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Millennials Shaping The New Wave Of Commercial Development In Miami

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Source: The Real Deal

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Kicking Off A New Brand, Earthy South Beach Hotel Opens

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If the 11,000-plant “living green wall” or hangers fashioned from recycled paper don’t give it away, the ceilings, furniture and doorways made of reclaimed wood will: 1 Hotel South Beach is serious about its eco-friendly mission.

“Hotels can do better with their impact on the earth,” said Michael Laas, corporate director of impact for SH Group, the hotel brand management company for Starwood Capital Group.

The environmentally-focused 1 Hotel South Beach features a green wall at its main entrance. The 1 Hotel South Beach opens on Wednesday after a massive re-working of the former Gansevoort. NICK SWYTER / MIAMI HERALD STAFF

The environmentally-focused 1 Hotel South Beach features a green wall at its main entrance. The 1 Hotel South Beach opens on Wednesday after a massive re-working of the former Gansevoort. NICK SWYTER / MIAMI HERALD STAFF

In a nod to its nature-centric philosophy, the hotel will celebrate its opening Wednesday with a sage-burning ritual, the unveiling of a coral sculpture and a release of butterflies by Plant the Future, a Wynwood company whose terrariums are found throughout the property. The very first guests checked in Tuesday.

Starwood Capital, an investment firm that is not affiliated with Starwood Hotels & Resorts, partnered with LeFrak, a privately held group of real estate companies, for the massive overhaul of the former Gansevoort. The hotel was also operated as the Perry before closing for renovations in spring 2013. Including the $230 million purchase price in early 2012, the developers have invested about $500 million in the 426-room, 155-residence property.

“Everything was basically, for all intents and purposes, it was gutted and we started over,” said Richard LeFrak, president of LeFrak. He said windows, terraces, air-conditioning systems, elevators, pools, ballrooms, guest rooms, bathrooms and more were redone. “There’s really nothing that resembles what was there,” LeFrak said. “Except it’s still on Collins Avenue.”

The hotel’s website gives the address as 2341 Collins Ave., but the giant property fills the block between 23rd and 24th streets. It includes four pools, including one on the roof; a signature restaurant called Beachcraft, lobby bar and poolside restaurant from celebrity chef Tom Colicchio; another restaurant, STK Miami; a ballroom; and meeting space. Rates start at $699 a night for entry-level rooms with king-sized beds.

Ceilings in the lobby are made of wood reclaimed from water towers in Alaska, while some of the furniture was crafted with fallen trees from South American rainforests. On guest room floors, hallways are accented with wood from trees that were taken down by mountain pine beetles.

“It’s all about telling different stories,” Laas said. But those back stories will have to be found online, not in a glossy brochure or coffee table book. “We’re paper smart, so we don’t have printed material in the rooms,” Laas said. Instead, in rooms that average more than 700 square feet, guests will find a tap with filtered water rather than plastic bottles, low-flow water fixtures and a mini chalkboard on the bedside table to replace a pen and pad.

Laas said the hotel will earn silver certification from the Leadership in Energy & Environmental Design, or LEED, green building program.

Hotel managing director Philip Dailey said he expects the brand’s sensibilities to resonate with modern hotel guests. “Real things are back,” he said. “We’re a very real, very natural product.”

Miami Beach is the first outing for the 1 Hotel brand; a Central Park location is expected to open in early July, followed by a site in Brooklyn Bridge Park at the end of this year or early next, said SH Group president Scott Rohm.

Dailey said Miami Beach, with its international appeal and superheated status, is a perfect place to launch the brand. “We know that there’s certainly a lot of competition here,” he said. “I think we have something that’s really special.”

The reputation of Starwood Capital and SH Group chairman and CEO Barry Sternlicht — who founded Starwood Hotels & Resorts in 1995 and created W Hotels — has also helped draw attention, Dailey said.

Gregory Rumpel, managing director of Jones Lang LaSalle Hotels in Miami, said he believes the hotel will be especially attractive to meeting planners and families drawn by its large rooms, some of which boast two king beds. JLL took the property through foreclosure in its previous iteration, sold the hotel to the current owners and remains “actively involved,” though Rumpel would not say in what capacity.

Rumpel said the 1 Hotel South Beach joins a growing list of high-profile new offerings on the beach, including the Thompson Miami Beach and Miami Beach Edition. “We’ve got this new cast of characters,” he said. “The picture just got broader, the picture just got more interesting and exciting.”

 

Source: Miami Herald

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