Deal Assessment - New Condo in Miami Beach
Investor · Miami, FL · Member since 2023 · 120 posts · 46 votes
Hey guys,
I am trying to asses the deal of a condo in 72 Park Miami Beach
https://72parkmiamibeachcondo.com/
The apartment is 1 Bedroom + 1 Den + 1 Bathroom
755 Sq/f + 195 sq/f Balcony
14th Floor North facing
Price $1,150,000
The building is STR approved and these are the estimated income they sent me:
Daily Rate $530
80% Occupancy
$154,760 Yearly Rent
Management 20% - $30,952
HOA - $12,231
Property Tax - $20,826
Insurance - $1,087
Net Expenses: $34,144
Net profit $89,662 - %7.75
There isn't any other buildings like this in North Miami Beach that can really be compared to, I haven't found any data on AirDNA that can support such an income, and it seems like most new condos in the area are selling for $850 sq/f.
I am trying to understand if this is a good deal, if anyone can give me "insider" insight into the likelihood of achieving such a return and in general what you guys think of this deal
Thanks
Hi Daniel, I live on Miami Beach at the Bentley Bay and have much investment and real estate experience here.
Nice that you are hustling to find a great investment property.
Much thanks for sharing what you found out regarding 72 Park Miami Beach.
Here are a few of my concerns:
1.) The # of new STR projects, plus new hotels coming to Miami Beach online over the few years.
2.) STR rates have fallen, especially in the "middle range" brands- 72 Park is a mid tier product in the worst section on Miami Beach.
3.) This summer has been the slowest I have seen on Miami Beach since I have been here since 1999. We are become very seasonal, as the record heat index is definitely keeping people away in JUNE, JULY, AUG, SEPT.
4.) There is nothing around 72nd street worth being around. I know the Carillon is on 69th- they sell they are a wellness center with little reason to leave. I see there is Denny's on the corner of 72nd and an IHOP on 69th. There is not one luxury hotel anywhere near this area.
THE EDITION (29th) & FAENA (32nd), 1 HOTEL (23rd), W is (21st), SETAI (20th), Ritz Carlton (17th)
I see you did $530 per night x 365 = $193,450 x 80%= $154,760.
I just went on Expedia and see the Carillon at $336 per night.
W HOTEL is $457 per night, 1 Hotel $439, St Regis at $615 per night, I just had friends here and they stayed at the Ritz Carlton for $455 per night.
I would use $530 from OCT, NOV, DEC, JAN, FEB, MARCH, APRIL = $111,300 x .70= $77,910
I would use $336 from MAY, JUNE, JULY, AUG, SEPT at 60%= $30,240
Total= $108,150
Management 20%= $21,630
HOA $12,231- seems a bit too low- new construct is notorious for low balling hoa until handed over to the residents. What does this HOA amount include????
Insurance $1,087
Property tax= $20,826
Net Profit= $52,575 / $1,150,000 (not sure if this includes closing costs)= 4.57%
I will reach out to my AIRBNB management people tmrw Daniel and ask them what is going on. I'll get back to you tomorrow
Great cap rate, great NOI, great views. Have you had any experience with STRs before?
If you are a seasoned investor, I'd go for it. If you are a new investor, maybe start at a smaller purchase. But the property looks gorgeous, the numbers seem good.
Not too well-versed on STRs, but I'd say go for it. What's the worst that happens?
Hi Daniel, I live on Miami Beach at the Bentley Bay and have much investment and real estate experience here.
Nice that you are hustling to find a great investment property.
Much thanks for sharing what you found out regarding 72 Park Miami Beach.
Here are a few of my concerns:
1.) The # of new STR projects, plus new hotels coming to Miami Beach online over the few years.
2.) STR rates have fallen, especially in the "middle range" brands- 72 Park is a mid tier product in the worst section on Miami Beach.
3.) This summer has been the slowest I have seen on Miami Beach since I have been here since 1999. We are become very seasonal, as the record heat index is definitely keeping people away in JUNE, JULY, AUG, SEPT.
4.) There is nothing around 72nd street worth being around. I know the Carillon is on 69th- they sell they are a wellness center with little reason to leave. I see there is Denny's on the corner of 72nd and an IHOP on 69th. There is not one luxury hotel anywhere near this area.
THE EDITION (29th) & FAENA (32nd), 1 HOTEL (23rd), W is (21st), SETAI (20th), Ritz Carlton (17th)
I see you did $530 per night x 365 = $193,450 x 80%= $154,760.
I just went on Expedia and see the Carillon at $336 per night.
W HOTEL is $457 per night, 1 Hotel $439, St Regis at $615 per night, I just had friends here and they stayed at the Ritz Carlton for $455 per night.
