Downtown Miami no longer shuts down after 6 p.m. It has become a millennial hot spot.
Economic Yearbook 2016
Miami-Dade/Monroe: A surge of residents and businesses
Downtown Miami's residential population has doubled since 2000. Thousands of condos were completed just as the bottom fell out of the real estate market. Their owners — either the original buyers or investors who snapped them up at bargain prices when buyers couldn't close — rented them out. What had been a downtown that all but closed after 6p. m. became a millennial hot spot. Today, downtown has some of the best restaurants in the county, and it's a tourist destination in its own right.
More than a dozen hedge funds have opened offices there, and companies are "chasing the creative class" living downtown, says Alan kleber, managing director at JLL in Miami. Yet, there's only about 500,000 square feet of empty office space downtown and little room to build. "You no longer have a place for people to put their headquarters or their offices," Kleber says. "The CBD has morphed from Central Business District. It's more like a central living district."
Downtown's desirability has led to traffic snarls and parking issues. "Those who can get to downtown or those who live in downtown will come to downtown," says Arnaud Karsenti, managing principal at Miami-based developer 13th Floor Investments. "The impediment is actually accessing it." Affordability has also become an issue as rents and condo prices rise. 13th Floor is one of several developers building projects with smaller units or near transit hubs (so residents don't need to own a car). Newgard Development Group was able to keep prices lower at its Centro Lofts condos by eliminating resident parking, including only a dedicated Car2Go sharing service hub. It has sold 90% of its units.
Broker Alicia Cervera Lamadrid of Cervera Real Estate says downtown's biggest problem is a shortage of good public schools. "These young people who moved to downtown … want to stay in Miami, but they can't because of the school system," she says. A recent Downtown Development Authority study found 22 early education programs available in downtown, which helps, Cervera Lamadrid says. The DDA and private developers are working to give potential residents better information about elementary through high school options, she says.
Meanwhile, three major mixed-use projects are under way downtown. The largest transit-oriented development is Florida East Coast Industries' MiamiCentral station, the southern terminus of its All Aboard Florida railroad (which will begin running between Miami and West Palm Beach in mid-2017). FECI plans to develop four towers on the station's 11-acre site, including 800 rental units for the non-luxury market, offices, a parking garage, retail and a hotel. City and county officials are working to add a MiamiCentral stop for TriRail, the area's light rail system. Miami has secured funding for most of the $69-million project but needs another $20 million from the state.
Next to MiamiCentral is the 27- acre, mixed-use Miami Worldcenter.
The development is designed to take advantage of MiamiCentral and will include residential units, from luxury condos and rentals to smaller, moreaffordable transit-oriented housing, says Nitin Motwani, managing principal of the project's master developer, Miami Worldcenter Associates, and a member of Miami's Downtown Development Authority board. The first two projects — a luxury condo tower and open-air retail — will open in the fall of 2018.
Another transit-connected development is likely to bring downtown's biggest change this year. Swire Properties' Brickell City Centre is rising on land that had been vacant for decades. The first phase of the nine-acre development will include two residential towers, two office towers, a hotel and 500,000 square feet of open-air retail, cooled by a 1,000-foot-long "climate ribbon" made of steel, fabric and insulating glass. Metromover will have a stop on the third floor. One office tower, with tenants including Florida's largest law firm, Akerman, opened in February.
Brickell City Centre's retail is set to open this fall, with luxury retail on the ground floor and other types of retail on the second and third floors. Downtown is one of the few markets in the U. S. in which retailers are expanding, says Debora Overholt, vice president/ retail at Swire Properties. In addition to a new Saks Fifth Avenue, she says, Brickell City Centre has "over a dozen emerging brands that are entering the U.S. with their first stores." They love the current density in the Brickell area — 90,000 affluent daytime office workers in Class A buildings, plus residents — as well as the fact that 30 residential towers are under development in Brickell alone. But the biggest draw, Overholt says, is downtown tourists — a group that didn't exist a few years ago. Downtown's reputation for dining and arts — it's home to the Perez Art Museum Miami and the Adrienne Arsht Center for the Performing Arts — has drawn visitors. "We're full on weekends," says Robert Hill, general manager of the 641- room InterContinental Miami hotel. In fact, 40% of visitors to Miami-Dade stayed overnight in downtown. During 2016, another 2,500 hotel rooms are projected to open in downtown Miami. "We can absorb that additional inventory with the attractions we continue to add," Hill says.
