Ryan & Ana On MIA
Ryan and Ana cover all things Miami development and real estate, the good, the bad the drama.
Ryan & Ana On MIA
Miami's Real Estate Boom: Skyrocketing Prices, Ambitious Projects, and The City's Evolving Landscape
Is Miami's real estate market the new gold rush? Join us in episode 21 of Ryan and Anna on Miami as we uncover the latest trends reshaping the Magic City. From skyrocketing single-family home prices to the influx of wealth and talent, Miami is becoming the epicenter of exciting real estate developments. This week, we discuss my recent guest appearance on Housing Wire's national podcast, where we tackled similar themes that resonate with South Florida's unique appeal. We explore how May's record-breaking median prices and the dwindling inventory of affordable homes are creating a highly competitive market across Miami-Dade, Broward, and Palm Beach counties.
Imagine a 48-story titan rising in the heart of Wynwood, an area traditionally known for its mid-rise buildings. Developers are not just changing Miami's skyline but also its very essence. In this episode, we delve into ambitious projects like the proposed high-rise complex in Wynwood and the massive 3,500-unit residential endeavor in West Little River. We explain the strategic dance developers engage in with local jurisdictions to push the boundaries of what's possible. Florida's Live Local Act and Miami-Dade's rapid transit zoning are game-changers, allowing for more innovative and expansive projects that promise to transform Miami's urban landscape.
Curious about the future? We wrap up with bold predictions for Miami's real estate market, forecasting continued wealth and talent migration and a tightening single-family home sector. We also touch on the city's unique development strategies, such as the shift from multifamily rentals to condos, and discuss how tech giants could soon make Miami their new home base. Plus, we cover the introduction of Tri-Rail's one-seat express service to downtown Miami, highlighting the high demand for efficient transportation in a city that's ever-evolving. Don't miss this insightful episode packed with the latest developments and future forecasts for Miami's booming real estate market!
Hi everyone. Welcome to episode number 21 of Ryan and Anna on Miami.
Speaker 2:We're of legal age.
Speaker 1:Finally, not that it stopped us before Drinking.
Speaker 2:Drinking age.
Speaker 1:Anyways, here we are, episode 21. The Miami story continues. So this past week I was actually on a national podcast called Housing Wire and it was a continuation of the themes that were covered in the Inman event, which I found very interesting because they didn't speak with each other. They're not the same organization, but it was an echoing of the same themes that everyone is seeming to catch on now on a national level, and it's this pattern of wealth and talent migration into South Florida. So I had a fantastic podcast there. You can find it, it's on everything Spotify, Apple, iTunes, whatever it is and we touched upon all the trends that are sending people here. And then they have this.
Speaker 1:We've got a national audience and once it went live, they were supposed to email me a link when it went live and they did, but it took them an hour or two in that interim. I didn't know it was actually live. And all of a sudden people started calling me I swear. And they said I just heard your podcast and they're calling me from Georgia, from. I had a man with a very strange Russian accent. Call me from Georgia. Oh boy, that was interesting. Georgia, or Georgia, Georgia, the state, but he was very Russian, Anyway. So people started calling me and they said same feedback I got after Inman. They said, wow, all these things you said and quantified are things that I've been feeling and seeing. It's in the early days. It's an enormous shift of wealth and talent in our nation. So it was a good corro. Miami, Long America thesis.
Speaker 2:We still need to get t-shirts for that. I think we do. Long America, long Miami Equals Long Miami. Yeah, equals Long Miami. I love that I'm going to get on Canva Maybe make it like a cool Miami palm trees and very cool stuff.
Speaker 1:Yeah, that was a great. That was just a great talk and again, the feedback I got on the phone immediately when it was launched. Then I emailed the producer and I said I think you guys went live because people are calling me and I did. I did preview one data point because May closed out.
Speaker 1:And one thing I've been talking about is the scarcity of single family, how we cannot add inventory vertically like we can for other types of product and especially Ryan will get into Live Local Act later and how we cannot housing inventory vertically For single family. We cannot, and we're seeing this like slight, i't want to say divergence, but the single-family home market is outperforming because the scarcity is so real and we hit another all-time high for median pricing in May for single-family homes. Condos are hovering off their high a little bit. It's normal, it's hovering. They didn't reach an all-time high. Single-family did. And inventory at the lower price points keeps nosediving For condos. It's not. Condos at lower price points are coming back in the market because of the law change next year. Single family no, and we had an interesting record. So I always like to look at outlier data. Past 2,000 a square foot. We had a 900% increase versus May of 2019.
Speaker 1:900% Yep, yep, that is wild All-time high May transaction volume, despite overall losses in transaction volume.
Speaker 2:And that's year over year.
Speaker 1:No, versus May 2019, pre-COVID. It is up year over year too, but looking at versus pre-COVID, it's huge. It's 10x.
Speaker 2:So that reminds me. I have a very close friend of mine who bought a house last year or the year before it was like a 1970s rancher in Cutler Bay, Palmetto Bay, I think. They got it for just over $500,000, like $600,000. They gutted it completely and they put a lot of money into it. They did the windows and all of that. They just listed it because they need to upgrade to a larger home. They just listed it for $1.4, $1.2.
