Miami and the South Florida market have been experiencing surging tenant demand across all asset classes in 2016. With that explosive growth comes the challenges of how to plan for increasing urban density—as well as rapidly changing technology—in current projects. At the Miami Finance Forum last Friday, top area developers talked solutions.
Pictured discussing the hospitality market: Joel Simmonds, CFO of the Murray Group, maintains that Miami—along with most other big cities in the US—is seeing a trend towards smaller units with better amenities.
In all, the panel featured five titans of Miami real estate representing five major sectors. In addition to Joel, the panel featured Alan Ojeda (office), founder and owner of the Rilea Group; Steven Gretenstein (retail, above), CEO of DACRA Development; Jay Massirman (multifamily), founder and managing principal of the Rivergate Cos; CEO of McCraney Property Steve McCraney (industrial), and Gregory M. Santin, president of the Miami Finance Forum.
Santin is also the VP and Relationship Manager of the Commercial Real Estate Group of BankUnited, which sponsored the event. Jim Shindell, partner at Bilzin-Sumberg's Real Estate Group (the title sponsor), moderated the discussion.
Speaking of a mixed-use office building his firm had built across the street from the venue on Brickell Ave, Alan (above) says that of the 60 or so tenants occupying the space, one-third are from outside of Florida, with many coming as far away as Switzerland. They work in a very diverse range of industries, from fashion to insurance. "Miami is becoming a very important city, and it's growing very fast," he says.
To keep up with this increasing residential demand, Miami needs to fix its "disaster of a public transport system," which its new mayor, Alan said, finally looks to address.
He says parts of Miami's current public transit system wouldn't be out of place in the 1950s. This has led to Miami's current layout as a sprawling, commuter-oriented city. The new transit lines, promising a more accessible urban core and more walkable city, represent a game changer for developers moving forward.
The shift has already begun to take place. He attributes the success of his own office developments on Brickell Ave to its proximity to Miami's train.
Developers also face big challenges in future-proofing their buildings. The structures need to be able to accommodate new technology and increasing power demands so they remain viable options for tenants for years to come.
McCraney (pictured right next to Gregory) emphasizes the rise of e-commerce as a continuing disruptive force in the big-box industrial space. The growth of Internet retailers like Amazon have greatly increased the need for tractor-trailer storage, so industrial developers must account for that.
Alan says office developers must similarly plan for incoming technology. Mixed-use offices' increasing technological integration will mean more electricity consumption. He attributes this to people working and living in tighter proximity to one another than ever before, and of course the power demands of giving everyone computers and Internet access.
At various points in the discussion, nearly all the developers touched on the difficulties of planning for the longer term. With technology like mail drones and smart offices on the horizon, how will building needs change in the future? Developers must predict as best they can to ensure their projects' staying power.
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