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Miami’s future skyscrapers: Part II

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Miami’s future skyscrapers: Part II

About a month after I posted about Miami’s future skyscrapers, where I introduced seven of Miami’s biggest high-rise projects, five additional projects have been revived and/or proposed for the Greater Downtown Miami area. The city is back to its old housing boom ways…

1400 Biscayne:
1400 Biscayne is being revived from the original building that was proposed for this site before the economic crash. 1400 Biscayne is mixed-use, although primarily residential. It is designed by the architects Pei Cobb Freed Partners. The building would rise 651 feet or 198 meters, towering over theArsht Center, located just a block south of this project. The building is designed with a ground floor courtyard with retail, perfect for cafés and restaurants for the theater crowd. Above this would be about 100,000 square feet of office space and 710,000 square feet of residential space, totaling 428 residential units.

The previous design for 1400 Biscayne was more airy, incorporating a lot more glass than the current, heavy design does. Currently on the site is a dull, three-story office building from 1971, which would be demolished to build this tower. The area around the Arsht Center is desolate with vacant lots surrounding every corner of the performing arts center. After a show, most patrons leave the area for other neighborhoods for dinner and drinks. 1400 Biscayne could be the catalyst for infill development around the beautiful performing arts center to finally create a 24/7 urban neighborhood here.

1400 Biscayne (old design)

The original design for 1400 Biscayne. The Adrienne Arsht Center can be seen to the right of the tower.

1400 Biscayne

Ground floor view of the new design for 1400 Biscayne.

1400 Biscayne

Aerial view of the new design of 1400 Biscayne.

Brickell Flatiron:
Designed by architect Enrique Norten, Brickell Flatiron was initially proposed to much fanfare in 2006 as one of Miami’s most exciting high-rise designs. Unfortunately, construction never began and the lot became a parking lot. In 2011, the lot’s southern corner was the proposed site of a small pocket park designed by Raymond Jungles. Work began on the park in 2012 but as of October 2012, work has been stalled for months. Now, the high-rise is back and the developer is in the permitting process with the city to get this built. Scrap the park idea.

Brickell Flatiron is located at 1015 South Miami Avenue, on a triangular lot. The design of the building takes advantage of this unique lot shape with a design reminiscent of Manhattan’s Flatiron Building. Brickell Flatiron will be 794 feet (242 meters) tall with 70 stories. Inside will be 554 residential units with 254,043 square feet of office space, 30,316 sf of retail, 16,913 sf of restaurant space and 820 parking spaces.

Brickell Flatiron from South Miami Avenue

Brickell Flatiron building as seen from South Miami Avenue looking north.

Brickell Flatiron back view

Brickell Flatiron as seen from SE 10th Street looking south.

Brickell Flatiron park plaza

The triangular lot’s southern tip will become a public plaza. The developer is currently going through a land swap with the city to transfer the lot’s southern tip to the city for public use. In exchange, Brickell Flatiron would get the tiny pocket park on the northeast corner of this block to develop.

Crimson Tower:
Crimson Tower is a 205 foot (65 meters) high, 18-story, 83-unit apartment building proposed for theEdgewater neighborhood at 527 NE 27th Street. Crimson Tower is designed by the architecture firm IDEA. The building is great in that it’ll provide greater population density in the growing Edgewater neighborhood, especially considering it will be built over a currently-vacant lot, however, the design is horrid. Of all the new proposed towers in Miami, this is the least favorite and most aesthetically painful.

With 150 parking spaces, there’s also way too much parking for an 83-unit apartment building. The city should discourage developers to include so much parking, especially in a neighborhood as walkable as Edgewater. Just looking at the elevations of this building and it’s clearly half parking, half apartments. Especially for a waterfront location, the city’s planning and zoning department should be more stringent on design standards. This is Miami, the city deserves quality urban design. Very unfortunate.

In total, Crimson Tower will be 219,350 square feet, half of which is dedicated to parking. 83 apartments, 6,654 sf of open and green space, 150 parking spaces and 7 bicycle racks.

Crimson Tower Miami

Element:
Element was originally proposed in 2006 and was later cancelled. Originally designed by Chad Oppenheim, the same Miami architect who designed Ten Museum Park in Miami’s Park West neighborhood, Element has been revived with a new design by Dorsky+Yue. Element is to be 412 feet (126 meters) high with 389 apartments in 36 floors. Element’s new redesign is beautiful with a public baywalk. Unlike other projects, such as Icon Bay that pretend to open the bay up to the public, Element’s baywalk is much more successful.

