ISG World Miami Report 2019

2019

TM

CEO Craig Studnicky President Michael Ambrosio Chief Marketing Officer Veronica Escobedo Gorson President, RelatedISG International Realty Alex Vidal Creative Director Edward Trelles Director of Market Research Athena Rossano Editorial Rebecca Stella Senior Marketing & Communications Associate Designers Emiliana Zelkowicz Graphic Designer Maria Latorre Graphic Designer Contributors Rowena Luna Marketing Director, RelatedISG International Realty Sergio Pintos Executive V.P. of Sales Chrystal Lozano Marketing Associate Lian Oteiza Marketing Associate Special thanks to: Becky Randel, MOR Printing, Inc., Element Image, Morphoto Inc., and Unsplash.com The Miami ReportTM is produced for general interest only. It is not definitive and is not intended to give advice. Although high standards have been used in the preparation of the information, analysis and views presented in the Miami Report, no responsibility or liability whatsoever can be accepted by ISG World, International Sales Group, LLC and/or Related ISG International Realty for the contents. We make no express or implied guarantee of the accuracy of any of the contents.

As far as applicable laws allow, we do not accept responsibility for errors, inaccuracies or omissions, nor for loss or damage that may result directly or indirectly from reliance on or use of its contents. Readers should not take or refrain from taking any action as a result of information in the Miami Report.

Welcome to the 2019 edition of the Miami ReportTM For the last nine years, ISG has produced and published the Miami Report. In each report, we have documented the unparalleled growth of South Florida and chronicled its journey in becoming an area of global importance and its rise as a truly world-class destination.

Our market research department has worked tirelessly over the past several months tracking new developments in order to present a clear picture of the current state of our condominium market.

Once again, we have assembled and graphically presented what we deem to be critical information for real estate industry leaders as they make decisions on future development and investment.

The constant changes in political climates of our neighbors to the south, Central and South America, and the strength of the U.S. dollar have had a profound effect on the absorption of new developer condo inventory over the last four years. This has resulted in a challenging condo market for urban centers reliant on international buyers.

So where are we now and what lies ahead for our immediate future?

We believe the data we have assembled and are presenting will confront you with what we have labeled a “supply shock.”

South Florida continues to be one of the fastest-growing areas in the United States. However, the stubbornness of the high U.S. dollar has, for the most part,slowed any meaningful new condominium development. Despite the slowdown, our data reveals just 2,101 unsold developer condo units in our market area, with only 587 of these units being standing inventory. The remaining units are either under construction or in the pre-construction phase. Even at the lower absorption rates of the past two years, the total remaining unsold inventory should be absorbed in the next 18 to 24 months.

Developers are expecting to launch pre-sale campaigns for the next cycle in 2020. Factoring in the height of these new towers, which are planned to reach 60 to 100 stories, it’s evident that most of these future buildings won’t be available for occupancy until 2024 or 2025 at the earliest. What becomes clear is that after the current developer inventory is sold, a buyer relocating in the next several years will need to look solely to MLS/resale inventory to satisfy immediate needs, thus the title of this Miami Report, “Supply Shock.”

We trust you will find our report informative and concise. We have endeavored to present the current conditions factually. We hope that this data will help you formulate your own conclusions and guide you to take advantage of what the current state-of-the-market is offering as you develop your business plans.

Sincerely,

02

C O NT EN T S 34

MLS/RESALE MARKET & RENTAL TRENDS

42

COMMERCIAL SNAPSHOT

PAGE

46

PAGE

04

Supply Shock Featured Story Dwindling new developer condo inventory paired with increasing demand has resulted in a shocking shortage of new condo inventory.

08 NEW CONSTRUCTION CONDO DEVELOPMENT An analysis and current status of South Florida’s new developer condominium market.

22 DEMAND - Florida’s population grows by more than 900 people everyday.

24 WEALTH REPORT

International An update on some of the most active international markets currently impacting Miami real estate.

Brickell City Centre

2019 MIAMI REPORT

03

PAGE

50

Cultural & Economic Growth The growth and diversification of the sectors impacting Miami’s culture and economy further position Miami as a top global city.

58 PAGE Echo Brickell

74 ISG CITY WATCH: BRICKELL

Transportation South Florida’s inter-city rail service, seaport and airports continue to expand year after year, improving accessibility to the region.

76 LANDSCAPE OF THE FUTURE - A wave of new developments in Greater downtown Miami is transforming the area into a world-class neighborhood.

78 ON THE GROUND - Expert insights on the South Florida real estate landscape from president of RelatedISG International Realty, Alex Vidal.

ISGWORLD.COM

04

FEA

ED TUR

STO

RY

ry ento v n i do r con e p o l deve w e n of cline e d ed lerat e c c a The

2019 MIAMI REPORT

The dwindling of new developer condo inventory paired with increasing demand for South Florida condo living has resulted in a shocking shortage of new condo inventory that the market has never seen before.

ISGWORLD.COM

Low Remaining Developer Inventory

Based on the current absorption rate, this remaining developer inventory is projected to be absorbed by 2021

SUPPLY Of the 19,868 condominium units that were developed in the current condo cycle and since 2012, 89 percent have been sold, leaving just 2,101 new developer units available for sale across South Florida, from Coconut Grove to Fort Lauderdale, east of I-95. At the current rate of sales, the absorption projection for this remaining inventory is as follows: Remaining Developer Inventory 587 Delivered Units................................................Estimated Sellout: 12 Months 1,331 Under Construction Units............................Estimated Sellout: 24 Months 183 Pre-Construction Units....................................Estimated Sellout: 24 Months

For more information on supply, see page 8.

Florida’s Daily Population Growth

The number of people Florida’s population grows by each day (does not include second-home buyers)

DEMAND Every day, Florida’s population grows by more than 900 people.

Of those moving to Florida from other countries and other states, 45 percent of them move to South Florida. While states like New York and Illinois are losing population every day, Florida’s population growth is the second-fastest in the country, resulting in an ever-increasing demand for real estate.

South Florida Yearly Population Growth Breakdown Miami-Dade............................................................. 82,308 Broward................................................................... 39,508 West Palm Beach.................................................... 26,338 Total....................................................................... 148,154

For more information on demand, see page 22.

New Condo Development Cycle

The year developers plan to launch new condominium developments

THE NEXT CYCLE As shocking as the current low level of new developer condo inventory is, it is the future supply of inventory that is more concerning.

The lack of condominium groundbreakings over the years is daunting compared to South Florida’s history. Major real estate developers expect to launch pre-sale programs for their next developments in 2020, kicking off the next condo cycle, with the majority of those developments being delivered in 2024 or 2025 at the earliest.

For more information on the next cycle, see page 21.

