Which Views Are The Best In Miami? A Case For Choosing A West-Facing View Posted on September 7, 2023 by Sarah Elles Boggs It is no secret that the availability of inventory of Miami’s real estate market is very low thanks to the Citadel Migration and migration from New York, and it is very natural for clients to automatically request an ocean view when they begin their home search. But what about the West-facing view? Is it also not beautiful? Here are my thoughts about why the West-facing view could even be superior to the ocean view when shopping for Miami condos. The Night View This is something that I always bring up to people. Naturally, the first thing that people ask for when moving to Miami is an ocean view. But what you don’t realize is the ocean view isn’t really all that interesting at night. On the West side of the tower, there are glittering lights and pedestrians and all sorts of things to observe. The Sunsets Miami offers some incredibly colorful and breathtaking sunsets. Watching the sun go down and all of the colors that are offered from your terrace in the evening is incredibly spectacular. And after the sun has set, you revert back to the glittering lights of the night view. If you are on Miami Beach you will see the Biscayne Bay, so there is still a water view with the lights of the Downtown Miami skyline in the background. If you are on mainland Miami in the Downtown or Brickell area, or even Coconut Grove, it is possible that you could see all the way to the Everglades. Watching the late flights arrive and depart from Miami International Airport is also interesting. Sunlight The morning sun is noticeably stronger than the afternoon sun. It is brighter and creates a glare on television screens and computer screens if you are working from home. Blackout shades are a must. There can also be a case made for those of us who maybe hold odd hours. A night owl is not going to want the sun beating down on them first thing in the morning. Maybe night owls prefer a calmer light at the end of the day. The Terrace I touched on this a bit before, but the terrace is so pleasant at the end of the day. The temperatures are cooler, there is plenty to observe and talk about and on Miami Beach, the streets with bay views tend to be more calm and secluded from tourists. Which One To Choose? Naturally every person has their own preferences regarding what they look at from their terrace, how much light comes in and how they like to live. A happy medium would be to find a building that offers north or south views. In this case, you will receive more sunlight on the south side of the building and softer light on the north side. Of course facing toward the ocean is a very marketable feature, but there is also something to be said for looking at the Biscayne Bay or the vibrant neighborhood that you choose. If you are interested in a new home or real estate investment, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
Follow The Money To Florida: Young Rich Professionals Flock To The Sunshine State Posted on September 1, 2023 by Sarah Elles Boggs Florida is shedding its stereotype of being “Heaven’s waiting room,” as we have been historically described with a healthy dose of snark. A post-COVID mass exodus from cities such as New York, Chicago and Los Angeles has earned Florida the position of amassing the highest number of affluent young professionals over any state in the US, according to IRS earnings data. Smart Asset did a recent study with findings from IRS data from 2021 to see where young professionals, people aged 26-35 who earn $200,000 per year or more, are moving. By and large, they are flocking to Florida and more specifically, to Miami. This migration is evident along the streets of Brickell and Downtown Miami, where high paying jobs and entertainment options are plentiful. Coconut Grove is another hot neighborhood for the young and moneyed with our laid back yet upscale atmosphere. According to the study, Florida saw 3,391 high-earning young professionals and 1,216 high-earners left the state, resulting in 2,175 as the net migration. Texas was a close secod with 1,909 new high-earners in their tax roll. These young and affluent taxpayers represent the top 2% of earners in that age bracket, and they come with the added expectation that their salaries will continue to grow as they become more experienced in their career paths. Where These Earners Are Coming From According to CNBC, many of these high earners are coming from highly-taxed states like New York and California. While this is certainly the case, we have also seen a mass migration in the Miami area from Chicago after Ken Griffin’s Citadel announced the relocation of its headquarters to the Magic City last year. The young professionals are both chasing opportunities from companies like Citadel, where interns could earn up to $19,000 per month, and running from the problems of their home cities. The local governments in New York and California have become so tolerant and permissive of the problems many cities face, they have become havens for crime, drugs and homelessness. The young and productive would obviously rather live in a cleaner and safer city that is ripe with opportunity, and here we are. What This Means For Miami As this migration continues, the only realistic result is that demand for housing in the urban core of Miami and surrounding areas is not likely to let up anytime soon. Citadel hasn’t even begun construction on their new headquarters and ancillary firms are following suit increasingly as they get settled. The job market in Miami is incredibly rich on the professional level, so we will need every one of the new housing units in the construction pipeline to be developed. While the new housing units are going up, we will also need more schools. There is an incredible strain on Miami’s school system, particularly with the private schools. These are issues that we are working out as we go along, with outposts of some of New York’s most prestigious schools opening in the South Florida area. In a nutshell, Miami is on the map in a large way with the young professional crowd. We offer the lifestyle, professional enrichment and rich culture that make us a long-term winner for them to lay ground roots and thrive. If you would like to discuss moving to a new neighborhood or building in the Miami area, please contact Douglas Elliman Real Estate broker Michael Light at 786-566-1700 or via email at michael@miamiluxuryhomes.com.
