Terra Group Cancels $35 Million Offer For West Grove Assemblage

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David Martin’s Terra Group has canceled a $35 million offer for a group of 40 properties in the West Grove.

Yet, an attorney for Terra said at a bankruptcy hearing on Wednesday that the developer is still interested in buying the Coconut Grove land, which takes up the majority of six blocks from Elizabeth Street to Plaza Street, the Miami Herald reported. “Environmental concerns” killed the deal, attorneys said.

Terra’s interest in buying the properties, which are tied up in litigation, became public because two of the corporations that own the land filed for Chapter 11 bankruptcy protection. Negotiations for a new contract will begin soon, with a hearing for the pending sale set for early January, the Herald reported.

The sale has been held up by infighting among partners Julio C. Marrero, Phillip Muskat, Orlando Benitez Jr. and others. Benitez, who reportedly stated that he brought Terra Group to the deal, tried to stop the sale in July. Marrero called him a “rogue stockholder,” the Herald previously reported.

Developer Peter Gardner had bid on the land in 2013, then asking $30 million, but the deal fell through. In July, the city of Miami sued the owners over poor living conditions and code violations at the dilapidated apartment buildings along Grand Avenue, Hibiscus Street and Florida Avenue.

If Terra ends up purchasing the properties, it would mark its first major foray into the West Grove. The Coconut Grove-based firm has developed and plans to develop more property on the east end of the Miami neighborhood.

 

Source: The Real Deal

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Jorge Pérez: Come To Miami In 10 Years And Be Amazed

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Jorge Pérez thinks that Miami will be transformed in the next decade.

Pérez told Local 10 that visitors will be shocked by what they see in Miami in ten years from now.

“People are going to say oh my God, what’s happened here, this has become a world class city,” Perez said.

He also thinks that more Miami residents will be giving up their cars in favor of an urban lifestyle.

“I’ve always wanted to have Miami become an urban center like New York, Paris, London, in which people don’t have such a need for the automobile,” Pérez said.

Pérez said that he send a letter to president-elect and former business partner Donald Trump telling him “I’m here for you,” even though he supported Hilary Clinton during the election.

 

Source: The Next Miami

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What Will Trump’s Presidency Mean For Miami’s Real Estate?

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The king of real estate is set to rule the country, but what will a Donald Trump presidency mean for local real estate, one of South Florida’s biggest industries?

The Miami Herald wanted to gauge response from Realtors, developers, economists, bankers and lawyers about possible impacts of the election, both in the short and long term.

The Miami Herald asked: Will a new president — especially a political unknown like Trump — mean uncertainty for Miami real estate? What will the election’s impact be on sales and developer activity? They also wanted to know their views on whether Latin American investors would hesitate to invest in President Trump’s America after his strong anti-immigration stance. Will his election depress demand from Latin American buyers?

Overall, those who responded are mostly bullish, as you might expect from business people who depend on optimism and consumer confidence for sales. The Miami Herald selected a representative sampling of the views expressed and excerpted comments they made, mostly via email. (Thanks to the team at Bendixen & Amandi, the Miami Herald partners on their annual Real Estate survey, which helped put out the word.)

 

Mekael Teshome, economist at PNC Financial Services Group

Trump’s policies on immigration and trade could have the greatest effect on the South Florida real estate market, Teshome said.

“The president in a sense is using a blunt instrument where you’re dealing with the whole country. Real estate is an industry where it’s very localized. It would be hard for a President Trump to craft a policy that affects the real estate market in South Florida.”

Since the early 2000s, the local real estate industry has relied heavily on foreign investors. But their numbers have thinned because of a strong dollar and weak foreign economies. If Trump’s proposed policies result in higher tariffs, friction over trade and lower confidence in the United States as a stable haven for flight capital, that could scare away foreign investors, Teshome said. “Fewer foreign buyers would weaken demand.”

 

Jeff Morr, broker with Douglas Elliman, chair of Miami Master Brokers Forum

“I think people are just happy that the drawn out, vitriolic election process is over. Interest rates are low, the economy is solid and many prices have adjusted. The timing couldn’t be better for buying in Miami.” Longer term, he said: “I expect continued improvement barring any major catastrophes.”

Morr’s business is about half foreign, half domestic; his domestic business has grown because of the U.S. housing market recovery and a strong dollar.

Will Latin Americans continue to invest in Miami real estate? “The U.S. is still the U.S. — a safe haven for people from around the globe. Miami is the unofficial capital of Latin America and will continue to be the beneficiary of Latin American money.”

 

Jorge Pérez, CEO, Related Group

Pérez recently returned from a sales trip to Mexico and said the biggest fear of potential buyers for real estate is the possible visa status changes that could take place with Trump as president.

“We had to reassure our clients that in our opinion there will be no increased restrictions on visas or ownership requirements for foreign buyers. Trump is a businessman and understands the importance of foreign buyers. We have done four condominium towers with him in Florida, and he was part of the presentations to Latin Americans. … I believe that, if anything, he will try to promote this investment to help our economy grow.

“A very large percentage of our buyers are from South America and also from Europe. They invest not only because they love Miami’s lifestyle but also because it is the most secure country in which to invest. Uncertainty is a big deterrent to investment, and I hope that no policies are developed which in any way affect our standing as the most secure country in which to invest. I am also hoping that, after clear and unbiased reflection, Mr. Trump realizes that trade will lead to greater growth and employment in America, which is the cornerstone of his campaign.”

 

Avra Jain, real estate developer and investor

“Overall, Trump will have a positive effect on the real estate industry. People may pause for a week or two while they digest, but I expect the market to resume its positive course.”

Over the next 12 months, “given he is heavily invested in the real estate space, I would expect him to protect favorable real estate tax laws currently in place and will probably try to create more incentives to encourage investment/development. “Favorable policies will be good for everyone, but the personal tax incentives from the income and capital gains would benefit U.S./resident buyers more.”

Her personal concern: Supreme Court justice appointments and how that will affect her daughter’s generation.

 

Masoud Shojaee, president and chairman of Shoma Group

“We have seen so much unpredictability in the course of this election; we are dealing with a very unpredictable person. That will destabilize our dollar in the short term, which will create opportunities for foreign investors. …The message we are hearing from the new administration is that more jobs will be created, more infrastructures and growing of the economy. If this is truly the case, it will have a positive impact to our market. No matter what the rhetoric was prior to the election, the new administration will focus on reality and hopefully on the positive path this country needed badly.”

 

Marcelo Tenenbaum, co-principal of Blue Road, a Miami developer of residential, hospitality and commercial projects

As to the short-term impact of a Trump presidency on Miami real estate, as well as the impact one year out: “We don’t see any change in that trend. Miami has been a magnet for investors for more than 30 years, regardless of different presidents, political moods and parties — they look at the long term. … As the electoral campaign defuses, people will go back to business as usual. Trump talked about a tax cut, which might help to increase profit for investors. That is music to their ears.”

