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 Transformation: Luxury Condo Surge, Single Family Housing Extinction, and Development Controversies
Could the future of South Florida real estate be reshaped by luxury condos and high-profile acquisitions? Explore the factors influencing market trends as we unravel the insights from our latest annual report, available for free at analyticsmiami.com. With a background in theoretical math and physics, our host confidently navigates the intricacies of market shifts, identifying primary drivers and predicting future trends with precision. This episode zooms in on both ends of the market spectrum, including the rise of high-priced single-family homes and the effects of recent statewide reserve law changes on older condo inventory.
Witness the transformation of Miami's housing landscape as we highlight the dramatic disappearance of affordable single-family homes under $500,000. Rising median prices and increased interest rates have created a lock-in effect, steering the market towards high-priced single-family replacement condos. We discuss the challenges of delivering new housing at lower price points, as potential buyers lean increasingly towards renting or moving further from the urban core. Delve into the bustling development scene, from North Bay Village's ambitious projects to Ken Griffin's strategic acquisitions that have captured media attention.
Miami's real estate development scene is a rich tapestry of opportunity and controversy. With major developments like Amazon's lease in Wynwood and the construction of 14 Rock, the region is poised for growth. We also tackle the contentious issues surrounding new housing projects in Miami Beach and the pushback from local residents. Yet, amidst these challenges, the entrepreneurial spirit of South Florida shines bright, offering a promising future fueled by the region's strategic advantages and supportive environment. Join us in raising a glass to the exciting prospects that await in the year ahead.
Greetings everyone. Episode number 30.
Speaker 2:30.
Speaker 1:Yes, aligning with the annual report.
Speaker 2:Yeah, your annual report is a doozy this year.
Speaker 1:It is a doozy this year.
Speaker 2:And we've taken a little break. We took a month-long break. It was good we reset over the holidays. How were your holidays?
Speaker 1:Not bad. I rested, it was good.
Speaker 2:Me too. My parents asked me to come back to South Dakota for the holidays and I was like, absolutely not. I love you very much, but we've done some upgrades. We've gotten some improvements here.
Speaker 1:Look how amazing it looks everyone.
Speaker 2:I know the colors and stuff.
Speaker 1:Look I love it and you're like in green. I kind of match with the green.
Speaker 2:And the green and the blue. I was doing like a wicked thing like pink and green. So let's talk about your report. Yes, it is a lot.
Speaker 1:Yes, it is a lot. So I publish. For those that don't know, I publish quarterly and annual reports. They're available for free to the public. On analyticsmiami that is the tldmiamicom, and I've been doing that 10 years. So the annual report I just put out you could download there and it is definitely a doozy. There's some major trends that are playing out and it's one of those things when I see things happening in the market. I saw this all four years ago and thankfully it's recorded that way in the press. I don't have to say it's documented what I was seeing. It's playing out.
Speaker 2:And you always post the memories of what you said on Instagram. Yeah, I forget so.
Speaker 1:I look at Instagram memories and I honestly forget. I do so much that I forget what I said last week, let alone two years ago. It's true, you know that I completely forget. So I see a memory from two, three years ago and I'm like, oh, I did say that. And look at that, it actually happened, yay. So this annual report, I feel, is really kind of the cherry on top. It really shows that what I've been seeing happening in the markets is very much playing out and the way that I do this. I gave a talk in January on behalf of a brokerage about predicting the future. Again, everyone wants me to do this. I gave a talk at Nobu, at some international conference two years ago, where the topic given to me was predicting the future, and they gave me a crystal. The last people gave me a crystal ball. It was like a prop.
Speaker 2:Okay, you should have kept it.
Speaker 1:I know I'm on Amazon. They're probably not that expensive. We definitely need to get one. So the reason that I've been able to predict these things is that I think I'm good at identifying the primary drivers of what's happening in a market. That really is key. Anyone can tell you that the median price is this. Anyone can look that up. But what is a price is a moment in time. It doesn't give you directionality.
Speaker 1:If you want to try to predict the future and make decisions and predict directionality, you have to identify what's driving what around you, what's pushing it and where it is in the cycle. What's the slope? Where's it going? What's the interplay with different things? Nothing is in isolation. Supply, demand, all these things, and so I studied really weird theoretical math and physics at Columbia, so I approach it like a proof. I do the same mechanism as writing some weird undimensional proof. That's how I do this stuff, so that's why I have full confidence in saying what I say and, lo and behold, that was correct. So what's playing out in this market is we have very interesting phenomena at both tails of the market. I'll call it the very low end. Well, it's not even that low anymore because median pricing's cut out, but relatively speaking, the lower end of the existing market and then the high end. So the high, sorry go ahead.
Speaker 2:Are you talking like single family and condo, or just Hi, sorry, go ahead Are you talking like single family and condo or just Good question.
Speaker 1:So both to an extent. For single family it's a simpler conversation between just price segments behaving differently. For condo there's another distinction that relates to the age of the building, because we had that reserve law come statewide this year which is affecting older inventory which tends to be less expensive. But really the reason it's affected is because the law changed. So the condo market has an extra nuance there. And also for the condo market we have an interplay with supply because South Florida, thankfully, is not afraid to build and so we can build more.
Speaker 1:Multifamily takes pressure off the condo market, it all does. We have an active pipeline. But when it comes to single family, within proximity of the urban core, of course South Florida we cannot add more inventory vertically. Urban core or cores, south Florida we cannot add more inventory vertically. And this segment was also not affected by that law change that's affecting the condo market. So what we're seeing in the single family market is fascinating.
