Globally known commercial, business and residential centers like Miami Beach, Coral Gables, Coconut Grove and all of South Florida are economic engines that drive business. Often their biggest proponents are the developers, property owners and landlords. Yet they cannot do it alone.
That’s where an organization like The Beacon Council comes in. The venerable agency is a public and private non-profit concern working to support the business climate of Miami and Miami-Dade County. Its executives and staff promote economic development, generate volumes of research about the positive business climate, and generally become the face of the community.
The Beacon Council now has a new face. The organization hired a new president and CEO, Larry K. Williams. His most recent post – one he’ll hold until taking over at the Beacon Council on Oct. 7, is as an economic development expert in Atlanta. His actual title is VP for technology industry development at the Metro Atlanta Chamber.
Long-time South Florida residents and business owners know the tale of the Miami Herald. Since 1903, the venerable newspaper has chronicled our lives. It’s been part of our journey from little more than a backwater pioneer encampment in the early 1900s to an escape for Northerners since the 1920s to the playground for the global elite it is today. Its business pages have charted Miami’s evolution, too, covering the emergence of the region’s commercial development, economic interests and certainly the explosive luxury real estate boom we’re witnessing today.
So it is with a heavy heart that we watch the building that housed this institution – home of such names as sports columnist Edwin Pope, South Florida native Carl Hiaasen, humorist Dave Barry, and the journalists who earned 20 Pulitzer Prizes – being reduced to rubble.
Certainly, the Miami Herald and El Nuevo Herald newspapers live on. But we all must realize the building’s demise is only the latest chapter in Miami’s story. That 14-acre parcel on Biscayne Bay, on which the Herald building stood since 1963 and watched as the Adrienne Arsht Center for the Performing Arts and the Miami Heat’s American Airlines Arena later were built, is destined for something great.
Several weeks ago on the Forté Properties blog, we discussed how Argentina was among the top markets for buyers investing in luxury residential properties in Miami Beach. Then this week, we read about how France has emerged as the top market among nations whose people are looking for real estate in Miami.
To some, it’s a surprising statistic. With all the Latin Americans and even Russians buying up properties in the region – paying top dollar and garnering top-of-the-fold headlines for their largesse – few would believe that the French are the top tire-kickers.
It seems that’s the difference here. The French are tops among those nationals searching Miamire.com, the website of the Miami Association of Realtors, for properties in town. That doesn’t necessarily lead to a showing, much less a contract to buy.
But the statistic does reveal the diversity among nationalities searching for homes in Miami and South Florida.
After decades of flight to the suburbs, America’s downtowns are rebounding. A resurgence in residential populations is seen across the county. More than half of the country's largest metro areas - 27 of 51 - witnessed faster growth in the urban core than nearby suburban markets, according to the 2010 census. This trend is driving a similar spike in commercial development. Nowhere is this more apparent than in South Florida. Areas like downtown Miami, downtown Coral Gables, and urban cores as far north as Fort Lauderdale and Palm Beach County have seen a rise in downtown residential development.
Mostly driven by luxury and mid-priced condominium and upscale apartment developments, residents are eschewing the commute and distance of the suburbs and looking for the buzz of urban living. In downtown Miami alone, the urban population has grown 80% in the past several years.
Big name retailers are taking need. So, too, are developers, owners and managers of commercial property and office space. For them, this trend represents positive future prospects. Downtown Miami alone has seen some two million square feet of class A office space come online in the past several years.
The Argentines are coming! Actually, they’re already here. And they’ve brought with them some $2 billion in residential real estate investment in the U.S., with heavy ownership concentration in Miami and the surrounding luxury communities, like Coral Gables, Coconut Grove and other South Florida neighborhoods.
At a time when Brazilians, Russians and – of course, Americans from the Northeast – garner the headlines for their share of some $68 billion in homes sold in the U.S. annually, Argentines quietly it seems have made steady and sure investments into the South Florida luxury residential marketplace. In fact, that reality may surprise even veteran luxury real estate industry watchers.
