Census finds more Americans are living alone

There seems to be a growing trend amongst Americans, and it is one that has the potential to largely affect the real estate market and the economy as a whole. Findings in the latest Census strongly suggest that more and more people are choosing to live alone. According to the findings, one-person households now account for more than one in four households in America.

In the past 40 years, the percentage of Americans living on their own has gone from 17 to 27. This share is greater than at any time in the past century. A close look at the numbers shows that around 33 million people in America live alone, a number that has tripled since 1970.

Graph courtesy of U.S. Census Bureau

There are many reasons that this phenomenon has taken place. An obvious reason is that less people are getting married and having children or, at the very least, they are waiting until later to do so. Since 1970, the Census has found that the share of households consisting of married couples with children has declined from 40 percent to 20 percent.

The advancement of technology has also played a tremendous role in helping connect the world in ways that do not require as many people to live together. Technological and medicinal advancements are also to thank for the fact that most people are living longer, which means many of these single person households belong to the healthy elderly folks who are no longer in need of nursing homes.

Most would assume that the recession had caused the pace of this trend to slow down, due to younger adults moving in with their parents and others moving into homes together in order to share expenses. However, the Census also found that since 2007, 2 million more Americans live alone. Surprisingly, the Great Recession may have contributed to the trend since marriage rates tend to hit a lull in poor economic times.

Overall, the trend may actually have a positive impact on real estate and the economy as a whole. Of course, less people sharing homes means more homes will be sold. This also means that less supplies and energy will be shared. While this naturally would not be ideal for the environment, it also points to an upward trend in the rate of consumer spending.

Jade Signature breaks ground in Sunny Isles

This past Wednesday, Edgardo Defortuna, head of Fortune International, along with several authority figures in the city of Sunny Isles, gathered at the future site of Jade Signature for the ground breaking ceremony. Among those in attendance to celebrate Fortune International’s latest development were Mayor Norman S. Edelcup and City Attorney Hans Ottinot.

As the third Jade project in Sunny Isles, Edelcup claimed that Jade Signature would help Sunny Isles become “Florida’s Riviera.” Jade Signature will be the fourth Jade project overall, the first being Jade Brickell, built during the last residential boom in South Florida. The Brickell project was then followed by the two projects in Sunny Isles.

Rendering of Jade Signature

Jade Signature, however, has a chance to be the most dazzling of all the Jade projects yet. Defortuna has acquired the services of some of the most notable names in their field for the 192-unit, 57-story project. The building’s parallelogram shape was designed by Pritzker Prize-winning Swiss architecture-firm Heurzog and de Meuron. The shape of the building creates room for 25-foot terraces to overlook the ocean.

The interiors will be designed by Pierre Yves Rochon and feature amenities such as a full-service concierge, beach-side restaurant, luxury spa, gym, playground and more. Raymond Jungles was hired to take care of the landscape, the same firm that will oversee the expansion of the botanical gardens for the new Miami Beach Convention Center.

The characteristic that best describes the work being done by everyone involved with Jade Signature would have to be “attention to detail.” The three-story parking garage at Jade Signature will be around double the cost of a normal parking garage, due to the fact that it is being built underground. This was done in order to bring all of the amenities closer to nature without having to put a parking garage in the way.

The workers in Sunny Isles have already begun the nine-month process of digging out space to create the underground parking for Jade Signature. Apartments at the new development are set to range in cost from $1.7 million to $25 million. According to Defortuna, Fortune International has already exceeded $300 million in sales.

Brazilians flock toward Miami real estate market

As we have previously discussed, the South Florida market is, for better or worse, in the midst of a development boom. The origins of this boom, however, may not be coming from the community itself. More and more it seems as though foreign buyers are the ones leading the climb back to prosperity for South Florida’s real estate market. Cash buyers from Brazil are at the top of that list.

The Miami Tower shining for Brazil

In 2012, approximately 690,000 Brazilians visited Miami and injected $1.5 billion into the local economy. Brazilians officially overtook Canadians as the city’s top international tourists and, more importantly, the top international buyers of Miami real estate. This feat was made possible by the 123 weekly flights between Brazil and Florida, a number which is expected to continue rising before the end of the year.

Another factor that continues to stimulate Brazilian tourism in Miami is the extremely favorable exchange rate. What does this mean for those looking to invest in Miami’s recovering real estate market? For the same price of a property investment in Miami, buyers would end up spending nearly three times as much in Sao Paulo or Rio de Janeiro. Ironically, Brazilian buyers may have been driven to South Florida’s real estate market after the global crash in order to take advantage of softer pricing.

