Allen Morris On Real Estate

A Sunny Forecast for Miami’s Commercial and Multi-Family Residential Markets in 2015

  |   Business, Commercial, Community, Office, Real Estate, Residential, Retail

Sunny days are indeed here again as Miami’s march toward becoming one of the world’s great international destinations proceeds unabated.

Both Miami’s Commercial and Multi-Family Residential Markets benefit profoundly from the tens of thousands of people who visit here – and invest here – from countries around the globe. The value they contribute is a significant part of the positive market growth of 2014, and there’s every indication in the first quarter of 2015 that the market’s upward trend will continue.

The Allen Morris Company kicks off the year with major projects under construction or in the planning stages in South Florida, the state of Florida and the Southeast, yet it is Miami where I focus attention in this blog post since the good news of what’s happening in our local community is particularly interesting to the real estate investor.

Here’s why:

  •  Miami is among just a handful of major cities in the United States to have rebounded quickly from the recession and we can credit our evolving global positioning for that. While we have earned our reputation as the ‘Capital of Latin America,’ within the last five years the scope of countries investing in us has become much broader. This is especially true for individuals with net worth over $30 million who have named Miami as one of the seven most important cities in the world, according to the Wealth Report, a London-based real estate consultancy Knight Frank. The survey was based on factors such as economic activity, quality of life, knowledge and influence, and political power.
  • Part of our lure is that for individuals or companies accustomed to the extraordinary costs of working, living and investing in international markets such as London, Paris, Tokyo, Hong Kong or New York – Miami, with its more reasonable costs and rental rates, is seen as a tremendous real estate “bargain.”
  • Our 57-story, $1.3 million-square-foot SLS Lux Brickell condominium and hotel project is a good example of Miami’s international appeal. Our buyers are not only from countries traditionally interested in the Brickell area, such as Brazil, Argentina and Venezuela, but we have realized significant sales from some non-traditional countries who continue to ‘discover’ Miami, such as Mexico, Italy, Switzerland, Turkey, Japan, Albania and China.

The international component not only buoyed our recovery, it is developing a broader base of economic support and stability for our community as a whole:

  • Greater Miami means business as we now comprise a total office market of nearly 100 million square feet (99,724,263 SF).
  • In light of our growing popularity, as well as confidence in the job market reflected in higher office employment, in 2015 we expect to see increased positive absorption of office space at a greater pace than in 2014. The volume of net office space absorbed in 2014, some 1,073,000 square feet of space, lowered overall office vacancies to 11.6{f861352ab7d0f3f786cb6cad7d8c1b9836ed30c85c37a8f77ba2d159a4e0e407} county-wide.
  • The reduced amount of available office space in key markets means that rental rates will strengthen in 2015, along with less in what landlords are willing to offer as concessions and accommodations.

In both Miami’s Commercial and Multi-Family Residential Markets I am bullish about 2015, and for good reason. The data encourages new development in the office space, retail and residential markets. The competition that results is driving high quality design and unique elements, showcased in properties designed by some of the best architects in the world.

 

 

 

 

 

 

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