By: Deidra Funcheon
In Miami, as we say adios to 2018 and “Dalé!” to 2019, several of South Florida’s real estate pros shared with Bisnow their predictions for the coming year. We’re warning you now: It will involve lots of scootering.
11. Amid Economic Uncertainty, South Florida CRE Will Stay Relatively Stable
Aztec Group Executive Vice President Charles Penan: Uncertainty in the global market will greatly influence the real estate capital markets in 2019 and beyond. Miami has evolved into a worldwide epicenter for development and investment with countless international players operating within our market. We are starting to see a fundamental change in investors’ mindsets where they are looking to pay off or recapitalize debt as soon as possible to secure the longest-term, lowest cost of capital and lock in perceived equity before the market shifts.
Ocean Terrace Holdings Founder and Managing Principal Sandor Scher on hotels: I expect 2019 to be much like 2018, where acquisitions and entitlements continue to move forward, but at a slower pace. As the credit markets continue to show signs of decreasing activity and spreads on borrowing remain at current levels or increase, that will have a negative effect on new deal activity. There are a number of projects that were acquired and entitled over the last two years and those projects should start in 2019. Locally, the Miami Beach Convention Center coming online should also begin to be a driver of demand for hotel rooms and hopefully create the compression in the market that is needed to drive RevPAR higher.
East End Capital Founder and Managing Principal Jonathon Yormak on multifamily: While Wynwood 25 currently has no competition as the first Class-A purpose-built rental product to exist in the submarket, there have been more than 30,000 apartment units already delivered in Miami-Dade and the shadow condo market adding thousands more. Therefore, based on city averages, we don’t expect to see real rental growth for the foreseeable future. The Miami office market looks to remain stable — neither any great increases nor decreases on the occupancy or rental side. As a result, outperformance will continue to be generated only by delivering a better product to the consumer.
10. Certain Submarkets Will Stand Out
Turnberry Ocean Club Residences Director of Sales Dan Riordan: In Sunny Isles, most of the residences (83%) expected to be completed in the next three years have already sold. There are no expected groundbreakings in Sunny Isles until at least 2021 and since an average project takes three years to build, there’ll only be a limited number of completed new residential residences until at least 2024. Demand will grow during this four-year period as new construction is on hold while the limited luxury inventory gets absorbed. This should bode well for people purchasing now.
Wynwood Business Improvement District Vice Chairman Albert Garcia: 2019 will be a transformative year for Wynwood. For the first time in decades, new multifamily and office projects are rising out of the ground here, and many will open their doors in the coming year. Residential projects like Wynwood 25 and The Bradley are set to add hundreds of dwelling units to the district in 2019, while Cube Wynwd, Wynwood Annex, Print House and the newly opened Wynwood Garage will help create a new office submarket for Miami. Together, these residential and office projects are further pushing Wynwood’s transformation from destination to true live-work-play neighborhood. And coming off a phenomenal 2018 Art Week that saw hundreds of thousands of visitors come to Wynwood, it’s clear that the district’s fundamental drivers — its trademark art, dining and retail elements — are stronger than ever heading into 2019.
Related Group Vice President Jon Paul Perez: The Wynwood market has grown in both strength and size since we first began construction. With the nearby Brightline (soon to be Tri-Rail station) connecting South Florida’s urban core to Broward and Palm Beach counties, the area will surely grow into a residential and hospitality hot spot … New retail leases have been signed and construction on two large commercial projects on Second Avenue have begun. Goldman Garage is complete and open, with more office projects announced this year. We expect the neighborhood to expand at a faster pace than it was before. As a sort of snowball effect, the success of our first large-scale residential development in Wynwood will give other developers the confidence to pursue new projects in the area.
UrbanX Group Principal Andrew Hellinger: “Next year, one area to watch will be the transformation of the Miami Health District west of Downtown Miami. For the first time in decades, we are seeing a rise of new developments, including River Landing Shops & Residences, and a surge of private investment pour in and around the District. Investors are realizing the value of bringing quality development to this submarket, which serves tens of thousands of people who descend daily on the Health District. Some of the recent investors in this submarket include Moishe Mana, Lyle Stern, Mill Creek and the Rubell family. All of them have played key roles transforming areas like Wynwood, South Beach and New York’s Meatpacking District over the decades. I expect to see new projects break ground in and around the Health District next year.
For predictions 9-1, view the original article by clicking here.