Sculpting Tomorrow's Miami
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FALL 2015 TM AN IN-DEPTH ANALYSIS OF SOUTH FLORIDA’S NEW CONDOMINIUM MARKET Sculpting Tomorrow’s Miami The Key Factors Defining Miami’s Future Featured Story New Construction MLS Inventory Rental Trends International Market Arts & Culture ISG CityWatch Miami 2020 On the Ground CRAIG STUDNICKY PHILIP SPIEGELMAN ISG Principal ISG Principal WELCOME TO THE MIAMI REPORT Welcome to our latest edition trends that serve to solidify Miami’s our city and recognizing the of The Miami ReportTM. The ISG position as one of the world’s most “livability benefits” Miami has to WORLD® family is proud to present important cities. In this edition, we offer. We will continue to monitor our most recent update on the go a step further and take an this interest and both report and current market conditions of our in-depth look into how these participate in its evolution. We emerging Global City. cultural livability factors are believe this trend, coupled with especially attractive to ultra high- the Panama Canal expansion, which Miami is a global gateway and net-worth individuals. will bring large Panamax ships to rising star on the world stage. our front door, will increase Asian Our city combines a diverse, yet Miami, like all major cities in our commerce, trade, investment and complementary mix of cultures to global economy, is not immune employment throughout our region. construct a magical environment to world events and cycles. The of limitless potential. economic softening in Brazil, Additionally, technological Principals | Craig Studnicky & Philip Spiegelman Russia, India, China and South advancements, international President | Michael Ambrosio Throughout the past six years we Africa (BRICS) and political finance and entrepreneurial have chronicled the state of the instability in South America serve endeavors will provide substantial Vice President | Sergio Pintos Miami luxury real estate market to influence the purchasing opportunities for job growth in through the ISG Miami Report dynamics within our South Florida Miami. The introduction of EDITORIAL and clarified the many myths, and market. Currently, the surge in innovative ideas combined with Chief Marketing Officer | Veronica Escobedo often misleading facts, questioning value of the dollar has caused a a well-educated labor force will Communications Director | Kattie Maldonado Miami’s stability and growth. softening of new condominium generate a flow of capital Marketing Coordinator | Melissa Tello Over time, our study evolved from absorption in our area. History, investments to our magical city. a purely statistical analysis into however, has proven that once the We at ISG look forward to witness RESEARCH an explanation of the various new currency dynamic is accepted this exciting time. Director of Market Research | Athena Rossano factors contributing to the growth as the norm, the lure of Miami’s Market Research Coordinator | Daniella Aragon and maturation of our South stable investment environment We hope you find our ISG World Florida region. and asset protection will once Miami Report 2015 useful and again fuel foreign investment in informative. DESIGN While continuing to provide the our market. Creative Director | Edward Trelles most comprehensive statistics Thank you for your continued Graphic Designer | Anthony Anchante regarding new construction, resale We are also cognizant of the emerg- interest. inventory, rental trends and emerg- ing interest of the Chinese market ISG TEAM CONTRIBUTORS ing sub-markets, we also include in our city. While not new to Florida, Liliana Gomez, Alex Vidal, Andres Valdivieso, the cultural and business the affluent Chinese are discovering Sincerely, Raquel Kaufman, Amanda Manteiga, Patricia Restrepo, Marly Jaramillo, Craig Studnicky Philip Spiegelman Micheal Ambrosio Andres Penalver, Rowena Luna ISG Principal ISG Principal ISG President COVER ART “City Wheel” Artist: James McNabb www.mcnabbstudio.com Photography: Aurelie Laurent, Petit Jules Cover Credit: 4 8 10 FEATURED STORY WEALTH REPORT MIAMI’S SKYSCRAPERS 12 16 26 NEW CONSTRUCTION DEVELOPMENT CYCLE MLS RESALE INVENTORY 32 40 42 RENTAL TRENDS POPULATION STATISTICS INTERNATIONAL MARKET 46 56 66 TRANSPORTATION CULTURAL & ECONOMIC GROWTH LANDSCAPE OF THE FUTURE 70 74 88 ISG CITY WATCH SOUTH FLORIDA 2020 ON THE GROUND FEATURED STORY 2015 MIAMI N THE RISE 2014 2013 In 2015, Miami moved up in rank to #6 for the world’s “ Miami continues to FACTORS THAT MOVED MIAMI UP IN RANKS? most important cities to ultra high-net worth individuals. move up in rankings The Wealth Report, which is issued annually by London-based because ultra high- real estate consultancy Knight Frank, also predicts that Miami ECONOMIC QUALITY OF KNOWLEDGE POLITICAL ACTIVITY LIFE & INFLUENCE POWER will remain in the top 10 for at least the next decade. net-worth individuals want to live there.” Top 10 Cities that Matter