Thoughts On The Miami Real Estate Market Considering The News About The National Economy Posted on August 10, 2023 by Sarah Elles Boggs We are constantly being fielded with questions about the national economy and whether or not it is a good time to buy if you are financing. This is a very tricky question for real estate professionals as there are so many mixed messages coming from the news media. Will there be a crash, or will it be a soft landing? Watch The Macro And The Micro Markets If you are relying upon the major news media for your Miami investing advice, you are likely stressing yourself out unnecessarily. The Miami market is nowhere near the markets in California, polar opposites even. The major news media tend to concentrate on the nation as a whole, the macro-markets. In order to make an informed decision about Miami, you must pay attention to what is going on in Miami and we have historically been an outlier. Yes, we were hit harder during the Great Recession, but we also recovered stronger and more quickly than other markets. Our job market is far more fruitful than the rest of the nation. Between our international banking hub in Brickell and Citadel relocating their entire operation to Miami, we not only have new jobs coming online, we have a lot of very good jobs available. Our tax climate is also favorable for investing, this is a large part of why the mass migration has happened from New York and other states up north that are more highly regulated. The Miami boom is not a heavily-leveraged fake heyday the way it was in 2005. We are funded by a thriving job market, large cash deposits on new construction and the global elite recognizing the opportunity that we offer. Prepare For Naysayers No matter what the market looks like, there will always be someone who says it’s an awful time to buy. There were even people calling for a crash in 2021 when rates were so low, money was almost free. This created a ton of missed opportunities. Values were on the rise and it was almost like stealing money. But this is the nature of investing, there will always be a naysayer or debbie downer. What We Actually See The updated CPI was released this morning and reported that inflation, while still present, has slowed on a national scale. The national job market is on the uptick slowly but surely, and Miami is still strong. Rates were raised in July, and despite fears of another hike in September, the reports this morning give some assurance that it will be awhile before the Fed does anything more with the rates. They no longer predict a recession. Goldman Sachs also predicts that we’ve already seen the bottom, and a soft landing is in store. What we see in Miami. Now as far as what’s going on in Miami, there is a slight loosening of inventory. This is a good thing as we are now in a position where buyers have more options, yet we are still firmly in a seller’s market. The inventory was not tight because of people holding onto sweetheart mortgages, it was tight because there was just not enough to meet the influx of demand. Developers are doing their part to remedy this. If you would like a detailed analysis of our Coconut Grove micro-market, I publish one every year. The last one was just a few months back in March and can be found here. Next week, we can dive into the Douglas Elliman market reports for the different areas of Miami to get a better picture of the performance in different neighborhoods. What The Future Holds Going forward, my advice is to accept the 7% rates for now. The rates of 2021 were an anomaly and while it may be jarring to compare what you could have bought a few years ago to today, but this is the reality today. If you are considering waiting for rates to slip just know that if that does happen (and it likely will not), that will only ignite more competition from others who are waiting. The increased demand will just bring the prices up higher, so you will wind up paying more anyway. The best thing to do if you are concerned about rates is to ask for a rate buydown. Alternatively you can lock yourself in at the prices available today and rates that we have today, then refinance at this price if/when rates do slip in the future. Regardless of which route you choose, all models point to the rates remaining stable for some time in the future and Miami remaining confidently strong. To speak more specifically about an investment or if you need/wish to move, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. We would be honored to assist you.
