February 21, 2017 | Crains
The high cost of prime downtown real estate has priced many South Florida home buyers out of the market. As developers turn to the region's suburban enclaves to build new, more affordable projects, many are asking themselves why they can't bring downtown living to the outskirts.
"People want connectivity among neighborhoods, but they also want neighborhoods to have several components," said David Martin, president of real estate development firm Terra Group. "Residents want to live in communities where there are good schools, parks, retail, walkability and culture and we're finding that you don't necessarily have to go downtown to find it."
Martin, along with several major real estate developers like Related Development and Codina Partners, are working on the growing need for more affordable real estate options that are close to work and close to great schools. While still offering that urban feel so many residents crave.
So what's driving development of these new frontiers? Affordability, proximity to work and the ability to quickly reach major shopping and entertainment centers is a major draw, said Martin. "People are living in smaller spaces due to affordability, they're not really interested in spending hours in traffic getting to work, and there's a much stronger need for these outdoor experiences," he said. Terra's Pines City Center project in the Broward County community of Pembroke Pines, a 17-acre project encompassing multifamily apartments, retail and restaurant space anchored by major retailers.
Martin said that Terra's multifamily apartments will range in price from about $1,600 for a one-bedroom to around $2,800 for a three bedroom – a staggering difference from the average rental rates in urban centers. For example, multifamily residential tower Midtown Five offers one-bedroom units starting at $2,100, and the building's three-bedroom units can rent for up to $5,300.
Ira Teicher, a partner at Strook, Strook and Levan that's worked with Codina Partners on the development of Downtown Doral, said the affordability factor is also a major draw for developers. "As land prices have escalated in Miami, its getting kind of tough to replicate the same model in urban areas," he said. "Instead, developers are tapping into the opportunity to create a self enclosed community."
Likely one of the most widely publicized major mixed-use developments in Miami today, Downtown Doral is being lauded as a game-changer for the heavily industrial area. The seat of some of South Florida's largest employers – Perry Ellis, Carnival Cruise Lines and the Miami Herald are all based in Doral – commuters into the city frequently complain about high traffic congestion in the area.
"I think Downtown Doral thinking aloud it really is a unique product in that it's a self enclosed community," said Teicher. "You can literally buy or rent a unit, walk your kid to school, go to the office, then go to a restaurant for dinner."
Still, Pembroke Pines and Doral aren't Miami Beach. For many who work in suburban areas but continue to visit urban centers for entertainment, moving that far west may not exactly sound so enticing.
Steve Patterson said that's exactly why Related Development is building CityPlace Doral as a prime foodie destination and retail experience. "Doral doesn't have a lot of experiential retail destinations, and by that I mean a place where you don't necessarily go to pick up things you can buy on the internet," said Patterson, who serves as president and CEO of Related Development. "We're building CityPlace Doral as a mixed-use complex with apartments and lofts, a movie bistro, entertainment center, comedy club, and a Fresh Market, along with two dozen restaurants serving food from all over the world, from sit-down fine dining to fast casual."
CityPlace Doral is certainly a departure for Related Development, who tends to focus on building in more urban locations. "We have a bias to urban development because those areas are typically serving a higher-earning population," said Patterson. "But Doral is an interesting place because its close to everything – it's close to the airport."
Despite their historically small-town feel, Martin said there's definitely a trend among South Florida developers for building out urban centers farther west. "When you look at a lot of cities and their suburbs, you realize that places like Pembroke Pines and Doral are accessible to so many neighborhoods and experiences," he said.
And while these developments may not have the towering skyscrapers and big city feel of Brickell or Miami Beach, their affordability – coupled with exciting new restaurants and amenities – should drive potential residents to think twice. Patterson said: "People who think Doral is average need to go back to Doral."