Coral Gables Transforming With Mixed-Use Projects

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Public art, pedestrian-friendly developments, and a booming commercial sector are all part of the future of Coral Gables, commercial real estate experts discussed at a panel last Wednesday.

Clockwise from left: Renderings of Paseo de la Riviera, a curbless Giralda Avenue and the Mediterranean Village at Ponce Circle

Clockwise from left: Renderings of Paseo de la Riviera, a curbless Giralda Avenue and the Mediterranean Village at Ponce Circle

Paseo de la Riviera is among the new projects. The planned, mixed-use development will replace an existing Holiday Inn with a open-air “paseo,” hotel and residential tower, said developer Brent Reynolds, president and managing partner of NP International. “We felt the U.S. 1 corridor was the right location,” said Reynolds, one of the panelists at a CREW-Miami luncheon at the Four Seasons Hotel Miami on Brickell.

The 2.66-acre project, located at 1350 South Dixie Highway, will activate that corner of U.S. 1 and Caballero with transit-oriented development, which includes green space the 0.5-acre Paseo will provide. It will be across the street from the planned Underline linear park, which runs underneath the Metrorail, as well as the University of Miami.

The paseo, or walkway, will span 352 feet in length and 72 feet in width. A 10-story, 252-key hotel and an eight-story, 224-unit residential building with 838 parking spaces will replace the 155-room Holiday Inn. “There really is no amenity space like this in the south Gables,” Reynolds said during the event.

The developer plans to complete the approval process with the city in October and begin construction next year. Coral Gables architect Jorge L. Hernandez and international firm Gensler are designing the project.“There really is no amenity space like this in the south Gables,” Reynolds said during the event.

Also among new developments redefining the Gables is Mediterranean Village at Ponce Circle. The 6.7-acre, mixed-use complex, developed by Agave Ponce, will include a five-star, 184-key hotel; a 300,000-square-foot Class A office building; 300,000 square feet of retail; two condo towers; 15 townhomes; a rooftop restaurant; and parks. Panelist Eddie Avila, president of Key Realty Advisors Development, said the $500 million project will span three full blocks and keep all streets open.

It will also feature an underground loading zone, keeping most of the street parking. To maintain the pedestrian-friendly design, the developers have decided to move the hotel entrance to inside the complex. The developer will spend an additional $7.8 million for public spaces including art, Avila said during the panel.

Downtown Coral Gables by the numbers

Downtown Coral Gables by the numbers

The city is also investing in pedestrian-friendly and green spaces. Funding for the $20 million streetscape improvements was approved back in August 2014: 50 percent will come from the city of Coral Gables and the other half from the independent BID property owners. The Gables BID is fully funded by its members, Foglia said. Marina Foglia, a panelist and executive director of the Coral Gables Business Improvement District, has led the $20 million Miracle Mile and Giralda Avenue streetscape project. Foglia also advocates for the overlay district, which will “change the coding to activate downtown Coral Gables,” she said.

Cooper, Robertson & Partners designed plans for the project, which calls for more green spaces and improved pedestrian areas, such as wider sidewalks, outdoor dining areas and mid-block parks and plazas. Parking on the street will be entirely parallel, doing away with the 45-degree angled spots for more sidewalk space. Giralda Avenue will become curbless, with the option of closing the road off to vehicles for special events. Next, Coral Gables will hold a design workshop on Aug. 27. The streetscape project will break ground in January, Foglia said.

Panelist Jane Tompkins, development services director for the city of Coral Gables, named other new projects that are under construction, including the Aloft Hotel at 2524 LeJeune Road; 2020 Salzedo, a residential project; and the University of Miami Health Center. More have been approved, including 4311 Ponce de Leon and 1200 Ponce de Leon. “We have a lot going on,” Tompkins said. “We have several projects under way.”

 

Source: The Real Deal

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Thirty Story Mixed-Use Tower Coming To North MIami Beach

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An Argentine developer, who is not named, is planned on building a thirty story mixed-use apartment tower at 1700 Northeast 164th Street in North Miami Beach, currently a parking lot.

[Photo via Google Earth]

[Photo via Google Earth]

The site is further west than most new development in the area, which are concentrated along the Biscayne Boulevard corridor, but is a few blocks east of the old 163rd Street Mall and its Walmart Supercenter, and will be one of the tallest buildings in the area.

1700 Northeast 164th Street in North Miami Beach

1700 Northeast 164th Street in North Miami Beach

 

 

 

 

 

Source: Curbed Miami

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Out-Of-Town Buyers Reshape Miami Real Estate Design

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Out-of-town buyers aren’t just snapping up Miami’s prime real estate — they’re also changing the way luxury developers build.

As more out-of-towners decide they want to put down roots in South Florida rather than simply buy investment properties for the rental market, they’re asking for bigger, better, more expensive designs. Units equipped with quarters for a nanny or maid. Guest suites for visiting relatives and friends. High-tech security with biometric identification.

Those requests come from both Latin Americans, who have driven Miami’s latest real estate boom, and wealthy Americans, who are appearing locally in greater numbers. Some developers, hoping to lure a growing pool of Chinese buyers, are even turning to “feng shui” consultants who specialize in the eastern art of balanced design.

“Foreign investment has completely changed our entire landscape from an architectural standpoint,” said Daniel de la Vega, president of One Sotheby’s International Realty. “People are bringing their families here to spend time, and that changes their needs. One Sotheby’s now advises all developer clients building units greater than 3,500 square feet to include live-in quarters for a maid or nanny,” de la Vega said.

At Paramount Miami Worldcenter, a luxury condo tower planned for downtown Miami, about 80 apartments out of a total 513 have a bedroom and bathroom — called a “lockout suite” — branching off from the main entrance near the unit’s private elevator. The studios, between 250 and 280 square feet, are envisioned as space for a maid or nanny, although they could also be used for teenage children who squawk for privacy or an elderly parent who needs quiet, said Peggy Fucci of OneWorld Properties, sales lead for the project. Units with a lockout suite start at about $1.5 million, or $650 per square foot.