Speaker 1:We have at the high end. So when I talk about high end we can talk about overall price. But price per square foot to me is underappreciated and super interesting because high prices per square foot isolate for new product at prime location and past 2000 a square foot sales in Miami-Dade County last year were 82% all cash and up 675% versus pre-COVID. That's a large number, it's huge and sales past 1,000 a square foot across the board for single family hit an all-time high sales volume and then 2,000 a foot is even higher relatively speaking. That's the general pattern of market. The higher up you go in price overall or price per square foot, the largest differential you have between transaction volume now versus pre-COVID just volume. And that is to me when you look at data sets and you see a spike, you have to ask what caused it and in my opinion this is a clear reflection of the appetites of the incoming wealth and talent migration.
Speaker 1:Now, at the low end of the single-family home market we have another extraordinary thing going on. We have the extinction of a price point, like it's really, it's very shocking. I verify this like two, three different ways and I've been tracking it for a while. It's not new data for me, it's just every time I look at it I'm like wow, so in Miami-Dade County under half a million dollars there are currently around 600 active listings and that's not filtering for stuff that's tear down land value. You know what I mean. I'm not even saying it's livable.
Speaker 2:That's just in total.
Speaker 1:Yes, total, If we take out land value, stuff sold for upzoning, whatever it is right, it's going to be livable. Even less right. But 600 active listings below that price point for search for single family home In 2019, this is December in 2019, right before COVID, there were over 3,500. That is an extinction level, 82% decline. It is gone and there's no introduction. It's flat year over year. I guess we can't get much lower. They're selling stuff for land value but we can't add more at that price point. It's not coming back.
Speaker 2:I have a question. Is that because the prices have raised or people are not selling at that price point?
Speaker 1:Both so median pricing for single family is up. I think it is 78% in that same time period. So it ended December at something like 670, something like this Remedy County, it was like 380 in 2019. So, yes, the prices have risen. Also, interest rates doubled, and so people who are locked into a house if they were to move now and stay in the area, they would get less house for more money and their loan would cost twice as much. Got it and so they're not selling.
Speaker 2:So it's a lock-in plus the prices have risen?
Speaker 1:Yes, and then also what happens is that when a property that is old but in a good location which anything within the urban core at this point is a good location, right when it gets purchased, many often it is either gut renovated or torn down and something else is rebuilt and the new stuff coming is much more expensive. So we can't add more vertically but replacement product is at a much higher price point.
Speaker 2:No one is creating new $500,000 houses in the urban core. Correct that's out in.
Speaker 1:Homestead somewhere and even that's going up. Yeah, Homestead had one of the largest increases as a neighborhood because people are pushing south Broward County last year had the largest percentage growth of sales past 1,000 square foot because of that squeeze from Palm Beach County's Miami-Dade County. Now Broward has product at higher prices so it's all spreading but no one is creating. I don't want to use the word cheap. It's not cheap, but no one is creating 500,000 is not cheap. But price attainable workforce stuff. No one can build it anymore.
Speaker 2:The middle.
Speaker 1:The middle, the missing middle. I did a whole report in this years ago, actually for Miami Beach. That's right, I call it the missing middle. No one can create that anymore. And 82% it's just gone. It's completely gone and it's not coming back.
Speaker 2:How do you think that is going to affect the market overall? That just seems like a massive event.
Speaker 1:It's a change in price profile for South Florida? A hundred percent. If someone wants to move here and purchase a house, the floor of the market has risen dramatically and it's not going back. So then it's a question of other products. Right, so people can rent, they can. We had the Live Local Act, which will introduce new rental product in the market, which will any housing look. Housing stock is housing stock. Maybe it's not somebody's dream, it's not the house they could buy at 400,000, right, because it doesn't exist anymore. Really.
Speaker 2:Yeah.
Speaker 1:But it still is. Housing is housing, I mean, at the end of the day, right. So it's offering some inventory, so that's coming, and then yeah it just. It is what it is.
Speaker 2:It's a raising in profile of the region pushing people into non-single-family homes. It's going to push people into single-family replacement condos which is why we see developers building that product now.
Speaker 1:Although, to be fair though, that stuff is very expensive, yes, so actually it's not even addressing that market segment. That's addressing the market segment of people who have some money but still can't find something they really like. Because even if you have money to spend and you want to be close to, let's say, brickell and you want a new house, that doesn't require work. I did a study once. It was like I drew something on the Biscayne corridor and I drew a five mile radius. I think my filter was two to five million dollars single family home built after the year 2000,. Something like that, right, and it was something like 15 active listings. The rest were all old and so they probably need work.
Speaker 1:So if you want something new and nice, even if you have two to $5 million, they're not that many options. So you're right, though, these new condo buildings are creating larger floor plans, things that are explicitly designed for end user single family replacement, but they cannot deliver at the disappearing price point, because you can't deliver product below a thousand square foot. It's not possible. That's the issue. So any product that's condo product that's 1,000 square foot I'm sorry that's below a million dollars is very small.
Speaker 1:And below 750 is condo hotel, almost exclusively. I think the only product that I've been able to locate that has end user. By end user I also mean where it doesn't allow for daily rentals, where it's a six, six month minimum and intended for long-term residents. I think the Mercedes-Benz tower had units starting at 700,000. They may have also, but they started at 700, but those are small units and besides that, it doesn't exist in the pipeline. Palm Beach's new construction condo pipeline has nothing below a million and a half. Basically, I mean, it's shocking.
Speaker 2:Speaking of outside of our little bubble here, I always follow developers up on Instagram and I have been seeing so many more launching products around South Florida and a little bit more north, even to Tampa and. Sarasota and all those places Like ultra luxury projects.
Speaker 1:Yes, yes, well, to the point. That's that growing activity at the very high end, and it has to do with wealth migrating from high-tax states, south Florida being more attractive as a destination for wealth, which is a separate trend, and the growing polarization of America. It's all that. It's the tail of the market.
Speaker 2:For me it was interesting that it's expanding up there Yep, Because normally it would be here, it would be in Sunny Isles, but it's going into Tampa and Sarasota and Naples, and often it's branded very fancy product. I've seen five or six branded hospitality flavored.
