Which Miami Neighborhood Will Heat Up Next?
The residential population in downtown Miami has doubled from about 40,000 in 2000 and is expected to surpass 100,000 in 2021. That is just one sign of the city's surging urban core.
The surge of population could help turn Downtown Miami's main corridor, Flagler Street, into a café district, said Gary Ressler, a principal at Tilia Cos. The Flagler Business Improvement District could give those efforts a big boost.
Tilia’s holdings include the 17-story, Art Deco Alfred I. DuPont building, which was built in 1939 and now hosts weddings and corporate events. Ressler’s grandfather acquired the site out of the savings and loan crisis in 1991, he said.
Now, “we're doubling down,” on downtown, he said. “My wife and I are opening a microbrewery and pub.”
Tenants are starting to see value there in comparison to bustling Brickell.
“The rent spread is $16 to $18 per foot,” Ressler said. “They can save $20 per square foot and be in a comparable building downtown.”
Ressler was one of the well-known figures in Miami real estate featured as a panelist at Bisnow’s Expanding Urban Core event last week. Predicting the next neighborhood to heat up, each panelist bet on a different part of the city, but all agreed that developers must pioneer areas with residential offerings first, bringing in a population base so that commercial activity can thrive.
Lissette Calderon, CEO of Neology Life Development Group, has been a pioneer on the Miami River since she opened NEO Loft in the early 2000s.
“I was my own market,” she recalled.
When she moved back to Miami after college, she said she couldn’t find a quality, affordable apartment.
“I could either commute one [to] one and a half hours, or live with mom. Where was the value proposal for someone like me?” she said.
When she looked at the river, she said the cheaper land meant she could offer cheaper units than the rest of the market. She also took into account what she and her colleagues would want in a building.
“We didn't have kids," she said. "But we had dogs.”
So hers was the first area building with a dog park.
Calderon recently paid $61M for a 21-story, 199-unit building on the Miami River that she has converted into a luxury product, Pier 19 Residences & Marina, and also has plans for apartments in Allapattah.
Two Roads Development partner Taylor Collins said he evaluates real estate like he does publicly traded companies: Which areas have great fundamentals?
“Find a hole in the market,” he said.
Collins found a niche developing spacious units for families that are moving out of suburban homes into the urban core, but don’t want to feel cramped.
He said he is bullish on Bay Harbor Islands, and the Edgewater/Little Haiti area where billionaire developer Russell Gabut has purchased lands in recent years and Avenues is opening an elite private school.
Developer Robert Finvarb said that the next area to redevelop will be the north part of Miami Beach, especially in the Town Center area between 69th and 73rd streets, where voters OK’d a zoning change to allow increased density.
Finvarb has proposed two, 220-foot-tall buildings with hopes of luring millennials to the beach. Finvarb said that while he has admired the strides made in Wynwood and the Design District, “our greatest natural resource is the beach.”
Finvarb is also interested in North Miami, where he bought property west of SoLeMia. He said the purchase was largely a transit-oriented play based on Tri-Rail’s plans to eventually add rail stops through its Coastal Link extension.
Emerging markets will largely depend on places where people don't have to drive, Finvarb said.
“I’ve got three millennials living in the house," he said. "Nobody wants to move. They want a Subway sandwich from across the street, they have it delivered. One ordered a Salty Donut — one! — from Uber Eats.”
Douglas Elliman Florida CEO Jay Parker agreed that while people are tired of long commutes, “it’s more about the product versus location,” he said.
He pointed to New York, where luxury product is no longer built only on the Upper East Side, but in formerly working-class areas like the Meatpacking District, Brooklyn and Harlem.
He remembered living in Brickell decades ago, when a Blockbuster video store finally opened in what was then a commercial wasteland.
“I thought it was heaven,” he said. “I didn’t have to get in my car.”
Now, he’s bullish on Edgewater.