The Retro Revival of MiMo – The Miami Modern Biscayne Boulevard District

By Sunny Isles Real Estate Expert on July 31st, 2015

Miami real estate

MiMo is the name given to the Miami Modern Biscayne Boulevard Historic District, but it also describes the architecture found in the area between 50th and 77th streets that were built between the late 1940s and early 1970s as well. While the motels lining this strip were once the chosen locales for prostitutes and drug dealers, it has now become one of the hippest areas in Miami’s Upper Eastside. (See properties for sale in the area – http://www.sunnyislesmiamirealestate.com/Design-District/)

Leading the Way

The force behind this once downtrodden area becoming the MiMo hotspot it is today is former Miami Beach residents who’ve decided that home ownership and a yard to call their own is a better option than a beachside condo. Along with them are plenty of boutique and shop owners, modern office spaces, trendy new restaurants and period hotels that are transforming Biscayne Boulevard.

MiMo Players

There are a number of buyers and developers snapping up spaces or putting down roots in the MiMo district who want rehabilitate these retro locations, and change the perception of Biscayne Boulevard in the process. One of the major players in Avra Jain, whose purchases and renovations started with Vagabond Hotel. Since that purchase in 2012, she has spent over $12 million on real estate in the area, as well as untold renovation costs.

Greenstreet Real Estate Partners, which is a real estate investment fund valued at $1.5 billion, is another developer making strides in the area, with over $14 million spent on office properties and retail space.

The MiMo Attraction

So why are all these developers and transplants choosing a retro-revival of the Miami Modern District? Because the current costs of buying and renting are still a relative bargain. However, with the influx of interest in the area, rent has gone up as well for retail space. With a 50% increase throughout the area over the last three years, it has left some worried that the increased prices and the costs of renovation will eventually drive rents too high, and force businesses to close that can’t charge enough to offset the increasing costs.

Others in the area disagree with this fear, as they believe that the purchases are based on actual business plans, rather than simple speculation, and a desire to return Biscayne to its former glory.

Changes from 51st Street to 77th Street

Biscayne Boulevard has become an investment retro-revival from 51st Street all the way to 77th, with investors and developers truly trying to make a difference in the area. In addition to Jain’s Vagabond Hotel, there are 16 other major properties along the Boulevard that are either in the process of being renovated, have already undergone renovation, or are slated for building to start in the near future. All of this shows that there are plenty of people and residents that are discovering MiMo, and doing their best to return it to something more than its former glory. With all the changes, and the numerous businesses and developers flocking to the area, it’s clear that this is one area that is worth watching and considering.


No Housing Bubble in Sight

By Sunny Isles Real Estate Expert on July 21st, 2015

Miami real estate

Statistically speaking, housing is on a roll. Year-to-date home sales are up 6.3 % and prices in May were 7.9% higher than a year earlier. The trends are expected to stay positive and are likely to boost business dollar volume by as much as 15% in 2015. These statistics don’t even include new home construction, which is growing at a strong clip as well.

But this rosy picture does raise concerns about affordability. After all, wages are rising by only 2% annually and renters are getting squeezed, having to endure 4% rate hikes while home prices accelerate more quickly. In addition, mortgage rates have notched their highest level of the year, reaching about 4% in June, and should continue to rise well into next year.

Some armchair analysts have suggested that we’re entering a new housing market bubble. But hard facts suggest otherwise. Underlying conditions today are fundamentally different from the bubble of a decade ago. Back then, credit was easy to obtain and home sales were running at more than 8.5 million a year (existing and new homes combined). New home construction volume topped 2 million annually.

By comparison, credit today is extremely tight, which has led to an unusually high level of all-cash sales. Home sales are barely over 5 million and new home construction is barely scratching 1 million units. Meanwhile, for the past eight years, total mortgage balances have failed. The reasons show what’s changed from 10 years ago: home owners are paying their mortgages on time and few are seeking cash-out refinances.