06

Supply Shock Summary Total new construction condo units currently available for sale in Brickell, Biscayne Corridor (Edgewater, Wynwood, Midtown, Design District, Omni), Downtown Miami, The Beaches (South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach), Aventura, North Miami Beach, Coconut Grove and Key Biscayne since 2012

CURRENT CYCLE

SUMMARY

Remaining developer inventory

ered

eliv 87 D

(5

/1

on

der C

Un ,331

tion struc

/ 183

P

on)

ructi

nst re-co

Florida’s daily population growth

2019 MIAMI REPORT

07

NEXT CYCLE

PROJECTIONS

Projected start of next cycle

Projected delivery of new developer inventory in the next cycle

ISGWORLD.COM

08

CURRENT CYCLE

NEW CONSTRUCTION CONDO DEVELOPMENT

2019 MIAMI REPORT

09 NEW CONSTRUCTION CONDO DEVELOPMENT

Downtown Miami

Photo by Janis Laubergs

ISGWORLD.COM

10 CURRENT CYCLE

New Construction Condo Development Summary Total new construction condo units sold and currently available for sale in Brickell, Biscayne Corridor (Edgewater, Wynwood, Midtown, Design District, Omni), Downtown Miami, the Beaches (South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach), Aventura, North Miami Beach, Coconut Grove and Key Biscayne since 2012

TOTAL DEVELOPER UNITS

SOLD DEVELOPER UNITS

REMAINING DEVELOPER INVENTORY

19,868 Total Units

89% SOLD As of May 2019

17,767

Total Sold Units

2,101

Remaining Developer Inventory (587 Delivered / 1,331 Under Construction / 183 Pre-Construction) Source: Developer Sales Reports, Miami-Dade and Broward County Property appraisers and onsite sales staff

2019 MIAMI REPORT

11 NEW CONSTRUCTION CONDO DEVELOPMENT

CURRENT CYCLE

New Construction Condo Inventory Analysis - Sold vs. Unsold Total new construction condo developer units east of I-95 and available for sale since 2012

Total New Construction Developer Units

587 Unsold

96% Sold

1,331 Unsold 70% Sold 183 Unsold 15,054 Delivered

4,454 Under Construction

50% Sold

360 Pre-Construction

Macro 2016-2021 Absorption Analysis for New Condos Built Since 2012 REMAINING DEVELOPER INVENTORY

1,340

19,868

Average Annual Absorption (Last 3 years)

6,515

Jan 2012

Jan 2016

Delivered Inventory Sold Out 5,195

Jan 2017

Pre-Construction/Under Construction Remaining

3,860

Jan 2018

2,498

2,101

1,238*

Jan 2019

As of May 2019

Jan 2020*

*Projected

ISGWORLD.COM

420*

0*

Summer 2020*

Dec 2021*

Brickell - 95% Sold Total new construction condo units available for sale since 2012

5,757 Total Units / 5,461 Sold Units (95%) / 296 Unsold Units SOLD DEVELOPER UNITS D RECENTLY DELIVERED

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

100% SOLD 382 Total Units

1100 Millecento

D

1010 Brickell

D

Una Residences

P

Brickell City Centre (Tower I) - Reach

D

Brickell City Centre (Tower II) - Rise

D

Brickell Heights East

D

Brickell Heights West

D

100% SOLD 332 Total Units

Brickell House

D

100% SOLD

Brickell Ten

D

Brickell Flatiron

U

Cassa Brickell

D

Echo Brickell

D

Le Parc

D

Nine at Mary Brickell Village

D

My Brickell

D

SLS Hotel and Residences

D

100% SOLD

453 Total Units

SLS Lux

D

100% SOLD

450 Total Units

The Bond

D

Smart Brickell Tower I

U

100% SOLD 50 Total Units

Smart Brickell Tower II

P

66% SOLD 50 Total Units

BRICKELL

100% SOLD

387 Total Units

45% SOLD 135 Total Units 95% SOLD 70% SOLD

390 Total Units 390 Total Units

100% SOLD 367 Total Units

374 Total Units

100% SOLD 155 Total Units 90% SOLD 100% SOLD 81 Total Units 98% SOLD

180 Total Units

100% SOLD 128 Total Units 100% SOLD 100% SOLD

390 Total Units

192 Total Units

100% SOLD 323 Total Units

*Est. % Sold - Project won’t release the information

2019 MIAMI REPORT

548 Total Units

Total new construction condo units available for sale since 2012 (Wynwood, Design District, Edgewater, Midtown & Omni)

Biscayne Corridor: 4,633 Total Units / 4,358 Sold Units (94%) / 275 Unsold Units Downtown Miami: 1,718 Total Units / 1,307 Sold Units (76%) / 411 Unsold Units SOLD DEVELOPER UNITS D RECENTLY DELIVERED

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

250 Wynwood

D

100% SOLD 11 Total Units

Baltus House

D

100% SOLD 167 Total Units

23 Biscayne Bay

D

26 Edgewater

D

Bay House

D

Biscayne Beach

D

The Crimson

D

100% SOLD 90 Total Units

Elysee

U

49% SOLD 100 Total Units

Emilia Edgewater

D

Icon Bay

D

Gran Paraiso

D

Missoni Baia

U

One Paraiso

D

Paraiso Bayviews

D

99% SOLD 396 Total Units

Paraiso Bay

D

100% SOLD *360 Condo tower only

Hyde Midtown*

D

Aria On The Bay

D

Canvas

D

Aston Martin Residences

U

Centro

D

One Thousand Museum

U

Paramount Miami Worldcenter

U

Okan Tower

P

YotelPad Miami

U

WYNWO OD

DESIGN DISTRICT

E D G E WAT E R

MIDTOWN

OMNI

D OWNTOWN MIAMI

100% SOLD 96 Total Units 94% SOLD 86 Total Units 100% SOLD 165 Total Units 100% SOLD 399 Total Units

100 % SOLD 30 Total Units

100% SOLD 300 Total Units 95% SOLD

333 Total Units

40% SOLD 249 Total Units 100% SOLD 280 Total Units

*Bay homes not included

100% SOLD 410 Total Units 96% SOLD 94% SOLD 48% SOLD 100% SOLD 82% SOLD 83 Total Units

648 Total Units

513 Total Units

390 Total Units 352 Total Units

85% SOLD

513 Total Units

56% SOLD 149 Total Units 74% SOLD 231 Total Units ISGWORLD.COM

*Condo-hotel not included

NEW CONSTRUCTION CONDO DEVELOPMENT

Biscayne Corridor - 94% Sold Downtown Miami - 76% Sold

13

The Beaches - 85% Sold Total new construction condo units available for sale since 2012 (South Beach, Miami Beach, Bay Harbor Islands, Surfside, Bal Harbour, Sunny Isles Beach, Hallandale Beach and Hollywood)

4,325 Total Units / 3,656 Sold Units (85%) / 669 Unsold Units SOLD DEVELOPER UNITS D RECENTLY DELIVERED

MIAMI BEACH/ SOUTH BEACH

B AY H A R B O R ISLANDS

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

85% SOLD

66 Total Units

Eighty Seven Park

U

321 Ocean

D

Beach House 8

D

Edition Residences

D

Faena House

D

Glass

D

L’atelier

D

Louver House

D

Marea South Beach

D

Monad Terrace*

U

One Ocean

D

Palau Sunset Harbour

D

Peloro on the Bay

D

Ritz-Carlton Residences

U

57 Ocean

U

Three Hundred Collins

D

100% SOLD 19 Total Units

Bay Breeze Residences

D

100% SOLD 17 Total Units

Harbor Park

D

100% SOLD 17 Total Units

Kai at Bay Harbor

D

Le Jardin

D

O Residences

D

Pearl House

D

Sereno Bay Harbor

U

100% SOLD 40 Total Units

The Ivory

D

88% SOLD 42 Total Units

Bijour Bay House

D

80% SOLD

Club at Bay Harbor

D

100% SOLD 42 Total Units

The Palm Residences

U

86% SOLD 42 Total Units

The Waters

U

50% SOLD 9 Total Units

The Sophie

P

26 Total Units - Just released

100% SOLD 21 Total Units 100% SOLD 8 Total Units 100% SOLD 26 Total Units 100% SOLD 47 Total Units

