Archives for posts with tag: Construction

Bringing more art to Miami is something that nobody can object. I myself love the idea of more art inmetrorail-863816_1920 the city but what I do not agree is the fact that Miami’s residents have to pay some punishing fee for that.

 

There are already many taxes, fees, and delays when it comes to the approval of city’s permit for construction. Instead of charging these fees to residents I believe it should be charged to tourists, not high fees, small fees to tourists would be enough to reach the intended purpose.

 

Let’s not make more taxes. Let private institutions develop art in the city giving them more freedom. Let’s encourage more donations but no more taxes because all that does is generate expensive local prices, fewer jobs, and less economic growth for the city.

To read the ordinance click on the link below:

Miami Art Ordinance

In recent months we have seen that the Greater Downtown Miami has become the epicenter of the recovery in the construction of the new condominium buildings. This creates a demand for land which has intensified enough for the sale of them to produce attractive prices for the sellers.

For the developers the most important number is the incidence on the price per unit of land that can be built. We see in the sales values ​​measured with impressive higher prices that sometimes impress us with the price, but does not really show if the financial analysis is feasible for the project.  The developer needs to invest his monies or his investors monies for a minimum of 4/5 years with the risks associated with the purchase of land, project & design process, construction plans, budgets, construction, sales and closings.

Some of the recently sales transactions of land are the following:

$28.2 Million for Miami Riverfront, 5 ST, Brickell

Potential units:  1,000

Incidence of land per unit: +/- $28,200

– $3 Million for Unika by the Design District Project, Midtown

Potential units: 180

Incidence of land per unit: $17,000

World Center Miami/ Former Miami Arena

Cost of Land: $35 Million

Potential Units:  1,400

Incidence of land per unit: $25,000

Tobacco Road

Cost of Land: $12,250,000

Potential Units: 500

Incidence of land & units: $24,500

– Infinity 2

Cost of Land: $18,500,000

Potential of Units: 582

Incidence of land & units: $27,000

The sellers find themselves divided into those who really understand this equation and sell, or put aside their land at market prices and those who believe that their land can fetch high prices.They do not reflect the reality of the developer or his development risks.  We can see that the average incidence is around 25,000 units but can be higher or lower according to its location and ease of putting together a project with very good views and low cost of implementation.

Our job as investment sales is for the seller to help them understand the financial analysis of the buyer and to reach an arm length transaction where both parties can be satisfied.  Speculating that future sales prices exceed the present value is only a stake a buyer with bad advice would take, the ones that have no experience in the local market or the ones that won the lottery and believe they can develop a project of more than 100 units is as easy or difficult as choosing the 6 number for the lotto.

Fabio F. Faerman

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Picture above: Unika by the Design District Project