Brickell condo rents soar 13% in year
By Marilyn Bowden
Rental rates for Brickell area condos continue to escalate as demand exceeds inventory.
Denise Sicuso, managing broker at Esslinger Wooten Maxwell's downtown-Brickell branch, said the average rental rate went up 13% from the end of 2010 to the end of 2011, from $2,067 a month to $2,239. The average rate per square foot rose from $1.89 to $2.12.
That means the overall average rental rate for condos has now overtaken the average rate in apartment buildings in the area, reported by Reinhold P. Wolff Economic Research at $2,173 in its February report.
"That figure is just slightly lower — 1.1% less — than in February 2011," said Reinhold Wolff President Keith White. "Most areas have backed off from strong increases the year before."
According to Esslinger Wooten Maxwell's April Facts & Trends report, Ms. Sicuso said, rental activity in Brickell during the first-quarter of the year has increased 109% over the past four years.
"The overall ratio of transactions across Miami-Dade County is 48% sales to 52% rentals," she said, "but this market seems to be closer to 75% rentals."
She said this is probably because Brickell has fewer foreclosures and short sales listed.
Facts & Trends records an increase in the number of units for rent in Brickell between January and March of this year from 459 to 516 units, Ms. Sicuso said.
But demand is such, Realtors say, that anything that does become available is immediately snatched up.
"There is no inventory," said Melanie Hyer, a broker at Keller Williams Miami Beach.
"Sometimes people who want Brickell have to go across the river, and those who are already renters may find when they go to renew that their rent has been raised 10%."
The Brickell rental market, said Rita Regev, broker-associate at Optimar International Realty, "is stronger than ever. Inventory is low, and the better units get snapped up very quickly, usually for asking price.
"It's no longer just students and young professionals. The area is appealing to the 30s through 50s age group as well."
Most developers no longer have a rental portfolio, Ms. Hyer said, so most landlords are unit owners — and that means potential renters have to make sure, first of all, that the owner is not facing foreclosure.
"They also need to check the parking situation," she said. "Some buildings charge guest parking fees or fees for valet parking for a second car."
An important driver for the rental market, Ms. Sicuso said, is the ongoing financing problems residential buyers face.
"Even for those who are financially stable," she said, "it's difficult to get approved for loans. Resales would be their only opportunity, because developers of new construction are requiring a minimum of 50% for closing.
"If the building as a whole isn't Fannie Mae-approved, a loan will only be approved for 75% of the appraised value — and appraised values are still coming in low."
There's also, says Ms. Regev, the simple appeal of a newly revitalized downtown.
"Art, entertainment, fine dining and shopping are now all in walking distance or a short drive away," she said. "For a native Miamian who remembers the downtown of the 1970s and "80s, this is a whole new city."
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