Middle Eastern Investment To Grow In Miami

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It’s no secret that Miami has become one of the world’s most attractive markets for international investors.

South Americans in particular have had a heavy influence in local real estate as one of the main demographics snapping up properties throughout South Florida.

But data from CBRE, a commercial brokerage that tracks such international trends, indicates that one region of the world is poised to take a much larger role in South Florida’s real estate game and in the United States as a whole: the Middle East.

Miami Beach EDITION hotel

Miami Beach EDITION hotel

So far, buyers from the Middle East have stuck to high-profile properties in Miami. This was made evident in February with the Abu Dhabi Investment Authority’s acquisition of the Miami Beach EDITION hotel for an incredible $230 million. That sale accounted for the majority of the $280 million Middle Easterners have sunk into South Florida real estate during the first half of this year, according to CBRE data.

Plot on Indian Creek Island — the highest price ever recorded for vacant land in the neighborhood

Plot on Indian Creek Island — highest price ever recorded for vacant land in the neighborhood

Also in February, a corporate entity linked to Saudi Royalty paid $23 million for a plot on Indian Creek Island — the highest price ever recorded for vacant land in the neighborhood.

St. Regis Bal Harbour hotel

St. Regis Bal Harbour hotel

Compared to last year, buyers from the Middle East have spent $37 million more on Miami real estate, CBRE data shows. The previous year saw Al Faisal Holding, a private company based out of Qatar, pay $213 million for the St. Regis Bal Harbour hotel, among other smaller transactions. However, in the context of the region’s historically large purchases, that increase does not necessarily translate to a large uptick in activity.

The evidence of this emerging trend instead comes from looking at the huge amount of money that the Middle East is pouring into U.S. real estate.

For the first half of 2015, the region spent $2.7 billion on real estate in the Americas, according to CBRE. That’s a significant chunk of the $11.8 billion total that investors from the Middle East have spent on global real estate during that time period, and CBRE expects that number to grow by another $2.4 billion by the end of the year. Most of that money comes from sovereign wealth funds.

“There’s no question that Miami has arrived as a primary market for investors worldwide, in the same league with other U.S. cities like New York, San Francisco and D.C., as this Middle East investment report suggests,” Quinn Eddins, CBRE’s director of research and analysis for Florida, said in a statement.

“The amount of foreign investment in South Florida office, retail and industrial product during the first half of 2015 alone was over $775 million – more than that of all the previous two years combined. If we factored in apartment, hotel and land sales, that number jumps to more than $1.2 billion. A lot of capital is still coming from Canada, Europe and Latin America, but there’s definitely an uptick in Middle Eastern and Asian investment – it’s an exciting trend that we’re tracking closely.”

South Florida was the fourth hottest market in the U.S. for Middle Eastern investment during the first two quarters of 2015. It stands to supplant the third spot belonging to Washington, D.C., which saw only $1 million more in transactions from the region. Above D.C. is Atlanta with $338 million in purchases so far this year, and New York in the top spot with $1.1 billion, CBRE data shows.

 

Source: The Real Deal

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Brickell City Centre Adds More Office Space

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The developer of Brickell City Centre has placed a larger bet on the office market, as it has converted a planned wellness usage into “Class A” office.

In 2014, law firm Akerman LLP signed a lease to occupy 80 percent of the 130,000-square-foot Brickell City Centre Green tower that was under construction as part of the $1.05 billion project in Miami. The rest of the space was supposed to be for wellness, but developer Swire Properties has made the 26,000 square feet available for office tenants. It also rebranded the tower Three Brickell City Centre. The project will include another office tower of the same size, Two Brickell City Centre.

“One of the two towers, Three Brickell City Centre, although designed with use flexibility, was originally designated as a wellness center, but current market conditions show demand for additional office space,” said Edward Owen, Swire Properties’ office leasing manager. “Swire decided that it was in the best interest of the market to create supply to further Brickell’s growth as a leading international business hub.”

Arquitectonica designed both buildings, which will have floor-to-ceiling glass and 10-foot high walls. Brickell City Centre will also feature a shopping center, restaurants, condos and a hotel. The office, condo and hotel parts of the project should be ready this winter.

