A Healthy Slowdown For Southern Florida Real Estate

By Sunny Isles Real Estate Expert on July 19th, 2016

Flatiron Miami condo

Between the amazing weather, the beaches and the unique culture, it’s no wonder so many people from all over the world look to make Miami their new home every year. Of course, it doesn’t hurt that there are so many amazing luxury homes and condos here to choose from too. Miami doesn’t lack for many things: incredible ocean views, new modern luxury condominiums, warm climate and ocean all-year-round, vibrant night life and top-of-the-line restaurants.

For the past several years Miami’s real estate was fueled by foreign buyers, but due the strong US dollar and domestic economy, there are less foreign buyers now. However, there are more American buyers currently on the market than ever before. The same goes for the real estate developers – more and more enter the Miami market with the mega condo projects, thus creating too much supply.
At the moment, it looks as though Miami has more new properties for sale than the demand for them. The result has been a version of survival of the fittest that threatens to kill off many developments before they can reach fruition.

Brickell Flatiron

One example of this could be Brickell Flatiron – see the website here, though it should be noted that the development of this new building still appears to be underway. Construction only just commenced this past March, but the developer—an Italian named Ugo Colombo who has been active in South Florida real estate for over 30 years — has been selling units for two years now. These units cost between $500,000 and $2 million, which is actually quite reasonable by the area’s standards.
Colombo has said, though, he hasn’t had to reduce the prices on any units. According to a number of local experts, deals are definitely taking longer to make, but that wouldn’t necessarily mean developers are finding it necessary to offer discounts on high-end properties.

A Healthy Slowdown

Another thing Colombo recently said that is of interest is that he feels the current slowdown is healthy. For years, now, Miami has been abuzz with people looking to buy new homes and condos. It was a nice way of saying goodbye to the recession.

As we’ve mentioned, though, things have slowed down considerably. It’s not recession-bad, but it’s still a noticeable change of pace.
When you consider some of the elements that brought about the mortgage crisis, it’s easy to agree with Colombo. A slowdown could be viewed as a correction, letting the market catch up with the enthusiasm of developers before they overextend themselves.

Planned Developments Getting the Axe

Still, it’s impossible to ignore that this slowdown has made some major impacts to Southern Florida’s economy. Most noticeable is the number of planned projects that are no longer in development.
For example, Krystal Tower was going to be a 35-story condo complex in Miami. Gulfstream Park Tower would have stood 27 stories in Hallandale Beach; that’s no longer happening. Oceanbleau was a 17-story building meant for Hollywood; once again, it’s been shelved.

The list goes on and on. Since 2011, 414 towers have been built or are in the process in the tri-county region. That’s 50,230 new condos—many of which carry large price tags.
At the moment, that means that only the best possible projects will be allowed to move forward in Southern Florida. However, what the actual implications of this development will be has yet to be seen.

Super Rich? Miami Is the 12th Top City for You

By Sunny Isles Real Estate Expert on May 31st, 2016

1000 Museum Miami Zaha Hadid

For those of us who live in or around Miami, it comes as no surprise that there is a lot of money here. Sure, there’s been a bit of a slowdown recently to our famous condo market, but that hasn’t done much to stop the ultra-wealthy from making Miami their home (or at least one of them). According to Knight Frank, though, our beautiful city is actually the 12th best place for the super rich to live.

Dropping Out of the Top 10

Knight Frank made these comments to the Real Deal last month. Although it’s definitely good news—wealthy people bring lots of money—there’s a bit of bad mixed in with it too.

As it turns out, Miami was actually ranked number six last year. This year, we fell out of the top 10 by a fair amount. Still, it’s not like we’re not in good company. Tokyo is right ahead of us. Furthermore, 12th place makes us second place for cities in the United States. New York City took the cake there.

Still, are you curious what caused us to slip?

A Dent in Foreign Currencies

Unfortunately, it’s mostly out of our control. Frank claims that weakening Latin American currencies are actually to blame.

On top of that, it doesn’t help that the U.S. dollar has been getting stronger. While it’s definitely good for the economy as a whole, a lot of foreign currencies simply don’t have the buying power they once did, meaning investors from other countries will look for other opportunities.

Frank even said that he regarded this drop in the rankings as nothing more than a “blip.”

