May 20, 2016 | Forbes
The international media has characterized South Florida’s real estate market as being dominated by luxury condos owned by absentee buyers. In fact, a deeper look reveals that the region’s housing landscape is becoming increasingly diverse as developers meet demand among actual residents, so-called ‘end-users.’
While the perception is that our market is one-dimensional due to the sheer number of high-rise condos that have been built over the past decade, today there are thriving single family home and apartment communities underway in neighborhoods like Doral, Weston, Pembroke Pines and even in and around downtown Miami.
Though we have seen an uptick in condo development in the past three years, the majority of units being built this cycle are selling to owners who will spend all or part of their time here. This marks a shift from the boom-turned-bust of 2008, which was driven by condo developers, their buyers and banks over-leveraging themselves in the name of speculation.
Case in point: In downtown Miami, the epicenter of overbuilding last cycle, 85 percent of the 3,438 condos delivering this year are pre-sold, according to the Miami Downtown Development Authority’s latest market report. The same study found 94% of downtown’s existing units are occupied by full-time residents.
Several factors are fueling this stability.
Enhanced lifestyle offerings are appealing to end-users from across the U.S., Latin America, Europe, the Middle East and Asia who want to own a home here, preserve their wealth, start a business, or upgrade their family’s quality of life. Our architecture has been elevated. World-class cultural and retail destinations are boosting our standing as a year-round destination. New museums are rising, our public and private schools are improving, and neighborhoods from Wynwood to Coconut Grove are being reimagined as urban and walkable.
Second, our market is on sound financial footing by comparison with past cycles. Because the vast majority of today’s home sales are all-cash, developers are insulated from the risks associated with insurmountable debt. Even when lenders finance purchases, buyers are contributing 30-40% equity, a high threshold favoring residents over speculators. The days of easy-to-access loans are gone, resulting in one of the country’s most under-leveraged markets.
At the same time, we are making important investments in our infrastructure, from creating new parks and public transit options, to expanding Miami International Airport and adding high-speed rail service.
Developers are doing their part to lure end-user residents by building low-density projects, prioritizing neighborhoods that foster a sense of community, and offering amenities that make people feel at home.
At Grove at Grand Bay in Coconut Grove, set for completion this summer, buyers include local accountants, attorneys and doctors. More than half of the building’s owners are from the U.S., including many empty-nesters relocating from across South Florida.
Nearby, at Park Grove, we’ve sold units to New England transplants and seasonal snowbirds. One of our buyers is a middle-aged couple relocating from Connecticut after years of vacationing on a sailboat in Coconut Grove. Now they’re putting down roots in South Florida and will split their time between Miami and Maine.
Likewise, the majority of our single family homes at Modern and NeoVita in Doral and at Botaniko in Weston are selling to existing South Florida families in search of new construction, contemporary home designs, more private space, and a suburban community offering a strong quality of life.
After years of enduring criticism as a one-dimensional market overrun by absentee buyers, South Florida’s diverse housing options are increasingly appealing to end users. That’s good news for our real estate market, our economy, and our City’s newest crop of residential developments.
May 25, 2017 | Forbes
by: David Martin
Read on: www.forbes.com
For many companies in "corporate America," choosing the right office space has long been about securing the most efficient space, the most convenient parking, and the highest-grade finishes in shiny skyscrapers near a city’s central business district. But now, as Millennials and young executives become the dominant generation in the American workforce, we’re seeing companies ditch corporate for cool.
Millennials, defined as 18-to-34-year-olds, now make up more than one-third of the U.S. workforce, accounting for the largest generation at work today. Because research indicates younger members of the workforce prefer utilizing public transit, walking to work over driving, and living and working within close proximity, it’s no surprise that urban areas have become the chosen home turf for millennials – and the companies seeking to hire them are following close behind.
More and more, major brands are foregoing sterile office towers for edgy workspace in areas that are walkable, home to trendy restaurants and bars, and close to accessible housing options. Developers are responding by building stylish office space suited for tenants ranging from entrepreneurial startups to Fortune 500 brands, a trend that’s giving birth to emerging neighborhoods across the country.
In Miami, we’re seeing this play out in two of the City’s hottest urban neighborhoods. Long-known for its bohemian laid-back lifestyle, Coconut Grove has come alive in recent years as a residential, dining and shopping hotspot home to big-name corporate brands like Virgin Hotels, Sony Music, General Electric and SapientNitro. Because the area has lacked purpose-built office space for so long, these companies have had no choice but to convert old shops, restaurants and even movie theaters into retrofitted office space.
Now, for the first time in 30 years, Coconut Grove is preparing to welcome three new office buildings, led by the mixed-use Mary Street complex.
