About 2.3 million square feet of retail space is set to deliver in Miami by 2018. What will a massive influx of retail supply mean for the overall market?

Jason Shapiro, managing director at Aztec Group, has some opinions. First, he tells GlobeSt.com, it’s noteworthy that the vast majority of that space—approximately 1.4 million square feet—is located within Brickell and Downtown Miami with major mixed-use projects such as Brickell City Centre, Miami Worldcenter and Met Square fueling this new development. That’s according to a Miami Downtown Development Authority.

“While the delivery of over 2 million square feet of retail space by 2018 may sound like a huge number, it is not necessarily an oversupply,” Shapiro says. “Historically speaking, the Miami’s Central Business District has been underserved in terms of access to high quality, international retail brands.”

As Shapiro sees it, substantial residential growth in the Downtown Miami area, along with organic employment growth and increased visitation, have all contributed to improved retail fundamentals. The DDA report found that over 30% of tourists to Miami in 2014 visited the downtown area. That’s a record-breaking number.

“As our city’s demographics evolve and neighborhoods such as Downtown Miami and Wynwood continue to build up and grow more sophisticated, the stronger market fundamentals support the fact that the additional supply will meet demand,” Shapiro says. “Most of the new product coming down the pipeline is luxury, high-street retail that will serve new demographics that live and work in those key urban areas.”

 

Source: GlobeSt.

A new study by commercial real estate firm CBRE says that rents in Miami are among the most expensive in the world.

Miami’s average monthly rent of $1,868 places it tenth out of 35 global cities studied. Rents in Miami are also increasing quickly, with the seventh fastest rate of growth worldwide last year.

Overall, investors in Miami are said to be earning an overall yield of 2.6$ – second highest in the world.

toptencities-highestrent

 

CLICK HERE TO DOWNLOAD THE CBRE GLOBAL LIVING 2016 REPORT

 

Source: The Next Miami

Costs could start to fall for Florida consumers who want to finance energy efficiency improvements with no money down and no credit check.

That’s the optimistic view from Paul Handerhan, a principal of the new Fort Lauderdale-based company, Clean PACE Inc., created to promote and certify program providers in the Property Assessed Clean Energy program.

Over the summer, four providers reached agreements with Broward County to offer property owners countywide the opportunity to finance a wide variety of energy efficiency and storm hardening improvements. Palm Beach County is working out details and expects to finalize agreements by early 2017, Handerhan said.

“Having them compete against each other, ultimately we’re going to see better consumer protections, interest rates and contractor controls,” Handerhan said. “We’re seeing that now. PACE providers are starting to get somewhat competitive in their offerings in order to gain market share.”

Unlike traditional loans, repayment is set up as an assessment on the owner’s property tax bill, and the loan can be transferred to a new owner when the property is sold. Homeowners with mortgage loans can have the repayments rolled into their monthly mortgage bills.

Eligible projects include solar energy systems, new roofs, new hot water heaters, new air conditioning units, upgraded insulation and impact-resistant windows and doors. Customers see cost savings right away as utility bills and homeowner insurance bills fall, supporters say.

Renew Financial, approved on June 14 to offer PACE financing programs countywide in Broward, officially launched its program in Florida.

Cisco DeVries, the company’s CEO, said his business recently certified 150 Florida contractors for PACE programs and is ready to market the program to homeowners throughout Broward and many cities in Palm Beach and other counties.

“Already, the company has hundreds of thousands of dollars in approved contracts with Florida homeowners, many of whom can’t afford upfront costs for expensive improvements,” DeVries said, adding, “We help them knock down those barriers. Formed in 2008 in California, the company completed more than $300 million in residential PACE projects in the state over the past two years. It’s growing very quickly. We signed contracts for more than $49 million in projects in August.”

Interest rates for financing through Renew Financial range from mid-6 percent to low 8 percent, depending on the size and term of the financing, among other factors.

“Assuming interest rates remain low overall in the financial world, consumers could see competition driving rates lower,” DeVries said. Competition is good for consumers and good for cities and counties they serve. Our approach is to encourage multiple PACE providers in cities so everyone benefits. But it’s critical for the programs to have strong rules — clear disclosures to consumers and protections for everyone involved so this continues to evolve.”