Speaker 1:St Regis is doing a bunch of them.
Speaker 2:It's fascinating that it's expanding to all of Florida.
Speaker 1:It's catering to that international jet set, which is a thing.
Speaker 2:Yeah, so overall, what do you think of this extinction level event at this point? What's your sort of wrap on it?
Speaker 1:I mean, it is what it is. What can I say? It's going to add squeeze, affordability, squeeze. It's not coming back and it's a phenomenon happening across South Florida and it's just that the floor of the market keeps going up, and that is true across all neighborhoods. The floor is a different price point in different neighborhoods, but the floor of the market is going up because of that continued demand, wealth and talent migration, all of it.
Speaker 2:And I think you said it earlier. But the interesting thing is that floor is like those are, let's just say, teardowns. That's the floor.
Speaker 1:Often yeah, not a new product. It's not a new product.
Speaker 2:Yeah, and if you're going to spend that much money, you're going to want a new or something.
Speaker 1:That's what's happening with the condo replacement product that people have money to spend and they're like, well, I have $5 million and I can't find anything nice in Coconut Grove, yes, and so they're buying pre-construction combining floor plans, doing things like that, 100%. That's the whole thing and it's fascinating to watch the condo market at the high end is doing this very similar. It's important to note that for condo resale data, we're not including pre-construction data in that, so the numbers are even higher. If we were to include it, it would reflect more of the single-family action. So at the very high end, people are buying. It's talk to developers, depending on the project type heavy domestic buying, 40%, 60%. That would have been unheard of before. And then again the condo market at the low end. But that's the but. You know, despite all these challenges, like the challenges with insurance prices and challenges with the condo law, when we look at median pricing for single family, it was up 12% year over year.
Speaker 2:Okay.
Speaker 1:And for condos it's flat to up a little bit, and so without segmentation, and so even then With old and new. Just the whole market.
Speaker 2:Yeah.
Speaker 1:Yeah, so even then there's no precipitous disaster. There's just so much cash in this market. At a million dollars,000, $30,000 assessment can make your day bad. That too, and the cash buying also creates a floor in the market, because there's not a situation where all of a sudden, debt can explode and it's over leveraged, so it creates a floor. It's like a bubble is when the underlying assets can no longer sustain the debt, and that's why we don't have that reality.
Speaker 2:And we've covered this endlessly in many podcasts, but I still feel like the larger press, publications and other people are expecting that to happen and it's just not, and they're just like.
Speaker 1:Correct. They don't know how to define a bubble. Ubs had this very irresponsible report about using Miami as the headline to get the eyeballs. Miami bubble poised for bubble and the only way they defined the bubble was talking about the speed of price appreciation. That's not how you define a bubble. Yes, okay, speed of price appreciation is notable, but how is it interplaying with supply and cash usage or debt usage? So we don't have that. At higher price points we have less gain in supply relative to volume versus pre-COVID, so the market is tighter and we have heavy all-cash buying. Where is the bubble? This is not a bubble, so the press has not been getting it right and they have not appreciated the disappearance of the floor and the high usage of cash.
Speaker 2:Yeah, speaking of narratives, I want to shift gears a little bit to another narrative that's interesting right now. If you saw recently Swire put up the One Brickele Center site for sale right now, if you saw recently Swire put up the One Bricusley Center site for sale I called that, by the way and so the backstory to that is that related companies, which is the related from New York, the one we like, stephen. Ross yeah, well, not now?
Speaker 1:Well, not now, yeah, but he founded it, but yeah.
Speaker 2:So he partnered with Citadel and Ken Griffin to build Citadel's headquarters on the bay, so that is two and a half blocks from the city. So when I saw that news story I'm like there's no way that Related is going to do, because Related was partnering with Swire to build one for Crystal City Center. But I saw it and I'm like there's no way. There's no way it didn't make sense.
Speaker 1:Yeah, I'm like they're not going to do that.
Speaker 2:They directly with each other. So that launched like a million headlines about my market is crashing, office market is crashing and I was like, guys, it's it's to do to to build a headquarters office tower. These days you need to have the anchor tenant basically be you to start, whoever the developer is Ken Griffin, santander they're building office towers where they are the anchor tenant. One brickle center did not have an anchor tenant built in. They had to go out and get it. The 830 brickle was in a time when there was a ton of new to market companies coming into Miami, so that's why they were able to lease up so quickly. That's not quite the case anymore. So you have to come in with an anchorage that's already. That's going to brand the building Big time yeah.
Speaker 2:Yeah. So I was reading those headlines. Oh, Miami is, the off-market is over. I'm like it's not. And also with that, in that same sort of narrative, they turned the tower that was going to be built on. That is, I think, is it 1000 Group, the one that's replacing the gas station there?
Speaker 1:on 36th? Yes, I think so it was going to be an office tower.
Speaker 2:They're converting it to residential.
Speaker 1:Yes, that was 1000 Group, correct.
Speaker 2:So it's just developers have to be smart and they have to be like if you're going to go out and build that superstar tower, you have to have the anchor tenant already built or you're going to have a rough time. Any, you're going to have a rough time. Correct, anywhere. Correct, not just Miami.
Speaker 1:Correct Agreed so.
Speaker 2:I think that narrative was questionable and also.
Speaker 2:Swire has missed at least three cycles on that site. Oh, because they originally were going to build a mix of like retail and condos and hotel there. Then that died and they were just going to build condos, and then one and then three they were going to do office. So they've now missed three cycles on that, which is I don't know. Like I can't defend them at that point. Come on, guys like you had three chances to do it. Also, speaking of citadel, it's very interesting the stories that have been coming out about ken allegedly trying to buy solaris there oh yes, the bulk purchases of the units next door Word has gotten out somehow.
