November 25, 2014
A little rain didn’t put a damper on the South Florida Business Journal’s 2014 Real Estate Market Review Friday morning, where expert panelists discussed the current and future status of residential and commercial real estate in the region.
The event, presented by the Related Group, was held at the SLS Lux sales office in Brickell and drew 80 attendees from industries like real estate, development, and banking.
Carlos Rosso, president of condominium development for the Related Group, spoke to the residential real estate climate in South Florida, which is currently in a boom cycle. The good news is that, because developers learned hard lessons in the last bust, most are sticking to 50 percent cash pre-construction deposits. That practice could help prolong the current boom, Rosso said. But other factors like land prices and lack of infrastructure will become more important to continued growth.
“We are in the fifth year of this boom and one of the real questions moving forward is: What is going to happen to the next series of developers? Today, land prices are crazy, construction costs [are] rising,” Rosso said. “Those are the two biggest indicators that we are looking at when we start planning development.”
Tere Blanca, founder, president, and CEO of Blanca Commercial Real Estate and Doug Eagon, president of Stiles Corporation, tackled the office space climate, which up until recently wasn’t experiencing much on the development front. Now and moving into the future, mixed-used properties in urban pockets along transit lines like All Aboard Florida will become incredibly important for office space development, Blanca said.
Lack of available office space will continue to be an issue for growing or new-to-market companies. In the next two years, companies seeking office space are likely to be significantly limited in options, she said.
George Pino, president of State Street Realty and Scott Helms, regional director for IDI Gazeley’s South Florida’s office, spoke to industrial real estate demands. Demand for cold storage and higher clearance warehouses is expected to increase.
Rounding out the panel was Ken Krasnow, managing director of CBRE South Florida, who discussed the retail climate. “Average rates in Miami right now are 45 bucks a square foot across the entire market. Vacancies are below 6 percent across the entire market,” he said. Retail is tied to the health of residential and commercial, and as those markets continue to thrive, so will demand for shops and restaurants.