For his part, he recommended keeping an eye on Coconut Grove and Miami Beach as the top neighborhoods in Miami for future investment opportunities.

The Top 10

As we mentioned above, we lost to Tokyo, which came in at number 11. The rest of the top 10 looks like this:

1. London
2. New York City
3. Singapore
4. Hong Kong
5. Dubai
6. Shanghai
7. Paris
8. Sydney
9. Beijing
10. Geneva

Making the List in 2017

Hopefully, Frank is right and Miami bounces back next year. Again, wealthy people represent money and opportunity for the rest of us.

That being said, there’s some reason to remain cautious with your optimism. The Financial Crimes Enforcement Network began requiring that title insurance companies essentially verify the identity of anyone who wishes to purchase property in Miami.

Why is this a big deal? Well, there are suspicions that much of the money that helped the condo market explode in the last few years is coming from foreign shell companies that operate as illegal tax havens.

While it’s good to ensure these investors aren’t breaking the law, cutting them off could hurt Miami’s economy.

At the end of the day, Miami is still an amazing place to live and people are going to continue trying to find a home in Miami to enjoy this incredible city. Still, here’s hoping our economy picks up again and we start making some progress on that list for next year.

Famous Architect Zaha Hadid Left an Amazing Legacy

By Sunny Isles Real Estate Expert on May 27th, 2016

1000 Museum Miami Zaha Hadid

The world of architecture lost one of its greats at the end of March with the death of Zaha Hadid. Although she had started her own architecture practice in 1980, Hadid achieved notoriety in 1988 when some amazing architecture drawings of hers were shown at New York’s Museum of Modern Art in the groundbreaking “Deconstructivism in Architecture” exhibition curated by Philip Johnson and Mark Wigley. However, her amazing work would eventually come off the page and amaze admirers from all over the world.

Buildings from Another Place and Time

520 West 28th Street NYC

Al Wakrah Stadium | Qatar

Glasgow Riverside Museum of Transport

Guangzhou Opera House | China

London Aquatics Center

Hadid is considered to be a boundary-breaker because of her success as a woman. Despite the fact that many women have pursued architecture, Hadid is largely considered to be the best.

Still, buildings generally don’t betray the gender of their creator and such was the case with Hadid’s. Instead, her buildings looked as though they came from another place and time entirely.
For example, the Al Wakrah Stadium in Qatar looks like it would be right at home in a sci-fi movie. Despite all the steel that went into creating it, the result appears to be something organic, though otherworldly.

Wangjing Soho, located in China, has a futuristic look like something you’d expect to find on the moon or at the bottom of the ocean.

One of her most famous and beloved works was The Heydar Aliyev Center in Azerbaijan. Again, it hardly looks like metal from a distance.

Then there’s MAXXI, the National Museum of the 21st Century Arts in Rome. This building is much more punctuated with angles and cubes. While it doesn’t look as futuristic as some of her other designs, MAXXI is still like nothing you’ve ever seen.

Are Hadid-Designed Properties About to Appreciate?

While it’s very sad to lose such a talented member of the architecture community, some people may see their home values go up because of it. As her buildings were definitely pieces of art, it probably shouldn’t come as much of a surprise that their prices are about to mimic what happens to a portrait when the famous artist who painted it passes away.

Investors who own Hadid-designed buildings may see their value appreciate now that their creator has passed on.

Keep in mind, too, that Hadid had several projects in the works at the time of her death. For example, a condominium she designed is currently being constructed in Manhattan. The fact that 50 West 28th Street has the address it does would be enough to justify the $50 million price tag for its biggest penthouse—at least to some people.

Another massive project currently is being built in Miami – 1000 Museum – www.sunnyislesmiamirealestate.com/Downtown-Miami/1000-Museum/ which is an ultra-luxury condominium currently in pre-construction phase. One Sotheby’s International Realty is the exclusive sales office, please call to learn more about this project – (305) 336-0457.

Certainly, part of its appeal was that it was conceived by the first female winner of the Pritzker Award. Now, though, this is literally one of the last chances many people will ever have to own a piece of her legendary portfolio.

Zaha Hadid was an absolute visionary who created some of the most beautiful buildings imaginable. Although she has passed on, her legacy is spread across the world in monuments that will be enjoyed and admired for generations to come.