Speaker 1:Yeah, so appreciation plus the upgrade, yeah, yeah, that makes sense. And another stat again this topic that I shared with the podcast was that if you look at tri-county data because it's the same pattern through Palm Beach County, broward and Miami-Dade you can't hide or find a separate. You have this problem in Miami-Dade. You can't go north and escape it and that's the disappearance of lower-priced single-family home inventory Below $500,000 now May versus May 2019. Tri-county inventory is down. I think it was 88%. Wow, it's basically gone.
Speaker 2:That's wild, it is wild.
Speaker 1:It's one of those numbers you look at and I triangulate and corroborate it in numerous ways because it looks so not fake but it's so drastic. You want to make sure that it's correct. And it's really gone. Past half a million dollar houses, it's gone. And then we can't okay, we can't add vertically, we know this, but in terms of land that's there, we can't even add inventory at those prices anymore because of land costs, construction costs and what the market is demanding. So it's going the way of the dodo bird.
Speaker 2:I think I read recently that they found some dodo birds somewhere.
Speaker 1:Really I don't know where. If we can extract DNA, we can make them now.
Speaker 2:Wouldn't that be cool Jurassic Park style.
Speaker 1:The movie didn't teach us a lesson.
Speaker 2:What Jeff Goldblum said just because we can, we no.
Speaker 1:Just because we.
Speaker 2:Because we could, I think we should, or something like that Right right.
Speaker 1:He has a very famous quote.
Speaker 2:What a party pooper. Yeah, we were talking about this last week about the condos and the new rule changes and I was reading some more about it. There's some more stories and it is interesting. Miami-dade has a huge dearth Is dearth the right word, or lack of condos that are for sale that are newer than 10 years? There's almost no inventory of condos that are 10 years and newer. There is like all the inventory that is 10 years and older and a lot older.
Speaker 1:Correct, exactly right.
Speaker 2:The bars were hilarious. It was like new inventory and old inventory.
Speaker 1:Exactly right and that's part of that bifurcation of the market that I was talking about on that podcast is that we have the segments that are attractive to the wealth and talent migration, which tend to be new product. So there's great demand for new product. Luckily, we do have a pipeline Miami is building and it's very much not an oversupply, because the existing inventory that is older and tends to be less expensive and cheaper on a per square foot basis is not attractive to the domestic migrants who are coming from New York.
Speaker 2:It's also you have to realize that even if these older units are an attractive price, no one is factoring in the assessments, the insurance, the blah blah blah that these older units are going to require Future headaches. So it's like you're basically getting a discount on the upfront cost and then having to pay it later.
Speaker 1:Yes, and the same holds for single family that is older, because they're built to lower elevations. Okay, so people think that they're buying an older single family house, they're getting a lower price than a newer house, but they're built to a different standard and the elevation of the house is different and the insurance rates are going to be completely different. Interesting, same pattern.
Speaker 2:Yeah, so I want to talk a little bit about Live Local.
Speaker 1:Tell us all what it is. This was actually a topic on that podcast too, because this is a great program the state of Florida has and I said the state of Florida is not afraid to build and we have this wonderful thing called the Live Local Act.
Speaker 2:And tell us what it is. So Live Local is a little. It's both complicated and simple. So what Live Local says is if you take a project and devote 40% of the available units to affordable, which in this case means the people cannot make any more than 120% of AMI, is that what you call it? Okay, average something, income, average income, and for Miami-Dade I think that's $72,000 or something like that, $70,000. Anyways, so you take 40% of the units and make them AMI, you basically get to disregard all zoning things, local zoning provisions Local things, yeah.
Speaker 2:So it's not like you can avoid safety and whatever you can, just it's the density. It comes down to the density.
Speaker 1:So you can match. You can build as much FAR. I believe it is as a project within a mile radius around you. There's some legislation trying to shrink that to half a mile. I don't know if that's passed or not, but it was written initially as within a mile radius of that project. You can match that FAR, even if it's within a different local jurisdiction with different zoning.
Speaker 2:Yeah, and also it's the height too. You can build to the height.
Speaker 1:To the height?
Speaker 2:yes, An example of that Wynwood W. An example of that Wynwood. Wynwood has about a 12-story limit approximately, and that's why all the buildings there have been mid-rise. There is a company, a developer called Baz Baz I think that's what they're called and I learned they made their money from plastic grocery bags.
Speaker 1:Oh, wow.
Speaker 2:Anyways, the lot they're trying to build on is in Wynwood, on North Miami Ave. It's right after 20th Street, so just on the entrance to Wynwood. They had originally proposed a very Wynwood project 12 stories, blah, blah, blah. But now, with a local, they are proposing a 48 story complex.
Speaker 1:Why not?
Speaker 2:And just for reference. I'm for it, I think it's great. I'm loving the pettiness of this developer. I think it's great, but that would be like, just for reference, that would be like putting the Waldorf Astoria on North Beach in Miami Beach.
Speaker 1:There's a town center in North Beach where they are building new things.
Speaker 2:I hear you it's going to have fabulous views.
Speaker 1:Ryan is trying to say it's a little bit off scale from the rest of the day.
