About five months ago, they had just begun driving piles down for the foundations, when construction of the 822 foot tower had finally picked up after an agonizingly slow beginning.
Source: Curbed Miami
About five months ago, they had just begun driving piles down for the foundations, when construction of the 822 foot tower had finally picked up after an agonizingly slow beginning.
Source: Curbed Miami
Edge, Sushi Samba, River Oyster Bar and Fox Hole Marketplace and Deli — are just some of the planned new eateries banking on the Miami River.
New restaurants, retail and increased public access along the Miami River were among the highlights of a development boat tour of the five-mile-long waterfront district on Thursday.
Developers and real estate professionals toured the river as part of an Urban Land Institute and NAIOP partnership. Brett Bibeau, managing director of the Miami River Commission, said that popular restaurants Seaspice (formerly Sea Salt and Pepper), Garcia’s Seafood and Casablanca have brought business to the area.
Among the restaurants awaiting permits or under construction are Sushi Samba, at 40 Southwest North River Drive; Edge at 39 to 55 Southwest Miami Avenue Road; a new location for the River Oyster Bar at 350 Flagler Street, and Fox Hole Marketplace and Deli at Latitude on the River, 615 Southwest Second Avenue.
The Miami River has increasingly drawn interest from developers who are embracing the river lifestyle. “It’s a place that people don’t have to see as up and coming. It exists,” said Andy Hellinger, developer of the River Landing project, a massive nine-acre development that will include apartments, retail and a linear park along the riverwalk.
River Landing’s retail component will include a five-story vertical shopping center, with a different theme for each floor. Among them: restaurants and supermarkets, sporting goods and entertainment. Two acres of the project are dedicated to parks and pathways. Hellinger compared the linear park, with a 50-foot setback, to the Highline in New York.
River Landing recently applied for a seawall permit, and digging for the foundation will be complete in a few weeks, Hellinger told The Real Deal.
Cleaning up the water and building the riverwalk are both key to the area’s success. Bibeau said his organization, the Miami River Commission, sends clean-up crews to pick up trash, pressure clean and paint over graffiti. “If the riverwalk is not maintained,” Bibeau said, “it will not live up to its potential.”
Source: The Real Deal
Architect ADD Inc has prepared a creative plan to preserve the historic church at 1836 Biscayne Boulevard, while adding 352 residential units and a parking garage.
Under a proposal scheduled to be reviewed by Miami’s Historic and Environmental Preservation Board, the church would be restored and retrofitted to become hurricane-resistant. Instead of a place of worship, a grocer would occupy the space.
A 34-story residential tower would be built next to the church. ‘Floating’ above the former church would be a parking garage. In total, up to 480 parking spaces are planned.
Developer Fifteen Group paid $14.25 million for the property last year. R.J. Heisenbottle Architects is working alongside ADD Inc for the developer as a historic preservation consultant.
The church is directly across the street from Atlas Capital Group’s newly proposed 429-unit residential tower at 1900 Biscayne.
Source: The Next Miami
A retail development site in Miami’s Edgewater neighborhood traded for $64 million, or $200 per square foot, to a well-known businessman.
The 7.35-acre site at the northwest corner of Northeast 17th Street and Northeast Second Ave. was previously approved as Bayview Market with 653,659 square feet of retail, a 2,047-square-foot gym/spa and 24 apartments. The seller obtained approval in 2009 but didn’t start construction.
BDB Miami LLC and 110 Avon, a partnership between Atlanta-based BDB Realty and Redwood Capital Investments, sold the property to Rebuild Miami-Edgewater, which is headed by Richard Meruelo. The deal included $34 million of seller financing.
Meruelo was the co-founder and chairman of EVOQ Properties, which was sold in 2014 to Atlas Capital Group and Square Mile Capital Management. EVOQ was one of the largest property owners in downtown Los Angeles. He’s also part of the Cuban American Meruelo family, which has owned the Deauville Beach Resort in Miami Beach for many years.
The deal was brokered by CBRE’s Gerard Yetming, Robert Given, Zachary Sackley, Casey Rosen, Dennis Carson and Tim Gifford.