People to Watch
» Brian Brackeen: A veteran of Apple, IBM, ADP and other large corporations, Brackeen founded Kairos, which makes facial recognition/analysis and human analytics software, in 2011. In the past year, he's become an unofficial representative of Miami- Dade's technology entrepreneurs, speaking at events, sitting on panels and introducing members of the innovation economy to each other.
» Moishe Mana: The developer wants to build a 9.7-million-sq.-ft. mixed-use development, targeted at tech companies, on the 30 acres he owns in Miami's Wynwood district. The Wynwood Business Improvement District, made up of other developers, opposes his plan, which includes buildings more than twice the height allowed under the area's new zoning code.
» Michael Comras: The longtime real estate player is a partner in joint ventures that acquired Coco-Walk and Grove Station Shops in Coconut Grove and the Shops at Sunset Place in South Miami last year. Now the president and CEO of Comras Co. Is working on plans to revitalize both and remains an important player in the Lincoln Road pedestrian mall.
» Carlos Rosso: As president of the condominium development division at Related Group, Rosso has supervised delivery of 1,400 condos across Miami-Dade and Broward counties this real estate cycle, and he should oversee another 3,640 across the two counties by the end of 2017. Few companies have as many units coming online.
» David Beckham: Beckham's Miami United Major League Soccer team has the league's official go-ahead and hopes for a final stadium site in Miami's Overtown neighborhood. But Beckham may need to embark on a publicity blitz to finalize the deal and win the approvals he needs: The group will have to buy most of the land from the county, and the city of Miami will have to rezone the site. Miami Mayor Tomás Regalado has questioned the lack of parking in the stadium plans.
» Eddy Arriola: The chairman and CEO of Apollo Bank purchased the distressed Union Credit Bank in 2009 then shepherded it to the $500-million asset mark last year. He's aiming for $1 billion in assets within three to five years, and he may be looking at an acquisition this year.
» Luis de la Aguilera: De la Aguilera, who joined Doral-based U. S. Century last year as president and CEO, will look to complete the turnaround at a bank that has a recent history of losses and failed plans to be acquired. The former TotalBank CEO and president will have the support of other former TotalBank executives who followed him to U.S. Century.
County Population: 2.68 million, „¼+4.6% vs. 2011
Unemployment rate: 5.8%
Per capita income: $43,625
DORAL — Codina Partners and Lennar have a contract to purchase a golf course with plans to develop it. The course is on the south side of the two developers' 120-acre Downtown Doral mixed-use center, which saw its initial phase of retail completed in December 2015 and its first condo completion in February.
KEY BISCAYNE — The Miami Open tennis tournament, which draws 300,000 attendees each spring, may leave Key Biscayne's Crandon Park after losing an appeal in a court case that upheld growth restrictions on the tournament. Although the tournament has eight years left in its contract with Miami-Dade County, which owns the park, tournament owner International Players Championship says the contract is invalid because the county has not upgraded Crandon.
MIAMI — Dacra, in partnership with L Real Estate, will finish about 80 new stores in its major redevelopment of the Design District this year. Hérmes, Louis Vuitton and many other brands opened stores in the district last fall. Dacra's final project will have more than 120 luxury-brand stores, about 15 restaurants, a boutique hotel, galleries, garages, furniture showrooms and condos, along with large-scale public art and design installations. Construction will continue on the next phase during 2017. Another major block of Design District property recently changed hands when Thor Equities sold its holdings to a New York-based joint venture between Redsky Capital and JZ Partners for $128.3 million. Miami-Dade hopes to be able to pitch in $45 million to help the Frost Science Museum, which has run out of cash to finish construction of its new Miami home (which will include a 500,000-gallon aquarium). Now it's considering including the museum in a community redevelopment agency district that will help fund it for decades.
