Greater Downtown Miami
Market Study Update
Prepared for the Miami Downtown Development Authority (DDA)
by Integra Realty Resources (IRR)
July 2016
Mid-Year Report
Greater Downtown Miami
Market Study Update
Prepared for the Miami Downtown Development Authority (DDA)
by Integra Realty Resources (IRR)
July 2016
For more information, please contact
IRR-Miami/Palm Beach
The Douglas Centre
2600 Douglas Road, Suite 801
Coral Gables, FL 33134
305-670-0001
[email protected]
Mid-Year Report
Contents
2Introduction
4 Greater Downtown Miami Market Submarket Map
5 What’s Changed since Year-end?
10 Submarket Analysis
12 Unit Sizes and Pricing Trends
14 Resale Condominium Pricing
16 Rental Market Statistics
19 Rental Market Supply
21 Condo Development Process Appendix
Introduction
Integra Realty Resources - Miami | Palm Beach (IRR-MIami) is pleased to present the following mid-year
update to our Residential Real Estate Market Study covering the Miami Downtown Development
Authority’s (Miami DDA) market area, defined as Greater Downtown Miami market through June 2016.
Findings during our Mid-Year update:
• Global and domestic headwinds continue to affect the market depth and velocity. Nonetheless, area
professionals remain optimistic that while current sales paces are not on par with 2014, current activity
is at a more normalized pace and remains strong.
Millicento
• Condominium resale pricing in Greater Downtown is down YTD 4% since year-end. This average price
decline is coupled with increasing inventory availability. The pricing retreat follows a five year period of
double-digit increases.
• Despite retreats in the resale pricing, the pre-construction market pricing remains solid. Projects nearing
close out are holding pricing, or even increasing pricing as the current wave of project deliveries is
substantially sold out. Sales offices reporting a slow January and February sales indicate that sales in
April and May were above trend.
• Given the declines in the reservation/contract phase, it is unlikely the that these projects will commence
fast enough to refill the under construction pipeline. The lack of inventory entering the pipeline today
will lead to less competition heading into late 2017-2018.
• Average condo rental pricing has leveled off year-to-date in all unit types except 1 Bedrooms;
where rents are growing 1.5%+. A similar trend appears in the conventional rental data, with studio
rents growing 4.4%, while all other unit types are nominal or slightly negative rent growth.
• IRR Miami expects that the development environment in the coming 12-18 months will require much
stronger developers/sponsors with higher levels of equity as availability of conventional financing wans.
• Larger projects will contemplate a rental format, or other form of development. Not every project is
going to fit into the conventional rental pipeline, and the current direction of rents suggests that the
rental market is going to favor the tenant for the balance of 2017.
2 | Integra Realty Resources
Introduction
• Therefore, the patient land investors will be rewarded in the next demand cycle for residential condos.
• The mid-year 2016 report is optimistic that the major new developments in downtown have met
with success over a very robust 4+ year period of gains. The market continues to mature, but general
housing market statistics suggest a reset is occurring in the broader market. Inventory is up, and
pricing may respond. Rental market availabilities will favor the tenant in the coming 6 months.
• In the balance of supply and demand in real estate, the good news is that affordability may come back
in vogue. The greater downtown market emerged as a vibrant force in Miami’s economy as young
people populated the city when rents were less expensive. Some near term rent stability will assist in
keeping the inflow of urban professionals needed to continue with the growth of Downtown Miami.
Respectfully,
Integra Realty Resources (IRR) – Miami/Palm Beach
Anthony M. Graziano, MAI, CRE, FRICS
Senior Managing Director
Dan Bowen
Market Research Analyst
3 | Integra Realty Resources
Greater Downtown Miami Market Submarket Map
The map opposite
illustrates the
boundaries of the
Miami DDA, as well
as each submarket
within the Miami
DDA market.
4 | Integra Realty Resources
What’s Changed since Year-end?