On Latin American investors in particular, he said, “Investors are pragmatic. They look at numbers and returns; they don’t look at political correctness, values, etc. If Trump reduces capital gains, income-tax rates and eliminates the estate tax (which is huge for foreign investors), they will keep investing in South Florida.”

 

Jack McCabe, a South Florida real estate analyst

The country was likely heading into a recession in 2017 no matter who was elected, but the uncertainty of a Trump presidency will accelerate it, McCabe said.

In South Florida, the implications of a Trump presidency will likely be most hard-felt among foreign buyers, who make up about 60 percent of South Florida real estate sales, he said, because of Trump’s disparaging remarks against Hispanics, Muslims and other minority groups.

“Without a doubt, Mexican buyers that have been a growing segment; I think many will find it difficult to invest.” The threat is particularly badly timed now, when foreign investment has eased due to recessions in other countries and a strong U.S. dollar.

Issues have arisen closer to home, too. Luxury real estate, which is largely bolstered by foreign investors, has been suffering from drops in resales and increasing supply. The uncertainty of Trump’s presidency will likely raise more questions for investors. In the past several months, several developers have put plans on hold due to the slowdown in the market, McCabe said.

“There is a tremendous amount of concern from different countries about how his presidency is going to affect global economics. We are headed for a very volatile period in the future, especially in the luxury real estate section.”

 

Marc Shuster, partner at Berger Singerman

“Generally speaking, I don’t see a connection to any president and his/her election on the one hand, and Miami real estate functionality, on the other. I think if anything we might see some pullback by U.S. investors in the short term who are concerned about yield over the next year or so.

“Conversely, the long-term tailwinds that the U.S. is positioned to inherit or even seize makes for a very rosy picture for Miami real estate in the long run. It is a premier destination, and a low-interest-rate environment creates a long-term play for prosperity.

“It seems dubious to me that his campaign speeches will be easily put into government, [with] the executive branch being checked by the Legislature and judicial. And I think, given the rest of the world has such strong economic dislocations, Miami will continue to be one bright spot on the world stage, almost out of necessity when looking at the entire world and desirous of achieving yield in cash-flowing assets. The weather, lack of state income tax, population growth, low-interest-rate environment will help.”

 

Jay Parker, CEO, Florida Brokerage, Douglas Elliman

Parker doesn’t expect a major impact this year.

“That said, I do believe the world in general has faced uncertainty by pausing on most major decisions, especially as we faced the end of a long and complicated election process. As has been seen in the stock market on the first day since the election, I expect that the world will find confidence in the fact that the U.S. is a strong and safe country to invest in. And as we see the country reunite, I think our real estate market will see a strong boost. I also expect that issues like Zika will subside, which will directly benefit Florida.

“Ultimately, I believe and expect Trump’s tax plan, banking regulations and overall effort to lower taxes will create more income, more spending power, which will lead to a housing industry boom. I expect we will see more impact as we move into the first and second quarters of 2017.”

In Florida, Douglas Elliman has seen slower velocity from foreign markets, but Parker believes that many such markets will resume their focus on the U.S., as he expects the security of investment and overall opportunity will increase under the Trump presidency. “I also believe that states like Florida will remain uniquely appealing due to our tax benefits and the continued maturity of our culture, educational institutions, hospitals and quality of life.”

 

Daniel de la Vega, president, One Sotheby’s International Realty

On a national macroeconomic level, most people will take a wait-and-see approach, de la Vega said. “From a local real estate level, I believe people just wanted to know the definite outcome. Now that they do, they feel more confident making their purchase. Donald started off on a good foot in his acceptance speech by saying he wants to bring America together, thanking everyone around him for his success and verbalizing his admiration for Hillary in a long hard-fought battle.

“Some of his fiscal policies and less regulation could lead to economic growth. Jobs created in states that are most competitive will lead to a healthy more stable U.S. Most foreign investors look for stability and a democratic place to put their money. Overall, this country always finds a way.

“2016 definitely shifted to a more domestic buyer. Financing has eased, and job and wage growth were on the rise. I believe this will continue if we make for a better America. This will not be about who our leader is, this will be about who we are as Americans. Like Deepak Chopra said: ‘Perhaps the future no longer depends on a single leader but on each of us who can quietly dedicate our life to light, love and healing.’”

 

Gil Dezer, Dezer Developments and Trump’s former business partner on several South Florida developments

“I think the overall economy will get a boost as consumer confidence grows due to the results of this election. Unfortunately, I’m sold out of Trump units in my six buildings, but I’m sure my clients will enjoy a nice bump in value. … I presume that a year from now is when we will really start to see the positive economic impacts of Mr. Trump’s presidency.”

Will Latin American investors in particular continue to choose to buy in Miami because the U.S. is a stable political and economic environment? “I think you answered your own question here. Latin American INVESTORS are doing just that. They are investing. There is a small fraction of them that actually leave their businesses and families behind to move here. I don’t believe there will be any changes to tourism policies or tourist visas. Latin Americans looking to emigrate to the U.S.A. will most likely go the EB-5 route. That is a completely separate transaction from a real estate purchase.”

 

Peggy Fucci, CEO, One World Properties

“I think our buyers will continue to see Miami as a safe haven — the U.S. continues to provide that image regardless of who the president is. The situation in all the markets that continue to buy Miami, especially Brazil and Argentina, hasn’t changed. Miami is a great bet. We are talking about a city that is poised to be the Hong Kong of the West with all the characteristics necessary — diversity, financial institutions — and it’s centrally located to South America and Europe.

“Trump has real estate in his blood. He has already said he is interested in boosting home ownership. If he shows that during the upcoming year by continuing to keep interest rates low, our housing market will continue to grow. There is too much international turmoil not to continue to keep our rates down. We will also see the rise of the U.S. buyer.”

She said international markets represent about 60 percent of her companies’ sales among all its projects. “Latin America has always invested in Miami … In addition, Trump’s immigration policy has changed since he started campaigning; immigration reform would be a tough bill to push through, so it’s difficult to determine whether this will have any influence in the real estate market.”

 

Armando Codina, developer and executive chairman, Codina Partners

“We do not believe that a new president equates to an uncertain real estate environment here in Miami. The Miami real estate market will probably react much like the stock market reacted [after the election results were announced] — a pre-market drop and then a quick rebound.

“If Trump is successful at getting his proposed tax plan into effect, we believe it will have a positive impact on the economy in general. Real estate will benefit from lower capital gains, and businesses should benefit from lower corporate rates. “Elections in Latin America have a much greater impact on us. America will continue to be seen as a great safe haven.”

 

Craig Studnicky, broker and principal of ISG World

Trump’s lack of experience in public affairs has international buyers and real estate developers concerned, Studnicky said, but Trump is a real estate developer — it’s in his blood.

“There are many people in Miami and abroad that are hoping Donald Trump will use his power as president to influence policies that are favorable for the real estate industry and build a healthy real estate economy. Time will tell. The real question is, in a year from now, will Donald Trump be perceived as a strong leader for the country and will his presidency be perceived as a benefit by the world? Domestically, he/it may be. It’s very unpredictable at the moment.”

