Before they start building, Miami condominium developers typically wait until about half the units are presold, a process real estate professionals say can often take a year or more. Naftali Group is making a big bet by beginning construction on Jem Private Residences, the New York developer's first Miami project, by pushing forward in less than five months.
Plans call for the 67-story tower, located at 1016 NE 2nd Ave., to contain 259 condominiums, 550 apartments and 3,600 square feet of commercial space in Miami’s Park West neighborhood. Rental and for-sale units are designed to have separate entrances, lobbies, elevators and amenities, with the condos on the top half with the better views.
The condos are set to range from 575 to 2,062 square feet and have prices of $600,000 to $2 million in a project that's part of Miami Worldcenter, a $6 billion master-planned project set to span 27 acres across 10 city blocks. Unlike other new condo towers in the area, Jem Private Residences will not allow short-term rentals.
Miki Naftali, chairman and CEO, won't say how many units have sold and points out that taking on that risk isn't unusual for the firm because Naftali Group is willing to bring “substantial equity" to deals. That means the company can move forward with construction without having to wait for a significant portion of pre-sales to help pay for the construction.
He said the aggressive approach has worked in the past, adding that the group’s New York projects had sold out before construction was done. Thanks to the 550 rental units between the tenth and forty-second floors, he said he isn't concerned about securing additional financing later next year. The for-sale units start at the forty-third floor.
As a result, Naftali may be rushing faster to build after starting to sell than any other condo developer in Miami, real estate professionals said.
“It’s a super-fast timeline,” Arden Karson, managing principal of real estate advisory firm Karson & Co. who's not involved in the project, told CoStar News. By joining Miami Worldcenter, “Naftali bought a shovel-ready property, with entitlements, in an approved master plan with all of the amenities and drivers" that "helped him break ground in record time."
The project is one of the latest developments from Naftali, whose portfolio includes over $15 billion in real estate development across the globe throughout his 35-year career. After founding Naftali Group in 2011, the developer has since focused on building in New York, and recently secured a $236 million construction loan for a residential tower in Manhattan.
“We have milestones that we create when we start a project," Naftali said. "Not that everything always go exactly as we plan, but we always try to stick to the schedule and move as quickly as possible.”
Naftali Group has been watching the market in Miami, where Naftali himself has lived for the better part of a decade.
“Miami became one of those top leading cities where there is a demand for quality. And that’s why we decided its our time for us to come in and do our thing,” said Naftali. “You either have the very, very expensive product, what I call 'on the sand' in Miami Beach that goes for $5,000 a foot, or the rest of the product is mediocre and is not really well designed.”
Naftali also wanted to make sure that residents at his first project in the city were in one of what he considers to be two walkable neighborhoods: South of Fifth in Miami Beach and Miami Worldcenter.
The 27-acre Worldcenter area is being developed by Miami Worldcenter Associates, led by Art Falcone, Nitin Motwani and Los Angeles-based CIM Group. The neighborhood, first announced in 2006, “is designed with the understanding that urban living is moving into walkability,” Naftali said.
For The Record
Jem Private Residences was designed by Miami's Arquitectonica, with interiors by New York-based Rockwell Group. Coastal Construction is the general contractor on the project. OneWorld Properties, led by Peggy Olin, is the exclusive broker for the project.