B
eyond the statistical changes in supply-demand, the downtown market is strongly tied to global high
net worth investment demand. By far, the hottest topic in this period in the financial markets was Brexit,
with the UK voting to leave the European Union. While some speculate this pivot will result in increased
capital inflows into the US, it remains unclear whether the US economy can resist GDP contraction against
these larger global events.
Brickell House
Before Brexit, Brazil’s President Dilma Rousseff was under impeachment proceedings, her defense against
impeachment continuing into July 2016, all under a political cloud of uncertainty due to weak economic
conditions. Rioting and food shortages continue in Venezuela with far less media coverage than Brexit, but
more important to global stability. Commodity, and particularly petrol prices, continue to drag on global
economies.
IRR Miami has concluded many times that the state of the Miami market rests heavily on global output,
coupled with a strong domestic economy. To be sure, the middle of 2016 continues to deliver uncertainty
globally, and far less enthusiasm domestically heading into a US Presidential election season heavy on
rhetoric, and light on encouraging policy pronouncements.
The city continues to evolve as a global destination, and its maturity will be tested in the coming 6-12
months in the face of many economic changes. The long-term outlook is strong for Miami as the rental
market will continue to activate the downtown urban market. This in turn improves the urban experience,
which drives future for-sale demand.
Miami should rejoice in the 2016 delivery of Brickell City Centre, one of the nation’s largest urban
development projects that not only has forever changed Miami’s urban landscape, but the project is a
testament to the resiliency of the downtown Miami market.
The addition of new units to the under construction pipeline coincides with the delivery of downtown
Miami’s greatest urban assemblage, the residential phase of Brickell City Centre, which removes 773 units
from the construction pipeline. Both phases of BCC (Reach and Rise) and Le Parc (128 units) received their
Temporary Certificates of Occupancy (TCO), and are therefore considered completed.
The highly-anticipated first phase of Miami World Center (512 units) broke ground in the past six months,
as did Flatiron (549 units), adding over 1,000 units to the under construction pipeline.
5 | Integra Realty Resources
What’s Changed since Year-end?
F
or the first time in 5 years, the average resale pricing dipped in the first half by 4%. However,
after 3 years of double digit price growth (2012-2014), the current retreat from 2015 pricing may
be temporary. After five years of double-digit growth, last year’s trend showed the first half
with 0% increase, only to close the 2015 year up 6%.
A review of the rental price changes within the past 6 months helps to explain some of the pricing retreat.
After (3) consecutive IRR-Miami reports signaling that rent stability was imminent, we finally reached
equilibrium in the rental market following the delivery of Melody, Soma, Brickell View Terrace, and Met3.
Conventional rent growth was nominal or negative in all unit types except studios, which grew 4%. The
condo leasing prices also moderated, with overall mid-year rent growth at 3.7%, 40 -130 basis points
behind prior years.
Pre-construction pricing continues to hold. Some projects even increased pricing this quarter, most
notably those closest to sellout. Developers and brokers report a continued expectation that pricing will
hold on new product, and remain bullish that slowing construction and normalizing traffic and sales will
deliver a soft landing.
There is a fair amount of market speculation that new construction debt is getting too expensive and
may become inaccessible for new construction in the coming quarter. IRR Miami notes that this level of
banking discipline will force more deals to move deeper into the equity stack, which supports a slower
construction cycle into 2017.
Few projects continued to be announced and planned, and some observers and media continue to issue
dire predictions as to the future of the downtown market. However, most downtown developers are
taking a wait and see approach. New entrants to the market include Missoni Baia (168 units) and Spark
(56 Units). New completions in the coming 6 months will likely include Centro and the Crimson.
6 | Integra Realty Resources
What’s Changed since Year-end?
Figure 1.0 and 1.1 list
the active projects
currently selling,
contracting, or
under construction
representing what we
defined as “current
growth” in the market.
