Skeptics Say Developers Might Be Too Hasty In Little Havana
Written by Shannon Pettypiece on March 11, 2004
By Shannon Pettypiece
Land banking and a significant amount of development is taking place in Miami’s Little Havana, but some say building there now might be premature.
One of the next residential projects set to break ground, Brickell Vista, is in the heart of Calle Ocho, or Eighth Street, and targeted at families who work in the city and want a shorter commute, said co-developer Peter Torres.
The 15-story building at 900 SW Eighth St. will have 107 units and is expected to be ready in spring 2005.
Prices in Little Havana are typically more affordable than developments on nearby Brickell Avenue or in the Design District that tout ocean views, Mr. Torres said. At Brickell Vista, prices range from $140,000 to $200,000.
"It is targeted at families or people who are clerical workers," Mr. Torres said. "Brickell is too expensive. It has gotten to the point where only the executive can buy homes in the area and the middle-class worker still has to drive (a longer distance), and there are very few projects marketed to them."
Mr. Torres’ company, Aston Development, has a smaller project at 402 SW 12th Ave. with 60 units ranging from $130,000 to $200,000.
Another developer in the area is B Development, which has projects at 1 Glen Parkway, between West Flagler Street and Northwest 22nd Avenue, at Northwest Seventh Street and 22nd Avenue and at 1861 South River Drive.
Also in the planning stages is Roads End Village, a 26-unit complex on Southwest Ninth Court between Southwest 10th and 11th streets.
In addition to the projects in the planning stages, investors have been buying up land in Little Havana for the past 10 years and waiting for demand to increase, according to property records.
Maria Gomez, vice president of marketing for the Keyes Co., said her real estate firm sees warehouse-type buildings being purchased and land banking in the area.
Private investment companies now own many lots in Little Havana, but some are still owned by small-business owners, according to county property records.
Owners of one of the largest sites is Jose Ortega, with 44,000 square feet at Eighth Avenue and Eighth Street, which was purchased in November 2001 for $1.8 million. Miami Automotive owns another large site with 71,000 square feet at Eighth Street and Seventh Avenue and another 43,500 square feet directly across the street purchased for $10.5 million, according to the county’s property records.
Property prices have increased over the past several years, Mr. Torres said, but they are still low enough to develop mid-level housing, unlike on the waterfront.
But some say land banking instead of developing might be best now since construction costs are increasing and buyers are not willing to pay much for condos in Little Havana, said Hank Rodstein, president of HR Mortgage and Real Estate.
Mr. Rodstein said developers who pre-sold units a year ago are finding that it costs a lot more to build the units now than when they were sold.
"The guys who have pre-sold their stuff at too low are going to get hurt," Mr. Rodstein said. "The guys who started out of the ground today and sold a year ago before they finalized the construction costs are going to be feeling the squeeze."
He said he knows of several developers who will likely lose money on projects because construction costs are greater than the price they received for the units.
Instead, Mr. Rodstein advised, developers should hold onto their land until they can charge more. When the new products on the water and in trendier parts of town are gobbled up, demand will be greater than supply, he said, driving up prices in second-tier neighborhoods such as Little Havana.
"Those areas need some time to mature," Mr. Rodstein said. "If these things on the water get absorbed over the next few years, you are going to have much more reality in Little Havana."