“There is still a lot of money around” CRE Pros on the state of the market in Miami

Following weeks of nonstop news coverage about hurricanes, real estate professionals were understandably concerned that investors might shift their sights away from Florida and its severe weather events. But the experts who spoke about capital markets and foreign investment during Bisnow’s Miami State of the Market event Tuesday agreed: the impact was almost nil.

Walker & Dunlop Managing Director Kevin O’Grady said he is in the midst of several hundred millions of dollars in deals, with foreign investors flying for tours, and “there hasn’t been a peep about the weather.” “There may be a short-term hangover, especially in the residential market,” O’Grady said, but the hurricane was otherwise mostly a temporary nuisance. “Living at the water has a price, but it’s certainly worth paying it,” Fortune International Group CEO Edgardo Defortuna said. “I’d rather have a hurricane than an earthquake.” He added that, because of building codes that came into effect after Hurricane Andrew in 1992, newer properties suffered little from Irma. As far as foreign investment, Defortuna said that “the urgency has gone out” recently, and buyers are being more selective. That is because cheap properties that had been available in the wake of the recession have all been scooped up and deals are harder to find. Also, he said, the high cost of the dollar is making some investors stick to their own countries until they see a more favorable exchange rate. In past years, foreign buyers often made deposits on projects during pre-construction phases, Defortuna said, but as exchange rates worsened over the construction period, they abandoned deals and walked away from deposits. Now, some projects are requiring 50% deposits to hedge against those scenarios, Defortuna said, and his company has stepped in to offer financing outside of typical bank loans and bridge such gaps.

But U.S. investors are also interested in Miami. “The capital has been taken over domestically,” O’Grady said, a push that is “really dominated by the debt funds … Investors want bondable returns.” As recently as the 1990s, he said, Miami was not generally perceived as a stable or attractive market for growth. Starbucks did not even put coffee shops here because it was too hot. Projects were built, but not with institutional-grade capital. That is changing, he said, as outsiders have come to understand that Miami is a gateway city for foreign capital and people want to live here full time. “Our exponential growth is just beginning,” he said. Foreign investors in politically turbulent nations will always invest in U.S. real estate for stability, the panelists agreed. Baker & McKenzie LLP partner Steve Hadjilogiou said foreign clients come to him primarily seeking advice regarding estate taxes and the tax rate on capital gains. He said he sees a lot of investment vehicles set up as corporations. After the Panama Papers saga exposed how foreign entities use shell companies to dodge tax obligations, companies are seeking advice on how to better comply with regulations. Because of the exposé, “we live in a more compliant world,” Hadjilogiou said. “There’s no time to fool around with tax savings restrictions and other things we saw a few years ago.” Overall, the panelists agreed that Miami is still young and ripe for development. “There’s still a lot of money around,” Integra Realty Resources Senior Managing Director Anthony Graziano said. He said real estate remains attractive, especially with the stock market at record highs and investors wondering when it might start to tumble.

“There doesn’t seem to be an end in sight” for real estate in Miami, O’Grady said. “We’re really at the beginning of our growth cycle,” he said. This is great for investors, but bad for affordable housing advocates, as experts pointed out on other panels during Tuesday’s event. “I don’t know if you can fix it,” Plaza Construction Southeast Region President Brad Meltzer said. “Cities that are 100 years ahead of us, you don’t see any affordable housing in the center of San Francisco or New York City. People have to move out to the suburbs and take transportation in. Property values are not going to go down. It’s just not going to happen.” Dezer Development CEO Gil Dezer said that builders are helping, not hurting, the city as they bring money into the region. “We are basically exporters — without exporting any product,” he said. People cannot take their real estate with them when they leave, he added. “Every time you see a crane go up, it’s making housing more affordable,” Key International Co-President Inigo Ardid said. Consider the current market, he said, which has some 12,000 rental units and 17,000 condos under construction. The supply would eventually make rents come down or at least slow the rate at which rents are increasing. Although, he said, “It may take some time before you feel it.”

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Development Partnership Sells Apartment Community in West Miami for $61M

WEST MIAMI, FLA. — A partnership between Estate Investments Group, Fortune Capital Partners and Mattoni Group has sold Soleste Club Prado, a 196-unit apartment community located at 950 Red Road in West Miami. Grand Peaks purchased the property for $61 million. The development partnership recently delivered the asset, which comprises one-, two- and three-bedroom units commanding rental rates from $1,680 to $3,475 per month. Community amenities include a pool with spa, sundeck and private cabanas, outdoor kitchen and bar, resident lounge, kids gaming zone, rooftop serenity garden, fitness studio and a parking garage. Robert Given, Zachary Sackley, Troy Ballard and Neal Victor of Cushman & Wakefield represented the seller in the transaction.

 

Development Partnership Sells Apartment Community in West Miami for $61M

Mattoni Group buys retail space at 1010 Brickell

Miami-based real estate investment firm Mattoni Group said it has acquired all the street-level retail space at 1010 Brickell, which is being developed by 13th Floor Investments and Key International Development.Mattoni Group purchased more than 11,000 square feet of space on the ground floor of the Brickell Avenue condominium tower, which will have 50 floors and 387 units. Mattoni Group said it plans to lease the spaces to major retailers, with an asking Rendering of 1010 Brickell rental rate of $100 to $150 per square foot. The property is scheduled to be completed in fall 2017.Brokers Fernando Naranjo, president of The Orange Group, Real Estate Corp. and Lucio M. Rodrigues, of AG Real Estate Advisors, represented Mattoni Group in the deal.1010 Brickell is positioned to have accessibility to the Tenth Street Metromover station on the Brickell Loop in Brickell. It is also in walking distance to Brickell’s main attractions & restaurants at The Shops at Mary Brickell Village and the future Brickell City Centre.In November, the developers obtained a $76 million syndicated construction loan, led by Regions Bank, for the project. Construction began in September for the building, designed by the Sieger Suarez Architectural Partnership.“Since Brickell is a growing metropolitan residential community,” Ricardo Caporal, founder and president of Mattoni Group, said in a statement, “the area has a high density of residents, making it a desirable location for retailers.”
Tags: 1010 Brickell, 13th Floor Investments, Key International Development, Mattoni Group– See more at: http://therealdeal.com/miami/blog/2015/02/17/miami-real-estate-firm-buys-retail-space-at-1010-brickell/#sthash.2X0Sokvq.dpuf

Mattoni Group buys ground floor retail at 1010 Brickell

Miami-based real estate investment firm Mattoni Group has acquired all of the ground floor retail space at 1010 Brickell, which is being developed jointly by 13th Floor Investments and Key International Development. Mattoni’s purchase amounts to more than 11,000 square feet of space in the condominium tower which will feature 387 units over 50 floors. The company is expected to charge $100 to $150 per square foot for the retail space which it plans to lease to major retailers. 1010 Brickell is scheduled for completion in the fall of 2017.