Figure 1.0
Greater Downtown Miami Current Growth – Contracts and Reservations
Submarket
Building
Brickell One River Point Edgewater Elysee Gran Paraiso Edgewater Edgewater Spark Auberge A&E Edgewater Bentley Edgewater Condo Hotel Missoni Baia Edgewater Total/Average
Avg. SF
Units Status
1,284
406 Contracts
3,383 100 Contracts
1,549 317 Contracts
1,378 56 Contracts
1,203 298 Reservations
905 207 Reservations
2,950 168 Reservations
1,5911,552
Figure 1.1
Greater Downtown Miami Current Growth – Under Construction and Q2 Completions
Submarket
Building
Brickell Brickell CityCentre - Reach Brickell Brickell CityCentre - Rise Le Parc Brickell A&E 1000 Museum Canvas A&E Brickell The Bond Flatiron Brickell Brickell Echo Brickell 1010 Brickell Brickell Brickell Brickell Ten Brickell Brickell Heights East Brickell Brickell Heights West (BH02) Brickell SLS Lux Brickell SLS Hotel & Residences Brickell Cassa Brickell CBD Paramount Miami CBD Centro Edgewater Aria on the Bay Edgewater Biscayne Beach Edgewater 26 Edgewater Edgewater The Crimson Edgewater The Edgewater Edgewater Paraiso Bay Tower I Edgewater One Paraiso Edgewater Paraiso Bayviews Midtown Hyde Midtown Total/Average
Excluding Completed 7 | Integra Realty Resources
Avg. SF
Units Status
1,368 390 Complete
1,368 383 Complete
1,272 128 Complete
5,389 83 Under Construction
892 513 Under Construction
960 328 Under Construction
1,160 549 Under Construction
1,510 180 Under Construction
1,283 387 Under Construction
1,050 155 Under Construction
1,078 350 Under Construction
983 332 Under Construction
1,250 534 Under Construction
1,117 450 Under Construction
1,060 81 Under Construction
1,793 512 Under Construction
703 352 Under Construction
1,317 648 Under Construction
1,305 399 Under Construction
645 86 Under Construction
1,143 90 Under Construction
778 30 Under Construction
1,360 360 Under Construction
1,682 272 Under Construction
1,044 398 Under Construction
1,100 410 Under Construction
1,2508,400
1,238
7,499
What’s Changed since Year-end?
R
elated’s Auberge has resumed reservations with a reduced unit count of 298 units. Elysee and
Missoni Baia enter the contracts/reservations phase with substantially larger units and smaller
overall project sizes. A total of 1,591 units are in the contracts/reservations phase as of mid-year,
a further reduction from the 2,000+.
The under construction pipeline nudged up 191 total units by mid-year, although this total will
come down significantly as other projects deliver in Q3 and Q4 2016. It is unlikely that projects in
reservations/contracts will commence fast enough to refill the under construction pipeline by 2017.
This will leave remaining projects under construction with less competition by late 2017-2018.
Figure 2
Current Greater Downtown Miami Condo Pipeline – Q2 2016
Submarket
Complete
Under Construction
Contracts
Reservations
Proposed
Totals
0
596 0
298 1,758 2,652
2,218 3,346 406 0
4,952 10,922
0
864 0
0
6,040 6,904
561 2,283 473 375 2,183
5,875
Midtown
0
410 0
0
195 605
Wynwood
11 0
0
0
478 489
Q2 2016 2,790 7,499 879 673 15,606 27,447
YE 2015
1,889 7,308 1,874 207 17,615 28,893
YE 2014 1,044 6,019 2,070 1,598 12,543 23,274
A & E
Brickell
CBD
Edgewater
8 | Integra Realty Resources
What’s Changed since Year-end?
