Building A Decorator Ready Condo To Win Budget-Minded Tenants



MIAMI—As condo buildings get completed, the last units are always the most difficult to sell. At the same time, investors putting their newly built units on the market are facing competition from the condos coming on line.

As a result, many sellers are choosing to position their units as rentals to generate an income. GlobeSt.com sat down with general contractor SPACiO Design Build’s Alex Wertheim to discuss how to build-out a “decorator ready” condo to attract tenants on a tight budget in part one of this exclusive interview.

GlobeSt.com: With so many luxury condos on the market, how can developers and investors position their condos to generate income?

Wertheim: When a developer nearly sells out a project, there are always a few units in the building that are difficult to sell. Increasingly, developers are calling us to turn those ‘decorator ready’ units into livable spaces. Investors who are unable to sell their newly built units as fast as they had planned are also moving in that direction.

We go into those units and install the flooring, paint the walls, build a closet system, create storage space, enclose dens and—from time to time—upgrade the kitchens and bathrooms to turn the condo into rental units. This strategy works well for units in luxury buildings. These units tend to attract affluent renters who want to experience the luxurious amenities of Miami’s high-end condo towers but don’t want to deal with the burden of owning a condo.

GlobeSt.com: What advice can you give developers and/or end-users who are turning their units into rentals?

Wertheim: There are hundreds of new luxury units nearing completion or under construction and hundreds of new condos hitting the rental market simultaneously. Many of the buyers closing on units in recently completed luxury towers across South Florida are investors.

While some of the investors are domestic and others are foreign, they all share the same plan: renting the units out until the time arrives to execute an exit strategy. If the newly-built unit comes “decorator ready”—which means the floor, walls, closets are finished—you should recruit a general contractor before the closing date to start planning the build-out of the unit. This way, a general contractor can start work as soon as the unit is yours, saving you weeks of ‘waiting time’ and placing a tenant in the unit much faster.

Other advice I would recommend would be to stick to neutral colors if you’re painting the walls and using basic standard materials to build-out the unit. The tenants are not going to treat your investment with the same quality of care, so don’t overspend.

For flooring, we recommend porcelain tiles because they are stylish, durable and low maintenance. If the unit seems small, consider knocking down walls to open up the floor plan, which usually involves combining the kitchen, dining and living areas into one large space. This will increase the natural light and create the perception that there’s more square footage.

 

Capitalizing on the shifting real estate markets: Look for opportunities — and always network

5 Luxury Homes With Exquisite Wine Cellars

By: 

For true oenophiles, building a beautiful wine cellar isn’t just about aesthetics. Other features such as placement, security, temperature and humidity control plus different bottles’ shapes and sizes must be considered as well, according to Richard Rosenthal, a real estate agent at Halstead in Manhattan.

Using a variety of materials ranging from wood to glass, some of the most impressive in-house wine rooms are works of art themselves.

Here are a few gorgeous examples on the market right now.

357 West 17th Street (New York, New York)Rich Caplan Photograph

357 West 17th Street (New York, New York)

#1: 18 FRICK DRIVE (ALPINE, NEW JERSEY)

Behold, here’s a classic wine cellar decked out with a solid mahogany double door, dark tiled floors with metallic accents and custom plaster ceilings. Yet, don’t be mistaken: there’s much more to this 4,000-bottle dual zone, temperature-controlled wine cellar than its traditional details. With a tamper-proof, biometric entry security system programmed to accept the fingerprint of selected individuals, numeric pass codes and RFID bottle authentication, the most impressive feature here is the smart home technology. Actively monitoring who and when someone accesses the wine cellar, this security system can quickly notify the owner of entry and departure via email or text.

What you can find in the spacious octagonal wine room at 18 Frick Drive are mahogany display cases and shelving lined from floor to ceiling, with some lined with rope lighting and others made to pull out for convenient access to bottles. Each room has its own cooling systems that can be used individually, giving the options of different climates or working together to keep the 4,000 bottle wine cellar uniformly chilled.  Evan Joseph

What you can find in the spacious octagonal wine room at 18 Frick Drive are mahogany display cases and shelving lined from floor to ceiling, with some lined with rope lighting and others made to pull out for convenient access to bottles. Each room has its own cooling systems that can be used individually, giving the options of different climates or working together to keep the 4,000-bottle wine cellar uniformly chilled.

