Part 1: The next wave of residential development.
Way back when, the great American migration was westward to the great state of California. Post pandemic, the current movement continues towards Florida to the southeast and specifically to Miami. More people moved to Miami than anywhere else in America. There are many reasons for this movement. The weather and lifestyle have always been an attraction. But now more than ever, the fact that Miami is an income tax-free state has brought many of the billionaires along with their companies and families.
The biggest wins for Miami include Amazon founder, Jeff Bezos moving to Miami after over 30 years in Seattle. And top hedge funder, Ken Griffin, head of Citadel, is bringing his troops from Chicago to their new Miami headquarters. And superstar athletes like American footballer, Tom Brady and Argentine soccer star, Lionel Messi have added some local star power.
All these new ultra-high-net worth residents are changing the complexion of Miami, turning it into an uber lux environment. Miami is growing up with a more sophisticated restaurant and nightlife scene. All of this has however led to an increased cost of living in Miami. Waterfront homes and penthouses are hitting prices in the stratosphere topping $100 million plus in Miami. The big migration to Miami has led to an increased demand for upscale residences from mega-waterfront mansions and penthouses to ultra-luxury condos.
The next wave of Miami residential development is seeing the movement to “Supertalls” since land is scarcer than ever before, with some new towers reaching up to 100 stories. And branded condos are coming in full force, including so many of the top five-star luxury hospitality names including the St. Regis, Ritz Carlton, Rosewood, Four Seasons, Waldorf Astoria, Mandarin Oriental, Baccarat and Edition to hipster brands like Nomad, Diesel and The Standard. Designer names like Missoni and Armani to Dolce & Gabbana are gracing the Miami skylines. Car brands are becoming condo brands too, from Porsche to Aston Martin and now Mercedes-Benz, and Pagani. The next wave seems to be restaurant brands like Cipriani, Casa Tua and Villa Miami in partnership with Major Food Group (MFG) and more.
There is also a trend towards turnkey fully furnished condos allowing short-term rentals for an easy investment for both out-of-state buyers as well as foreign buyers. These condos meet the demand for those who want part-time residences and part-time rental income properties. And the younger tech magnates and influencer entrepreneurs are gravitating to hipster-oriented condos in emerging neighborhoods that include shared workspaces and creator corners with podcast setups to simplify their live and work environment. There are many offerings in this turnkey category from HUB to JEM and The Rider Wynwood.
In addition to the booming residential development in Miami, commercial office building development is going gangbusters. It is the best performing office market in America. Demand for office space has been sparked by expanding Latin American trade operations, growing tech companies, law firms and high-earning financial firms like hedge funds and private equity funds coming to escape high tax states. An impressive list of companies has expanded their presence in Miami including Blackstone, Goldman Sachs, Citadel, Santander, Starwood Capital, Microsoft, Kaseya and many more. And of course, all of these new companies and their employees moving to Miami need a place to live, further fueling the demand for housing. Thus, both Miami’s commercial and residential real estate markets are synergistically growing rapidly.
Hope Gainer