Why Is The Miami Population In Decline If Demand Remains High? Posted on August 4, 2023 by Sarah Elles Boggs I’m sure we have all heard the news this week. The Miami population has declined for the first time since 1970. Housing prices are up 53%. Is affordability the problem? Is this a problem? The numbers are just numbers. They can’t give a reason, so here are my thoughts. The problem is not just housing costs. Not really anyway. It’s lifestyle. The pandemic opened a lot of people’s eyes to how they want to live. With remote work now being more widely embraced after being forced into it during COVID, we have more choices. People who were stuck in a condo for months maybe would prefer some land now. So off they went to the country. But in their place came someone from New York who saw that they could be stuck indoors with floor to ceiling windows and a water view in Miami for the same price as an older building without much view in New York. This shift kept our market strong during COVID and there were a lot of people from up north who were looking to have that water view if they could work from home. And with that price shift, a lot of people were priced out. It should also be mentioned that it’s not just housing that is more expensive these days. Everything is higher. Food, gas, literally everything. So there are quite a few people who would rather pay less than to have the water view, and they left. The post-pandemic lifestyle has changed as well. There used to be a little inside joke between professionals in the Miami population. When you met a local person, you’d determine if they worked in tourism, banking or real estate. But this stereotype doesn’t work anymore. There are a lot of industries that have catapulted into the limelight. Now people try to figure out if the new local is a tech bro or a crypto bro (I kid, sort of). This is a really good thing. It has changed the demographic landscape of our city for the better. We now have a very rich entrepreneurial demographic. As a matter of fact, the US Census also did a study on the entrepreneurial demographic in Florida and found that the Miami population is the most entrepreneurial. There are more new business licenses filed per 1,000 residents in Miami than any other county with almost 50 applications per 1,000, totaling nearly 128,000 licenses filed in 2022. They also made a fun interactive graphic that you can find here. The future is bright. The entrepreneurial spirit that emerged from COVID is an amazing sign of the economic health of an area, and it just keeps getting better. We have companies like Citadel beginning to enrich our economy. Keep in mind that the Miami population report that everyone is looking at does not take into consideration the Citadel effect. It was not so long ago that Ken Griffin committed to relocating his headquarters to the Magic City, so we have not yet seen the economic effect of this. Also, the global elite are only just now starting to really make Miami a priority aside from just somewhere to visit for a week. There are more ultra-luxury properties in the pipeline than ever before and they are selling quickly. All in all, the increase in prices is not necessarily the cause of the Miami population decline. The population decline is an overall demographic and lifestyle shift and a new era of Miami is here. To speak more specifically about an investment or if you need/wish to move, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. We would be honored to assist you.
Inside The Expected “Messi Effect” On Miami’s Economy, Including Real Estate Posted on July 21, 2023 by Sarah Elles Boggs Miami is no stranger to being in the limelight. This also is not the first time we’ve bathed in the glow of the limelight as we welcome an athletic prodigy. In 2004, we welcomed Shaq to the Miami Heat, in 2010 it was Lebron James “taking his talents. to South Beach” and ushering in the era of the Big 3 for the Miami Heat. These are very exciting times! In addition to the celebrations, and sports wins and boasting to the rest of the world about our athletic prowess as a city, there is also a positive effect on the local economy. This time, the celebration is a bit different. Shaq, Lebron, and Bosh were all amazing boons for Miami. And while the NBA is wildly popular in the United States, other countries haven’t quite caught on at the same level. This time it is Messi, an international superstar in an international sport, and arguably the GOAT at soccer football. So what can we expect from the “Messi Effect?” Ticket Sales David Beckham has dedicated his career to bringing an MLS team to Miami for the last ten years. Through so much adversity and doubt, his faith in