Since the pandemic, construction costs have soared—a trend likely to intensify with the anticipated effects of President Donald Trump’s tariffs. As expenses climb, it’s reasonable to expect developers to seek cost-saving strategies. One increasingly popular approach is investing in shovel-ready sites, which already have the necessary approvals and permits in place.
Virgilio Fernandez, vice president of Colliers’ South Florida capital markets team and a specialist in the Miami market, has noticed a growing interest in restructuring deals for these shovel-ready properties. He also points out rising demand for “double-ready” sites, which come with both permits and architectural approvals secured.
He added that there is plenty of demand for "deals that are value-engineered correctly."
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"There's tremendous demand, and owners know this, so they're trying to cash out," Fernandez told GlobeSt., while adding that investors are "very selective" on the location and the type of product to swoop up.
DEVELOPERS CAN SAVE HUNDREDS OF THOUSANDS
Fernandez notes that shovel-ready sites can save developers at least $200,000 in planning costs, as well as shave multiple years off project timelines.
He adds that few places in the country are more appealing to commercial real estate firms than Miami. The city continues to benefit from an influx of wealth and enjoys relatively flexible zoning regulations—with opportunities to relax them even further if needed, Fernandez said.
"There's a lot of Fortune 500 and big companies, such as Citadel FIFA, that have moved their headquarters here, although the employees haven't all trickled in yet," he noted.
"Those employees who move in are going to be headquartered here. A lot of the proposed projects are going to fill up."
STRUCTURE PARKING SITES COULD FACE CHALLENGES
While demand for shovel-ready sites is likely to grow as developers seek more affordable options amid rising construction costs from tariffs, Fernandez expresses concern about structured parking projects, especially in suburban areas.
He cites South Dade as an example, noting that rents there range from $2.50 to $3 per square foot—rates he considers too high to make such developments financially viable.
“You can’t build it. You’ll lose money,” Fernandez cautioned.
Nevertheless, he remains optimistic about the outlook for shovel-ready sites in Miami overall, expecting them to perform well in the short term despite ongoing uncertainties.
MIAMI WILL DO BETTER THAN OTHERS IN POTENTIAL ECONOMIC DOWNTURN
Fernandez says that ultra-luxury condos and branded residences are likely to benefit the most from the real estate market.
"Miami boasts a very high Area Median Income (AMI) and rental market compared to other regions," he explained.
In lower-income areas, structured parking projects must be approached strategically to succeed. The parking solutions typically involve surface parking, separate precast garages, or wrap-style structures.
Given Miami's affluent population and strong in-migration, Fernandez believes the city is well-positioned to weather an economic downturn.
While the future remains uncertain, he has recently observed a significant influx of institutional capital, primarily targeting residential development deals for shovel-ready sites.
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