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Miami-Dade

Miami-Dade

Home building and a strong Spanish-language market

Rising rents downtown and banking concerns

Miami-Dade County

» The hunger in the U.S. and Latin America for Spanish-language or Hispanic-focused TV and movie content is fueling a flurry of activity. A recent $400-million merger between InterMedia Partners and Azteca Acquisition formed Miami-based Hemisphere Media Group, which expects to start operations this month. The new publicly held company includes Spanish-language hemisphere-wide movie channel CineLatino and Puerto Rican assets. The Doral-based English-language network formed in 2012 by Univison Networks and ABC News is investing more than $274 million in news and programming that targets Hispanics. Comcast is pumping resources into its Miami-based Spanish-language network, Telemundo, increasing its annual programming budget by nearly 20% and encouraging it to produce more original shows.

» While residential real estate of all types is having a strong year, rentals are the hottest investment sector. With the apartment vacancy rate at 4.2%, experts say demand for rentals will remain strong for years, buoyed by a desire by young professionals for flexibility and homeownership’s tarnished reputation. Miami-Dade is short on rental properties that attract institutional investors because so many were converted to condos during the boom, and developers are eagerly trying to fill the gap. For instance, Miami-based Crescent Heights plans to build rentals rather than condos on its prime land in Miami Beach’s South Beach, where the median rental rate rose 12% and leasing activity increased 15% during 2012.

» Not all the effects of the real estate bust have been worked out. One Bal Harbour condo/hotel is in Chapter 11 bankruptcy proceedings by its owner, Elcom Hotel & Spa — despite its prime location overlooking Haulover Inlet, just north of Miami Beach. Elcom, which filed for bankruptcy in January, paid $14.6 million in 2009 to buy the property’s common areas and 51 units out of bankruptcy from WCI Communities. WCI, which developed the project as the Regent Bal Harbour, intended it to be a five-star property but declared bankruptcy shortly after opening the Regent in 2008.

»  Among area banks, U.S. Century Bank, the largest undercapitalized bank in the U.S., announced a deal in which local investors — including Jimmy Tate and Sergio Rok — would capitalize it to the tune of $50 million, wiping out its bad loans. The Doral-based bank has been under FDIC enforcement action since June 2011 and took $50.2 million from the Troubled Asset Relief Program (TARP). St. Petersburg-based C1 Bank canceled its planned acquisition of U.S. Century in December.

Immigration

» Immigration undoubtedly influenced Miami-Dade voters in the presidential election, and area Republican politicians and activists don’t want to lose another election because of it. U.S. Sen. Marco Rubio has put forth several “principles” for reform, and Republican Miami-Dade U.S. Reps. Mario Diaz-Balart and Ileana Ros-Lehtinen have been holding forums around the county. Former Gov. Jeb Bush has a new book out on the topic, and Republican power broker Al Cardenas (co-founder of the Tew Cardenas law firm) has been making the rounds to conservative media to push for immigration reform.

Businesses to Watch

» Lennar: A recovering residential real estate market nationwide boosted Lennar, which had a 2012 profit of $679.1 million, nearly six times its 2011 profit. The company received orders for 15,684 new homes around the U.S., and its multifamily division has a $1-billion pipeline of work through 2016. With many competitors out of business and labor costs lower than a few years ago, the company is poised for more development. Its Rialto Investments subsidiary, which invests in distressed real estate, completed the first closing of its second real estate investment fund, and China Development Bank is lending Lennar $1.7 billion for two projects in San Francisco.

» The Miami Beach Convention Center: The meeting facility could finally be on track for an expansion by the end of this year. Two final bidding groups will spend the next several months presenting their ideas to residents. Not all are happy about the $500-million-plus price of the mixed-use project, which will also likely include a hotel and commercial components on land surrounding the center. The commission is expected to choose a partner this summer.

» Perez Trading: Plenty of companies are poised to take advantage of favorable international trade trends, such as expansions at PortMiami, increased activity with Latin America, and Panamanian and Colombian free trade agreements. Perez Trading, which sells and handles logistics for paper and packaging products throughout Latin America and the Caribbean, is already doing so. The Miami-based company added a 280,000-sq.-ft. warehouse in September.

People to Watch


Torno


Srebnick


Lazenby

» Art Torno: The American Airlines’ Miami-based vice president for Mexico, Caribbean and Latin America will have a tough job regardless of whether a merger between American and US Airways goes through or the company figures out another way to exit its year-plus bankruptcy.

» Jessica Goldman Srebnick: Srebnick took over as CEO of Goldman Properties last September after the death of her father, pioneering real estate developer Tony Goldman. Srebnick, who has long been deeply involved in the business, is shepherding the company’s hotel, retail and commercial holdings in South Beach, New York and Philadelphia, as well as development of the 400,000 square feet the company owns in Miami’s Wynwood warehouse district.

» Matthew Whitman Lazenby: As head of the luxury Bal Harbour Shops, Lazenby will shepherd the company’s 230,000-sq.-ft. expansion. The company is also partnering with Hong Kong-based Swire Properties to develop the retail portion of its Brickell CityCentre project in downtown Miami. The company is making what it has called a “significant” equity investment in the 500,000-sq.-ft. retail portion of the project. Plus, it is part of one of the two groups bidding to redevelop the Miami Beach Convention Center.

