Developers and brokers are bullish on South Florida. Talk of a recession is unwarranted, they say. What about a housing bubble? Also unlikely.
Miami’s perpetual optimism helps mask some of the issues that we’ve been reporting on.
In The Real Deal’s cover story, I took a macro look at the real estate market in South Florida and the red flags that may be clouding the region’s future.
A lot is going well, and an abundance of industry pundits are available to speak to that. The wealth migration continues, and construction crews are showing up to work every day. But many challenges also have plagued developers for years. Condo sales slowed, construction, insurance and debt are all too expensive. Projects require more equity. And some sectors are experiencing longer, stronger pauses than others.
Condo developers have had to secure more equity at a time when equity is lacking, one capital markets broker told me. We reported this summer that many multifamily developers sitting on land are looking to sell their sites, and demand for spec office space has dried up. Retail is still doing well.
And restaurants had to endure a tough summer. Many closed.
One thing that I’ve noticed in conversations with sources and publicists is that developers and real estate agents are cutting back on their marketing budgets. They’re re-engineering projects to save money, even if they have already sold those units. Companies have stopped hiring, or pulled back on hiring.
Affordability is playing a big role in the region’s economy because the gap between the haves and the have-nots has grown tremendously.
Late last month, UBS released its housing bubble report, which looks at price to income, price to rent and prices compared to the national average. At the top? Miami. If only the wealthy can afford to live here, that will have a big effect on the region in the long term.
What we’re thinking about: Historian Marvin Dunn alleges in a new lawsuit that Miami Dade College violated Sunshine Laws in approving land for a potential Trump Presidential Library without public input. The site could be worth hundreds of millions of dollars. What do you think, and how does this end? Send me a note at [email protected].
CLOSING TIME
Residential: Deborah Ann Robinson, a novelist and the widow of Edward J. Robinson, chief financial officer of RJR Nabisco, parted with a single-family home at 217 Clarke Avenue in Palm Beach for $30 million. The buyer was Southern Mark LLC, a Delaware-registered company reportedly tied to Winifred “Winnie” Johnson Marquart, heir to the SC Johnson fortune.
Commercial: Tishman Speyer acquired a 270-unit apartment complex at 5500 Broken Sound Boulevard Northwest and 950 Northwest Broken Sound Parkway in Boca Raton for $124.5 million. The seller of the complex, known as the Bell at Broken Sound Apartments, was Greensboro, North Carolina-based Bell Partners.
— Research by Mary Diduch
NEW TO THE MARKET
An oceanfront estate in Manalapan hit the market for $75 million. The ocean-to-lake compound at 640 South Ocean Boulevard was built in 2020. The nearly 17,000-square-foot mansion has 11 bedrooms, six and a half bathrooms, a gym, spa, bar and lounge, two boat lifts, a guard house and a guest house, according to the listing. Casey Flannery of Equestrian Sotheby’s International Realty has the listing. The property is owned by a trust, and it was on the market last year for $85 million. It sold in 2020 for $36 million.
A thing we’ve learned:
Florida’s Treasure Coast is living up to its name. A shipwreck salvage company recovered more than 1,000 silver and gold coins valued at about $1 million from an 18th-century shipwreck. The treasure is allegedly part of gold, silver and jewels lost by the Spanish fleet during a hurricane more than 200 years ago.
Elsewhere in Florida
- As lawyers duke it out in court over the future of Alligator Alcatraz, the Trump administration awarded Florida $608 million for the state’s immigrant detention efforts, the News Service of Florida reports. The money will come from the $150 billion that Congress awarded to the Federal Emergency Management Agency this year.
- Florida regulators will open hearings Monday on Florida Power & Light’s revised $7 billion rate hike, down from its original $9.8 billion proposal, according to Florida Phoenix. Critics called FPL’s original proposal the largest utility rate increase in U.S. history, and the latest proposal would still grant FPL a return on equity above the national average.
- A grand jury in Tallahassee will hear testimony this month as part of a criminal probe into the Hope Florida Foundation, a charity led by First Lady Casey DeSantis, after revelations that $10 million from a state settlement was funneled into a political committee tied to Gov. Ron DeSantis’ chief of staff, the Miami Herald reports.