In past projects, Fucci said, “we had people buying small units in addition to their main purchase because they wanted a place for the maid.” Now they expect that space to be available as part of their units.

Look To The Roofs

Families like to entertain and, in Miami, that naturally means enjoying the outdoors. Large outdoor terraces and elaborate rooftops are becoming the norm for high-end developments.

MiamiRealEstateDesign-OasisParkRoofIn single-family homes, the need for rooftop-space is partially driven by high land prices and small backyards. At Oasis Park Square, a 150-unit single-family home development marketed to Venezuelans, some backyards are large enough for a 392-square-foot pool. But the flat rooftops — tricked out with a jacuzzi and the option of a summer kitchen, as well as a bathroom — are where many homeowners will entertain. That wouldn’t be possible in Miami’s traditional Mediterranean style of building, which usually uses low-pitched tile roofs. The rooftops on these modernist homes are between 1,300 and 1,900 feet of open space. That’s more than a third of the size of many houses, which range from 3,300 to 4,000 square feet.

“The buyers find rooftop space very attractive,” said project architect Francillis Domond, who grew up in Venezuela. “Venezuelans have large extended families, and it’s very common to get together for family events at least every month.”

Oasis Park developer Masoud Shojaee of Shoma Group said when interviewed all but nine of the homes, which run from $1.15 million to more than $2 million, have already sold, with the majority going to Venezuelan buyers. “There is so much product on today’s market that you have to give the buyers exactly what they want,” Shojaee said.

Family Ties

MiamiRealEstateDesign-Aria on the Bay-PlayroomFamilies also need places for children to play.

“Kids’ rooms in condos used to be an afterthought,” said developer Carlos Melo, co-owner of the Melo Group. For a project called Aria on the Bay that will open in fall 2017, Melo plans to include a 2,360-square-foot play room for children, equipped with toys, board games, rock-climbing, pingpong, televisions — and cameras linked up to the security room to soothe nervous parents. One of the project’s four swimming pools will be a shallow “kiddie” pool.

Melo said he thinks that some younger couples accustomed to life in Miami’s downtown and other major cities may not want to give up their urban lifestyles for the suburbs. Instead, he argues, they’ll look for high-rises with enough space for kids. “We are expecting a new generation of young families who want to live in the city,” Melo said.

Down From The Northeast

Domestic buyers are also making more of an impression on Miami’s market — meaning some developers are focusing on public transit, smaller units and semi-urban projects common in other big American cities.

Statistics on where exactly those buyers are coming from aren’t precise, said Ron Shuffield, president of EWM Realty International. But he said that through the first six months of 2015, the number of luxury buyers in Miami-Dade County, home of Miami, listing a New York address is up roughly 20 percent over the same period in 2014.

Anastasia Townhomes

Anastasia Townhomes

That’s important because the number of foreign buyers has been slowing as currency crises rock economies in Latin America and Europe. Cash sales — which often indicate international buyers — were down 12 percent in Miami-Dade in June 2015 compared with June 2014, according to the Miami Association of Realtors.

Santander Townhomes

Santander Townhomes

Townhomes are one sub-market that have appealed specifically to New York and northeast buyers, said Shojaee of Shoma Group. His firm built a 10-unit townhome project called Anastasia and has another 10-unit project called Santander scheduled to open by year’s end. The two-story walk-up homes at Santander are made from coral rock and start at $1.35 million for 3,000 square feet. Most buyers have been domestic.

New Balance

Chinese buyers also are growing in numbers, although they accounted for only 2 percent of international deals in South Florida in 2014, according to a report by the National Association of Realtors. But that’s double the number from 2012. Local brokers have visited Beijing to pitch buyers, including Ugo Colombo’s CMC Group.

And Paramount Miami Worldcenter has even hired Claudine De Bolle, a Miami-based feng shui consultant, to help make sure the condo’s common spaces have the right feel for Chinese buyers.

“It’s important for Chinese buyers to know the project was designed with feng shui because it is associated with good luck and prosperity in their culture,” De Bolle said.

De Bolle said she recommended that developers replace a lobby chandelier that was too angular in its design with one that used smoother features. “The chandelier was very beautiful, but it was very pointed coming down from the ceiling and it felt like a threat,” she said. Other recommendations included placing a fireplace in the lobby to balance the other feng shui elements of wood, earth, metal and water, and using matte tiles instead of a shinier material to slow the energy of a ninth-floor conservatory meant for reading and relaxation. Chinese buyers have accounted for about 15 percent of sales so far, according to developers.

Part of the reason South Florida has been so attractive to out-of-towners looking to buy a vacation home or relocate is because it is well-priced compared with other global cities. Urban apartments in London ($2,948 per square foot), New York ($2,024 per square foot) and Moscow ($1,243 per square foot) are all much pricier on average than Miami Beach ($760 per square foot), Miami ($475 per square foot) and Fort Lauderdale ($400 per square foot), according to research compiled by EWM in 2014.

And for developers there is a clear advantage to building and marketing buildings for end-users rather than investors. “Investor-dominated buildings face risks from fluctuations in foreign currencies,” said Jack McCabe, a housing market analyst based. But focusing on the high end of the real estate market means home prices and rental rates in Miami — already some of the nation’s highest compared with median income — won’t see any relief, he added.

“There’s very little that you would consider to be affordable that’s under construction,” McCabe said. “The developers have been targeting the sweet spot of the buyer pool, which is primarily affluent cash buyers.”

And if currency crises persist and some foreign buyers can’t close, some projects may go under or have to reduce prices.

“The upper end is almost like a separate market,” McCabe said. “The prices are so high above the rest of South Florida that we’re likely to see a correction just in the luxury end of the market if there’s not enough demand.”

 

Source: The Bulletin

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Coral Gables Zoning Board To Consider Mixed-Use High-Rise Along South Dixie Highway

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Developers are looking to build big in Coral Gables, this time along South Dixie Highway.

