In 2013, a shuttered pawnshop stood at the corner of NE 10th Street and NE 2nd Avenue in downtown Miami. Today, the site is a valet lounge for residents of One Thousand Museum, the futuristic, ultraluxury condo tower designed by the late Pritzker Prize-winning architect
Zaha Hadid.
Now complete after a seven-year-saga, the tower embodies a transformation of Miamis gritty downtown. With its distinctive, diamond-patterned concrete exoskeleton visible throughout the city, the building is seen as a symbol that Miami has reached a new level of sophistication and status as a global destination.The financial success of the project is a different matter.
My clients are very excited that we have a Zaha Hadid landmark in Miami, said real-estate agent Elena Bluntzer. Its something that the international, sophisticated buyer appreciates. The challenge is that sales have slowed down, especially for new construction.
One Thousand Museum isnt sold out after nearly seven years on the market. Expensive and complicated to build, the 62-story tower has large units asking two to four times the average price a square foot for downtown Miami condos over $1 million. Many affluent buyers prefer beachfront homes, brokers said, and a pullback of international buyers has led to a slowdown in Miamis condo market amid a glut of inventory.
The developer declined to say exactly how many units have gone into contract since sales started in 2013. But an analysis of public records by the Miami real-estate consulting firm Condo Vultures shows that since the building received its temporary certificate of occupancy this summer, 54 of the projects 84 unitsabout 64 percenthave closed. In addition to the developers unsold inventory, roughly 20 resale units are also on the market.
Miami developers typically aim to presell 85-90% of their units before closings begin, said
Peter Zalewski
of Condo Vultures. Now theyre stuck having to peddle them one by one. When you get into a situation like that, the only way to differentiate one unit from another is to cut the price or offer incentives.
In early January, Ravi Saligram, the former CEO of OfficeMax, and his wife, Nalini Saligram, paid $6 million for a 4-bedroom unit which had previously been listed for $7.325 million, according to Zillow.
One Thousand Museum is now moving into a crucial phase. The developers must sell the remaining units to pay the outstanding balance on their $256 million in construction loans, and they must do so in a soft market. Louis Birdman, one of the projects developers, said prices, which range from just under $5 million to $25 million, are negotiable. Each floor has only one or two units, ranging in size from about 4,600 square feet to 10,400 square feet and each has at least four bedrooms. Given whats going on in the market now, I think all of us developers are competing for a similar buyer, so theres obviously flexibility on price, he said.
Mr. Birdman said the developers have explored the possibility of a condo inventory loan but didnt move forward with it, at least for now. And he remains optimistic, saying there has been an uptick in traffic to the project now that the structure is completed. The last six months have been super busy here, he said.
On a recent tour of One Thousand Museum, exercise machines in the gym sat at the ready with towels and water bottles emblazoned with the buildings logo. A residents beauty salon is stocked with products like Oribes Gold Lust Transformative Masque, which retails for $66 per tube. We wanted it to function like a five-star hotel, Mr. Birdman said.
The building has a helipad, a juice bar and two pools: one outdoors plus the indoor Aquatic Center on the top floor. The Sky Lounge overlooking Biscayne Bay has a 28-foot-high, rounded ceiling imprinted with a raindrop pattern in a silvery hue.
A unit in the building that recently sold for $6 million, including the furniture.
The unit was furnished by Morada Haute Furniture Boutique.
This 17th-floor unit is priced at $5.75 million and interior design was done by Artefacto.
Unit #2502, priced at $5.69 million, comes furnished with items from Roche Bobois.
Each of the buildings common spaces has its own scent custom-designed by the fragrance company 12.29. In the Aquatic Center, it is Warm Skin, a blend of orange blossom and coconut, while in the spa, the scent is Yunan, with aromatic herbs and fresh spices.
A PILLAR OF TALENT
Known throughout the world for her visionary, logistically challenging designs, Iraq-born Zaha Hadid in 2004 became the first woman to receive the Pritzker Architecture Prize, the fields most prestigious award. Born in Baghdad, she founded Zaha Hadid Architects in London in the 1970s. Her best-known works included the London Aquatics Centre for the 2012 Olympics, the National Museum of 21st Century Arts (MAXXI) in Rome, and in China, the Guangzhou Opera House and the Beijing Daxing International Airport. She did only a few single-family homes, including the Russian home of billionaire Vladislav Doronin.Ms. Hadid kept a home in Miami Beach, and died in Miami in 2016 at age 65. Zaha Hadid Architects is now headed by Patrik Schumacher, Ms. Hadids longtime partner at the firm.