Speaker 2:Just a little. It's like, for example, the building's parking podium is going to be about the height of the current buildings in Wynwood. They're just jealous, yeah, but the interesting thing is I said this before what developers are doing is they are proposing these crazy projects because they can?
Speaker 1:The Clevelander did it yeah.
Speaker 2:And then they're going to the jurisdictions and saying we can build this without you being involved at all.
Speaker 1:But instead of 48, we'll build 20.
Speaker 2:Yes, so you better approve the 20 without any shenanigans.
Speaker 1:Or we'll go back to 48 and put neon lights on it Exactly.
Speaker 2:So that is exactly what developers are doing, and some of these projects may actually be built Exactly. So that is exactly what I was doing, and some of these products may actually be built.
Speaker 1:They may be, which is great. Yes, I'll take it anyways, it's fantastic.
Speaker 2:And then there's another one, which I actually have up here. This is in West Little River, and West Little River is not like Little Haiti. This is way it's like west of 95, far west. They want to build around 3,500 units in seven towers, I think, or six towers, and right now the land is literally like in the middle of a single-family neighborhood with two-story buildings, and they're going to build like a little mini brickle way west, and they can do it because there is obviously a 30-plus-story building within one mile and they can build it because there is obviously a 30-plus story building within one mile and they can build if they want to, I feel like Live Local Act, activates itself because that project uses one that's off a certain distance radius and then, when it's completed, its existence pushes the radius further, do you see?
Speaker 1:Because then another building that was further from the original, where they couldn't invoke Live Local, now can, because of the new project.
Speaker 2:I did read that it is written that it doesn't work that way.
Speaker 1:Oh, I feel like it spawns Live Local projects.
Speaker 2:The NIMBYs would be like oh, they would just die.
Speaker 1:So it has to be a project that predates Live Local that you use as your.
Speaker 2:I think there's like a certain date on it that says before X, y and Z date. They thought of that yes.
Speaker 1:Frankly.
Speaker 2:I'm surprised that the legislators thought of that, and that, to me, is something interesting, because this whole act is very progressive for Florida Very, and it was signed with a pretty much a overwhelming support in the Senate and the governor. It actually may be among the most progressive housing acts in the United States.
Speaker 1:I can't think of something similar. I'm not an expert on this matter, but nothing similar has gotten the media attention or pops to my mind.
Speaker 2:Yeah, california does something called the Builder's Remedy Okay, which basically says that, which is. It's so California. It says if someone wants to build something and they have I don't know the rights or something and a state or legislation blocks them, they can sue for lots of money to build it. Wow, which is very California. So basically, nimbys cannot block it based on the city. But Florida is saying please build it, please build this, we'll support it. There also is another layer we need to talk about. So the way it works is there's the state stuff all the way at the top from Tallahassee, then you have the county and you have the city and that's how the strata works of permitting and zoning. We have live local at the top. That says you have to be affordable 40%. You get these benefits. Next layer down is Miami-Dade's rapid transit zoning and basically that's if you're within some sort of half mile or whatever of the Metro, mover, the Metrorail, tri-rail or Brightline, you can ignore the jurisdictions.
Speaker 2:The parking requirements. Parking requirements and the density Right. For instance, the lot next door where the Herald used to be, is a large lot With rapid transit zoning. They could technically build like 8,000 units on that land. I don't think they're going to do that, but they could, and they could just tell the city to go pound sand.
Speaker 1:Right yep.
Speaker 2:So you have to remember that is important to remember because all those things override and developers can take advantage of the LiveVocal and the rapid transit Together, Together, yep, to add, for some crazy dense projects.
Speaker 1:I'm all for it. I think it's interesting. Yeah, it allows for creativity. Yeah.
Speaker 2:And they can also buy rights from like neighboring properties and add to their density, like air rights. But not. Yeah, yeah, mellow did that on their project. They're doing by Publix over here in Edgewater. Yeah, doing by Publix over here in Edgewater. Yeah, they bought like a thousand units to add to their lot next door, because Publix doesn't have anything, it's just Publix. So they bought a thousand developing units.
Speaker 1:I love it. Florida's not afraid to build, yeah, and everyone's watching us, so it's good and speaking of everyone watching us.
Speaker 2:There has definitely been some articles and I talk to others a lot, but definitely it's definitely starting to heat up. We're building a lot, Rents have plateaued, there's been a couple of foreclosures and whatever, and it's all like normal.
Speaker 1:Yeah.
Speaker 2:It's all like normal things that happen. Not dramatic, nothing that crazy Like buildings go to foreclosure, people go bankrupt. It's very normal, correct, I think? Yep, and so now the Now the stories that are coming out, are those like small points? That's okay. The Gateway of Wynwood is going to foreclosure next week and to me that just says they did something wrong with the financing. Someone messed up which happens, happens In every market but it's getting almost like national press now, because they're looking for any sort of chink in the armor.
Speaker 1:Or they're like oh, the hurricane season will be bad. They're trying to create chinks before they're even there.
Speaker 2:Yeah so.
Speaker 1:Negative Nancys.
Speaker 2:Yeah, I always send them to Anna on Instagram or Twitter and I'm just like I'm going to put your next.
Speaker 1:My next topic of something yeah, your next topic.