 

Art Falcone, co-founder and managing principal of Encore Capital Management

Like traders in the stock market, real estate buyers may react to gyrations in the market and become skittish, Falcone said. “But as to developers, if you are not thinking long term, you should not be in this business. You can’t invest hundreds of millions of dollars into projects and overreact to short-term market changes.

“We were on the phone with some partners from China [Nov. 9], and there was certainly no overreaction about changing their long-term thinking about Miami. If Trump does half of the economic stimulus policies he has mentioned, versus things the media has hyperbolized as being hurtful to the economy, we would be in good shape. He’s certainly not going to eliminate trade altogether.

“With EB-5 projects, you could see a big push to file new applications because of the uncertainty of what the new administration might do with that program. There could be some very positive long-term benefits here if Trump and the policymakers are successful with the infrastructure investments they hope to facilitate. “In general, consumers don’t cause recessions — policymakers do. We have to keep a careful eye on what policymakers will do in the first year of the administration.”

 

Chris Zoller, broker at EWM Realty International

After an election year of uncertainty, Trump’s presidency ushers in an era of certainty, Zoller said. “Now we know what we have, but don’t forget one important thing: What we have is a system that works so well, that is still the strongest democracy on the planet, is still creating the safest place to be investing in real estate.”

Zoller expects the next few years to be prosperous, largely driven by economics, not politics. “In my experience, the president in the White House has much less to do with economics than the business community or the Treasury or the Federal Reserve System or Wall Street.”

Experts have worried that Latin American investors, who are major players in South Florida’s real estate industry, would be scared away by Trump’s anti-immigration stance. Zoller disagrees. “I don’t think every foreigner is looking to come here to live,” he said. “And I don’t think there is a more attractive place for them to make an investment [than Miami].”

 

Andrés Asion, master broker, founder/broker of Miami Real Estate Group

Asion was in Mexico for a poorly attended real estate expo that started the day after the U.S. election. While the peso was tumbling and the country seemed to be in shock about the news, Asion believes that will be temporary.

“Many Mexicans I spoke to feel that Trump is looking out for the best interest of the American people first and they understand that. [They] also feel that after the initial state of shock, Mexicans will continue to invest in the United States because other areas like Europe are too far and South America does not offer the security of the United States. … They feel people will always want to invest in a country that is doing well, so if Trump’s policies will make the U.S. economy strong, it will in turn make everyone else want to invest into it, regardless… The people I spoke to also understand that Trump wants to have a hard stance on immigration.

“In the short term, the hold from many Latin Americans in ‘wait-and-see mode’ will cause sellers in Miami to possibly lower prices in order to move units quicker as the South Americans slow their buying power for approximately the next six months.”

 

James Shindell, attorney and chair of Bilzin Sumberg’s real estate group

“On the commercial side, Miami will continue to be an attractive destination for Latin American capital. It is still an exciting gateway market on an upward trajectory. It is still Spanish-speaking. It is still safe. The rule of law still applies. Alternative investment choices haven’t suddenly lost their flaws. If that’s not enough, the president-elect is a real estate developer.”

 

Dan Kodsi, developer and CEO of Paramount Ventures

Kodsi said a Trump presidency may create some short-term uncertainty in the Miami real estate market, which may weaken the dollar over the next 60 days and send a buy signal to Miami’s largest market, South America, as a good time to buy.

As Trump begins to build his cabinet with fiscally conservative Republicans combined with private sector ex-CEOs who wouldn’t ordinarily get involved in the public sector, it will create a new confidence in our economy, Kodsi said. “While our largest market the Latin Americans may be offended by Mr. Trump’s rhetoric, they will make investment decisions based on the strength of our economy, not his personality. Continuing the reckless spending of past administrations will continue to weaken us over time and would have created an unforeseen long-term issue.”

About 90 percent of Kodsi’s business is from foreigners — about the same as a year ago, he said. “Most of the Latin Americans that invest in Miami do not come to the country illegally. His anti-immigration stance is against illegal immigration, not overall immigration to the U.S. The type of buyers that invest in Miami real estate are the immigrants that a Trump administration will most likely incentivize to come live and invest in the U.S.”

 

Mike Pappas, Realtor, CEO and president of the Keyes Company

The market likes clarity and consistency. There may be a slight pause until the market understands his economic and immigration plan. Longer term, “If Trump implements a pro-business strategy, then that will lift sales and prices.”

Thirty percent of Keyes’ Miami-Dade market is from foreign buyers. “With the dollar strengthening and turmoil in Venezuela, along with political and economic issues in Brazil, we have seen a slight decrease this past year. We are seeing a rising interest now from Asia, as well as a strengthening of the northeast domestic market toward South Florida. For the long term, there’s no effect. In fact, it may actually be positive. As for the short term, they may sit on the sideline until they are comfortable with the new policies.”

 

Ezra Katz, real estate investor, CEO of Aztec Group

“Donald Trump is a businessman and developer by trade, so I believe his presidency will positively impact our economy — and by extension, real estate development, finance and sales. I think his administration will create jobs, which will stimulate consumer spending, and I believe he will be pro-business. By eliminating many of the bureaucratic regulations that are hurting U.S. companies, we will encourage entrepreneurship and entice companies to relocate to gateway markets like South Florida. The real wild card is whether President-elect Trump will reach across the aisle to work with members of both parties in Congress. If he makes bipartisanship a priority, then the U.S. economy is destined for significant growth.

“The U.S. will be a significantly better-managed country under President Trump, particularly when compared with nations in Latin America and Europe. As people overseas begin to see the U.S. economy thriving, it’s only natural that they will want to join in on the growth and profit themselves by opening businesses here and investing here — as they should. The vast majority of inbound investors in South Florida are migrating and doing business here legally, so President-elect Trump’s stance on immigration is unlikely to have a measurable effect on our regional real estate economy.”

 

Karen Elmir, broker, CEO of the Elmir Group

Elmir believes short-term impact will be minimal. “The long-term projections relative to Miami real estate are positive due to the economic policies of President-elect Donald Trump — lowering of tax rates for individuals and corporations, and the reduction of governmental regulations. These should result in an increase in the GDP from the current lethargic figure of 1 to 1 1/2 percent to a robust projected increase of 2 1/2 to 4 percent GDP projected for mid-2017 through mid-2018. A commensurate increase in property values in part due to the increase in GDP and in part due to these policies will result in a slight increase in the inflation rate, which should create upward pressure on residential prices.”

Foreign nationals find investment in Miami real estate attractive because of proximity to South and Central America and the stability of the United States’ political and economic environment, she said. “The immigration policy should have minimal impact on buyers of luxury real estate in Miami.”

 

Calixto Garcia-Velez, executive vice president of FirstBank Florida

“Sales and developer activity are affected by economic drivers, not necessarily political changes. For example, the Federal Reserve has the potential to have a more effective impact on real estate, as any increase or decrease in interest rates can materially affect someone’s ability to pay a mortgage/loan. Although the new president cannot directly influence the Fed, the movement we’ve seen across America and the new administration’s platform could influence the Fed’s decision-making process moving forward.