the mission has gone undeterred. He has been successful in forming the Inter Miami CF in 2018, with games beginning in 2020. Before this monumental addition, you could venture up to DRV PNK Stadium in Fort Lauderdale and watch the home team play for as little as $30. Although they usually didn’t win, you have to recognize that it takes a new club a bit of time to get their feet wet, so to speak. It also adds fuel to Miami’s fire to now have such a star player on the roster, as we are incredibly competitive and love to see the home team win. For the Messi opener tonight versus Mexico’s Villa Azul, tickets are now starting at $265 per person, and venturing up to the $110,000-range. While the price tag will likely level off below the $110,000 price tag for the most expensive seats, the increase in both volume and cost are expected to remain remarkably strong throughout Messi’s tenure with the club. Tourism and Merchandise Aligning with the increased cost of tickets to Messi’s Inter Miami matches, the economic impact on the city as a whole will benefit. When large sports events occur in any city, there is a spike in tourism. There is an increase in the amount of money spent in restaurants and recreational outlets, local goods and services as well as sales for local merchandise. Additional infrastructure is also usually needed in order to accommodate the boon of visitors who descend upon the host city for the event. This is evidenced already in the recent renovation of DRV PNK Stadium as well as Freedom Park Stadium, the $1 billion future home of the club that is currently beginning construction. The anticipated delivery date is 2025. These factors not only generate tax revenue, but also new jobs for the local residents, who then increase their spending habits, creating a full-circle economic strengthening effect. The economic strengthening phenomenon is evident in the competition between cities and politicians when jockeying for hosting privileges of things like the Super Bowl, Copa America, Formula 1, The Olympics and the World Cup. Miami is very fortunate to have the formula down, and easily is able to garner such events with relative ease, enjoying regular hosting privileges for the Super Bowl and Formula 1 as well as the recent Copa America. upcoming World Cup feathers in our cap. Last year’s debut of Miami Race Week drew $350 million into the local economy in one week alone. With a worldwide superstar Messi as a regular spectacle on the pitch, these benefits will be more consistent than one large week before returning to normal. This will become the new normal at least until his contract ends (and is hopefully renewed). Real Estate With Florida’s favorable tax climate, there are many who would prefer to own a piece of Miami that they can use when they wish and then rent out when they are home. Bringing in a sports superhero such as Messi increases this demand. We saw it when Lebron joined the Miami Heat in 2010 as well as when Shaq hung his hat here in 2004. People recognize the need for additional rental opportunities and want to be part of both the visiting and the earning aspect of the spectacle. The thing that is different this time is that with Lebron and Shaq, they each had an immense fanfare with people from the United States. Messi however has a more international and global appeal, as football is more popular in these areas than in the US. This is set to reignite the international appeal of Miami, and bring back the foreign investors that may have waned a bit in recent years. We have already seen an increase in web traffic and phone calls from people in various countries in South America, and with our position in the Knight Frank Global Connection, we are very happy to see so many new faces interested in taking part in Miami’s continued evolution and revitalization. The Knight Frank Global Connection is an invitation-only network of brokers from around the world whose mission it is to make foreign real estate purchases attainable to the global elite. We are very proud to have the opportunity to represent Miami within this network. Whether Messi and the Inter Miami win tonight or not, this is a large win for the club, for the MLS, for the city of Miami and South Florida as a whole. “Today a new journey and a new chapter starts. There will always be a before and after Lionel Messi,” Inter Miami FC Co-Owner Jorge Mas told the crowd at Messi’s welcome event on Sunday. “We are recipients of a legacy of the greatest player in the world that started at Newell’s Old Boys. Went to Barcelona and ended at PSG, but today it sits in the hands of Inter Miami and its fans. This is our moment to change the football landscape in this country.”