According to Cushman & Wakefield’s second quarter report, the Class A office market in downtown Miami has a 13.3 percent vacancy rate and average asking rent of $41.81 per square foot. The last new office delivery was 2010.

CBRE reports that about 1 million square feet of office space is under construction in Miami-Dade County, with Brickell City Centre and All Aboard Florida’s Miami Central Station as the largest projects.

The Business Journal is tracking another 5.4 million square feet of office space that’s in the pipeline in South Florida, as described in a recent centerpiece.

Click here for a “Behind the Scenes” slideshow of the Brickell City Center

 

Source: SFBJ

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Miami Chamber Of Commerce ‘Asia Task Force’ Targets China

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An Asia Task Force organized by the Greater Miami Chamber of Commerce wants to organize Miami trips for Chinese journalists, investors and developers to help market the city to businesses and entrepreneurs from the Far East, The Real Deal has learned.

Greater Miami Chamber of Commerce’s Asia Task Force

Greater Miami Chamber of Commerce’s Asia Task Force

At its first brainstorming session Friday morning, the eight-member task force laid out its objectives. Task force chairman Seth Gordon, a Miami publicist who represents Shanjie Li, the Chinese businessman whose company purchased a 2.39-acre site on Brickell Avenue for $74.7 million last year, said he wanted the Chamber to sponsor a delegation of reporters from China, who would then write articles about Miami’s business offerings. Gordon told other members he recently hosted a small contingent of eight Chinese journalists with assistance from Turnberry Associates founder Don Soffer and Carnival Cruise Lines.

“Don is very interested in working with the Chinese,” Gordon said. “He contributed a full week of rooms at the Fontainebleau Miami Beach hotel and we flew them in with eight round trip business class tickets provided by Carnival.”

While the reporters were in Miami, Shareef Malnik, owner of the Forge, had them over for dinner at the storied restaurant’s wine room, Gordon said. In addition, developers Armando Codina and David Martin briefed the reporters on their respective projects.

“If we do it as a chamber project, we can do something more serious,” Gordon said.

Peng Lu, Florida International University’s associate provost of international programs, said the college would like to coordinate events and activities, including meetings with top business leaders in Miami, for a delegation of 22 Chinese business people visiting the city in mid-September.

“Two of them are billionaires,” Lu said. “One is a frozen food king in China who wants to buy fish products from Latin America. They are all extremely interested in seeing what business opportunities are here.”

In exchange, Lu said FIU can assist the chamber in organizing a business delegation trip to important cities in China. Andy Perez, CEO of South Miami-based EB5 Visa Funds, also suggested the chamber consider sponsoring classes on how to conduct business with the Chinese.

“One of the most important things you can do is educate the chamber’s membership,” Perez said. “It’s very important, down to how you hand over your business card.”

The task force is scheduled to meet again at the end of September.

 

Souce: The Real Deal

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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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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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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 Center Office Tower To Undergo $20M Renovations After Citigroup Renews 125,000 SF Lease

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The 34-story Miami Center office tower downtown is set to undergo $20 million in renovations after main tenant Citigroup renewed its lease.

Cushman & Wakefield’s Jon Blunk represented landlord Crocker Partners in the lease, while NGKF’s Patrick Duffy represented Citigroup.

MiamiCenter2The banking giant will continue to occupy 125,000 square feet at the building, at 201 S. Biscayne Blvd., and will add a retail branch there. Citibank had $3.1 billion in deposits in that office as of June 30, 2014, according to the Federal Deposit Insurance Corp. – its most in Miami-Dade County

Crocker Partners said the $20 million in renovations to Miami Center will include a makeover of the lobby and exterior plaza, a new entrance with a valet, and elevator modernization. The tower totals 786,267 square feet.

“Locking in a long-term lease at today’s rental rates is a wise move,” Crocker Partners’ Angelo Bianco said. “Tenant demand from both organic and new tenant growth is in its fourth consecutive year of expansion. Couple that fact with the limited amount of office development in the pipeline and we have a perfect storm on the 12-to-24-month horizon for a significant increase in rents.”

 

Source: SFBJ

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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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