In Private Meeting, Miami Mayor Shares Outlook With CRE Execs
Miami Mayor Francis Suarez had just left a meeting with Pitbull when he settled into a conference room in his real estate office at Carlton Fields just before Christmas to meet privately with about a dozen key real estate and finance executives and share his thoughts about the coming year.
"This is a pivotal moment for the city," said the 40-year-old mayor, who was elected in November after serving eight years as a city commissioner.
Largely because of a real estate boom, the tax base had grown 37% in 12 years, Suarez noted. And more projects are set to come online.
According to the the Downtown Development Authority, the development pipeline is loaded with 23,500 condominiums, 5,300 apartments, 6,000-plus hotel rooms, 3.5M SF of office space and 4M SF of retail. Suarez said his challenge is to manage that growth.
"How do we make sure that success permeates to every sector of the city?" he said. He added that the city's rapid development was "a little scary because of our insufficient infrastructure."
Already-frustrating traffic could become so bad as to tarnish Miami's brand, said one attendee, Miami Parking Authority CEO Art Noriega.
A new private rail service, Brightline, is expected to launch in early 2018 with service to Fort Lauderdale, West Palm Beach and later, Orlando, but other transit projects have been notorious for fits and starts.
Suarez said Miami's real estate boom was largely dependent on wealthy foreign buyers from less politically stable countries who were looking for a safe place to invest, but that such investment is slowing.
"Miami benefits significantly from dysfunction in other parts of the world," Suarez said.
From mid-2016 to mid-2017, 11% of all South Florida residential real estate sales were to foreign buyers, and the median price they paid was 18 percent higher than that of domestic buyers. Suarez said that the pace of investment was slowing, though, and that increased scrutiny by U.S. Attorneys looking for money laundering had some effect.
One attendee at the meeting, Baptist Health Services Vice President Kathleen Moorman, said land prices were getting so high that healthcare facilities cannot find affordable space. Suarez said that is a problem for schools, too, and suggested creative partnerships with developers to fill sagging ground-floor retail spaces.
As in many major cities, workforce housing is a challenge in Miami, but Suarez pointed out that he had helped bring 1,600 such units to the city and that voters had just approved taxing themselves with a $400M bond, part of which is earmarked for affordable housing.
Suarez said that, even with so many projects in the development pipeline, the city is still getting pitches for additional projects, although he was not sure how many of those might come to fruition.
"You count your chickens when the check has cleared the bank," he said.
He also rattled off positive developments for the city, such as Derek Jeter's taking over the Miami Marlins baseball team, David Beckham's plans for a Major League Soccer franchise and more. He was highly optimistic about the city's real estate market resiliency.
"I don't want to say [it is] recession-proof — that's probably a stretch — but from what I'm seeing, demand is outpacing supply," he said. "The counter-branding of Miami is that it's going to be underwater in 10 years. That's the only thing people up north can come up with."
In response, his goal is to make Miami the most climate-resilient city in the world.
The meeting was a "Mastermind" session organized by the REAL Professional Network, a private, invitation-only group with paid membership that operates in 13 cities.
Its Atlanta-based CEO, Rick Lackey, said the group organizes private, exclusive events and facilitates networking and dealmaking, essential in the relationship-based real estate industry.
"What [it] really comes down to is friends helping friends," he said. "It's insider trading any way you cut it."
In addition to Moorman and Noriega, attendees at the meeting included Behar Font Architects Principal Javier Font, Del Busto Capital Partners principal Juan Del Busto, Carlton Fields shareholder Brian Hart, Federal Reserve Bank of Atlanta Miami Branch Vice President and Regional Executive Karen Gilmore, Baptist Health Enterprises Director of Development Teresa Martinez, Cherry Bekaert partner Jamie Byington, Cherry Bekaert partner Carol Surowiec, C Bridge Inc. owner Jack London and Carlton Fields shareholder Jay Koenigsberg.