100% SOLD 10 Total Units

100% SOLD 23 Total Units 100% SOLD 12 Total Units 100% SOLD 30 Total Units 20% SOLD 58 Total Units 100% SOLD

50 Total Units

100% SOLD 45 Total Units 100% SOLD 114 Total Units 72% SOLD 111 Total Units 18% SOLD 81 Total Units

96% SOLD

57 Total Units

80% SOLD 30 Total Units 100% SOLD

41 Total Units

76% SOLD 15 Total Units

41 Total Units

*Est. % Sold - Project won’t release the information

2019 MIAMI REPORT

NEW CONDO CONSTRUCTION NEW CONSTRUCTION CONDO DEVELOPMENT

15

Surf Club Four Seasons Private Residences

D

Fendi Chateau

D

Arte Surfside

U

Oceana

D

400 Sunny Isles

D

Aurora

U

Residences by Armani Casa

U

Chateau Beach

D

Jade Signature

D

SURFSIDE

BAL HARBOUR

SUNNY ISLES BEACH

The Estates at Acqualina

U

Mansions at Acqualina

D

Muse

D

Parque Towers

D

Porsche Design Tower

D

Regalia

D

Ritz-Carlton Residences

U

Turnberry Ocean Club

U

2000 Ocean*

U

Beachwalk

D

Apogee Beach

D

Hyde Beach House

U

Hyde Resort and Residences

D

Sage Beach

D

H A L L A N DA L E B E AC H

H O L LY W O O D BEACH

87% SOLD

150 Total Units

100% SOLD 58 Total Units 13% SOLD 16 Total Units 80% SOLD

240 Total Units

100% SOLD 230 Total Units 72% SOLD 61 Total Units 78% SOLD 100% SOLD 81 Total Units 96% SOLD

192 Total Units

75% SOLD 100% SOLD

308 Total Units

242 Total Units

79 Total Units

93% SOLD 68 Total Units 100% SOLD 96% SOLD

320 Total Units

132 Total Units

100% SOLD 39 Total Units 75% SOLD

212 Total Units

53% SOLD 154 Total Units 15% SOLD 64 Total Units

100% SOLD 84 Total Units

100% SOLD 49 Total Units 85% SOLD

342 Total Units (Now including all residences)

100% SOLD 407 Total Units 100% SOLD 24 Total Units

ISGWORLD.COM

North Miami Beach & Aventura - 97% Sold Total new construction condo units available for sale since 2012

1,442 Total Units / 1,392 Sold Units (97%) / 50 Unsold Units SOLD DEVELOPER UNITS D RECENTLY DELIVERED

Aventura Park Square

D

Bellini

D

Echo Aventura

D

Privé

D

The Harbour

D

The Reserve at Marina Palms

D

AV E N T U R A

N O RT H M I A M I BEACH

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

85% SOLD 131 Total Units 100% SOLD 70 Total Units 100% SOLD 190 Total Units 86% SOLD 158 Total Units 99% SOLD 425 Total Units 99% SOLD 468 Total Units

Key Biscayne & Coconut Grove - 92% Total new construction condo units available for sale since 2012

638 Total Units / 588 Sold Units (92%) / 50 Unsold Units SOLD DEVELOPER SOLD DEVELOPER UNITS UNITS D RECENTLY DELIVERED

K E Y B I S C AY N E

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

100% SOLD 154 Total Units

Oceana

60% SOLD 23 Total Units

Glasshaus in the Grove

U

Fairchild Residences

U

Grove at Grand Bay

D

One Park Grove

U

60% SOLD 67 Total Units

Two Park Grove

D

99% SOLD 73 Total Units

Park Grove Club Residences

D

Arbor

U

C O C ONUT GROVE

75% SOLD 26 Total Units 100% SOLD 97 Total Units

100% SOLD 152 Total Units 83% SOLD 46 Total Units 2019 MIAMI REPORT

17 NEW CONSTRUCTION CONDO DEVELOPMENT

Fort Lauderdale - 74% Sold Total new construction condo units available for sale since 2012

1,355 Total Units / 1,005 Sold Units (74%) / 350 Unsold Units SOLD DEVELOPER UNITS D RECENTLY DELIVERED

UNSOLD DEVELOPER UNITS

U UNDER CONSTRUCTION

P PRE-CONSTRUCTION

R NEWLY RENOVATED

55% SOLD 23 Total Units

321 at Water’s Edge

D

33 Intracoastal

D

100% SOLD 11 Total Units

Adagio on the Bay

D

100% SOLD 12 Total Units

Adagio Fort Lauderdale Beach

U

Aquablu Fort Lauderdale

D

Aqualuna Las Olas

D

Aquamar Las Olas

D

100% SOLD 20 Total Units

Aquavita Las Olas

D

100% SOLD 22 Total Units

Aquavue Las Olas

D

100 Las Olas

U

Auberge Beach North Tower

D

Auberge Beach South Tower

D

Four Seasons Private Residences*

U

Gale Hotel & Residences

D

100% SOLD 129 Total Units

Paramount Fort Lauderdale

D

100% SOLD 95 Total Units

Riva

D

75% SOLD 100 Total Units

The Conrad

R

W Residences Fort Lauderdale

R

Wave

U

71% SOLD 31 Total Units 94% SOLD 35 Total Units 100% SOLD 16 Total Units

75% SOLD 8 Total Units 40% SOLD 113 Total Units 100% SOLD 57 Total Units 86% SOLD 114 Total Units 55% SOLD 90 Total Units

60% SOLD 65% SOLD 89% SOLD 18 Total Units

ISGWORLD.COM

290 Total Units 171 Total Units

*Est. % Sold - Project won’t release the information

18

Fort Lauderdale

Hollywood Beach

Hallandale Beach

Aventura Sunny Isles Beach North Miami Beach

Bal Harbour Bay Harbor Islands

Surfside

Design District BISCAYNE CORRIDOR

Midtown Wynwood

Edgewater Omni

Miami Beach / South Beach

Downtown Miami Miami River District Brickell

Coconut Grove

Key Biscayne

2019 MIAMI REPORT

19

New Construction Condo Development Summary by Submarkets Total new construction condo units available for sale since 2012

50% - 74% SOLD Hallandale Beach ........................ 64% Fort Lauderdale .......................... 74%

75% - 99% SOLD Coconut Grove............................ 90% Brickell ........................................ 95% Downtown Miami ....................... 76% Biscayne Corridor ....................... 94% Miami Beach/South Beach ......... 79% North Miami Beach .................... 99% Surfside ....................................... 92% Bay Harbor Islands ..................... 91% Bal Harbour ................................ 80% Sunny Isles Beach ....................... 86% Aventura ..................................... 92% Hollywood Beach ....................... 89%

100% SOLD Key Biscayne.............................. 100%

Photo by Muzammil Soorma

ISGWORLD.COM

NEW CONSTRUCTION CONDO DEVELOPMENT

CURRENT CYCLE

20 CURRENT CYCLE

Condo Groundbreakings The number of South Florida condominium groundbreakings has significantly tapered off from when this condo cycle peaked in 2014, indicating a winding down of the current cycle.