Miami As An Emerging Global City – Banco Santander’s Expansion Into Coconut Grove Posted on July 18, 2023November 27, 2023 by Sarah Elles Boggs As 2023 rolls on, Miami’s finance and tech sectors are showing no signs of slowing down. Both the Brickell International Financial District and the burgeoning tech sectors that have popped up throughout the Greater Downtown Miami area are experiencing exponential growth despite signs of strain in the rest of the country. There is even a book, detailing how Miami is now among the Emerging Global Cities with the company of Dubai and Singapore. These cities are joining the ranks of areas such as New York, London, Tokyo, and Paris. At the same time all of this is happening, Coconut Grove is also experiencing a renaissance. The once sleepy community is now filled with glittering condo towers that enjoy amazing water views as well as the townhomes and single-family residences that are missing from the Greater Downtown area. Even with all of the growth and expansion, it has been done in a way that has preserved the casual quirkiness of The Grove and welcomed newcomers. Banking & Tech’s Global Expansion Trickles Into Coconut Grove Banco Santander, the 19th largest banking institution in the world is taking a huge leap in Miami. Being based in Madrid, Santander has long had a solid respect for the Magic City because of our international banking hub in Brickell. Some may not yet know this, but Brickell Avenue is home to the largest concentration of international banks in the world. It is the latin markets’ gate to the US. Santander owns a 14-story Class A office tower at 1401 Brickell Avenue and has also committed to a 95,000-square-foot lease in the new Class AA office tower at 830 Brickell Avenue. It is curious how they can be so bullish on the market with the traditional news media touting a possible global recession. But Santander is not finished. After announcing the new Brickell lease last October, they have also decided to make a big leap forward, moving all of their app development and technology functions to a new flexible workspace right here in Downtown Coconut Grove. Rendering of Banco Santander Coconut Grove Lobby Why Coconut Grove Is Perfect For Tech Professionals Historically, those who are successful in tech development flourish in an area that harbors creativity. Flexibility and balance foster collaboration, innovation and a sense of play. Coconut Grove is able to offer all of these factors just a stone’s throw from the hectic finance-centric hub in Brickell. The new space will be located along Mary Street and Grand Avenue, in Mayfair in the Grove. Some seasoned Groveites will remember this space as being the old Miami Improv theater that closed in 2013 as prices rose when Park Grove was announced, kicking off Coconut Grove’s renaissance. This thriving area is surrounded by sidewalk cafes with internationally-inspired menus, relaxing and manicured waterfront parks and so many amenities that nurture your sense of wonder and collaboration. With our international culture, hearing Spanish, French or Portuguese on the street is commonplace and the new team members at Santander will feel right at home no matter where their birthplace was. Santander’s US Expansion Despite already being listed in the top 20 financial institutions in the world, Santander is incredibly bullish coming into this new market. Just yesterday, it was announced that they are also expanding their investment banking arm in the US, as in previous years they have been more reliant upon Latin America for growth. In their technology departments, they experienced an increase of 5 million digital customers just in 2021. A whopping 54% of total sales in 2021 were digital transactions, according to their website. Because of this, Santander Group has committed 2 Billion Euro per year to developing their tech-driven business. Santander Group’s recognition of Coconut Grove is a feather in our cap as we continue to evolve, and we are proud that we can offer the lifestyle they seek for a successful new workspace for their new tech department. Rendering of Banco Santander Coconut Grove Rendering of Banco Santander Coconut Grove Valet
Miami Now Has The Hottest Rental Market In The United States Posted on July 12, 2023 by Sarah Elles Boggs The Summer of 2023 is hot in Miami, and in more ways than just the weather! Starting off 2023, RentCafe ran a study of the top rental markets among major cities across the United States. At the time, only New Jersey slightly inched past Miami in terms of competitiveness for rental properties in the first quarter. Fast forward to today, and the tides have turned. Miami’s historically low vacancy has caused a decrease in the supply of available properties, paired with ever-increasing demand, pushing us into the #1 slot as the Most Competitive Rental Market. Let’s break down how we got here, and how to succeed in this environment if you need to move… The Rush of Demand His critics can say what they wish about Mayor Suarez, but nobody can take away the fact that he is a champion for business in Miami. He has created a business-friendly atmosphere that has caused a mass migration from cities including both New York and Chicago. The movement of these companies has expanded our job market beyond the historically-common tourism and real estate sectors. We are now a burgeoning tech hub and even considered an emerging global city in a new book that was recently published. This swarm of new professionals arriving to the city is joining the swarm of migrants from that arrived in Miami during COVID, seeking a more laid-back lifestyle and remote working environment. The current statistics