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According to the Miami Association of Realtors’ Realtor Commercial Alliance, Miami’s commercial vacancy rates continue to rank among the lowest in Florida, leading to more local investment from global companies and investors.

Miami’s vacancy rates for office (14.9 percent), industrial (5.3 percent), retail (6.3 percent), and multifamily (4.4 percent) are the lowest among major cities in Florida, according to a May 2015 Commercial Outlook report from the National Association of Realtors (NAR) and Reis, Inc., a leading provider of commercial real estate market information. Each of Miami’s commercial sectors are performing better than the U.S. average, except for multifamily which is 0.1 percent lower. The national vacancy rates in May were 15.6 percent for office, 8.4 percent for industrial, 9.6 percent for retail and 4.3 percent for multifamily, according to NAR and Reis.

“One of the world’s top global cities, Miami has become a launching pad for new industries,” said Barbara Tria, the 2015 Miami Commercial Alliance President. “Technology companies and other businesses are moving to Miami largely because of the region’s top-tier cultural offerings, outdoor lifestyle, and affordability compared to other major cities around the globe.”

Miami Office Market

Miami’s 14.9 percent office vacancy rate in May ranks as the 21st lowest out of 82 major U.S. cities, according to the NAR and Reis report. New York leads the nation at 8.9 percent. Statewide, Miami’s office vacancy rate is performing better than Florida’s major cities. The Sunshine State’s other major metropolitans had the following rates: Fort Lauderdale (18.6 percent), Jacksonville (20.4 percent), Orlando (16.5), Palm Beach (16.5) and Tampa (19.7). The national average is 15.6.

South Florida’s growing, multilingual workforce is one reason for its low office vacancy rate. Miami-Dade County added 33,700 jobs across several sectors from April 2014 to April 2015, a 3.1 percent increase, according to job numbers released May 22. Miami had the third-largest job gain in Florida behind Orlando and Tampa. Miami’s unemployment rate from April 2014 to April 2015 decreased by 0.7 percentage points, to 6.2 percent from 6.9 percent.

Miami Industrial Market

Miami’s industrial vacancy rate of 5.3 percent is the third-lowest in the nation among the 82 major American cities studied by NAR and Reis. Only Orange County (Calif.) and Los Angeles performed better than Miami in the industrial sector in May, registering vacancy rates of 3.4 and 3.6 percent, respectively. Florida’s other major metropolitans had the following rates: Fort Lauderdale (8.2), Jacksonville (6.9), Orlando (10.3), Tampa/St. Petersburg (7.8), and Palm Beach (5.5). The national average is 8.4.

Miami International Airport and PortMiami are two of South Florida’s international trade successes. Miami International ranks as the top airport in the U.S. for international freight, and the ninth-best airport for foreign cargo in the world. In 2013, Miami International handled 2.1 million tons of total airfreight, of which 88 percent was international freight.

PortMiami is the top-ranked container cargo port in Florida with 900,000 TEUs handled each year. The port has an opportunity to expand its international business as it is deepening its channel from its current 42-foot depth to 50-52. When the deep dredge project is completed, PortMiami will be the only U.S. port south of Norfolk, Va. that can accommodate the new, mega cargo vessels that will pass through the expanded Panama Canal.

Miami Retail Market

Miami has the 15th lowest retail vacancy rate among U.S. major cities, according to the NAR and Reis report. Miami’s 6.3 percent rate is considerably lower than Florida’s other large metropolitans. Fort Lauderdale (9.3 percent), Jacksonville (12.9), Orlando (11.0), Palm Beach (9.5) and Tampa (10.6) are higher than Miami. The national average is 9.6.t”>

Miami’s tourism and multilingual employment base are just two reasons why major developers are bringing new retail ventures to the region. Earlier this year, the company that owns and runs the largest mall in America announced plans to build the nation’s largest shopping mall in northwestern Miami-Dade, a roughly 200-acre entertainment complex with submarines, a Legoland, sea lions and an artificial ski slope. American Dream Miami is projected to cost as much as $4 billion to build.

