Not All Condo Booms Created Equal

A boom is a boom is a boom—except this time around, speculators aren't fueling the Miami condo boom like they did during the mid-2000s, Miller Samuel prez Jonathan Miller tells us. So there's less likely to be a bad aftertaste when things eventually slow down.

Not that the market's slowing down anytime soon. “Only about four years ago, the Miami condo market was the poster child for a collapsed market,” Jonathan says. “Since then, it's morphed into a luxury brand. Buyers are still coming.” The current boom is still dominated by cash buyers—about two-thirds of the sales were cash in 2013, Jonathan explains, and he expects that trend to continue this year. (Benjamin Franklin is getting a workout.) During the last boom, people quit their day jobs and became speculators with a short-term view of the market. “More of the current pool of buyers have a long-term outlook. They aren't buying to flip, so the expansion is more sustainable.”

George Miquilena

Douglas Elliman's Q4 South Florida condo reports, which Jonathan prepared, were released today. Some takeaways: The median sales price for all Miami condos was up over 14% since last year, and while the number of sales edged up only 0.4%, total sales were still the highest for a Q4 in more than seven years, since Douglas Elliman started compiling the reports. Non-distressed market share (which leaves out those pesky foreclosures and short sales) rose 8.7 percentage points since last year to 67.2% of the overall market in Q4. 2014 outlook: more price growth, but the pace of grow will probably ease as supply comes on line, Jonathan says. “Buyers will continue to come from overseas and the Northeast.”

As a submarket, Miami Beach will continue to have special momentum this year, One Sotheby's Daniela Bonetti tells us. “Miami Beach will continue to grow, despite getting increasingly difficult for developers to find land to build on,” she says. Many luxury developments are moving north from South Beach, creating new desirable neighborhoods. Daniela reps Beach House 8, a beachfront condo development with eight full-floor units in Mid-Beach—that is, one of those developments north of South Beach. (Could be that North is the new South.)

Pour That Concrete!

Snapped at the first pouring of concrete this week for Marina Palms Yacht Club and Residences in North Miami Beach (and proving that neon yellow goes with anything): DevStar principal Anthony Burns, Plaza Group prez Neil Fairman, North Miami Beach Mayor George Vallejo, and NMB Councilman Tony DeFillipo. Construction crews funneled more than 250 yards of concrete covering 8,000 SF of the deck. The north tower's shell-work will be complete by this fall, and after that, Neil tells us, 540-foot luffer cranes—typically used in Europe and in other high-density urban areas—will be brought in to complete the remaining framework of the north tower on the 14-plus acre site.

Office Market Gets Some Love, Too

Condos aren't the only property type with sizzle in '14. Blanca Commercial Real Estate EVP Juan Ruiz tells us that everything points to this year as a strong one for office leasing. “In Doral/Airport West, for instance, no new office product has been delivered since 2009, and Doral Park Centre, which will be ready for occupancy during first quarter, is the only office building currently under construction,” he says. The logistics industry, the bulk of which is in Doral/Airport West, is booming and Juan says he knows of logistics companies considering moving their corporate offices out of warehouses and into nicer office buildings to enhance their image.

Juan says that office rents have stabilized marketwide, and although concessions are still present in most deals, they're reduced. (Above is Doral Park Centre, which Juan reps.) “In fact, in many cases higher tenant improvement allowances are included not just as concessions, but because construction costs have increased because of the surge in residential construction,” he says. The CBD, which tends to be a great indicator, is very active. “At 1111 Brickell, for example, we're seeing an incredible amount of activity. I wouldn't be surprised if we see rental rates start to increase again next year."