Paseo de la Riviera, a mixed-use project that would replace the old 155-room Holiday Inn across from the University of Miami, will come before the city’s planning and zoning board on Wednesday, Aug. 12.

Paseo de la Riviera - 2The project application details the plans to revamp the strip-mall-dominated corridor on U.S. 1 that splits Coral Gables. Proposed are a 13-story residential building with 234 units, and a 10-story hotel with 252 rooms.

Built on 2.7 acres, the main building will be 142 feet tall, have 4,380 square feet of restaurants, 14,094 square feet of retail, and 903 parking spaces, as well as three sculptures. The project would feature shops and restaurants on the ground floor and a pedestrian passage, dubbed the “Paseo” (72 feet wide, 325 feet long) connecting to the adjoining neighborhood.

This isn’t the first venture of its kind flowing through the city’s pipeline. A barrage of high-density projects have been approved, some already under construction or currently in the process of being birthed, stirring heated debate among Gables residents and elected officials.

Paseo de la Riviera - 3In June, commissioners approved the Mediterranean Village project at Ponce Circle — more than one million square feet of condos, hotel and commercial space just three blocks south of Miracle Mile on Ponce de Leon Boulevard. That project sparked deep conflict, creating major division in the community. Some feared the city’s proud tradition of scrupulous planning and highly controlled development would come to an end, bringing in loads of outsiders and traffic.

Paseo de la Riviera - 4Others, however, were firm that the mixed-use enterprise would bring growth and rejuvenation to the city’s downtown area, all while honoring Gables founding father George Merrick and his scenic vision of a Mediterranean promised land.

Although Paseo de la Riviera is smaller in scale, the plans have divided residents of the single-family neighborhood who live directly behind it.

Wayne “Chip” Withers, who served as a city commissioner from 1991 to 2011, has lived off Hardee Road and Maynada Street for more than 60 years.

“If you look at the city of Coral Gables, it is very well planned. You don’t have really tall commercial buildings butting up directly with a residential neighborhood,” Withers said, adding that his major concern is the reasoning behind the Paseo. “At the end of the day the overriding question is: What’s the reason we’re doing this? Does the city need tax dollars? What is the pressing reason? To appease the developer? Or is it something that is really gonna be beneficial to this city and to this neighborhood. Why are we allowing it to be up to three times taller than the Holiday Inn?”

Henry Piñera, 39, said the Paseo could possibly reshape the South Gables and its tight-knit neighborhoods, serving as a lunching pad for other high-rise developers to move in, build and make some money.

“We know that this is going to be the domino effect that sets everything off. From an overall Coral Gables perspective, no other building would be this tall outside of the downtown area,” said Piñera, who lives on Aduana Avenue with his wife and two young daughters.

He said the Riviera neighborhood already experiences intense cut-through traffic because of congestion on U.S. 1. He says the new project wouldn’t be what he “bought in” for.

“I made the decision to purchase and renovate this house because this is where I’m going to raise my kids. This particular building is so massive that it will have a huge impact. You’re taking the density and roughly making it three-and-half-times larger than the Holiday Inn,” he said. “Not only that, but the project overlooks Jaycee Park, one of the reasons why I bought into the neighborhood.”

Developers however, see the location as a benefit to residents, saying the project has strategically been placed in a transportation hub — right across the street from the University of Miami, Metrorail, trolley route stop, bike paths, as well as on the block of a future pedestrian bridge.

“That’s what makes this site special,” said Jorge Hernandez, who is the project’s leading architect, a longtime Gables resident, and a UM architecture professor. He said the transport amenities make for an “animated urban ground floor.” “If you look at the renderings, the Paseo would connect to U.S. 1, giving the notion to being able to walk and bike to a lively open space. It would be a hub for everyone.”

Developer Brent Reynolds says “given the adjacency to the Metrorail, it would develop a place for next-generation families and nonprofessionals.” “It really is an amenity that is not seen anywhere in Coral Gables,” Reynolds said. “It’s a well-designed sophisticated boulevard, focused around public transportation and drawing the community in.”

Developers are asking the city to make a zoning exception on the parcel, allowing their project to be 142 feet tall, instead of 77 feet.

Both Reynolds and Hernandez hope that the building across the street — UM’s Gables One Tower — which also reaches 142 feet in height, will convince city officials to vote in favor of the Paseo.

“People dislike the UM building. It’s a square and flat building; it doesn’t have a profile against the sky,” Hernadez said. “Our building will begin to tame that image. We’re hoping to build a community of buildings of the same scale and amend the city code back to what it was under George Merrick’s vision, using the building next door as a height precedent.”

Until 1979, Coral Gables zoning laws in the area allowed buildings up to 142 feet tall. After Gables One Tower was built, city officials in 1980 reacted to the aesthetics and changed the zoning code, reducing the height cap to 77 feet. “It was a reaction from the aesthetics and the effect of that particular building. It runs parallel to the street. It’s a giant wall. Our building would run perpendicular,” Reynolds said.

Hernandez said he hopes the current Gables commission swiftly approves the project.

The Coral Gables Planning and Zoning board will meet at 6 p.m. Wednesday, Aug. 12 at Coral Gables City Hall, 405 Biltmore Way.

 

Source: Miami Herald

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Foreign Investors Staking Claim To Miami’s Office And Retail Sectors

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High net worth investors, families, and wealth managers from Latin America, seeking to diversify their portfolios, have been on a buying binge for office buildings and single-tenant retail properties throughout Miami-Dade County during the past 18 months, real estate advisors and developers specializing in the commercial sector told The Real Deal.

“Their appetite for well-positioned income-producing assets coupled with Miami’s prospering economy are translating into appreciating property values at a faster pace than previously anticipated,” said Alex Zylberglait, president of The Zylberglait Group at Marcus & Millichap Real Estate Investment Services in Miami. “It is fueling transaction velocity across most product types. And there is particular interest in single tenant spaces.”