Brickell City Centre and The Mall at Miami World Center are two other significant Miami retail ventures. At Brickell City Centre, Hong Kong developer Swire Properties will deliver 500,000 square feet of retail space anchored by Saks Fifth Avenue by late 2016. The Mall at Miami Worldcenter, in the heart of downtown, will complete 765,000 square feet of restaurant, retail and entertainment space by 2017.

Miami Multifamily Market

The vacancy rate for Miami’s multifamily market is tied for 38th among 82 major U.S. metros, according to the NAR and Reis report. Miami’s 4.4 percent multifamily vacancy rate is the lowest in the state. Fort Lauderdale (5.2 percent), Jacksonville (7.0), Orlando (6.1), Palm Beach (5.6), and Tampa (5.0) all have higher rates. The national average is 4.3 percent.

 

Source: WPJ

A new strategic vision, competitive pricing and a less hectic lifestyle are three reasons North Miami Beach is emerging as an attractive location for new residential and commercial investment.

Both the scenic Biscayne Boulevard corridor and the 163rd Street commercial district are in the early stages of an exciting transformation that will bring many positive benefits and developments to the city.

NorthMiamiBeachHiddenGem-ChartLed by Mayor George Vallejo, the city of North Miami Beach adopted a strategic plan in September that sets guidelines for real-estate development, design and zoning for the next 15 years. The “visioning” framework, which was guided by two consulting firms, encourages new mixed-use projects and high-end residential towers in appropriate locations. It also includes funds for a comprehensive parks master plan, which will make the city an even more appealing place to live.

Already, a new wave of commercial development is under way, including plans for new high-end restaurants and a hotel along West Dixie Highway south of the roadway congestion in Aventura. Gil Dezer, president of Dezer Developers in Sunny Isles Beach, purchased the Intracoastal Mall for $63.5 million last year and plans to open a luxury iPic theater in the mall this summer.

On the residential side, North Miami Beach is becoming a destination of choice for both domestic and international buyers seeking an alternative to higher-priced properties in more congested areas along the beach, in Aventura or in downtown Miami. Because the redevelopment of North Miami Beach is just in the early stages, pricing for luxury residences is more attractive than other markets that have already experienced a run-up in values.

Marina Palms Yacht Club & Residences

Marina Palms Yacht Club & Residences

For example, the sales prices for the second tower of Marina Palms Yacht Club & Residences, now under development on Biscayne Boulevard, averages $550 per square foot. To the north, a residence in a new Aventura building would be $850 per square foot, and the price for oceanfront units could be double or triple that rate.

Looking back at the last few decades, it’s clear that South Florida communities are at varying stages of the real-estate cycle. For instance, South Beach real estate was a bargain in the 1980s, before a wave of new hospitality, retail and residential investment created one of the world’s most popular (and expensive) urban resort markets.

Downtown languished until the early 2000s, when new residential and mixed-use developments exploded on the scene. After the recession, developers were quick to pick up unfinished projects and market them on an all-cash basis to affluent buyers from Latin America and Europe.

Meanwhile, North Miami Beach has remained a quiet, suburban city with about 40,000 residents and great recreational amenities, such as Greynolds Park and Oleta River State Park. In addition, the Biscayne Bay campus of Florida International University is conveniently located in nearby North Miami.

With its new strategic plan in place and a growing flow of commercial and residential real-estate investment, North Miami Beach is entering a new era, just as other Miami-Dade communities have evolved in the past.

Now the world is about to discover the new “hidden gem” in South Florida’s real-estate market. It’s an exciting time to participate in the transformation process, which will create a bright future for North Miami Beach and its residents.

 

Source: Miami Herald

PanoramaTower2Foundation construction at developer Tibor Hollo’s Panorama Tower in Brickell, the future tallest tower in Miami, has reached ground level, and appears poised to go vertical any moment now.

About five months ago, they had just begun driving piles down for the foundations, when construction of the 822 foot tower had finally picked up after an agonizingly slow beginning.

 

Source: Curbed Miami

Edge, Sushi Samba, River Oyster Bar and Fox Hole Marketplace and Deli —  are just some of the planned new eateries banking on the Miami River.

 New restaurants, retail and increased public access along the Miami River were among the highlights of a development boat tour of the five-mile-long waterfront district on Thursday.