Not only did Brazilians lead the pack amongst foreign buyers of real estate last year, according to the Miami Real Estate Agents’ Association they represented 6 out of 10 foreign buyers. A good portion of the buyers (41.9 percent) intend to use their property as a vacation home for themselves and their families. On top of that, 78 percent of Brazilians paid for their property in all cash purchases, a trend that may prove troublesome for U.S. tax authorities in Brazil.

Brazilians have created a massive trend of investment in the South Florida real estate market, not simply because of the previously mentioned factors, but also due to their close-knit culture. Local brokers that have worked with Brazilians claim that if you can sell to one, you can sell to more, given that they tend to enjoy living near one another. This characteristic makes Brazilians a truly great friend for the South Floridian economy.

One Herald Plaza set for demolition

Founded in 1903, The Miami Herald quickly became the largest newspaper in all of South Florida and one of the most highly-regarded papers in the nation. On August 19, 1960 construction began on a building for the Herald, and by March 24, 1963 the newspaper had a new home at One Herald Plaza. Now, 50 years later, the Genting Group has received a permit from the city to demolish the iconic building.

The Genting Group, a gaming company based in Malaysia, purchased the property for $236 million in May of 2011. Demolition on the building is ultimately set to begin some time before the end of this year. Their plan for the 14 bay front acres is a mixed-use project that would include a luxury hotel, along with condos, retail, restaurants, and a glamorous 800-foot promenade overlooking Biscayne Bay.

Excitement had been generated through town at the news that the project would include a casino, but the plans have since been scaled down a bit. Genting made up for this fact at the Port of Miami, where their new ferry contains a casino and takes travelers from Miami to Bimini, where there of course is another Genting casino.

The Herald moved out of the building into their new location in May of this year. What they leave behind at One Herald Plaza is a storied-history that has earned much respect from the citizens of their city. The building was the representation of a nationally-honored media outlet and it became a landmark for those driving through downtown Miami. In their time at One Herald Plaza, the newspaper won 19 of their 20 Pulitzer Prizes, the most prestigious award for any newspaper in the country.

The building at One Herald Plaza is a display of the importance of real estate in Miami. One building has the capability to represent both a prestigious history and an exciting future. For one last virtual glimpse of the iconic building, take a look at this picture-tour from Curbed Miami.

Decision around the corner for Miami Beach Convention Center

The moment is finally here. Those who closely follow Miami’s progress have been seemingly waiting a lifetime for this decision to be made. Now they have less than a week. Commissioners are set to make a final decision on which Miami Beach Convention Center proposal will move forward.

Both groups, Portman-CMC and South Beach Ace, have identified over $1 billion in renovations to be made to the convention center. Both groups are projecting to create well over 10,000 jobs for the community. Most excitingly, both groups have taken the initiative to team up with world-class architects, Portman-CMC with Bjarke Ingels and South Beach Ace with Rem Koolhaas. Neither proposal is anything less than extraordinary and the community of Miami Beach is extremely lucky to have these two groups competing for their approval. Though it has made for an unbelievably compelling race, there can only be one victor crowned. So without further ado, we shall take a look at a brief summary of both proposals.

Portman-CMC

The Portman-CMC group has proposed creating a central square, which will be surrounded by a Latin American Cultural Museum, City Hall, and the landmark Jackie Gleason Theater. A low-height hotel will be attached to the southern end of the convention center. The planned hotel will be a monument to healthy living, as it is rumored to feature daylight-simulating alarm clocks, vitamin-c showers, and other mind-blowing innovations. The hotel will also have a viewing terrace on the roof, with a view of the planned “art roof.” The 17th Street garage will also be completely rebuilt and low-rise residential buildings will surround the west of the ballroom.

Here’s a preview:

 

South Beach ACE

The South Beach ACE proposal is just as exciting, though strikingly different. They have proposed completely reorienting the convention center, adding a concourse to the south and a loading & unloading area to the north. Their hotel will be built on top of the convention center and contain 800 rooms, each with their own private balcony. With Rem Koolhaas on the job, one can be certain that these balconies will be of the highest quality art deco design. Hotel meeting spaces will also be on top of the main convention center. The defining feature of the ACE proposal is their expansion of the botanical garden. Their desire is to surround the center with greenery and create a Central Park atmosphere for the Miami Beach community. A plaza to the south of the center will link the Miami Beach City Hall, Jackie Gleason Theater, and a retail/residential area to the west. The ACE plan also includes a preservation of the 17th Street garage, with added ground-level retail.

Here’s a preview:

 

Endorsements

So far each proposal has their fair share of endorsements. South Beach ACE recently received a big endorsement from the Miami-Dade Chamber of Commerce as well as Planning Board Chair, Charles Urstadt. Amongst their endorsements, Portman-CMC can point to a 4-3 vote in their favor from the Miami Beach Convention Center Advisory Board. However, none of that matters after next week, when the final decision is made. Residents of Miami Beach and admirers of the South Florida culture are on the edge of their seats.