Alex Zylberglait, president of The Zylberglait Group at Marcus & Millichap Real Estate Investment Services

Alex Zylberglait, president of The Zylberglait Group

Zylberglait told TRD that his firm brokered the sale of six commercial properties to buyers from Argentina, Brazil, El Salvador and Italy in the past 15 months.

For instance, Zlyberglait represented the seller of a 20,000-square-foot office building at 1250 Northwest 57th Avenue that is the headquarters of Summit Aerospace, an aircraft maintenance company that generates approximately $18 million in sales annually. The building was sold in March of last year for $2.6 million to a company called Algafin, which lists Giorgio Rubini, an Italian national, as its manager.

4995 Northwest 72nd Avenue

4995 Northwest 72nd Avenue

In another Zylberglait brokered transaction in July of last year, a Brazilian-owned entity called Kireland 41 Street Doral purchased an L.A. Fitness at 10055 Northwest 41st Street for $9.9 million. More recently, Zylberglait represented the previous owner of an office building anchored by a Wells Fargo Bank at 4995 Northwest 72nd Avenue. The property was bought for $5.3 million on March 25 by St. Helena LLC, a corporation listing Frech Hasbun and Freddie Moises of La Libertad, El Salvador, as managers.

Zylberglait’s firm is not the only commercial real estate brokerage seeing more interest from foreign buyers. Earlier this month, Fabio Faerman of Fortune International/FA Commercial told TRD he represented a foreign buyer that purchased a 2,259-square-foot Taco Bell at 1650 Northeast 163rd Street in North Miami Beach.

“International investors are looking for business opportunities like this,” Faerman said in a statement. “This is a prime location with a great franchise, Taco Bell.”

Camilo Lopez, president and managing director of The Solution Group

Camilo Lopez, president and managing director of The Solution Group

The company is tearing down the old structure to make way for a Mediterranean-style office building called OFIZZINA. It will have 54 units totaling 96,767 square feet of office space, as well as three retail units at ground level and 332 parking spaces, Lopez told TRD. Camilo Lopez, president and managing director of real estate development and management company The Solution Group, said demand from Latin American buyers for commercial office space is the reason his firm is building an office condo in Coral Gables. In August of last year, Solution paid $6.6 million for a one-story office building at 1200 Ponce de Leon Boulevard, built in 1972.

“In our research meetings, we realized the office market is the least served sector in Miami,” Lopez said. “It doesn’t even reach 5 percent of the overall real estate market. Because of the very limited offerings, we decided to build a luxurious office condo building.”

The project, including the land purchase and construction, is being financed privately through a capital fund made up of investors from Latin America and Europe, Lopez said. He said the office condo concept appeals to South Americans.

Claudio Stivelman, a principal partner in Aventura-based S2 Development

Claudio Stivelman, a principal partner in Aventura-based S2 Development

Claudio Stivelman, a principal partner in Aventura-based S2 Development, said foreign investors staking claims to commercial properties in South Florida have buying power that begins in the $3 million to $5 million range.

“These are people who have likely already bought a condo or two in Miami and are looking to upgrade their portfolio,” Stivelman told TRD. “They may want to buy a Walgreens, a strip mall  or a warehouse.”

In recent months, Stivelman said, his contacts in Brazil have been introducing him to investors who are not interested in condos.

“They are seeing the strength of the commercial side,” Stivelman said. “They see an opportunity to make big money.”

Zylberglait said the foreign buyers he’s dealt with view commercial properties as a safer bet.

“The income generated from the properties is a much more stable situation than buying a half-a-million dollar condo that doesn’t produce income unless you can rent it,” Zylberglat explained. “Buying a commercial asset not only produces a stronger yield. It also allows the buyers to leverage those investments.”

 

Source: The Real Deal

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Renting And Flipping – New Miami Condos Is All The Rage

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The majority of new condo buyers in Miami have been looking to capitalize on their investments by flipping the units or renting them out, according to research by CraneSpotters.com.

Looking at the four largest condo towers completed in greater downtown Miami since construction resumed in 2011, anywhere from 45 percent to 96 percent of the units sold by the developers in each building were placed back on the market or put up for rent. That indicates a high level of investor ownership in those buildings, and also raises some questions.

With more than 18,100 condo units either under construction, planned with approvals or proposed in greater downtown Miami, according to CraneSpotters.com, is there enough rental demand at higher price points to support that many new units? And how will they be impacted by the nearly 7,800 apartments in the development pipeline?

The recently completed condo towers in Miami sold in the mid-$400s per square foot, but the average price per square foot for new projects is more than double that now, CraneSpotters.com principal Peter Zalewski said. When the sales prices climb, so must rents. Are there enough high-earning renters in Miami to fill those units?

“We strongly believe that when Brickell CityCentre opens and people will be able to walk to a shopping mall with a Saks Fifth Avenue, 11 cinemas and 500,000 square feet of retail, Brickell condos will raise in value and so will rents,” said Carlos Rosso, head of the Related Group’s condominium division. “Twenty-four-hour urban living close to the workplaces is and will continue to be in high demand.”

