Commercial Observer: 5 Questions with Mast Capital's Camilo Miguel

ByCommercial Observer
March 3, 2023

Mast Capital made a splash in 2021 when it paid more than $100 million for a prime development site in Miami’s Brickell neighborhood. More than a year later, Mast Capital CEO and founder Camilo Miguel Jr. said he considers the price a bargain, given the continued in-migration of residents and companies to South Florida. “There’s a lot of wealth coming to Miami,” Miguel said. “The way I look at Southeast Florida and Miami is that it’s positioned to outperform the rest of the country.”

He spoke to Commercial Observer about his business strategy. This interview has been edited for length and clarity. Commercial Observer: I remember when $100 million bought not just land but a trophy tower. What does your acquisition of the Brickell site say about Miami’s real estate market? Camilo Miguel Jr.: Keep in mind that we’re talking about $103 million, but for 2.8 acres that has some of the most intense zoning in the city of Miami. The property is worth substantially more than we paid for it. Yes, it’s a big dollar amount, but it’s worth a lot more than we paid for it. We bifurcated the site into two 1.4-acre sites. A lot of properties on Brickell are smaller, and it would be difficult to cram a tower on there. Miami has really gone through a renaissance and a real reinvention as a result of COVID. There are people who haven’t moved here yet but have committed to move here in the next three years. Citadel opened an office in Miami. My understanding is that only 60 people of those 1,200 people have moved here. So that’s built-in demand that’s going to bolster the market going forward. Florida has experienced population growth for decades. What’s different about the post-COVID influx? It’s permanent. People are looking to live here — not just own here or vacation here but to live here. Historically, the Brickell market has been just an investor market. That is no longer the case. People are going to live in Brickell permanently. You used to see 20 percent of the unit owners lived in the building. That’s going to be much higher.

You’ve got a massive project on Brickell, but you’re doing a number of other developments. We have projects in Broward, in Palm Beach County, in Tampa, in Orlando. On Alton Road in Miami Beach, we’re building 175 rental units. People usually don’t build multifamily in Miami Beach. The problem is the price of land in Miami Beach is so high that you can’t underwrite rentals. The price we paid for the land allowed us to do it. The barriers to entry are so big for ground-up multifamily. It’s hard to say what rent we’ll be able to get, but it’ll be tremendous. We have our suspicions, but it should be some of the highest rents in the market for professionally managed multifamily. Also in Miami Beach, we have The Perigon, which is 72 full residences. It’s not just that it’s on the beach. It has 200 linear feet of sand, and on the west side there’s no building, so you get unobstructed views of Downtown Miami. Those are very unique things. Every unit we put on the market has sold very quickly. Part of that is how thoughtful we’ve been — paying attention to every detail, really thinking about who our buyer is and the lifestyle they want to live in that location. There’s a private restaurant for unit owners and their guests. It was important to not open a restaurant to the public there, because exclusivity is very important. This buyer appreciates that. The second floor is this really cool speakeasy that we designed. During the day, you can sit up there and have a drink and look over the beach, and there’s a private dining room guests can use for events. We really think all that stuff through. We’re putting inventory on the market on a case-by-case basis. We’re being very methodical.

What’s your biggest challenge? Financing costs and construction costs. Those are two things that remain an issue. If financing costs go up, it puts a burden on your expenses and the basis of your property. If you were trying to exit in this market, it would affect asset values. No matter how strong a market you’re in, you’re not immune to what’s going on in the world. Because of our growth, because of the in-migration, we’re doing very well. The influx of people and wealth has been great for real estate values. It’s also creating an affordability squeeze and stress on infrastructure. Every growing city around the world has stress on infrastructure. It’s just part of the pains of a growing community. We need to get in front of it as much as we can. I know many New Yorkers who have moved here, and they actually use public transportation to move around. That’s going to be something that’s going to be important to address, so we can continue to grow.