Figure 3
Greater Downtown Miami Condo Market Size – Q2 2016
Submarket
Current Market
Size [1]
A & E
Current
Growth
%
Growth
Potential Long
Term Growth
% Growth
Longterm
894 22% 1,758 43%
4,052 Brickell 22,061 3,75217%4,952 22%
CBD
6,288 864 14% 6,040 96%
Edgewater
4,6133,13168%2,183 47%
Midtown
978 Wynwood111
410
0
42%
195 20%
0% 478 431%
Q2 2016
38,103 9,051 24% 15,606 41%
YE 2015
37,202
9,389
25%
17,615
47%
YE 2014
36,357
9,687
27%
12,543
34%
[1] Includes all 2014-2015 new deliveries. Net change of 1,227 units in 2015, 566 in 2014, and 96 in 2012.
[2] Long-Term Growth is the remaining Conceptual units, net of current growth.
[3] Current Growth is all Under Construction, Contracts and Reservations.
As mentioned in the year-end report, the Wynwood submarket has the largest long-term growth
potential, and the mixed use projects in this submarket are likely to emerge in the coming months.
The overall annual supply growth (U/C; contracts; reservations) has held relatively constant at about
27% (2014) of existing market supply, declining slightly in 2016 to 24%.
IRR Miami has reviewed published and unpublished pricing, interviewed various sales and brokerage
offices, and continues to monitor back to back quoted pricing. On balance, the pre-construction
pricing has held relatively constant. Sales offices reported an extremely slow January and February
season, but report more active April and May contracting.
9 | Integra Realty Resources
Submarket Analysis
A summary of the key changes to date:
Brickell
A temporary certificate of occupancy was granted to the 773 condominiums in
Brickell City Centre, although not all of the complex is open (the office tenants opened
first), and Le Parc (128 units). Brickell Flatiron broke ground, adding 549 units to the
neighborhood’s total. The 76 market-rate units in Brickell View Terrace were delivered
in the first quarter.
CBD
Miami World Center’s Paramount tower broke ground with 512 units in the second
quarter. Although sales have not yet begun for the former Epic Marina site at 300
Biscayne Boulevard Way, the site’s owner has filed plans for a sales center and
384-unit condominium.
Arts and Entertainment
After a brief hiatus, Auberge has resumed marketing reservations. Melo has
completed their Melody rental tower and is moving on to 14 Plaza, with up to
760 units.
Edgewater
Missoni Baia moved immediately to begin reservations within one quarter of its
announcement; another project, Spark, has moved into contracts; however, it will
only contain 56 units.
10 | Integra Realty Resources
Submarket Analysis
Midtown
Midtown has remained predominantly a rental submarket with the groundbreaking
of Midtown 29. Currently under construction, Midtown 5 and District 36 advancing;
the latter could be complete by year-end.
Wynwood
Similar to Midtown, Wynwood’s current growth has been static, with few major
condo or rental proposals.
Overtown
There has been little change this cycle in the DDA portion of Overtown east of Interstate
95. David Beckham has proposed a Major League Soccer stadium in the neighborhood;
however, that lies outside of Greater Downtown’s borders.