CBRE said the site could be zoned for up to 3 million square feet of development. Edgewater has a host of new condo towers rising along Biscayne Bay.
“BDB Miami is the perfect canvas for a visionary developer,” Yetming said in a news release. “Population growth for the one-mile radius around this site is forecast at nearly 10 percent over the next five years. With this acquisition, the buyer has an opportunity to capitalize on all of the new energy associated with Miami’s most transformative commercial real estate development projects.”
Will the recent free fall of the Euro hurt sales of new and existing condominium units in Miami?
Miami right now probably feels quite expensive compared to last year for returning international visitors who are armed with euros, the official currency of 19 countries in the European Union.
The current exchange rate to convert euros into U.S. dollars stood at about $1.178 on Thursday, following a steep drop in value resulting from a surprise monetary move this week by the Swiss Central Bank, according to the foreign exchange trading website OANDA.com.
Some currency watchers say Switzerland’s sudden maneuver to protect its currency, the franc, could send Western Europe’s primary currency plummeting against the dollar in the weeks and months ahead.
The current exchange rate is the weakest the euro has been against the dollar on the date of Jan. 15 since back in 2003 when the currency was worth about $1.055. In the more than a decade since the 2003 level, the euro has had a value ranging from between $1.265 and $1.485. A year ago on Jan. 15, 2014, a euro was worth $1.367, according to OANDA.com.
The dramatic drop in the euro means that everything in Miami, from hotel rooms to bottle service at nightclubs, and rental cars to condo purchases, now cost about 14 percent more than a year ago, according to OANDA.com. A deeper weakening of the euro could diminish Miami’s reputation as a cheap, must-see global destination for vacations, shopping sprees and real estate investments with Western European visitors.
For their part, Western Europeans are a key part of the crucial pool of international buyers purchasing real estate in South Florida, according to the 2014 Profile Of International Home Buyers In Florida report released in September by the Florida Realtors.
Buyers from Western Europe purchasing in South Florida accounted for 8 percent of all international sales in the Latin American-dominated Miami area, 18 percent in Fort Lauderdale and 24 percent in the Palm Beach area.
Statewide, the report concludes that buyers from Western Europe paid a mean price of $321,500 per transaction for Florida real estate with some 85 percent of the deals transacting in cash. Price statistics for Western Europeans who purchase in the South Florida region are unknown as the Florida Realtors report does not address that topic.
What is known is that South Florida’s condo market east of Interstate 95 has a growing pool of available inventory that needs buyers, whether they originate from Western Europe, Latin America or the Northeast. An estimated 6,400 new condo units are scheduled to be completed this year east of Interstate 95 in South Florida with an additional 6,700 units slated to be delivered in 2016 and 5,000 more units in 2017, according to the preconstruction condo projects website CraneSpotters.com.(For disclosure, my firm operates the website.)
An additional 12,750 condo units are currently on the resale market east of Interstate 95 in the tri-county South Florida region. The number of condo units currently on the resale market represents nearly nine months of available inventory. Ideally, a healthy market has about six months of supply available for resale. More months of supply suggests a buyer’s market and less months a seller’s market.
The unanswered question going forward is whether South Florida’s current condo boom will be able to maintain its momentum of recent years, if buyers from Western Europe find it more expensive to buy units in the tri-county region.
Thought Of The Week: South Florida Condos “Not Priority” For Russian Investors
At a time when the U.S. currency’s run-up in value is prompting some Wall Street experts to predict the beginning of the next King Dollar era, Russian condo buyers – who have seen their home country’s currency tumble by nearly half in the last year – are reportedly rethinking their necessity to own multiple beachfront condo units in the tri-county region.
“An apartment in Miami, even the most glorious beachfront apartment, is not a priority right now,” New York Attorney Marlen Kruzhkov reportedly said in a recent press report.
This sentiment from Russian investors – a key buying pool in the tri-county region for at least the last two decades – cannot be good news for sellers of new and existing condos in South Florida who are seeking top dollar for their luxury units.
Source: The Real Deal
Rodolfo Ishak has had plenty of opportunities to launch his first condo project in Miami during boom cycles of years past, but he feels now is the perfect time.