“It is premature to predict long-term activity as a result of the election. In any event, it is important to note that change in political arena does not necessarily mean change in the real estate market. More significant drivers are what occurs in the world markets and the countries that directly contribute to our real estate activity. For example, Latin America’s economics and political landscape may have more of an effect than short- or long-term election results.

“Regardless of who is president of the United States, Miami has been, and will continue to be, a safe investment and beacon of strength and stability for Latin American investors.”

 

Ron Shuffield, Realtor, president and CEO of EWM Realty International

Shuffield does not think it means uncertainty for the market because Trump is such a highly recognized entity within Miami’s real estate community. “A president-elect who has frequently stated that one of his main goals in office is to address overregulation by the government would have an immediate positive impact on the market.

“I see it as all the more positive in the long run. While much of the luxury market is driven by cash or mostly cash sales, securing a mortgage, especially at the entry level, has become incredibly cumbersome. The overly stringent credit limits that came to pass as a reaction to the financial issues from the recession have had a very negative influence on specifically, the entry level market. His working to eliminate unnecessary barriers will certainly help keep the market moving forward at a viable growth pace.”

Shuffield also doesn’t see negative fallout in the Latin American market. “The person who is purchasing in South Florida is in the U.S. legally, and they certainly have means. Trump has always said that he has no issue with people who are in the U.S. legally. Will the Latin American buyer be psychologically affected and hence not purchase? For the most part, I really do not think so because we are already seeing a softening of that stance from even 60 days ago. I believe Trump’s pro-business, pro-real estate stance will compensate for any negative feelings they may have.”

 

Alex Zylberglait, broker and senior vice president of investments with Marcus & Millichap

In the short term, uncertainty created by a new administration will most likely mean a pause among some investors until emotions settle down. But Zylberglait doesn’t project a slowdown in deals. “Miami real estate deals in South Florida and especially Miami are, in big part, fueled by foreign capital. Except for Mexico, the impact of the Trump elections hasn’t reflected negatively on the value of their currency against the dollar. On the contrary, from the yen to the euro, currencies around the world gained strength, making U.S. real estate more affordable. Also, many real estate investors feel comfortable having a real estate person calling the shots in the White House.

“Having said that, every new administration brings uncertainty to the market so we may see a rush to close deals before Jan. 20 to take advantage of current rules on the books to play it safe. I would not be surprised if the uncertainty in the stock market will re-direct capital to the real estate market in search for a better return.”

Longer term, it will all depend on how the credit markets respond to the new administration, Zylberglait said. “If banks trust Trump’s ability to govern and support its agenda in terms of lending regulations, lenders will feel comfortable refinancing deals and making acquisition and construction loans. Otherwise, it will negatively impact the future of deals because most domestic investors need financing to close on a deal and developers to finance new construction. Since many foreign investors buy cash, they will have the flexibility to buy assets even when the U.S. credit markets put more restrictions on lending. Miami benefits from cash-buyers from across the globe so a tighter lending environment will have less of an impact in Miami than in other cities.”

Zylberglait doesn’t see a slowdown in foreign investment on commercial real estate in the $1 million to $20 million range. “Having said that, if the Trump administration develops an anti-immigration stance, it will hurt deals. Investors are people and they go where they feel welcome. … It is important to see how governments across LatAm will react to Trump’s unexpected victory.”

 

Edward W. Easton, chairman and CEO of the Easton Group based in Doral

“In my opinion, President Donald Trump will not be harmful to Miami real estate. Because he understands real estate, I’m of the belief that he’ll be pro-growth between South and Central America, and North America — and that will be to our benefit, if in fact it happens. Same for long-term activity: It will take time, but in my opinion, it will be neutral or positive.”

Easton believes there will be a waiting period where people watch and see what kind of people Trump surrounds himself with. “I’m hopeful he will be a pro-business president and will cut back on the regulations that I believe are harming our economy.”

Foreign sales are down, but mainly because of currency, not because who the president is, he said. “What will be helpful is if the Trump presidency will be less regulatory than the Obama presidency. Regulations, especially around the Dodd Frank Act, have caused some worry for potential investors from South and Central America. That basically puts the burden on the investor to supply a lot of the documentation to the government about what they’re doing. And that’s not something investors want to have happen. So, maybe by Trump eliminating a lot of the regulations, that will be very positive for investment in the United States by foreigners.”

Regarding Latin American investment, “I believe it will be a net positive. Their fears of investing are coming from what’s going on in their own countries, more than the fears of what’s going on politically in our country. Real estate is a protective asset for them, and I don’t think that reality changes. They feel safe putting money in America and that will continue. Regulatory behavior will be helpful for that.”

 

Aaron Drucker, managing broker in Miami for national real estate brokerage Redfin

Inventory levels and economics will drive consumer decision-making, not election results. Any uncertainty will be short term as Trump lays out more concrete plans for how he’ll help the housing market, Drucker said.

Some wealthy sellers may delay listing their homes this year, hoping to get a more favorable death tax rate, he said. Trump’s proposed tax plan does include repealing the “Death Tax.” “I don’t believe developers will make any rash decisions or change any current promotions they are advertising. For projects currently on hold, it’s likely some developers will revisit coming to market if they believe GDP growth will improve under a Trump presidency and a Republican-led congress.”

Long term, if Trump can execute his tax plan, business and personal taxes will be cut from current levels, Drucker said. Finance regulations implemented under Dodd-Frank and the CFPB could be repealed or replaced with guidelines that are more business-friendly.

“One of the biggest impacts Trump can have to the housing market long term is a refocus on FHA loans. Those are the federal government’s strongest tools for increasing home ownership and expanding access to housing for low-to-middle income and minority Americans, but the mortgage insurance premium for the life of the home loan under FHA can be a deterrent for some borrowers. If Trump can remove that premium, we could see increased access to home ownership and sales volume in the market.”

Trump can also relax some of the scrutiny appraisers must give to the “condition” of the home required when a veteran obtains a VA loan, Drucker said. “When veterans are trying to buy a home with a VA loan and get into multiple-offer situations, it can be hard to compete with other buyers bringing conventional loans or cash to the table. Trump has talked a lot in the campaign about the importance of taking care of our veterans, so we’ll see if he incorporates their housing needs into his plan.”

 

Jill Hertzberg and Jill Eber, “The Jills” at Coldwell Banker, master brokers

Uncertainty can rattle the stock market, which impacts the high-end luxury market, The Jills said. Election night was difficult for the market, but it rebounded the next day.

Longer term, “It’s hard to have a crystal ball, but the Miami market will really depend on the growth of the economy in the next year, both here in the U.S. and economies around the globe. The world is so interconnected, and we are very dependent on what happens in our feeder markets. We are a primary as well as a second- and third-home market, and we are very attractive [for] our favorable taxation [and] reasonable pricing compared to the Northeast U.S., California, Europe and Brazil, and [the U.S. is] a safe country for capital flight.”