I would use $530 from OCT, NOV, DEC, JAN, FEB, MARCH, APRIL = $111,300 x .70= $77,910
I would use $336 from MAY, JUNE, JULY, AUG, SEPT at 60%= $30,240
Total= $108,150
Management 20%= $21,630
HOA $12,231- seems a bit too low- new construct is notorious for low balling hoa until handed over to the residents. What does this HOA amount include????
Insurance $1,087
Property tax= $20,826
Net Profit= $52,575 / $1,150,000 (not sure if this includes closing costs)= 4.57%
I will reach out to my AIRBNB management people tmrw Daniel and ask them what is going on. I'll get back to you tomorrow
Hi @Account Closed You are correct there is no "comp" for this building, there are just no condos in the area that are similar to a product like 72 park. Carillon is not a comp, its 1958 construction. Looking at hotels can give you an idea but its not an accurate comp. The hotel rooms aren't condo units and dont have kitchen, fridge, etc.
My investors who are analyzing 72 park are looking at STR income and also betting on future price appreciation. They see the value in the neighborhood and see prices continuing to go up. The neighborhood has lots of room to grow and the city is improving the infrastructure. The area is attracting Michelin star chefs, etc etc etc you heard the developers sales pitch.
Regarding the # of new STR projects: it feels like there is going to be oversupply. I mean everywhere you look it seems like another condo building is going up. But did you know that in this current cycle (2021+) we are actually under building new condos compared to prior cycles (2000's-2010's, 2010's-2020). In past cycles we'd see anywhere between 100-270 new buildings... in this current cycle we are only at 46 buildings.
Hi Daniel, I live on Miami Beach at the Bentley Bay and have much investment and real estate experience here.
Nice that you are hustling to find a great investment property.
Much thanks for sharing what you found out regarding 72 Park Miami Beach.
Here are a few of my concerns:
1.) The # of new STR projects, plus new hotels coming to Miami Beach online over the few years.
2.) STR rates have fallen, especially in the "middle range" brands- 72 Park is a mid tier product in the worst section on Miami Beach.
3.) This summer has been the slowest I have seen on Miami Beach since I have been here since 1999. We are become very seasonal, as the record heat index is definitely keeping people away in JUNE, JULY, AUG, SEPT.
4.) There is nothing around 72nd street worth being around. I know the Carillon is on 69th- they sell they are a wellness center with little reason to leave. I see there is Denny's on the corner of 72nd and an IHOP on 69th. There is not one luxury hotel anywhere near this area.
THE EDITION (29th) & FAENA (32nd), 1 HOTEL (23rd), W is (21st), SETAI (20th), Ritz Carlton (17th)
I see you did $530 per night x 365 = $193,450 x 80%= $154,760.
I just went on Expedia and see the Carillon at $336 per night.
W HOTEL is $457 per night, 1 Hotel $439, St Regis at $615 per night, I just had friends here and they stayed at the Ritz Carlton for $455 per night.
I would use $530 from OCT, NOV, DEC, JAN, FEB, MARCH, APRIL = $111,300 x .70= $77,910
I would use $336 from MAY, JUNE, JULY, AUG, SEPT at 60%= $30,240
Total= $108,150
Management 20%= $21,630
HOA $12,231- seems a bit too low- new construct is notorious for low balling hoa until handed over to the residents. What does this HOA amount include????
Insurance $1,087
Property tax= $20,826
Net Profit= $52,575 / $1,150,000 (not sure if this includes closing costs)= 4.57%
I will reach out to my AIRBNB management people tmrw Daniel and ask them what is going on. I'll get back to you tomorrow
Thanks for all this info! Super helpful, I will not be doing this deal.
Hi @Account Closed You are correct there is no "comp" for this building, there are just no condos in the area that are similar to a product like 72 park. Carillon is not a comp, its 1958 construction. Looking at hotels can give you an idea but its not an accurate comp. The hotel rooms aren't condo units and dont have kitchen, fridge, etc.
My investors who are analyzing 72 park are looking at STR income and also betting on future price appreciation. They see the value in the neighborhood and see prices continuing to go up. The neighborhood has lots of room to grow and the city is improving the infrastructure. The area is attracting Michelin star chefs, etc etc etc you heard the developers sales pitch.
Regarding the # of new STR projects: it feels like there is going to be oversupply. I mean everywhere you look it seems like another condo building is going up. But did you know that in this current cycle (2021+) we are actually under building new condos compared to prior cycles (2000's-2010's, 2010's-2020). In past cycles we'd see anywhere between 100-270 new buildings... in this current cycle we are only at 46 buildings.
