Postcards from the Bust

Exploring the wreckage of South Florida's condo meltdown.

Drive down Biscayne Boulevard or Federal Highway in Broward, and the "For Sale" signs seem inescapable. Every lonely strip mall storefront and empty condo complex pleads to become someone else's problem.

Of the empty joints, high-rise condos are perhaps the most depressing. During the boom years, an endless parade of concrete towers competed for space on South Florida's skyline, but now only a handful of their windows light up at night.

Miami alone has produced 23,000 new condo units since 2003 and is experiencing the worst condo meltdown of any city in the nation, according to Jack McCabe, a local real estate analyst. Broward and Palm Beach counties built or permitted more than 18,000 condos. As a region, South Florida is probably the worst hit, McCabe says. "I think our population growth is about zero right now, and we're not creating any jobs," he says. "Who is going to live in these things?"

The building is empty, but Sara Gordon loves it.
C. Stiles
The building is empty, but Sara Gordon loves it.

Some developers appear to be in denial, masking empty units with a façade of glamorous amenities while legions of buyers file lawsuits to avoid closing on their purchases. Others survive by accepting renters and auctioning off unsold units. Then there are complexes with so many empty units that crime has begun to invade. The resulting fear prompts more owners to flee.

Miami's Downtown Development Authority issued a report last week that stated less than two-thirds of the condos built in downtown since 2003 are inhabited. Incredibly, this was considered good news and a story about the report appeared on the Miami Herald's front page.

So here's a tour of some once-celebrated condo projects. Welcome to condo living — after the boom.

Miami

The $1.3 billion luxury Icon Brickell is adorned with enormous glowing chandeliers, golden sculpted chairs, and $5 million Easter Island-inspired pillars. It rests like a relic of better days on Biscayne Bay.

But the driveway is eerily empty. A stylish receptionist struggles to stay awake in the lobby. It seems nobody is around to enjoy the decadence.

Outside, a baby-faced 25-year-old security guard who declines to give his name checks his watch: Four more hours to go. "I sit here by myself and go crazy," he says, shaking his head. "It's sooo slow."

He puts his hands in the pockets of his crisp black uniform. He gestures toward a building that could be mistaken for a skyscraper. "That's tower one; nobody even lives in there," he says. "Over in tower two, there are only 15 residents." (Jorge Perez, CEO of the Related Group, which owns the complex, recently claimed it would take three years to fill up the place.)

The condos, located at Fifth Street and Brickell Avenue, once sold for $600 per square foot, says Peter Zalewski, a principal with Miami-based company Condo Vultures. Now he estimates they're worth about a fourth of that.

"This is the best of the best and they're sitting here vacant," he says. "It's Miami's Machu Picchu."

Hollywood

Sara Gordon is convinced she got an amazing deal when she bought a place at the Radius at the eastern edge of downtown Hollywood. The 28-year-old paid $300,000 for a two-bedroom condo with views of the Atlantic Ocean.

"It's super-cool," she says. "I have Starbucks in my building."

This kind of enthusiasm is what investors had in mind when 200 people camped out on the street five years ago to buy homes in Radius. The 311-unit pair of curved white towers was to be the first large residential development along Young Circle in three decades. The city chipped in $11 million in incentives.

But recently, Radius has given up selling glamour in favor of selling anything at all. "You've got to redefine success," says Andrew Gardner, VP of condo operations for Lane Company, which partnered with Hollywood developer Firm Realty to build Radius. "Success right now, for any developer, is to get rid of its inventory at a number that allows it to fight another day."

Radius was approved for occupancy in December 2007, and 190 of the original buyers closed deals before the real estate market collapsed, Gardner says. After that, his company's strategy was to sacrifice profits in the name of survival. Last November, Lane auctioned off 40 Radius units at prices that began as low as $90,000. "Compared to three years ago... it's a bloodbath," Gardner admits.

He estimates the building is about 64 percent occupied — and that includes renters and seasonal residents.

Tom, a 30-year-old renter who declined to give his last name, complains the building has too many maintenance problems. His bathroom door was installed backward, the dishwasher leaks, and the gym spa was closed for a long time. "I think they just threw the building up too fast," he says. The emptiness, he says, "feels like the movie The Shining when you're walking down the hallway."

Sunrise

The 26-story Tao Sawgrass is built above a parking garage. Right now, most of the visitors are employees — the security guard at the front desk, the woman who sells the condos — because no one lives there. Not a single resident, in 396 units. "Not that I'm aware of," says a security guard named Hugo.

Carolyn Van Gorder, marketing director for Hyperion Development, which is selling Tao's units, said she could not confirm or deny the presence of residents.

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