#2: 321 OCEAN, UNIT 201 (MIAMI BEACH, FLORIDA)

Style meets function in this 50-square-foot, refrigerated wine room. Boasting an open, more transparent atmosphere, the climate-controlled room features a sleek, insulated glass enclosure, customized acrylic and thermal metal framing, which is powder-coated with a matte black finish to match the custom black finish on the racks.

Sophisticated yet minimalistic, this beautiful wine room at 321 Ocean, Unit 201 has a storage capacity of 440 bottles.Evan Joseph

Sleek and sophisticated, this wine room at 321 Ocean, Unit 201 has a storage capacity of 440 bottles.

#3: 357 WEST 17TH STREET (NEW YORK, NEW YORK)

Reflecting the best of modern and country styles, this stunning wine cellar is one of the biggest highlights of this $36.8-million house. (That’s saying a lot considering the 11,000 square-foot house comes along with a White 2016 Bentley Mulsanne!) Each bottle within the climate-controlled space is tastefully illuminated by backlit LED walls, combined with a rustic brick wall and arched ceiling to create an effortlessly chic look.

This beautiful wine cellar at 357 West 17th Street holds about 500 bottles.Rich Caplan Photograph

This beautiful wine cellar at 357 West 17th Street holds about 500 bottles.

#4: 795 HIGHCOURT ROAD (ATLANTA, GEORGIA)

Inside a six-acre European-style estate is an extremely well-manicured, 2,000-bottle wine cellar. Consisting of a high-velocity, self-contained cooling system that keeps the temperature at 59 degrees, the most impressive detail here is the barrel-vaulted, hand-laid Italian tile ceiling, which uses a centuries-old technique to ensure even weight distribution in the design.

The ceiling’s installation spanned two weeks and required such intricate precision that the homeowners flew in an installation specialist from Italy.Atlanta Fine Homes Sotheby’s International Realty

The ceiling’s installation of 795 Highcourt Road was so intricate that the owners flew in a specialist from Italy to complete the two-week process.

#5: DARLINGTON (MAHWAH, NEW JERSEY)

Dubbed by many architectural enthusiasts as the American Versailles, this rare estate (sold furnished) has a wine cellar—with separate temperature controls for red and white wines—connected to a squared shape 27-by-27-foot wine room. While everything in the wine room is beautifully custom made, the pièce de résistance is certainly the wine wall displaying 326 bottles. Along with two blue chairs that once belonged to Sir Elton John, the entire combination works like a well-curated art installation many cultural aficionados would die for.

The room’s design started with the purchase of a slab of a very unique blue marble which was used for the tabletops – then everything else was brought in and designed around that to matchSpecial Properties/CIRE

The room’s design started with the purchase of a slab of a very unique blue marble which was used for the tabletops – then everything else was brought in and designed around that to match.

The Crocker Mansion in Mahwah, New Jersey, a 55,000 square foot single family home built by architect James Brite in 1908. It is on the National Register of Historic Places. Constructed of Indiana limestone and Harvard brick, the home is also named "Darlington."Special Properties/CIRE

The Crocker Mansion in Mahwah, New Jersey, a 55,000 square foot single family home built by architect James Brite in 1908. It is on the National Register of Historic Places. Constructed of Indiana limestone and Harvard brick, the home is also named “Darlington.”

the wine storage cabinets have separate temperature controls and they are ran by two separate coolers, which allows for the proper storage or red and white winesSpecial Properties/CIRE

The wine storage cabinets at the back have separate temperature controls run by two separate coolers, which allows for the proper storage or red and white wines.

Read the full article here: https://www.forbes.com/sites/eustaciahuen/2017/06/30/winecellars/#bce7b704e89e

Q&A Guest Contributor: Michael Internoscia Talks About Marina Palms Yacht Club and What Makes It Different

What advice would you give condo sellers seeking to re-sell their newly purchased units in such a competitive condo market?

I would suggest finishing out their condo with flooring, baseboards, paint and build-out closets to show off the unit. It is easier to show an apartment with finishes when the competition has only concrete floors and primer on the walls. Most buyers want to occupy the unit or rent it out right away instead of waiting weeks or months to build-out the space. This strategy can give sellers a competitive edge.