South Americans will continue to invest in Miami, the Jills believe. “They have been coming for years and years, they have relatives and friends here, and they are very comfortable here.”

 

Mark Meland, a partner at Meland, Russin and Budwick

While markets don’t like uncertainty, the transactions scheduled to close before the end of the year likely took political risks into consideration, Meland said. “So, in the short term, we do not see much impact [on] the markets. Certainly, interest rate volatility is more impactful in the short run. In the long term, a Republican president with a Republican House and Senate should provide for similar, or favorable, tax treatment for real estate transactions.”

The maturity and stability of the market and the U.S. dollar are more important factors than immigration policy, he said. “While some foreign buyers may be investing for immigration purposes, i.e. EB-5 investments, most are investing in the U.S. market for the stability of the market, as a hedge against currency fluctuations/devaluations and inflation in native countries. The devaluation of Latin American currencies to the dollar (i.e. Mexico) could have potentially negative effects on the real estate market as U.S. real estate assets will be more expensive for these foreigners.”

 

Paul Shelowitz and Ira Teicher, real estate attorneys at Stroock, Stroock & Lavan

These attorneys think that in the short term, Trump’s victory will temporarily chill sales activity, given how overheated the real estate market is right now. As to developer activity, there will be little or no discernible impact given the long lead time associated with project development, they said.

“Our clients tell us that uncertainty relative to a Trump presidency is expected to create buying opportunities. Of course, with that comes additional risk. Our clients are already acting on the news and putting out feelers for jittery institutions and the like. Our clients have also noted that a positive/negative start to Trump’s administration might bring added/reduced value to properties located in the vicinity of Trump branded assets. The latter point of course remains to be seen.”

They believe Latin American investors will perceive the same opportunities that their domestic clients have noted. “Our experience dictates that shrewd investors — here or abroad — are able to divorce their own political views from their investment decisions. We don’t believe that Trump’s anti-immigration stance will materially impact that analysis.”

 

Ken Krasnow, executive managing director for the South Florida region, Colliers International

The lack of certainty and unpredictable nature of any election affects investor confidence, Krasnow said, but market volatility was short-lived, and, ultimately investors found opportunity.

“While uncertainty levels remain high, we expect the Fed to delay raising interest rates this year, and investors may push investment decisions into Q1 until they understand what a Trump presidency means for them. … Miami is already recognized as a safe haven for investors, and Trump’s promise to lower taxes and reduce capital-gains rates could spur additional investment here. An area to watch would be the industrial market: Trump’s plans to renegotiate trade agreements may pose a level of uncertainty for Miami. Global trade and job growth have been a catalyst for the growth of Miami’s industrial market.”

 

Liza Mendez, Realtor

“Some portions of the market have been at a standstill, waiting the results. Now that we know the direction, the marketplace will start to make decisions on what is best.” But Mendez is most optimistic about “getting our government to actually work on the issues and provide solutions rather than gridlock.”

Source: Miami Herald

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How Elon Musk Is Making Solar Panels ‘As Appealing As Electric Cars’

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Tesla Motors (Nasdaq: TSLA) and sister company SolarCity (Nasdaq: SCTY) unveiled new solar roofing tiles at an event on Friday at Universal Studios in Los Angeles.

“The concept behind the new technology is to make solar panels “as appealing as electric cars,” Musk told the audience. “The goal is … to make solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and an installed cost that is less than a normal roof plus the cost of electricity,” Musk said. Musk is also chairman of SolarCity, which Tesla plans to buy in a $2.2 billion acquisition deal.

Traditional solar panels typically have photovoltaic cells assembled on a rectangular glass frame that sits on top of a roof. Tesla and SolarCity have updated the look by embedding technology that converts sunlight into electricity within glass roofing tiles. The goal is to make solar panels less of an eyesore and more of what consumers would like to install on their modern homes. Musk showcased various types of solar roofs, which were set up on mock buildings around the studio.

tesla-roofing-tilesTesla will make four variations of the glass roof tiles: an American-style textured glass tile; a French slate roof tile; one with a smooth, modern look; and a Tuscan tile that mimics Italian terracotta roofing. SolarCity will begin making solar products next summer at a factory in Buffalo, New York. In addition to the solar panels, Musk also revealed new versions of its batteries for buildings and the power grid. Tesla’s newest generation Powerwall 2 will cost $5,500 and can provide 14 kilowatt-hours of electricity, which is enough juice to power a four-bedroom home for a day.

“People always think of Tesla as an electric-car company, but really the whole point of Tesla was to accelerate the advent of sustainable energy,” Musk said.

After Tesla merges with SolarCity, the combined company is expected to achieve more than $150 million in cost savings in its first year. Additional information about the proposed merger is planned for Nov. 1. Shareholders on each side of the transaction are scheduled to vote on the merger on Nov. 17.

Tesla just reported third-quarter profits of $22 million, or 14 cents per share, beating Wall Street’s expectations. It’s the first quarterly profit Palo Alto-based Tesla has reported since the first quarter of 2013.

In January 2015, Tesla Motors of Florida Inc. signed a lease for a 2.57-acre, 33,750-square-foot warehouse in Interstate Park, 100 S. Lake Destiny Drive near Eatonville, where the car maker built out a showroom, sales center, service center and charging station. This was a second Central Florida location for Tesla Motors Inc. (Nasdaq: TSLA), as the company in 2013 opened a ministore and service center in Longwood.

Musk‘s SpaceX rocket company also has a significant presence on Florida’s Space Coast, where it launches its Falcon 9 rockets from NASA’s Kennedy Space Center.

 

Source: SFBJ

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Insider Reveals Deceptive Strategy Behind Florida’s Solar Amendment

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The policy director of a think tank supported by Florida’s largest electric utilities admitted at a conference what opponents have claimed for months: The industry attempted to deceive voters into supporting restrictions on the expansion of solar by shrouding Amendment 1 as a pro-solar amendment.

Sal Nuzzo, a vice president at the James Madison Institute in Tallahassee, detailed the strategy used by the state’s largest utilities to create and finance Amendment 1 at the State Energy/Environment Leadership Summit in Nashville on Oct. 2.

Nuzzo called the amendment, which has received more than $21 million in utility industry financing, “an incredibly savvy maneuver” that “would completely negate anything they (pro-solar interests) would try to do either legislatively or constitutionally down the road,” according to an audio recording of the event supplied to the Herald/Times.

Nuzzo offered others a recommendation: “As you guys look at policy in your state, or constitutional ballot initiatives in your state, remember this: Solar polls very well,” he said. “To the degree that we can use a little bit of political jiu-jitsu and take what they’re kind of pinning us on and use it to our benefit either in policy, in legislation or in constitutional referendums — if that’s the direction you want to take — use the language of promoting solar, and kind of, kind of put in these protections for consumers that choose not to install rooftop.”