Having completed more than 40 projects in his native Brazil, Ishak is making his Miami debut with Krystal Tower, a 35-story, 153-unit project at 530 N.W. First Court. It launched sales in November, starting at $342 a square foot, with an average price of $450 a square foot. It will also include 5,500 square feet of commercial space.
The property currently has a five-story shell of a project that stalled during the recession. Ishak’s company will build atop that structure. He plans to launch construction once presales reach 50 percent, he said.
Ishak and sales director Roderyck Reiter said his company and his experience has reached a level where he feels comfortable to come to Miami, a market that’s more conductive than in Brazil. His reservations are evenly divided between Brazilians and Venezuelans. Both countries are suffering from economic problems and the weakening of their currencies against the U.S. dollar.
“It has helped us in Miami because of the instability and insecurity of the economy in both countries,” Ishak said. “People who have the capital want to take their capital to a safe market like this. … It’s like a savings account to them. If they keep it in their country, they will lose value on inflation.”
Ishak said his goal with Krystal Tower is to offer the amenities residents would expect at a luxury building at a lower price point. It helps that he paid only $3.5 million for the property, compared to the tens of millions of dollars that other developers paid to obtain land near downtown Miami.
Just how hot is Downtown Miami’s condo market?
New stats are rolling in that make investors smile and developers move perhaps even more quickly. For starters, Downtown Miami’s condo market has posted two straight years of price appreciation. At the same time, land values are escalating and developer yields are compressing. Overall, land transaction volume is increasing. All this is according to a new study the Miami Downtown Development Authority (DDA) commissioned.
“The demand drivers of an urban lifestyle continue to provide motivation for suburban or Miami Beach residents to reconsider the Downtown Miami area,” says Anthony M. Graziano, senior managing director for Integra Realty Resources in Miami. “As the large-scale projects continue to progress, along with the development of a more transit-oriented metro area, Downtown Miami will benefit from increased downtown housing options.”
Turning to rentals in the urban core, prices are rising. That, in turn, is supporting more end-unit pricing increases and an overarching demand for new multifamily projects. Specifically, rents in Downtown Miami are appreciating by over 5% each year and are on track to experience annualized increases of 8% in 2014.
With such strong demand, new rental construction is moving ahead at a rapid clip. Developers currently building 2,301 multifamily units in five downtown projects. Another 2,742 units are in the planning phase of development to meet the demand, including strong demand from Millenials, who are moving to Downtown Miami in droves.
The third quarter saw some of the biggest blockbuster land sales in history, including the Epic Marina Site in the CBD that sold for $125 million, representing $2,296 per square foot. Ten land sites have either recently sold or are being marketed for sale through July 2014. In addition, there are three additional land transactions all upward of $50 million expected to close by the fourth quarter 2014.
“In 2008 many condos were sitting empty and pundits predicted they would remain dark for years to come,” says Alyce Robertson, executive director of the Miami DDA. “Local job growth, combined with foreign buyers and investors from Europe, South America and Asia have acquired most of the inventory and prices are again increasing even as dozens of new projects are in the works. Downtown Miami is witnessing a metamorphosis and evolving into a true 24/7 city as restaurants and retailers come online in the urban core.”
Since its launch in Miami in 2002, Art Basel has been attracting people from all over the world who appreciate innovation and creativity.
Today, satellite events have spread to Wynwood, Midtown, downtown, Mid-Beach and North Beach, and last year about 75,000 people attended the main fair. The first Basel fair featured 160 galleries from 23 countries, attracted 30,000 visitors and has grown and grown and grown — much like our skyline and real-estate industry. The growth and popularity of the event have bolstered the tourism industry and made us one of the fastest emerging cultural epicenters of the world.
For one week in December, all eyes started looking to Miami, including those of some of the world’s greatest architects and developers. Today, they are creating a skyline that is second to none, while Basel brings buyers appreciative of artistic creations. The burgeoning love affair between Miami and art can be evidenced by two recently announced museums: the Institute of Contemporary Art, Miami, the brainchild of Norman and Irma Braman, and the Latin American Art Museum by Gary Nader. Miami was largely a blank canvas in 2002, and so many have seized the opportunity to fill the space with remarkable buildings that are works of art themselves.
