Surfside collapse could turn real estate market into feeding frenzy for coastal developers
“Now you’re going to see what we call condo terminations, where developers buy out old buildings, tear them down and put up new ones,” one real estate agent warned.
SURFSIDE, Fla. — The deadly collapse of the condo building in Surfside, Florida, has spurred many in the region to ensure that their buildings are structurally sound. In the long term, those assessments — as well as buyers’ fears and rising costs — could lead to a reshaping of South Florida’s real estate market as a whole.
Market observers said they have already begun to see diminishing demand for units in older buildings in the area that are typically occupied by lower-income tenants and retirees, similar to the fallen condo, Champlain Towers South in Surfside. And those built since 2000, typically inhabited by wealthier Floridians, are getting greater attention from buyers.
“That’s going to be more common, at least for a while,” said Sepehr Niakan, a real estate broker for Condo Black Book in Miami. “The fear of going into an older building is going to be greater, and buyers are going to be much more careful and sensitive to the history of repairs and maintenance of a building, which wasn’t really an issue before.”
The building in Surfside, built in 1982, was going through its 40-year recertification. That process requires an engineer to ensure the building’s structural and electrical safety, and it can often reveal the need for costly repairs. The engineering report given to Champlain Towers indicated that the condo needed millions of dollars in repairs to fix “major structural damage” to the concrete slabs under the building’s pool deck and entrance drive, documents showed.
Niakan and other real estate agents said that they have pushed to get information about a building’s recertification process for their clients because it provides fair warning of a looming assessment — a determination on how a larger building expense, like roof work or elevator repairs, will be shared by tenants.