The comments underscore the claims made by opponents to Amendment 1 on the November ballot that the utility-backed political committee, Consumers for Smart Solar, was formed to undercut attempts to allow third-party sales of rooftop solar by leaving voters with the impression that their rival amendment will expand solar generation in Florida.

Spokeperson for Consumers for Smart Solar, Sarah Bascom, however, contradicted Nuzzo’s claims and told the Herald/Times late Tuesday that “Consumers for Smart Solar did not engage or hire or ask JMI to do research regarding the effort.”

Robert McClure, executive director of the Tallahassee-based James Madison Institute, responded to this report and said Nuzzo “misspoke” when he characterized the effort as a strategy to deceive voters into thinking the plan was a pro-solar amendment.

“At an event with an unfamiliar, national audience, Mr. Nuzzo generalized his commentary and misspoke in reference to JMI partnering with Consumers for Smart Solar in any capacity,” McClure said in a statement. “JMI has never worked with or received funding from Consumers for Smart Solar,” McClure said in a statement. “We have released policy positions on both solar amendments and have publicly spoken on the pros and cons of each.”

The solar industry-backed group, Floridians for Solar Choice, wants to encourage a broad-scale solar market in the Sunshine State by using the state Constitution to remove the ban on third-party sales and require lawmakers to allow customers to lease their solar generation to neighbors or building tenants. But the effort failed to get enough signatures to appear on the November ballot. It is expected to return in 2018.

Threat To Utilities

Utility investors, like Warren Buffett, and the industry’s trade group have warned that distributed energy from solar and wind are long-term threats to the monopoly economics model of the investor-owned utilities. Floridians for Solar Choice claim that the amendment attempts to convince voters that it is pro-solar when it “paves the way for barriers that would penalize solar customers” and adds to the state Constitution “the false assumption that solar customers are ‘subsidized’ by non-solar customers.”

Nuzzo confirmed that he made the comments while on a panel for the conference. He disagreed that the strategy was deceptive and instead claimed that the opponents of Amendment 1 “have been rather deceptive about the degree to which solar is already incentivized and already propped up and subject to more crony carve-outs than anything else.”

In mailers and television ads for Amendment 1, the utility industry says it will allow customers to “strengthen your right to generate your own solar energy … protect consumers, particularly our seniors, from scam artists … and protect consumers who don’t choose solar from having to pay higher monthly electric bills.”

The Florida Supreme Court approved the amendment language in a 4-3 vote, concluding the proposal was not misleading but did enshrine into the Constitution protections consumers already had. Justice Barbara Pariente, in her dissenting opinion, called the language “a wolf in sheep’s clothing” because it would allow utilities to raise fees on solar customers and was “masquerading as a pro-solar energy initiative.”

In the hour long audio recording acquired by the left-leaning Center for Media and Democracy and the Energy and Policy Institute, Nuzzo told the group that the utility-backed amendment was motivated in part by the popularity of the solar industry’s proposal and their ability to win the support of free-market advocates.

“They actually leveraged some of the less savvy, less informed, tea party groups and formed what is now called the Green Tea Movement — God help us, we’re dead and destroyed,” Nuzzo said. “So they come in and they merge and they start a constitutional ballot initiative. They go out and sell a ballot initiative saying if you put solar on our rooftop, shouldn’t you have ability to sell to your neighbor? Yes, that’s free-market … that’s exactly what they were marketing as a free market principle and the tea party got behind this.”

Who Pays For Grid?

He said JMI, a free-market research and policy organization that has ties to the Florida utility industry, saw it differently. Nuzzo explained that they believe that solar users are being subsidized by non-solar users because they don’t pay for the fixed costs of maintaining the electricity grid.

“So here’s the James Madison Institute, this right-wing think tank, the Koch Brothers-funded group, part of the vast right-wing conspiracy going ‘please stop!’ ” he said. “They wouldn’t stop, so the idea was that they were completely and vehemently opposed to any grid maintenance cost being spread out.”

Nuzzo said that his reference to the Koch brothers was “in jest” but that they had given money to JMI. Nuzzo would not say how much. According to federal tax documents, JMI has received more than $120,000 from the Charles Koch Institute and Charles Koch Foundation, and Stan Connally, the CEO of Gulf Power, sits on JMI’s board of directors. Gulf Power and its affiliates have contributed more than $2.3 million to the utility-backed amendment, which also has received funding from Florida Power & Light, Duke Energy, Tampa Electric Co., and non-profit groups primarily funded by Exxon and the Koch brothers.

Adding to the utility industry’s dilemma, Nuzzo told the panel, was the fact that the solar-industry-backed amendment “was actually polling in the 70s.”

“Why? Because the tea party was behind it,” Nuzzo said. “We even saw some folks that we would normally play pretty well with — the chambers of commerce locally, the business community — was kind of galvanizing behind it. Why? Because if you’re not a utility generating organization, this kind of helps you because it makes it a little bit easier for you to go that route and sell it. The other problem with the pro-solar amendment is that the language of the ballot initiative is mandating in the Florida Constitution that solar is the preferred energy source in the state of Florida. It directed in the Constitution that the Legislature create policy to advance solar interests in the state. So the utility industry came to JMI and said you guys are the adults in the room, you’re the ones that have access to the research, to the scholarship … to a lot of the national organizations. We need some help.”

‘Savvy Maneuver

Nuzzo said that the utilities also created a political committee, Consumers for Smart Solar, that not only funded the JMI research but then “also, in what I would consider an incredibly savvy maneuver, they put forth their own constitutional ballot initiative.

“That ballot initiative also gathered the 700,000 signatures, but what it said was individuals have the right to own solar equipment, they have the right to install solar equipment and lease it, they have the right to generate as much electricity as they can.”

Nuzzo said JMI partnered with the conservative Heartland Institute and a free-market researcher from Florida State University’s Devoe Moore Center to conduct the research requested by the utility industry. Consumers for Smart Solar said did not clarify whether or not the organization reached out to these groups for the research assistance.

Together they “built a model” and, in a report released in December, concluded that over 10 years if the solar industry-backed amendment was approved, the cost of maintaining the electricity grid would be shifted from solar customers to non-solar customers — a $1 billion cost shift “from wealthy solar consumers on to the folks who were not able to install and to the rest of the ratepayers.”

It’s an argument solar promoters vigorously disagree with. They argue that instead of costing non-solar customers more, solar energy brings more value to the electricity distribution system than it takes away. Floridians for Solar Choice argues that instead of protecting customers, Amendment 1 imposes barriers to solar expansion in Florida that will cost customers more money in utility bills.

They point to a Brookings Institution study in May that concluded that when solar customers sell their power back to the electric utility through a billing system known as net metering, it helps non-solar customers by reducing the need to build new power plants to meet peak demand, reduces the need for costly grid maintenance, reduces reliance on oil and gas power generation, lowers utility rates, increases energy security and saves customers money.

“The economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers,” the Brookings report concluded. “Far from a net cost, net metering is in most cases a net benefit — for the utility and for non-solar rate-payers.” The report also cited several state-based studies that offered similar conclusions.

