Between Two Super Bowls, Downtown Miami Real Estate Development Boomed To Record Levels
When South Florida hosted its last Super Bowl in 2010, downtown Miami was still reeling from the great recession and the real estate market crash. Ten years later, as downtown Miami takes center stage for Super Bowl LIV, the city’s urban core has rebounded with an unprecedented building boom that has added more than a dozen new skyscrapers, including the Zaha Hadid-designed One Thousand Museum Miami, CMC Group’s Brickell Flatiron and the massive mixed used project Brickell City Centre.
Christina Crespi, Deputy Director of the Miami Downtown Development Authority (DDA), said South Beach was the hub of activity when the New Orleans Saints defeated the Indianpolis Colts in Super Bowl XLIV at Hardrock Stadium a decade ago. “Since 2010, the center of gravity in Miami has shifted as downtown comes alive as one of the nation’s most vibrant neighborhoods for tourism, business and everyday living,” Crespi said. “Few urban centers in the U.S. have seen this degree of progress in one decade.”
Using data compiled by the Downtown Development Authority and commercial real estate brokerage firms, here’s a look back at how new construction has fueled population growth and economic activity in downtown Miami and Brickell.
A 2018 demographics study the authority commissioned shows more than 92,000 full-time residents live in downtown Miami, a jump of 38% since 2010. That number will reach 109,617 when the 2020 census numbers are reported, representing 67% increase since 2010. More people are moving to downtown Miami as condo prices have stabilized as the construction cycle winds down. Meanwhile, new apartments are under construction as multifamily developers race to meet demand for downtown living, Crespi said.
At year-end 2010, the average price per square foot for an existing condo sold in Downtown Miami was $224 a square foot. At year-end 2018, the price per square foot rose to $416. In January 2010, the average monthly rent for an apartment in Downtown was $1,765. At year-end 2018, the average rent for an apartment stood at $2,164 per month.
According to another DDA report, more than 6.3 million square feet of office space was leased in downtown Miami and Brickell since 2013. Roughly 72% of new office space is leased to start-up tech and innovation companies. Approximately 58% of companies entering the Miami market for the first time choose to locate in downtown.
Finance and investment firms relocating to downtown Miami are also fueling the office market’s growth. The number of S.E.C.-Registered Investment Advisors in Downtown has nearly doubled over the past five years from 42 to 82, according to the DDA. The amount of total reported assets under management has grown to more than $75 billion and the number of full-time employees working for investment advisors has expanded by an estimated 55%.
Tenant renewals are driving leasing activity, with 89% of downtown users staying in place and expanding their office when faced with an expiring lease, the report states. According to a report from JLL Research, downtown Miami’s total office market had approximately 35 million square feet of space. At year-end 2019, it grew by approximately 10% to 38.5 million square feet.
In 2010, average Class A office rents in greater Miami were $37 a square foot. At year-end 2019, that number was $49.91 a square foot, representing a 35% increase. The vacancy rate dropped 28% between 2010 and 2019.
According to the Miami DDA’s most recent tourism report, Downtown Miami is now home to 39 hotels with 8,504 rooms, up from 28 hotels and 6,404 rooms in 2010. This 33% increase in hotel inventory is accommodating a dramatic uptick in visitors, with Downtown Miami ranking among the top-ten U.S. markets for hotel occupancy and the neighborhood attracting six million business and leisure tourists annually, said DDA boardmember Suzanne Amaducci-Adams, a partner at the law firm Bilzin Sumberg and head of the firm’s real estate and hospitality practice.
“Even with the addition of thousands of new hotel rooms and countless short-term rental options, data shows our market is strong,” Amaducci-Adams said.
According to STR, which tracks hotel markets, Miami was the only city in the country to experience a double-digit increase in occupancy rates (11%) from 2018 to 2019. Miami also had the second-largest jump in Revenue Per Available Room at 16.3%.
Read full post here