It’s fair to ask, though, whether at some point affordability problems will choke off home buying. That’s possible. But there’s my thinking about what could neutralize those fears. After running various scenarios, I expect home prices to rise continuously as long as mortgage rates remain under 6%. Early in the summer, the average rate was 4%. It may rise to 5.5% by the end of next year. Should mortgage rates cross the 6% mark, maybe two years down the road, then either home prices will be flat or other forces will be evident. Going forward, keep in mind that robust job creation and meaningful increases in income levels will help propel home prices. For now, though, no bubble or impending crash is in sight.

By Lawrence Yun, NAR (National Association of Realtors) chief economist.


South Florida Commercial Real Estate Looking Bright

By Sunny Isles Real Estate Expert on July 15th, 2015

Miami Brickell City Centre

The JJL’s Pulse360 2015 panel members provided predictions about South Florida’s commercial real estate (view all commercial listings), and the outlook is looking very bright. Among these predictions were:

• 2015 is looking to be a strong year for commercial real estate in Florida due to steady investments and a strengthening economy.
• Prime office spaces may see an increase rental rates from 15 to 25% over the next two years as new workplace construction slows, and absorption rates begin increasing.
• South Florida is continuing to grow in popularity thanks to the tourism boom, and world-class hotels, restaurants, and retail locations.
• Millennial entrepreneurs and their rush to the urban core, including in places such as the Design District, Miami Beach, and Wyndwood, along with the increasing popularity of shared office spaces, will cause changes in the face of work sites.
• The Miami Worldcenter, Brickell City Centre, and the Design District, which are three of the top ten retail destinations in the nation, are all currently being built in Miami.
• Currently, the only prime office tower that is slated to be built is the Brickell City Centre by Swire Properties, and it will not be completed until 2019.

All of these predictions and findings show that South Florida is poised to take advantage of the increasing demand for space required by national and international retailers who are choosing to take advantage of the tourist base in Miami. This tourist base, which includes international travelers from locations such as Brazil, arrive in Miami with empty suitcases that they plan to pack with purchases to take back home with them. Major retailers want a piece of that pie.

Land Price Increases

Another driving force behind the increase in office rental prices is the high land prices. This is causing many developers to abandon office sites, and change their focus to the popular luxury condominiums that are being bought up by foreign buyers, many of whom pay in cash.

Considering that the Swire project is the only one expected to occur between now and 2019, JJL’s Pulse360 members believe that this will result in one thing – rental rates will go sky high. These rates will be driven by the lack of additional supply of office spaces in a market that is already tight, and according to the predictions, this is going to be a major push to getting those rental rates even higher.

While there are no other projects currently under development, Nitin Motwani, who assisted with the creation of Venture Hive, a shared workplace for entrepreneurs close to downtown Miami, has said that there have been other developers who are interested in the concept, and creating sites that are similar. However, the problem with creating those sites is that financing is not as easy to secure since it is outside of the typical office space. Motwani believes that this will change as well, although it may take up to 10 years for that type of financing to become the norm.

All of these predictions show that South Florida is a prime location for retail rentals, and it is only going to get better.


International Buyers and the South Florida Real Estate Boom

By Sunny Isles Real Estate Expert on July 12th, 2015

Miami homes for sale

Over the past four years South Florida has seen record-breaking real estate sales. According to a report completed for the Miami Association of Realtors, Latin American buyers are leading the way in driving those real estate sales higher.

The Ultra-Rich Buyers

Ultra-rich buyers are snapping up luxury residences in Miami-Dade County and Broward County at a record pace. According to reports from 2014, 68% of these buyers are from Latin America. Rounding out these buyers are:

• Argentina – 12% of sales
• Brazil – 11% of sales
• Columbia – 8% of sales
• Canada – 7% of sales
• France – 5% of sales
• Mexico – 4% of sales

In addition to the foreign cash from these locations, China joined the list in Miami with 2% of the total sales, and this is the first time they have been on it. Considering that China is one of the strongest markets for new business, this can have major benefits for Miami home sales.