Total macro* new construction groundbreakings by year for condos built since 2012 and east of I-95 *(Brickell, Biscayne Corridor, Downtown Miami, South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach, Aventura, North Miami Beach, Coconut Grove, Key Biscayne and Fort Lauderdale). Condo developments with 20 units or less not included.

TOTAL GROUNDBREAKINGS

23

20 20

18

15

15

2000 Ocean

14

Four Seasons Private Residences

11

The Estates at Acqualina Glasshaus In the Grove

57 Ocean Okan Tower

10

Una Residences Smart Brickell Tower II YotelPad Miami

4

5

5*

0* 2012

2013

2014

2015

2016

* Projected

2019 MIAMI REPORT

2017

2018

2019*

2020*

21

NEXT CYCLE (projected)

NEW CYCLE INCEPTION*

2020

0

Pre-Sale

2021

0.5 years

1 year

1.5 years

Miami’s pre-construction development cycle timeline Over the past three decades, the typical high-rise condominium’s development cycle, from inception to delivery, was a two- to three-year process. Today, real estate developers are building 50- to 100-story luxury residential towers, which easily doubles the development and construction timeline to five or six years.

2022

2 years

Pre-Sale Requirement Achieved/ Groundbreaking

2023

3 years

Top Off

2024

2025+

* Projected

ISGWORLD.COM

3.5 years

4 years

Completion

DELIVERY*

2.5 years

4.5 years

5 years

NEW CONSTRUCTION CONDO DEVELOPMENT

Typical high-rise condominium development cycle

22

Brickell City Centre

DEMAND

2019 MIAMI REPORT

23 DEMAND

ISGWORLD.COM

24

Wealth Report Miami ranked a top global city for its prime residential property

#1

According to Knight Frank’s Wealth Report, Miami is expected to be the fastest-growing luxury real estate market in the U.S. and the fifth fastest-growing in the world in 2019.

MIAMI

fastest-growing luxury real estate market in the U.S.

#5

fastest-growing luxury real estate market in the world

2. Berlin

7. Vancouver

3. Paris

9. Los Angeles

5. Miami

1. Madrid

10. Geneva 6. Monaco

8. Sydney 4. Cape Town

Source: Knight Frank Wealth Report

2019 MIAMI REPORT

25

Wealthy residents from high-tax states like New York, New Jersey, Connecticut, Chicago and California are relocating to Miami and other parts of South Florida and purchasing ultra-luxury real estate. This group includes Wall Street hedge-fund managers, tech moguls, and other high earners looking to escape the effects of the tax reform law that was implemented last year by re-establishing their primary residence in Florida. This trend has resulted in record-setting real estate sales across the Miami area.

‘Tax refugees’ are dropping between $10 million and $50 million on ultra-luxury Miami homes

First-quarter luxury sales from Coconut Grove - Fort Lauderdale Beach Single-Family, $5M+

Q1’17 Q1’18 Q1’19

Median Sales Price

$10.9M

Volume

$153.4M $103.8M $224.6M

Sales

14 12 18

Condos + Townhomes, $3M+

Q1’17

Q1’18

Q1’19

Median Sales Price

$6.1M

$6.3M

$5.6M

Volume

$225M $235.6M $254.7M

Sales

37 37 45

Source: MLS Closed Sales

Miami’s private jet industry is soaring As the ultra-wealthy flee high-tax states and cold weather for South Florida, the market’s private jet industry is seeing major growth, with more and more flights taking off and landing in South Florida.

35%

increase in private flights in South Florida

Sources: Miami Herald & Privatefly

ISGWORLD.COM

$8.6M

$12.4M

DEMAND

Highest earners in U.S. leaving New York, Chicago, Silicon Valley for Miami

26

Population Growth As the populations of the world, country and state of Florida continue to surge, a significant upward pressure is placed on the demand for goods, services and housing.

World Population Growth 9.8B* 7.7B

1.5 Bil

BILLIONS

people in 1914

It will only take 33 years to add the next

3.5B 1.5B

1800

1914

1967

2018

2051*

2.1 Bil*

United States Population Growth 400M* 326.8M

100 Mil people in 1914

MILLIONS

200M It will only take 33 years to add the next

100M

1800

1914

1967

2018

Florida Population Growth

2051*

28.9M* 20.6M

Florida #2

21.3M

MILLIONS

18M

nationally in population growth (2014-2018)

6.6M

1967

73 Mil*

2006

2017

*Projected Source: WorldPopulation.com & Statchat.com

2019 MIAMI REPORT

2018

2040*

27

The U.S. is experiencing a domestic migration trend and population shift from states in the Northeast and Midwest to states in the South like Florida and Texas. According to U.S. Census data, Florida had the highest level of net domestic migration from 2017-2018.

1998 NORTHEAST

California........... 1,381 per day Texas..................... 884 per day Florida.................. 823 per day

WEST

MIDWEST

New York.............. 580 per day New Jersey........... 193 per day Illinois................... 150 per day

SOUTH

Connecticut.......... 130 per day Massachusetts...... 125 per day

2008

NORTHEAST

Texas.................. 1,200 per day California.............. 994 per day Florida.................. 473 per day

WEST

MIDWEST

New York.............. 430 per day Massachusetts........ 82 per day Illinois..................... 75 per day

SOUTH

Connecticut............ 70 per day New Jersey............. 55 per day

2018

NORTHEAST

Texas.................. 1,032 per day Florida.................. 902 per day California.............. 342 per day

WEST

New Jersey............. 55 per day

MIDWEST

Massachusetts........ 14 per day Connecticut............. -3 per day

SOUTH

Illinois.................. -123 per day New York............. -132 per day

Sources: U.S. Census Bureau

ISGWORLD.COM

DEMAND

Regional Population Migration

28

20 Years of Florida’s Daily Population Growth Florida has consistently been one of the most desirable states in terms of weather and tax climate, maintaining a strong average daily population growth throughout the last couple of decades.

FLORIDA 1200

1000

911

N U M B E R O F P E O P L E P E R D AY

823 800

862

818 747

827

869

890

789

550

600

522 437 343

400

200

0

1998

1999

2000

2001

2002

2003

Sources: U.S. Census Bureau

2019 MIAMI REPORT

2004

2005

2006

2007

2008

2009

2010

29 DEMAND

1,063 1,002 900

902

803 701 645

2011

2012

671

2013

781 Florida’s 20-year average daily population growth

2014

2015

2016

2017

2018

ISGWORLD.COM

30

Average daily population growth (last 20 years) (1998 - 2018)

TEXAS

FLORIDA

CALIFORNIA

1,159 per day

781 per day

943 per day

Source: U.S. Census Bureau

States with the largest daily population growth (2018) 1

2

3

TEXAS

FLORIDA

CALIFORNIA

1,032 per day

28.7 Mil total pop.

902 per day

21.3 Mil total pop.

342 per day

39.5 Mil total pop.

Source: U.S. Census Bureau

Projected average daily population growth (next 20 years) (2019 - 2040)

TEXAS

FLORIDA

CALIFORNIA

1,409 per day

946 per day

690 per day

Source: Statchat.com

2019 MIAMI REPORT

31

45%

Of the 902 people that Florida’s population grows by each day, 45 percent of them are in Miami-Dade, Broward and Palm Beach counties.