Old Element design Chad Oppenheim

The old design for Element as designed by Miami architect Chad Oppenheim in 2006.

Element Miami new design

The new and current designed for Element.

Miami World Center:
Oh, Miami World Center. After Brickell CitiCentre, this is one of the most exciting and promising projects for Miami. It’s scale is massive, its urban and economic impact is incredible and its design is amazing.

Miami World Center was first proposed in 2007 and then it died down during the Great Recession. Now, with recent land purchases and activity it seems Miami World Center and it couldn’t be more exciting. Miami World Center would take over eight, mostly vacant city blocks in the heart of the city and convert them into a dense, busy neighborhood with thousands of apartments, offices, stores, restaurants, theaters, etc. It’s the kind of development that any city could dream of. Everything is still very abstract and preliminary about Miami World Center, so nothing is exact quite yet. Depending on the aggressiveness of the developer, a project of this scale would no doubt, easily take many years to complete.

Miami World Center is divided into five districts:

  1. Worldcircle: The central public plaza of the project. It would feature an impressive fountain and sculpture. Business and retail activity would center around this public plaza.
  2. First Avenue: Lush shade trees would line First Avenue with stores, restaurants and cafés on the ground floor of hotels and high-rise apartment buildings.
  3. Seventh Street Promenade: Seventh Street would be a pedestrian-only promenade connecting the American Airlines Arena to the east with the Historic Overtown/Lyric Theatre Metrorail station to the west. Seventh Street would have cafés and restaurants on the ground floor with apartments above. Think South Beach’s Lincoln Road, but with much more density.
  4. Worldwalk and Worldplaza: A diagonal road connecting Bayfront Park to Miami World Center. This area would have wide, open public spaces with lush shade trees.
  5. Worldsquare: This would be a massive semi-interior public space forming a courtyard space within one of the buildings. This space would be  covered with a trellis-style roof canopy connecting five stories of retail on either side. This space is billed as ideal for Miami Fashion Week.

Miami World Center aerial

Miami World Center looking east towards Biscayne Bay.

Miami World Center

MWC looking north towards Edgewater and Wynwood.

Miami World Center Worldcircle

MWC Worldcircle would be the center of the retail and business activity in the new neighborhood.

Miami World Center 7th Street

MWC Seventh Street Promenade. Seventh Street would be a pedestrian-only promenade connecting the Overtown Metrorail station to the west to the American Airlines Arena to the east.

Miami World Center streets

Urban and pedestrian-friendly streets of Miami World Center.

Miami World Center Worldplaza

Miami World Center’s Worldplaza would be the perfect location for Miami Fashion Week.

Miami, Miami Beach, Miami Real Estate News

Former Versace Home Lists for $125M

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June 08, 2012 03:00PM

Casa Casuarina The late designer Gianni Versace’s former Miami Beach home Casa Casuarina is on the market asking $125 million, according to the Wall Street Journal. The 10-bedroom, 11-bathroom, 19,000-square-foot estate was purchased by Versace in 1992 for close to $10 million. The designer had made $33 million in renovations to the property, adding a 6,100-square-foot south wing, a 54-foot-long mosaic-tiled pool lined with 24-karat gold and a courtyard before he was murdered outside the house in 1997. The mansion, which is located at 1116 Ocean Drive in South Beach, has since been converted to a hotel and restaurant by Peter Loftin, a telecom entrepreneur. It is now called the Villa by Barton G. Loftin purchased the house in 2000 for $20 million. Jill Eber and Jill Hertzberg of Coldwell Banker are marketing the property. [WSJ]

Miami News, US Real Estate, US Real Estate News, Vacation Homes, World Real Estate News

Where The Global, “1%” Live Right Now

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Where the Global 1% Live Now
Shutterstock

London, Hong Kong, and New York rank as the top three cities for the ultra-rich, according to the 2012 Wealth Report released by real estate firm Knight Frank and Citi Private Bank.

The report is based on detailed data on the number, distribution, and preferred locations of high net-worth individuals (defined as households with more than $100 million in assets). This is the globe-straddling capitalist over-class that Cynthia Freeland has dubbed the “new global elite,” or what the report itself labels the global economic “plutonomy” of the “richest 1%.”