What makes Marina Palms Yacht Club & Residences stand out from many of the other new condo developments in South Florida?

Clearly our marina. We offer amenities for boaters and watersport fans that are hard to find in many other luxury projects in South Florida. Marina Palms offers 40-foot to 100-foot boat slips and plenty of aquatic activities, including jet skis, kayaks, water skiing, windsurfing and snorkeling. We have it all and everything is fully managed. By the way, the 112-slip private marina provides open ocean access for boaters via Haulover Inlet just 20 minutes away. Another unique feature of Marina Palms is the size of the units. The condos are either two or three bedrooms and range in size from 1,821 to 2,500 square feet, providing a mix of luxury and value.

How would you describe the profile of Marina Palms buyers?

Our buyers come from different regions of the world, including South America, Canada and the US. What they all have in common is an affinity for water-based activates and the boating lifestyle.

Behind the Scenes: Building out the Iconic Grove at Grand Bay

Over the last decade, Miami has become a forefront for cutting edge architecture in the world thanks to starchitects like Zaha Hadid, Arquitectonica and Bjarke Ingels. As a GC, it’s always an honor to leave our imprint on projects that are taking Miami’s skyline to the next level. In fact, the SPACiO team recently completed building out a unit in Grove at Grand Bay, the luxury condo tower in Coconut Grove described by its architect Bjarke Ingles as a Caribbean interpretation of modernism.

With its twisting, dancing glass towers, it was by far one of the more unique projects we’ve ever worked on. All of the rooms in the unit were angled, making it extremely important for us to take the precise measurements in order to incorporate all of the different angles. For example, our client wanted to incorporate the large, structural columns into the interior design of their unit. The columns had a slight slant so we had to be very accurate with the marble installation. To incorporate the columns aesthetically, we advised the owner on the best color palate for the tile and wall paint tones.

When you’re building out luxury units at iconic buildings like Grove at Grand Bay, it’s important to integrate your own personal touch in a way that doesn’t disrupt the natural feel and ambience of the building. The work we successfully carried out for our client did just that. It combined raw with high-end materials, including mixed raw concrete of the columns, high-end marble, glass and woodwork, giving the unit a natural feel.

In addition to installing the columns and marble throughout the entire unit including on the walls of the powder bathroom, we also installed motorized solar and blackout blinds with channels to eliminate all light when they were closed. This is a great feature to have especially in Florida when the sun is always shining bright at 6 am.

We installed a beautiful onyx mirrored glass backsplash in the kitchen, which helped magnify the light in the room and give the wall a classy appearance. We built the closets, which included drawers, shelving and hanging space in beige linen egger colors, giving the closet a modern and clean look. We installed unique light fixtures, bathroom mirrors and a custom laundry room with pure white quartz countertop and beige linen cabinetry. We hung Onyx mirrored glass in the foyer of the unit, which made the entrance really stand out. Last but not least, we also painted the entire unit.

We’re looking forward to building out more units at the Grove at Grand Bay. It gives us the opportunity to truly show our level of craftsmanship.

The Real Deal: A sit-down with Alexander Wertheim: Spacio founder on his business, SoFla’s construction challenges & more

“You’ve got guys that show up today, and three weeks later, they’re gone.”March 23, 2017 10:30AM
By Doreen Hemlock

Alexander Wertheim is founder and president of Spacio Design Build, a general contracting firm with clients such as Nobu Miami Beach, the Related Group and the Marriott Stanton South Beach. A former pro tennis player on the ATP whose coaching gig got him into the construction and property management business, Wertheim now oversees a firm of about 20 employees with revenues of about $20 million.

Wertheim spoke with The Real Deal about building a business, challenges facing South Florida contractors and the latest construction trends.

“I’m a guy who believes you go with the curve,” said the 45-year-old Miami native. “You have to adapt.”

(This interview has been edited for length and clarity.)

