Transformative high-rise towers are changing the Edgewater neighborhood, with more to come as demand for luxury residences continues to grow.
Residential real estate developer Melo Group, which built Edgewater projects like 22 Biscayne, 22 Skyview, Bayhouse, 25 Biscayne, Second Plaza, 25 Mirage and Urban 22 – all luxury condos and rentals – is beginning work for Aria Reserve, 62-story dual residential towers designed by Bernardo Fort-Brescia of Arquitectonica and Morada Haute Furniture Boutique.
The South tower’s 383 residences are 95% reserved and are to be completed in 2024. The North tower’s 363 units, which are 50% reserved, are to be completed in 2025 as the tallest waterfront dual residential towers in the nation, according to a press release from the firm.
“The project started around 10 years ago when we started buying land,” said Martin Melo, principal of Melo Group. The company made more than 81 purchases of land in front of Biscayne Bay to acquire the 5 acres where the towers are to rise, connecting downtown and Brickell to Edgewater.
The project’s one- to four-bedroom apartments ranging from 1,100 to 3,030 square feet are priced from $1.1 million to over $4 million, according to the company.
The towers are also to have “an exclusive collection of penthouse residences” that would be three stories and feature private rooftop decks with pools, ranging from 3,500 square feet to over 9,000 and priced up to $12 million. Additionally, there would be 2 acres of amenities, including an exclusive lounge area called “Sky Lobby” with outdoor terraces with bay views and private workspaces.
“The project is unique,” said Mr. Melo. “It has view over the Biscayne Bay, where you can see the island in front (Pace Picnic Island), with Miami Beach views.”
Almost 50% of the apartment buyers, he said, are international. “Who comes to Miami is looking for water views, which is each time more expensive and scarcer.”
And the location, Mr. Melo said, adds to the attraction of the area, which is becoming a premium residential zone.
Melo Group is also developing a public park that will connect to the Miami Baywalk along Northeast 23rd Street, proving access to the 5-mile-long pedestrian and bicycle-friendly waterfront along Biscayne Bay from Edgewater. The park is to be completed along with the first tower in 2024.
The firm has always focused on Edgewater, Mr. Melo said, and the company has more land to continue developing another 6,000 units.
Currently, Melo Group is developing a 58-story tower downtown with 560 rental units that is to open in November. The firm is also developing 460 residential units in Edgewater, along Second Avenue between Northeast 22nd and 23rd streets, which is to be done in January or February 2023. A 60-story building at Northeast First Avenue and Sixth Street with 824 units will be coming soon, the company said.
“We are in Edgewater since 2021, and we have built more than 7,000 units in total, mostly in Edgewater,” said Mr. Melo. “Of those, 2,300 in the Art and Entertainment District, downtown, and some in Brickell.”
Similarly, Two Roads Development has acquired a 3.5-acre waterfront site for an “ultra-luxury branded” residential property with 191 condo units in three towers.
Avison Young’s Florida Capital Markets Groups aided the closing of a $150 million sale of Biscayne 21, at 2121 N Bayshore Drive. “It is a pretty unique deal,” said John Crotty, principal at Avison Young’s Capital Markets Group consulting and advisory. “[It] started over a year and a half ago, when owners of the property had potential interests in selling their individual units of an older condo building that was originated in the 1980s and it had been growing older. We talked to the owners and expressed the fact that there would be interest from a lot of developers on this.”
The team listed about 92% of the apartments of the entire property, said Mr. Crotty, about 172 units of the project, in a 45- to 60-day process. “That’s a huge amount of people to get all on one page,” he said. “We created marketing materials, we listed the property, we widely marketed it to all kinds of buyers, international, national, regional buyers; and we wanted to bring in multiple offers on the property on what we called our initial call to offers to highly qualified developers who are looking to build 514 units or more on the property, per the Miami 21 code,” which establishes procedures for new development or redevelopment in the city.
At the time of Avison Young’s marketing campaign, around 92% of all the units were occupied, said Mr. Crotty.
“We then went back to the top groups who had the most aggressive pricing in terms,” he continued, “and we pushed them even more against one another to sharpen their pencils and be more aggressive with higher offers, and ultimately select a group who had experience working in Edgewater.”
The winning team was Two Roads Development, which are planning ultra-luxury condominiums, also designed by Arquitectonica.
“Two Roads Development agreed to provide the sellers the option to stay in their units temporarily while plans are being finalized to replace the current building with an ultra-luxury residential development that could rise as high as 650 feet with all units having views of Biscayne Bay,” said Michael T. Fay, managing director of TRD’s Miami operations, in a press statement.
“[The replacement] is what I would call a sweetener,” said Mr. Crotty. “It’s something that we help negotiate for our clients as part of the deal, and what that’s doing is allowing those sellers to typically make two to three times whatever they sell their units for.”
There is a tremendous demand for multi-family or rental projects in Edgewater because of the connectivity to downtown Miami and the neighboring areas, he added.
“In my most recent discussions with developers, everybody right now is underwriting to $4 a square foot in rent, which is almost 25% more than they were years ago,” said Brian de la Fe, vice president at Avison Young’s Capital Market Group. “Apartment rentals in South Florida have probably one of the highest growing rents in the country, so a lot of developers are really now trying to get shovels in the ground.”
“And on the west side of Biscayne Boulevard – between the train tracks and Boulevard – is an opportunity zone,” he continued. “If [developers] were to hold these projects for over 10 years, they would achieve higher returns at the end of the day, because it’s an opportunity zone investment.”