What's Unique About Miami's New Boom

MIAMI—In today's competitive real estate market, having a seasoned team of professionals on board is a key for long-term success in investing and developing trophy assets. Miami-based 13th Floor Investments understands that principle and has attracted some of the country's most experienced professionals to help grow the firm.

Rey Melendi, a former executive of Rialto Capital Management and president of Lennar's southeast Florida land division, oversees 13th Floor's development, construction and operational asset management of the sponsor's investments. GlobeSt.com caught up with Melendi to get his views on strategies, market conditions and challenges ahead in part one of this exclusive two-part interview.

GlobeSt.com: How many projects does 13th Floor Investments have under construction at this time?

Melendi: We have three assets under construction. In Sunny Isles Beach, we have 400 Sunny Isles, which consists of two 20-story towers with 230 luxury condos that are completely sold out. Central Parc consists of 427 single-family homes in Tamarac. Sierra Grande is a 273-unit garden style luxury apartment community in Naples.

There's much more on the way, across several asset classes. For example, 1010 Brickell is a sold-out 50-story luxury condo tower on Miami's Brickell Avenue. We plan to break ground in the next two months. We'll also begin work on two retail showrooms at 3650 Design Plaza and 51 Northwest 36 Design Plaza in Miami's Design District. Another project we plan to start soon is Sereno, a 40-unit boutique condominium on Bay Harbor Island.

GlobeSt.com: How did four years as director of Rialto Capital Management and 13 years as president of Lennar's southeast Florida land division prepare you for this new economy and your role at 13th Floor?

Melendi: During my tenure at Lennar, I played a major role in both the firm's acquisitions and developments. In 2001, I launched the company's high-rise division, which prepared me for my role here at 13th Floor. Currently, I am overseeing the development of our firm's residential and commercial assets across Florida.

While at Rialto, I gained experience in the acquisition and management of all asset classes, specifically related to commercial assets. One of the things that 13th Floor does really well is find uncovered value in assets and specific deal opportunities. My background in development and asset management is helpful in identifying hidden value in all asset classes.

GlobeSt.com: You lived through several real estate cycles over your professional career, what is unique about this cycle when it comes to 13th Floor's approach to getting deals done and construction off the ground? 

Melendi: The real estate market has become very competitive as domestic and foreign investors see Miami as a safe place to invest. For that reason, we had to develop a very specialized approach to getting involved in deals.

We're very selective when it comes to investing, choosing partners, and developing. We focus on class A and B locations across Florida, so there are many opportunities out there. Getting a deal done in today's complex market means staying creative, mitigating risk, and identifying opportunities that offer options based on current market conditions.

We especially focus on income deals with development optionality. For example, we recently partnered with Mast Capital to purchase a fully-occupied office building in Coconut Grove. The building sits on a prime redevelopment site, but we have flexibility because the asset is generating strong income for the time being. We call this optionality.

Be sure to come back this afternoon for part two of this exclusive interview.