Mr. Birdman, who trained as an architect, said when he and his co-developer Gregg Covin started planning the project, we said, lets get an architect who has never done anything in Miami. The top of our list was Zaha.
She agreed, and they hired her at the end of 2012. The project would be her first skyscraper in the Western Hemisphere. Sales started in 2013 amid hoopla over Ms. Hadids involvement.
There was so much hype and so much excitement, said Harvey Daniels of One Sothebys International Realty, who is heading up sales at the project. We wanted the world to see it. He described running all over Miami with a Xerox copy of a rendering.
But the project had naysayers from the beginning, Mr. Daniels said. People told us, youll never get it built. They felt it was going to be so expensive to build, how would the developer ever do it?
But build it they did. Messrs. Birdman and Covin brought in other investors, including Brazilian developer Gilberto Bomeny, and closed on the purchase of the land in 2014 for a total of $36 million, Mr. Birdman said. They broke ground later that year.
Ms. Hadids design was complicated and expensive to execute, requiring nearly 5,000 precast concrete panels to be shipped from Dubai. The buildings shell cost over $70 a square footroughly double what it would cost in a standard building, Mr. Birdman said. He added that the projects total hard construction costs came to just under $300 million.
The finished building has won awards, and Ms. Hadids death in 2016 led to even more publicity.
Its a clear home run in terms of what they built, said Miami real-estate agent
Mark Zilbert.
But you dont have a beach. Youre in the city. That remains the question for people. Do you give up the beach lifestyle for a better building?
Many high-end buyers moving to the area simply wont consider downtown Miami, brokers said.
For example, recent buyers Fred and Carol Kiekhaefer were relocating to Florida from Colorado, and Mr. Kiekhaefer, a 72-year-old engineer, wanted a home on the water where he could keep a boat. While visiting Florida this summer and fall, he looked at properties in Miami Beach and Coconut Grove, and it was only at the insistence of Ms. Bluntzer, his broker, that he went to see One Thousand Museum.
She said, Theres another building I want to show you. It wasnt on your list and doesnt really meet the target criteria, but you really gotta see this, recalled Mr. Kiekhaefer. At the time he had never heard of Ms. Hadid, but he agreed to see the building. It just totally blew me away, he said.
In November, the Kiekhaefers paid $5.3 million for a four-bedroom, 26th-floor condo. He plans to find a nearby marina for his boat. They paid more than they planned, he said, but the developer moved a little bit on the price$5.9 million, according to Zillowand threw in extra parking for his collectible cars.
A challenge for One Thousand Museum is keeping prices up. There is a 5-year inventory of $1 million-plus condos in downtown Miami, said Mr. Zalewski. If [a buyer] isnt incentivized, that buyer will go elsewhere.
Mr. Daniels, who is heading up sales, said there are still about 20 developer-owned units for sale in the building, including several that are fully furnished. We are not selling units for $2 million, he said. If we were selling units for $2 million, I would have been sold out four years ago.
Great Design Cant Overcome a Weak Market
520 West 28th Street
Photo:
Education Images/Universal Images Group/Getty Images
Zaha Hadid designed another condominium building shortly before her death, this one adjacent to the High Line in New York City. The West Chelsea project, 520 West 28th Street, is also facing slow sales in the weak Manhattan luxury market. Developed by Related, the building has sold only about 55% of its 39 units since sales started in 2015, and the units are being sold for deep discounts. In June 2019, for example, a 2-bedroom unit closed for $3.8 million, 20% less than its asking price of $4.795 million, according to the real-estate listings website Streeteasy.com. A penthouse originally priced at $50 million is now asking $24.975 million.
Luxury condo projects in West Chelsea have been particularly hard hit by the market slowdown, due to an overabundance of high-price product in the neighborhood, said condo marketing expert Andy Gerringer. That area has been really tough on condo projects at certain price points, he said, noting that there are a surplus of units for sale at 3,000 square feet and over. Much like downtown Miami, West Chelsea is still so gritty, said Mr. Gerringer. With both Hadid-designed condominiums, he said, slow sales arent necessarily a reflection of the design but simple supply and demand.
Name alone and design alone will not trump a market if youre coming in overpriced and oversized for the marketplace, he said.
Write to Candace Taylor at Candace.Taylor@wsj.com
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