show that for each available rental option, there are 24 prospective tenants. This figure is nearly double the demand of North Jersey, the second most in-demand market in the country. Developers are working as quickly as possible to bring new apartment and condo options to the marketplace, but these new buildings are not constructed overnight. A new high rise takes at least 24-months to construct, considering one floor per week is added to vertical construction. Developers were not yet caught up with the COVID-era demand when the new professionals began to arrive. These are excellent problems to have, we are of the mindset that growth is good, but it comes with growing pains and this surge of demand is showing no signs of letting up anytime soon. As long as crime and taxes increase up north, those who are able will migrate to the south and Miami is mighty attractive. Aerial View of Ritz-Carlton Residences Coconut Grove The Supply Crunch We touched on this a bit above, but the short supply issue we are faced with is more than just the fact that developers cannot finish new towers quickly enough. We are also faced with historically low vacancy because people in Miami are just not moving the way they used to. According to the RentCafe.com survey, almost 72% of renters renewed their most recent leases, a figure that typically rests slightly lower than 60%. The market has changed so quickly that those who are situated in the most desirable neighborhoods are no longer willing to run the risk of losing their spot in the skyline in search of a spot in the latest building to open. Prices have skyrocketed and the newer towers that are opening are astronomically-priced compared to what residents are accustomed to paying. Rather than risking having to move to an emerging neighborhood, more people are staying put. Another issue we are faced with is that buyers of available condos and homes have increasingly been end-users of the spaces, rather than rental investors. In the past, investors from foreign countries have taken advantage of Miami’s steady demand and availability of purchase opportunities to invest in spaces that are used as rental units. There was a time not so long ago that entire condo towers were almost completely sold out to rental investors. It was a win-win for everyone involved as the neighborhoods were flush with available options for tenants, whether long-term or just until they found a more permanent place to hang their hat. For the investors, their assets remained safe from political fears, or other issues in the investors’ homeland. Changes in government policies on both sides of the border have slowed this pace, although not brought it to a grinding halt. Aerial View of Brickell City Centre The fact that 2023’s Miami condo buyers are increasingly end-users also displaces tenants who have been in their rental condos for years, which leads us back to the demand issue and another tenant jockeying for rental units that just aren’t there. It’s an ongoing cycle that compounds itself, showing no signs of letting up until these new towers start to be delivered to the marketplace. How To Survive And Thrive In This New Rental Market For starters, it goes without saying that you need proper representation. Gone are the days where you can peruse the national listing aggregates (Realtor.com and Zillow), calling the number listed on a pretty listing and deciding the following week to move in within the next month. Today’s market requires tenant representation. You need someone whose sole job is to know what is currently available, what is possibly coming available soon, and knows how to sell you as a tenant to the landlord who has an opening coming up. It takes someone organized, knowledgable, professional and dedicated. Know your budget boundaries and have a clear list of things you need from a rental home followed by a list of things you would like to have. Your Realtor will need to know their boundaries when they go out to do your bidding for you, else you could go out of budget quickly or wind up with a home that does not fit what you need. You will also need to be realistic with the cost of a rental property that embodies all of your “must haves” list. These tips are not meant to stress you in any way. Any of the agents in The Light Group at Douglas Elliman are knowledgable and can seamlessly guide you into what you need based upon the guidelines we are given by you. Being candid with your agent and realistic with yourself is the best way for a stress and drama-free moving experience. When working with an agent, also know that every real estate agent you encounter is working with the same inventory of possible options. Working with several agents will only stress you out more. Furthermore, agents are naturally more dedicated to their loyal clients. If you want an agent’s undivided attention and full-service for your home search, it’s a good idea to find someone you trust and work with that person. If this is your first trip into the Miami property market, you can also prepare yourself for the fact that tenants do not pay their agents. Our service is free to you, the landlords take care of us. We realize that in some other markets, agents are compensated differently, but in Miami real estate representation is free for tenants. We at The Light Group would be honored to help you to bypass the stress and competition that this market brings and get you set up peacefully and seamlessly. If you need/wish to move and are looking for a Miami rental property, or would like to talk about rental investment opportunities, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. We would be honored to assist you.
