Miami Booms (With a Few Caveats)
Miami’s hot, but that doesn't mean city and business leaders can’t do more to attract new businesses and make the city a more desirable place for top talent to relocate (and in January and February, everyone thinks about it). That was one of the main takeaways from our Miami State of the Market this week.
In the plus column, according to our panelists: enviable weather, but also the city’s vigorous and international cultural, culinary, and entertainment growth in the last few decades. Also—at least compared with places like New York or San Francisco—the cost of living here is still fairly low. These are factors attracting businesses and human talent to Miami. In the minus column, however, residential properties between luxury and older stock can be hard to find, the schools need improvement, and transit isn’t all it could be. About 220 attendees joined us at the Intercontinental Miami.
Snapped: Flagler VP-investment sales Cary Cohen, who focuses on the disposition of properties throughout South Florida; and Hunt Mortgage Group SVP Marc Suarez, who was tapped by Hunt recently to expand its commercial mortgage financing business in Miami. The panelists acknowledged that Miami’s always been a condo town, and because of the continuing influx of flight capital, that isn’t likely to change. Since the tide of investment tends to focus on luxury properties, the city is facing a shortage of residential properties that appeal to middle- and upper-middle earners. Even the highest paying jobs come with support staff, and they need a place to live.
Arnstein & Lehr attorney at law Rebecca Abrams Sarelson, who moderated; ADD principal Jonathan Cardello, whose firm is designing the redevelopment of the old INS HQ on Biscayne Boulevard; and Plaza Construction Group FL president Brad Meltzer, AIA Miami’s most recent Contractor of the Year. Non-traditional companies—tech, for instance—are now considering Miami more seriously as a location than they ever have, the panelists explained, and some of them are coming here. But tech companies have some difficulty finding talent here, despite the tax benefits compared with a place like Boston or San Francisco. There also need to be more large corporate HQs here (tech or otherwise) before there’s a major influx of the smaller companies and startups that feed off of them.
Franklin Street regional managing partner Greg Matus, who also moderated; Aria Development principal David Arditi, who's developing 321 Ocean in Miami Beach; and Berkowitz Development Group president Jeff Berkowitz, who’s developing Skyrise Miami. The overseas investment that’s been driving so much of the market has graduated from putting flight capital into condos into seeking commercial deals, the panelists observed. Core housing is still the darling among foreign investors, but they’re also going to other property types in the region to chase yields. Also, developers in Latin America have family members opening operations here and are partnering with local owner-operators. In short, foreign capital is becoming more actively involved in Miami.
Sakor Development principal Barbara Salk, who’s developing ION East Edgewater; Metro 1 Properties CEO Tony Cho, who’s helping remake Wynwood and other urban neighborhoods; and Miami Worldcenter Associates managing principal Nitin Motwani, who's overseeing the creation of 1M SF in experiential retail and other uses just north of the CBD. In the retail market, Miami’s having a special moment, the retail experts say. A lot of attention’s been paid to the retailing successes in Design District, but retailers are doing very well in most markets, including longstanding hubs such as Bal Harbour. The main reason retail will continue to do well: Miami’s still under-retailed.