11 | Integra Realty Resources
Unit Sizes and Pricing Trends
Figure 4
Greater Downtown Miami New Condominium Pricing Metrics
Submarket Name/Location
Arts & Entertainment
1000 Museum
Auberge Canvas Le Parc Brickell The Bond Flatiron One River Point Echo Brickell
1010 Brickell Brickell Ten
Brickell Heights - East Brickell Heights - West (BH02) SLS Lux SLS Hotel & Residences
Brickell CityCentre Reach Brickell CityCentre Rise Cassa Brickell CBD
Paramount Miami Centro Edgewater
Aria on the Bay Biscayne Beach 26 Edgewater Bentley Edgewater Condo - Hotel Elysee The Crimson The Edgewater Gran Paraiso Paraiso Bay Tower I One Paraiso Missoni Baia Spark Paraiso Bayviews Midtown
Hyde Midtown Total/Average
12 | Integra Realty Resources
# Units
Avg. Price
Avg. SF
Avg. $/SF
83
298 513 128 328 549 406 180 387 155 350 332 534 450 390 383 81 512 352 648 399 86 207 100 90 30 317 360 272 168 56 398 410 9,952 $6,937,775 $703,463 $462,200 $593,309 $570,780 $812,000 $1,059,428
$1,900,000 $833,333 $420,000 $600,000 $600,000 $745,000 $521,759 $889,200 $923,400 $627,500 $1,365,778 $308,945 $958,950 $688,723 $312,662 $601,765 $2,935,000 $623,194 $340,333 $1,205,100 $782,000 $1,201,627 $2,750,000 $686,251 $586,900 $632,500 $892,640 5,389 1,203 892 1,272 960 1,160 1,284 1,510 1,283 1,050 1,078 983 1,250 1,117 1,368 1,368 1,060 1,793 703 1,317 1,305 645 905 3,383 1,143 778 1,549 1,360 1,682 2,950 1,378 1,044 1,100 1,303 $1,287
$585
$518
$467
$595
$700
$825
$1,258
$650
$400
$557
$610
$596
$467
$650
$675
$592
$762
$439
$728
$528
$485
$665
$868
$545
$437
$778
$575
$715
$932
$498
$562
$575
$685
Unit Sizes and Pricing Trends
T
he new construction pricing models are adapting to the market. As developers see slower
sales velocity and less traffic, they are increasing pricing where projects are substantially
sold. Despite having one building 90% sold out, and the other 40% pre-sold, Brickell City Centre
raised prices on average 9% this past quarter expecting the market to react favorably to existing
new inventory ready for delivery.
However, for sale inventory increases across all condo segments and price points will compete
for buyers in the market, which could extend sell-out times on remaining projects irrespective of
the pricing strategy.
13 | Integra Realty Resources
Resale Condominium Pricing
Figure 5
Average $/SF Sale Price Trend – Greater Downtown Miami Resale Market
$500
$372
$400
$431
$457
$438
$305
$300
$221
$224
2009
2010
$240
$200
$100
0
2011
2012
2013
2014
2015
2016 YTD
F
or the first time 5 years, prices retreated 4% in the resale market comprised of buildings
constructed after 2001. A review of MLS statistics indicate the broader condo market pricing
declines are deeper, indicating that the new product pricing is outperforming older product.
Last year demonstrated a similar pattern, where the first six months showed nominal change, and
the back-end 6 months closed higher. This is unlikely to repeat for 2016 given that in the prior (3)
6-month periods, the market closed approximately 750 condominium units in the market (excluding
developer sales), and this current 6 months period closed nearly 550.
A review of monthly listings indicate a large increase in the level of inventory offered for sale.
As inventory increases, Figure 6 demonstrates that resale pricing will adjust. This will likely continue
if for-sale inventory remains at a level exceeding 2,500 units per month.
14 | Integra Realty Resources
Resale Condominium Pricing
Figure 6
Greater Downtown Miami Condo Listings (Built 2001+) by Month
(Zip codes: 33127, 33128, 33129, 33130, 33131, 33132, 33136, 33137)
Date
For Sale
New Listing
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Pended
1,918 387 144155
1,926 351 146146
1,939 345 132120
1,932 340 118155
1,931 356 135147
2,006 410 131140
2,078 342 114104
2,152 35712499
2,127 399 109136
2,146 408 106153
2,264 499 140143
2,428 518 112155
2,481 413 152139
2,539 452 133124
2,568 438 130144
2,546 410 126128
2,619 465 136139
2,726 511 128108
2,792 396 104109
2,747 346 126100
2,8595369084
2,976 528 83123
2,980 431 111121
3,045 469 95110
3,041 412 88136
Source: Trendgraphix, compiled by Integra Realty Resources, Inc.