25%

of Florida’s daily population growth occurs in South Florida

12%

Broward (Fort Lauderdale)

Miami-Dade

8%

Palm Beach

55%

rest of the state

Source: Demographics for the Bureau of Economics and Business

ISGWORLD.COM

DEMAND

Florida’s Daily Population Growth

Photo by Blake Connally

32

Florida

#2

in population growth

Photo by Jonathan Riley

in population loss

#1

New York 2019 MIAMI REPORT

33 DEMAND

Florida vs. New York New Yorkers seeking milder weather and lower taxes are increasingly drawn to states like Florida, driving New York into a daily population loss for the first time in history.

[Miami] is experiencing more activity than usual from buyers living in states like New York, New Jersey and Illinois.

Daily Population Growth (Florida vs. New York)

FLORIDA

1,002

NEW YORK

1,063

902 900

people per day in Florida

2017

2018

N U M B E R O F P E O P L E P E R D AY

803 701

645

671

522 437 343

2008

2009

2010

2011

2012

2013

2014

2015

2016

-132 Sources: U.S. Census Bureau

ISGWORLD.COM

people per day in New York

34

MLS/RESALE MARKET & RENTAL TRENDS

2019 MIAMI REPORT

35 MLS/RESALE MARKET & RENTAL TRENDS

Downtown Miami

Photo by Frank Charles

ISGWORLD.COM

36

Miami-Dade & Broward Residential Snapshot Single-Family Homes, Townhomes, Condos and Rental Units available on the MLS

What is Total Housing Units?

Total single-family homes, townhomes, condos and apartments for sale or rent that have been delivered in Miami-Dade and Broward County

Real Estate Rule of Thumb 5% of inventory on the market or below = a seller's market.

10% of inventory on the market or above = a buyer's market.

MIAMI-DADE COUNTY

LOW INVENTORY

Total housing inventory: 1,024,211

ONLY 3.31%

of total housing units are available for sale or rent in Miami-Dade County

96.69%

3.31%

(unavailable)

Total Active Single-Family Homes.................... 6,932 0.68% Total Active Condos / Townhomes................ 16,067 1.57% Total Active Rentals......................................... 10,865 1.06% TOTAL ACTIVE LISTINGS..............................33,864 3.31%

BROWARD COUNTY

LOW INVENTORY

Total housing inventory: 823,602

ONLY 2.30%

of total housing units are available for sale or rent in Broward County

97.70%

(unavailable)

2.30%

Total Active Single-Family Homes.................... 5.925 0.72% Total Active Condos / Townhomes.................. 8,098 0.98% Total Active Rentals........................................... 4,890 0.59% TOTAL ACTIVE LISTINGS..............................18,913 2.30%

Sources: U.S. Census Bureau & MLS

2019 MIAMI REPORT

37

Total new construction condo units delivered in Brickell, Biscayne Corridor (Edgewater, Wynwood, Midtown, Design District, Omni), Downtown Miami, The Beaches (South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach), Aventura, North Miami Beach, Coconut Grove and Key Biscayne since 2012

Total Units Delivered

Total Active MLS Listings**

% Active

(2012-2019)

Brickell

4,974

783

15.74%

Downtown Miami/Biscayne Corridor

4,588

690

15.03%

The Beaches

2,575

444

17.24%

Aventura/North Miami Beach

1,442

261

18.10%

Coconut Grove/Key Biscayne

544

83

15.26%

Fort Lauderdale

931

107

11.49%

15,054*

2,368

15.73%

Totals

* Under construction/pre-construction projects not included, only those with certificate of occupancy. ** Total active MLS listings as of May 2019

Total Units Delivered (2012-2019)

15,054* Total Active MLS Listings

2,368 % Active

15.73% Source: MLS

ISGWORLD.COM

MLS/RESALE MARKET & RENTAL TRENDS

Condo MLS/Resale Market Snapshot

38

Unsold Developer Inventory vs. MLS/Resale Absorption Analysis Total new construction condo units delivered in Brickell, Biscayne Corridor (Edgewater, Wynwood, Midtown, Design District, Omni), Downtown Miami, The Beaches (South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach), Aventura, North Miami Beach, Coconut Grove and Key Biscayne since 2012 TOTAL UNSOLD DEVELOPER INVENTORY

TOTAL MLS RESALE’S SOLD

5,195 5,000

3,860

4,000

DE

3,000

VE

LO

PE

RI NV EN

TO

RY

DE

CL

INI

2,498 NG

2,000

1,000

88

259

455

0

Dec 2016

*Projected

Dec 2017

Source: MLS

2019 MIAMI REPORT

Dec 2018

39

MLS/Resale transactions continue to increase.

MLS reported a 75% increase in resale transactions in 2018 for condos built since 2012

1,238*

638* MLS/ T O TA L

1,000+* Total MLS/Resales sold RE L D IN C ES SO L A S E R

A S IN G

0* - Developer inventory SOLD OUT* Dec 2019*

Dec 2021*

ISGWORLD.COM

MLS/RESALE MARKET & RENTAL TRENDS

As developer inventory continues to decline,

40

Condo MLS/Rental Market Snapshot Total new construction condo units delivered in Brickell, Biscayne Corridor (Edgewater, Wynwood, Midtown, Design District, Omni), Downtown Miami, The Beaches (South Beach, Miami Beach, Surfside, Bal Harbour, Bay Harbor Islands, Sunny Isles Beach, Hallandale Beach, Hollywood Beach), Aventura, North Miami Beach, Coconut Grove and Key Biscayne since 2012

Total Units Delivered (2012-2019)

Total Active for Rent*

Asking $/PSF

Rented 2017 $/PSF

Rented 2018 $/PSF

Brickell

4,974

234

$3.32

$2.76

$3.19

Downtown Miami/Biscayne Corridor

4,588

370

$2.88

$2.61

$2.63

The Beaches

2,575

117

$5.02

$4.02

$4.33

Aventura/North Miami Beach

1,442

104

$2.60

$2.20

$2.40

Coconut Grove/Key Biscayne

544

34

$4.67

$4.50

$4.61

Fort Lauderdale

931

23

$4.45

$3.23

$3.49

15,054*

882

$3.82

$3.22

$3.44

Totals * Total active MLS listings as of May 2019

Total Units Delivered (2012-2019)

15,054

*

Total Active Units Available for Rent

882 Average MLS Rental Absorption

4 months

(based on 2018 average absorption of 230 units per month)

*Under construction/pre-construction/multi-family projects not included.

