you can only imagine. Related has bought the Omni — there [are] going to be huge changes in the alternatives people have, from Brickell all the way to 36th Street.”