After several starts and stops, the developer of the proposed 35-story Sky Palace at Mary Brickell Village condominium in Greater Downtown Miami is finally ready to go vertical, unveiling plans June 4 to begin construction of the 369-unit tower in July, according to the Miami Herald.

The developer is reportedly set to finalize an $85 million construction loan from a Colorado-based hedge fund at the end of this month, clearing the way for construction to begin in the third quarter.

CondoVultures.com first reported in August 2009 the resuscitated plans to begin construction of the Sky Palace in the Brickell Avenue area. Plans at that time called for a November 2009 construction start that was ultimately pushed off to March 2010.

"The symbolic effect of a condo construction crane going up in Greater Downtown Miami - the epicenter of Florida's condo crash - will be overwhelming," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "Even though new condos are selling at a clip of 240 units per month in Greater Downtown Miami, the odds are still against the Sky Palace going up next month. That being said, every month that goes by the odds for Sky Palace's construction seem to improve."  

At the end of the first quarter of 2010, nearly 6,600 new condo units have still not been sold in Greater Downtown Miami, a figure that represents about 30 percent of the 22,250 new units constructed since 2003, according to a recent Condo Vultures® White Paper™. 

By comparison, the number of unsold new units in Greater Downtown Miami in the first quarter of 2009 totaled 41 percent, or 9,200 condos,  according to the report based on the Condo Vultures® Official Condo Buyers Guide To Miami™.

Buyers purchased 713 new condos at an average price of $326 per square foot in Greater Downtown Miami in the first quarter, which works out to an average sales velocity of 238 units per month. At this pace, Greater Downtown Miami has 28 months of remaining unsold developer condo inventory.

The biggest unknown for Greater Downtown Miami is financing, which is currently extremely difficult to obtain for a condo purchase. Only 17 percent of the new condos purchased in Greater Downtown Miami involved financing, according to a recent CondoVultures.com report.

If financing does come back to the Greater Downtown Miami condo market in any normal way, watch for the current closing rates in the submarkets of Brickell Avenue, Downtown, and the Biscayne Boulevard Corridor to only increase, industry watcher said.

At this time, the Sky Palace has about 51 percent, or 190 units, of the project under contract with prices starting at $249,000, according to the press report.

"Hard construction costs are $150 per square foot, and total costs are estimated at $130 million, or $285 per square foot, including interest, sales, marketing and other soft costs," Sky Palace's  vice president of sales Isos Y. Stamelos-Monroe told the Miami Herald.

If the project is delivered on time in late 2011 and on budget, the developer forecasts to net a profit of $40 million, according to the press report.

Stamelow-Monroe, who participated in a Condo Vultures® panel discussion entitled the Future of Condo Development in South Florida in April, has attracted 28 new contracts and "reaffirmed 162 of the its 240 sales contracts" from the original sales campaign in 2007 before the construction project was first delayed, according to the press report.   

"We want to be one of the only products available in the market upon delivery that's new,''  Stamelos-Monroe told the Miami Herald.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or view our Video Gallery. Looking for bulk projects direct from developers or lenders? Visit the Condo Vultures® Bulk Deals Database™. Our new books, the Official Condo Buyers Guide to Miami™ , Official Condo Buyers Guide To South Beach™, Official Condo Buyers Guide to Sunny Isles Beach™, Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and the First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

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