Speaker 2:But there are interesting things, Like we were talking last week about the condos and how that's coming up Soon it's January 1st 2025.
Speaker 1:Yep.
Speaker 2:Correct, yeah, and there's going to be a lot of people, I think, that are still going to be caught off guard from that. I don't think these old towers are ready.
Speaker 1:I don't think they're ready at all. I think they've been in denial for a long time.
Speaker 2:It's going to hit them like a ton of bricks. It is no pun intended, it is, and I don't even know what happens then, because I don't think developers are they're not going to be able to absorb all these buildings that are going to have to be bought out or redeveloped.
Speaker 1:No, and they're not all equally attractive for buyout either, for various reasons location, type of building, whatever it is. So some will get saved, but most will not in the short term, I don't know what their solution is.
Speaker 2:Yeah, because, like I said, these are people on fixed incomes, lower incomes.
Speaker 1:Which is why they kept voting to have no reserves, because they don't have any money. They don't have any money.
Speaker 2:But it's good, because we can't have another Surfside.
Speaker 1:No, no, it was insane that a building fell in the 21st century. Yeah, I can't believe watching it was just colossal.
Speaker 2:Yeah, it's.
Speaker 1:And it didn't come out of nowhere. It wasn't like an earthquake hit. They had red flags for 20 years.
Speaker 2:They had red flags since the building was built. Yeah, correct.
Speaker 1:The BBC asked me. I did a lot of press on that after that tragedy and the BBC I did a podcast with them or some type of radio interview with the BBC. It came to me I said it was a trifecta of negligence and competence and corruption. Yeah, and I think that played out across many buildings in South Florida.
Speaker 2:Yeah, I think it's still playing out and we see these stories, the news of HOA corruption and whatever.
Speaker 1:It's really colossal.
Speaker 2:And I just I don't know, I'm not sure what's going to happen in the next two to three years with this, but it's going to be a seismic shift and I'm for it, because I think I've said this before, I'll say it again I think buildings have expiration dates. I think they have lifespans.
Speaker 1:And they're not equal. They weren't all built equally, they weren't all kept up equally. These are all things to consider.
Speaker 2:Yeah, and most of these buildings were built in like the cocaine era, like when they were building with toothpicks and Put it up, yeah, put it up. And so it's why I have a rule that I won't live in a building that is older than me. That's a good rule.
Speaker 2:I'm a little old now 36 is old but basically the rule is more or less like 20, 25 years. That's a good rule. I just won't, I refuse, and not that I'm afraid of a Surfside, but I just, I don't know, I don't trust buildings of that age. I just don't.
Speaker 1:Such a Miami statement because other cities around the world are full of older buildings and they're fine New York even. I lived in Zurich for a bit before here, and a building that's 170 years old there is considered pretty much new. Their Altstadt is 500, 600 years old. In Belgrade there's tons of pre-war, 1913, 1915 buildings that are fine.
Speaker 2:I would trust a 100-year-old building more than I would trust a building from the 70s.
Speaker 1:Yes, fair, I agree. For sure, for sure, I agree, yeah.
Speaker 2:I agree. I think I trust buildings that are really old and that are just built.
Speaker 1:Agree, agree. There was this kind of crappy middle ground where I don't know what they were doing. Yeah, yeah, I agree.
Speaker 2:Okay, let me rephrase this. I won't basically live in a building that was built before the Florida Building Code went into effect. Oh, that's really what it.
Speaker 1:Right, andrew, was that big shift in code?
Speaker 2:Yeah. So if you guys, just if you're wondering, we had obviously Andrew in 1996, and that just wrecked Miami-Dade.
Speaker 1:Homestead Parts of Homestead were just obliterated.
Speaker 2:And what they found out is that people were building buildings with toothpicks and chewing gum. One of my dear friends lived in Country Walk, which was the hardest hit. Okay, and it was one of those sort of pop-up developments it was actually by a subsidiary of Disney, actually and Andrew came through and it literally cleared it out, it flattened it. There was nothing left standing.
Speaker 1:Those pictures are shocking.
Speaker 2:Yeah, look at them and her whole family survived in their garage. Oh my God Like a whole family. They were like holding the garage door shut during Andrew because their house was flattened, but anyways, there was tons of lawsuits and then the Florida State Register was like OK, we have to get this settled statewide. So they made really strict building codes. We have the strictest building codes outside of earthquake codes in.
Speaker 1:California, Yep that's right.
Speaker 2:So the long story to say is I trust buildings that were built after that date.
Speaker 1:Yeah, same the 1970s, 80s stuff. No, thank you.
Speaker 2:Yeah, no, I always see them like when I see deals randomly on Zillow or something on Instagram. I look at that and I'm just like, nope, it's not worth it. It's no, I just it gives me the. And also for me, it's the same reason I can't live on South Beach Because in order to live in the same kind of apartment that I live in, I'd have to pay probably $5,000, $6,000 a month what I pay currently. I would get like an Art Deco building and I can't do that. The damp and the mold and just like the mold is a.
Speaker 1:thing.
Speaker 2:Yeah.
Speaker 1:It's a thing in the older houses too. Older houses that are not even cheap will smell like mold.