Terra’s $1.2 Billion Downtown Miami Deal Is Off. What Does This Mean For The Miami Real Estate Market? Posted on June 30, 2023 by Sarah Elles Boggs Well, that’s a wrap. The record-breaking $1.2 Billion development site deal between Terra Group and Genting at 1431 North Bayshore Drive is not moving forward. What was heavily touted in every news outlet as the most expensive deal in the history of Miami is canceled. What does this signify about the market? Is the news media onto something that we are about to come to a screeching halt? Let’s break it down. The Deal And Why It Fell In order to really get ahold of what this signifies for the market, we first have to look into the development deal itself. Why it was a marker to begin with and why the deal failed. Of course, the sheer dollar amount of the purchase is the reason that the deal was so newsworthy. Genting had big plans for the site. At the time, their purchase price of $236 million was in and of itself groundbreaking. But their plans did not make it through the governmental red tape and Downtown Miami is just not the spot for table games and gambling. Genting really did make a solid go of it too. I don’t really gamble, but that Superfast mini-cruise ship/Bahamas ferry was a lot of fun (for those who remember). Rather than continue to put good money after bad, they finally said forget it and flipped the property to someone with a different plan. After a short period of collecting bids, Genting chose Terra Group’s bid of $1.2 Billion. The actual plans were very hush-hush, potentially because they were still in the conceptual state and not ready for press. But as quickly as the deal started, it stopped. It turns out that the problem with the deal was simply that Terra Group requested an extension of the due-diligence period for the deal and Genting said no. This is pretty common in development deals, and in my opinion, the deal should have already passed the due diligence period before being released to the press because so many things can happen during this delicate time. It could have been that the soil testing came back in a way that needed more testing, the seawall needed more work than anticipated and they needed to get more bids. It could have been that the return on investment at sell-off needed some tweaking, it could have been ANYTHING. This is in no way an indicator that either party is acting in a negative way toward the other or that the market is too unstable to withhold a development of this magnitude. What this does mean is that Genting is in a position of power. They have four other buyers eager to send them ten-figures for their land. Why should they give extensions? This is business and they are here to sell their land to the person who will close as quickly as possible and for the highest amount possible, so everyone can move along to their next deal. It’s a good position to be in. Can Terra come back and bid again? Certainly. And we love Terra Group’s product, so we hope that this does happen. Either way though, we are as eager as everyone to see how this pans out. Rendering of Casa Bella Rooftop Pool View North What this means for the Miami Real Estate Market In the time that the Terra/Genting deal was starting and failing, sales have not slowed down. Casa Bella Residences, which is gearing up to begin construction directly to the west of the development site at 1444 Biscayne Boulevard, has recently announced that they have sold over 70% of their 312 residences. They are now busy offering the 23 penthouses, which is the last step of the new development sales cycle. To reach this point in less than 18 months with the amount of competition the Miami new development market is offering is outstanding. Rendering of EDITION Residences Edgewater Arrival To the north of the development site is a flurry of action. Two Roads Development’s EDITION Miami Residences in Edgewater is located just to the north at 2121 North Bayshore Drive, and is gearing up to begin construction. Within a month of launch this spring, they had sold over $160 million of their 185 residences. This all happened before they were even able to open their $10 Million sales gallery. Rendering of Villa Miami Entrance And we cannot finish this analysis without looking at the all-star luxurious foodie-haven Villa Miami, which is also a Terra Group product in partnership with Major Food Group. This project has 75 super-luxury residences that embrace an array of culinary-focused amenities. The residences start at $4.5 million and have debuted in the market with much fanfare. I’m not going to rule out the possibility that maybe Terra Group realized its plate is a bit too full (see what I did there?) with Villa Miami and other projects in its pipeline this month, so asked for another month to complete the due diligence on Smart City with Genting. I do not know this to be a fact, it is purely speculation. My point is that nobody really knows why the Smart City transaction failed, but it doesn’t really matter either. Someone else will buy it (or maybe Terra Group will buy it again) and sales traffic has not slowed in the neighborhood. As long as there are new taxes and increased inflation in New York and other key areas of migration, there will be opportunity in Miami. If you are interested in continued updates on the development site, stay tuned here. If you are interested in a private presentation, more details and/or specific pricing for any of these projects, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.