The other PACE providers approved to compete countywide are Ygrene Energy Fund, which pioneered the concept in the South Florida market over the past year; Renovate America; and Florida PACE Funding Agency.

Handerhan predicted the PACE market could see some companies offering interest rates as low as 5.9 percent regardless of the loan term. Also, some might seek an edge by lowering origination fees, which tend to be slightly higher than traditional financing.

“Those higher fees come with benefits borrowers don’t get from traditional financing,” Handerhan said. “If I go to a bank and borrow $10,000, I’m kind of on my own at that point. If the contractor walks away, I owe that $10,000 regardless. With PACE, the provider manages every step of the process, including pulling permits and certifying the contractor. The customer only signs off at the end of the process.”

 

Source: SunSentinel

Primary-election voters approved the expansion of a renewable-energy tax break that backers say will help businesses and spark the expanded use of solar energy in Florida.

But while the measure had support from an array of groups, they are divided on an unrelated solar amendment on the November general-election ballot that could lead to a major political fight.

The proposed constitutional amendment approved Tuesday was known as Amendment 4 and was placed on the ballot by the Legislature. It is designed to extend a residential renewable-energy tax break to commercial and industrial properties.

Shortly after the polls closed, the measure was more than 10 percentage points above the required 60 percent threshold needed for approval of constitutional amendments. The preliminary results indicated that the measure, which backers say will spur growth in solar and renewable energy, was supported in almost every county.

“The strong showing of support for Amendment 4 sends a clear message to elected officials at all levels of government that Florida voters want more diversity in our energy market,” said Sen. Jeff Brandes, a St. Petersburg Republican who sponsored the proposal during the 2016 legislative session.

Though approved by voters, the measure still needs the Legislature to enact the changes. The measure, sponsored in the House by Rep. Ray Rodrigues, R-Estero, and Rep. Lori Berman, D-Lantana, will exempt for 20 years the assessed value of solar and renewable-energy devices installed on businesses and industrial properties.

“Eliminating high tax barriers will unleash the potential of the ‘Sunshine State’ to become a leader in solar energy production,” Rodrigues said in a statement.

“The election results allow Florida to enter a new era where renewable energy can be accessible for all, and clean energy jobs can be at the forefront of Florida’s economy,” Berman said.

Voters approved a similar exemption for residential property owners in 2008, with the measure taking effect in 2014.

The new proposal also has an element to help residential property owners, as it would exempt all renewable-energy equipment from state tangible personal property taxes.

Support for the measure came from a wide range of organizations such as the Florida Retail Federation, the Florida Restaurant & Lodging Association, the Florida Petroleum Marketers and Convenience Store Association, the Florida AFL-CIO, the Nature Conservancy, the Sierra Club of Florida and Surfrider Foundation.

A poll released last week by the Florida Chamber of Commerce showed 70 percent of Floridians supported the proposal, with 14 percent opposed. Yet on Friday Mason-Dixon Polling & Research released findings that indicated the measure was having serious trouble with Republicans and independent voters.

Some late opposition to the measure came from groups such as the Orlando-based political action committees Stop Playing Favorites and the Advocacy, Action & Accountability Alliance, which claimed the amendment would provide “millions in tax breaks to big corporations” at the expense of money that would otherwise flow into minority communities.

Backers of the measure also had to overcome some confusion that the proposal was linked to a separate utility-backed solar proposal on the November ballot.

With Tuesday’s victory, supporters of Amendment 4 are now expected to divide up on what is known as Amendment 1 in November.

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said his group is ready to immediately “pivot” from having supported Amendment 4 to vocally opposing Amendment 1.

“What Amendment 1 does not have is the support of a broad, very diverse, grassroots coalition,” Smith said. “It is exactly what it is, a utility-backed, utility-funded, self-promoting approach to try to keep a monopoly control on their terms.”

The November “Consumers for Smart Solar” initiative would generally maintain the status quo in allowing Floridians with solar equipment on their property to sell energy to power companies.

More than $15 million has already been spent promoting the November amendment.

 

Source: Daily Business Review

Coworking giant WeWork has signed a deal to lease nearly 65,000 square feet of uncompleted office space at Swire Properties’ Brickell City Centre project, sources told The Real Deal.