Buildings Designed by Hadid May Hold Unexpected Value

By Sunny Isles Real Estate Expert on May 11th, 2016

1000 Museum Miami

It’s a well known fact amongst those who collect art that the death of an artist automatically makes their work more valuable. After all, they won’t be making any more of it. As grim as it can be to think about tying someone’s death to an appreciation in value of their work, it turns out that this may also happen in other creative fields as well. For example, the architecture world was shocked recently to learn that Zaha Hadid—a trailblazer and unbelievable talent—had passed away. Does this mean that the buildings she designed are now worth more?

“A Surge in Inquiries”

Keep in mind that not all of Hadid’s work had been finished yet either. She was still hard at work leading up to her death, so there are a number of buildings all over the world that haven’t been completed yet but were designed by the famous architect.

One of these is One Thousand Museum, presented by One Sotheby’s International Realty. Located in Miami—where Hadid kept a residence—One Thousand Museum is a condo building that bears many of Hadid’s hallmarks (if she can be said to have any). It’s a combination of Miami-style glass condos with metal veins running up each side.

At 62 stories high and located right on the beach, the complex was going to get a lot of interest and come at a steep price no matter what. Add Hadid’s name to it and it’s understandable that the price increased a bit more.

However, since Hadid passed away on March 31st, the developers have received a surge of inquiries about the project. It would seem many people either realize this is one of their last chances to own a piece of their favorite architect’s work or—equally likely—investors understand these condos are about to appreciate significantly.

Adding to the potential for One Thousand Museum is that it’s the first high-rise residential building Hadid had done in the Western Hemisphere.

Possible Designs

Furthermore, it’s worth thinking about all the designs Hadid either left behind or which hadn’t even reached the development stage yet. You can bet a lot of those are going to get green lighted now, especially if other buildings she designed show that the public is willing to pay more in the wake of her passing.

Whether or not this will happen in Miami—where the condo industry is sort of slow at the moment—is yet to be seen. However, there is a build going on right now in Manhattan of one of Hadid’s designs, so other areas are definitely paying attention as well.

Commercial Works

Of course, Hadid didn’t just design residential buildings. Her best known works would almost all be commercial buildings like the Riverside Museum in Scotland, Hungerburgbahn in Innsbruck or the Heydar Aliyev Center in Azerbaijan. It will be interesting to see if her death influences any of the owners to sell to a new bidder.

Hadid’s death represented a huge loss to the international architectural community. However, with her passing, it would make sense that her life’s work will now be considerably more valuable.

To get more information on available units, please contact One Sotheby’s International Realty at (305) 336-0457 or click here to view the site – www.sunnyislesmiamirealestate.com/Downtown-Miami/1000-Museum/

A Look Back at the Hot South Florida Real Estate Market for 2015

By Sunny Isles Real Estate Expert on April 19th, 2016

downtown Miami real estate

The real estate market for 2015 was, to say the least, hot. With a number of record-breaking sales, it does not appear that this trend is going to slow down anytime soon. However, these huge sales were not the only result of this great year. There were a number of design companies that developed a number of impressive renderings for new developments and even created images that illustrated what the region may look like down the road.

A Vision of Downtown Miami in 2030

Thanks to VisualHouse, a rendering of what Downtown Miami would look like in 2030 was created. Assuming that there are not any new projects that will a be proposed and constructed between now and then, this image shows an authentic photo of the existing Miami skyline, along with a computerized version of 11 planned skyscrapers that have been approved, or that are already being built. Several of the buildings that are going to be built include the SkyRise Miami, which is a 1,000-foot tall observation tower, as well as the Ugo Colombo’s Brickell Flatiron. This is similar to the Flatiron Building in New York.

Elysee Residences

During the latest building boom in Miami, there was a new addition to the Edgewater community called Elysee. This is a unique all-glass tower, which is going to reach 57 stories when complete. The project has been headed by the Two Roads Development team, which is also part of the Biscayne Beach project that is currently being built and located just a few blocks away. When the tower is complete in 2018, it will be the tallest in all of Edgewater.

