Another successful ‪Commercial Real Estate transaction! FA Commercial closes a bulk deal.

Fabio Faerman Closes Bulk Sale Of Miami Condo Units For $6.7 Million

Aug 12, 2015

FA Commercial’s Fabio Faerman closed a $6.7 million bulk deal for a total of 21 units at Mint Condominium, located at 92 SW 3rd Street in Miami.

Faerman was the broker of record in the all cash transaction.

The deal represented an opportunity for the buyer to acquire a large number of units in the prime downtown building, strategically located in the epicenter of Miami’s flourishing cultural arts scene.

Situated on the eastern side of downtown Miami, Mint at Riverfront was built in 2010, designed by the renowned Revuelta Vega Leon  Architects and developed by Key International.

Mint – Press Release

Looking Ahead: Commercial Real Estate in 2014

Another new year is upon us and, as we do every year, we will look back at the past twelve months and marvel at the swiftness with which they raced by. However, rather than being taken aback by this perpetual occurrence, perhaps it is vital to accept that a year is actually not that long a span of time to begin with.

Through this lens, the upward statistical trends that commercial real estate experienced in 2013 may just be the beginning of strong momentum in 2014 and beyond. This idea is supported through research in a recent article from the Wall Street Journal.

Investment & Leasing Markets

The expectation is that investment sales in the commercial real estate sector will continue to grow in volume through 2014. In 2013, lending actually began to accelerate once again after having stalled in recent years. This along with an increased volume of money flowing to the asset class attributed to the recovery of investment sales. The ball is expected to keep rolling in the coming months and the expectation for 2014 is 10 percent year-over-year growth.

For the most part, the leasing market in the past year has been flat. This has certainly led to some worries of a gap between investment and leasing. However, there are a few indicators that leasing will soon be tipping in the right direction, none the least of which is the strong improvements in occupier sentiment. Corporate profitability is also soaring, specifically in the retail sector where large retailers are having their best year since 2010.

Office Market

We recently discussed the snail-like pace of the office market, but this is a sector that is tied heavily to the tech and energy industries. As those sectors continue their economic growth, we can also expect the office market to make a marked improvement in the coming year. Forecasters expect office rents to grow at about 5.5 percent. Despite this increase, trends in construction are expected to be below average until around 2015. However, in tech and energy heavy geographies, progress is clearly on the horizon for the office market.

Other Factors

Once again, the millennial generation will play a critical role in the improvement that we do or do not see in the coming year. As we know, this demographic holds a special place in their heart for urban environments. Most would project activity to continue to increase in these areas, but this does not spell doom and gloom for the suburbs, though we do expect them to adjust accordingly.

Most importantly, 2014 should see a genuine increase in demand, which is the most important factor for generating sales. The labor market has seen a long and steady pace of moderate monthly job growth. As a result, most industries have recouped job losses from the recession and demand is ready to be stimulated once again.

Lastly, a key contributing factor to the growth in commercial real estate is the accelerated growth in housing. Though the housing market has steadied in the past couple of months, experts had been waiting for a recovery like we saw in 2013 for several years. Continued growth in housing during 2014 will lead to more development, lending, retail and jobs growth.

Art Basel takes over South Florida

This year will be the 12th for Art Basel Miami Beach. Each year the event has grown and has continued to play an integral part in the development of South Florida’s artistic culture. This weekend, visitors can count on the festival to feature more than 250 of the world’s leading galleries.

Art Basel creates a key opportunity for continued growth

Art Basel Miami Beach has become an international artistic spectacle with visitors, including many celebrities, coming from all over the globe to get a look at the newest trends in the art scene. Miami expects more than 60,000 visitors to attend the event this year. Of course, with international cash-buyers playing such a key role in the revival of South Florida real estate, Art Basel creates a key opportunity for continued growth.

Brokers will be able to highlight South Florida’s latest real estate development to Art Basel’s international guests. Condominium inventory is running thin, thanks in large part to international buyers who accounted for approximately 70 to 80 percent of condo sales during the latest boom. South Florida is compensating for the diminishing inventory with 175 new condo projects planned for the area that would be of great interest to overseas buyers.

With the evolution of Art Basel over the years, the festival is no longer solely taking place in Miami Beach. Events and showings connected with Art Basel are popping up all over Miami-Dade County, creating unique opportunities for brokers to mingle with VIP guests over a meal or drink. Private events can be the perfect place to develop relationships today that will help sell a luxurious space in a development months from now.

