Paul Silverstein, P.A.
Broker- Senior Vice President
Commercial Division
RE/MAX Advance Realty
305-794-9773 direct
Commercial properties of every stripe are selling in Miami. Multifamily properties are hot! In my latest apartment building sale the apartment building units went for over $118,000/door! And these were one bedroom apartments! Demand is so strong that there is actually a lack of product, which of course is driving CAP rates down. It is not uncommon to see properties trading in the 6.5-7% range. Shopping centers, retail strip centers and even office buildings in the inner urban core of Miami are now difficult to find, and when we do find them the prices are aggressively high. Even land, the property type on the lowest part of the real estate totem pole, is beginning to make a comeback, especially properties in or close to the urban core.
New Projects such as Citicentre, a 3.5 Million Square Foot Office and Hotel project are underway, as is construction for several quasi luxury apartment buildings. A new Walmart is under construction in Miami, the first in six years, as well as a new Big Box Retail Center in Coral Gables.
What is driving these purchases and construction? The simplest answer is twofold. First, the interest rates offered for CD'S and Treasuries is ridiculously low. Earning 1/2 % on one's money is a sure way to lose money. Returns of 6-7% from returns on real estate become awfully attractive. Second, Miami is benefitting from enormous inflows of money from various South Amercian countries. Miami is, in fact, the financial capital for many of these countries, and South Americans appreciate the ease with which they can both do business in Miami and enjoy the returns offered by commercial real estate. While most South Americans have had to adjust to the lower returns offered by commercial real estate, they are nonetheless strong believers in the US econmy over the long term, especially in light of the political uncertainty facing their own countries. It is ironic that foreign investors seem to have greater faith in the performance of the US economy than their Northern, native cousins.
Many observers are noting that Miami real estate has bottomed out in many catagories and as steep as the decline was, the rise may be equally steep, leaving investors blinking their eyes and wondering what happened.
Now is the best opportunity to purchase commercial real estate in Miami, before a rise in pricing and interest rates locks investors out from the next upward cycle.
For more information on the state of the commerical real estate market please call Paul at 305-794-9773 or email me at paul@FCTUS.COM.
Feel free to visit me at www.FloridaCommercialTeam.com