Renderings of River Landing Project

Renderings of River Landing Project

Developers and real estate professionals toured the river as part of an Urban Land Institute and NAIOP partnership. Brett Bibeau, managing director of the Miami River Commission, said that popular restaurants Seaspice (formerly Sea Salt and Pepper), Garcia’s Seafood and Casablanca have brought business to the area.

Among the restaurants awaiting permits or under construction are Sushi Samba, at 40 Southwest North River Drive; Edge at 39 to 55 Southwest Miami Avenue Road; a new location for the River Oyster Bar at 350 Flagler Street, and Fox Hole Marketplace and Deli at Latitude on the River, 615 Southwest Second Avenue.

River Landing rendering and Andrew Hellinger

River Landing rendering and Andrew Hellinger

The Miami River has increasingly drawn interest from developers who are embracing the river lifestyle. “It’s a place that people don’t have to see as up and coming. It exists,” said Andy Hellinger, developer of the River Landing project, a massive nine-acre development that will include apartments, retail and a linear park along the riverwalk.

River Landing’s retail component will include a five-story vertical shopping center, with a different theme for each floor. Among them: restaurants and supermarkets, sporting goods and entertainment. Two acres of the project are dedicated to parks and pathways. Hellinger compared the linear park, with a 50-foot setback, to the Highline in New York.

River Landing recently applied for a seawall permit, and digging for the foundation will be complete in a few weeks, Hellinger told The Real Deal.

Cleaning up the water and building the riverwalk are both key to the area’s success. Bibeau said his organization, the Miami River Commission, sends clean-up crews to pick up trash, pressure clean and paint over graffiti. “If the riverwalk is not maintained,” Bibeau said, “it will not live up to its potential.”

 

Source: The Real Deal

A plan to remake the Coconut Grove waterfront is up for review by Miami’s Historic Preservation Board.

The plan includes the demolition of Scotty’s Landing and the Chart House, and the addition of new boat storage space, restaurants, retail, and a promenade along the water.

Miami voters approved the project last year, although activists claim that the majority of voters in Coconut Grove precincts voted against the proposal. Several lawsuits that could halt the project remain pending.

Arquitectonica is handling architecture and landscape design.

 

Source: exMiami

As traffic congestion worsens in South Florida, a plan to restore passenger service to the Florida East Coast Railway corridor that dates back to industrialist Henry Flagler’s first train service to Miami in 1896 is generating a buzz in the local real estate development community.

Opportunity-minded investors are closely monitoring a two-tiered process that could ultimately result in regular daily train service from Miami to Orlando with multiple stops in between in various downtowns in Miami-Dade, Broward and Palm Beach counties. To accommodate the proposed new passenger commuter service, plans call for the creation of nearly 30 train stations to be built east of Interstate 95 along the South Florida coast.

The creation of train stations for the planned passenger service is expected to trigger a wide array of indirect investment in the surrounding areas to develop everything from residential towers to retail centers, hotels to office buildings. Under a pair of separate but interconnected plans, All Aboard Florida — an entity that is privately controlled by the owner of the Florida East Coast tracks — wants to launch a high-speed passenger rail service from downtown Miami to Orlando with stops in the downtowns of Fort Lauderdale and West Palm Beach. This service is scheduled to begin by 2016.

Just this month, All Aboard Florida issued $405 million of debt to help finance the creation of the high-speed rail service that is expected to cost at least $2 billion. Complementing the All Aboard Florida private-sector initiative, the South Florida Regional Transportation Authority — a public entity that oversees the Tri-Rail passenger service on tracks west of Interstate 95 — plans to introduce a new commuter line that is to travel on the Florida East Coast line on the east side of Interstate 95 with stops in various downtowns from Miami to West Palm Beach.

Under the Tri-Rail plan, Miami-Dade County would have eight stations stretching from Aventura to the Miami Design District to a newly proposed Grand Central Station to be built in downtown Miami. Plans call for the east of Interstate 95 commuter service — dubbed the TriRail Coastal Link — to be “implemented” within seven years for a launch in or before the year 2020, according to the organization’s website.