Miami-Dade Population: 2,598,976
Population Growth Rate (2009-13): 1.34%
Population by Age:
0-14 15-19 20-39 40-64 65+
17.45% 6.26% 27.71% 33.89% 14.69%
Per Capita Income: $39,617

MSA Dec. 2012 Dec. 2011 % Change Jobless Rate
Miami/Miami Beach Kendall 1,180,462 1,148,960 2.7% 9.1%
Source: Agency for Workforce Innovation

Homes - Single-family, existing-home sales
MSA 2013 Sales 1-Year Change 2013 Price 1-Year Change
Miami/Fort Lauderdale/
Pompano Beach
39,232 +9.4% $202,000 +10.4%
Source: Florida Realtors

Miami

» The city didn’t have much luxury retail activity until last year, when real estate company DACRA’s Craig Robins lured brands such as Louis Vuitton, Cartier, Dior Homme, Celine and Prada into its buildings in the Design District. Hermes opened a store there this year, and about 40 other luxury brands have committed to moving in by the end of 2014. DACRA’s partner in its $312-million project to build an outdoor mall in the Design District is L Real Estate, a luxury retail-focused private equity fund in which Louis Vuitton Moët Hennessey is a minority shareholder. Farther south, in downtown’s Brickell area, developer Swire has set aside 40% of the retail space in its Brickell CityCentre project for luxury brands and brought in Bal Harbour Shops to co-develop it.

» Startup accelerator Venture Hive, an offshoot of The Launch Pad at the University of Miami, has given 10 companies grant money and free office space and is working with 25 Miami-based startups not in the building. Focused on technology startups in travel/hospitality, health care and creative services, Venture Hive is armed with $1.5 million in public funding. Project Lift Miami, an accelerator aimed at health care technology, will enroll its first class of 10 to 15 companies in May, giving them seed money and space at the UM Life Science + Technology Park. Project Lift is backed by Lift1428, Miami Innovation Center (a co-working space in the park), park developer Wexford Science + Technology and UM’s Miller School of Medicine. Global entrepreneurship non-profit Endeavor plans its first U.S. program in Miami this year, with $2 million in support from the John S. and James L. Knight Foundation. It helps businesses earning $500,000 to $15 million in revenue jumpstart growth.

»  Among the list of concerns in Miami: Resort giant Genting Group is in limbo as it waits for legislators to act on expanding gambling. The company, which has spent more than $400 million to buy the site of the Miami Herald building and nearby land, still hopes to develop a destination resort and casino on the property. But it dropped its petition campaign to put a gambling-expansion amendment on the 2014 ballot after six months of work. An earlier effort to lobby legislators ended last year when a gambling bill failed to even reach the floor of the state Senate or House. Genting says it will support legislators’ efforts to examine gambling statewide.

Rising Rents

» With downtown Miami at nearly full residential occupancy, rents are rising rapidly. In just the first nine months of 2012, downtown rents jumped 10% — and in the popular Brickell neighborhood, they were up 28%. Tenants almost universally report large increases as they renew their leases, and that’s threatening to drive out the young professionals who have made downtown a 24/7 city, patronizing restaurants, bars and stores and filling sidewalks and parks.

People to Watch


Sarnoff


Medina


Suarez

» Marc Sarnoff: The city commissioner, whose district covers downtown and much of the city’s coastline, chairs the commission this year. It’s fitting, since some of its biggest projects right now are in his district: Miami Marine Stadium and the Gusman Center for the Performing Arts.

» Manuel Medina: After Verizon paid $1.4 billion for his technology company, Terremark Worldwide, Manuel Medina founded Medina Capital, which invests in IT companies focused on cloud and mobile computing. He’s a regular speaker at area technology and startup conferences and events and is spearheading an effort to create a Tech Conference of the Americas in Miami for 2014.

» Francis Suarez: This year is a mayoral election year, and no dominant candidates have surfaced yet to challenge Mayor Tomás Regalado. However, City Commissioner Francis Suarez, son of former mayor Xavier Suarez, threw his hat in the ring in January, after months of speculation.

Businesses to Watch

» Florida East Coast Realty: The developer is involved in two unusual projects to help the city maintain and grow its international business sector. The city is including its Panorama Tower in a federal application to become an EB-5 visa regional center, allowing foreigners to make significant investments within the city to apply for a special visa with a path to residency. Florida East Coast could also be the developer on an idea the city is kicking around to create Chinatown Miami/El Barrio Chino del Miami, which would cater to the Asian community with shopping, a charter school, housing and offices.

» City National Bank: The bank is one of the state’s most profitable and one of south Florida’s largest community banks. Even as it grows, though, its parent company has to sell it. Spain-based Bankia, which needed a bailout from the European Union, agreed to sell the Miami-based bank as a condition of receiving the money. City National, which employs more than 440 in the region, is likely to be a coveted acquisition target.

» Carlisle Development Group: Affordable and workforce housing builder Carlisle Development has projects all over south Florida but perhaps its most anticipated is Liberty City Transit Village. If Carlisle can pull off the development, under construction now and set to open next year, it will finally complete a project that has eluded the city, and at least one other developer, for years. The $54-million hub will be a significant mass transit transfer site with a theater, retail and affordable apartments.

Monroe County

» Monroe County is in the midst of a state-mandated series of wastewater- and stormwater-treatment projects covering the lower Keys, although it still hasn’t figured out how to pay for all of them. Last year, the county secured $50 million in state funds for the project — a piece of the $200 million the Legislature had appropriated for the projects in 2007 but never allocated. Two contracts have been awarded, but two losing bidders are challenging the contracts in court. At the same time, the $50 million didn’t cover the full cost of the project, and Keys officials have begun lobbying Tallahassee for another $50 million this year. Meanwhile, several municipalities are debating whether to create their own water management districts.

Monroe Population: 75,022
Population Growth Rate (2009-13): 0.81%
Population by Age:
0-14 15-19 20-39 40-64 65+
12.70% 4.08% 23.48% 40.83% 18.90%
Per Capita Income: $63,313