Speaker 2:Yeah, it was. I think it was the Wall Street Journal.
Speaker 1:Yeah, it was a lot of places, yeah.
Speaker 2:It was a big story about it and how they have successfully bought up, I think, 60% of the building so far.
Speaker 2:And then, like these people found out now and they're trying to what they're trying to do, they're trying to say I think they were trying to get $1,000 a square foot on these 2006 built condos and they sent a letter to whoever was representing Ken Griffin being like pay this or else we're going to go to someone else. Just what I was saying is all Ken Griffin has to do is wait for the next assessment and those people will fold.
Speaker 1:Poor Ken Griffin then those people will fold. Poor Ken Griffin, the guy who sold a lot next to Bezos' house that Bezos bought where they were suing the broker. After he found out that Bezos bought it, he sued, saying that it should have been disclosed that Bezos was the buyer because he would have charged more.
Speaker 2:Okay. Well, that's not right. I mean they don't have to.
Speaker 1:It could be nondisclosure, it could be whatever.
Speaker 2:I just ugh whatever, I just I would charge more if I knew it was him well, you can always charge more, but it just was interesting because so ken griffin owns the lot on the water. Now he owns the office tower on brickle and he owns that like little weird lot that's in between them. This is, if you're not familiar, this is like jade's on the water over there. And then you have what is that?
Speaker 2:701 brickle, something I don't know whatever it's up there, it it's there, and so if he Solera is like the last piece that he doesn't own this whole giant block, so it'll be interesting to see how it plays out. If I was people, I would put up some number and just sell.
Speaker 1:This is their best shot.
Speaker 2:So you know what this reminds me of. Do you remember the saga of the Tropicana and the Ritz-Carlton?
Speaker 1:and Sunny Isles, so this is one of my favorite stories.
Speaker 2:Every time I posted about it on Twitter, people have loved it. So if you go north of Miami Beach, in between Miami Beach and Sunny Isles, there's Hallover my favorite beaches and then the first tower after Hallover is Tropicana. It's like a 10-story 1980s derelict, and then directly next to that is the brand new Ritz-Carlton, I believe, gorgeous building. So during the construction of the Ritz-Carlton, the developers of the Ritz-Carlton used straw people to buy out units in the Tropicana and basically they ended up buying 80 or 90% of it so that they could never sell. So now Ritz-Carlton has preserved views for basically forever. Wow. And now the people who are left? They sued and went to the Florida Supreme Court and the Florida Supreme Court was basically like sorry guys, what?
Speaker 1:can we do? There's nothing wrong here.
Speaker 2:So the the building is only five people left because of the straw people who had left their units to rot. So oh wow, Like that. That to me was like pretty all time high.
Speaker 1:You should have sold yeah.
Speaker 2:You should have sold at that point.
Speaker 1:Writing is on the wall.
Speaker 2:Yeah, and it's like the people at Citadel. This is good for your thesis is that people were saying, with what Ken Griffin was offering them, allegedly, they cannot buy again in Brickell.
Speaker 1:Right.
Speaker 2:Like they can't. Like they can't replace what they have.
Speaker 1:They can't probably.
Speaker 2:Yeah, so that was a very interesting thing. They're like that's why they wanted whatever Buku dollars, because they cannot move back into the neighborhood Right. Extinction of price points.
Speaker 1:There you go On the condo side too. In condo side yeah, it's a real thing, because a new product is expensive. Yeah, that's right.
Speaker 2:It is on price points. Condos is interesting, but also I find it interesting that in multifamily and rents they finally started to taper off, which is amazing. I think Agree, and even some buildings that were just super stubborn during the pandemic. My favorite building, 900 Biscayne they were going one bedroom was going for $5,400. And this is a building that was built in 2008.
Speaker 1:It's a bit much, guys. They have nice views, but come on. Nice views and amenities, but it's not.
Speaker 2:No, so now they're back down to about 3,500 because there are so many new projects coming up directly in that area, yep.
Speaker 1:Makes sense Supply.
Speaker 2:Supply and demand. I was speaking of that generalized area. I was walking around my world center. My world center is really starting to become alive. The Apple store opened last week Gorgeous, I walked through it Not an Apple guy, but the store is gorgeous. And then the park around it is beautiful. It's like native trees and palms. It is beautiful, it is beautiful.
Speaker 1:It's like native trees and palms. It is beautiful. I've biked through it during construction many times and seen it. It's come together great.
Speaker 2:Because the original concept for that space was like a smaller store and just like an open sort of grass. I like this option better because there was no shade in the other one, it was just like it's come together really nicely. This is like native plants.
Speaker 1:It's a great area. It's very lush. It's a great area.
Speaker 2:It's very lush. It's nice. It's so lush and every time I walk by there and I walk the sidewalks and then I go to Brickell, I'm like ugh, like it makes Brickell look like a third world city, because the sidewalks in my world center are huge. There's like trees.
Speaker 1:There's artwork. There's artwork.
Speaker 2:It's nice you go to B said this before, but this cycle to me is interesting because I think we're in a new cycle for projects. The start for new Conroe Central is really heating up. Things are actually moving along. They just got the permits for the Dolce Gabbana built. Is that Dolce Gabbana?
Speaker 1:888. Yeah, dolce Gabbana JDS. Yeah.
Speaker 2:Yeah, they just got the permits for that, for the deep mixing and stuff. That's gonna be a super tall mercedes-benz is out of the ground and going up, the world of historia is like on level eight or nine. There is a lot, a lot happening. Okon tower is on 10th floor. I don't want to call it a quiet cycle, but it's happening, and without a huge amount of fanfare. Agree, it's almost like it's been it a quiet cycle, but it's happening without a huge amount of fanfare.
Speaker 1:Agree, it's almost like it's been normalized. All this stuff is happening.