Speaker 2:Yeah, we live in a literal swamp. Yep, correct. And you have to have good air conditioning, you have to have everything sealed. If you don't, you are going to for sure get mold. Yeah, for sure, no question. And the buildings that are the Art Deco type are going to be moldy Unless they've been gutted Unless they've been yeah.
Speaker 1:Unless they've been completely gutted. I've been in some of the older high rises on South Beach and you can smell the dampness.
Speaker 2:I know, yep, yep, it's bad for you Extremely. I have three air purifiers in my apartment I also use like a really high grade furnace filter.
Speaker 1:Oh, wow, I don't do any of that.
Speaker 2:You should.
Speaker 1:It's super smart.
Speaker 2:Because not only do we have a lot of cars here, we also have cruise ships and they have the soot and all of that. That's true. You go out on your balcony and you'll see the yeah yeah, yeah.
Speaker 2:You'll see it, so I'd recommend it. You can get Costco for a good deal. He's right. Going on to a positive thing. This is an interesting story 6.1 billion in new construction added in Miami the past year. That's amazing and they have some interesting stats here. Here are the stats 2019. Oh, this is the estimated taxable whatever like property values. And in 2024, it's $469 billion.
Speaker 1:Wow, that's quite the growth there.
Speaker 2:Yep, and then the new construction 2000. And the new construction 2000,. We've that's pretty steady yeah, since COVID. So COVID was we had the most $7.7 billion and we've gone up since then to $6.1 billion. So I think that's pretty cool.
Speaker 1:Correct, we have a pipeline again. Yeah, most other cities do not. Yeah, new York does not.
Speaker 2:And it's good, because we have to remember that Florida doesn't have a state income tax. That's right. That is where everything comes from, correct, for better or worse Correct. So it's like we're incentivized to keep building because that is where it all comes from, that's where the money comes from, correct I? Don't know. I thought that was pretty good. Any other stories that you want to talk about?
Speaker 1:No, on this topic of new construction, my friend Kyle Goodman. He runs MarketProof in New York and he keeps track of all the new construction inventory. It's a great service. We can't really do the same thing in Miami because the data is not public. For example, in New York you can look at a per-unit level of what's selling pre-construction. We can't do that here. It's not disclosed.
Speaker 1:But anyway he has this great service where he tracks all this and I just saw actually today he was on a podcast talking about how New York has had one zero or one was it one filing for a project over 100 units the entire year.
Speaker 2:What.
Speaker 1:Yes, yes, and he and I hi, kyle, I'm bringing my shout out here he and I were discussing this when he was in New York. He came when he was in Miami. He came when I gave that talk at Five Park with Russell Galvin, david Martin all of them and Jay Parker. He was in the audience. Then he and I had lunch. We hung out. I've known him for a while now and he was telling me how underappreciated that point is. I think that's what he said, and today I saw he reposted himself talking on someone's podcast saying this again what he told me a month or so ago is that there was one filing for a structure worth more than 100 units.
Speaker 2:There is no pipeline. I guess my question is Florida, does New York just build small?
Speaker 1:stuff no they just died. This was not always the case, but now there is no pipeline, so weird, yes.
Speaker 2:I think people think of a place like New York as someone they just build all the time. Nope.
Speaker 1:New York's pipeline is dead, Yep. So imagine five years out there's nothing.
Speaker 2:Yeah, because it takes three to four years to build something that's right. Wow.
Speaker 1:Yeah, yeah, because it takes three to four years to build something.
Speaker 2:That's right. Wow, yeah, it's amazing. Listen, I could just throw a stick here and hit 3,000 units under development that are out of the ground and going to be delivering in the next two years.
Speaker 1:Correct, just like I could throw a stick. Yep, that's exactly right.
Speaker 2:Really Only one.
Speaker 1:It's in his Instagram right now Because he told me this when I saw him in person a month or so ago in Miami. And then I was reminded of it because just today, before I got here, I saw that he posted a story. He was on a podcast and he said hi, this is Colleen from With Market Proof, and this you're listening to is the real talk. He says the issue of Manhattan market is lack of inventory, as you were saying earlier, but even more, there hasn't been a single offering plan with more than 100 units, not one.
Speaker 2:That is wild.
Speaker 1:In the last year. He said it.
Speaker 2:Wow, and he keeps track of all the stuff.
Speaker 1:He's the expert for New York pre-construction Not one.
Speaker 2:On that note, this is the next Miami and this is just some of the things. This is two PMG projects. They have about 1,400. There's another project at Miami World Center that's going to have 2,300. Here's your Dolmus Brickle Park. Yep, Gale is opening next week. It's amazing. I know Miami is a bubble and it happens to me all the time, but I just forget that we actually build things here.
Speaker 1:Lots In New York. Nothing, Not one filing.
Speaker 2:Huh, I wonder where San Francisco is. I don't know, that's probably worse.
Speaker 1:How can it be worse than none?
Speaker 2:Wow, okay, I need to think about that some more, yeah, oh, also, speaking of good news for Miami, let me go over here. This tri-rail is doing a one-seat express to downtown Miami. What?
Speaker 1:does one-seat mean?
Speaker 2:So right now, tri-rail to get to downtown Miami. You have to transfer.
Speaker 1:Oh, I see no transfer, okay, yes.