15 | Integra Realty Resources
Sold
Rental Market Statistics
T
his mid-year report is the first period when condominium rent levels held steady with only increases
demonstrated in the studio segment. Two bedroom rents remain largely unchanged, three bedroom
rents declined slightly, and one bedroom rents are up 1.5%. Prior annual rent changes by unit type ranged
from 4% - 10% per year since mid-year 2012.
Figure 7
Average Condo Leasing Price – Greater Downtown Miami
Year Overall* Studio $/Unit $/SF $/Unit
1 BR $/SF 2 BR $/Unit $/SF 3 BR
$/Unit $/SF
2012
$2,255$1,421$2.64$1,804$2.33$2,625$2.13$4,340$2.25
2013
$2,371$1,504$2.67$1,926$2.30$2,819$2.21$4,427$2.51
% Change
5%6%1%7%-1%7%4%2%12%
2014 [1] $2,481$1,632$2.92$2,008$2.48$2,908$2.32$4,346$2.60
% Change
5%8%9%4%8%3%5%-2%4%
2015 [1] $2,582$1,698$3.03$2,139$2.62$3,008$2.45$4,773$2.89
% Change
4.1% 4% 3.6%6.5%5.8%3.4%5.7%9.8%11.1%
$2,677$1,683$2.97$2,165$2.66$3,009$2.46$4,675$2.72
2016 YTD [1]
% Change
3.7%-0.9%-2%1.2%1.5% 0% 0.4%-2% -6%
[1] Midyear.
This leveling off of rent levels in the condominium market is largely due to increased supply of
units in the downtown conventional category. IRR Miami believes rent levels will remain relatively
constant through year-end as more rental inventory is expected to deliver by the close of 2016.
16 | Integra Realty Resources
Rental Market Statistics
C
onventional rent levels were also muted, with studios showing the greatest gains, but one, two
and three bedroom units competing for tenants without much increases, and in some cases,
slightly decreasing conventional rents.
Figure 8
Overall Downtown Conventional Rental Rent Survey (2,474 Total Units)
Studio 1 BR $/Unit $/SF SF
2 BR $/Unit $/SF SF 3 BR
SF $/Unit $/SF SF $/Unit $/SF
Q3 2014
638$1,585$2.49
864 $1,605$1.86
1,221$2,106$1.73
1,752$2,622$1.50
Q2 2015
638$1,856$2.91
864 $1,774$2.05
1,221$2,241$1.84
1,752$2,707$1.55
Q2 2016
638$1,937$3.04
864 $1,772$2.05
1,221$2,257$1.85
1,752$2,652$1.51
Q3 2014‐Q2 2015 17.1%10.5% 6.4% 3.2%
% Change
Q3 2015‐Q2 2016 4.4%-0.1%0.7% -2%
% Change
This survey omits the Filling Station Lofts from SF and pricing analysis because of the loft style layout of their units as well as the
ultra-luxury status of the building. The units are included in the overall unit count.
17 | Integra Realty Resources
Rental Market Statistics
B
ased on the 2014 household density, the market turnover of units represents approximately
10% of households annually. The spread between asking rents and achieved rents has
narrowed significantly, indicating the landlord market is pricing aggressively and getting
reasonably-set asking pricing.
Figure 9
Average Current Asking vs. Achieved Leasing Price and Velocity (2016 YTD)
Submarket
Overall
Asking
Brickell$2,649
Overall
Achieved
Total # Leases/
Month
$2,606
# of Households
(2014 est.)
123
18,338
CBD$2,502 $2,544
68
7,482
A & E$4,395
$4,172
9
6,725
Edgewater$2,742
$2,793
46
Midtown$2,672
$2,580
11
Wynwood$3,133
$3,100
1
[1] Wynwood, Midtown, and Edgewater were not broken out in the 2014 population report.
18 | Integra Realty Resources
6,756 [1]
Rental Market Supply
Figure 10a
Greater Downtown Miami Rental Pipeline - Proposed Projects
The following is
the list of under
construction and
planned apartment
complexed in the
Greater Downtown
submarkets.