A source with knowledge of the lease told The Real Deal that WeWork will occupy space at Two Brickell City Centre, the second of two Class A mid-rise office buildings at the project.

A rendering of Two Brickell City Centre and WeWork’s Miguel McKelvey and Adam Neumann

A rendering of Two Brickell City Centre and WeWork’s Miguel McKelvey and Adam Neumann

The lease includes “nearly half” of the 132,280-square-foot building’s total space, though an exact size was not given. According to data from the CoStar Group, asking rents at the building average $53 per square foot, annually. That means the lease is likely worth millions of dollars.

Swire Properties has yet to complete the building, though its twin Three Brickell City Centre received its certificate of occupancy earlier this year.

This deal marks one of the largest expansions for WeWork in Miami, mirroring the shared office space provider’s explosive — and at times controversial — growth both in New York and throughout the country.

WeWork landed in South Florida in summer 2015 with its launch of an outpost on Lincoln Road, and the workspace provider jumped to a second 850-desk location at 429 Lenox Avenue in Miami Beach earlier this year.

In its biggest move so far, the company signed a lease for the entirety of downtown Miami’s 16-story Security Building, totaling about 96,000 square feet. WeWork has yet to open that space.

The company has battled both data leaks and challenges to its $16 billion valuation, all while working to aggressively expand in the hot co-working industry.

 

Source: The Real Deal

Related Group and The Allen Morris Company are proposing a $250 million project to replace city-owned parking garages at 245 and 345 Andalusia Avenue in Coral Gables.

The project, called Coral Gables City Center, would have two 16-story towers and could be built in phases.

TOWER 1:

  • 140,000 square feet of office space
  • 11,871 square feet of ground-floor retail
  • 770 parking spaces

TOWER 2:

  • 270 residential units (either rental or condo)
  • 16,878 square feet of ground-floor retail
  • 799 parking spaces

Zyscovich is the architect. Related and Allen Morris are competing against another bid from ZOM and Terranova. Both were the finalists selected out of five bidders for the property, and the city commission will vote later this month.

 

Source: The Next Miami

MiamiApartmentConstruction_5

Miami’s apartment scene is booming, with the market projected to deliver 13,245 new units in 2016, per Rent Cafe.

This ranks eighth nationally, closely behind Austin (13,568) and Seattle (13,384).

Texas paves the way, with Houston topping the list at nearly 26,000, followed by Dallas (23,159).

Midtown has been especially hot with rental projects, with several new developments announced within the past few months.

Top20MetrosApartmentDeliveries

 

Source: Curbed Miami

The Coconut Grove office building that houses Miami Today’s headquarters is officially up for grabs at $20 million.

2000 South Dixie Highway Coconut GroveLocated at 2000 South Dixie Highway, the building is fully occupied, including a handful of notable tenants like Miami Today, one of the city’s longest-running business publications, and Tinsley Advertising, a storied ad agency that’s worked with brands like Airbus and Paramount Pictures.

The building is owned by a limited liability company named after its address. State corporate records show the entity’s registered agent is Jose Pita, head of a company called Sunrise Grove Management that manages properties for investors.

After purchasing the property, built in 1972, for $4.925 million in 2010, the current owners started a major renovation program. New impact-resistant windows were installed, the interiors were modernized, and the building’s two-story atrium was redone. At 53,074 square feet, the building’s asking price breaks down to just under $377 per square foot.

Listing agent Scott Sime of Sime Realty told The Real Deal that the owners sensed it was a good time to sell now that the office market has matured.

The current tenants are paying roughly $28 per square foot, triple-net, according to data from the CoStar Group. And Sime said as those leases expire, a new owner could potentially bring those rents higher. A second-quarter report from commercial brokerage CBRE shows asking rents in the neighborhood now hover at about $34 per square foot for Class A space, and $31.64 for Class B space.

2000-South-Dixie-HighwayAs for whether developers could be potential buyers because of the property’s 90,000 square feet of land, Sime said “That is certainly a possibility. But this property functions very well in its current state as an income producing property.”

 

Source: The Real Deal

Slower sales and a glut of inventory has led to a buyers’ market for South Florida luxury properties, according to Miami Beach real estate agent Jill Eber.