There are now 63,000 households worldwide with $100 million or more in assets, up 29 percent since 2006 and projected to rise even higher in the future. The top ten current preferred locations for the ultra-rich are:

  1. London
  2. New York
  3. Hong Kong
  4. Paris
  5. Singapore
  6. Miami
  7. Geneva
  8. Shanghai
  9. Beijing
  10. Berlin

The report also asked respondents to predict the most important cities in 10 years. The projected key cities of 2022 include:

  1. London
  2. New York
  3. Beijing
  4. Shanghai
  5. Singapore
  6. Hong Kong
  7. Paris
  8. São Paulo
  9. Geneva
  10. Berlin

On this list, Beijing and Shanghai move up, displacing Paris (which falls from fourth to seventh) and Miami (which drops off the list completely), along with Hong Kong and Singapore. Sao Paulo, Brazil, moves onto the list in eighth place.

What’s behind these rankings? According to the report, the ultra-rich value cities that offer “personal safety and security” most, followed by “economic openness” and “social stability” which top “luxury housing” and “excellent educational opportunities.” As the report’s authors explain:

The most significant driving force of any city is its people. It is crucial to have a livable environment for increasingly mobile populations, and to attract a significant workforce. More than one-third of the people in New York and London are foreign-born. Despite their astonishing growth, Asian economic powerhouses fail to reach that level of cosmopolitan culture. New York or London will continue to top the indices, but only if they ensure their strong cultural offers are unmatched and maintain open immigration policies.

But the rise of global superstar cities also has a dark side. According to Barron‘s Richard Morais:

Anyone who has recently tried to make their way through the thronged pavements of Piccadilly in London knows there’s another, more important and less politically-correct answer for why certain cities in the West will remain top dogs. The reason is flight capital. The globe’s rich aren’t really moving to London or New York – they are fleeing their home countries and cities.

Any private banker will tell you, that as soon as a centa-millionaire in Moscow, Beijing or São Paolo makes their fortune, the first thing they do is figure out how they can ferret away large chunks of that wealth to countries that guarantee political and personal freedoms, have sound legal systems, a favorable tax environment, good security and good schools for their kids. Those last two items are not to be underestimated. When asked what was the most important factor drawing them to a city, 63% of the globe’s super-rich said “personal security” and 21% said “education.”

The rise of these protected enclaves is creating very real tensions between the very wealthy and more average city residents.

Just one example – high-end apartments and townhouses in London and New York regularly top $50 million, pricing locals out of the market. It’s no coincidence that London boiled over into riots last summer and that the Occupy movement was born on Wall Street.

There is a very real danger that such disruptions are a “feature, not a bug” of global cities. As the Financial Times wrote last summer:

Globalisation has made our great cities incalculably richer but also increasingly divided and unequal. More than youth, ethnicity or even race, London’s riots are about class and the growing divide between the classes. This dynamic is not unique to London but is at work in many of the world’s great capitals. Instead of reducing and flattening economic distinctions, globalisation has made them sharper.

We make a big mistake when we look out across the peaks of privilege from our eyries in London, New York, Tokyo and Mumbai, and tell ourselves that the playing field is level. Our world, and especially its cities, is now spiky and divided.

Biscayne Blvd Condos, Brickell Ave, Brickell Ave Condos, Downtown Miami, Icon Brickell, Luxury Apartment, Miami New Developments, Miami Real Estate

Once Empty Downtown Miami Condos Reach 93% Occupancy

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No vacancy in Miami’s condo canyon

The latest report card on downtown Miami’s condo market shows almost all of the units built during the housing boom are full. That’s thanks to renters, who would be priced out if not for all of the cash purchase deals.

BY DOUGLAS HANKS

DHANKS@MIAMIHERALD.COM

Miami’s infamous condo canyon is almost full, thanks largely to a steady flow of cash from Latin America.

The latest survey of downtown high-rises built during the housing boom shows more than 90 percent of the condos are occupied. After Latin American investors snapped up condos at distressed prices amid a wave of bankrupt high-rises, they turned to local renters to fill them. Four years into the buying spree, vacant units have almost disappeared.

“I always encourage my clients to bring their checkbook for the first month’s rent,’’ said Lauren Popham, an agent with Jeanne Baker Realty who specializes in rental units. “There is a lot more demand than there is supply.”

The study by Miami’s Downtown Development Authority found 93 percent of the nearly 23,000 condominiums built in downtown Miami after 2002 are occupied. Of that, only about a third are occupied by full-time by owners, with the majority serving as rental apartments.

Behind the statistics are a fundamental shift in real estate math allowing for downtown Miami to become one of South Florida’s hottest rental markets.

The boom prices, where top condos were selling for $600 or more a square foot, would require rents too pricey for all but the most affluent residents. Instead, investors who bought then hoped to flip their units for even more money to future buyers.

