December 15, 2014

A five-year-old condo boom continues


South Florida Business Journal by Nina Lincoff.

South Florida’s condo market revival started in 2009 after bank-held inventory started rising in price.

Cash buyers’ strong demand for condo units made it a no-brainer for developers to build condominium projects again, said Carlos Ross, president of the Condominium Development Division for The Related Group, a company that has redefined skylines across South Florida.

Ensuring that those projects are quality builds has been a priority for the Related Group, said Rosso, Rosso the keynote speaker at the Business Journal’s 2014 Real Estate Market Review.

“That means we have 80 percent pre-sales with big deposits, and then we start construction,” he said. “We are in a very interesting time. We are in the fifth year of this boom, and the real question moving forward is: What is going to happen to the next tier of developers?”

As construction and land prices rise, those are two key indicators for developers to consider, Rosso said.

“We are launching, right now, the last three jobs with condos in the $500,000 range: Brickell Heights, Hyde Midtown and Paraiso Bay. Those are the jobs where we found sites that fit those price points,” he said. “The next projects are going to be in an area where we can command higher prices, because that will be the only way we can make the margins work.”

Much has changed in the South Florida real estate landscape, as few people could have predicted the surge in urban retail, including Brickell City Centre, which will provide a shopping center experience for its residents, Rosso said.

But with swift growth comes some challenges, such as parking, education, affordable housing and quality public spaces, he added.

“[Related] is doing affordable housing. We are doing three towers of affordable housing,” Rosso said.

Foreign investments will continue to be key to Miami’s transformation, he said. “In a sense, Miami is not different from a New York, a London, a Paris. Big cities in the world where foreign investors are suddenly seeing us as safe havens for their investments – they are seeing Miami as that, as well.”

But you can’t discount U.S. buyers, as many of the first to snap up spaces at the SLS Lux were from the U.S., Rosso added.

“People who come from urban areas understand that view is not the most important thing; that location, that walking distance to restaurants and to a shopping center is something that is going to be incredibly valuable in the long run,” he said. “A couple of years ago, no one would have imagined that they would have lived in a condo, come down to the street level, have dinner and walk back, without taking a car.”