MIAMI BEACH — The city will soon begin accepting bids to build its portion of a transit system connecting the Miami Beach Convention Center, South Beach and downtown Miami. It will represent the first concrete steps forward on a light-rail line that was first studied in 1988 and was supposed to be funded in part by a half-penny transit sales tax that Miami- Dade voters approved in 2002. While Miami Beach officials envision breaking ground on its part of the transit system in about three years, the city of Miami hasn't even discussed its portion of the project in several years.
MIAMI-DADE — In the county's coastal real estate markets — east of I-95 — 15.1% fewer single-family homes and condos sold during the fourth quarter of 2015 than during the same period in 2014. Average sales price, though, was up 2.8%. In Miami Beach and the county's other barrier islands, sales volume dropped 20.4%, while the average sales price rose 5.1%. Experts expect sales activity will continue to slow from previous years, but most people aren't thinking "bust" amid this boom — distressed condo sales on the coastal mainland were down 41% from the fourth quarter of 2014, and on the barrier islands, they were down 35.8%. Most expect a cooling and soft landing. Class A office vacancy rate is 12.7% (in-demand areas such as downtown Miami and Coral Gables are even lower), with 572,067 square feet of new office space planned within the county. That led Hogan Group to break ground in January on a 250,000-sq.- ft. Speculative office building at the Waterford at Blue Lagoon business park. The company is also building a new headquarters for Burger King at the same business park. Analysts say an office-space squeeze could be coming. Meanwhile, prices for highquality office buildings are rising: A unit of Prudential Financial paid $83 million for downtown Coral Gables' 16-story 355 Alhambra office tower. December rainstorms flooded Zoo Miami's moats so badly that it had to close for several days. "King Tides" and El Niño weather flooded the streets of Key Largo, Miami, Miami Beach and other cities. While real estate prices haven't reacted to predictions that parts of the county may be under water in less than half a decade, business leaders have been pushing for the county and cities to address rising water levels. The county fi nally hired an offi cer to oversee environmental planning. Miami Beach has been raising streets and installing pumps to keep water back; other cities are considering similar efforts. Babson College's Women Innovating Now Lab, an accelerator aimed at women entrepreneurs and known as WIN Lab, will launch in Miami this year, backed by $800,000 in support from the John S. and James L. Knight Foundation. Florida International University will launch StartUP FIU on its Sweetwater main campus, creating a hub for students to turn ideas into companies. The university will also bring Miami MedTech, which helps startups in the medical device industry, to that campus. New co-working companies continue to enter the market, including New York-based WeWork's WeWork Miami Beach, which the company expects to follow up this year with a space in downtown Miami. Massachusetts-based Cambridge Innovation Center will open at the University of Miami Life Science and Technology Park in Miami — it plans to eventually house 500 tech startups. Miami-based Pipeline Workspaces expanded from the city's Brickell district into Doral and Coral Gables (as well as Philadelphia), and Miami-based Buro Group expanded from its original location in Miami's Midtown and its second location in Miami Beach to the city's MiMo and Coconut Grove neighborhoods. Telemundo will consolidate and enlarge its headquarters and production facilities into a new, $250-million, 560,000-sq.-ft. building in the county's airport west area. The lease is reported to be the most valuable ever in Florida, and Telemundo parent company NBCUniversal will make a major investment in high-tech broadcast, post-production and studio space.
» MIAMI GARDENS — The Miami Dolphins are in the middle of a $450-million renovation of Sun Life Stadium, funded by owner Stephen Ross. A canopy over the stadium and four new video boards should be installed before pre-season games begin.
County Population: 77,573, „¼+4.8% vs. 2011
Unemployment rate: 3.2%
Per capita income: $64,104
MONROE COUNTY — The county is lobbying for the Florida Keys Stewardship Act, which proposes investing $20 million annually for 10 years into water and wastewater projects, plus spending another $5 million per year on land acquisition. County commissioners approved land use and zoning changes that could pave the way for affordable and workforce housing on land owned by Rockland Operations. Mote Marine Laboratory has begun demolishing some buildings in its Summerland Key lab to construct a larger research and education facility that it hopes will earn LEED gold certifi cation. The lab focuses on coral reefs.