Speaker 2:But they're just trying it out in a sort of basic way. It's only going to be one train in each direction each day, but if it works they'll expand it. That's awesome. The reason they're doing this is because Brightline recently got rid of their commuter passes because they are at capacity Okay, which is both a good thing and a bad thing, because obviously it's not great for commuters who have relied on it. But it also means there is tremendous demand for Brightline service and Brightline always has stated that their service is for they want to make the money.
Speaker 2:On the long distance from Miami to Orlando and eventually to Tampa. The commuter part was just they don't really care about it because it makes money. But this is good because TriRail is stepping and they're going to try and do this. I think it's going to be successful. When I lived in San Francisco, it has a version of Tri-Rail called Caltrain and it runs up the peninsula and they do this. They're called mini bullet trains and they go from San Francisco down to wherever they end up San Jose down there and they just do minimal stops Because TriRail has a lot of stops and it takes about two and hours plus to go from Miami to West Palm Beach on TriRail. This will cut that down by about 45 minutes.
Speaker 2:Oh wow, so they'll stop in Miami, the airport station, boca Raton and West Palm Beach. I think. That's awesome. Yeah, I really like that a lot. Beacon Transportation this is interesting. Amazon is going to test their self-driving cars.
Speaker 1:I love that yeah.
Speaker 2:I always say, if they can test the self-driving cars here and they work, they'll work anywhere.
Speaker 1:Correct If they can handle the driving here the algorithm will be like easy.
Speaker 2:If they can do it here with the weather and the drivers and our terrible roads Awesome. Also, other interesting news this is we're going a little. I thought this was a joke when I first. I think Hugo posted it or not, hugo, his name was Hector, I don't know but I really thought it was a joke and I saw it and I was like what?
Speaker 1:Who are they targeting with this? This is where I'm confused Female buyers.
Speaker 2:Yeah, I don't. I was like, who's going to buy this the project?
Speaker 1:looks nice. It's fine, It'll look nice. But you're going to tell a straight guy to go buy at L residences.
Speaker 2:Oh, I can't see it, I'm confused by this.
Speaker 1:I don't see straight men buying here.
Speaker 2:Yeah, I don't either. It's like oh, I live at L.
Speaker 1:They don't want the straight male buyer. I don't know what their plan is. What are the community events going to be like Fashion shows, that's?
Speaker 2:what I'm saying, like how to make up.
Speaker 1:Or some guy might think that a whole bunch of young starving female models will live there and he'll be smart and buy a condo there.
Speaker 2:And it's been a weird location too. So this is 195. And this is Blue on the Bay, which is like the last skyscraper on the row and it's like in this little weird little I just I would have loved to know the logic behind this name and who thought of it I think they threw a thing at a dartboard that said they had brand names on it.
Speaker 2:Yeah, it's l next one's gonna be like teen vogue exactly yeah, I don't know, I think this branding thing is starting to get a little. They they're grasping at straws here, literally, I don't know. There was another one. Oh, this is not branded, but this is cool. This is straight from Midtown. It's called Tower 91. I don't know if that's his final name, but multifamily it's going to be right across from that blank space in Midtown. It's nice. Okay, yeah, there, I've seen this before, but there is so much happening in development in miami that I struggle to keep up with it it's so much all the time I send things to you all the time whatsapp, but I'm like did I some?
Speaker 2:did I somehow miss this? Like correct, correct, there's tons, there's so much which is good it's, it's super good, it is good and I think even with interest rates and the economy glowing over the fact that people are still breaking ground and building things is Miami did not used to be this resilient, from everything that I know. No, the last crash was probably the worst in the country here. Yeah, maybe it's at Vegas and Miami both, but it didn't used to be this good.
Speaker 1:Also, what we had here was that spike that we had post-COVID or in the immediate aftermath of COVID. That was driven by the domestic buyer. The international buyer, the Latin Americans, didn't come here. We know this from airport traffic. They couldn't come because of COVID. And so this I said this back then is that, guys like this surge that we're getting, it's in the absence of the Latin American buyer. The Latin American buyer didn't go away forever, they just physically could not come because of COVID. They will be back, got it. And so we have this domestic demand that is still there, which is new, which is going to be next five, 10 years, the shift in our nation. And now the Latin American buyer is coming back, like they always do, because now they're coming here again. So it's like we have two forces of demand Okay, interesting, which might be adding to the resiliency.
Speaker 2:Yeah, I think we're more resilient than people are giving us credit for.
Speaker 1:It's not a one-trick pony anymore.
Speaker 2:Yeah, yeah, we're not just tourism and vacations.
Speaker 1:Yeah, we're not just selling condos to Venezuelans.
Speaker 2:Yeah, and I said this podcast. The rate of people moving here after COVID was never going to continue to go up in a straight line. It was going to plateau and normalize. I think a lot of people in the press are writing negative stories that they're just seeing the normalization of it at a new level, correct, and they're seeing that as bad. Okay, this is bad. No, it's not bad, it's just normalizing at a new level.
Speaker 1:Correct Things happen in any market, yeah.
Speaker 2:Yeah, you see the number. We put the numbers out here the 900% increase.