Source: MLS

2019 MIAMI REPORT

41

MLS/RESALE MARKET & RENTAL TRENDS

ISGWORLD.COM

42

COMMERCIAL SNAPSHOT

Brickell City Centre Photo by Janis Laubergs

2019 MIAMI REPORT

43

COMMERCIAL SNAPSHOT

ISGWORLD.COM

Brickell City Centre

44

Retail Miami boasts some of the most desirable retail

Miami-Dade retail vacancy rates

Miami-Dade retail rents

(2013-2018)

(2018)

Under 4% 15%

property in the world. Vacancies are below 4 percent overall, while new neighborhoods for development are constantly on the rise.

Miami-Dade retail asking rates and total market availability rate ASKING RENT

VACANCY RATE

Availability Rate ($PSF)

Vacancy Rate (%)

$40

5%

$36.59 $35

4%

3.2% $30

3%

$25

2%

2013 * Projected

2014

2015

2016

2017

2018

2019*

2020*

Source: CBRE Research - Q4 2018

Largest mall in the U.S. is coming to Miami Spanning 6 million square feet, the $4 billion American Dream Miami will be a retail and entertainment complex about twice the size of the nation’s current largest mall, the King of Prussia Mall in Pennsylvania.

$4 Bil

retail and entertainment complex

6 Mil square feet

Source: Business Insider - May 2018

American Dream Miami 2019 MIAMI REPORT

45 COMMERCIAL SNAPSHOT

Terminal

Office As Miami’s job market grows, so does the value of its office space. Price per square foot, absorptions and completions are all up. One look at the burgeoning downtown area tells you all you need to know about this thriving sector.

Lease rate (PPSF)

$45.60

Net Absorption

76,000 SF

Completions

214,000 SF

Asking lease rate ($) CLASS A

CLASS B

$50

$45.60

$45 $40

$36.10

$33.89

$35 $30

$27.18

$25 $20

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

Source: CBRE Research - Q4 2018

Industrial

Miami’s strong economy and job growth suggest another strong year for the industrial market in 2019. Similar to 2018, heavy demand for warehouse/distribution space and continued trade will support the market, keeping vacancy rates low.

Overall Vacancy 8% 6%

5-YEAR HISTORICAL AVERAGE = 5.4%

3.7%

4% 2% 0%

2014

2015

2016

2017

2018 ISGWORLD.COM

Vacancy levels dropped at a record pace to 3.7% Source: Cushman and Wakefield - Q4 2018 update

46

INTERNATIONAL

2019 MIAMI REPORT

47 INTERNATIONAL

Miami Beach

Photo by Raphaël Biscaldi

ISGWORLD.COM

48

Miami

Mexico Mexico’s current leftist government has created a sense of cautiousness among high-net-worth individuals. We are currently seeing an increase in Mexicans seeking to purchase high-end condos and make other real estate investments in Miami as a “plan B,” should their political situation change for the worse.

Wealthy Mexicans have always viewed Miami as a safe haven, and are attracted to the social and financial security it offers.

Population: 123 Mil President: Andrés Manuel López Obrador

Colombia Over the past few years, Colombia has remained a fairly steady market, with stable political and social conditions, even more so since Iván Duque Márquez became President. We see constant activity from Colombians buying real estate in Miami, both as investments to diversify their portfolio with, and as second homes, primarily in high-end condo buildings.

Population: 49.9 Mil President: Iván Duque Márquez

2019 MIAMI REPORT

49 INTERNATIONAL

International Markets Contributed by Sergio Pintos

The growing population and desire from international buyers, specifically from Latin America, have always fueled the Miami real estate market. The high U.S. dollar and political uncertainty in several Latin American countries over the last real estate cycle have had an impact on the South Florida condominium market. Below is an update on some of the most active markets for Miami currently.

Florida

#1

in U.S. foreign buyer sales (2018) Source: National Association of Realtors

Brazil Brazil is exiting one of the worst recessions in its history.

Last year, a new right-wing government won the election and is creating a new image for the country in an effort to generate economic confidence. High-net-worth Brazilians are coming to Miami to buy real estate because they remain uncertain about the future of their economy and enjoy the security of the U.S. A policy shift to reform the country’s pension system is crucial to Brazil’s economic growth and could result in more interest in Miami real estate.

Population: 208.5 Mil President: Jair Bolsonaro

Argentina Argentina is currently facing political, social and economic challenges. The depreciation of the peso since Mauricio Macri assumed office in 2015 has caused negative sentiment around his presidency. With elections this October, there is some suggestion that former president Cristina FernĂĄndez de Kirchner could be re-elected, which could cause further economic and social unrest for the country, prompting more Argentinians to invest in Miami real estate.

Population: 44.7 Mil President: Mauricio Macri ISGWORLD.COM

50

TRANSPORTATION

2019 MIAMI REPORT

51 TRANSPORTATION

Miami

Photo by Eduardo Velazco Guart

ISGWORLD.COM

52

“Brightline is at the forefront of innovation in this market, and the ideal partner for Virgin to work with to alter perceptions and traveling habits across the United States.�

RICHARD BRANSON Founder, Virgin Group

2019 MIAMI REPORT

53 TRANSPORTATION

By Land Virgin Trains Florida’s intercity rail service, formerly Brightline, is rebranding itself as Virgin Trains. Thanks to a new partnership with Richard Branson’s Virgin Group, the train system will utilize the international company’s brand recognition to help promote its services, while Virgin makes a footprint in one of the U.S.’s hottest markets.

Photos courtesy of Brightline

Next stop: Orlando

Orlando

Brightline/Virgin Trains’ planned future expansion includes

Tampa

Orlando, with a station to be located at Orlando International

Theme Park Area

Airport. Virgin has filed plans and secured funding of $1.75 billion for its expansion to Orlando, and has proposed to extend their train service to Orlando’s theme park area, as well as Tampa.

West Palm Beach Current Station & Route Future Station & Route

Fort Lauderdale Miami

Expected launch of Orlando to Tampa service

2021 Source: The Next Miami

Connecting Miami Interstate 395, which connects Miami Beach to downtown Miami, is currently undergoing an $800 million restructuring. The project includes a design-focused statement bridge, as well as plans to add 30 acres of urban parkland and revitalize parts of the historic community of Overtown.

$800 Mil ISGWORLD.COM

Interstate 395 Redesign

54

Port Miami PortMiami, the busiest cruise port in the world, once again won Porthole Cruise Magazine’s Editor-in-Chief Award for Best U.S. Port in recognition for its customer service, quality operations and all around excellence.

#1

Photo by Linval Ebanks

Leading cruise port in North America

$43 Mil Economic impact

Carlos Gimenez, Miami-Dade County Mayor

Source: World Travel Awards

Cruise capital of the world Anyone who drives over the I-395 causeway is familiar with the impressive line of ships coming in and out of PortMiami. Its cruise terminals are among the most modern in the world, hosting 22 cruise lines and 55 ships, and setting the bar in passenger service.

Source: Miami Dade County, PortMiami, Sun-Sentinel, Cruise & Ferry, Travel Weekly

Record-breaking

55,819

22

passengers in one day

Cruise Lines

(short 66 people for world record)

Port Everglades: 11 • Port Canaveral: 4

Record-breaking

Soon to be the only port with

in new development

year-long cruise lines

$500 Mil+ 2019 MIAMI REPORT

5

55 TRANSPORTATION

Terminals on the rise On the heels of the completion of Royal Caribbean’s “Crown of Miami,” comes Norwegian Cruise Line’s “Pearl” of Miami. Slated for completion by fall 2019, the new terminal will welcome the Norwegian Encore, the newest ship in the cruise line’s Breakaway Plus class. PortMiami’s other major cruise lines also have big plans in the works for their terminals.

