MIAMI â€” Of the 22,000 condos created in downtown Miami during the boom
years, only about 600 remain unsold â€” thanks mainly to an influx of
Latin American investors seeking a safe haven for their money.
The construction of Brickell CityCentre in Miami, which will have 800 condos.
Developers are reacting to the unexpectedly swift condo recovery in a predictable way: they are building more condos.
The most ambitious project by far is the $1.05 billion Brickell
CityCentre, a 5.4-million-square-foot mixed-use development that will
add about 800 condo units in two 43-story towers to the central business
district, a hotel, a luxury movie theater, and a wellness center aimed
at tourists from Latin America. With the Brickell CityCentre, the
downtown neighborhood will have its first upscale shopping center and
its first office building since 2007.
The Miami construction boom â€” with its own local idiosyncrasies â€” comes after a broad revival in the real estate market.
As demand rises and supply shrinks, cities around the country are experiencing a residential rebound.
In February, national home prices jumped by 9.3 percent over the same
month a year ago, the highest growth rate since May 2006, according to
data released on Tuesday by the S&P/Case-Shiller index, which
measures 20 major cities.
Miami fared better than most, with home values rising by 10.4 percent.
The local condo market, which is not counted in the Case-Shiller data,
is equally robust. Prices of condos in downtown Miami increased to $440 a
square foot in the last quarter, compared with $400 in the same quarter
a year ago, according to Condo Vultures, a local brokerage.
With foreign buyers scooping up properties, developers are trying to capitalize on the demand.
In the last two years, 25 new condo projects have been announced in the
downtown area, although it is far from certain they will all be
completed. Within sight of Brickell CityCentre alone, eight residential
buildings are under construction, including three being developed by the
Related Group, an affiliate of the Related Companies of New York.
â€œWe seem to be on the cusp of another boom,â€ said Peter Zalewski, a
principal at Condo Vultures. â€œThe question is whether this will be a
controlled boom or another out-of-control boom, which is what weâ€™re
The developers of Brickell CityCentre, Swire Properties, a division of
the Hong Kong conglomerate with deep roots in Miami, are trying to
balance the various market forces. While the residential market is
looking healthier, demand for office space is still weak.
Swire also sees a strong need for high-end shopping in the rapidly
growing downtown neighborhood. The companyâ€™s partner in the
500,000-square-foot retail component at Brickell CityCentre is the
Whitman family, the owners of Bal Harbour Shops, a hugely successful
open-air shopping center just north of Miami Beach.
On the office side, Swire is remaining cautious. The vacancy rate in the
cityâ€™s financial district is well into the double digits at roughly
16.7 percent, according to CBRE, a real estate services firm.
Swire hopes eventually to include an office tower with 750,000 square
feet, but for now, the office component of the project will contain only
120,000 square feet. Diana L. Parker, a senior vice president at CBRE,
said the new office space would be available just as a number of leases
downtown were expiring. â€œTheir timing is impeccable,â€ she said.
The plans for Brickell CityCentre reflect Miamiâ€™s desire to bring its
downtown in line with trends occurring in business districts across the
country, where developers are being encouraged to provide convenience to
public transportation, street-level retail and underground parking.
Occupying four blocks, the Brickell CityCentre is next to the 8th Street
station serving Metromover, a free transit line that circulates
Stephen L. Owens, president of Swire, said his company had been looking
at the location, known as West Brickell, since 2006 when two of the
sites were listed for sale at $110 million. Two years later, Swire paid
$41 million for those properties, which were vacant except for several
dozen 100-year-old oak trees. (The trees were uprooted and transported
by barge to Museum Park on the other side of the Miami River.)
Subsequently, Swire added to its assemblage by buying the Brickell
Tennis Center and 799 Brickell Plaza.
That gave Swire 9.1 acres â€” slightly more than it needed to qualify as a
special area under Miamiâ€™s new zoning code. This designation enabled
the developer to work with the city to create a master plan that
includes improvements to the streets and sidewalks.
Officials are allowing Swire to build two bridges to make it easier for
shoppers to travel from one building to another. These bridges will
house shops and cafes, Mr. Owens said. â€œThe biggest challenge was
connectivity,â€ he said. Many urban planners, however, frown on such
bridges because they draw foot traffic away from sidewalk.
Swire also won approval to build something rare in Miami â€” an
underground parking lot with 1,600 spaces for the projectâ€™s commercial
components. Shoppers will of course have the option of taking the
Metromover and getting off at the 8th Street station, which Swire is
Though Miami is not exactly known for its public transportation,
ridership on both Metromover and Metrorail, an elevated train that
connects suburbs north and south of Miami, has been steadily increasing â€”
up 5.5 percent and 11.3 percent in February over the same period in the
The increased usage, in part, comes after an influx of young residents
to downtown. The recent condo boom was driven primarily by cash-paying
Latin American investors who either use the apartments occasionally or
rent them out, often to young professionals working nearby, said Mr.
Zalewski of Condo Vultures.
Swireâ€™s focus on high-end shopping also happened to coincide with a new
direction in the Whitmansâ€™ business. Since Bal Harbour Shops opened in
1965, the family had luxury shopping almost exclusively to itself and
fought strenuously to keep tenants from opening other stores in the
area. The Whitmans say sales last year at Bal Harbour Shops â€” their lone
shopping center â€” were $2,810 a square foot, compared to a national
average of $526.
But more recently, several longtime tenants, including Louis Vuitton,
Cartier and HermÃ¨s, have decamped to the Design District across Biscayne
Bay. Luxury shops are also opening at Aventura Mall, just north of
With the competitive landscape changing, the Whitmans decided to expand
by investing in Brickell CityCentre. â€œWe see that area as a strong
residential community with a thriving tourist market that is only
getting stronger,â€ said Matthew Whitman Lazenby, the operating partner
of Bal Harbour Shops and a grandson of the companyâ€™s founder, Stanley
The shopping center is being designed so that shoppers will feel the
breezes off Biscayne Bay, just as they do at Bal Harbour. A glass
trellis will â€œprotect you from the outside elements but let you have a
natural al fresco experience,â€ Mr. Owens said.
â€œThis will be our Rockefeller Center,â€ said Robert Kaplan, a principal
with the Miami Beach office of Ackman-Ziff, a New York-based mortgage
brokerage, referring to the Brickell CityCentre. â€œWe donâ€™t have anything
like that here.â€