Here’s a look at how the four largest recently completed condo projects in Miami have performed:

CondoFlipping - Nine at Mary Brickell VillageNINE AT MARY BRICKELL VILLAGE
Units: 390
Units sold/price per square foot: 300 for $501
Active MLS listings/price per square foot: 17 for $469
Units resold: 0
Asking rentals/price per square foot: 95 for $2.78
Closed rentals/price per square foot: 23 for $2.47

CondoFlipping - 1100 Millecento Residences1100 MILLECENTO RESIDENCES
Units: 382
Units sold/price per square foot: 376 for $435
Active MLS listings/price per square foot: 99 for $403
Units resold: 1
Asking rentals/price per square foot: 67 for $2.59
Closed rentals/price per square foot: 120 for $2.25

CondoFlipping - BrickellHouseBRICKELLHOUSE
Units: 374
Units sold/price per square foot: 374 for $504
Active MLS listings/price per square foot: 91 for $627
Units resold: 7
Asking rentals/price per square foot: 64 for $3.63
Closed rentals/price per square foot: 77 for $3.24

CondoFlipping - MyBrickellMYBRICKELL
Units: 192
Units sold/price per square foot: 192 for $360
Active MLS listings/price per square foot: 31 for $379
Units resold: 8
Asking rentals/price per square foot: 19 for $2.67
Closed rentals/price per square foot: 126 for $2.01

It looks like some of these condo towers are more like apartment buildings. Projects in other South Florida cities have behaved quite differently. For instance, in Broward County’s largest newly completed condo tower:

CondoFlipping - BeachwalkBEACHWALK – HALLANDALE BEACH
Units: 300
Units sold/price per square foot: 289 for $448
Active MLS listing/price per square foot: 49 for $532
Units resold: 1
Asking rentals/price per square foot: 6 for $2.97
Closed rentals: 0

There’s a fair amount of resale activity, but not many rentals. However, Beachwalk has a rental pool system managed by the hotel management that doesn’t show up on MLS, so many unit owner participate in that. CraneSpotters.com also looked at the largest recently completed condominium in Palm Beach County, Bay Colony Juno Beach, and found only two of its 121 units on the rental market, although it had 23 resales.

For more on the South Florida condo market, see this week’s feature story with comments from the region’s leading condo experts. Most of them agree that sales are slowing.

 

Source: SFBJ

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Florida Developers Woo Chinese Buyers

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Wealthy buyers from Brazil, Venezuela and Argentina have fueled a real-estate frenzy in Miami in recent years, sending luxury-condo prices soaring. Now, Miami developers and real-estate agents are setting their sights on a more distant part of the world: China.

A rendering of the Brickell Flatiron. Illustration: Brickell Flatiron

A rendering of the Brickell Flatiron. Illustration: Brickell Flatiron

In April, representatives for several Miami condo buildings made the 8,000-mile-trip to the Beijing Luxury Property Show, a trade show that attracted more than 5,200 wealthy Chinese to look at international properties. Sales agents for the Fendi Chateau Residences, a luxury development going up near Florida’s Bal Harbour, handed out brochures in Mandarin for condos priced from $5 million to $22 million. Nearby was Lauren Marks, the marketing coordinator for two luxury-condo buildings: Palazzo Del Sol and the forthcoming Palazzo Della Luna, on Miami’s Fisher Island.

“I’m here on a fact-finding mission,” said Ms. Marks. “I’m trying to decide if this is the right place for us to facilitate a meaningful relationship with Chinese buyers.”

Executives of the Miami Association of Realtors, the largest local group of the National Association of Realtors, were there, too, handing out Miami market data and gold palm-tree pins attached to a card with the tagline, written in Chinese, “Enjoy the unique taste of life.”

Part of the reason for their journey: South American buyers, who comprise the largest foreign buying group in Miami, aren’t buying as rapidly anymore. A recent study by the Miami Downtown Development Authority found that sales of new condo units still under construction have slowed, in part because South American investors have less buying power, due to the increase of the U.S. dollar compared with South American currencies.

Meanwhile, Chinese buyers are beginning to take a closer look at the city.

“The Chinese are coming along very strong,” said Simon Henry, co-founder of Juwai.com, a China-based website that connects wealthy Chinese with overseas properties.“Miami looks relatively cheap compared with some of the big cities like San Francisco and New York.” Juwai says the average budget for Chinese buyers shopping for overseas properties on its site is $2.3 million.

Karen Xu, a Shanghai resident, is looking at one-bedroom condos in the U.S. as an investment. She says she didn’t consider Miami until she saw a marketing table at the Juwai Agent Summit in Shanghai in May for Brickell Flatiron, a downtown Miami development where one-bedroom condos cost $500,000 to $750,000. The deputy director of a boutique investment firm, Ms. Xu, age 35, was initially interested in a Manhattan home, but said she’s priced out. “Two to three years ago, prices were OK,” she said. “Now people are saying, ‘Buy in Brooklyn.’ I don’t want Brooklyn.”

Vanessa Grout, president of CMC Real Estate, which is developing Brickell Flatiron in downtown Miami, traveled to Shanghai in May to meet with investors and real-estate agents who could help connect her to Chinese buyers. Photo Credit: Alexia Fodere for The Wall Street Journal

Vanessa Grout, president of CMC Real Estate, which is developing Brickell Flatiron in downtown Miami, traveled to Shanghai in May to meet with investors and real-estate agents who could help connect her to Chinese buyers. Photo Credit: Alexia Fodere for The Wall Street Journal

CMC Group, which is developing Brickell Flatiron, is marketing the property to the Chinese via local brokerages, says Vanessa Grout, CMC Real Estate president.

Currently, only 2% of international buyers in Miami come from China, according to the Miami Association of Realtors. But potential changes in Chinese investment policies, and the relatively strong Chinese yuan, are making the Chinese look like a good bet to Miami developers. The Chinese government is expected to begin raising annual limits on how much an individual can invest overseas from the current $50,000 cap—a rule often skirted.

Lauren Marks, marketing coordinator for Palazzo Del Sol and the forthcoming Palazzo Della Luna on Miami’s Fisher Island, attended the Beijing Luxury Property Show in April. She is shown here in the Palazzo Del Sol sales office. Photo Credit: Alexia Fodere for The Wall Street Journal

Lauren Marks, marketing coordinator for Palazzo Del Sol and the forthcoming Palazzo Della Luna on Miami’s Fisher Island, attended the Beijing Luxury Property Show in April. She is shown here in the Palazzo Del Sol sales office. Photo Credit: Alexia Fodere for The Wall Street Journal

Lauren Marks, marketing coordinator for Palazzo Del Sol and the forthcoming Palazzo Della Luna on Miami’s Fisher Island, attended the Beijing Luxury Property Show in April.