In downtown Miami, Zaha Hadid paired with developers Louis Birdman and Gregg Covin for the grandiose 1000 Museum. What was once the famous Bal Harbour Club will become the spectacular, all-new Oceana Bal Harbour, thanks to Italian architect and interior designer Piero Lissoni and developer Consultatio USA. And then there is Herzog & de Meuron, Richard Meier, Norman Foster and Rem Koolhaas, among the many other great names, with others soon to be announced.
Art Basel is certainly a time for businesses to shine. It provides an instant injection of funds into the economy, and the effects of the fair linger long after it leaves town. This is certainly the case for the real-estate industry, which has benefitted greatly from the influx of discerning art lovers. Amid the week of amazing art and all the accompanying events, the glitterati look up and see Miami as a wonderful place to purchase property. And they have many to choose from, for a relatively affordable budget. All are designed by local and international architectural greats who provide a perfect place to display a new piece or two.
The past week has seen traffic gridlock, long lines and a shortage of restaurant reservations. But as an enthusiastic collector of Latin American art and a member of the Photography Committee at the Solomon R. Guggenheim Museum, Daniel De La Vega, President of One Sotheby’s International Realty, will be sad to see the sun set on the event so soon. Art Basel will continue to play an important role in the growth of South Florida’s real-estate industry and the development of greater Miami as a whole. As a native Miamian, Mr. De La Vega is grateful for how this fair has moved the city forward in so many ways. As the tents come down and the works are carefully packed away, Miamians can still admire innovative and creative pieces all year-round.
All you have to do is look up to the skyline and thank the increased business to the bottom lines.
Source: Miami Herald
Amazon.com has signed a lease for a distribution and fulfillment center in Doral that will could create approximately 500 new jobs in the area.
The announcement corresponds with increases in manufacturing activity, international trade, and online shipping in industrial real estate in South Florida.
The 335,841-square-foot space leased by Amazon is in the Miami International Distribution Center, located at 1900 N.W. 132nd Place.
KTR Miami constructed the building last year.
The driving force behind securing a distribution center in Miami is that most customers in the region are demanding same-day delivery. Not only is it great to have Amazon in Miami, but the center could generate approximately 500 new jobs, said George Pino, Principal at State Street Realty.
“I don’t know what’s next, maybe delivery by drones? But it’s great to have them here,” Pino said.
And not only is the Seattle-based company moving into Doral, it is also opening up a store.
“They’re doing a huge distribution facility, [but] they’re also opening up a brick-and-mortar store,” said Ken Krasnow, managing director for CBRE South Florida. That location has not been announced, he added.
The increased use of technology and online sales is redefining the supply chain of e-commerce retailers, and more of these companies are looking to improve speed of delivery to remain competitive.
Because of that, the location of warehouses and distribution centers is likely to play a critical role, more than ever before in industrial real estate, Pino said. Amazon’s Doral lease is just one way to get packages on front stoops quickly.
As a city sitting virtually at sea level, Miami has been called ground zero for the problems posed by climate change, a place where rising sea levels threaten its future existence.
The latest forecast of sea level rise from the Intergovernmental Panel on Climate Change, for example, predicts that by later this century, global sea levels will be two feet higher than they are today, quite possibly higher. Under that scenario, the nuisance flooding in Miami that periodically comes with high tides will be a daily affair, the storm surge impact of hurricanes will be amplified, and lower-lying areas of the city will be uninhabitable. That’s actually not the worst of it: Under higher sea levels, the Biscayne Aquifer—where southeast Florida draws its drinking water—will increasingly suffer from saltwater intrusion, a problem for which there is no foreseen solution other than the investment of billions of dollars in water treatment facilities.
As bleak as this future would seem to be, few with real skin in the game in Miami—residents, real estate investors, and companies—are backing away from long-term investment. Exhibit A: Miami has been undergoing a nearly unprecedented surge in real estate construction, with planning discussions centering less on who will leave first and more on how high new projects can be built. Among the projects under way, for example, is an 80-plus-story behemoth in Brickell Center, the city’s urban core. If Miami is on the verge of being a modern-day Atlantis, those who would have the most to lose are apparently not buying it.
