New Construction
The Wall Street Journal recently reported about Miami’s new construction recovery. The report said 118 condo towers are in the works for the metropolitan area, 35 of which are under construction. Downtown Miami is planning for 41 towers, good for an influx of 12,100 units. Though this number is just more than half of the 22,200 units constructed between 2003 and 2008, the report said Miami new construction seems is rebounding well. What do local professionals think about the development scene?
Alan Macken, Principal, Macken Realty, Miami/Fort Lauderdale
How is the new construction market, and what will happen in 2014?
The construction market in south Florida is vibrant. Credit constraints continue to impact the manner in which contracting base conducts its business operations. The economic breakdown certainly led to a reduction of ready, willing and able contractors in the market. This reduction has led to an increase in pricing, but in many instances price is based on comfort in that business relationship.
As opportunities continue to rise, I expect to see growth in business entities in the sub and contracting base. Most of the projects have been commercial, and investor type opportunities. I expect to see a broader based eruption of construction options and opportunities. Demand is trending higher.
What do new construction buyers want?
Residentially, they would like to incorporate more green technology and homes that include smart systems. They want safe structures that offer open contemporary spaces and are more reasonable in size and scope.
Fernando Levy Hara, CEO, Mckafka Development Group, Miami/Fort Lauderdale
How is the new construction market, and what will happen in 2014?
Miami’s condo market is experiencing a boom since last year. There are currently more than 100 projects in different stages of planning or construction. After seven years of no construction, after the bust of 2006, there is a big pent up demand for residential condos and rentals in good locations.
We are selling also a lot to Europeans, particularly French buyers, which are getting the money out of France due to an increase on the income tax to 75 percent .Although prices are already going up (in some cases they are already higher than 2005, before the crisis), we believe that this trend will continue for the next 2-3 years.
What areas of Miami will boom next year?
Sunny Isles and Miami Beach have several buildings under construction, but there are not too many good lots left. These are cities that will be filled in in the next few years, as well as Aventura, where just 3 land of the land is available. Downtown Miami will keep growing at a fast pace, triggered by several reasons: the expansion of the Panama Canal in 2014, the increase in international commerce and the growing of Brickell as the second financial hub in the U.S. East Edgewater is the area with the most amount of new buildings under construction. It is the only piece of the city with vacant land right on the water, and it is very downtown.
How is demand trending?
Current demand comes from international buyers looking for good investments and a safe economy. Prices are much cheaper than in New York, Chicago or Boston, and the buyers also like the weather and the proximity to their countries. They are investors, which plan to have the units rented after completion, keep them for 5-6 years and sell them afterwards.
What do new construction buyers want? Will any features become obsolete?
They look for buildings with some amenities, but they do not want to have high maintenance fees because their profit will shrink, so they are trying to avoid buildings with a lot of service and employees. They prefer buildings with good technology and LEED green buildings, which are energy efficient. We are currently building The Crimson, which will be Gold LEED, and will save 35 percent on water consumption and 30 percent of the energy bill.