The neighborhood has room to grow? 72 is selling at 30% premium to South Beach, it would take a long time for the neighborhood to grow into $1500 sqf...
Hi @Account Closed You are correct there is no "comp" for this building, there are just no condos in the area that are similar to a product like 72 park. Carillon is not a comp, its 1958 construction. Looking at hotels can give you an idea but its not an accurate comp. The hotel rooms aren't condo units and dont have kitchen, fridge, etc.
My investors who are analyzing 72 park are looking at STR income and also betting on future price appreciation. They see the value in the neighborhood and see prices continuing to go up. The neighborhood has lots of room to grow and the city is improving the infrastructure. The area is attracting Michelin star chefs, etc etc etc you heard the developers sales pitch.
Regarding the # of new STR projects: it feels like there is going to be oversupply. I mean everywhere you look it seems like another condo building is going up. But did you know that in this current cycle (2021+) we are actually under building new condos compared to prior cycles (2000's-2010's, 2010's-2020). In past cycles we'd see anywhere between 100-270 new buildings... in this current cycle we are only at 46 buildings.
The neighborhood has room to grow? 72 is selling at 30% premium to South Beach, it would take a long time for the neighborhood to grow into $1500 sqf...
I know you passed on this project but you mentioned that it's selling at a 30% premium compared to South Beach, which is interesting, could you elaborate on how you arrived at that number?
As you know 72 Park is a new construction project with unique features and amenities that set it apart from other condos. Currently there are no similar new construction projects in South Beach to make an apples-to-apples comparison. So I am just curious to learn ;)
Like I said in my post earlier, my clients who bought are looking at STR revenue, they want a place to stay in Miami when they're in town, and they're betting on future price appreciation; long term buy & hold play.
Hi @Account Closed You are correct there is no "comp" for this building, there are just no condos in the area that are similar to a product like 72 park. Carillon is not a comp, its 1958 construction. Looking at hotels can give you an idea but its not an accurate comp. The hotel rooms aren't condo units and dont have kitchen, fridge, etc.
My investors who are analyzing 72 park are looking at STR income and also betting on future price appreciation. They see the value in the neighborhood and see prices continuing to go up. The neighborhood has lots of room to grow and the city is improving the infrastructure. The area is attracting Michelin star chefs, etc etc etc you heard the developers sales pitch.
Regarding the # of new STR projects: it feels like there is going to be oversupply. I mean everywhere you look it seems like another condo building is going up. But did you know that in this current cycle (2021+) we are actually under building new condos compared to prior cycles (2000's-2010's, 2010's-2020). In past cycles we'd see anywhere between 100-270 new buildings... in this current cycle we are only at 46 buildings.
The neighborhood has room to grow? 72 is selling at 30% premium to South Beach, it would take a long time for the neighborhood to grow into $1500 sqf...
I know you passed on this project but you mentioned that it's selling at a 30% premium compared to South Beach, which is interesting, could you elaborate on how you arrived at that number?
As you know 72 Park is a new construction project with unique features and amenities that set it apart from other condos. Currently there are no similar new construction projects in South Beach to make an apples-to-apples comparison. So I am just curious to learn ;)
Like I said in my post earlier, my clients who bought are looking at STR revenue, they want a place to stay in Miami when they're in town, and they're betting on future price appreciation; long term buy & hold play.
Unit 09 750 sqf is selling at 1.2m $1,542 a sqf, south beach 1 bedroom comparable sqf project like 5 Park unit 808 878 sqf selling 1.1M for $1,250 for example is 23% over for an entry level. But wait, it's not comparable because its STR? I think paying a premium for STR is not a positive move at such a high price point. And you're going to compare S of 5th to North Beach. Ya...doesnt make sense.
Betting on North Beach STRs growing from $1,500 a sqf in the next few years is a big bet that I wouldn't take.
Hey there,
Thanks for sharing the details on the condo in 72 Park Miami Beach. It looks like a unique opportunity with the 1 Bedroom + 1 Den + 1 Bathroom layout and a sizable balcony.
The estimated income breakdown is comprehensive, and the STR approval is a plus. However, it's crucial to scrutinize the figures and consider factors like market trends, competition, and potential fluctuations in daily rates and occupancy.
Given the absence of comparable data on AirDNA and the distinctive nature of this building, assessing the deal might be a bit challenging. The pricing per square foot compared to other condos in the area is also a notable point to consider.
I'd recommend digging deeper into the local market, maybe perhaps exploring single family homes with a pool. The ADR on these are quite competitive versus condos and occupancy is higher rates are higher. I represent a lot of investors in this market and would be happy to walk you through options that make most sense for your goals.