Miami’s roller coaster real estate market is booming again after its worst crash left dozens of unfinished buildings and failed condo projects.
Related Group of Florida, Adler Group and Area Property Partners LP, are among builders developing amid a shortage of rental properties as the economy improves. The average rent for a two-bedroom apartment increased 6 percent to $2,568 a month in the third quarter, compared with the year ago period, according to Condo Vultures LLC, a brokerage and consulting firm.
“There’s a boom in Miami that we’ve never seen before,” said Stephen Ross, chairman and founder of New York-based Related Cos. and owner of the Miami Dolphins football team, at the Bloomberg Commercial Real Estate Conference in New York on Nov. 13. “Miami is probably the hottest real estate market in the U.S. from a residential perspective.”
Between the real estate trough and the middle of this year, price per buildable unit -- the price of land per number of units that are entitled to be constructed on it -- in Miami jumped 155 percent for multifamily developments, according to Real Capital Analytics Inc.
“If developers are paying more on a price-per-buildable- unit basis, that means they believe that after construction is complete, the property will be worth sufficiently more than the sum of the price of the land and the cost of construction to justify the risk the developer is taking,” RCA analyst Ben Thypin said.
Price per buildable unit climbed to $75,028 during the recovery starting in 2011 through July from $29,455 between the trough between 2008 to 2010, RCA said. Baltimore followed in second place with an 87 percent increase from the trough to the recovery and Philadelphia in third with a 74 percent climb, according to RCA.
Read More: http://www.businessweek.com/news/2012-11-19/miami-booms-like-never-before-on-rental-demand-mortgage
A Florida investor recently acquired one of Miami's best-known office addresses for $262.5 million, the biggest office deal in the city since 2008 and a gutsy bet that the city's commercial real-estate market is on the road to recovery.
Crocker Partners acquired the marble-clad Miami Center from Sumitomo Corp. of America, a unit of Sumitomo Corp., a Japanese global trading firm. Designed by Italian born architect Pietro Belluschi, the 34-story tower bearing CitigroupInc.'s logo includes the bank among its biggest tenants. The now-defunct Stanford Financial Group also occupied several floors before its collapse in 2009.
The deal last month comes as a trickle of buyers are prowling for bargains in second-tier markets, like Miami, where office rents and vacancies have yet to recover from the recession. Analysts say they are watching if large institutional investors will follow locally based Crocker's lead and help push up values and volume. "The market's healing, but it's certainly not all the way back," said Ben Carlos Thypin, director of market analysis for Real Capital Analytics, which tracks office deals.
Read More: http://online.wsj.com/article/SB10000872396390443295404577545401645668054.html?mod=WSJ_RealEstate_MIDDLETopNews
“This is just what happens in Phoenix and Miami every 10 to 15 years, and then it comes back to the surface. For Vegas, this is probably only their second boom/bust,” says Ben Thypin, a senior market analyst for New York–based market research firm Real Capital Analytics (RCA). “When you’re investing in Phoenix and Miami, you can price in some rent growth or, at the least, population growth. Whereas in Vegas, the economic outlook is just so uncertain."
“The return of high-priced acquisitions in Phoenix over the past year and a half supports the thesis that it was a valuation issue more than oversupply,” Thypin says. “Properties are trading again at competitive prices, whereas if there was a huge supply, they would trade at higher yields."
Read More: http://www.housingfinance.com/aft/articles/2011/november-december/1111-feature-Distress-Test.htm
Commercial property is showing signs of life as overseas buyers purchased $447.9 million worth in the first six months of 2011, according to Real Capital Analytics Inc., a New York-based researcher. That’s almost 10 times the $48.1 million in all of 2010 and twice the $209.5 million in 2009.
Drawn by a weakening dollar and low prices, overseas commercial-property investors probably aren’t looking for profits from quick resales, a practice that helped fuel a condominium-building boom, said Ben Thypin, Real Capital’s market-analysis director.
“The large-scale projects indicate the interest to stay in the market a significant amount of time,” he said in a telephone interview. “I think of Miami more along the lines of a San Francisco or Manhattan.”
Read More: http://www.bloomberg.com/news/2011-07-12/miami-seeking-budget-relief-looks-abroad-to-revive-commercial-real-estate.html
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.