More Developers Look To Sell Miami Sites They Once Hoped To Build On

Shovel-ready sites are popping up for sale all over Miami as developers that had planned to join in the Magic City's building boom look instead to take the money and run from an increasingly uncertain market.

Amid rising construction costs, fluctuating interest rates and tariff disputes, developers are increasingly choosing to sell sites they have spent years entitling rather than sit on land they can’t afford to build on yet.

The hope is to cash out at a premium while the window is still open, brokers said.

“We see it quite frequently where, in many cases, would-be developers are calling us because they're trying to figure out their best next steps,” said Brad Capas, CBRE multifamily sales and land development sales executive vice president. “They're not in a position to break ground today.”

North Carolina-based developer Evolve Cos. listed two sites it had purchased in 2022 that were supposed to become 246 apartments, The Real Deal reported.

Wynwood 35, a 41K SF development site at 535-585 NW 35th St., was the planned first phase of that development. Evolve expected to finish the 141-unit, eight-story project by the end of 2024, Commercial Observer reported. 

But the company listed the tract for $14M alongside its second property in Midtown, which it put up for sale for $12M just days before with Dwntwn Realty Advisors agents George Belesis and Wilson Alers.

Evolve purchased the 31K SF Midtown lot at 475 NW 36th St. for $9M and got approved for an eight-story, 150-unit project that never came to fruition.

“They like Miami and South Florida, but when push came to shove, these development sites aren’t part of the core business,” Belesis told Bisnow.

A third entitled Wynwood site at 35-83 NW 27th St., named Wynwood Easel, was listed in March for $26M. Developers Scott Robins Cos. and Philip Levine had originally planned in 2020 for a 120-key hotel with 72 apartments and 13K SF of retail there. In 2022, the pair tweaked those plans with a new proposal to build 203 multifamily units and 15K SF of ground-floor retail.

“We didn’t think a hotel project was appropriate at this time in that area,” Scott Robins told The Real Deal at the time.

The 39K SF site is now listed with Dwntwn for $26M with its approvals. One of the site's listing agents, Tony Arellano, told Bisnow the partnership planned to assemble, hold, entitle and then sell.

“In some cases, these developers had intended to break ground a year or two ago, and now we're not sure how much longer this choppy environment is going to last,” Capas said. “In some cases, they may have lender pressure or partner pressure to go ahead and sell, or they may just want to deploy that money elsewhere.”

The trend of entitled properties hitting the market is expected to grow as uncertainty in the development landscape persists with rising interest rates, insurance costs and tariffs, Capas said.

And shifts in interest rates and tariffs tend to hit South Florida particularly hard, given the region's constant cycle of construction and active development, Colliers South Florida Capital Markets Vice President Virgilio Fernandez said.

As of Wednesday, the 10-year Treasury yield stands at 4.4% — a sharp rise from near-zero lows, around 0.6%, in April 2020 and the 2% to 3% range seen throughout 2022.

Construction costs have climbed in tandem, as materials rose 40% higher than before 2020, according to Construction Dive, and are expected to rise further due to the Trump administration’s most recent implementation of tariffs.

The policies announced April 2 — a 10% universal tariff, along with 25% on steel and aluminum and 145% on Chinese goods — sent ripples through the market, threatening to further increase costs and put deals on ice.

“There’s developers that see the opportunity to sell and make a nice premium rather than taking the risk of developing in this environment,” Fernandez said.

The target percentage for return on cost for developers is 6.5%, and if that becomes harder to obtain, they won’t build, he said.

So the only option may be to sell.

“They're going to see if they can sell their site and go do something else, because their business plan did not materialize the way they had intended,” Capas said.