A recent story on the “Argentine invasion” in MercoPress outlined the breadth and scope of their forays. Data from the National Association of Realtors supports the $2 billion figure. Anecdotes and tales from leading South Florida luxury Realtors back that up.
American Airlines / US Airways Merger Big for Miami, Coral Gables Business, Office Markets
Word this month that shareholders approved the $11 billion merger between American Airlines and US Airways is big news for Coral Gables’ and Miami’s business, real estate, Class A corporate office and real estate communities. This is about more than creating the world’s largest airline. It’s about fueling business opportunities across South Florida.
American Airlines for decades has been a driver of international business in Miami-Dade County and all of South Florida. Its billion-dollar terminal expansion at Miami International Airport – its second-busiest hub – radically changed and markedly improved international air traffic to and from the “Gateway to the Americas.”
Now, the merger further expands the foundation of business that American Airlines has laid. It removes American from under the cloud of bankruptcy, and allows the company to focus on the future.
Tropical Storm Chantal fizzled into a wave, leaving those with businesses, offices and homes in Coral Gables, Miami, Coconut Grove and all of South Florida breathing a sigh of relief. But the Atlantic Hurricane Season should have all business and residential property owners on alert. Storms can emerge at any time and threaten business continuity. Are you ready?
Small business disaster preparedness is a process, not an act. At Forté Properties, we’re prepared for any storm – long before hurricane season begins or a storm looms on the horizon.
As a Class A building, Madison Circle is well designed to handle hurricane season.
Moreover, Forté Properties staffs Madison Circle 24/7 – including during hurricanes and other threats. Owners and managers also are on site immediately following storms to help tenants with any business continuity needs they may have. This type of personal care during a time of crisis is our way of doing business.
It doesn't take mysticism to figure out: Across Miami Beach or the Coral Gables or Coconut Grove waterfront along Biscayne Bay, as well as other prime South Florida residential real estate markets, mortgage rate rises create little cause for concern among some home buyers. When you’re buying a $20 million luxury mansion or penthouse – whether you’re a Russian oligarch, a Brazilian business executive or a New York financier – you’re probably issuing an order for a wire transfer. Safe to say, you’re not calling a mortgage lender.
But for some buying “luxury” homes, a percentage point or two move in the prime lending rate could be reason to break out the calculators and tabulate the cost of a loan’s principal and interest.
So recent rises in the cost of money has some real estate watchers and real estate developers more closely watching the market.
At Forté Properties, we recently posted an item to our Facebook on the rising prime rate. Some Realtors worry that South Florida’s hot real estate market may cool with the higher cost of money. Rates have been so low for so long that some fear a rise may stifle the resurgent residential real estate market.
A commentary in this week’s Miami Herald discussed how some areas of Miami-Dade County’s residential housing market are showing better signs of recovery than others. One upscale community – Key Biscayne – in fact has recovered to within eight percentage points of its pre-recession prices. Meanwhile, other areas, the writer noted, are still close to 50% off their pre-crash peaks.
One has to ask: How much “recovery” should property owners expect? Is a return to full, pre-crash property valuations reasonable? Or should expectations be tempered by realism?
One could argue that much of the South Florida market has recovered remarkably well. To be sure, some elements of the luxury markets like those found in Coral Gables, Miami Beach and Coconut Grove, among other areas, have shot well past pre-crash levels.
Prices may be off peak highs from around 2007-08. But were those valuations reasonable? For example, modest suburban homes in the run-up grew by double-digit percentages. Homes that in the 1990s cost closer to $300,000 were selling for $600,000 - or more. Even million-dollar homes saw price spikes.
This month, celebrity Rosie O’Donnell became the latest to make news in the Miami Beach, Coral Gables, Coconut Grove and South Florida luxury residential real estate scene. O’Donnell sold her mansion – located at 43 Star Island in Miami Beach.
The home went on the market for $19.5 million in 2012. By this year, the price dropped to $17.5 million. It sold for $16.5 million. No small sum – and a nice, tidy profit for O’Donnell, who bought the residence in 1999 for $6.75 million.
