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Miami Real Estate, Miami Beach Real Estate, South Beach Real Estate - News - Information - MLS Property Search |
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Newest club accessory: A 'crash pad' on SoBe By Susan Stabley
Many buyers are those who stay for the winter or come down to party on the weekends. They are as likely to fly in from the Northeast to escape the chilly winter as drive down from Fort Lauderdale, eager to avoid heading home in the wee hours of the night. "They want to come for a weekend, park their car in a municipal lot, go clubbing and not have to worry about it," said older brother David Burstyn, 29, Burstyn Properties president. "Our buyer is the end user." The brothers target gutting and rehabbing older historic apartment buildings. The units typically average 600 square feet and can run about $650 a square foot or more. While that may seem pricey for such a small unit, VP and project manager Bradley Burstyn, 25, counters that their locations are top shelf, with the same high-end finishes found in multimillion-dollar condo towers, plus character that defines Miami Beach. "These are historic buildings. Art Deco is what made Miami Beach, and our demographic wants to live surrounded by this kind of style," he said. Real estate's all in the family
Their grandfather, Efraim Burstyn, sold his sweater factory in New York, moved to Miami Beach in the 1970s and entered the real estate business, buying small and mid-size hotels. Father Judah Burstyn owns one of the most noticed hotels in Miami-Dade County - the Hotel City Inn, whose Heineken banner ad on the north side is a landmark to commuters stuck on I-95. Both Judah and their uncle Samuel are hoteliers and developers who prefer to buy distressed properties, often out of foreclosure. The brothers followed that strategy, buying properties for only a few million dollars, instead of tens of millions. Bradley Burstyn, who scouts out sites by driving around, has found most of their properties. He says it's all just a matter of "doing the due diligence, taking a chance and not fearing." But the brothers stick to conversions, which gives them a better handle on controlling construction costs, David Burstyn said, especially as the market starts to correct itself and material expenses stay high. "They sell out fast and there's a 10- to 14-month turnaround. The internal rate of return is stellar. As long as it is good, it doesn't have to be great, but it has been way more than expected," he said. He added that he believes Miami Beach is less likely to suffer from a residential real estate meltdown: "Not to say it's bulletproof, but there's only a limited supply of land. Where are you going to build when you are not allowed to tear down historic properties?" John Messing, senior VP for Bank of Florida in Fort Lauderdale, said some lenders are pulling away from high-rise construction and the brothers have found the right niche, developing projects of a manageable size and in a good market. His financial institution has been the brothers' primary lender, doling out about $10.2 million for their projects. "The market in South Beach is excellent, not just as a local market, but as a national and international market," he said. "Many who fly in and out of Miami Beach look at these units as cheaper than a hotel room, and they can make some money off of it" by building equity. Knickerbocker reborn
The brothers snatched up the former hotel, built in 1926, for $3.4 million, with closing completed on Jan. 13. The seller was Cloud Nine Holdings, led by Jeffery and Faye Roth of Coral Gables, which bought the Knickerbocker in 1992 for $450,000, according to state and Miami-Dade County property records. Bank of Florida provided a $3.2 million acquisition and construction loan. The brothers plan to sell off 19 units ranging from 500 to 950 square feet, at prices starting at $650 a square foot. Sellout is expected to top $7 million and 2006's sales figures for the conversion division should surpass $35 million. Outside of the brothers' six South Beach projects, the pair has a conversion called the Hemmingway in Fort Pierce, which sold out in four months and has now begun closings. Three being developed
- The Bennet, 1512 Washington Ave. - The Evelyn, 1600 Euclid Ave. Construction has just begun
on the two-story, 21-unit conversion project. Built in 1936,
it
was bought in August for $2.07 million. It will have three 1,100-square-foot
penthouses with patios added to its roof. Prices have reached
$685 a square foot.
Built in 1951, the Sage on 15th apartment building was bought in July 2004 for $1.2 million and sold out in eight weeks. Sage on Lenox will start closings in about six weeks. Built in 1949, Sage on Lenox was bought for $1.34 million in October 2004. The brothers created the Sage brand with their first conversion, Sage on 123rd in North Miami Beach, in 2003. Bank of Florida has financed the Burstyn brothers' projects from their first. Messing said his bank stuck with them because they brought on strong brokerage firms, quality architects and designers, plus solid work crews. "A lot of bankers would shy away from them because of their
youth, but they came from a good real estate family." he
said. "They are energetic, enthusiastic and hard-working
and showed a lot of maturity for their age."
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