Miami Established As 'The Capital Of Capital,’ Mayor Says
Miami Mayor Francis Suarez marveled at the hot streak the city has been having while speaking at Bisnow's State of the Market event Wednesday.
He said that in the past 16 months, "we've moved $1.1 trillion of assets under management companies to the city of Miami," and the city is No. 1 in the nation for tech job growth.
"In the last six weeks, we've done about $550M of closed venture capital deals, which, annualized — you know, you can't really take one month and annualize it, but I like to, because it was a good month," said Suarez, eliciting laughter from the crowd.
Suarez said Miami has about a $4.5B annualized venture capital pipeline, a 150% increase from 2019.
"We've pivoted to a city that I call and I've kind of rebranded as 'The Capital of Capital,'" Suarez said.
The phrase was reportedly first coined by a Vogue writer to describe Miami in the 1980s.
"It's important because we know that capital is the fuel for the engine of growth," Suarez said. "And we know that, whether you are creating a small business or a large business or a business that you want to scale to the world, you're going to need capital, whether it's human capital or financial capital, to help you get to your goal."
Suarez, who in May joined Miami-based private equity firm DaGrosa Capital Partners as senior operating partner, promoted Miami's low taxes, parks, cultural venues and sporting events. He also said that Miami is hiring police.
"People who are in the real estate business really get this: Safety is a massive premium," Suarez said. "Whether you're in South America, whether you're in the Middle East, whether you're in the West Coast or up north, safety is an incredible premium. So while some cities have gotten into this concept of defunding their police, we have refunded our police and continued to increase funding for our police."
He said the city added about 35 new police positions.
"We feel that safety is something we can sell," he said. "Safety is something people are looking for, and the quality-of-life issue — if you don't feel safe in your city, not much else matters."
Suarez didn't address the issue that has dominated Miami headlines all week: a clash between several entrenched city commissioners and Miami's new police chief, Art Acevedo, who Suarez recruited and who has held the position for about six months. The commissioners, including Joe Carollo, inappropriately meddled in police affairs, the chief warned in a memo. The commissioners held a meeting this week to question his job performance, complete with "Miami-style political theatrics" that included commentary on clips of Acevedo dancing and dressed like Elvis Presley, according to The New York Times.
Owners of the popular Ball & Chain nightclub on Thursday voiced similar concerns about meddling in a $28M federal lawsuit they filed against the city. The bar owners have long complained that Carollo and associates have weaponized city resources like the fire department and code department to raid and harass the establishment. Carollo allegedly had a personal vendetta against the bar owners for supporting his opponent in a 2017 election.
The bar was forced to close last year after the city amended an ordinance and revoked its certificate of occupancy. Critics caution that such problems are endemic to the city, but Suarez focused chiefly on the positives Wednesday.
Suarez said in his speech that a census by the Miami-Dade County Homeless Trust revealed there are 510 homeless people in Miami.
"We will be unveiling a plan in the next couple of weeks, which we call Functional Zero, and we hope to be the first major city in America to have zero homeless," he said.
Other speakers at the event also hyped Miami. Even with cruise ships docked and business and international travel crippled by the coronavirus pandemic, hotel revenue per available room in Miami has been beating 2019 levels. Miami reported the largest average daily rate increase for rooms compared to 2019, up 27.5% to $173.61, Hotel Management reported this month.
"The future is very, very bright," Greater Miami Convention & Visitors Bureau President and CEO William Talbert III said. "The world can't get enough of this Miami, Miami Beach product."
Dream Hotel Group Vice President of Development and Acquisitions Christian Glauser Benz said the food and beverage program accounts for 60% of the revenue at some of his firm's hotel locations. Dream's portfolio in South Florida includes the Dream South Beach, a project in Downtown Miami, and the former Bahia Cabana in Fort Lauderdale, which it is renovating.
"We want to be amenities for the neighborhood, to be part of the fabric of the neighborhood," Glauser Benz said. "If you are successful [at that], you will make a lot of money."
Panelists said potential tax hikes or an interest rate hike, rising flood insurance rates and the lack of affordable housing potentially driving workers elsewhere are the headwinds the market could face, but the speakers were by and large optimistic.
"Miami is on fire. It just is. If you're in Europe, Russia, Asia, Miami's on sale," said Urban-X principal Andrew Hellinger, whose River Landing project opened last year with 528 rental units, 346K SF of retail and 150K SF of office.
He acknowledged that the influx of people was creating an affordability problem for locals and working-class people. A limited amount of space can easily mean more demand than supply. Bilzin Sumberg partner Anthony De Yurre noted that the Miami area is home to Biscayne National Park and Everglades National Park.
"So the reality is, we're just 7 miles' drive between the sharks and the alligators, and we have to somehow find the dirt to fit all this demand that everybody wants," De Yurre said.
"Miami real estate is like walking into an ice cream shop," said Transacta Developers CEO Silvia Coltrane, who is working on an 11-story condo project in the North Beach section of Miami Beach. "There's a flavor for everybody."
But the area's real estate professionals have to look ahead, said Tony Cho, founder of Metro 1. Cho also launched a platform called Future of Cities that is part think tank, part real estate development firm and part venture ecosystem.
"I think we need to become the capital of innovation around climate solutions," he said. "There's no other place in the world that is more potentially impacted financially by climate change and sea-level rise, so why are we not the leader in this industry? I think we can be, and so I'm cautiously optimistic about the smart money that's coming here and where to invest, so that that's where I think the opportunity is."