Q. How did you get into the construction business?

After retiring from professional tennis, I coached. One of the guys I was coaching owned 30,000 apartments across the United States. I was up at his house one day and said, “I need a career.” So he hired me. He started to buy in Florida in the early 1990s. He bought a couple thousand units in west Fort Lauderdale and offered me a job there as a social director. So now, I’m doing bingo, fitness at the swimming pool, handing out bagels…I looked at it like school. I was there six months and stuck my nose everywhere. I found out what the property manager did, the leasing agent, the superintendent, the sprinkler guy, everything. Then, he says to me, “Do you want to move to Connecticut and be my son’s right-hand man?” I left the following week. I was 23 years old, director of operations of a company with 52 employees, about 10,000 apartments, half a million square feet of industrial space and four condo associations.

I learned construction, punch-out work, leasing and managing apartments, budgets, due diligence on new buys. Later, I went out on my own. With a partner, we did a bunch of condo conversions, and then, I came up with the current concept.

Q. When and why did you start Spacio?

We started in Coral Springs in 2007 to go after homeowners who wanted basic renovations. We built a beautiful showroom, and the recession came, so we went lean, down to my partner and myself. Back then, you’d call me and say, “I have a dry-wall repair,” and I’d be there.

After the recession hit, we landed our first building in downtown Miami, the Ivy. The majority of developer units are what they call “decorator-ready,” with a finished kitchen and finished bathroom. But if someone wants to move in, you need to do the floor and baseboards, window coverings, painting, closets and lighting. We came in and did those upgrades on more than 400 units.

From that, we went across the street to The Mint and changed our business model. We opened up a design center to offer a turnkey package, a one-stop shop. We did construction and even worked with furniture providers if you wanted. Mint was 532 units. Our average ticket at Ivy was $10,000, and at Mint, about $30,000. So, we ended up doing seven other buildings at the same time. We became known as the condo contractor.

Then, we landed Paramount Bay in Edgewater, and those units had $80,000 to $100,000 tickets. Next, we did 224 rooms at the Stanton South Beach Marriott. That was our first big commercial project.

Q. How much business did you do last year, and what do you project for this year?

Last year, about $20 million. This year, I have almost $14 million on the books, and it’s only March. So, it should be more.

Q. Tell us about some key projects.

We just finished Eden Roc Nobu, which is a hotel within a hotel. We took the existing restaurant, gutted it and added about 3,000 square feet of exterior space to make the largest Nobu in the world. We also did the lobby, common areas and the hotel rooms – around 150. At the Marriott Stanton at 161 Ocean Drive, we started out with the rooms, then common areas, the front and façade, the entrance, lobby. Because they couldn’t build new, we literally had to rebuild the entire structure from the inside outside, including the roof – all with the hotel in operation.

Q. What is the biggest challenge you face as a contractor in South Florida?

The workforce here. It’s laid-back, and that makes things take longer. And it’s very transient. You’ve got guys that show up today, and three weeks later, they’re gone. You hear a lot of horror stories. We’re very careful about the subcontractors we work with and develop long-term relationships with them.

Q. What trends do you see in construction in Miami?

One is incorporating exterior space into the interior. People are adding collapsible window-doors that open to one side to bring exterior space inside. You’re seeing this in homes, restaurants and hotels, because so many people love to be outside. In houses, people are putting bars, kitchens, TV rooms, sitting areas and fire pits outside to continue the experience of their great-rooms inside. It makes the space seem bigger and more welcoming.

ARTICLE LINK: https://therealdeal.com/miami/2017/03/23/a-sit-down-with-alexander-wertheim-spacio-founder-on-his-business-soflas-construction-challenges-more/

If I Knew Then…

IF I KNEW THEN…

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy. See the article featured in Crain’s Miami here.

By: NicoleMartinez |@niki_frsh

The Mistake:

I was getting a lot of new business continuously and not focusing on my past clients as an added source of revenue.

When I first got started, I was letting the business run me, instead of me running the business. One of my most common mistakes was that I would land a client, and this would happen especially with some of my bigger clients, and I would do the job and just move on after that. I wouldn’t necessarily continue maintaining a relationship with them, whether that meant through person-to-person contacts, e-mail marketing or regular follow-up phone calls and meetings to see how they were enjoying the new space.

In the construction business, you’re only as good as your last job. In my space, you have huge general contracting firms and those guys have a pipeline for years of work. A firm our size, however, doesn’t have a tremendous pipeline, so you’re always working on trying to get that next job.