Submarket
Building 2016 Q2 Status A&E
17 Edgewater
Proposed 14 Plaza Phase II Melody II School Board Brickell
TBD Allen Morris/Related Brickell Market Place Megacenter Brickell One Brickell II MaiZon at Brickell CBD
River Tower 54 West Flagler M-Tower Cultural Center Garage Redevelopment Grand Station 225 SE 2nd St Miami River Village 7th Street Promenade Tower 2 Lynx Tower Luma at Miami World Center Miami World Center Block E Edgewater
AR Edgewater 1900 Biscayne 1836 Biscayne (Possible Condo)
700 Edgewater Biscayne 27 Midtown
Midtown East Midtown 6 Midtown 8 Wynwood
2801 NW 3rd Avenue Wynwood Central 2110 N Miami Ave 2800 NW 2 Ave 222 NW 24th St 19 | Integra Realty Resources
Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Proposed Total # of Units Proposed
# Units
240
760
TBD
TBD
TBD
TBD
57
500
262
449
391
440
432
300
TBD
TBD
413
TBD
429
418
171
429
352
TBD
330
700
447
387
264
69
163
TBD
80
8,483
Rental Market Supply
Figure 10b
Greater Downtown Miami Rental Pipeline - Under Construction and Complete Projects
Submarket
Building 2016 Q2 Status Arts & Entertainment
Melody Complete 500
Brickell SoMa Complete 418
Brickell View Terrace (Market Rate)
Complete
76
CBD
Monarc at Metropolitan 3
Complete
462
Arts & Entertainment
Square Station (14 Plaza Phase I)
Under Construction
710
Brickell
Broadstone at Brickell
Under Construction
372
Panorama
Under Construction
821
Solitair Brickell (former Brickell Bayview Center)
Under Construction
438
CBD
MiamiCentral Apartments (up to 5 towers)
Under Construction
800
7th Street Promenade Tower 1
Under Construction
450
Vice Under Construction
464
Avant at Met Square
Under Construction
391
Edgewater
2500 Biscayne
Under Construction
156
Midtown
District 36
Under Construction
197
Midtown 5
Under Construction
400
Pearl Midtown 29
Under Construction
Total # of Units Under Construction
Total # Units Completed 2014-2016
Total # Units U/C or Proposed
# Units
309
5,508
1,456
13,991
D
espite delivery of over 500 units in the past two quarters, the rental construction pipeline expanded
to top over 5,500 units under construction as of June 2016, with the largest concentration in the CBD.
This rental pipeline will deliver over the next 12-24 months, so rent growth will remain constrained in the
coming months.
IRR Miami has discussed the impact of the conventional rental market extensively on the condo market,
but it is no surprise that as rental growth has retreated, and inventory of for-sale units has increased, that
we see the first signs of prices retreating on the resale product.
Overall, the downtown market continues to demonstrate strong household growth, owing to net job
creation in the CBD and Brickell corridors. The launch of the Brightline connecting Miami to Ft. Lauderdale
and Palm Beach Counties (expected in late 2017) could positively alter the rental landscape.
20 | Integra Realty Resources
Condo Development Process Appendix
Proposed
The proposed phase
is the initial phase
of the development
process; a conceptual
plan for a new
building or project
is initiated by
a developer or
property owner.
The developer may
release a press
release or a news
story with an initial
rendering to gauge
the interest in the
project, but the
project size may
change over time to
conform to market
demand and/or as
site due diligence
constrains the
process.
Reservations
The reservations
phase is the
second phase of
the development
process; the
developer and
architectural/
design team
produce additional
renderings and
floor plans; the
sales centers are
opened and the
finishes, amenities,
and features of
the project are
disclosed. The
developer files
with the State of
Florida to be able
to take reservations
and deposits for
units during this
stage. This begins
the pre-sale phase
during which
reservations are
taken.