International Buyers Love Miami

In order to understand just how much international buyers are increasing Miami real estate sales, it’s important to understand just how much they are paying for their new luxury homes. Among these ultra-rich international buyers, 28% spent over $500,000, with 9% paying as much as $1 million or more. The average price per purchase comes in at just over $444,000, which is considerably more than the national average of only $245,000. Another important bit of information – 81% of these purchases were paid for in cash. These purchases have led to Florida leading the nation in international transactions, with a staggering 23% in 2014.

Why are so many foreign investors leaping to make purchases in Miami? Besides the gorgeous weather and beautiful surroundings, there are two other important reasons:

• Security of Assets – When these buyers invest their own fortunes in American properties and dollars, they protect themselves from the decreases in value that occur with the currency from their own countries.
• Luxuriousness – Another important factor for these increases is the extravagant luxuriousness of the homes that are available in South Florida. Developers understand that foreign buyers want the best of the best, and they are doing everything they can to provide it. By building residences that answer to the discerning tastes of the ultra-rich, they continue to drive massive sales.

Single-Family Homes in Miami

While the influx of foreign investors in Miami has driven the increases in luxury home prices, that has also had an effect on single-family homes as well. February numbers showed that the median price for a single-family home in Miami increased by 7.9% over the previous year, coming in at $245,000. Condos also saw an increase, with median prices jumping to $189,000, which is an 8.4% increase over the previous year. The increases in February marked 39 months of increases on single-family homes, and 44 months for condos.

While all of these increases are considerable benefits, major players in the Florida real estate market caution that it is important to remember that balance and discipline are still important to ensure that these increases continue, without causing major problems in the future.


S&P Case-Shiller Indices Show Miami Had Highest Gains

By Sunny Isles Real Estate Expert on June 30th, 2015

Sunny Isles Oceanfront condos

According to the S&P Case-Shiller Home Prices Indices for January 2015, Miami real estate – view website had the second highest gain year over year in the last 12 months, with an 8.3% increase in home prices. Additionally, the city tied with San Diego and Charlotte for month-over-month increases, with .7% rises.

Year over Year Increases

S&P Case-Shiller provides both 10-City and 20-City Composites for year over year prices, and both saw increases for year over year numbers over December’s totals, with the 10-City showing an increase of 4.4% compared to December’s 4.3%. The 20-City Composite shows an increase to 4.6% compared to the previous 4.4% increase.

Month over Month Indices

The month over month indices, however, showed a decline of .1% with a majority of the cities showing no change. The report explained that the noticeable decline in cities such as San Francisco, which has a .9% decrease, and Washington, D.C., which had a .5% decrease, could have been due to the weather that was unseasonably wet and cold during the period.

Overall, there continue to be price gains across the housing market. While this is a major benefit that is likely led by an increase in consumer confidence, low inflation, cheap oil, and low interest rates, there are some difficulties in the housing market, as well.

Market Difficulties

The housing market still faces difficulties for a few different reasons, which include:

• Wage Deficit – While home prices are increasing, wages are not seeing the same growth. In fact, the home prices are rising at nearly twice the rate of average wages. This means that if the home prices continue on the same pace, without the wages catching up, would-be homebuyers will not meet the median income requirements to qualify for homes that meet their needs.
• Interest Rates – While the interest rates are currently low, the differences between wage and home price increases could cause problems. If the interest rates increase the slightest bit, it could result in a major setback as homebuyers are put under even more pressure.
• Residential Construction – New residential home construction has still not made it back to the pre-crisis peak, and the current level of one million is not comforting. Historically, any time prior to 2008 when these numbers were that low, the economy was suffering from a recession. Due to this, the new home sector is still considered weak, and this can present its own problems if there are changes in the future.

Miami developers are still seeing increases, which is a major bonus for them and the South Florida economy. However, one area that has shown some decreases is the sale of condos. While these numbers are still higher than previous years, there are some that believe that this sector may be reaching its peak. Time and future indices will tell, but for many in the Miami housing market, the future is still looking bright, and the area is expected to continue growing due to interest from foreign buyers.


In France, the Response to South Florida is a Resounding “Oui!”

By Sunny Isles Real Estate Expert on June 29th, 2015

Miami condo for sale

Miami-Dade County has become a hotspot for foreign buyers from all over the world, but the France is sitting in the top spot when it comes to European countries whose citizens are taking a very close look at what South Florida real estate (see website here) has to offer.

