Real Estate in 2023: What's the future of South Florida's high-end developments

ByDaily Business Review
December 21, 2022

The increasing migration of individuals and companies looking for opportunities, a favorable tax environment and a good climate is expected to continue into the new year with a focus on luxury living. From branded residences to luxury apartments and condominiums, South Florida real estate professionals believe a surge in demand for high-end living is here to stay. South Florida has gone through a renaissance over the past two years, according to Camilo Miguel Jr. of Mast Capital.

“Heading into 2023, this trend will continue to fuel demand in South Florida’s market, further positioning it to outperform and better withstand shifting economic conditions compared to other parts of the country,” he said. Last year, Mast Capital, bought prime land in Brickell for $103 million to begin construction on the Cipriani Residences condominium, two multifamily towers with 850 luxury apartment rentals to be built in partnership with Rockpoint. The developer also saw potential in Miami River with Waterline Miami. The first tower was leased in under a year and the second phase, which is now underway, will deliver 346 apartments. Also to come is a 175-unit luxury development on 4000 Alton Road, and the development of a new 100-unit luxury condo project at 5333 Collins Ave., to bring The Perigon, a new ultra-luxury residential building to Mid Beach.

There is a booming market for branded residences in prime locations, where many high-end luxury buildings are on the market, according to Taylor Collins, managing partner at Two Roads Development. Collins said South Florida can expect increased investment from domestic buyers and residents of cities like New York and Chicago, as financial giants and law firms select places like EDITION Residences in Edgewater. “A level of familiarity with a brand they know and love resonates with buyers, especially from international markets looking for a second or third home,” said Collins. “This demand coincides with the rise in hospitality-infused amenity areas, with new developments incorporating on-site restaurants, bars, lounges and a la carte hotel services, such as town car services.”

There’s still a strong sales momentum for luxury condo projects in Miami, according to Vanessa Grout, CEO of OKO Real Estate. “The volume of sales and consistently high price per square foot underscores the fact that there is continued demand for new condo projects that provide desirable waterfront locations, strong ownership teams and iconic design,” said Grout. OKO Group and Cain International’s residential portfolio in South Florida includes two luxury condominiums in Miami. The first, Missoni Baia, which is nearing completion in Edgewater, and Una Residences, which is under construction in Brickell. The joint venture is also developing One River, a mixed-use multifamily tower underway in downtown Fort Lauderdale. Emerging neighborhoods such as Edgewater are seeing big growth in terms of development investment and relocation from residents. “Dwindling developer inventory is creating a surge in demand for rentals and propping up rental rates,” said Grout. “Miami condo owners are also taking advantage of the strengthening rental market to achieve a higher rate of return.”

In the multifamily sector, South Florida will see strong demand continuing into 2023, says Arnaud Karsenti, managing principal of 13th Floor Investments, a Miami investment and development firm. “We are bullish on the market—multifamily, workforce housing and high-end luxury products—all present strong opportunities,” said Kersenti. “People want to move down here, they want to live next to the water and in areas where there is high demand such as Coral Gables, Miami Beach and Brickell. Anywhere there is job formation, we will continue to have an increase in population.” Greg West, CEO of ZOM Living, said he’s seeing renewed interest in the urban cores of major cities, while the suburbs have remained in demand since many employees have hybrid work schedules, allowing for shorting weekly commutes.

“As we head into 2023, multifamily development will probably decrease given economic conditions. There will likely be less supply to satisfy strong rental housing demand,” said West. “This translates into opportunity for established developers with a strong track record who are able to secure the limited financing available, because less construction means the cost of building could improve next year and projects that move forward will be strongly positioned as the economy improves.” Going forward, there will be more of a focus on the domestic buyer, especially Miami locals. That’s according to Christine Martinez de Castro, vice president of sales and marketing for CMC Group, a luxury developer in Miami. CMC Group’s Onda Residences in Bay Harbor Islands is underway with completion slated for next year, and construction at Vita at Grove Isle in Coconut Grove is expected to begin this winter. “Traditionally a gateway to Latin American investment, the influx of out-of-state buyers due to the wealth migration has shifted demand principles in the luxury real estate market. There’s a flight to quality, which is synonymous with Ugo Colombo. These purchases are for the long term and for people who will utilize them as primary residences, leading to greater attention to details and finishes,” said de Castro. “Coconut Grove has grown in popularity for people seeking homes in close proximity to live-work-play offerings, along with top schools. Many buyers at Vita at Grove Isle are looking to right-size from their nearby estates, which require extensive maintenance.”