JLL took the pulse of South Florida’s commercial real estate market at its inaugural Pulse360 event this month in Miami, where institutional property owners, lenders, developers and top CRE brokers gathered for a panel discussion to shed light on key trends to watch in the local real estate market. The panelists touched on just about everything – ranging from shifting investment from Latin America, the impact of loosening Cuba-US relations on future real estate investment and financing availability today.
We had a great line up of speakers including our very own John Sikaitis, US research director at JLL giving the keynote address; Gregory Rumpel, managing director of JLL’s hotels & hospitality group; Nitin Motwani, principal & managing director at Miami Worldcenter; Jeff Morris, managing director of capital markets at JLL; Brad Simpkins, senior director, asset management at TIAA-CREF; and Ed Coco, senior managing director at GE Capital.
Here are a few takeaways that resonated with many of the 150 commercial real estate professionals who attended the event:
Miami emerging as shoppers’ paradise
Good news for consumers, panelists discussed how Miami is emerging as a shoppers’ paradise with nearly 1.5 million square feet of retail planned at the mega mixed-use projects Brickell City Centre and Miami Worldcenter, 22.9 acres of retail planned in the Miami Design District and let’s not forget about the proposed mega mall in Miami-Dade County that would become the biggest mall in the US. And with Miami-Dade reaching a record-setting 28 million visitors last year, according to a new JLL report, international and national luxury and big-box retailers are entering and expanding in the Magic City. For example, Mr. Motwani added that Miami Worldcenter will be “a very pedestrian-friendly project with big sidewalks, public parks and restaurants that flow onto the sidewalks.”
Miami’s office market feeling the squeeze
With all eyes on Miami’s condo real estate market, the city’s office market is feeling the squeeze, panelists noted, especially as land prices continue to soar. In fact, panelists highlighted that the Miami office market is experiencing the highest absorption gains in nine years and rents are reaching their highest level since before the recession. Mr. Morris foresees new office space being developed in Brickell as part of larger mixed-use projects and not a traditional, stand-alone office building. “I don’t think we will see new office space in Brickell until probably Phase 2 of Brickell City Centre,” which Mr. Morris said will probably happen around 2019.
Liquidity strong in the lending market
The lending market is extremely liquid, added Mr. Coco of GE, as banks are well capitalized and currently a lot of capital is chasing assets in the marketplace. The challenge on the development front as the current building cycle continues, he noted, is what will be the return on equity.