Nuzzo acknowledged Tuesday that the JMI research looked only at the hypothetical impact of the solar industry-backed proposal and did not take into consideration the net metering studies done by governments in many other states, including those that allow third-party leasing. He said he considers Florida’s current net metering law, which pays customers retail rates for the excess energy they sell back to utilities “absolutely the subsidization of solar.”

Also at the Oct. 2 meeting, Todd Wynn, director of external affairs at Edison Electric Institute, the trade association for investor-owned utilities, detailed the threat net metering poses to the industry. None of the presenters made any mention of the Brookings report or the reports from several states that have studied the impact of net metering on customer bills.

“If a homeowner had a large enough solar power system, they could essentially zero out their bill,” Wynn said, arguing that the cost of maintaining the electrical grid would then be borne by the non-solar customers.

He suggested two solutions are to charge all customers to access the grid, and the other is to reduce the net metering rate so that the utility will not have to pay retail rates for the excess energy. When asked about what impact Amendment 1 would have to any pro-solar amendment in the future, Nuzzo told the Energy Summit that it is likely to severely limit the Solar Choice amendment in 2018.

“If Amendment 1 passes, in my opinion and the opinion of people far smarter than me, it would completely negate the ability of the Green Tea movement folks to make a ballot initiative that would include subsidization and a cost shift on it,” he said. “It would cancel — it would attempt to cancel — that one out.”

David Pomerantz, executive director of the Energy and Policy Institute, one of the groups that obtained the tape, said the audio reveals that the groups behind Amendment 1 “were very clear about the utilities’ plan when they thought the public wasn’t listening: They’re trying to confuse voters into believing their utility-backed ballot initiative is pro-solar.

“It’s a dirty trick, and Floridians should show them that they’re too smart to let them get away with it.”

 

Source: Miami Herald

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Millennials Shaping The New Wave Of Commercial Development In Miami

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Whether it’s Wynwood, downtown Miami or Miami Beach, commercial developers and brokers are starting to look toward one demographic above all others for how they market and sell their projects: millennials.

So said a panel of industry heavyweights during “Commerical Outlook: Examining the flurry of activity across South Florida’s retail, hospitality and office markets,” at recent The Real Deal’s South Florida Showcase & Forum.

From left: Stuart Elliott, Steven Kamali, Lyle Stern, Keith Menin, Donna Abood and Tony Cho

From left: Stuart Elliott, Steven Kamali, Lyle Stern, Keith Menin, Donna Abood and Tony Cho

Panelists included Donna Abood, principal of Avison Young’s Miami branch; Keith Menin, principal of Menin Hospitality; Tony Cho, president of Metro 1; Lyle Stern, president of the Koniver Stern Group; and Steven Kamali, founder of Hospitality House. TRD‘s Editor-in-Chief Stuart Elliott was the moderator.

“The millennial way of thinking has already started filtering into Miami’s evolving office market,” Abood said. “All Aboard Florida is building more than 800 market-rate rentals right next to its Class A offices as part of the MiamiCentral development in the downtown area. The project also has a built-in transit hub — a detail that helped convince global media company Cisneros to lease 30,000 square feet of office space before the project even opened. They’re speaking millennial languages. These guys don’t want to own cars, they don’t want to own homes.”

Abood added that the overall office market in Miami has been starved of supply, leaving brokers frustrated as potential tenants leave Miami-Dade County for greener pastures.

“We are tight on office space to the extreme,” Abood said. “Condo developers took prime sites that were really meant for offices. Since there’s been a dearth of new construction, the trend has been for investors to scoop up Class C or Class B office buildings and renovate them. Co-working operators like WeWork have also proliferated as smaller businesses and startups seek affordable office space.”

That’s been the case in Wynwood more-so than anywhere else in Miami, where companies have transformed a swath of the neighborhood’s aging warehouses into hip workspaces and shops.

“There’s still a big gap to fill for development in Wynwood. Top-shelf retail space in the neighborhood is pushing $100 per square foot and land prices are rising as a result,” Cho said.

His firm recently brokered the $53.5 million sale of nearly an acre to the Gindi family, which is planning to build a new two-story retail project.

“It won’t be long before Wynwood starts seeing hotel projects,” Cho said. “Wynwood is underserved in terms of hospitality leaving room for one or even several new hotels. Metro 1 is already in talks with several operators.

Outside of Wynwood, Cho said he’s also working on a dual-branded hotel in Brickell that’s geared toward the middle market instead of luxury.

“The first developer is a little bit scared,” Cho said. “But once the first person does it, everybody’s going to follow.”

One major point of fear: Zika, the mosquito-borne virus linked to birth defects, which made landfall in Wynwood earlier this year and wreaked havoc on local businesses as tourists avoided the neighborhood. Cho said the situation was overblown in the media, and that Wynwood’s retail market quickly bounced back once Gov. Rick Scott declared the neighborhood a Zika-free zone in September.

Menin conceded his hospitality firm hunkered down for the Zika fallout amid an already slow summer season, cutting costs as much as possible, paying staff quarterly and offering incentives to guests and events ahead of any drops in occupancy. “For us, we really just watch every dollar and every cent,” he said.

Stern was also keeping his fingers crossed, hoping a cold winter in the Northeast would keep business flowing to South Florida. “Usually around Yom Kippur, we start praying for icebergs in the Hudson,” he said. “That’s not always going to be the case.” He added that though business may be slowing in Miami’s already well-established neighborhoods, Miami River and especially Allapattah are seeing a boom in property sales — and development will likely follow soon.

Stern said two major investors have scooped up almost 20 acres of industrial properties in Allapattah over the past several years, totaling some $40 million in transactions. And with a swath of new national retailers coming to Brickell City Centre and Miami Worldcenter, the surrounding neighborhoods are poised to see a wave of hip street retail and restaurant concepts fill in the gaps.

“If you drew an arc from New York to Chicago to Las Vegas, there’s not another city in that entire arc that has the number of restaurants doing over $8, $10, $12 and $15 million dollars in business that we do in the Miami market,” said Stern.

 

Source: The Real Deal

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Coral Gables Paves The Way For Development On Land Where Police Department Sits

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The Coral Gables Police Department isn’t leaving its current building just yet, but if it moves, a future owner will have more flexibility to develop the space.

2801 Salzedo Street, Coral Gables

2801 Salzedo Street, Coral Gables

Commissioners gave initial approval to measures that change the current police department headquarters, 2801 Salzedo St., from public building use to commercial high rise and from special-use zoning to commercial zoning. The changes come almost a year after the city said it might build a new police headquarterson a city-owned parking lot at the corner of Salzedo Street and Alcazar Avenue.

City Manager Cathy Swanson-Rivenbark said her staff plans to present the latest recommendations at a future meeting. The zoning and land-use changes would not prevent the space from continuing to operate as police headquarters.

“A government building can be in a commercial area. A commercial building cannot be in a government area,” Swanson-Rivenbark said. “It doesn’t preclude our operation of 2801 Salzedo as a government facility.”