Royal Caribbean’s “Crown of Miami” cruise terminal, the largest in the U.S., is now open NEW TERMINALS TO COME FOR: Norwegian Cruise Line Disney Cruise Line MSC Cruises Virgin Voyages Source: Cruise Ferry

PortMiami welcomes Virgin Voyages Virgin Group’s bold, new cruise line,

to free Wifi and a focus on environmental

Virgin Voyages, is now in business. Its first

protection, Virgin Voyages will offer a

ship, Scarlet Lady, will set sail from

cruising experience that is quite different

Virgin’s new PortMiami terminal in

from that of traditional cruise lines.

April 2020. From no buffets on board,

New $300 million Royal Caribbean HQ coming to PortMiami Royal Caribbean is expanding its main headquarters at PortMiami. The new, ten-story, 350,000-square-foot complex breaks ground this year and is expected to be completed by the end of 2020.

$300 Mil Minimal construction cost

350,000 Sq. ft. corporate campus

Source: The Next Miami

Source: South Florida Business Journal

ISGWORLD.COM

56

By Air Both Miami International Airport and Fort LauderdaleHollywood International Airport are among the busiest in the U.S. in terms of international passengers and flight options. Each year, they continue to grow their airline offerings and departures, and serve as top economic engines for Miami-Dade and Broward counties, as well as the state of Florida.

Miami International Airport & Fort Lauderdale-Hollywood International Airport

80 Mil Passengers To put it in perspective:

160%

180%

of Colombia’s total population

of Argentina’s total population

$62 Bil in economic impact for Miami-Dade and Broward Counties Source: Miami International Airport & Fort Lauderdale-Hollywood International Airport

Photo by chuttersnap

2019 MIAMI REPORT

57 TRANSPORTATION

Busiest airports TOTAL DEPARTURES PER DAY BY STATE #1 New York

(1,613)

#2 California

(1,611)

#3 Florida

(1,555)

#4 Texas

(1,476)

#5 Illinois

(1,376)

Source: Flightfrom.com

Lufthansa first to offer facial recognition departures from MIA Passengers departing from Miami International Airport to Munich on Lufthansa flight 461 can now board with the quick click of a camera instead of a boarding pass and passport, thanks to the airport’s launch of biometric exit technology.

Source: Miami International Airport

Miami International Airport Direct Weekly Flights A sampling DOMESTIC Atlanta........................................... 988 Chicago......................................... 701 Dallas............................................. 592 Houston......................................... 521 Los Angeles................................... 817 New Jersey.................................... 411 New York..................................... 2101 San Francisco................................. 309 Washington................................... 790 EUROPE & MIDDLE EAST Denmark............................................ 4 Turkey................................................ 7 London.............................................. 5 Russia................................................. 7 Israel.................................................. 3 Switzerland........................................ 3

#1 in flights to Latin America and the Caribbean SOUTH AMERICA Ecuador........................................... 48 Peru................................................. 42 Colombia......................................... 93 Venezuela........................................ 69 Guyana.............................................. 2 Suriname........................................... 5 Brazil.............................................. 121 Paraguay............................................ 4 Bolivia................................................ 9 Chile................................................ 31 Argentina......................................... 47 Uruguay............................................. 9 Source: Miami International Airport

Photo by Brandi Ibrao

ISGWORLD.COM

58

CULTURAL & ECONOMIC GROWTH

Institute of Contemporary Art Photo by Juno Jo

2019 MIAMI REPORT

59

CULTURAL & ECONOMIC GROWTH

ISGWORLD.COM

60

Florida’s economy is the

Economic Landscape

4

th

Referred to as “The Gateway to the

connectivity, multi-cultural population

Americas,” Miami has long been a

and desirable quality of life. From

crucial market for companies seeking an

flourishing startups and Fortune 500

international foothold, especially within

businesses, to the thriving tech scene,

Latin America. Global corporations are

South Florida’s also become a magnet

drawn to the city’s low taxes,

for talented professionals.

largest in the U.S. Florida

#3

Florida’s economy tops $1 trillion

best taxpayer ROI

US WORLD NEWS

Florida

LARGEST U.S. ECONOMIES BY STATE

U.S. Ranking

#4

World Ranking

California 1 5 Texas

2 10

New York

3

business climate index

12

Sources: South Florida Business Journal, Tax Foundation 2019 State Business Tax Climate Index, WalletHub

Florida 4 17

Florida markets lead U.S. for economic momentum

ECONOMIC MOMENTUM INDEX

Florida’s economy is booming and has become the 17th

Orlando

157

West Palm Beach

150

Tampa

138

Dallas

137

Austin

136

Florida. From growing populations that support strong

Houston

126

San Jose

123

economic and commercial real estate fundamentals, to

Ft. Lauderdale

122

the lack of state income taxes in the state, the dynamics

Salt Lake City

120

largest economy in the world. Cushman & Wakefield evaluated markets around the country across a range of factors indicative of economic momentum. Of the 10 cities with the most economic momentum, five are in

in these markets create a more favorable environment for development and investment.

Miami

120 0

20

40

60

80

100

120

140

Source: Cushman & Wakefield

New opportunity zone program for investors Studies of the new federal Opportunity Zone Program are naming South Florida one of the most desirable destinations for these types of investments. Because Miami boasts a growing population, no state tax and a strong real estate market, investors can take advantage of delaying capital gains taxes by investing in economically distressed communities.

Sources: bisnow, floridajobs.org

2019 MIAMI REPORT

“The program could become the most impactful federal incentive for equity capital investment in low-income and distressed communities ever.”

61

economy is thriving, expanding at a record pace.”

Brickell

Tax comparisons: metropolitan areas Personal Income Tax %

Corporate Income Tax %

Florida’s Tax Advantages Sales Tax %

City

State Local State Local State Local

Miami

0.00 0.00 5.50 0.00 6.00 1.00

New York

4.0-8.9

2.9-3.6

7.10

8.85

4.00

Chicago

5.00 0.00 9.50 0.00 6.25 3.00

Houston

0.00 0.00 1.00 0.00 6.25 2.00

ISGWORLD.COM

0%

State Personal Income Tax

0%

State Corporate Income Tax

5.5%

4.50

Los Angeles 1.0-9.55 0.00 8.84 0.00 8.25 1.50

Source: Tax Foundation 2019 State Business Tax Climate Index

Local Personal Income Tax

CULTURAL & ECONOMIC GROWTH

“Florida’s

62

W Residences Fort Lauderdale

“Buy into a reputable brand and you have the assurance in the delivery and quality of the development as well as professional management.�

CHRIS GRAHAM Graham Associates

Auberge Beach Residences & Spa Fort Lauderdale

The Ritz-Carlton Bal Harbour

2019 MIAMI REPORT

63

What defines a branded residence?

The traditional branded concept is a

(smooth running) and services (luxury).

hotel-led development with integrated or

In essence, this gives the owner the comfort

linked residences. They naturally benefit

and performance of a home but with the

from the hotel brand (quality), management

full benefits and luxury of a five-star hotel.