Ironically, the same train tracks that have historically meant lower prices and constant complaints about noise and traffic delays from nearby residents are expected to trigger a wave of new residential developments for individuals seeking easy access to planned passenger rail service.

Anyone who has ever relied on public transportation knows that train service is much more predictable than that of buses. Many commuters in cities around the world generally attempt to live and work close to train stations to improve the efficiency of using public transportation. As a result of this phenomenon, the introduction of passenger rail service in Miami-Dade County has the potential to stimulate real estate development in areas that are far removed from the water.

It is not surprising that developers who focus on the South Florida mainland have typically tried to build condo towers on sites that front Biscayne Bay or the Intracoastal Waterway. If waterfront land is not available at acceptable prices, the next best alternatives are usually development sites in popular neighborhoods such as Midtown Miami or on iconic streets such as Brickell Avenue.

Generally, the interest level in land near the railroad tracks — which are west of Biscayne Boulevard and east of Interstate 95 — is not the first choice for developers or buyers in South Florida, especially in Miami-Dade County. For example, fewer than 385 condos between west of Biscayne Boulevard and east of Interstate 95 from Flagler Street in downtown Miami north to Aventura were sold, at an average price of about $187 per square foot, between January and May of this year, according to the Southeast Florida MLXchange. By comparison, nearly 1,025 condo units east of Biscayne Boulevard from Flagler Street in downtown Miami north to Aventura were sold, at an average price of $250 per square foot, during the first five months of the year.

Some quick arithmetic suggests condo units east of Biscayne Boulevard traded at an average premium of 34 percent over the units on the west side of the street, according to the data. As for the supply of available condos, about 800 units are currently on the resale market west of Biscayne Boulevard from downtown Miami to Aventura.

Based on the 2014 sales pace of about 77 transactions monthly, there is more than 10 months of available inventory on the market west of Biscayne Boulevard, according to the data. The condo market east of Biscayne Boulevard from downtown Miami to Aventura has nearly 1,800 units available for resale. Despite having more units up for resale than the area west of Biscayne Boulevard, the condo market east of Biscayne Boulevard has less than nine months of supply available, according to the data.

For the rental market, there is less of a difference between east and west of Biscayne Boulevard in Miami-Dade County from downtown Miami north to Aventura when it comes to price and transactions. Tenants leased more than 1,025 residential properties west of Biscayne Boulevard at an average price of $1.63 per square foot monthly between January and May of this year, according to the data.

For the same five-month period, tenants leased nearly 1,200 residential properties east of Biscayne Boulevard at an average price of nearly $1.62 per square foot month. Currently, about two months of rental-property supply are available for lease west and east of Biscayne Boulevard, according to the data.

Given the market trends, developers could become more open to the idea of building residential towers in the area located west of Biscayne Boulevard and east of Interstate 95 especially since land costs are generally cheaper and rents are comparable to those rates being achieved on the east side of Biscayne Boulevard.

The unanswered question going forward is whether developers and residents will ultimately embrace a lifestyle in South Florida that revolves more around public transportation than the current dependence on cars. If this were to happen as the government planners are hoping, the future of real estate development in Miami-Dade County could increasingly focus on the land west of Biscayne Boulevard in the coming years.

 

Source: Miami Herald

For the first time, shopping centers have an individualized way to benchmark energy use.

Thanks to the new Property Efficiency Scorecard recently launched at the ICSC’s Retail Green conference, property owners can input data online on energy use, water consumption, recycling and waste and overall green operating practices.  Enter data from one center or all of the centers in a portfolio and compare it with others in a portfolio or to centers with similar characteristics.

Eventually, the goal is for the Scorecard to have ranking similar to an Energy Star 0 to 100 rating, says Will Teichman, director of sustainability for Kimco Realty, one of the partners that helped craft the tool. For now, in each category, property owners can receive a score that is similar to the energy-use intensity (EUI) score, which measures kilowatt use per sq. ft. per year. The program will offer basic suggestions on how to save energy, based on the benchmarking results, but the real work comes after benchmarking. “What it does is give you insight that allows you to dig deeper,” says Teichman, who adds that he expects all of Kimco’s retail properties to be benchmarking with the program by January.

