SLS Lux Brickell is Sold Out: Fact or Fiction
I recently read an article about the supposedly successful SLS Lux Brickell condo project that was jointly developed by The Allen Morris Company and The Related Group. The article states that the 450 condo units are entirely sold out; however, I was skeptical of this claim and investigated the information.
Presently, 321 units reflect as being owned by AMCO PRH 801 S MIAMI AVE LLC, which is the developer’s holding company. The remaining 129 units have recorded deeds by third party buyers.
The units that have transferred deeds reflect that closings began in March, some five months ago. Further, if you look at the MLS, one will see that there are 68 units listed for re-sale.
This data leaves industry watchers with two striking conclusions and many questions that are particularly noteworthy. First, 129 units closed on their contracts in a five month period, that is an average of 26 units a month, a less then impressive figure for developer powerhouses like Allen Morris and The Related Group. Second, it is astonishing that of the 129 closed units, 68 are back on the MLS re-sale market. That implies 53% of the transacted units are listed on the MLS today. We can further expect that roughly 15% of units in a building are held as pocket listings, with brokers strategically leaving these units off of the MLS, indicating that nearly 70% of individually owned units, are presently for re-sale in this building.
It will be interesting to watch how this project continues to perform. Many people are curious how many buyers will decide to walk from there contracts, potentially embroiling the project in litigation. It will also be interesting to see how many units close out each month, and if velocity slows even more than what it is. Additionally, local market participants are interested to see if the developers come out publicly in the future to identify that in fact, the building is not entirely sold-out, and that they indeed have inventory they are willing to transact on. Finally, the market will be watching closely to see how many additional units end up back on the MLS re-sale market. If the stats indicate that 70% of the individually owned units are available for re-sale, this building is prime for a race to the bottom, as owners try to stem the bleeding as swiftly as possible. We have already seen numerous examples of 2014-2018 condo product with owners listing and closing units at a loss. It is likely this trend will continue as we get into 2019 and 2020, as prices continue to fall precipitously.
SLS Lux Brickell appears poised for a crater like event. I will continue to monitor this project and update the statistics as additional information hits the market. Stay tuned.