Florida Buyers Shun Older Buildings After Condo Collapse

While consumers show concern over property age and safety, investors eye opportunities to tear down and rebuild.
Construction equipment digs through the mound of debris from the collapsed 12-story Champlain Towers South condo building

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Construction equipment digs through the mound of debris from the collapsed 12-story Champlain Towers South condo building Sunday in Surfside, Fla.

The Surfside, Fla., condo collapse reportedly has led to diminishing demand for units in older buildings—built prior to 2000—along the city’s coastline. “That’s going to be more common, at least for a while,” Sepehr Niakan, a real estate broker with Condo Black Book in Miami, told NBC News. “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.”

Real estate professionals say they are fielding more questions from clients about a building’s recertification process, which provides an assessment of the building’s soundness as well as the magnitude and costs of needed repairs. Consumers also are requesting engineering reports, which can be more difficult to access.

The condo building that collapsed, Champlain Towers South, was built in 1982 and was in the midst of its 40-year recertification when it pancaked in the middle of the night, leaving a mound of deadly destruction. The engineers who were reviewing the building had already indicated it needed millions of dollars in repairs to fix “major structural damage” to the concrete slabs under the pool deck and entrance drive.

Since the tragedy last month, sales of older condos in Surfside—which were booming before the building collapse—have plummeted, NBC News reports. Real estate experts predict prices to continue falling, especially in the absence of an engineering report that can verify a building’s condition.

In an effort to support current inventory, real estate pros say engineering reports will need to become more available to soothe clients’ concerns. “The demand is not just in Surfside. It’s not just in Miami. It’s all over the place,” Mike Clarkson, president of the Hilb Group of Florida, a statewide insurance firm, told NBC News. “The amount of emails and phone calls I’ve been getting—and we’ve got 750 to 800 associations we insure in the state of Florida—it’s crazy. I’m getting calls from buildings that are three stories high.”

But engineering reports, if they were more widely used, could have ramifications for older buildings in need of repair. “If the results from those engineering reports in older buildings require significant amounts of remediation or tens of millions of dollars and the condo owners can’t afford the assessments, you’ll see units getting dumped,” Adam Mopsick, CEO of Amicon, a construction firm that works with condo associations, told NBC News. That could eventually lead to a “feeding frenzy” among developers eyeing valuable land on the Florida coast. Developers may want to snatch up these older buildings to tear them down and construct new ones.