Speaker 2:It's just happening, it's just happening, the fact that we have three supertalls under construction. It's pretty awesome. Oh, and there was one yesterday that I tagged you and it was random. It's on Flagler Street, it's directly right there. It's going to be called the James, I think.
Speaker 1:Oh wow, that's right.
Speaker 2:Yeah, it's just like there and apparently it's going to have the highest bar lounge in North America.
Speaker 1:That's right. I saw that. Yeah, cool, I know it's random. It's going to be like Drinking with the view.
Speaker 2:There we go, it's going to be like because whole like marshals, like all those like sort of crummy shops right there and there's one piece of land in the middle of that assembly that's vacant, they're going to just put 80 stories right there. It's great. Yeah, I mean there's a lot happening. Forma is open now Gorgeous. The Whole Foods is coming along there. Villa is in progress. There was something else the Cove Miami is starting work. Yeah, I walked, I biked by Vita Edgewater. It's like toward the north. There that is topped off. 11. 11 is the first tower of 11 is topped off. A lot happening, yeah it's exciting.
Speaker 2:Do you have any projects that you're excited about?
Speaker 1:Well, off the top of my head, it's hard to say because I think about so many of them. But what am I really excited about? I don't know. They're all so good. There's so many good ones. It's just a question of what someone is looking for, and I believe strongly in the single-family home replacement thesis. I think that's underappreciated. It's a product that addresses that I think is going really well. I think that North Bay Village is exciting. There's some stuff happening.
Speaker 2:There's a lot happening there. It's like a new frontier.
Speaker 1:Yeah, and it's great. It's a great spot, great views. It makes sense that it develops. So I'm excited to see what happens in North Bay Village and how it plays out.
Speaker 2:Yeah, it really comes down to if WSVN can get their assembly, because that's huge, because they own like half of it, and then you have Continuum, and you have the supercar, one that I can never pronounce.
Speaker 1:I was at their sales center opening recently.
Speaker 2:Yeah.
Speaker 1:It's really nice. Yeah, the cars are pretty, it's nice. Great attention to detail. I'm not even a car person and I liked it.
Speaker 2:I feel like Pagani is like the ultra universe version of the L Tower in Edgewater it is. It's like me. The husband, the wife live at the separate towers.
Speaker 1:Speaking of that, we were having an interesting conversation about tower last week not reselling. Well, yeah, it's like 60. So a lot of listings over 30. Oh well, it could be more. I don't want to speak, but it's a lot. It's well over 30. Yeah and yeah, and very few sales yeah, because it's just such a I think it's unique, it's too masculine.
Speaker 2:I mean, like I said, it'd be like the porch tower, out l tower and edgewater it's. I don't know. Do you want to say you live there if you're a woman or a man?
Speaker 1:If you're a man, I could see it. If you're a woman.
Speaker 2:Well, I'm saying like opposite.
Speaker 1:If you're a man, do you want to say you live at L Tower? Oh yes, we joked about that. Who's the buyer there? I started with L Tower. I'm like what. It's very I don't know. You have to be like a real car person to appreciate it.
Speaker 2:Maybe if you tell them that Maluma is their neighbor.
Speaker 1:What is Maluma?
Speaker 2:He's a Colombian reggaeton rapper. Very famous.
Speaker 1:Oh, he lives there. He lives there.
Speaker 2:Oh, okay, so maybe if you tell them that, then they'll be like, oh okay.
Speaker 1:I mean, what's the angle there?
Speaker 2:Yeah, oh, speaking of office positive news, amazon took their largest lease in Miami.
Speaker 1:I saw that in Wynwood At the Plaza. That's exciting.
Speaker 2:It is 50,000?
Speaker 1:50,000 about yeah 50,000 square feet.
Speaker 2:That is, that's good, and that's small for Amazon Right but massive for Miami.
Speaker 1:Miami yeah.
Speaker 2:So you know what I think this is. My presumption here is that north of the river, downtown, edgewater and Wynwood and Midtown, they are going to be the ones picking up the leases from these trendy things. Because you don't have to, you can take a smaller floor plate and not worry about taking 10 floors that can brickle.
Speaker 1:Agree.
Speaker 2:And also I think people are realizing that brickle is a lot to deal with Right Traffic and getting in and out of excess.
Speaker 1:I always get stuck an extra 20 minutes. Bridge goes up.
Speaker 2:So I think they realize that okay, if we're in Wynwood we have easy access to 95 and all that. So I think it's, and I have offices here. So I'm a little biased, but I think it is, it's easier to get here.
Speaker 1:Easier to get here.
Speaker 2:Much, a little biased, but I think it's easier to get here. It's easier to get here, so I think you'll see Amazon and Apple's and Google's take space in Wynwood.
Speaker 1:Agree, agree.
Speaker 2:It's filling in what else is oh, the demolition for 14 Rock is starting. That's going to be a cool project.
Speaker 1:That's going to be a cool project. It's right over here. I like it they have a really nice architect. Russell's really proud of that. I'm blanking now on the name. This is terrible. I've discussed this at length and I'm blanking now. But Russell Galbitt is super proud of the design work and the interiors in this project. He said that he was concerned that they did too much, that they made it too nice.
Speaker 2:Well, it is an up-and-coming neighborhood, yeah, so maybe it'll bring it up.
Speaker 1:I think it's a New York-based architect or interior designer. Okay, he was talking about the level was really nice what they were doing in the interiors.
Speaker 2:Well, I mean they did a really good job with the gale. I mean I don't say architect, but they really did a good job with the design.
Speaker 1:I walked by the restaurant there at the bottom.
Speaker 2:Ah, yes, it's very this is going to be a trendy.
Speaker 1:The restaurant's great. If that's a secret or not, I should say that they're working on him with creating a branded brunch, I believe. Let me stop before I say more.