Even at the sharply discounted $200-a-foot purchase prices in the depths of the housing bust, many of the condos would be too expensive to generate enough rent to cover association fees and mortgages on the units, said Craig Werley, of Focus Real Estate Advisors and author of the DDA study. But with the vast majority of investors paying cash for their downtown condos, they require far less rental revenue each month to make the deals “pencil out” as reasonable investments, Werley said.

“Traditional financing wouldn’t have made these rentals viable,’’ said Werley, who conducted the study in a partnership with Goodkin Consulting. “If you had a mortgage on a half-million-dollar condo, the monthly costs would be way out of line with any reasonable rent you could generate.”

Not all condos being rented in Miami’s urban core depend on cash investments, and the DDA study only covers units built during the last decade. Other indicators point to a downtown that is an increasingly popular place to be. The bust didn’t stop a wave of new retail complexes from opening, including the Midtown Miami mall on northern side of downtown and the Mary Brickell Village mall to the south. Restaurant taxes have surged 77 percent within Miami city limits since 2005 compared to a 35 percent gain countywide.

Tyler Tejeda commutes almost an hour each way in order to spend weekends in Miami. The 24-year-old recruiter for a Fort Lauderdale firm moved into a Brickell Avenue apartment in August, despite having a job nearly an hour away. “I could move to Fort Lauderdale if I really wanted to,’’ Tejeda said. “But I’d rather be in Brickell on the weekends. It bothers me less to have to commute on weekdays than have to come down to Miami on the weekends.”

Paul Riemer could afford to buy a condo of his own, but the young insurance executive instead pays upwards of $2,000 a month for a one-bedroom apartment at the Icon, a posh condo complex on Brickell Avenue.

“I’m not ready to make a big purchase yet,’’ the 23-year-old said. He cites a gap in what he can afford to rent and what he can afford to buy. Why move out of a luxury apartment to purchase his own condo somewhere else with a large mortgage?

“I have the money to comfortably rent,’’ Riemer said. “I don’t know if I’d be able to comfortably buy.”

The 93 percent occupancy rate in the latest DDA condo survey identifies little more than 1,000 vacants units in a condo market that came to symbolize the excess of Florida real estate. And it marks a big improvement over the 65 percent occupancy rate in the first DDA survey taken four years ago — a number that at the time seemed surprisingly high.

That was in 2008, at a time when South Florida real estate sales were just beginning to show a rebound. But prices were heading the other way, accelerating into a decline that has so far last five years, according to the Case-Shiller housing index. At the time, the DDA wasn’t sure it wanted to know how many people were living downtown.

“We were hearing from everybody driving down the road: Hey the condos are empty,’’ said DDA director Alyce Robertson. “You never know what the numbers are going to say. What if they really were all empty?”

With a hot rental market, downtown Miami has become a more expensive place to live. Mark McCann, owner of the Miami Apartment Locators brokerage, said a one-bedroom apartment in the downtown area went for about $1,300 a month several years ago. “Now that’s almost impossible,’’ he said. “Now it’s closer to $1,500 or $1,600. There is a lot of competition for the units. There was more supply before the recession.”

The rental market has helped usher in a new crop of condo projects downtown, a revival many thought might have to wait at least a decade after the big crash. Harvey Hernandez runs the company selling units in Brickell House, a 46-story building planned for 1300 Brickell Bay Drive. His sales staff runs weekly reports on the rental market — statistics that can help close a sale for a $400-per-square-foot unit at Brickell House.

“The rental market influences the buyer a lot. It is a great option,’’ Hernandez said. Miami “has about half the inventory available for rent we had four months ago. And four months ago, it was at least half of what it was four months prior.”

Commercial Real Estate Investment, Creative Real Estate Investing, Miami Real Estate, Miami Real Estate Law, Miami Real Estate News, US Real Estate, US Real Estate News, Vacation Homes

Commercial Investors Eye Single-Family Homes

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Commercial Investors Eye Single-Family Homes

Published on: Wednesday, March 07, 2012

Written by: David Bodamer

 U.S. federal agencies are casting about for ways to pull the country’s housing market from the brink as reports from the Case-Schiller National Index indicate housing price falls for the eighth straight month. The Federal Housing and Finance Agency has announced a pilot program that will allow commercial investors to buy foreclosed single-family homes in bulk. The plan has several high-profile backers who are anxious for the opportunity to bid on these properties. Once purchased, the properties could be rented out or resold. For more on this continue reading the following article from National Real Estate Investor. 