A sign of the spectacular mark that Art Basel has made in the development of South Florida’s culture can be seen in the opening of the Perez Art Museum earlier this week. The building itself was touted as a work of art and contained 500 pieces on display the day it opened. The future of the Miami art scene and its contribution to the development of our city is bright.

New Yorkers are bullish on Miami real estate

Over the summer statistics pointed to South Americans as the heroes in the South Florida real estate market. However, recently it seems that cash-buyers from down south may have some competition in the northeast. That’s right, the new boon to the Miami market is coming from the Big Apple.

Brokers in the area have reported a 25 percent uptick in purchases from New Yorkers. Our northeast neighbors are now competing with foreign investors for prime Miami real estate and, in many cases, are willing to pay more. The main reason? Their lack of sensitivity to rising prices in the area. New York is widely known as one of the most expensive markets in the country, giving residents of the state a thick skin for the prices in Miami’s luxury markets.

New York is now the largest feeder market for South Florida. As a matter of fact, New Yorkers have accounted for approximately 15 percent of sales in the luxury real estate market this year. Luxurious condos in Brickell are seen as a bargain in comparison to Manhattan prices.

Purchasing real estate in Miami has tremendous benefits for New Yorkers, as well. The main bonus for these buyers is the opportunity to escape their rising state taxes and head on down to Florida, where there is no state income tax . Setting up shop in South Florida has become a great way for high earners from New York to save a ton of extra cash, making it so that these luxury condos practically pay for themselves.

Of course, New Yorkers do not have to sacrifice much culturally when making the move to Miami, either. Like New York, Miami has no lack of places to visit or events to take part in. Specifically, the rising Wynwood art scene and multiple cultural festivals make for an easy sell to prospective buyers looking for the New York lifestyle.

With their low sensitivity to Miami’s beachfront prices and their desire to escape burdensome income tax, New Yorkers are making the transition without missing a beat. With buyers coming from both foreign and domestic regions, the Miami-Dade market is on the rise.

Fabio Faerman discusses booming value in Brickell

This past week Miami Today spoke to FA Commercial Advisor’s very own, Fabio Faerman to get his perspective on the booming real estate market in Miami’s downtown area. Faerman divulged some interesting tidbits for investors interested in the future of Brickell.

Take a stroll down the streets of downtown Miami these days and it is easy to see that times are once again changing. While South Florida may have experienced one of the largest busts in the real estate crash years ago, the recovery, particularly that of the Brickell area, may be one of the most rapid in the nation. Several sites are set for demolition and construction cranes have now become the “unofficial bird” of our city. Existing buildings are chipping in, too. Many office buildings have begun pouring millions of dollars into upgrades.

Faerman says that all of this excitement is attracting celebrities, financial advisors and families alike to move downtown and experience life on Miami’s sunny shores. Faerman receives calls from buyers looking to invest in Brickell about one to two times per day.

The beautiful Brickell skyline

Last year, a buyer purchased a package from Faerman that included the landmark Tobacco Road, River Seafood & Oyster Bar, as well as six parcels on Seventh Street for $12.45 million. With values currently sky-rocketing, Faerman estimates that the same assemblage would be sold for double that amount this year.

Those are prices that buyers these days are more than willing to pay, if the investment properly fits their objectives. For example, this past summer Swire spent $64 million to acquire 700 & 710 Brickell in order to build One Brickell CityCentre, the 80-story gateway to their $1 billion Brickell mega-project. Faerman believes this deal was good for Swire because it gave them the Brickell Avenue frontage that their project needed.

Faerman touted a river-facing site behind Brickell CityCentre that could have that type of value for the right buyer. The 2.52-acre off-market property would give a potential investor the opportunity to create a mixed-use project of up to 1.98 million square feet. The owners are seeking a buyer in the range of $100 million for this site, which Faerman says has, “huge potential.”

Swire has high hopes for One Brickell CityCentre

This summer, Swire acquired the rights to the 1.5 acre site at 700 Brickell Avenue for $64 million. We all knew that their plans for the property were big. Now it turns out those plans could actually be the largest that Miami has ever seen.

Swire has proposed a project to the City of Miami that, if approved, could end up becoming Miami’s tallest building and easily the tallest project currently under construction in the crane-flooded streets of South Florida. One Brickell CityCentre, the proposed 80-story tower, would be connected to phase one of the CityCentre project in downtown and would be covered by the project’s climate control trellis.