Speaker 2:Anna's spilling all the tea, so the restaurant is awesome.
Speaker 1:It's going to get more.
Speaker 2:Awesome is all I'm going to say about this it's in the works, and on the other side they have Bodega opening soon.
Speaker 1:Yes, Bodega is going to be on that, yeah, correct, and there's a little place there also on the street that has Capacito Capacito, correct, capacito place. It's a really good street activation. It's very nice.
Speaker 2:Yeah, well, that whole section from Chico I'm back in the past the Gale, ocon you have across the street, you have the Crosby and then whatever, that whole area, the street, it's like I said back, it's like I said back to my world center, the whole space there is just really, really nice.
Speaker 1:I want to live there. That's where.
Speaker 2:I want to live I like living on the beach.
Speaker 1:I grew up in New York City, so for me it's I don't know, it's not New York. I mean, it's just not. I don't mean, it's all bad or good I just, and I like being able to walk to the beach.
Speaker 2:Oh, yes, that's very nice. It's my weird thing.
Speaker 1:Yeah, and maybe I'm becoming more antisocial.
Speaker 2:Speaking of the beach, they are starting work on the pedestrian bridge.
Speaker 1:Oh, I know Finally.
Speaker 2:The one on the causeway.
Speaker 1:Finally, the city held that up forever.
Speaker 2:It's going to be beautiful, it's going to be beautiful, it's going to be amazing. It's that multicolored glass.
Speaker 1:It's really nice.
Speaker 2:I think that is because the MacArthur Causeway and Fifth Street act like a wall.
Speaker 1:Yes, now, currently, to get there you have to walk through the underpass, by the Publix, by the bus station, You've got to walk all the way around it's really a pain and not pretty. This is going to be great. It's transform to look really nice too. Crossing the causeway. It's this French artist I forgot his name, but he's very well known and it's a color kaleidoscope effect with glass. It's really nice.
Speaker 2:I like the fact that on Five Park there it has like a ramp. It's kind of a ramp on both sides so you can just sort of gently walk like stairs.
Speaker 1:And it's accessible. Yes, yeah, it's great.
Speaker 2:Correct all the way down to South Point, so I think that's a really.
Speaker 1:It's super nice. It takes you off right at the marina by the icon.
Speaker 2:Yeah, yeah, on the other side, the signature bridge is actually on the Miami side.
Speaker 1:It's progressing, it's progressing. I know Little arches are better all the time. I think there's two connected.
Speaker 2:now Okay. Yeah, I think on both sides it's interesting because and then on this side you've got the bridge it's going to make a big difference on both sides Because right now on the Miami side the 395 really is like a wall as well Between Edgewater and Miami World Center. Being able to nicely walk that area is going to be a big deal. Oh, huge, I agree, and also 14 Rock will benefit from that, because you'll have a very easy access to.
Speaker 1:It's that whole district there with the park and everything.
Speaker 2:Yeah, I think there's a lot more, also across the street, sort of that way. They're doing Excel Miami, which is multifamily. Speaking of multifamily, there are quite a lot under construction still Excel, the why did I just? I just blanked on that one, but there's that one over there there is. There's going to be one right next to my world center, in between Brightline it got approved yesterday. Oh, also NAMDAR, their tower is topped off and they're working on the exterior. Now that's, that's a little bit further south, that's on Fourth Street, right by the courthouses. There there's, there's quite a lot.
Speaker 2:It's it's not really slowing down, like, like I said, it's like a quiet cycle or normalized yeah, they're just used to it like cranes are there, stuff is coming yeah, and there I say it's a lot, but there is still there's so much in the pipeline that hasn't quite broken ground but it's fully approved and entitled and finding there's just there's so much happening it.
Speaker 1:It's hard to keep track, even for me.
Speaker 2:I know Whoa, just, you have the my river district, my river bridge, the one that's replacing the Hyatt, that's going to be demolished. They're very far along in demolishing one Bayfront, finally, after it was covered in graffiti and all that. They're far along in demolishing that. There's. There's just a lot of big projects that are finally starting to move forward, agree, and I think I think there's many more to come. There's, oh, the one up in Edgewater, the huge project by Amco, they, the Wendy's. There is clear, like the whole block is cleared. So I think people are, developers are. Now we're past the inauguration and the election and, like all of that, people are starting to move. There was a pause, but I think we talked about this inauguration and the election and, like all that, people are starting to move.
Speaker 1:There was a pause Because I think we talked about this. There's like a. The uncertainty of it created a subconscious pause, I think, in people's minds.
Speaker 2:Yeah, the uncertainty has passed, and now Also directly across the street from here at the hub where we are, the where the old church is right there. They're going to build a multifamily next to Venetia there. But it got approved 40 stories.
Speaker 1:That's great.
Speaker 2:It is, and there's just, there's just a lot going on. So I am, I'm optimistic. Where are we? I'm excited about it. Any other thing you want to?
Speaker 1:No, just the general. I see that, I see the main trend. So my, what is my credit? We need a crystal ball I'm going to get to outperform and we're seeing introductions of new prices per square foot, new frontiers where we have spec homes being developed right now in Gables Estates and so forth that are at prices per square foot that don't exist in the resale market because there's no inventory good enough. We're having oh no, I'm completely serious. So it's this new price point that's coming into the Miami existence, into Miami's existence, as the sort of global ranking of the city keeps rising, and so that will continue. That's the tail of the market and again it coincides with wealth disparities, all that stuff that is part of the cycle that we're on economically, of national polarization, that's feeding that in. And then I expect that at the low end, for the single family homes, that price extinction is very much a force, the floor of the market will keep rising. And then for condos, again the high end is heavy cash. It will keep being that product Basically, generally product that is attractive to the incoming wealth and talent migration that feeds into their appetites, will continue to do extremely well, and in fact we don't have enough of it.