While France has taken notice of South Florida, realtors and developers have noticed the interest as well, and they are certainly playing into it. So much so, that ONE Sotheby’s International and Century 21 both use Janet Choynowski’s website Real-Buzz.com to translate their listings into French so that potential buyers can search for homes in their native language.

French Search Patterns

Choynowski, who has researched the nationalities using her site, has also tracked their search their patterns. What she discovered about the French searchers was that they are generally males that are interested in sports. Additionally, most of them also began their searches by checking out a few properties in California. After that, the searchers ended up looking at properties in Florida. Another interesting thing about those Florida searches: there were also more page views on properties in the area, as well.

US Interest

It isn’t a secret that foreigners have an interest in the US. After all, there is plenty to offer. However, the main draw from the searches revolves around the weather and waterfront. Warm sunny climates and waterfront locations garner more interest, and of those, South Florida is the hands down winner in France and among other international potential homebuyers.

Another part of the interest is based on the types of outdoor amenities that are offered by the properties. Paramount Miami Worldcenter, which is a current project that is being brokered by OneWorld Properties, is a location that caters to those desires. This condo tower is a total of 60 stories, and it will include a number of outdoor amenities, including pools, a running area, a soccer field, and tennis courts in the ninth floor recreation deck. Additionally, the floor will also be home to 12 two-story Balinese-style villas that are situated among water features and pools. The final outdoor space attraction is the outdoor living rooms that replace the traditional balconies.

Foreign buyers have shown interest in the Worldcenter, and currently, 15% of the total reservations made since sales launched have been European natives.

Euro Value

Another major consideration for European buyers is the value of their own euro, which is decreasing. When these buyers invest in properties or second homes in areas like South Florida, they are able to preserve their fortunes, despite the lowering in value of their own currency. As the interest in South Florida continues, it is also easy to see that these investments are lucrative, as home sale prices continue to increase, as do the number of home sales that are all cash. Again, a vast majority of these are buyers that are coming from all over Europe, and this is not a trend that is showing any signs of decreasing in the coming year.


Chinese Interest Growing in South Florida Real Estate

By Sunny Isles Real Estate Expert on June 24th, 2015

Miami preconstruction condos

While Latin American investors have begun to decline in South Florida, there is a new player that is quickly emerging to take their place – China. In fact, their potential is so great that many firms are taking serious steps to accommodate these new investors.

• Shanjie Li, from Da Tang Group, has created a campaign specifically to attract Chinese investors. The campaign is designed to generate interest through opening a Cantonese restaurant for high-end tastes, as well as other areas of focus to generate greater interest in spas, condos, and shops that he plans to develop – all in an effort to make SoFla a welcoming haven for affluent investors from China. His plans include:

o A luxury Chinese restaurant in the Four Ambassadors building
o Condos geared towards business professionals
o A wellness center for those needing pampering and retirees
o A Doral-based golf community for Chinese vacationers
Paramount Miami Worldcenter, a tower of signature luxury condos located in downtown Miami that is scheduled to open by 2018, has Feng Shui consultants on staff to assist with project design to increase Chinese interest, and even removing numbers from floors and units that the Chinese avoid in their culture.

The two towers of the Estates at Aqualina, which was developed by the Trump Group, named both towers using numbers that are considered lucky in Chinese culture. Countless other brokers and developers are taking major steps to attract Chinese buyers, including translating brochures into several different Chinese dialects, wooing potential buyers by visiting Shanghai and Beijing.

There are also many other developers and brokers that are following these footsteps to capture the interest and potential cash that Chinese investors are expected to spend in South Florida.

Why the Heavy Focus?

SoFla is a gorgeous location that already caters to the elite that can afford the multi-million dollar trophy homes, but many firms have noticed a sharp increase in interest from Chinese buyers. Additionally, these buyers are paying cash, and that is worth all of the effort going into attracting them. So far, the Paramount location has received 20 reservations from Chinese investors, all of them prior to the official open of the project.

