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'The Cat Has Come Out Of The Bag' As Developers Descend On Hialeah

Factories, one-star motels, strip joints, warehouse outlets, and botánicas selling religious and spiritual goods have long defined the city of Hialeah. For decades, there was almost no development to speak of.

But things are changing fast in "The City of Progress."

The historic Hialeah Casino & Racetrack is one of many sites in Hialeah slated for new multifamily construction.

The predominantly Cuban neighborhood is the sixth-most populous in Florida, but almost 60% of all of its housing units were built between 1950 and 1979, according to census data. Just 1,102 units were constructed between 2000 and 2020 — but developers in Hialeah have a far greater number under construction at this very moment.

Related Group and Jeffrey Soffer's Fontainebleau Management bought a former greyhound racing track that closed in 2020 after the state banned the activity, and broke ground last year on a $150M, 642-unit luxury project on more than 28 acres at 7218 West Fourth Ave.  

Dania Beach-based Dacar Management is underway with a mixed-use project that features 190K SF of retail — including Publix, Burlington and HomeGoods — and 244 apartments at 3685 West 85th Path, The Real Deal reported in May. Dacar landed an $81M loan for that project less than two weeks after J.V.C. Management Corp. secured a $67M loan from Ocean Bank to develop 314 units at 4030 West 88th St.

Local developer Prestige Cos. is the most active builder in Hialeah, with 43 completed projects, a dozen under construction and nine more in pre-development, Chief Operating Officer Alexander Ruiz told Bisnow. Ruiz was born and raised in Hialeah, as was the development firm's CEO, Marty Caparros.

As Prestige has continued to build up the city, Ruiz said he has seen a return of people who grew up in Hialeah, but moved away because there was nowhere appealing for single young people to live.

“We have always felt there is a real need for an attractive and modern product in the city and there just wasn’t any,” Ruiz said. “The city was built between 30, 40, 50 years ago. Something as simple or as common as a washer and dryer being available in the units, this did not exist. A washer and a dryer are huge amenities. It sounds basic but this was something that wasn’t available in the marketplace.” 

Prestige broke ground last year on a 284-unit project called The Trail, which will debut Miami-Dade County's new Ludlam Trail, and just closed Monday on a $13.7M land acquisition to clear the way for a 343-unit project on a piece of the Hialeah Park Casino and Racetrack.

“Hialeah had that issue of the young professional class that lived here would move out of the city, not because they did not want to live here, but because they were limited to old product,” Ruiz said.

A rendering of Shoma Village, the recently delivered luxury mixed-use project at 445 Hialeah Drive

Just a 10-minute drive south of Hialeah Park Casino, past old bodegas blasting salsa music, the landscape begins to morph into modern storefronts and half-built towers with contemporary architecture, resembling more of Downtown Brooklyn’s Atlantic Avenue than the old-school industrial strip it once was.

The newest addition to that transition is courtesy of Shoma Group, which opened a two-tower, 304-unit luxury apartment project last month at 445 Hialeah Drive, dubbed Shoma Village. He said the quality of amenities in the city have made it a draw for people who grew up in Hialeah without them. Shoma Village has a Shoma Bazaar food hall and space for more retail.

“We are getting a lot of younger people that had moved to Miami Lakes and they have family in Hialeah and they want to come back again to Hialeah and they have a reason to come back," Shoma Group CEO and Chairman of the Board Masoud Shojaee said. "There was nothing there, and now everything is there."

Shojaee might have founded his Coral Gables-based company 30 years ago, but the development veteran has become something of a Hialeah evangelist. Shoma dubbed Hialeah the "Brooklyn of Miami" in a flyer on the website for its Shoma Village development earlier  this year.

"Hialeah is not like five years ago or 10 years ago. That it was only purely for Cubans and Cuban-Americans and when they come from Cuba they want to land here in Hialeah. It is not that anymore. We changed that culture," Shojaee told Bisnow. "It has become a new city. A new town ... For the next few years, it will transform into one of the most dynamic places in the whole, entire Miami."

Even Hialeah natives who are industry veterans like Ruiz and J.C. de Ona, Centennial Bank's Southeast Florida president, have been surprised by how quickly the momentum has shifted.

“We did this new building and it was sold out, from a rental standpoint, overnight,” de Ona said of Prestige Cos.' Amelia Lofts development at 340 West 78th Road, delivered earlier this year. Centennial provided the financing for that project, which has 30 apartments over 17K SF of commercial space.