Why this apparent deafness to the dire warnings? Well, here’s a paradox. If one talks to developers and city commissioners in the area, it’s hard to find evidence of overt denial of current and future risk; Miami was a city, after all, almost completely destroyed by a hurricane in 1926, and most concede that a recurrence is a matter of when, not whether. Likewise, few deny that the city’s unique geography makes it vulnerable to the effects of rising sea levels. It’s a long-term problem that the planning commissions of Miami and Miami Beach acknowledge exists and threatens to get worse.
Where locals disagree with outsiders, however, is about how best to deal with the problem. Rather than sounding alarms and cutting back on development, there’s an implicit sense that the best approach may be, ironically, to do the opposite. And while a strong case can be made that this behavior has no rational basis, it may represent Miami’s best long-term hope for dealing with the threats posed by climate change, one that other cities might be advised to mimic: The best strategy, in fact, may be to foster a collective belief that there’s no threat—or at least not one serious enough to lose sleep over.
Before an explanation why, let’s first address the two standard explanations for the building boom, explanations that are indeed part of the puzzle. The first is that real estate developers, by their nature, are gamblers with short planning horizons. In the late 2000s, the real estate and equities crash quickly wiped out many builders. One might assume that would have made them skittish. To the contrary, the quick recovery that followed taught most that big risks are worth taking, and are survivable. While developers today may concede that sea levels are rising, it’s a risk that lies well beyond their investment horizons, and in any case is dwarfed by the more immediate risk of a returning recession.
The second explanation is that many of the buyers for all the new condo units are cash investors from Latin America, and the risks of Miami real estate—overdevelopment, speculation, environmental unsustainability—remain small relative to similar investments back home. No one is saying that real estate isn’t risky in Miami, or that sea level rise is fiction. What they are saying is that all investment carries risk, and development there is a bet they’re prepared to take.
But there’s another rational reason why even risk-averse residents in South Florida might, paradoxically, hope that buyers and sellers remain collectively naïve, or at least act as if they are, about the risks of sea level rise. South Florida relies almost exclusively on real estate taxes to fund public infrastructure. If the threat (or reality) of sea level rise suppresses property valuations, there will be less public money to address the risk. As an illustration, the head of public works for Miami Beach recently argued that the city would be wise to accelerate its investments in storm water drainage improvements ($100 million now and $400 million planned) simply because the city has the tax base to afford it—something it could not necessarily count on in the future.
Because buyers and sellers in Miami Beach have yet to connect the dots between nuisance flood events and the future consequences of sea level rise, property buyers continue to be drawn to the area, and development projects continue unabated—both of which are essential for a continued healthy tax base. If and when buyers and sellers do connect the dots, everything changes: Doing so could spark a rapid downward wealth spiral that, once initiated, would be difficult to reverse. Lowering property valuations would reduce the city’s tax revenue which, in turn, would leave it with less money to shore up the city against sea level rise. The city would then be forced to choose between two losing remedies: increase taxes on those who choose to stay, or decline to make the needed improvements. Both, of course, would only exacerbate the problem. Miami’s best move at that point would be to go hat in hand to the state and federal government for a bailout, but that seems unlikely. Quite aside from the “I-told-you-so” reactions that such pleas might evoke, almost all coastal communities would be facing similar problems and asking for commensurate help. Miami Beach as we know it now could cease to exist long before the Atlantic reclaims Collins Avenue.
Given this, South Florida’s best shot at coping with the long-term environmental threat may be a strategy that no doubt seems perverse to environmentalists: aggressively foster a collective belief that sea level rise is not something we urgently need to worry about. South Florida is potentially facing a huge adaptation bill down the road, and paying for it will require a healthy tax base. Keeping that tax base flush depends on a cooperative equilibrium where buyers and sellers maintain an optimistic view that it’s tomorrow’s problem, one that will be easily tackled when the time comes. This keeps the coffers filled and provides the resources needed to pay for the engineering adaptations required to keep the game going.
In this light, Miami’s construction cranes aren’t monuments to climate change denial. Quite to the contrary—they’re the instruments that may, indirectly, allow the city to survive global warming. Controlled ignorance, in some cases, can be a good thing.
Source: Bloomberg Businessweek
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