And Chinese buyers have become an increasingly dominant force in U.S. real estate overall. According to the National Association of Realtors, Chinese buyers recently surpassed Canadians as the top foreign buyers of homes in the U.S., purchasing $28.6 billion of properties in the 12-month period ending in March.

The Miami Association of Realtors forged a partnership with Soufun Holding’s Fang.com, one of China’s largest real-estate portals, several years ago. The relationship allows association members to offer special pricing to the website, said Teresa King Kinney, CEO of the Miami  association.

One of the largest booths at the Beijing Luxury Property Show belonged to OneWorld Properties, which is marketing Paramount, a condo tower in downtown Miami with more than 500 units priced from about $650,000 to more than $6 million. Peggy Fucci, CEO of OneWorld Properties, says Miami’s luxurious image and thriving art and cultural scene appeal to Chinese buyers.

Still, there are plenty of challenges for Miami brokers trying to target the Chinese market. One of the most pressing issues is the lack of a direct flight from Beijing, Shanghai or Hong Kong to Miami.

“There were no direct flights to Hawaii until last year and up until that point foreign investment was almost nonexistent,” Mr. Henry said. “Now the Chinese are the second largest buyer there.” Spokesmen for American Airlines, which has a hub in Miami, and Cathay Pacific Airways, based in Hong Kong, both said there are currently no plans for new routes from greater China to Miami.

Ms. Grout, who spent a week in Shanghai in May, said it’s difficult to figure out what appeals to Chinese buyers, because there are many contradictions and not all buyers think alike.

During the Juwai summit, Ms. Grout said a Chinese real-estate agent asked her which direction the Brickell Flatiron units face. She told him they were east facing, toward the ocean. “He walked away right after I said that, saying facing east is bad for Feng Shui,” Ms. Grout said. “I had never heard that before.” (Feng Shui consultants say a south-facing unit is most preferable, to get ample sunshine, but a window facing east, for example, could create good energy for early birds.)

A rendering of the Fendi Chateau Residences in Miami. Agents for the development handed out brochures in Mandarin at the Beijing Luxury Property Show. —Venegas International Group

A rendering of the Fendi Chateau Residences in Miami. Agents for the development handed out brochures in Mandarin at the Beijing Luxury Property Show. —Venegas International Group

Monica Venegas, principal of the Miami-based real-estate firm Venegas International Group, has been coming to China property shows for the past seven years. “People finally recognize my face here,” Ms. Venegas said during LPS in Beijing. She added that she’s learned to be patient, as Chinese buyers rarely buy on the spot, and often are swayed by the advice of their friends.

Real-estate agents estimate that bringing a sales team and setting up a booth at a mainland property show can cost anywhere from $30,000 to $150,000—making it a pricey trip if a there’s no sales outcome. Aside from travel and accommodation costs, developers also must pay for translation services and shipping materials to China ahead of the show.

A few weeks after returning from Beijing and Hong Kong, Ms. Marks, of Palazzo Del Sol, said she hadn’t heard of any sales as a direct result of Miami developers attending the Beijing expo.

“I have a hunch our marketing dollars are going to be better served in Hong Kong with more intimate gatherings of ultra-high-net-worth individuals and less red tape,” said Ms. Marks, emphasizing that her development is looking for residents, not investors. “The only way to really grasp that was to go there and experience China in person.”

 

Source: The Wall Street Journal

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Miami Innovation District Idea Gaining Tech Community Support

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While debate continues over a 10-acre development centered around a 633-foot LED tower, support is growing among some local entrepreneurs and tech investors for the Miami Innovation District proposed for the Park West section of downtown.

“I’m becoming pretty passionate about this project,” said Andres Moreno, executive chairman of Open English, a fast-growing online education company in Coconut Grove that has attracted $120 million in venture capital. “Miami is definitely coming together as an ecosystem but it is pretty spread out … We haven’t found a hub.”

Moreno is among the South Florida entrepreneurs, angel investors and board members of Endeavor Miami who have met with Innovation District developer Michael Simkins to discuss the project. Moreno, who also recently founded Next University, is among the more bullish: He said he would move his companies there.

National players may share his enthusiasm, according to Simkins, who said he is in active discussions with large tech companies as potential anchor tenants. Already lined up, Simkins said, is Silicon Valley’s 500 Startups, a well-known global venture fund for early-stage tech companies.

According to Simkins, the “verbal understanding” with 500 Startups calls for the organization to open an accelerator for top Latin American startups in one of the existing buildings on his property, possibly as early as this fall, with the goal of moving to a new tower when complete. Dave McClure, founder of 500 Startups, brought the company’s PreMoney Conference to Miami in March and said then he was looking at opportunities to expand to Miami. 500 Startups did not return calls seeking comment for this story.

A rendering of the Miami Innovation District project shows a street view of the public spaces and "cloud" layer, or elevated public space (Rendering provided by Innovate Development Group)

A rendering of the Miami Innovation District project shows a street view of the public spaces and “cloud” layer, or elevated public space (Rendering provided by Innovate Development Group)

To be sure, Simkins and his Innovate Development Group have been promoting the benefits of clustering large tech companies, mid-sized companies, startups, incubators, co-working and public spaces, services and cafes in a common area wired with super high speed Internet access as a way to accelerate the growth of a tech ecosystem — an effort supported locally by the Knight Foundation and eMerge Americas, among others. Similar districts are found in Boston/Cambridge, New York, Seattle, Philadelphia, San Francisco, Las Vegas and one emerging now in downtown Detroit, as well as London, Barcelona, Berlin, Stockholm, Medellin and many other cities, according to a 34-page Brookings Institution report. Many are in walkable-bikeable urban downtown-midtown areas close to public transportation and contain housing.