For more information on the race, take a look at this brilliantly detailed overview of both proposals from The Miami Herald: http://www.miamiherald.com/static/media/projects/convention-center-comparison/

Miami-Dade recovery in full swing

We’ve been discussing it for months, if not years, and now it seems to all be coming to fruition. The Miami-Dade real estate market is well on it’s way to soaring past pre-recession peaks and setting it’s eyes on historic highs. It is certainly a very exciting time to be living this city, and an incredibly opportunistic time to be working in the development, construction, or real-estate sectors.

Leading the way in this boom is the downtown area, as we have discussed previously. The Real Deal South Florida reports that out of the 23,000 condos built in the area from 2003 to 2012, 93 percent have been sold. This has led to a dramatic increase in assessed property values (6.4 percent) and asking prices, but also an inventory crunch. Not to worry, developers have gracefully accepted the challenge. There are currently 5,500 condo units planned for development in downtown Miami.

However, other areas have assisted in making Miami-Dade one of the most attractive counties for real-estate investment in the country. Jade Signature in Sunny Isles, from our very own Fortune International, is one of the most breathtaking developments in South Florida. Designed by the famed architecture team, Herzog & de Meuron, the latest Jade project has already surpassed $300 million in sales. Miami Today also recently sang praises for the Coconut Grove area, where condos and single-family residences are primed to reach new peaks. The luxurious Grove at Grand Bay is the most appealing of many new preconstruction projects in the area.

This has all, of course, led to an increase in economic activity and tax revenue for the city of Miami. The Miami Herald recently reported that property-tax rolls have increased by 3.39 percent in 2013, marking the second consecutive year of growth. With a higher tax base, the city can expect government downsizing to slow down and taxpayers will in-turn see more bang for their buck.

However, one must always account for negative indicators, as well. This boom is not being felt, for example, in Florida City, where taxable value has decreased by 5.58 percent. Hialeah has also seen their rolls decrease by 3.5 percent, though that could be attributed to a new homestead exemption for low-income seniors. Even areas such as downtown, where values are skyrocketing, run the risk of growing too quickly and pricing too many people out of the market.

Overall, the news is too optimistic to end on a negative note. So, in that case, let’s enjoy this awe-inspiring preview video of Fortune International’s Jade Signature:

Jade Signature Sneak Peek Video from Jade Signature on Vimeo.

Hotels bring added value to Downtown Miami

One of the major advantages in favor of the South Florida area is the vast nightlife that comes with the territory. Over time, the hotel scene has become one of the greatest boons for establishing this one-of-a-kind selling point. It has done this not only by providing a first-class experience to those searching for a vacation (or staycation), but in cases like Club 50 at The Viceroy, by becoming a key fixture in the nightlife itself.

b2 Miami Hotel in Downtown

The downtown area, according to the Greater Miami & The Beaches Hotel Association, supports 31 of these properties. This gives the area an approximately 7,000 room capacity for businesspeople and partygoers alike. Those numbers were calculated including the new b2 Miami downtown resort and the Aloft Miami opening on July 11th, however it did not take into account the several unannounced hotel deals that are also in the works.

That’s right! A development boom is taking place for hotels, too. The popular and much hyped SLS Hotel in South Beach is planning to open a new location in Brickell. Atton Hotels from Chile has also decided to open up their first North American outpost in the downtown Miami area. However, the best doesn’t only lie ahead for the Miami hotel scene. Arguably the most important hotels in downtown Miami have already been up and running, each doing their part to set the bar. The Intercontinental with their breathtaking views of Biscayne Bay, The Viceroy with Club 50, and The EPIC with Area 31 all add a spice of life to the area.

It’s no wonder that Smith Travel Research ranked Miami as the top hotel destination in the country. The research company also found the city to have an occupancy rate that was 20 percent higher than the rest of the U.S. at around 80 percent, and ranked Miami at the top in revenue per available room and average daily rate. Statistics such as these will only lead to more development, more hotels, and a nightlife beyond our imagination.

For more on hotels in South Florida, check out Curbed Miami’s list of The 38 Essential South Florida Hotels.

Facing the future of real estate

With the pace of development rising and home prices ticking upwards, it seems we may finally be reaching the light at the end of the tunnel for real estate markets. However, a failure to acknowledge future problems will only lead to more of the same. In an article for the National Real Estate Investor, David J. Lynn, Ph.D. discusses the following two issues facing commercial real estate in depth.