21 | Integra Realty Resources
Under
Construction
Contracts
The contracts
phase is when the
initial proposition
and reservation
of a completely
undefined
development idea
meets the actual
contracting for sale
upon the receipt of
further deposits.
The architectural
and construction
drawings are
completed; the
developer obtains
government
permitting and
approvals. The
final unit floor
plans are defined
as the reservations
are converted to
sales contracts
with additional
buyer deposits
upon filing of the
Master Declaration
of Condominium.
Changes to these
documents are
costly, and therefore
the development
plan tends to
be more static
following this phase.
The Contracts stage
is typically the
make-or-break stage
of development
as the project was
either well-received
by buyers, investors,
and lenders, or
it was not. If the
developer has as a
sufficient number
of sale contracts,
buyer deposits,
and a commitment
for financing,
the project’s
construction
will most likely
commence. If the
project was not
well-received, either
by a lack of pre-sales,
or insufficient equity
from initial investors
or debt financing,
a project may be
scrapped, shelved, or
significantly altered
in another future
attempt (either later
in the cycle or in the
next one). Projects
which fail the
Contracts stage may
move all the way
back to Proposed
during this process.
The site
improvements and
vertical construction
have commenced.
At this stage of
development, the
project has secured
sufficient pre-sales
with significant
deposits and most
likely a financing
commitment.
These projects will
enter the market
under a reasonably
definitive timeline
of 24-48 months,
depending upon the
scale of the project
and surrounding
infrastructure
requirements.
Completed
This is the final
stage of the
development
process; as the
construction of the
units is completed,
CO’s (Certificates
of Occupancy) are
issued, and the
closing of the unit
sales are finalized.
Disclaimer & Acknowledgment
The information provided herein is for informational purposes. This publication does not render legal,
accounting, appraisal, counseling, investment, or other professional advice. Should such services or
other expert assistance be needed, it is recommended that the services of a competent person or firm,
having access to the details of the situation, be employed.
22 | Integra Realty Resources
Images
Cover: Page 2: Page 4: Page 5: Page 10:
Page 11:
Page 12:
Page 14:
Page 16:
Page 19:
Photo courtesy of Robin Hill.
Photo credit: © 2015 IRR-Miami/Palm Beach.
Photo credit: © 2015 IRR-Miami/Palm Beach. Map courtesy Miami DDA.
Photo credit: © 2015 IRR-Miami/Palm Beach.
Brickell, artist’s rendering of Brickell CityCentre used by permission of Swire Properties Inc.
CBD, photo courtesy Miami DDA.
Arts and Entertainment, photo courtesy Miami DDA.
Edgewater, photo credit: © 2015 IRR-Miami/Palm Beach.
Midtown, photo courtesy Miami DDA.
Wynwood, photo credit: © 2014 IRR-Miami/Palm Beach.
Overtown, by Ebyabe, Wikimedia Commons.
Photo credit: © 2015 IRR-Miami/Palm Beach.
Brickell, artist’s rendering of Brickell CityCentre used by permission of Swire Properties Inc.
Photo credit: © 2015 IRR-Miami/Palm Beach.
Photo credit: © 2015 IRR-Miami/Palm Beach.
23 | Integra Realty Resources
About Integra Realty Resources
With corporate headquarters in New York City, Integra Realty Resources (IRR) is the
largest independent commercial real estate market research, valuation, and consulting
firm in North America, with 66 offices and more than 200 MAI-designated members of
the Appraisal Institute who are among its more than 900 employees located throughout
the United States and the Caribbean. Founded in 1999, the firm specializes in real
estate appraisals, feasibility and market studies, expert testimony, and related property
consulting services. Many of the nation’s largest and most prestigious financial institutions,
developers, corporations, law firms, and government agencies are among its clients. For
more information, visit www.irr.com or blog.irr.com.
Contact Information:
200 S. Biscayne Blvd, Suite 2929
Miami, Florida 33131
T - 305.579.6675
F - 305.371.2423
W - MiamiDDA.com