“The one thing Miami is lacking as a great city is the high-paying jobs that will allow us to evolve and elevate us overall. We visited innovation districts. We chose an architecture firm that has designed other innovation projects” — including recently Uber’s new headquarters, said Simkins, in an interview in his Miami Beach office.

He has not done a project of this scale before. Simkins’s proposal has faced a mountain of negative sentiment about the 633-foot centerpiece tower that would contain an observation deck, restaurants, retail, event space – and advertising in lights visible from the freeways. An electronic billboard in the sky is one of the nicer ways critics have described it.

Simkins prefers “a $250 million icon in the sky” and said the tower could also be used for public service messaging – a dashboard for the city if you will. But he is also quick to point out that the media tower, called the Miami Innovation Tower, is just one part of the vision for the live-work-play district, which includes nine towers with 7.4 million square feet – more than half of that earmarked for office space.

But it’s the overall concept, not the media tower, that interests the early tech supporters. What distinguishes successful innovation districts are big tech anchors. Juan Pablo Cappello, a lawyer and co-founder of the AGP angel network, said having a place – with literally the space – to house large companies is what excites him most about the Innovation District plan for Miami.

“If Miami can offer a place where enterprise tech companies like a Google, like a Facebook can have the space and resources to hire 100, 200, 500 people, that could be transformative,” Cappello said. “Companies like to cluster … With a project like this you can get some momentum building.”

Patrick McKenna, managing partner of HighRidge Global and an investor and entrepreneur who moved here a year ago from Silicon Valley, saw the power of momentum first hand. About six years ago, he said, San Francisco risked losing Twitter and other tech companies that were outgrowing their spaces. Meetings between the tech community and government ensued. Thanks to tax breaks and the rezoning of blighted sections of the city, the offices of Twitter, Square, Salesforce and Zynga lie within walking distance of one another. A district can attract both critical mass and tech anchor tenants, both critical to Miami’s tech development, he said.

Colombia-born entrepreneur Juan Franco, who moved to Miami from Silicon Valley about a decade ago to launch social gaming publisher Mentez and since has started three more companies, met Simkins through YPO, the Young Presidents Network. He, too, is a supporter of the project.

“What is missing here is an environment of entrepreneurs. That is what I like most about this project. … It will bring people together – young people with new ideas, people with experience, hopefully venture capitalists in the future. They are close together and that creates the interactions and the new ideas,” said Franco. Franco even likes the controversial tower: “I believe he Simkins needs to create a statement, that’s why I like the tower. It could be an icon of the city very related to technology and around the tower we can start to create that excitement.”

Moreno said he spent some time recently talking about the importance of frequent collisions – entrepreneur-speak for interactions that happen in tech clusters that Franco spoke about – during a visit with CEO Tony Hsieh, CEO of Zappos and engineer of Las Vegas’ innovation district. For Hsieh, moving his company headquarters and more than 2,000 employees there wasn’t enough. Hsieh also funded and led a resurgence of a once-blighted downtown area that now includes multiple big companies, startups, services, weekly speaker series, regular conferences, cafes, bars and a dog park.

Matt Haggman, Miami program director of the Knight Foundation, said he has talked with Simkins about the project in concept but has not seen the plans.

“I don’t know the details of the proposal, but our focus at Knight Foundation is to expand Miami’s entrepreneurial ecosystem, helping it become more diverse and broad-based. Any project that advances those goals would be good for the community,” Haggman said.

In the past three years, Knight Foundation has invested more than $10 million in Miami entrepreneurship programs.

Simkins plans to continue meeting with tech community leaders and wants to share plans and hear feedback at a future event by Refresh Miami, South Florida’s largest tech meet-up organization. He is also taking part in a panel discussion hosted by the Commercial Industrial Association about “Miami’s tech footprint” on Thursday. Moreno, a member of the Miami board of the global entrepreneurship nonprofit Endeavor, said a tech community advisory board is being formed for the Miami Innovation District project.

“The developer has spent a lot of time and money on what it will look like, but what will happen inside that venue is still to be defined. As a community, we still have an opportunity to shape this to be a really core part of the ecosystem. I think that is hugely exciting,” said Moreno.

Simkins, born and raised in Miami Beach, has become increasingly involved in the tech community and helped fund donations to various organizations and conferences, including Black Tech Week, Start-Up City: Miami, 500 Startups PreMoney Conference, Smart City Startups and eMerge Americas. About a year ago, he joined the AGP network, a group of angel investors, and has invested in six local startups.

He said his involvement and “brainstorming meetings” have helped shape features of the project, such as adding more community space. The plans by New York-based SHoP Architects, which also designed Uber’s new San Francisco headquarters, include a “cloud layer” – elevated public space with gardens and gathering places connecting all the towers. Also in the plans: parking lots near the I-95 exit so cars would be off the roads quickly to create a walk-bike culture, and 250- to 350-square-foot micro-unit apartments that would appeal to millenials. Nearly a third of the project – 2.4 million square feet – is earmarked for residential.

Though Simkins has already acquired the land needed, many political, legal and regulatory hurdles remain, particularly when it comes to the controversial media tower. Still, Simkins hopes to break ground next year. If that happens, he hopes to open the first buildings within three years and complete build out within seven. The developer said he is focusing first on securing a large anchor tenant. He then will move to middle-sized companies, startups, funding and support organizations in addition to 500 Startups, coworking spaces and university involvement. He’s also looking at ways to activate part of the property before construction, such as locating 500 Startups there.

Yet, the Miami Innovation District is just one piece of a much larger picture of Miami as a technology hub of the Americas, Simkins says.

“It is a component that is needed, along with a lot of the other things that are already taking shape,” he said. “But this provides the infrastructure … We need the enterprise companies that will bring the employees. That will keep the talent here.”

Panel Discussion

Michael Simkins

Michael Simkins

Miami Innovation District developer Michael Simkins is set to appear on a Thursday lunch panel titled “What is Miami’s Tech Footprint?” hosted by the Commercial Industrial Association of South Florida at Venture Hive in downtown Miami. Other panelists are Venture Hive founder Susan Amat, Pipeline founder Todd Oretsky and Peter Crovo, senior vice president of Prologis. For more information and to register for the event, CLICK HERE.