Speaker 1:And when we discuss the condo market, it's important to distinguish. Are we speaking condo hotel? And when we discuss the condo market, it's important to distinguish. Are we speaking condo hotel or end product? These are different things. Yes, and also in the condo market, the lower end that is affected by this law change. Not all buildings are a mess. No, not at all, right. So the buildings are not a mess that have managed their resources. They're not seeing crazy spikes in HOAs, no-transcript. So any end user one, two bedroom real size property below 500,000 for a condo is not being introduced ever again into the urban core, and so buildings that have managed themselves well, that are not a disaster, will feed into that demand. So they're going to do okay. So, anyway, I see it all continuing. The high end, the tail, is going to keep outperforming. The low end will keep being squeezed and I'm optimistic that this introduction of new rental product will take pressure off the middle.
Speaker 2:I hope so. Developers are still really doing the live local. It just started.
Speaker 1:Really, because it's a new law and people have to figure out what to do with it, how to implement. You have some jurisdictions suing to prevent the projects like Miami Beach.
Speaker 2:I saw one in Coral Gables when they wanted to do the Sears Right. I think RK owns that piece and it's next to Coral Gate which is like a single family home. But they can. The story was a little bit. I felt a little bad because I was smiling reading the whole story Because, I'm sorry, the people who were quoting the story were like very much the boomer Karens and Kevins of that and they were like crying that there was more housing coming to the neighborhood Not in their neighborhood, because it's like across the street, it's not destroying like anything, but destroying a Sears that hasn't done anything in 25 years. But they were like, oh, we feel defeated and I'm like, good, you should, you should, because you should not be able to hold up housing coming to your town by crying at a committee meeting.
Speaker 2:That's what they've been doing you should not be able to do that.
Speaker 1:That's what they've been doing.
Speaker 2:Yes, and that's let's pull out the violence.
Speaker 1:Okay, yes, I'm sorry.
Speaker 2:I'm sorry your house was worth. You bought it for a hundred thousand. Now it's worth 1.2 million. I'm really sorry about that.
Speaker 1:It's a tragedy.
Speaker 2:Okay, yeah, that coming in there, it will probably actually raise your home values.
Speaker 1:They're so short sighted they can't see.
Speaker 2:It's going to bring amenities. It's going to bring.
Speaker 1:They can't see. These are the pettiest people who literally spend hours and years of their life crying to neighborhood committees trying to stop housing.
Speaker 2:Yes, also, there is a whole string of A developer wants to do a whole bunch of stuff on Alton Road.
Speaker 1:The Crescent Heights. Yes, yeah, that was on the paper recently.
Speaker 2:It was in the Next Miami, I saw that and they want to do four or five projects Correct and like they're live-localing it.
Speaker 1:Of course they are. And Miami Beach is suing? Yeah, of course they are. Miami Beach is going to lose and they're going to waste taxpayer money suing.
Speaker 2:Yeah, four projects and they're like 30 stories.
Speaker 1:But of all the places, miami Beach needs middle housing incredibly, so I did a whole report to get to the city years ago called the Missing Middle, where I quantify this One hundred percent. Miami Beach is housing, with this whole hospitality industry.
Speaker 2:there are all these hotels and they live in Kendall. Where are they going to live? Or Homestead?
Speaker 1:Yes.
Speaker 2:And.
Speaker 1:Alton Road. Okay, alton Road is not a single family area. For those listeners that don't know, it's a commercial street. It's ugly, nobody lives there, it's very busy, it's hard to cross the street, it's a whole thing. So it's not like some quaint little neighborhood.
Speaker 2:Yeah, and the buildings there are not historical value, so Miami.
Speaker 1:Beach is going to sue. They're going to lose, they're going to waste taxpayer money suing, and something I just think out of anywhere, Miami Beach needs that the most. Desperately.
Speaker 2:Because what happens is you keep getting these people, you keep pushing them further and further out Homestead, even further Broward.
Speaker 1:What Miami Beach has done, restricting supply with those ridiculous historic zoning laws on structures that no one thinks are historic outside of the people who think they are.
Speaker 2:Yeah, I know I was walking around and just looking at these buildings. These buildings are, think they are.
Speaker 1:Yeah, I know I was walking around and just look at these buildings. I've had so many conversations with people who are objective, outsiders, who are like why does Miami Beach look like?
Speaker 2:shit, that's a quote right there.
Speaker 1:They're like oh, they're nice parts, yeah, but then you walk a little bit and they're like it looks like East Harlem. Quote is what someone said to me recently. Wow, I said historic zoning. Yeah, I quote is what someone said to me recently.
Speaker 2:Wow, I said historic zoning. Yeah, I mean, I think that's what Live Local was built for, or written for yes 100%. Because you just can't freeze a neighborhood for.
Speaker 1:I had one. I used to train with fighters at McMasters and I had some friends over after training this was like a year, two years, a year and a half ago and one of my friends, a professional fighter, and he. He grew up like he's american and he grew up in a rough part of whatever city he's from I think it was pittsburgh, doesn't matter but he grew up like in the hood and so he's not. He's not like some carrot at all, yeah, like overly sensitive nothing. And so we went to my house.
Speaker 1:We're walking through, we walk through miami beach to get to the beach, through the some of the lovely historic district and this young man he's walking through with me there and he's looking around like this and he goes Anna, he was like I thought Miami Beach was nice or expensive or something and I'm like parts are. And then he's looking around and there's some building with an AC hanging out the window and it's like the walls are rotting literally and this looks like a really rough part of town. I swear he said this and this guy's like from a rough part of town and he's a fighter.
Speaker 2:And I'm like it's historic. Yeah, it's wild that there's more development happening in a place like Wynwood than there is Miami.