The Ritz-Carrolton Residences that are located on Singer Island have already sold seven units, in addition to three others at the Miami Beach location to investors from China. There are also many other locations in the region that have noticed an upswing in interest and purchases by Chinese buyers, and nearly all of them are for million dollar homes.

There is no denying that there is a trend in both the Chinese interest and purchases of luxury homes in South Florida (click here to view listings), and brokers and developers are doing everything they can to continue to push sales.


Faena Miami Beach Developments Expanding

By Sunny Isles Real Estate Expert on June 20th, 2015

Faena Miami Beach

Hotelier Alan Faena has announced that there will be two more additions to his Faena Miami Beach, bringing the total up to three condominium towers, a retail and event complex and a hotel that are all being pitched by Faena as an arts hub. Each tower will be designed around its own concept, providing additional luxury that meets varying tastes.

Faena Contemporary

Faena Contemporary, which is expected for occupancy in 2017, will feature 41 units. The luxury residences will be from 1,111 square feet up to as large as 5,469 square feet. The units will be available with one to five bedrooms. There will also be two different penthouses that will be more than 8,000 square feet. One of the penthouses will also include a rooftop deck of 6,600 square feet, and an infinity pool that is 2,097 square feet.

Faena Versailles Classic

The second of these two towers is the Faena Versailles Classic, which is located at 35th and Collins Avenue in the former Versailles Hotel. This tower was designed by William Sofield, and will feature 22 units.

Each unit provides a wealth of amenities, with gorgeous ocean views in every unit. The condos will also feature customized bathrooms and kitchens. Each unit will range from 1,034 to 2,743 square feet, with one to four bedrooms. There will also be two duplex penthouses with a square footage of up to 7,300.

Even with the renovations, the 1940s-era façade, custom chandeliers, terrazzo flooring and the grand lobby are all being preserved to add to the classic feel.

The Faena Contemporary and the Versailles Classic will also have a range of amenities, including gardens designed by Raymond Jungles, two gyms, valet parking, storage space, and a preferred status to of areas of the Faena district.

The units will only be available through the Douglas Elliman sales and marketing firm, with prices that will range from a minimum of $3 million up to over $50 million.

Faena’s Vision

Faena’s vision is to do the same in Miami that he did in Buenas Aires, which was to create a neighborhood that was a mix of art, architecture, taste and, of course, food. The Miami Beach project is Faena’s dream to take the area from a sleepy one into an epicenter for the city, with efforts towards its art hub development.

Interestingly, the normally difficult to deal with historic preservationists and planners are all behind Faena’s dream as well. His goals of combining the contemporary designs of his buildings with a MiMo design that pays homage to the roots of the architecture in Miami Beach.

In all, this dream and project that Faena is creating in Collins will cost an estimated $750 million by the time it is all completed. With a focus on art, and a family friendly walking environment that will replace the currently traffic-choked area, Faena hopes to recreate Puerto Madero magic in Miami. They imagine a neighborhood which will combine art, luxuriousness, old and new architecture, and a touch of old world glamour all into a single neighborhood.


Forget the Ocean View – Miami Global Buyers Want Designer Labels

By Sunny Isles Real Estate Expert on June 15th, 2015

Armani Casa Sunny Isles

There was once a time when a gorgeous view of the Atlantic was all it took to generate interest and purchases in Miami’s exclusive beachfront skyscraper condos. The stunning beauty and beachside access were hallmarks that enticed many a buyer to decide to hang their hat in a second or third home. However, for the ultra-rich international jet set, the newest selling point is all about labels.

Luxe Designer Labels Are the New Trend

It’s no secret that clothing, jewelry, handbags, and cars that carry labels such as Armani, Porsche, or Fendi are more in-demand and have higher price tags. The new trend in Miami, however, takes those labels to new heights by using them to brand luxury hotels and homes to net greater profits.

While it may seem unlikely that simply adding a designer brand could drive premiums to staggering levels, there is plenty of proof available. Wealthy home buyers from locations such as Argentina, Brazil, China, France, and Russia are snapping up these new digs, and they are spending millions to do it. While many pursue high-dollar purchases to protect their fortunes from the decreasing
values of their currency, the designer logos are also a major factor.

