Ken Griffin's Miami Neighborhood Of Choice Rises To Meet Its Moment
The neighborhood — just south of Brickell along Biscayne Bay — has long been a destination for local families because of its single-family offerings, walkable streets and quality schools but has in recent years become a relocation hot spot for well-heeled residents from places like New York, California and Chicago. Their arrival is beginning to transform the area known as the Grove, luxury condo towers are breaking ground, restaurants and retailers are signing leases and developers are pushing to build mixed-use schemes that strengthen a self-contained neighborhood where residents live, work and play.
“It's a place that is in a neighborhood that has restrictive zoning, a very active community, a very educated community and one that has a lot of pride in its neighborhood,” said David Martin, CEO of the development firm Terra, which has been building properties in Coconut Grove for more than a decade. “I think that activism has brought about a special kind of energy, spirit and soul to the neighborhood that I think people are drawn to.”
Corporate executives and middle managers are also drawn to the Grove because of its accessibility, access to schools and diverse mix of restaurants and stores, according to developers and brokers. Last September, Citadel CEO Ken Griffin purchased two mansions set on 4 acres in the neighborhood for $107M, the highest price ever recorded for a house in Miami-Dade County. In April, entertainment magazine Variety labeled the neighborhood a “real estate hotspot.”
“There’s been a ripple effect. Every family that moves to Miami has a network, and when they move here, they provide a new ambassador for our city,” Martin said. “Important people and important leaders in our community, like Ken [Griffin] and others, are moving here, and are being part of the institutions and the nonprofits, and are trying to help the community.”
The focus on Coconut Grove has helped propel real estate growth there in recent years. The average price of a condo in the neighborhood grew to $2.9M in the first quarter, according to a report from Douglas Elliman, up more than 125% from the year before.
“We had a market up to 2019, and then we had a completely different market after the pandemic,” said Enilda Rubin, a realtor with The Keyes Co. who has worked in Coconut Grove for 25 years. “I sold a townhouse in 2019 for $625K, and the same townhouse today is $1M, $2M, $3M.”
At least four luxury multifamily projects are under development. Last month, Terra announced it secured a $43.2M loan to begin construction on a 148-unit luxury property called Residences in the Grove, and CMC Group broke ground on a 65-unit luxury condo project called Vita at Grove Isle.
CMC’s project, located on the exclusive island built in the 1970s and accessible from Coconut Grove, includes a seven-story, 65-unit, high-end condo project with private elevators, concierge service, a poolside bar, a spa and marina access. As part of construction, CMC will also upgrade the gatehouse for the bridge leading to the island, replace road pavers and redo the landscaping leading to the property.
“While we beautify that area, it sort of brings back the grandeur of the Isle to what it was,” Christine Martinez de Castro, vice president of sales and marketing at CMC Group, said.
Terra also has two other projects under construction that will add more than 600 housing units to the neighborhood. It’s building the 231-unit luxury Mr. C Residences, a two-tower condo project that the developer said is fully sold ahead of its delivery later this year, and the transit-oriented Grove Central, a 23-story apartment building with 170K SF of retail space.
Martin said Grove Central’s ground-floor retail was aimed at enhancing the neighborhood by “trying to deliver all the basic services and trying to have the big idea” of creating healthy, sustainable neighborhoods. The property has signed tenants like Target, Sprouts Farmers Market and Total Wine & More ahead of its delivery later this year. In March, Terra also announced Club Studio, a high-end fitness concept from the owners of LA Fitness, would open a 38K SF gym at the property next year.
“The Grove has an amazing purchasing power, and I think a lot of businesses want to be part of it,” Martin said. “There's definitely, I think, a huge amount of excitement around what's happened.”
CocoWalk, the 273K SF open-air shopping mall that opened in the 1990s and has long served as an anchor of Coconut Grove, is 100% leased. The property’s owner, Federal Realty Investment Trust, said in a Securities and Exchange Commission filing Friday that increased rental revenue from a 2021 redevelopment of CocoWalk contributed to the company’s overall 6.4% increase in rental revenue in the first quarter.
Next door, Major Food Group is looking to open a 25K SF food hall in the Mayfair at the Grove, a mixed-use complex with a hotel that was named as one of the best new hotels in the country by Condé Nast.
“Because there is such a huge amount of people coming to South Florida, I would say that we're seeing a resurgence in some neighborhoods that maybe were overlooked in the past,” Castro said. “We knew about it as locals, but maybe if you spoke to someone in New York or Chicago and you mentioned Coconut Grove, they would have no idea what you're talking about. And now Coconut Grove was named one of the busiest, trendiest neighborhoods in the world.”
Castro said CMC’s Vita at Grove Isle condo project, which broke ground last month, was already more than 40% sold, with around 60% of buyers coming from outside of Florida. She said the pandemic shifted the condo market away from investment units and toward properties that people plan to occupy long-term.
The influx of new residents has had a knock-on effect in the office market, as corporate executives and managers look to co-locate near their offices in self-contained neighborhoods with retail and dining options.
Weighted average office rents were up 21% year-over-year in the Grove, according to Blanca’s first-quarter office market report, and vacancy fell to 4.4%, the lowest of any submarket tracked by the firm.
Despite the high demand, limited available land and zoning restrictions have made it difficult to develop office properties in the area. There are no office buildings under construction.
“There's a huge amount of demand, but the critical thing is there's no large enough sites where you could satisfy your parking requirement and build the office,” Martin said. “If I could find a site to build 150K SF of office in Coconut Grove, I would love to.”
2601 Bayshore Drive, a 294K SF office tower that accounts for more than 40% of the office space in the submarket, is nearly fully occupied with prospective tenants currently in lease negotiations, said Tere Blanca, the founder and CEO of Blanca Commercial Real Estate, which leases the building.
Blanca said there was still strong demand for office space in the market and that she expected developers will propose projects in the neighborhood that incorporate office space as part of a broader mixed-use scheme.
“We all wish we had another 100K SF to lease right now,” Blanca said.
While luxury properties are being built all across Miami, Coconut Grove is uniquely positioned to meet tenant demands, brokers and developers told Bisnow. The neighborhood is set apart from other areas because of its high-quality schools and relatively short commute times due to the area's proximity to other major submarkets like Brickell, Downtown and Miami Beach.
The Ransom Everglades School in the neighborhood was ranked the No. 1 private high school in Florida by school search platform Niche, and the area is also home to some of the top Catholic schools in the country. Carrollton School of the Sacred Heart in the south of the Grove was ranked the No. 5 best Catholic high school in America, according to the site, and the nearby Immaculata-La Salle High School ranked ninth. Coconut Grove’s public schools also perform well. The neighborhood elementary school was ranked No. 12 in Miami-Dade and No. 35 in the state by U.S. News & World Report.
Blanca said access to the area’s high-quality schools has become “an important aspect of the decision matrix” for companies and their executives when looking to relocate.
“I think that the schools drive decisions on location for executives, in many cases, especially if you're not a global company that needs to operate in the financial district,” Blanca said.
Rubin, the Coconut Grove real estate agent, said that while schools are a priority for families coming to the Grove, new residents without kids are still drawn to the area because they want to live near retail and dining options and close to the central business district. At a time where Miami ranks fifth among cities with the worst traffic in the world, she said that being close to points of interest is paramount.
“You need to be as close as possible for everything you need to do,” Rubin said. “My No. 1 recommendation for people moving here is to ask: What kind of a lifestyle do you want to have? And then of course you need to point them to places where traffic is going to be circulating. That’s the convenience for the area, it’s the reason why it’s so in demand.”