O’Donnell becomes the latest in a long list of A-listers to have made Miami Beach luxury residential real estate their own – current or past.
When chamber of commerce and luxury residential and commercial real estate executives look for accolades that can be attached to their community, Miami, Coral Gables and South Florida would seem to have bragging rights in the Miami Heat. (Image Courtesy National Geographic)
Two NBA titles in six years - and currently competing for a third. Home to arguably the best player in basketball - LeBron James - and a supporting cast of well-known faces and characters. Owned by a cruise line magnate (Micky Arison) and led by one of professional basketball’s most respected coaches (Pat Riley).
This is the kind of company and attention any community advocates love to associate with.
It's what we at Forte Properties have long championed - how a positive impression can help the greater community.
And Miami has it all.
With the NBA Finals currently underway, that global spotlight is focused on South Florida and the world is transfixed with the “money shots” of the Miami skyline and views of a shimmering Biscayne Bay.
Talk about press money can’t buy... The Finals are being broadcast in 215 countries and territories worldwide. Broadcasters are announcing the games in 47 languages.
In South Florida, the term “white hot” could define the Miami Heat. In Miami, Coconut Grove, Coral Gables and across the region, the word also describes the residential real estate market. From fast-rising residential real estate prices to commercial and office properties that are growing in kind, prices are rising and inventory is shrinking. This translates to good times for residential and commercial property owners and landlords, as well as those businesses or tenants already in favorable long-term leases.
Savvy real estate agents or brokers who work with commercial or office properties don’t need a national report to tell them the market is hot.
Yet in case any validation is necessary, a recent Case-Shiller real estate index reveals that property values have risen by double digits in recent months.
Moreover, the market’s growth shows no signs of abating.
News that Hollywood actor Christian Slater has bought a home in Coconut Grove bodes well for the area’s residential status – and highlights the robust return to the real estate economy that stretches beyond Miami Beach and Coral Gables.
The television, film and stage actor and his fiancé this month purchased Villa Dolce Far Niente for $2.2 million. Loosely translated to “a house of blissful idleness,” the 1928-built Old Spanish-style home like so many others in the area has been updated and renovated, without losing its timeless charm. The home features a gourmet kitchen with SubZero and Viking appliances, marble floors and arched mahogany French doors that open to the patio and pool.
Beyond the four-bedroom, three-and-a-half-bath residence, Slater is buying into a bohemian community known for a charm and groove all its own. Lush with tropical foliage and culturally rich, the Grove is home to arts and artists, social events, public parks, Biscayne Bay, shopping and dining. The “Grove lifestyle” has drawn an eclectic set for years.
Finally, business owners, restaurateurs and residential developers in Coconut Grove, Coral Gables and elsewhere in Miami-Dade County have reason for optimism in the discussions surrounding the county’s water / sewer dilemma. The decades-old infrastructure is crumbling and reportedly is incapable of handling additional strain – even from single, new hook-ups as part of any business renovation or residential development.
Yet, as the economy from Coconut Grove to Coral Gables and throughout the county and the region continues the climb out of recession, growth requires permits. And permits – needed for a business expansion or a new residence – were stymied as the county faced claims by the Environmental Protection Agency and other governmental organizations that it is violating the federal Clean Water Act.
Now, agreement has come. So, too, could come the permits.
Any economist, retailer or residential or commercial real estate investor - especially one in Miami, Coral Gables or now, Coconut Grove - knows the law of supply and demand. The more scarce the commodity, the higher the price. Consider also the three rules of real estate: Location, location, location.
Now, take a look at the residential real estate market in Coconut Grove to see the law and rules in action. Where other markets still have excess residential inventory, Coconut Grove is as tight a market as there is anywhere in South Florida.
It’s especially true in the rental market. With inventory tight and a Miami Water and Sewer Department building moratorium preventing any new residential or even commercial product from coming online, rental rates are on a steady climb. They’ve gone up approximately 25% in the past year.