The Proof Is in the Purchases

Even if the idea of haute logos commanding higher prices seems questionable, there is plenty of evidence available that proves otherwise. The following luxury Miami condos feature designer labels and prices to match, but buyers are snapping them.

Porsche Design Tower

This 132-condo location developed by Gil Dezer is scheduled for construction to be completed in 2016. However, it is already almost completely sold out – despite prices ranging from $4 million to $30 billion. The luxury condos inside this glass and concrete piston-shaped marvel feature stunning panoramic views of the Atlantic, but a major draw for some buyers is the three car elevators that take homeowners and their cars directly to their own personal garages.

Juan Pablo Verdiquio, an Argentinian native that moved to Miami and started his own construction business, took “a leap of faith” with his purchase, based solely on his ownership of a Porsche 911 4S. For him, living in a condo with the same name was nothing short of a perfect fit.

Armani Casa

Another designer condo skyscraper from Dezer is the Fendi Chateau. With its location near major boutiques that include Tiffany’s, Gucci, and Chanel, these apartments are also going fast. Verdiquio, who purchased one of the staggering Porsche condos, was shown blueprints of units available at the Armani, which start at $1.5 million. After seeing them, he purchased a unit in that building as well.

Luxury and designer labels are having a major impact on Miami Beach real estate, with prices for the top homes in the area leaping 66% in the past year. At the current rate, and as more of these branded condos emerge, these prices are expected to continue rising as more international buyers flock to the area. This will continue forcing Miami locals farther in-land for more affordable housing.


Deposit Requirements Dropping for Some Developers

By Sunny Isles Real Estate Expert on June 6th, 2015

Brickell City Centre

Swire Properties and Property Markets Group are making changes to some of their deposit requirements in South Florida. While some believe this is an indication that the luxury condo boom may be hitting its peak after a four-year cycle, others insist this just isn’t true.

Swire Properties

Swire Properties, the developer of the Reach and Rise residential towers in Brickell City Centre has announced that their down payment requirement for the condos is dropping from the average 50% down to 35%. While some insist that this change to presale terms is a sign that the condo boom is finally slowing, the president of ONE Sotheby’s International Realty, which is the exclusive broker for the Swire Properties, explained that Swire’s decision was based on the fact that closings for remaining units in the towers are coming up quickly at year end.

Property Markets Group

Another developer that is making changes is Property Markets Group (PMG). They are not lowering their down payments on units in Sage Beach in Hollywood, Echo Aventura, Echo Brickell, and Muse in Sunny Isles, but they are making deals with some foreign buyers that allow for payments on the required 50% deposits.

A spokesperson of International Sales Group, which markets the PMG properties, explained that the move is mainly for Argentinian and Venezuelan buyers, who are having more difficulty with moving money out their accounts. For these buyers, the deposit is broken down into 40% being required down, with the additional 10% being sent as installment payments that have to be paid before closing.

Are Condo Sales Waning?

While the number of condos was down by 15% in January, they did increase by 1.4% in February over last year’s sales in the same month. The cycle of condo sales started in 2011, and since that time, 20,000 units have been announced. The reason PMG and Swire’s lowering their down payment requirements is making waves is because only four months prior to these decisions, the Crimson condominium developer began allowing 15 to 35% for some local buyers, using a Fannie Mae program.

The important thing to understand about both Swire’s and PMG is that neither developer relies on the deposits in order to carry out construction on their projects. Instead, they rely on equity that is already available. For these companies, that means there is essentially no risk for them in lowering the deposit requirements.

These down payment requirement changes do raise some questions about the future. The first is whether these lower requirements will carry over to other of the developers’ future properties, and second, whether other companies will follow suit.

The International Sales Group spokesperson, Craig Studnicky, believes that other developers may choose to lower their requirements as well, but that it will only be others like Property Markets Group and Swire’s that can depend on their current equity that will do so.

It will remain to be seen whether these decisions actually mark a downturn in the condo boom, or whether it is just two companies making a move that won’t risk their bottom lines.