Apeiron Located at the Jockey Club

Spearheaded by the past CEO of the Ritz-Carlton Hotel Co., a development that was designed to help and revitalize the older condo complex found in the area of North Miami, which is referred to currently as Jockey Club. Some of the plans of this new development include dual towers that will have 240 individual residences, as well as 90 hotel rooms. The uneven elevations of these towers will give the impression of four towers, rather than two, even though the glass exteriors have a sharp contrast to the existing 1960s style buildings.

Convention Headquarter Hotel at Miami Beach

In an effort with designers from the John Portman & Associates, the Miami Beach Convention Center began a redevelopment project that will feature a hotel portion that will include 800 individual rooms, a rooftop lounge, as well as a number of beverage and food outlets. However, in order to have the project move forward, it still needs to receive 60 percent of the votes from residents of Miami Beach. The firm has hopes to have the hotel fully constructed by sometime in 2018.

There are a number of projected and in-the-works projects going on in Miami Beach right now. This construction is leading to more and more appeal in regards to new residents and something that is being embraced by the existing residents.

According to Economist, Miami Real Estate Getting Close to Peak

By Sunny Isles Real Estate Expert on April 9th, 2016

Four Seasons Miami for sale

According to a national economist who spoke at the Four Seasons Hotel – www.sunnyislesmiamirealestate.com/Downtown-Miami/Four-Seasons, the majority of Miami’s real estate sectors are currently at, or about to reach their peak levels.

While the majority of other real estate sectors across the nation are positioned to expand, there are a number of local markets that have currently seen quite a bit of growth, including Miami and according to Hugh Kelly a clinical professional and member of the Counselors of Real Estate, it is about time to start playing defense.

Existing data has suggested that there is still some room for the Miami office market to grow, but it also shows that the apartment and hotel sector have reached the peak. Rental and industrial sectors in Miami are getting close to peak levels, as well.

Monetizing Gains in Miami Real Estate

When it comes to ensuring those gains are preserved and monetized, if possible, there are a number of things that must be considered. For example, is it a hold or sell strategy? If acquiring it is important to base a purchase on existing cash flow, rather than future appreciation. Thinking defensively will help a person figure out where they stand in this cycle and ensure that it runs in their favor, rather than reacting to the cycle as it is turning.

However, most trends are favoring Miami in the long-term. For example, Miami is considered to be a 24-hour city, which is a location that tends to be extremely beneficial for real estate investors who are in it for the long term. Also, financial markets are currently going through a volatile period, which will cause an increase in the flow of cash toward the real estate, making it what is considered a “safe haven.”

In many cases, the reasons above are why gateway cities (such as Miami) do so well in regard to foreign capital.

Current Challenges

However, because of increasing capital rates, interest rates and rises in regulations, there has been a deceleration in regards to international capital flows. This is going to result in some marginal deals falling apart across the nation. This results from the capital pool being deep, but not limitless.

The bottom line is, if an investor knows what they are doing and remain awake, knowing when to play defensively and offensively, they will do fine in the US real estate market. Also, there is not much talk of major corrections in the majority of hot real estate markets, except for some places that are extremely overpriced and saturated, such as Manhattan

The fact is, even in hot markets, building 5,000 apartment units that require buyers at $10 million or more will experience a thinner customer base.

Future Outlook

With the foreign currencies dropping steadily, it is believed that Miami may be heading for a price correction. It is only a matter of time before an investor from South America sells their units for under market value. Also, there are quite a few residential units being constructed. This may eventually lead to an oversupply of the market from a residential standpoint.

The Look of Downtown Miami’s Skyline: 14 Years in the Future

By Sunny Isles Real Estate Expert on March 31st, 2016

downtown Miami real estate

There is no question that the real estate market in Miami – (see downtown real estate listings here) is constantly changing. There is no place that this is more evident than the city’s skyline. However, while the skyline itself is pretty impressive currently, changes that are coming in the future will add to this impressive sight, making it look different and better than ever before.

Visualhouse, which is an international design and marketing firm has made a mockup of what they believe the skyline in Miami will look like 14 years in the future. This is based on the development of 11 handpicked projects that have either been approved or are currently being built. These buildings have been placed over the existing buildings to create a futuristic and accurate ideal of what the skyline will look like in the future.

Visualizing the Future

According to the managing director from Visualhouse, Robert Herrick, they work with quite a few developers in the New York and Miami regions. There are quite a few people who go to them when it comes to skyscraper work. This is because as time passes, they are able to create a pretty accurate idea of what the future of the cities is going to look like.

