Two Recent Luxury Beachfront Condo Sales
September 23, 2010 by Lucas Lechuga
Two luxury beachfront condos closed within the past two days. The first, located at Continuum South Tower, closed yesterday for $6,750,000, or $1622 per square foot. The 3 bedroom/3.5 bath condo is located on the 18th floor and has 4,161 square feet of interior. Not my taste at any price but I'm sure there's someone out there who appreciates this type of decor.
The second condo sale took place at Acqualina in Sunny Isles Beach. The sales price was $4.8M, or $837 per square foot, for a penthouse located on the 46th floor. The unit has 4 bedrooms, 5 full baths and 2 half bath with 5,735 square feet of interior and 1,990 square feet of exterior.
That continuum unit looks like a cross between an office building and a space ship. Yuck.
This Continuum sale seems fishy. Didn’t the penthouse at Continuum South sell not that long ago for around the same (or even *less*) per square foot?
Following up, according to Lucas’ charts, this Continuum sale occurred at a higher price per square foot than any other unit, except for a massive 36th-floor unit, was even *asking* — and this building has at least 33 other units for sale.
“Paging FBI money laundering unit. Money laundering unit, please report to Continuum South.” LOL.
Sorry for a third consecutive comment, but I just found that Continuum South penthouse sale I mentioned above, and indeed, it sold for well under the price of yesterday’s Continuum South sale. The 7,374-square-foot penthouse, which was immaculate and equipped to the hilt, sold for $9.9 million, or $1,342 per square foot — a whopping 20% premium over the penthouse sale. Yesterday’s sale makes no sense at that price, unless the buyer knows there’s gold bullion hidden in the walls or something nefarious is going on.
Oops … part of my last comment (the part between the two *) went AWOL. It should have read as follows:
Sorry for a third consecutive comment, but I just found that Continuum South penthouse sale I mentioned above, and indeed, it sold for well under the price of yesterday’s Continuum South sale. The 7,374-square-foot penthouse, which was immaculate and equipped to the hilt, sold for $9.9 million, or $1,342 per square foot — *in other words, yesterday’s sale occurred at* a whopping 20% premium over the penthouse sale. Yesterday’s sale makes no sense at that price, unless the buyer knows there’s gold bullion hidden in the walls or something nefarious is going on.
Folks!
A new real estate encumbrance/covenant strategy has just crossed my desk and I wanted to bring it to your attention – – in case it is relevant. It appears that real estate developers are trying to recoup their losses through a rather clever tool: private transfer fees. (a.k.a. “capital recovery fees”) These fees are inserted in the deeds of individual properties via covenant. The consequence being that, if properly done, they “run with the land” and, as such, are binding on subsequent purchasers.
These fees require the seller to pay a a percentage (typically 1 or 2%) of the sales price to the developer of the development EVERY time the property is sold. I note that these covenant contracts are a recently spawned financial product being hocked by investment banking firms, who, by-the-by, also get a percentage of the developer’s cut of the purchase price.
I bring this to your attention because: (1) there are a lot of recent articles on the practice in the newspapers; and, (2) it’s the kind of hidden fee that uninformed buyers and sellers will not react well to as sellers will want to shift the cost to the seller via contract or purchase price adjustment and buyers will work to avoid paying.
Granted, 18 states, including Florida (Section 689.28, Florida Statutes) have enacted laws banning the practice. But, as we all know, things are different in south Florida. MORE IMPORTANTLY, Florida’s statute, signed by Governor Crist on May 28, 2008, only invalidates private transfer covenants recorded on or after July 1, 2008. (See, FSA §689.28(3)). The statute explicitly states:
“This subsection does not mean that transfer fee covenants or liens recorded in this state before July 1, 2008, are presumed valid and enforceable.”
WOW!
Bottom line: Watch for these issues because, when they pop up, these covenants could be a real deal breaker.
Police the deeds folks!
Happy Friday!
scriv
The sale included a cabana too. So if u take out about 900k for the cabana, the price is about 1406/sq ft
Wow, there is no end to sneaky tactics. Thanks for the heads up.