The Modern Office Space

Technological advancements have clearly redefined the structure of the typical office. As employees have gained the ability to connect to their clients, co-workers, and supervisors through various electronic mediums, the need for cubicles and offices has dwindled. Lynn cites CoreNet Global, stating that dedicated space per office has reduced to 176 sq. ft. in 2012 from 225 sq. ft. in 2010.

Beyond this, technological advancements have raised questions about whether employees even need to commute to their office. There has been a rise of independent contractors working from home and participating in meetings and conferences through virtual means.

Businesses that do encourage their employees to work from the office have also changed their way of thinking. The traditional cubicle setting has been exchanged in favor of more open space, giving employees the flexibility to move around and collaborate with each other.

Investments must be adjusted accordingly from the traditional office space to the more progressive, technology-friendly settings in order to move with the times. As of now, however, there is a fear that office space could be facing a grim future.

The ‘Echo Boomers’

From 1982 to 1995, the baby boom generation spawned a new large group of young people now known as the “echo boom” generation. This group of young adults is ready to move out and create a huge impact on the national economy through demand for housing.

The problem seems to lie in the fact that the echo boomers are leaving their homes for more urban areas. This is due to a variety of reasons including the vast nightlife, amenities, and restaurants offered by cities. However, this phenomenon is mostly due to the increased employment opportunities that cities provide in comparison to suburban areas. Echo-boomers are even willing to trade size of residence for proximity to these locations.

The echo boomers are not necessarily dependent on motor vehicles. They enjoy walking, riding bicycles, and even mass transit. Echo boomers are also not looking to buy homes, but choose to rent instead. These characteristics all make the city more appealing than the suburbs for the echo boom generation.

As there is increased demand in these urban areas, the suburbs will begin to see bumps in the road. Demand for housing and/or retail space will very likely decline and tax revenues will shrink. Lynn suggests that suburbs take action to modernize by investing in mass transit, parks, and other ways to create more urban surroundings in hope of attracting future generations.

The boom is on in South Florida

After the economic downturn that began in 2006, about 30 percent of the South Florida economy was eaten up due to poor real estate investments. Speculative buyers inflated prices, creating the necessity for other buyers to take out risky loans. Since the bust, South Florida has been waiting for the moment that real estate would make a grand comeback. 2013 seems to be the year they have been looking for.

It seems these days there is finally nothing but good news everywhere you turn in the South Florida real estate market. Figures recently came in from CoreLogic, a California-based data firm, that home prices in the greater Miami area are up 8.6 percent in March from a year ago. Adding to this outstanding development is the fact that prices rose 0.3 percent from February to March alone.

  The gorgeous Downtown Miami skyline, 1100 Millecento highlighted to the left

Miami-Dade, Palm Beach, and Broward have approximately 15,000 condo units in the preconstruction stage. Nowhere is the recovery more prevalent than in Downtown Miami, where locals seemingly cannot walk one block without running into a new development being built to meet the increasing demand.

The poster-child for these developments being the Related Group’s new 1100 Millecento development in Brickell. After breaking ground just a few months ago, 1100 Millecento is already 99 percent sold. While buyers in the last South Florida boom were posting deposits around 20 percent, preconstruction buyers are putting down close to 50 percent this time around. Signs such as these display true confidence in a real estate boom that is just beginning to take flight.

Downtown area is leading the recovery for Miami

A recent article in The New York Times praises Downtown Miami for boosting the recovery in South Florida. Developers have responded to an influx of foreign buyers by attempting to get new plans off the ground. In the past two years, the area has announced 25 new condo projects to begin development.

So far, of the 22,000 downtown condos created during the boom years, less than 4 percent have yet to be sold. The recovery in residential real estate being seen in Miami is ahead of the curve, even for an overall strong rebound in the national real estate market.

In February of 2013, national home prices were 9.3% higher than they were in February of 2012. This rate of growth was the highest that the nation had seen since May of 2006. In addition, over that same span of time the growth rate in Miami added up to 10.4 percent, well ahead of the national average.

Rendering of Brickell CityCentre

No project is a greater representation of this progress than the highly-anticipated Brickell CityCentre. The $1.05 billion project is set to span four blocks in West Brickell, measuring in at 5.4 million-square-feet. Brickell CityCentre will consist of four stories dedicated to retail and entertainment, including a luxury movie theater and restaurants. It will also feature six other towers that will add 800 condos, a hotel, business district, and wellness tower to the Downtown Miami area.

One could argue that the Brickell CityCentre has already brought a noticeable economic boost to the city, not just by it’s own construction, but by the construction of the 1,600-car underground parking lot that will accompany it. The 8th Street exit of the Miami Metromover will also be seeing renovations in order to incentivize citizens to use public transportation in their commute to the CityCentre.

These projects, along with the many other developments in Downtown Miami, will undoubtedly continue to be a boost to South Florida and assist in the robust recovery for the area.