Speaker 1:It's crazy the $6 billion in new construction, just it's sour grapes from some of the press too, which is the point I've been making. It is sour grapes, yeah, because they're like, oh, how dare they prosper? They were doing bad things, it's true. They wanted to see us suffer in some capacity, and we're not.
Speaker 2:And I think people still don't understand that Miami could be more successful other than just vacation.
Speaker 1:Their brain resists it.
Speaker 2:They resist it. It can only be a fun in the sun. Drugs and clubs and bottle service Nope exactly?
Speaker 1:Oh, who's that famous YouTuber you sent me his thing XIAO man, nyc or something. He has lots and lots of followers. I've not seen him before, I'm not really on YouTube that much, but anyways. So he made a video saying that he's lived in New York City for 22 years of his 32-year-old life, or something like this, and he's leaving. And when we saw that video when Ryan sent me it was just posted, already had almost 2 million views. I think he moved to New Jersey though.
Speaker 2:No, no, that was his whole point.
Speaker 1:He didn't move for climate or for taxes, which is what Ken Griffin was saying too, that it wasn't taxes. The tax situation never changed, so we can't attribute the taxes to the spike in migration, because that condition remained the same. So it's what changed. And he was like that's it, he goes. How they spend my money is ridiculous. The subway is basically a scene of terror. My quality of life is deteriorating. We don't have any program for kids pre-K. They promised them a pre-K program he mentioned years ago. I don't know what it was. It never happened. He's a three-year-old so I guess he kept up with it. He was saying meanwhile they're giving debit cards to migrants and he goes listen as many people are. And he left. The taxpayers are leaving.
Speaker 2:Yeah, this is random, but I was watching a show on Netflix last week. It was called Eric Okay and it had the guy from Sherlock and the Cumberbatch dude. Anyways, it was based in New York in the 80s Okay fun, and it was very when they had streetwalkers. Well, yeah, that was the point. It was very. I assume it was very realistic, it felt realistic and the funny thing is is a lot of the stuff that I saw there portrayed was a lot of things that I see now happening in real life in New York and San Francisco and Los Angeles, 100% and I feel like large, superstar cities like New York and LA. They did this 20, 30-year trip back to the same place. Yep, that's how I feel. Yep, I don't have the hard data proof, but just from the visuals and having a balanced look on it, that's how it feels.
Speaker 1:Yeah, Actually, in part of his video he was talking about how, not infrequently, he has a kid like a three-year-old kid in a stroller and he has to cross the street because in broad daylight he has a half-naked man in the street shouting obscenities and punching the air, I'm done, he goes.
Speaker 2:his wife won't walk on the street at night with a kid. Yeah, speaking of tying it into Miami thing, I saw that Miami, as far as I know, I had to learn this. They had. We have functional veteran zero homeless. They are trying to get to functional zero homeless. In general we have very few homeless in Miami and I just think I think we take for granted we have it. We have homeless, we have transients and unhoused, but just the sheer number of them compared to any other place is so far below. One other story I wanted to touch on that. I just saw you might have some insights on the South Florida condo demand surging. They're turning multifamily developers projects into condos. Can you elaborate on that a little bit?
Speaker 1:Oh, there are multiple examples of this. The project is initially conceived as being a multifamily for rental project. That's how it pencils out the best for them and then, as they get in some phase of planning or financing, whatever it is, they realize that oh wait, people are still buying condos and perhaps we can get more money. And then they convert. Even Five Park on the beach did this. By the way, it was going to be the bottom half, so the building has two distinct floor plates. If you look at the building, it has almost this divider. In the middle it's a private club floor. The top half of the building is one floor plate. That was always condos and it's all. At first, the bottom half of the building was supposed to be rentals and then they changed it.
Speaker 2:Interesting. We have a great example of this with the PMG Society and now the Essler, whatever it is.
Speaker 1:Elser, yeah, elser, it was going to be Society.
Speaker 2:It was going to be high-end multifamily, but what they said is they had buyers ready to go, with checkbooks open and had nothing to sell them, so they were like let's change it.
Speaker 1:They were like let's change it and get free money right now.
Speaker 2:Exactly. It's interesting, but I do think it's fine. We there are. We have plenty of multi-family clan line in winwood and I don't think in the direct core it doesn't have to be multi-family all the time it's what?
Speaker 1:sorry, in the direct core, I don't think that's the multi-family all the time yeah condos are fine yep, completely fine and it's interesting.
Speaker 2:I was having a conversation with someone this week who they were lamenting about how miami-dade's only building ultra luxury stuff, forury stuff for billionaires, and I sat there and I explained to them. I said listen, and I said this before. So if I'm boring you guys, I'm sorry, but I was like you have to build every single level of housing, from the ultra-luxury, from billionaires, to Section 8. It's like a ladder If you start up here and if you cut any part of it, the rest falls. Yep, they're not separate, they're not hung on the wall separately, they're all on the wall together. If you cut any part of it, it falls.
Speaker 1:Agree.
Speaker 2:And it falls down. If I am upper middle class and I want to go for a nice condo, there's nothing available there. I'm going to go down one level to a mid-range condo. I'm going to push that buyer to the next level down.
Speaker 1:Yep, it's all connected. It's all connected. We do build the whole range. Yeah yeah, no one's really building Section 8, but it's there though.
