1010 Brickell is rising in the heart of Miami’s financial district. Stand nearby and listen — you may just hear another pulse drawing louder.
Not scheduled to open for another year, the 50-story, 387-unit complex (from one to three bedrooms and penthouses) will offer three floors dedicated to activities and relaxation, including a rooftop that will sport swimming pools and covered bar and grill. Two other floors will provide a host of activities for children, such as bowling lanes and playgrounds.
On the ground, meanwhile, dining and nightlife options will complement the setting around 1010 Brickell, where prices for a unit range from $490,000 to $1.5 million.
Also next year, Canvas will help open another era of development in downtown Miami. The 37-story, 513-unit condo project (at 1630 NE 1st Ave.), located adjacent to the Adrienne Arsht Center for the Performing Arts, will have its own artsy feel. Among the integrated design elements are gardens on the expansive decks surrounding the sunset and sunrise pools and floor-to-ceiling glass windows in each unit. Amenities abound, as well, with unit prices starting at a more moderate $236,000 and going to $627,000.
Mostly, Canvas will serve as an expression for the area: stylish growth.
1010 Brickell and Canvas are only two of literally hundreds of condo buildings that have been planned, proposed or approved — 252 new condo buildings, to be exact, totaling 36,000 units east of Interstate 95 in Miami-Dade County. The average proposed building consists of 23 floors and more than 140 units.
Call it a multibillion dollar makeover, a recovery from rocking times, which is setting the stage for a new generation of development.
And it’s a condo trend that is proving to be contagious across tri-county South Florida (Palm Beach and Broward along with Dade). Since the current building cycle commenced five years ago, some 400 new condo buildings have been announced. All, of course, won’t become reality. The numbers, though, certainly warrant the term “boom.”
Back downtown, 8,750 condo units are expected to have hit the market between 2015 and 2017, with the bulk arriving over the next 21 months, according to the Miami Downtown Development Authority, an independent agency of the City of Miami funded by a special tax levy on properties in its district boundaries.
Yet, by virtue of downtown’s population doubling during the past decade to 80,000, plus an additional 39 percent projected population growth over the next three to five years, the market should be capable of absorbing most of the new units, cites the Miami DDA, pointing to pent-up demand from recent lean years of construction.
International buyers also are expected to keep the market in balance. Almost three-quarters of preconstruction units currently at various stages of development are aimed at international buyers, according to market data.
Too Much of a Good Thing?
Nonetheless, there is at least some caution in the air. With inventory rising, industry observers are looking out for a tipping point. In a report released last September by the DDA (Greater Downtown Miami: Residential Market Study Update [April-August 2015], a “required recalibration” by developers was cited — due to rising land and construction costs, fewer international buyers, and generally changed local market dynamics.
Anthony Graziano, senior managing director of Integra Realty Resources, which conducted the study for the DDA, was quoted: “The next six months are going to be a strong barometer of where we are in the market.”
Now is right at about those six months. And concern lingers.
Jean Louis Delbeke, an 18-year veteran of the Miami condo market and a broker working with One Sotheby’s International Realty, says a strengthening of the U.S. dollar is one reason sales momentum has slowed. Buyers are becoming more deliberate.
Since 2007, the dollar is roughly 200 percent stronger compared to Argentine and Venezuelan currencies; more than 160 percent stronger against the Russian ruble; and up about 120 percent vs. the Brazilian real, 35 percent against the Canadian dollar and more than 25 percent against the euro, according to published reports.
“Everything is slower,” Delbeke says. “There still are a lot of buyers with cash money. … They are waiting for the market to quiet a little. Now they are thinking twice before coming into the market.”
With all the inventory set to arrive in Miami, he adds: “It’s like a fight between international investors with a lot of money.”
Delbeke sees several planned towers placed on hold in secondary locations that are off the water. Also, whereas buyers were being asked for deposits of 50 percent not long ago, as little as 30 percent is now being accepted.
One net result: There isn’t rampant building or buying. And just maybe, in the wake of a debilitating real estate bust fresh in memory, that’s a good thing.
Another result brings little debate. Population growth and the condo boom have brought retail development. Lots of it.
Downtown Miami’s retail market gained nearly $4.5 billion in revenue in 2014 and will add 1.4 million square feet of new leasable space over the next three years, according to a report released Feb. 2 by the DDA. Driven largely by mega-projects like Brickell City Centre, Miami Worldcenter and Miami Central, the growth marks a 22 percent increase in available retail space in the district.
The report, compiled by Integra Realty Resources, suggests an influx of both residents and visitors is creating pent-up demand. Notably, in 2014 nearly one-third of visitors to Miami-Dade County spent time in downtown Miami, reflecting an all-time record.
“Downtown Miami retailers are generating sales north of $500 per square foot — a figure that is raising eyebrows and capturing attention from major brands,” says Graziano, who authored the report. “Considering the substantial growth we have seen across the major demand drivers and the large-scale developments set to deliver, we expect these trend lines to hold steady.”
Restaurateurs are among the market’s biggest winners, with profit margins increased by nearly 80 percent from 2013 to 2014, a sign of downtown Miami’s emergence as a culinary epicenter. In 2015, nearly 40 new restaurants opened there. More than a dozen high-end eateries are already anticipated for 2016, including PB Station, an urban concept from the creators behind South Beach’s Pubbelly; and Laffa Kitchen, a new concept by the owners of My Ceviche.
That growth has been good for established area restaurants, too. “In many ways, we knew we were taking a risk when we opened our restaurant back in 2007,” comments Juan Chipoco of CVI.CHE 105, a hip Peruvian eatery. “We wanted to create a gastronomic and service revolution, but we also knew that a critical mass had yet to form downtown. This area was mostly office spaces with little resident or tourist flow. But as dozens of high-rise buildings and thousands of new residents poured in, we started to see a dramatic change in the volume of clients.”
Downtown’s historic Main Street is also getting a welcomed $13 million reboot. Flagler Street, home to the highest concentration of historic buildings downtown, will soon come alive with enhanced pedestrian amenities, thanks to a large scale revitalization project funded by the City of Miami in coordination with the DDA. The project coincides with significant private-sector interest in the major downtown artery, including nearly 30 parcels secured by investor Moishe Mana.
“After years of planning, the pieces of downtown Miami’s retail market are painting a picture of diversity, with luxury brands, new-to-market retailers and homegrown entrepreneurs all looking to stake their claim in the urban core,” says Miami DDA Chairman Ken Russell, who also serves as City of Miami District 2 Commissioner. “We are building a sustainable ecosystem and a livable urban community that can keep Miami on the map for decades to come.”
The destination: urban Miami.
Photo Credit: Top image by Robin Hill via Miami DDA.