Rendering of the Amelia mixed-used complex, a $10M project, located at 7755 West Fourth Ave. on Red Road in Hialeah.

“We did not know there was such a huge demand," de Ona said. "We went from focusing on two-bedrooms to one-bedroom, mixed-used spaces. With the one-bedrooms, you are seeing a lot more younger renters in there, either singles or young couples. Now there are offices nearby, new business and fintech-related companies. It’s changing.”

"The average renter we are seeing is in their 30s," Ruiz added. "Almost 20 years ago none of these people would have stuck around Hialeah."

The retail at the Amelia Lofts perfectly exemplifies the transforming city. Its tenants include a Cuban bakery and sandwich shop and a high-end daycare and preschool.

“It is shocking. They have tablets, interactive blackboards, it is so wild,” Ruiz said. “They have high-tech microscopes. A high-tech daycare in Hialeah! Every person that walks in there wants their kids there.”

Chick-fil-A opened its first Hialeah location in 2020 on 57th Avenue, and is opening a second later this year 2 miles away, What Now Miami reported, although Ruiz said chains like Outback Steakhouse and Texas Roadhouse continue to pass on the city because their data doesn't reflect the way its population operates.

"Hialeah has a great cash economy but that [information] does not make it to the census," he said. "If you build it, they come. We have an Olive Garden now. What I have been told, is that now it's in the 10% of top-performing Olive Gardens in the country."

While Hialeah's housing and retail markets are surging post-pandemic, the city has long been viewed as an ideally located industrial hub with its proximity to Miami International Airport — and warehouse properties have soared in demand.

There was 500K SF of industrial space under construction at the end of the second quarter, by far the largest figure in the last four years, and nearly five times more than there was in Q2 2020, according to CBRE data provided to Bisnow.

Industrial vacancy sits at 2.2%, while direct lease rates hit $11.72 per SF in Q2 — up from $7.46 per SF two years prior.

“The more people move here, the more demand," said Andrew Fernandez, a senior associate on CBRE's industrial and logistics services team. He said he's seen asking rents in some parts of the city are up between 75% and 85%.

"I don’t think these developers can build fast enough," he added. "The vacancy rate has never been like this."

Amid such a rapid turnaround fears are already popping up around gentrification and displacement — Shoma's comparison drew headlines for the social media backlash it created. The median household income between 2016 and 2020 was $38,471, according to census data, and the homeownership rate is 47% — below the national average of 65.8%.

Centennial Bank is working with the Hialeah Housing Authority on a Section 8 housing development, de Ona said, and he said fears of displacement — especially of the many Spanish-speaking seniors on fixedincomes — are overblown.

"I don’t think the older population will get priced out," he said. "They see something good happening. That Hialeah is changing and it is nicer and there is work. I think we will be OK. A good portion of [new development] will be dedicated to the elderly so they live in newer buildings."

In addition to developing mixed-use, mid-rise and garden-style apartment projects, Prestige acquired the Valsan of Hialeah thrift shop across the street from the Amelia District, Ruiz said. The store is a favorite of local immigrants, and Prestige is embracing it while adding new restaurants and other tenants aimed at younger, wealthier customers.

“There can be a Valsan next to a smoke shop or a craft brew house. These businesses can co-exist because there is this new, young urban class, but also the older, traditional Cuban-American class," Ruiz said. “These things can coexist side by side.”

They will increasingly have to: While Hialeah's rents are still relatively affordable, Miami-Dade apartment rents were up nearly 20% in 2021, according to Cushman & Wakefield. Renters fleeing steeper hikes in Downtown, Wynwood and Aventura — as well as migrants from New York and Chicago — are showing up at Shoma Village, Shojaee said.

"This is something that we did not anticipate before Covid," he said. "This is what is happening after Covid. It’s been a perfect storm for us."

And unlike many other long-underserved markets, Hialeah has a powerful employment hub in the airport, which Ruiz expects to generate more demand as the city draws in more business overall.

"This is why we have been so bullish on it for the past 10 years or so. More people will realize it," Ruiz said. “It has a central location, a pro-development administration and the city has a lot of things going for itself. The cat has come out of the bag.”

CORRECTION, OCT. 6, 3:30 P.M. ET: Masoud Shojaee is Shoma Group’s CEO and chairman. A previous version of this story incorrectly identified him as president. Additionally, a flyer for Shoma Village dubbed Hialeah the “Brooklyn of Miami,” not Shojaee, as previously stated in this article. This story has been updated.