Rendering of One Brickell CityCentre

Designed by Arquitectonica, the tower would add more Class-A office space, condos, retail and even another hotel to downtown’s development. Upon completion, One Brickell CityCentre would be seen as the gateway to the entire mega-project. The tower would be built not only on the 700 Brickell site, but also on the Eastern National Bank building property that Swire acquired in 2011 for just over $13 million in 2011, combining for a total of 2.7 acres of land area ready for development.

Swire has estimated the total economic impact of One Brickell CityCentre at $851 million. The project would create over 2,000 construction jobs at peak manpower and nearly 2,500 permanent jobs once it is completed according to an analysis by the Miami Economic Associates. They also project the tower to bring in over $137 million in sales tax to the state of Florida.

The hope for Swire is that the city will approve One Brickell CityCentre as an extension of the current project. If this were to happen, it would save them the trouble of going through a new grueling approval process with the City of Miami. Phase one of the Brickell CityCentre is still currently set for completion in 2015.

Big plans ahead for Miami Worldcenter

The investors behind the new Miami Worldcenter development in downtown are hoping to bring in some flagship retail for their 750,000-square-foot-mall, and they just may get it. Earlier this week, the South Florida Business Journal reported that the Worldcenter hopes to land Macy’s to anchor acres of restaurants and retail.

For those that have not yet heard, the Worldcenter is yet another mega-project set for development in downtown Miami. The project will be located within blocks of Biscayne Boulevard, the Metrorail and the Metromover. It will also stand between downtown landmarks such as the American Airlines Arena, where the last 3 NBA Final’s champions have been crowned, and the Adrienne Arsht Center, home to Broadway in Miami.

Rendering of the Miami Worldcenter

Investors in the Miami Worldcenter are turning to The Forbes Co., and Tauman Centers to help snag Macy’s for the upcoming development. Forbes and Tauman already have a level of familiarity with Macy’s. Their Orlando mall, The Mall at Millenia, already has one. Another well-known retailer may also be in the cards for the Worldcenter. Bloomingdales, which does not yet have any stores in the downtown area, has also been rumored to be part of the move.

Spokespeople for Macy’s, as well as those for the Worldcenter, would not comment on whether or not a deal between the two was in the works. However, if the Worldcenter manages to find big name restaurants and retail capable of fitting their square footage, this could be one of the more exciting developments out of many in the downtown area. The Worldcenter may have the potential to be on the same level as Swire’s Brickell CityCentre, with the capability to transform the downtown landscape.

Developments such as these make it clear that now is the time to invest in South Florida. The South Florida real estate market, which was originally not projected to rebound until 2016, has seen the median sales of condos spike 27.5 percent in one year, to go along with a 20.5 percent uptick in single-family home sales. With every passing day, as new cranes go up in the downtown skyline, South Florida is quickly becoming the place-to-be for affluent buyers.

Real estate leads South Florida economic growth

The Federal Bureau of Economic Analysis recently released new numbers indicating that the real estate sector accounted for nearly a third of South Florida’s economic growth last year. The $274 billion economy expanded at a rate of 3.5 percent, the largest that the tri-county area had seen since 2006 and well past the national average of 2.5 percent.

Miami-Dade, Broward and Palm Beach have the real estate sector to thank for their exceptional rate of expansion. In 2012, real estate accounted for $52 billion contributed to the South Floridian economy. That number represented an 8.4 percent growth from real estate’s contribution in 2011.

Much like the overall numbers, real estate also experienced it’s best year since 2006, displaying the close-knit relationship that the sector has with the area’s economy. South Florida also experienced the sharpest growth rate of all of Florida’s largest economies.

Condo prices have seen strong increases in each of the past 26 months

This report comes on the heels of more good news for the real estate sector in Miami-Dade. The month of August brought another double-digit surge in the year-over-years numbers for prices and sales in the area. Single-family home sales experienced an increase of 15.1 percent from August of 2012, while condo sales also gained 7.9 percent from last year.

The median sales price of a single-family home in Miami-Dade increased 2.2 percent to $235,000 from July to August. That price represents a 20.5 percent surge from the previous August. The price of condo sales saw a spike, as well. The new median sales price of $180,500 represents a 5.3 percent increase from last month and 27.5 percent year-over-year growth. Condo prices have seen strong increases in each of the past 26 months.

Real estate, however, was not the only contributing factor to the surprising growth rate in South Florida. Sectors such as trade, finance, retail and information also played an integral role in the area’s progress. The success of the retail sector speaks volumes for commercial real estate prospects in the South Florida area.

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.