Speaker 2:Yeah, maybe Section 8 is the wrong term. It's just like actual affordable. Yeah, yeah, yeah actually affordable, that's government subsidized Yep. That is what I was trying to say. I want to do one thing new here. I would like to say if you had some predictions to make over the next two years for my real estate development, what would they be?
Speaker 1:For development. How do you mean?
Speaker 2:Just like in general, like Miami predictions, like Anna's predictions for the next two years.
Speaker 1:Oh, so my predictions the next two years is that baseline. The wealth and talent migration is continuing and that's what's driving everything we see around us. So I don't see that changing at all. I see our feeder jurisdictions continuing to increase their hostilities towards capital through ridiculous policies that make quality of life continue to deteriorate. So I think we're going to keep getting people with money from these cities that had their previous heyday in the 20th century. So that's not going to change and I think that flow of people here is going to keep the flow of business coming.
Speaker 1:I think that, like county level, like I said, we hit an all-time high for single-family home pricing. I think the single-family home market will continue. I don't want to use the word outperform because they're different markets, because we're adding inventory on the condo or multifamily side, but I think the single-family home market will continue to really tighten over the next few years because, again, we can't add more vertically and, as people keep coming, that land supply is just so scarce and valuable. So I see that happening. I see old houses continue to get replaced by new houses and I see us continuing to have a very active pipeline with prices stabilizing across the board in the condo space. Okay, cool.
Speaker 2:My predictions for the next couple years are that we are going to finally see large tech companies take meaningful positions in Miami, like Apple took 50,000 square feet in Coral Gables. I think we're finally going to see a break, because it's going to take one or two of them to be here and be successful for the dam to break. We have Microsoft moving into Brickell, but I think you're going to see a large tech company I don't have any knowledge of this. I think you're going to have a tech company either relocate from a high-tax jurisdiction to Florida Miami, agree, I don't know if it's. Whoever it may be. Still waiting for Elon?
Speaker 1:Yeah, still waiting for Elon?
Speaker 2:Yeah, we're still waiting for Elon. We need that drama, but that's my prediction for that. And then I think over. I think in the next year and a half, we may actually see rents dramatically decrease because there are so many projects in the progress that the market will not be able to absorb them all. I agree with you on the rental market and that's fine. That's great. It's a great thing. It's a great thing. But I think you're going to see people have really good incentives to rent. It's actually going to drive rents down. Is it ever going to go back to pre-2020? No.
Speaker 1:No.
Speaker 2:But it's going to come off of its absolutely insane highs Agree, and that's a great thing and I'm fine with that. And then I think also you're going to see just the continued absolute explosion of live local projects, because once a couple of them get out of the ground and are successful, every developer and their mother is going to build it. I think they're going to start racing because I don't think the Live Local Act as it's structured isn't going to last forever. I think when we get a new governor or a new legislature, which is coming up soon, I think there might be changes. So I think developers are going to rush to get in the ground, in the dirt, to build as quickly as they can.
Speaker 1:Those are my predictions for the next couple of years, I agree, and it's all going to feed into the ongoing domestic migration because yeah. Because it's that entrepreneurship flowing to the path of least resistance, and we're one of them.
Speaker 2:I do have one prediction that doesn't relate to Florida, but I wanted to say it, Completely random, but I've been thinking about it recently. I think in the next two to three years, a developing nation, probably in the global south, is going to give whatever AI company, whatever tech company is hot at the moment. They're going to offer them basically to privatize, almost like a country, or not privatize, but give them a huge amount of land, a huge amount of leeway to say we'll give you all this, bring your company, your people here to this developing nation and we'll just let you be alone.
Speaker 1:Have a fiefdom.
Speaker 2:Yes, have a fiefdom. I know it's a completely random prediction, but I've been thinking about it because someone like OpenAI or whoever comes next it's going to reach a point where the government is going to say you can't do this anymore.
Speaker 1:And some developing nation can say you can come here and do this Like Iceland.
Speaker 2:Somewhere random that probably doesn't have an extradition treaty with the United States, say you come here, bring your trillions of dollars, we'll give you this half of the island or whatever, and you just do your stuff. That is my prediction for the world.
Speaker 1:I like that prediction.
Speaker 2:I'm not sure I like it for the United States, but I just don't see the United States government, no matter who wins, whomever wins the election, it doesn't matter. I don't see them allowing a company like OpenAI just have runaway success with no legislation and no controls. You could be right. That would be very interesting. I don't know. That's how I feel about it.
Speaker 1:I love this Ryan's prediction. We have it here on record. I love it. Yeah, Not really to relate to Miami, but and we'll get Elon here and have him do jujitsu.
Speaker 2:That's my other prediction. You just need to send him some of your videos and photos my cage fight. You should start tagging him. You should just start tagging him in your stuff and say, jujitsu, forget Zuckerberg, let's go. I have a challenge, although you might end up wife number like 50? Whatever, whatever, whatever, how many?
Speaker 1:Yeah, no, but that's 15 children by now.
Speaker 2:I don't know Whatever. Anyway, we digress, we digress. But, guys, thanks for listening and we will see you again in two weeks. Bye, guys.