Benchmarking is important because property owners can’t start saving money on energy unless they know how much they are using, he explains; however, benchmarking also has tangible benefits that extend well beyond energy efficiency. “Although some argue this may correlate to higher rents over the long term, we view it as more of a competitiveness issue,” says Teichman. “Sustainability is an expectation of leading retailers and the implementation of these measures lowers one of our tenants’ largest occupancy costs.”

Sustainability is also becoming an increasingly important priority to investors, Teichman says. “Particularly with large institutional shareholders—they are requesting greater transparency into the sustainability performance of real estate portfolios, and view sustainability as an opportunity to improve property performance and mitigate risks,” he says. “Growth in disclosure forums such as the Global Real Estate Sustainability Benchmark (GRESB) is a leading indicator of investor interest in sustainability.”

The information on each center is not public, so property owners need to know how their buildings stack up against centers in similar geographic areas, says Rudolph E. Milian, ICSC’s senior staff vice president for professional development services. Enrollment begins in January. “We definitely want to have at least 1,000 properties in the system in 2014, and I think we can exceed that,” Milian says. Payment is based on the number of properties benchmarked: one to 10 properties costs $400 per property annually, and 51 to 100 centers costs $255 per property per year. The fee for benchmarking more than 101 properties is a flat $30,000 fee annually.

Joyce Mihalik, vice president of energy services for Forest City Enterprises, is another one of the Scorecard’s early adopters and creators. About 75 percent of Forest City’s retail portfolio is already entered into the Scorecard system. She says her company has an internal benchmarking tool used for its properties, and she expects to use the ICSC Scorecard in a similar way. “We use it as a prioritization tool, for budget and forecasting purposes, where to do upgrades and interventions,” Mihalik says. “This is the way we know that here is a property where we have to go back and spend the day with the property manager to see what is really happening out there. “Are they really a poor performer? Or was the system on over-ride for three months because that tenant needed extra hours?” she says. “The data is only half the story. Then you have to do the homework.”

It is crucial for the shopping center sector to have its own benchmarking metric because that property type is so different from the rest of the commercial real estate sector, Mihalik says. While Energy Star and Portfolio Manager are widely known and well regarded, she adds, they don’t take into account the unique nature of the shopping center market. Although Mihalik says Energy Star has an important place, she notes that one of the frequent criticisms of the Portfolio Manager program in the fact that the data used for comparing commercial properties is from 2003. “This Scorecard is going to allow you to compare yourself to a live dataset,” she says. Energy Star has come under criticism from the multifamily sector for not having a rating designed for the quirks of that sector, and a score targeted for multifamily is expected in 2014. No other commercial real estate sector has created its own benchmarking system like the ICSC Scorecard.

The Scorecard also allows users to upload data only once and then to export it into other formats, such as Portfolio Manager or GRESB, in order to meet local laws or requests from tenants or investors. “I don’t want to have to key in my data a hundred times in different places,” Mihalik says. “I’d rather have our energy-efficiency team being sent out to do an energy audit or develop sustainable policy.” Mihalik says she doesn’t see ICSC’s Scorecard as being “in competition with other reporting standards.” Instead, she says she appreciates it as “an added feature and an added tool.”

 

Source: National Real Estate Investor

 

An 8,300-square-foot building operating as a fashion store for Guess in Miami Beach has sold for $12.5 million, which equates to $1,499 per square foot.

Marcus & Millichap represented the seller, a Miami-based owner/developer. The buyer, also represented by Marcus & Millichap, is an institutional investment group interested in building a South Florida retail portfolio.

“The building is a trophy retail asset located in the heart of the Collins Avenue fashion district,” said Drew Kristol, VP of investments in Marcus & Millichap’s Miami office. “Guess has occupied the property since 1998, and over the years has re-invested into their build-out. The new owner is an excellent position to capitalize on the below market in-place rental structure.”

The two-story building, located at 736 Collins Ave. between Seventh and Eighth streets in Miami Beach, was extensively remodeled in 1998 and has received complete interior renovations from Guess within the last 18 months.

 

Source: SFBJ