City staff estimated the cost of building a new facility on another lot or renovating the current building at $17 million to $33.5 million last year. Those estimates and proposals would also put the fire station that’s housed at the public safety building on Salzedo in the new building or create a new stand-alone fire station there. Both items will require a second vote at a future meeting before they become official.

 

Source: Miami Herald

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Miami Urban Development Review Board Green Lights Three Major Projects

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Miami’s Urban Development Review Board gave the thumbs up to three mixed-use projects in Brickell, Coconut Grove and Little Havana.

Maizon by Zom rendering

Maizon by Zom rendering

The board voted 4-0 to recommend approval for Zom’s new apartment tower in the Brickell neighborhood. The board’s Wednesday vote allows the Orlando-based developer to now seek the go-ahead from Miami planning director Francisco Garcia for Maizon, a 262-unit residential building with 15,258 square feet of ground floor retail space.

“Very nice work,” said board member Jesus Permuy of the project’s design. “I like the articulation of the building.” Agreed his colleague Anthony Tzamtzis: “It is a very good project.”

Permuy did recommend a few minor design changes such as improving the landscaping in the building’s setback areas as well as the facade by adding a three-dimensional element.

Zom, which has a contract to purchase land owned by Maria Ramon and Alberto Cabrera, would demolish low- to mid-rise apartment buildings at 1100-1142 Southwest Second Avenue and 221-237 Southwest 12th Street and replace them with the new tower. The project will consist of 424,258 square feet with 366 parking spaces and 24 bicycle spaces. It will also include open courtyard areas, an amenity deck and pool on the ninth floor, and an onsite residential leasing center.

Zom sought approval recommendations of four waivers, including a 30 percent reduction in parking, a 10 percent reduction in a driveway width and to replace the required commercial loading zone with two residential loading zones.

Cassa Grove rendering

Cassa Grove rendering

The development review board also approved plans for Cassa Grove, a 116-unit, 200,000-square-foot project at 2900 Southwest 28th Lane that is located near the 10-mile long Underline.

“This building has a lot of potential in redeveloping this area,” said boardmember Felix Perez. “This is the type of project that this park needs.”

The 12-story project is being developed by Miami-based MEC Development Associates and B Developments and New York-based Abington Properties. The transit-oriented development features luxury apartments ranging from 652 square feet to more than 1,300 square feet, a 3,600-square-foot commercial component, and shared workspaces for residents. It will also feature a public plaza on the ground floor and a sky deck.

In order to make the project work, the developers sought four waivers, including a 10 percent reduction in parking. ALFA SF Equity and B Developments bought the 1-acre property for $6.1 million.

“We are trying to make a nice, high-end apartment building,” said B Development principal Miguel Angel Barbagallo. “We are very committed to linking with the Underline. I think it is a great public space.”

Eight and First rendering

Eight and First rendering

The board also approved Eight and First Development’s plans for a 12-story, 96-unit residential building at 45 Southwest Eighth Avenue in Little Havana. The property owners, Ana V. and Pedro O. Rodriguez, submitted plans for the mixed-use project to include 44,525 square feet of commercial space, 311 parking spaces and 15 bicycle parking spaces. The retail space will be anchored by a 35,930 square foot Presidente Supermarket.

 

Source: The Real Deal

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BOMA Forecasts Sunny Outlook For Miami-Dade’s CRE Industry

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The commercial real estate market outlook for Miami-Dade: Sunny, as long as more mass transit is on the horizon, said industry experts at the Building Owners and Managers Association of Miami-Dade’s 2017 Commercial Real Estate Outlook event.

In the office market, rents are at an all-time high in certain sub-markets, said Brian Gale, Cushman & Wakefield’s vice chairman of Brokerage Services who represents nearly 5 million square feet of office space in South Florida.

On Brickell, office space is hitting around $60 a square foot for Class A space; back in 2008 the high was in the upper $40s, said Gale, during the panel discussion at the East Miami in Brickell. Downtown Miami is just behind it, and Aventura and Airport West have also hit all-time highs, too, he said. Coral Gables presents a different story, he said. In 2007-08, rent in the trophy buildings was $46-$48 a square foot; today it’s the low $40s.

“For many years, Coral Gables was the darling of the office market. I would say it has a temporary black eye with less demand and blocks of spaces still existing. But Coral Gables also has the most to gain,” Gale said.

Gale sees the South Miami market as vaulting too, once new mass transit options fully kick in for the area.

“The traffic on Useless 1 is not getting any better. … Miami Beach needs to figure out a way to get light rail over there.” Gale said. “Rental rates will continue to increase in 2017. Looking further out, being a gateway city … there is no reason to believe we couldn’t be a $70 rental market in 2022.”

Growth in shared office spaces has exploded — for instance, WeWork recently leased 65,000 feet at Brickell City Centre and there are now more than 20 shared workspace centers in downtown Miami alone. Sometimes these shared office centers can act as an incubator for a building; when the companies grow out of the co-working space they take space on other floors, Gale said. In the broader office market, expect more smaller offices, with more open spaces and cubicle areas on the outside of the floor with the glass-walled offices in the center, he added.

In the industrial sector, with job growth projected to slow in 2017 and 2018, is that a concern with 1.8 million square feet coming online in 2017 and 1.4 million in 2018?

“That’s actually less than half of what we have seen in 2015 and 2016.” said JLL Managing Director Brian Smith, who led the team representing NBC Universal/Telemundo Enterprises in the record breaking lease of over 550,000 square feet for a world headquarters broadcast center in western Miami-Dade.

He said he looks more closely at population growth. In both the office and industrial markets, new-to-market tenants are pushing the records. The last three years have brought more than 700,000 square feet of new-to-market office tenants. But that’s more than the previous 15 years combined, Gale said.

The last two years saw 300,00 square feet of new-to-market industrial tenants, but this year it will be 2 million and perhaps 3 million square feet.

“John Deere, new names. We have quickly become one of the most important industrial markets on the globe,” said Smith. “Three large deals in the works may be the biggest ever, in addition to the NBCUniversal deal.”

To be sure, urbanization has transformed the retail landscape, with Miami’s downtown population now approaching 90,0000 people, a 30 percent increase since 2010, with an incredibly affluent demographic, said David Moret, president of Highline Real Estate Capital, which acquires and redevelops office and retail properties with capital partners.

Retail rents are in the stratosphere on Lincoln Road, surpassing $300 a square foot. They are hitting $200 in the Design District and Coconut Grove and Wynwood are flirting with $100 a foot, Moret said. How far will they go?

“I think we have gotten ahead of ourselves,” Moret said. “ I think there will be a reset. … We are already seeing resistance. We are seeing leasing volume way down on Lincoln Road.”

He sees the biggest impact coming from millennials, a group that will have the most spending power by 2017. This means tenant mix is more important than ever.

“Successful centers are going to be about creating experiences, to give people a reason to go there instead of click on their phone,” said Moret.

 

Source: Miami Herald

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Is Downtown Miami About To See Retail Overload?

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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.

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