MIAMI—Call it the spillover effect. Local and international real estate buyers are converging on Miami, but there is only so many luxury condos available in the city's urban core.
That is leading investors to Miami submarkets like Coral Gables. Case in point: Merrick Manor, the first luxury condo to rise from Coral Gables dirt in more than five years, has sold 60% of its 174 units in less than two months.
“The fact that we have reached the 60% reservation milestone so quickly is a testament to the strength of Miami's real estate market and the fact that buyers are now turning their attention to desirable areas outside of downtown,” says Alicia Cervera Lamadrid, managing partner of Cervera Real Estate, the development's exclusive sales and marketing brokerage. It helps, of course, that prices are still about 40% below the boom era.
Again, part of the driver is diminishing inventory and high prices in Downtown Miami. Nearly all of the 23,000 residential units built during the recent boom have been absorbed. Median condo prices have risen by 41% since November 2010 and inventory has fallen by 53%, according to a recent report by the Keyes Company.
“With occupancy in Miami's urban core at 95%, we knew the time was right to launch a luxury mid-rise in the Coral Gables submarket,” says Peter Torres, vice president of The Astor Companies, the developer of Merrick Manor. The luxury condo offers pre-construction prices from the mid-$200s to $1 million.
The Coral Gables commercial market is experiencing growth alongside the city's residential base. New office and retail product is delivering to market, major international developers are investing in the development of new projects, and large commercial users are leasing space. More than 140 multinational companies are located in Coral Gables.
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