“For almost five years we were just on an upward spiral,” Eber, of Coldwell Banker’s the Jills, told a gathering of real estate professionals Wednesday evening. “But, right now, it has adjusted and it has become more of a buyers’ market. As a result, developers are adjusting their pricing and increasing broker commissions to move units. In no way is this like 2008, 2009, and 2010. The market has been steady.”

Eber participated on a panel hosted by the Miami chapter of the Asian Real Estate Association of America at Brickell City Centre’s East, Miami hotel. The discussion was moderated by Coldwell Banker luxury real estate Vice President Craig Hogan and featured Debora Overholt, Brickell City Centre’s vice-president for retail, Swire Properties Vice President Maile Aguila, Eber, Miami Association of Realtors President Teresa Kinney and Ramona Messore, vice-president of Saks Fifth Avenue at Brickell City Centre.

Overholt and Aguila offered their insights into Swire’s ability to finish massive developments like Brickell City Centre. Overholt noted that the $1 billion nine-acre mixed use project is modeled after Pacific Place, a complex of office towers, hotels and a shopping centre the company built in Hong Kong 27 years ago.

“If you are familiar with Pacific Place, what we are developing is very similar to that,” Overholt said. “We are very excited to bring something fairly new to U.S. retailers, but something we already do well.”

Since opening in 1989, the four-floor mall at Pacific Place has more than 711,000-square-feet of retail space that houses a Harvey Nichols department store and 140 luxury brand shops and boutiques. Similar to Brickell City Centre, the mall is integrated into three Class A office towers, four five-star hotels, and a condominium. Swire spent $2.1 billion in 2011 on a redesign project led by Thomas Heatherwick.

Aguila told the audience Swire’s success with Pacific Place proves the company has the strength and wherewithal to deliver every phase of Brickell City Centre.

“When we do things, we do things long-range and take a long time,” Aguila said. “I remember when we were developing Brickell Key, we were all looking forward to a retail component and food and beverage component that just never happened. We saw that need. We had the vision to come into the area at the right time and the right place.”

 

Source: The Real Deal

An entrepreneur who’s bought a big chunk of downtown Miami while promising some mold-breaking surprises was apparently not kidding: He wants to build an eye-catching 49-story tower with apartments so small there’s no room for ovens in the tiny kitchens. And there’s no parking.

Actually, that last bit’s not quite right. There will be parking — for bicycles. Is Miami really ready for this?

Moving-company and arts mogul Moishe Mana — who’s also building a mini-city on a large swath of Wynwood and has lately spent tens of millions to buy up property on and around downtown’s Flagler Street — certainly thinks so.

A rendering of developer Moishe Mana’s proposed “micro-living” apartment tower. (Zyscovich Architects)

A rendering of developer Moishe Mana’s proposed “micro-living” apartment tower. (Zyscovich Architects)

He’s the first in Miami to formally propose putting up a building consisting entirely of what’s been dubbed “micro-units” — compact, hyper-efficient and affordable apartments meant for young singles who want to live in dense urban neighborhoods and get around primarily on foot and public transit. The plan, which Mana’s team says fully conforms with downtown zoning rules, will have its first and likely only public review before the city’s Urban Design Review Board on Monday

MicroApartments3The blueprint calls for 328 apartments starting at 400 square feet, the minimum allowed by city code. The penthouse units top out at a relatively generous 600 square feet, but most will be 500 square feet and under, said the project’s architect, Bernard Zyscovich.

The apartments would be equipped with built-in furnishings, including beds and tables, that tilt, fold or slide into walls and cabinets, Zyscovich said. And the building, at 200 North Miami Ave., would be flush with amenities, including built-in superfast WiFi and fully equipped common kitchens and dining rooms for when residents want to entertain.

“It’s like living in a Transformer,” Zyscovich said. “The idea was, let’s make these apartments in the urban core, let’s make them small and let’s build in all the stuff that makes it desirable. We’re going for that authentic coolness that comes from being in the middle of everything. It’s for a particular type of person, probably Millenials but not exclusively so, who want to live an urban life and simplify their life, and not have all their money going to rent and furniture and maintaining a car.”