Speaker 1:Beach. I did a study once at the preservation board in Miami Beach just disliked greatly, where I drew a perimeter around the Flamingo Historic District and I charted the resale values and the rents specific to that area. I then adjusted them for inflation and also did not like. I showed you both right. So without even adjusting for inflation they were hemorrhaging value. This was even a while ago and this was before COVID, and median rents were within five, no, four and a half percent of Alapata. Wow, alapata is an industrial off the ocean kind of area.
Speaker 1:Yeah, so huh, yeah, that's what they were doing why?
Speaker 2:Because those units are barely livable.
Speaker 1:Yes.
Speaker 2:And yes, a hundred percent. Like I've had friends live in the Art Deco-y sort of things and there's mold, the air condition doesn't work, they all have mold, they're all mold, they all have mold, they're crumbling, literally, and it's a little bit like New York. I'm just saying in the dynamics, yes, in how they can't raise the rent because of the law, so they leave the unit.
Speaker 1:Well, here they can't raise the rent because they're not livable.
Speaker 2:They're not livable because they're historic. They can't put more money into it. They can't change anything.
Speaker 1:Correct it's the same. Some people even like they hide their zealotry behind their belief that it's actually enforced subsidy like enforced cheap housing.
Speaker 2:Yes, well, they're like making it if we'll have them by making it terrible.
Speaker 1:Yes, and they're okay with that and their zealotry. What they fail to see is that it's just, it's terrible. It forms their whole restriction on supply and then people who work there can't. It's terrible.
Speaker 2:Yeah, I don't. I hope Live Local gets some of these my Beach projects through. I really do they will. I really do they will. Because I just want some of these NIMBYs just cry. Oh I know Crocodile tears.
Speaker 1:NIMBY tears make me the most happy of all the things. They're racist too, which is why they don't want transit coming to the beach.
Speaker 2:Oh exactly, they've been blocking the Metro for 30 years, so that those, those, people don't come over.
Speaker 2:I told a side note but I used to work a long time ago in Washington state and you have Seattle, you have Lake Washington, you have Bellevue. Bellevue is like the very rich, very white neighborhoods and Seattle has transit of some sort, but all of the big employment centers Boeing and Microsoft are on the other side of the lake. They have like light rail or something and they've been trying to bring light rail over to Bellevue and the east side for many years. What happened is there's this one guy his name was Kemper and he owned most of Bellevue and he literally is on record saying that he did not want them to build the light rail from Seattle to Bellevue because those people could come to Bellevue Exactly Without a car.
Speaker 1:Exactly.
Speaker 2:He said that I know. Yeah, and it's the same sort of effect.
Speaker 1:It's exactly the same effect.
Speaker 2:Here it's like.
Speaker 1:Which is why they fought the footbridge across the causeway also. Really, yeah, the South of Fifth Associations didn't want it.
Speaker 2:The people from West Ave couldn't come over.
Speaker 1:They didn't want it, they fought it. What they didn't want a connection.
Speaker 2:Between, yes, oh my God.
Speaker 1:Yes, forget to the mainland. They didn't want the connection to north of Fifth Street, ugh.
Speaker 2:Yes, that's what we're doing. Go, move to Indian Creek they can't afford it or they would. Big Indian Creek. I just saw here that Tom Brady's spec house is for sale for $150 million.
Speaker 1:Yeah, it's a $100 million price point. Miami is now chasing.
Speaker 2:Wouldn't that be like one of the highest in Miami-Dade?
Speaker 1:Yeah, I think does Ken Griffin still hold the record? What he did when he bought something in Palm Beach? So Ken Griffin likes to purchase the most expensive thing. He'll pay more to make it the most expensive. He still holds the record for the most expensive. Well, on record, the most expensive condo purchase was the Fianna penthouse that he purchased back in 2016, pre-construction, so he spent $60 million for the penthouse at Fianna.
Speaker 1:Technically I think it was two units, but they called it one because he plans to combine. He bought it pre-construction, so it was like he bought one property for $60 million. Yeah, he paid more than asking. I don't know quite how that went down, but anyway he did pay $60 million. That is still the highest record for a closed property. We have word that a penthouse pre-construction sold last year at $100 million, but we don't know until it closes out right, and Fianna Purchase is still the record high for a condo purchase in Miami-Dade County. He never lived in it or moved in.
Speaker 2:Okay.
Speaker 1:Yeah, apparently word is, he walked in when it was done and didn't like the view. Yeah, he sold it at a loss. It must be very nice, but it came out in his divorce proceedings back then that his monthly income is something like $560 million.
Speaker 2:Monthly.
Speaker 1:Yes, he was going through a divorce around that time. It was in the paper, and so that $17 million loss, whatever he had selling that property I mean coffee. I don't know what you want me to say.
Speaker 2:In the couch cushions.
Speaker 1:Right. And so then he bought, I think, an over $200 million thing at the water in Palm Beach and he's building, by all accounts, a billion-dollar compound in Palm Beach on the water. Wow.
Speaker 2:Amazing. Well, I think, the wealth and all that will continue. There's no signs of stopping. We have the best weather in the US and I think, with Best airport Best airport location, at least.
Speaker 1:It's a healthy place to live, and.
Speaker 2:I think with the administration we have for the next four years, it's only going to. I mean, half of the administration is from Florida, really, I know so what I.
Speaker 1:I stand by what I said, though it's. I think I feel like the administration is friendly towards entrepreneurship, and I think that entrepreneurship flows to the path of least resistance, and I think that we are one one of those paths. So one of the paths of least resistance for entrepreneurs currently flows to South Florida.
Speaker 2:Yep, I think that's it All right, guys.
Speaker 1:Thank you for watching. Sorry, we were off a little break. We're back. Whatever, look at this setup.
Speaker 2:It's going to be a really good year, it's going to be fantastic here.
Speaker 1:Cheers, cheers, cheers.