to UHNWIs - 2015 Global Survey 2011 Source: Knight Frank 1. London 6. Miami 2. New York 7. Paris ECONOMIC ACTIVITY 3. Hong Kong 8. Dubai Miami is poised for a prosperous future economic output and 4. Singapore 9. Beijing increased market activity. The city is known as the “Gateway 5. Shanghai 10. Zürich to the Americas” and is home to a number of Fortune 500 companies and international businesses. QUALITY OF LIFE The city has an array of cultural and leisure options, as well as its famous climate and beaches. Miami has some of the highest air quality in the nation and consistently promotes pedestrian friendly and green initiatives. Additionally, the region provides high personal security, sound political freedom and stability. KNOWLEDGE & INFLUENCE Miami has a growing centrality of knowledgeable workers. New education and tech programs have emerged to facilitate a growing tech and start-up scene in the area. POLITICAL POWER Miami’s international connections and location within the United States, positions it as an influential city of global political thought and opinion. Florida is the 3rd most populated state and is considered a prominent state in decision making during the U.S. presidential elections with its 29 electoral votes. Sources: Miami Herald Knight Frank Global Cities Report The Real Deal 4 ISG MIAMI REPORT ISG MIAMI REPORT 5 QUALITY OF LIFE MIAMI’S LIVABILITY FACTORS FOR INTERNATIONAL BUYERS Miami is distinguished by its secure environment, economic prosperity, abundant lifestyle and cultural dynamic. Most importantly, buyers from around the world arrive on the mainland with their families confident that Miami will offer them peace of mind. These livability factors continue to drive Miami’s desirability for the ultra- luxury market. “ Aside from the luxurious lifestyle and remarkable weather, financial security and safety is the No. 1 reason as #1 Cleanest Air to why we see our international clients buying in Miami. City residents enjoy a stable political and economic climate in addition to the vibrant community and culture.” FINANCIAL SECURITY VS. WEATHER LUXURY SHOPPING AIR QUALITY GREEN SPACE Liliana Gomez International Sales Director OTHER COUNTRIES Livability noun: liv·abil·i·ty The quality of life, usually in Miami offers foreign buyers peace Miami’s tropical weather attracts “A cosmopolitan playground for Miami has higher “good air quality” Miami is one of four cities in an urban setting, where the of mind. The city provides a safe foreign buyers to its shores year round. the world’s wealthy, South Florida days than most major cities in America that offers “playgrounds environment and comfortable is increasingly synonymous with the U.S. for adults,” and parks with Fitness accessibility to needs and lifestyle along with the financial 248 Sunny days per year luxury in all its many manifestations: Zones, encouraging everyone services contributes to overall stability of living in the multimillion-dollar real estate, to spend time with their families Avg. yearly temp: 77F / 25C well-being; livable acts. United States. exotic cars, yachts, high-end outside in an active and green Avg. yearly rainfall: 62 inches / 157cm watches, and designer apparel.” environment. Sources: Financial Security – USA Today, May 2015 Sources: U.S. Climate Data Source: Miami Herald, January 2015 Sources: Air Quality – OurMiami.org, 2013 Source: Livability.com, November 2014 BestPlaces.net Readers Digest “ [Florida is the No. 1 state for international real estate sales] Top 10 States for International 1. Florida 6. New York There’s a strong flow of foreign money entering the Real Estate Sales 2. California 7. Illinois American real estate market every day, and especially 3. Texas 8. Washington [through] gateway cities like Miami.” 4. Arizona 9. Michigan 5. New Jersey 10. Hawaii - Daily Business Review, July 2015 Source: Daily Business Review, National Association of Realtors 6 ISG MIAMI REPORT ISG MIAMI REPORT 7 INVESTMENT – Top 10 Cities that Matter to UHNWIs - 2015 Global Survey A MILLIONAIRE’S GLOBAL PERSPECTIVE 1. London 6. Miami 2. New York 7. Paris MIAMI VS KNIGHT FRANK’S TOP 10 GLOBAL CITIES 3. Hong Kong 8. Dubai 4. Singapore 9. Beijing TOTAL SQ.FT. $5 MILLION DOLLARS WILL BUY 5. Shanghai 10. Zürich 5,000 SQ.FT. 4,500 SQ.FT. MIAMI 4,000 SQ.FT. WHAT DOES $5 MILLION DOLLARS BUY SHANGHAI IN THE LUXURY CONDOMINIUM MARKET OF MIAMI 3,500 SQ.FT. BEIJING ZÜRICH 3,000 SQ. FT. DUBAI PARIS 2,500 SQ.FT. NEW YORK 2,000 SQ.FT. SINGAPORE HONG 1,500 SQ.FT. KONG Miami 4,500 SQ.FT. 1,000 SQ.FT. LONDON DOWNTOWN AVERAGE PSF ON A $5 MILLION DOLLAR CONDOMINIUM MIAMI $1,111 PSF SHANGHAI $1,315 PSF Shanghai Zürich Beijing 3,800 SQ.FT. 3,500 SQ.FT. 3,500 SQ.FT. BEIJING $1,428 PSF ZÜRICH $1,429 PSF DUBAI $1,562 PSF Dubai Paris New York $1,666 PSF PARIS 3,200 SQ.FT. 3,000 SQ.FT. 2,500 SQ.FT NEW YORK $2,000 PSF SINGAPORE $2,381 PSF HONG KONG $2,500 PSF Singapore Hong Kong London LONDON $4,166 PSF 2,100 SQ.FT. 2,000 SQ.FT.