CRE Gurus on Miami's Big Potential

MIAMI—It was literally standing room only at the University of Miami's (UM) fourth annual Real Estate Impact Conference last week.  

During the “Retail Evolution and Revolutions” panel, Michael Comras, president and CEO of Comras Company, moderated a discussion about the dramatic changes taking place in the region's retail market.

“Miami is now the third-biggest market after New York and L.A. for luxury retail,” said David Forbes, a partner at the Forbes Company, an owner and developer of iconic regional shopping centers and co-developer of Miami Worldcenter's mall.

That reality is driving up rents. Robert Cohen, president of retail leasing and investment sales brokerage firm RKF's Southern California division, says retail rents have doubled over the past six years and called “sustainability” a big word in terms of continued rent growth.

Steven Witkoff, CEO of The Witkoff Group, a New York-based real estate developer, interviewed Ian Schrager in the “New Concepts in Lifestyle Hotels” panel. Founder and chairman of the Ian Schrager Company, Schrager developed the South Beach's iconic Delano Hotel and transformed he fabled Gramercy Park Hotel in New York City. He recently launched his Public Hotel brand in several cities.

"I like the Biscayne Boulevard corridor and I like Downtown Miami," Schrager said. "They could have a sophisticated hotel at a good rate and attract people with food and beverage. We have been talking about a couple locations in Miami, one near the ocean."

Although there's been plenty of focus on trendy Wynwood, Schrager isn't convinced the emerging neighborhood is ready for high-end projects. Wynwood, he said, reminds him of Brooklyn's Williamsburg. “I think he's not safe at night there yet, but it's cool,” he said. “I'm keeping my eye on it.”

A group of experts explored the potential for linear park initiatives in South Florida to have a transformative impact on the metropolitan area in a panel called “Creating Value: Urban Real Estate and Public Space.” A project called the Underline would develop 10 miles of bicycle and walking paths under the Metrorail line that runs from Dadeland to Brickell Station. The space is currently not used.

“We want to find ways to take these leftover lands and give them back to the public in meaningful ways,” said Meg Daly, founder of Friend of the Underline, a group lobbying for the project. She pointed to an elevated walkway in Manhattan called High Line along the site of an unused railway spur that drove investors to an abandoned area.

"It will increase property values and be a new way to get around the city," Daly said. "We can use the leftover land owned by the public and give it back to the community in a meaningful way."

In the final portion of the event, UM President Donna Shalala had a candid conversation with Richard LeFrak, CEO of LeFrak Organization and one of the most prolific and iconic real estate developers of our day. The New York real estate industry titan is making a big push in Miami with his $350 million renovation of the 1 Hotel & Homes South Beach.

"You have great cultural and great culinary, a great beach, a financial sector, and the second busiest airport in the country," LeFrak said. "You are a global city and your market here is the world."

Nevertheless, LeFrak, who also owns 183 acres at Biscayne Landing in North Miami, warned to expect another down cycle. He said, “There will be some volatility in the market even if people are buying condos and putting 50% down.”