Rents, which have not been set, would be at market rates, but would be significantly lower than the norm downtown and in surrounding neighborhoods like Brickell — where high costs have some renters taking in roommates and doubling up in bedrooms — by virtue of the apartments’ small size. The substantial savings Mana will realize by not having to build costly structured parking will also help keep rents down, Zyscovich said.

A rendering of developer Moishe Mana’s proposed “micro-living” apartment tower. (Zyscovich Architects)

A rendering of developer Moishe Mana’s proposed “micro-living” apartment tower. (Zyscovich Architects)

The project takes advantage of a zoning exemption that allows buildings close to transit stations in downtown Miami to dispense with parking. The building, on a sliver of land that Zyscovich said would make it hard to fit in a parking garage in any case, sits a short stroll from the Government Center Metrorail station, three Metromover stops and the station for the All Aboard Florida train service, now under construction.

There is lots to walk to nearby, including courthouses, government buildings and offices with tens of thousands of jobs, not to mention classes at Miami Dade College’s downtown campus two blocks away. The All Aboard station will have a food market, and Whole Foods and Publix stores can be reached by Metromover or city trolley.

Those who insist on having a car have options: The building site abuts a big city parking garage, and another public garage sits a couple of blocks away.

Two South Florida analysts predicted Mana will have no trouble renting out the building at a time where rents in Miami have risen much faster than salaries, creating a housing affordability crisis.

If Mana rents his apartments in the middle of the range for the area, or about $2.25 a square foot, that means someone could get into one of the 400-square-foot units for $900 a month, a relative bargain, while enjoying the privacy of his or her own space, noted Jack McCabe at McCabe Research in Broward County.

“They will fill it up,” McCabe said even as he expressed surprise at the apartments’ size and lack of fully equipped kitchens — though they will have cooktops. “Affordability is key right now. There is definitely demand for more-affordable rentals without a real kitchen in a cramped apartment that allows you to enjoy the lifestyle in downtown Miami.”

McCabe said the common kitchens, which Zyscovich said would have to be booked in advance, are a desirable feature for many people, and the compact units would not bother many of the South Americans and Europeans now flocking to the city who are used to living in smaller spaces than Americans.

The “micro-living” concept, which is catching on in other U.S. cities like Seattle, San Francisco and New York — the Big Apple’s first such building just opened in the Kip’s Bay neighborhood on the east side of Manhattan — can help solve not just the affordability problem but also relieve traffic congestion, said Suzanne Hollander, a broker and lawyer who teaches at Florida International University’s Hollo School of Real Estate.

“It’s very smart. It’s pioneering,” Hollander said. “Micro units are tiny solutions to big urban problems, and Miami is becoming a big urban city. It gives options to a lot of people who otherwise would not have them, so they can enjoy the urban living we are building.”

Micro-living buildings also carry other potential social benefits that could prove attractive not just to Millenials but also to retirees or business executives who need a pied-a-terre, she added.

“People sleep in a micro-unit. But, really, the whole building is their home,” Hollander said. “And the amenities here are amazing. What they’re trading is space for an A-plus location. This all encourages people to interact not just inside the building, but in the neighborhood, making everything more social.”

Another benefit, she said: Because the units are new and built to code, they are safer alternatives to the unregulated rooms in older homes or apartment houses that are often the only alternative for people on limited incomes.

Micro-units in New York and elsewhere are even smaller than Mana’s, with those in New York’s Carmel Place ranging from 260 to 360 square feet after the city waived its 400-square-foot minimum. That’s something some advocates are pushing to happen in Miami as well.

The no-parking alternative has a longer track record in Miami. Other developers have used the transit exemption to build no-parking residential towers downtown, including Related Group’s Loft buildings, but those units are for sale and tend to be larger. Units at Centro Miami, a high-rise condo tower now nearing completion, also without parking, range from 500 to over 1,111 square feet.

A new city zoning rule also allows for small buildings near transit routes to forgo parking. A small developer has broken ground on townhouse-like apartments without parking in East Little Havana.

Though Mana’s apartments will be small, the tower’s design aims to make a big impression, Zyscovich said. It looks like stacked blocks, with some sides on the west and south screened with a “veil” of metal mesh to shade them from the sun.

“It wants to say, I may filled with micro-units, but I’m cool,” the architect said.

 

Source: Miami Herald