Over dinner with other business partners one night, one of them had mentioned to me that it seemed like I was not focusing enough on my existing clients. He said that I needed to keep extracting them for additional work.

“The majority of my clients that I have today are friends, because I do maintain monthly contact, whether that’s something as simple as a phone call.”

The Lesson:

Throughout the years I’ve learned and we’ve grown tremendously from taking our clients and extracting them for additional business. So if you’re not following up continuously and reminding them about who you are and what you do, they forget about you.

It doesn’t just stop at traditional marketing initiatives. Whenever I meet a client I try and figure out what they like to do. For instance, I take my clients to play golf, dine with them, or take them fishing. We become friends. The majority of my clients that I have today are friends, because I do maintain monthly contact, whether that’s something as simple as a phone call. I try and stay on top of their business, and at the top of their mind, and that’s become a failsafe way to continue having lasting business relationships that allow my own business to grow.

This approach, coupled with quality craftsmanship, has helped SPACiO grow from $9 million in 2014 to nearly $20 million in 2016.

Follow SPACiO Design Build on Twitter @spaciodb.

SPACiO Tells Invest:Miami Magazine What’s Trending in Miami Real Estate

In case you missed it, Invest Miami Magazine sat down with SPACiO president Alex Wertheim to discuss what he expects to see in Miami’s construction and design industry this year.

Alex discusses some factors that are driving demand for construction and design services, based on his experience as a general contractor building out some of Miami’s most iconic residential and commercial projects. He states that residential demand growth in Miami will continue, due in large part to the lower cost of living compared to other major gateway cities across the U.S. and Florida’s advantageous tax structure.

While construction in the residential sector is clearly slowing down, Alex continues to see an increase in construction activity in the commercial real estate sector, especially in the restaurant and hospitality areas. This reflects a trend in which restaurant owners/operators are increasingly allocating resources to upgrade the aesthetics of their facilities to match the level of service and culinary experience. For that reason, he expects to see more complex designs and build outs as new restaurants enter the market. SPACiO recently built out the Nobu restaurant in Miami Beach, which is a great example of this trend. Hotels are also recognizing the importance of investing in aesthetics to remain competitive and provide an ‘experiential’ atmosphere. This trend is fueling the renovation and repositioning of several Miami hotels, including SPACiO’s latest project: Marriott Stanton South Beach.

Alex concludes by highlighting the importance of restaurant and hotel owners/operators as well as developers hiring the proper architect, designer and general contractor to ensure that pre-construction work is handled by highly qualified professionals. If the selection process is executed poorly, the construction phase will probably create unplanned challenges to the final vision of the hotel and restaurant owners/operators.

To read more about Alex’s predictions for 2017, you can view the entire article here.

Growing Rapidly and Steadily

GROWING RAPIDLY AND STEADILY

January 2017MiamiReal Estate & Construction |

Alex Wertheim

Invest: Miami speaks with Alex Wertheim, President, SPACiO Design Build

What demand is currently driving design services?

Over the years, we have seen significant growth in residential demand. Developers can execute large-scale projects, as the cost per square foot in South Florida is still much less expensive to buyers than in many other major cities within the U.S. This region offers a competitive cost of living as well as an advantageous tax structure. Growth in the residential segment has caused growth in the commercial segment as well, to the point that we are seeing more activity in the commercial real estate sector than in the residential market when it comes to construction in Miami.

What are the main profile trends of the client base for contractor and design services in Miami?

There was an important change in the profile of the clients after the crisis of 2009. We have started to see more Latin American clients reaching out to us to build-out their recently purchased high-end condos since then. This is expected to continue, as Miami is a melting pot for Latin Americans. However, in the past few years, we have begun to see an increase in the number of clients from the U.S. retaining our services, which makes me think the domestic market is coming back. Miami is attracting many retirees from the Northeast that are looking to take advantage of the lower cost of living. We have also seen an increase from international clients from other regions of the world such as Asia and Europe.
Miami is growing rapidly and continuously. In 2017, we will continue to see such growth driven by international and American buyers. We are also going to keep seeing continuous repositioning of real estate properties. As we run out of developable land, developers are rapidly buying up existing Class B and Class C properties in up-and-coming neighborhoods to turn them into Class A properties, from hotels to retail space. As a full-service general contractor, we are seeing – and we will continue to see in 2017 – an increase in retail space construction. We are currently involved in building out Breitling and very soon Swarovski in Brickell City Centre. The demand is a direct result of Miami’s evolution as a high-end shopping and dining destination.