One of the biggest and most prominent projects in all of the Miami area is the 1,000 foot observation tower, which is quite controversial. Being constructed by Jeffrey Berkowitz, this structure would be one of the biggest and tallest towers that was ever built in the Miami area. Currently, this record is held by the 789 foot tower of Four Seasons that was erected back in 2003.

Projects Depicted in the Image

There are 11 planned or in construction projects that are included in this imaging that will impact the Miami skyline in the near future. The ones that have made the cut and that are depicted on the image that has been created can be found here:

• 300 Biscayne
• SkyRise Miami
• Miami World Center
• Villa Magna
• MiamiCentral Station
• Echo Brickell
• One Riverfront
• One Brickell City Center
• The Edge On Brickell
• Brickell Flatiron
• Brickell City Center

downtown Miami new skyline

These are all towers that are being constructed and that will impact the Miami skyline within the next five to 10 years. The image created by the team at Visualhouse takes into account the size and type of architecture to create a quality image that is realistic and accurate based on the actual sizes of the buildings.

This is not a feat that many design firms could accomplish. There are quite a few factors that must be considered when creating this image in order to make it accurate. A solid knowledge of computer graphics is also required.

While the Miami skyline is ever-changing, this unique look into the future is something that many developers find extremely intriguing. Not only does it let them see what is being done now, but also where there is room for more development and more opportunity.

If you’re interested in purchasing a condo in downtown Miami, please contact One Sotheby’s International Realty office at (305) 336-0457.

First US Location of Novikov Set to Open in Downtown Miami

By Sunny Isles Real Estate Expert on March 6th, 2016

Novikov Restaurant Miami

The internationally renowned Italian and Asian restaurant, Novikov Bar & Grill, will be opening its very first storefront in the US in downtown Miami at the Met 1.

The MDM Development Group recently signed an agreement with the representatives of Arkady Novikov, the restaurant entrepreneur, for the ground level location in the condo located at 300 Biscayne boulevard, which is one of the hottest areas in terms of luxe living in all of Miami. See website for downtown Miami real estate here

While the restaurant representatives looked at a number of other cities, as well as venues located in Miami and in Miami Beach, they ultimately made the decision to open the flagship US restaurant in Met Miami. This is a huge move and one that Miami sees the significance of.

Moving to Miami

Novikov has settled on the former Chop House location and has plans to gut the interior and provide a complete redesign of the space, which totals 8,500 square feet. There is no word, as of yet, if the design will be the same as what is found in other locations around the world. Because of a confidentiality agreement in place, the actual terms of the lease have not been disclosed. Set to open in the early part of 2017, this location will join the others around the world. This includes sites in Dubai, London, and Moscow.

There will be a dining room with 250 seats, as well as a private dining area and bar. In Metropolitan Miami, this restaurant is joining other well-known locations, including Whole Foods that originally opened in 2015, as well as DP Moderne, which is located in the Marriott Marquis Miami. Still in the works to open is the Silverspot Cinema, in addition to five more restaurants, all of which are in lease negotiations currently.

Developing the New Eatery

The owner of the project, MDM Development Group, has been extremely selective in regard to tenants. While they don’t have to be all expensive restaurants, they have to feature the right level of design. Due to what and who Novikov is on an international basis, the acquisition of the restaurant for the development was an important addition to the area.

Currently, Metropolitan Miami is made up of Met 1, which is a 40-story, 447 unit luxury tower; Met 2, the Wells Fargo Center which is a 47 floor and 752,000 square feet office tower that is adjoined to the 41 story Hotel Beaux Arts Miami and JW Marriott marquis Miami; and the Met 3, which includes the parking garage, luxury condo tower from Zom, which is still being constructed and the Whole Foods. The final phase of this project, Met Square, is still under-development. This will house a theater, residences, retail outlets, as well as four restaurants.

Thanks to the addition of Novikov Bar & Grill, Miami is quickly becoming more and more of an international hub. This planned addition to the Magic City is going to feature both Italian and Asian components, which it is known for, as well as a lounge in the middle.