With the latest data from the Case-Shiller National index showing that housing prices have fallen for the eighth straight month and are now back to January 2003 levels, the housing crisis appears no closer to its end.

But might there be an unlikely savior on the horizon for the single-family sector in the form of commercial real estate investors? On Monday, the Federal Housing Finance Agency (FHFA) announced a pilot program through which it would take bids from investors to buy foreclosed residential properties in bulk for the purpose of turning them into rentals.

The pilot program is the result of an effort launched last summer by the FHFA, along with the Treasury Department and the Department of Housing and Urban Development, to solicit outside input on how the government could deal with its millions of real estate owned (REO) residential assets and help turn the housing market around. The first pool of assets is a group of 2,490 properties, including 2,849 units in some of the hardest-hit residential markets: Atlanta, Chicago, Florida, Las Vegas, Los Angeles and Phoenix. There are 1,743 single-family homes, 527 condos, seven manufactured homes, one co-op, 118 duplexes, 36 three-unit buildings and 58 four-unit buildings.

To date, investors have purchased homes in foreclosure auctions and rented them out. But investors can only buy one or two assets at a time this way. The idea here is to enable investors to buy larger pools of foreclosed homes in order to get them on the market as rentals and deal with the glut of troubled assets more quickly.

“This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties and reduce the supply of REO properties in the marketplace,” FHFA Acting Director Edward J. DeMarco said in a statement.

Investors must fill out a qualifying form on the FHFA’s REO Asset Disposition page, post a security deposit and sign a confidentiality agreement to access detailed information about the properties. According to the FHFA, only investors who qualified through this process will be eligible to bid.

INITIATIVE’S BACKERS

The concept of involving the private sector to help solve the foreclosure problem has some high-profile backers.

REO Loan Count

Lew Ranieri, who helped pioneer mortgage-backed securities in the 1970s, and Kenneth Rosen, chairman of real estate market research firm Rosen Consulting Group, are the main authors on a policy paper issued this monthlaying out how the private sector’s involvement could help turn around the housing market and deliver attractive returns to investors.

“Without question, this is an opportunistic place to make investments,” Rosen says. “It’s similar to what opportunity funds have done with commercial real estate. There are more than one million units to be auctioned. Instead of having small players buy the assets, this would allow for bulk acquisitions.”

Overall, 453,266 residential units are currently classified as REO. Of those, the federal government holds nearly 50 percent of the inventory through Fannie Mae and Freddie Mac and another 9 percent with the Federal Housing Administration. In addition, private label securities hold 33.3 percent of the REO inventory and banks hold 17.5 percent.

But gaining control of those assets is a time-consuming process. In existing auctions, properties are sold one at a time. Private equity investors have gotten involved in converting vacant homes into rental properties, according to Rosen. But creating bulk programs could increase interest by making it easier for large investors to amass portfolios.

Investors then have several strategies for how to handle the assets. According to the policy paper, “Homes can be purchased for three potential outcomes, depending on a range of factors: the micro-conditions of the home, employment and income of potential tenant/owners and the macro-conditions of the neighborhood and market.” Specifically, investors could choose to offer the units in rent-to-own, rent-to-rent or resale arrangements.

In a rent-to-own scenario, an investor would enter a long-term relationship with a tenant who would offer the renter a right-of-refusal to buy the home. The lease could also be structured to give the tenant a share of any upside in a property’s sale. According to the policy paper, “This share can be structured to be payable regardless of whether or not the tenant purchases the home or be restricted to only if the tenant converts to ownership. This share can be pro-rated down or eliminated if a tenant leaves before the ?ve-year term.”

REO Investor Options

In a rent-to-rent scenario, the investor operates the asset as a straight rental property. And a resale would simply involve moving the asset to an owner-occupier.

“The private sector has a lot of solutions to the mortgage problem,” Rosen says. “They are engaged and want to be involved. I think this is something that has to be pushed as fast as it can.”

One caveat Rosen notes is that the government needs to ensure that the participants in the program are legitimate players. For example, the policy paper notes, “Programs that we deem to be unscrupulous are requiring tenants to pay a down-payment when signing a lease. We believe ?rst and last month’s rent and/or a security deposit in keeping with state law is acceptable, but do not believe additional advance payments are warranted.”

If all goes well, Rosen thinks the pilot program could be expanded “full scale” within a year with the government offering its inventory in bulk sales as well as banks and private-label securities conducting similar programs.

This article was republished with permission from National Real Estate Investor.