A few miles away, in Miami’s once-blighted Wynwood district, we’ve seen decades-old warehouses enjoy second lives as makeshift offices home to companies like Revlon and GoPro. Today, we’re seeing conventional office developers take steps to transform this graffiti-covered haven for aspiring artists and creatives into a legitimate office market, with four new office buildings planned in the neighborhood for the first time ever.
Miami is not alone. In Chicago, developers have transformed the City’s Fulton Market district from a gritty industrial zone into a mixed-use neighborhood that’s capturing global brands like Google, McDonald’s and Dyson, the high-tech vacuum cleaner maker which announced it would relocate its US headquarters to the area later this year.
On the west coast, the once-overlooked Arts District in Downtown Los Angeles – better known as “DTLA” – has seen an influx of new restaurants, bars, hotels, and residences. Now, office developers and investors are preparing to welcome corporate blood into the mix. Following last October’s announcement that Warner Music Group will move hundreds of employees into a former auto plant in DTLA, big-time players like Hudson Pacific Properties, Atlas Capital, and Tishman Speyer are pouring millions into the area by converting old buildings into newly-designed office space.
Millennials and young executives have already changed the way real estate investors are planning residential and retail development and the way communities are bringing new neighborhoods to life. Now, as our workforce becomes younger, the office market is emerging as the next frontier in the race for capturing millennials.
On the west coast, the once-overlooked Arts District in Downtown Los Angeles – better known as “DTLA” – has seen an influx of new restaurants, bars, hotels and residences. Now, office developers and investors are preparing to welcome corporate blood into the mix. Following last October’s announcement that Warner Music Group will move hundreds of employees into a former auto plant in DTLA, big-time players like Hudson Pacific Properties, Atlas Capital and Tishman Speyer are pouring millions into the area by converting old buildings into newly-designed office space.
March 31, 2017 | Forbes
By: David Martin
Read on: Forbes.com
The trend toward urban living may be here to stay, but as residential towers rise higher and the amenities in buildings become more elaborate, people moving into cities are putting increased emphasis on connecting with the environment outside their doors. As developers, we understand how to integrate a building within nearby shops and restaurants. Now, we're asking ourselves: what else can we do to help people live balanced lives? How do we balance living with our residents' desires to integrate to integrate within their community? To what extent can development serve as a common denominator in a diverse community?
The answer lies in creating parks and great public spaces.
The world’s most livable urban centers have long offered what residents crave – a seamless environment between home, neighborhood, and public space. But all cities are not created equal, and the truth is that some metro areas haven't kept up with growth.
Fortunately, private developers are catching on and making meaningful investments in improving public parks, cultural amenities and outdoor gathering places in close proximity to their properties. This concentration on contextual living is real estate’s new best practice.
One of the best case studies for this public-private model is Millennium Park. The project was spearheaded by the City of Chicago but relied heavily on funding from major corporations with a vested interest in improving quality of life in downtown. Opened in 2004, the 24.5 acre park cost $490 million, with $270 million coming from the City and the rest from sourced from the corporations such as BP and Chase. By 2011, a study by Texas A&M and DePaul Universities showed nearly $2.45 billion in new condominium, office and hotel construction had come to life since the park’s debut.
Now Miami and Miami Beach, home to one of the country’s most active real estate markets, is enjoying the benefits of private investment in public spaces. Projects like the proposed 10-mile linear park The Underline, the planned overhaul of Miami Beach’s North Shore Open Space Park, and the recent completion of Regatta Park in Coconut Grove have all been made possible through funding from private sources.
There are smaller-scale examples as well. In Miami's Coconut Grove neighborhood, funds generated through development impact fees made possible the creation of Regatta Park along Biscayne Bay. This park opened as new high-rise towers were underway nearby, serving as a key selling point for people looking to move into the neighborhood.
Residents and users of developments adjacent to these public spaces aren't the only ones experiencing benefits. Proximity to public amenities creates increased property values, yielding additional tax revenue that can fund infrastructure improvements throughout a community.
We have seen this along the High Line, which transformed one of New York's most undervalued neighborhoods into one of the city's hottest districts. And we're seeing it in Miami, with new investment pouring into North Beach in anticipation of a fully re-imagined 35-acre oceanfront park to be designed by West 8 over the coming years.
Beyond creating immediate lifestyle benefits, investments in parks can also promote future sustainability, as evidenced by The Big U project in lower Manhattan. Designed by Bjarke Ingels' BIG studio and funded in part by the City of New York and the federal government, The Big U will create new waterfront green space while simultaneously increasing the height of the city's shoreline to protect against rising seas.