Which sectors are expected to be the growth engines for design and contracting services the upcoming years?

Even though both residential and commercial sectors are growing simultaneously, commercial will
start to see an important increase in the hospitality sector, especially restaurants. Miami has developed its culinary offerings extensively over the past couple years.  These new restaurants have made significant investments in design services because they understand the importance of aesthetics for their businesses. The Nobu restaurant in Miami Beach is a perfect example. Chef Nobu Matsuhisa sought the “best of the best” to build out the space.  For example, the stone flooring was imported from Italy, the oak flooring from Denmark and many other finishes are derived from around the world. Nobu truly adds an extra level of sophistication to the iconic Eden Roc. We were very fortunate to work under Chef Matsuhisa’s leadership building out that amazing space. Hotels – both new and existing – have also made important investments in design with an important emphasis on quality and that will continue to happen in Miami

What would you identify as the current major challenges in construction?

From a business perspective, one of the main challenges for the developers is making sure they hire the right architect and designer. Doing all the correct due diligence and pre-construction work is extremely important. Not many people realize the amount of work that goes into pre-construction and its importance. When done poorly, this ends up being a problem for developers as they execute their projects. The way to tackle this issue is by making sure their pre-construction work is handled by highly qualified professionals.  Another challenge is finding qualified construction workers, especially when you are working on high-end projects. We make sure we take good care of our people because we see value in loyalty and having an A team that we can move from job to job.

 

To see this published article and to learn more about Invest: Miami, a publication of Capital Analytics, please visit this link.

Softening Your Exposure To Miami’s Fluctuating Real Estate Market

Softening Your Exposure To Miami’s Fluctuating Real Estate Market

MIAMI—With the condo construction market slowing down, general contractors are finding ways to soften their exposure to Miami’s fluctuating real estate market. That is key to a healthy market since they are an important generator of construction jobs. SPACiO Design Build president Alex Wertheim sat down with GlobeSt.com to discuss how his firm is adapting as Miami’s real estate cycle evolves.

GlobeSt.com: How are you adapting to a slowdown in the condo construction market?

Wertheim: As a boutique full-service general contractor, we benefit tremendously from an active condo construction market. But knowing how cyclical the Miami real estate market is has helped us diversify our operation so we can equally focus on commercial and residential projects. (Read about three safe construction bets during economic volatility.)

For example, when the condo market was very active, we were busy doing the build-out of sales centers, including the sales center for Residences at Armani Casa. As many of the new luxury condo high-rises are delivered, we are focusing on building out individual units at projects such as the Grove at Grand Bay, Oceana Bal Harbor and SLS Brickell. But as the condo construction slows down, our commercial projects keep us busy.

In the last five years, Miami has become a destination for high-end shopping and dining. As a result, we are increasingly getting involved in building out retail stores for Breitling and Swarovski in Brickell City Centre.

We have also turned our attention to hotels and restaurants such as Nobu Restaurant, Nobu Hotel, Marriott Stanton South Beach and others. Also, emerging areas like Little Haiti are generating a significant amount of work as old warehouses are being turned into trendy spaces to accommodate businesses relocating from Wynwood, where rents have skyrocketed.

GlobeSt.com: How did you survive the last recession?

Wertheim: SPACiO was created during those dark years as a response to market demands at the time. As newly-built buildings were sitting empty with buyers unable to come to the closing table, developers began to convert unsold condos into rental units. Back then, the units were sold ‘decorator ready,’ which means the buyer was responsible for building out the units in terms of flooring, wall finishes, closets, et cetera.

So when the developers had to turn the units into apartments, they called us to do the build-out of their high-end units. Since then, we have built out nearly 1,600 luxury units in the Greater Downtown Miami area. The work was interesting and challenging. While developers were putting tenants in those condos, their exit strategy ultimately was to sell the units when the market came back so our work had to meet pretty high standards.

Tere Blanca is pointing to one big trend in Downtown Miami. Read about it here.