 

Source: Miami Herald

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Codina Partners Nabs Big Loans To Build Coral Gables Apartment/Office Project

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An affiliate of Codina Partners obtained two big loans from Regions Bank to build its 2020 Salzedo mixed-use project in Coral Gables.

The bank (NYSE: RF) made a $53.54 million mortgage to Codina CG for the residential portion and a $15.35 million loan to Salzedo Office for the office portion. The site covers 1.6 acres at 2020 Salzedo Street.

Codina assembled the property with purchases of $5.2 million in 2010 and $977,500 in 2013 and then paid the owners of historical properties to transfer development rights to the property.

The project will have 213 apartments in 16 stories, 46,000 square feet of office in four stories, 5,000 square feet of retail and 559 parking spaces. The parking garage will have a rooftop amenity deck with a pool.

 

Source: SFBJ

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Miami Commercial Investment Activity Upticks, Aided by Low Vacancies

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According to the Miami Association of Realtors’ Realtor Commercial Alliance, Miami’s commercial vacancy rates continue to rank among the lowest in Florida, leading to more local investment from global companies and investors.

Miami’s vacancy rates for office (14.9 percent), industrial (5.3 percent), retail (6.3 percent), and multifamily (4.4 percent) are the lowest among major cities in Florida, according to a May 2015 Commercial Outlook report from the National Association of Realtors (NAR) and Reis, Inc., a leading provider of commercial real estate market information. Each of Miami’s commercial sectors are performing better than the U.S. average, except for multifamily which is 0.1 percent lower. The national vacancy rates in May were 15.6 percent for office, 8.4 percent for industrial, 9.6 percent for retail and 4.3 percent for multifamily, according to NAR and Reis.

“One of the world’s top global cities, Miami has become a launching pad for new industries,” said Barbara Tria, the 2015 Miami Commercial Alliance President. “Technology companies and other businesses are moving to Miami largely because of the region’s top-tier cultural offerings, outdoor lifestyle, and affordability compared to other major cities around the globe.”

Miami Office Market

Miami’s 14.9 percent office vacancy rate in May ranks as the 21st lowest out of 82 major U.S. cities, according to the NAR and Reis report. New York leads the nation at 8.9 percent. Statewide, Miami’s office vacancy rate is performing better than Florida’s major cities. The Sunshine State’s other major metropolitans had the following rates: Fort Lauderdale (18.6 percent), Jacksonville (20.4 percent), Orlando (16.5), Palm Beach (16.5) and Tampa (19.7). The national average is 15.6.

South Florida’s growing, multilingual workforce is one reason for its low office vacancy rate. Miami-Dade County added 33,700 jobs across several sectors from April 2014 to April 2015, a 3.1 percent increase, according to job numbers released May 22. Miami had the third-largest job gain in Florida behind Orlando and Tampa. Miami’s unemployment rate from April 2014 to April 2015 decreased by 0.7 percentage points, to 6.2 percent from 6.9 percent.

Miami Industrial Market

Miami’s industrial vacancy rate of 5.3 percent is the third-lowest in the nation among the 82 major American cities studied by NAR and Reis. Only Orange County (Calif.) and Los Angeles performed better than Miami in the industrial sector in May, registering vacancy rates of 3.4 and 3.6 percent, respectively. Florida’s other major metropolitans had the following rates: Fort Lauderdale (8.2), Jacksonville (6.9), Orlando (10.3), Tampa/St. Petersburg (7.8), and Palm Beach (5.5). The national average is 8.4.

Miami International Airport and PortMiami are two of South Florida’s international trade successes. Miami International ranks as the top airport in the U.S. for international freight, and the ninth-best airport for foreign cargo in the world. In 2013, Miami International handled 2.1 million tons of total airfreight, of which 88 percent was international freight.

PortMiami is the top-ranked container cargo port in Florida with 900,000 TEUs handled each year. The port has an opportunity to expand its international business as it is deepening its channel from its current 42-foot depth to 50-52. When the deep dredge project is completed, PortMiami will be the only U.S. port south of Norfolk, Va. that can accommodate the new, mega cargo vessels that will pass through the expanded Panama Canal.

Miami Retail Market

Miami has the 15th lowest retail vacancy rate among U.S. major cities, according to the NAR and Reis report. Miami’s 6.3 percent rate is considerably lower than Florida’s other large metropolitans. Fort Lauderdale (9.3 percent), Jacksonville (12.9), Orlando (11.0), Palm Beach (9.5) and Tampa (10.6) are higher than Miami. The national average is 9.6.t”>

Miami’s tourism and multilingual employment base are just two reasons why major developers are bringing new retail ventures to the region. Earlier this year, the company that owns and runs the largest mall in America announced plans to build the nation’s largest shopping mall in northwestern Miami-Dade, a roughly 200-acre entertainment complex with submarines, a Legoland, sea lions and an artificial ski slope. American Dream Miami is projected to cost as much as $4 billion to build.

Brickell City Centre and The Mall at Miami World Center are two other significant Miami retail ventures. At Brickell City Centre, Hong Kong developer Swire Properties will deliver 500,000 square feet of retail space anchored by Saks Fifth Avenue by late 2016. The Mall at Miami Worldcenter, in the heart of downtown, will complete 765,000 square feet of restaurant, retail and entertainment space by 2017.

Miami Multifamily Market

The vacancy rate for Miami’s multifamily market is tied for 38th among 82 major U.S. metros, according to the NAR and Reis report. Miami’s 4.4 percent multifamily vacancy rate is the lowest in the state. Fort Lauderdale (5.2 percent), Jacksonville (7.0), Orlando (6.1), Palm Beach (5.6), and Tampa (5.0) all have higher rates. The national average is 4.3 percent.

 

Source: WPJ

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