South Florida Real Estate Trends: What to Watch for in 2016

By Sunny Isles Real Estate Expert on February 2nd, 2016

Miami real estate for sale

In virtually all industries, January is the time to look into the future and make a prediction regarding what the next 12 months has in store. This allows businesses and industry leaders to take the right steps so they can capitalize on the trends that are anticipated.

If you are interested in the South Florida real estate market (view website here), then the trends to watch for in 2016 that are highlighted here.

The Rental Market will Start to Stall

After the 2007 crash of the condo market in South Florida, one of the main benefits that residents saw was cheap rental rates. This was the result of easy financing and overbuilding. At that point in time, owners of new construction were converting condos and slashing lease prices to help and attract tenants, which would generate more revenue. When the units were inhabited, the economy began to stabilize.

This also resulted in landlords increasing prices at an aggressive pace to get back some of the money that was lost. The higher rental rates that are now seen in South Florida have resulted in quite a bit of new construction in 2015 and this is a trend that is going to continue for, at least, the next three years. With more rental units available, it will likely mean lower costs for rent in the near future unless the economy in South Florida adds an industry that will result in higher paying jobs.

Increase in Real Estate Commissions

Due to the supply of resale and preconstruction condos in Miami being high, developers are at a point where they need and want to sell the planned and existing units. The last element that most are willing to revise is the price. Watch for commissions in the real estate market to increase in 2016 thanks to an early attempt to sell the units prior to having to reduce prices.

Cancellation of Proposed Projects

Since the current real estate cycle started in 2011, the plans for almost 20 new condo towers in South Florida, which hold over 2,800 units have been changed. These are projects that were revised for a number of different reasons, which range from the changing market conditions to the developers being able to flip the land to get a big return.

Chances are there are going to be more proposed projects that will pivot if they do not meet the pre-sale requirements.

Financing for Mortgages is Increasing

The current real estate cycle in South Florida has mainly benefited because of the cash investors that are coming in from out of town and buying up the property with the intention of renting them out to the local residents who are unable to purchase due to financial limitations.

The main question that needs to be answered is whether or not 2016 is going to be a time of transition to a period of slower growth for the real estate market in South Florida.

December saw Impressive Home Price Growth for Miami & South Florida Real Estate

By Sunny Isles Real Estate Expert on January 28th, 2016

Miami real estate for sale

While the residential real estate market in South Florida is experiencing a slight battle with the global economic crisis, this has not put a damper on housing prices in the region. These prices are steadily appreciating and there is no end in sight for this upward trend.

The prices for Miami and South Florida homes grew by 8.1 percent year over year in November. This data was gathered from a report published by S&P/Case Shiller.

In Palm Beach County, the median price for pre-existing single-family homes hit $305,000, which was an 11 percent increase from the previous year, even more than the average of 8.1 percent. However, there were several other areas that saw this kind of growth, as well. Broward County had a median home price that was also $305,000, which represents a seven percent increase from the prior year. This was the first time that either of these county’s crossed the threshold of $300,000 since over the summer.

Faster Growth in SoFla

This means that the tri-county area saw a faster pace of price growth than almost all of the remainder of the United States. In fact, the only areas that were ahead of South Florida were Dallas, Texas at 9.4 percent, Seattle, Washington at 9.7 percent, Denver, Colorado at 10.9 percent, San Francisco at 11 percent and Portland, Oregon at 11.1 percent.

It is not the entire economy that is suffering. In fact, the consumer portion, which includes automobile sales and housing, was actually quite strong in the previous year. In fact, this improved economy has provided homebuyers with the confidence necessary to actually enter into the market; however, there are some who have been less than overjoyed with the options available, specifically in the range of $150,000 to $400,000 homes. Thanks to strong sales in the past few years, a large number of listings have been depleted all throughout the region. The current owners are still unable or unwilling to test the market, with some not understanding what they could actually get for their home currently.

Economic Struggles in Miami

However, other parts of the economy are not doing quite as well. For example, businesses in the energy and oil sectors have begun to suffer from the significant drop in oil costs over the past 18 months. The strong buying power of the U.S. dollar is also resulting in slower exports. Unfortunately, the housing market is not big enough to help and offset these weak areas.

In December, the national housing market also saw a number of similar gains. In fact, prices increased by 5.3 percent year over year, which accelerated quite a bit from the 5.1 percent jump seen in October.

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