Coconut Grove:The Market
Coconut Grove is the oldest neighborhood in Miami Florida, together with Coral Gables. It showcases an old and charming, Mediterranean style of construction. From an urban design point of view, Coconut Grove has a tighter planning with very narrow roads, and lush landscaping providing a unique beauty.
A typical house in the Grove is like an oasis in the middle of a jungle, which normally cannot be fully appreciated from the exterior, but that once inside it opens up to idyllic interior magical gardens.
Mainly composed of family homes, the Grove, as it is called, has a very limited condominium inventory along Bayshore Dr. As opposed to other Miami markets such as Brickell, Downtown Miami or South Beach – all who have tens of thousands of luxury waterfront condo buildings – the Grove has merely a handful.
The above has occurred because the waterfront of the city has been devoted to public amenities, in the form of beautiful parks, a one of a kind marina, and public buildings such as the convention center, the public library, as well as cultural and educational facilities as churches and schools.
As a result, there are merely 3 competitive high-end condo buildings, the Grovernor House, the Grove Hill and the Ritz Carlton. In total these three buildings account for approximately than 600 units, at an average of 200 units each. This means the supply of this type of product in Coconut Grove is very limited, which is great in terms of holding real estate value. As opposed to other areas such as Brickell, the prices in these buildings – both for sale and rent – held pretty well during the market crash,. There is very limited land as well for real estate development projects of this kind. In fact the only new project that is coming into the pipeline, The Grove at Grand Bay, will be built in the site where the Grand Bay Hotel stands.
This 20 plus story structure will be demolished in the next couple of month in order to enable the new project to break ground. With two towers and a total of 95 units combined, this will project will raise the bar in the Miami condominium market and will sell at average of $850 dollars per square foot. This is slightly over the average price of the Grovenor House, one of the landmark buildings in Miami – developed by CMC and owned by the Italian developer Ugo Colombo – which sells at a consistent average of $700 dollars per square foot. The Grove Hill and the Ritz Carlton average $550 dollars a foot.
In summary, the Grove Miami Florida has proved to be a very stable market for high end condos, even in the midst of a bad economy, because of its very limited supply. For that same reason, the rents are very strong, with almost no vacancy, providing handsome rates of return compared to markets with a larger supply.