The Value of Branded Residences

PRIME LOCATIONS

HASSLE-FREE OWNERSHIP

Located in major, world-class cities as

Owners of branded residences enjoy peace

well as luxurious beach and resort locales,

of mind that their property will be safe

branded residences are found in the most

and maintained in their absence, as well as

desirable destinations in the world.

rental flexibility and the option to rent their property through the development’s hotel

PROFESSIONAL, TRUSTWORTHY & CREDIBLE MANAGEMENT

Buyers can expect certain management standards from these prestigious and reliable brands, as well as an assurance of quality and consistent re-investment in and

rental program.

maintenance of the property and brand.

SUPERIOR SERVICES & AMENITIES

OWNER BENEFITS

STRONGER RESALE VALUES

Reputable, respected and desired brands

A branded residence typically comes with

Branded residences tend to sell at higher

consistently deliver 5-star service and quality amenities to all residents.

owner-specific perks including exclusive access or discounts to property amenities, restaurants and other properties that the

prices than non-branded properties as their limited availability and exclusivity help maintain property values.

brand operates.

Sampling of South Florida’s branded residences

BY THE NUMBERS

40+

properties in South Florida

400

properties globally

69,000

branded units globally by 2023 Source: Knight Frank Branded Residence Report

ISGWORLD.COM

CULTURAL & ECONOMIC GROWTH

Real Estate Trend: Branded Residences

64

A Transformative Tech Scene Rapid job growth in Miami’s tech sector has made the city one of the most attractive for technology professionals.

According to a recent report from RentCafe, from 2014 – 2017, the Miami metro area had the fifth-fastest rate of tech job growth in the U.S., higher than that of San Francisco, and growing by more than 20 percent.

Miami #1 in the U.S. for startups

Tech job growth

40%

(projected to grow an additional 11% by 2023)

Courtesy of Magic Leap

Source: miamiherald.com

Miami becoming a true “startup city”

$25 Mil+ investment in co-working spaces, accelerators and events such as eMerge Americas since 2012

For the last two years, the Kauffman Foundation, a nonprofit focused on entrepreneurship, has ranked Miami #1 in the U.S. for startups. Corporations from all over the world, from Goldman Sachs to Endeavor to Cambridge Innovation Center, are investing in Miami’s burgeoning startup scene.

Source: miamiherald.com

2019 MIAMI REPORT

65 CULTURAL & ECONOMIC GROWTH

TheVentureCity brings Google Launchpad to Miami Miami-based tech startup accelerator and

in the U.S. outside of Silicon Valley. The

consultancy TheVentureCity partnered with

intensive program aims to boost the growth

Google Launchpad, a global acceleration

of startups in flourishing tech markets, which

program created by Google for developers,

further positions Miami as an international

to bring the tech-focused workshop to Miami,

startup launcher.

making it the first city to host the program Source: prnewswire.com

“We believe that Miami is on the cusp of something transformative and we know the data and trends back it up.�

FELICE GORORDO CEO of eMerge Americas

2018 SOUTH FLORIDA TECH MARKET

$1.38 Bil invested in South Florida startups

128

startup deals

Top venture capital-funded South Florida companies 2018 sampling

Source: eMerge Insights Report

ISGWORLD.COM

Ranked

11th

in the nation in venture activity & investments by dollar volume

66

Top 10 hotel markets in the U.S. 1. New York 2. Oahu Island 3. San Francisco

Hospitality

4. Miami 5. Boston

Miami’s tourism industry is extremely

beyond the beaches. According to the

robust, attracting a record 16.5 million

Miami Downtown Development Authority,

overnight visitors in 2018, up 3.5% from

growth in tourism in downtown Miami

7. San Diego

2017. While Miami Beach remains home

has led to a boom in hotel construction,

to some of the area’s top hotels, the

with nearly 4,000 new hotel rooms in the

8. Anaheim

region’s tourism boom has spread well

development pipeline.

6. Los Angeles

9. Seattle 10. Washington, D.C. Source: STR

2018

23.3 Mil total number of visitors

$18 Bil economic impact HIGHLIGHTS • Latin America and New York City were key feeder markets in 2018, contributing significantly to the total overnight visitors.

• The top three countries of origin for overnight international visitors into Greater Miami were Brazil, Colombia and Argentina.

Source: GMCVB 2018 Visitor Industry Overview

W Fort Lauderdale 2019 MIAMI REPORT

67 CULTURAL & ECONOMIC GROWTH

Waldorf Astoria Hotel & Residences Miami Image by ARX Solutions Courtesy Property Markets Group

Miami is getting its first Waldorf Astoria Hotel and Residences — and it will change the city’s skyline

1,049 Feet Tall

200 Hotel Rooms*

400 Condos*

“Miami – a vibrant, dynamic and truly cosmopolitan destination that draws travelers from all over the world – is the perfect market for our Waldorf Astoria brand.”

Danny Hughes President for the Americas, Hilton

*Proposed

Source: South Florida Business Journal

ISGWORLD.COM

68

$1.43 Bil Photo by George Pagan III / Wynwood Arts District

Arts and cultural economic impact

Arts & Culture

16 Mil+

annual visitors to Miami-Dade cultural events and venues

Miami loves art and art loves Miami.

sector generates a whopping $1.43 billion

A recent study by Americans for the Arts,

in economic activity annually. Additionally,

the nation’s leading nonprofit organization

attendance at Miami-Dade’s cultural events

for advancing the arts and arts education,

continues to grow, representing over

found that Miami-Dade’s arts and cultural

16 million global attendees annually.

$158 Mil Local and state revenue

Source: Miami-Dade County Department of Cultural Affairs

Miami-Dade County is in the top ranks of comparable American cities with New York, Chicago and Philadelphia in the arts.

Adolfo Henriques Chairman of the Miami-Dade Cultural Affairs Council

Photo by Ruben Ramirez

2019 MIAMI REPORT

69

CONTINUING SUPPORT OF THE MIAMI ART SCENE Knight Foundation invests an additional $37 million in Miami arts This latest investment of $37 million brings the total arts funding that the Foundation has contributed to the city since 2005 to $165 million, which supports the growth of Miami as a force for arts and culture. The new funding will be invested in: • Fostering the work of anchor institutions • Promoting the creation of cutting-edge art in Miami • Advancing training and learning opportunities • Knight Arts open calls for ideas

Art Center/South Florida Miami art scene’s new $100 million player Nonprofit ArtCenter/South Florida has accumulated $100 million, more than any other South Florida visual arts organization, to help grow Miami’s art infrastructure and provide career support for emerging artists. In a move from South Beach to Little Haiti, the ArtCenter will build a new $30 million facility scheduled to break ground in Fall 2020 with a planned opening in Spring 2022.

A new $30 million, 40,000-square-foot art center will include: • 22 studios for resident artists

• 2,500-square-foot exhibition space

• 120-seat theater

• Classrooms and work spaces

Surrounded Islands made a lasting impact on the city’s cultural history, marking the birth of Miami’s international artistic profile while anticipating its rise as a hub for contemporary art.

Source: PAMM.org

Source: KnightFoundation.org

To commemorate the 35th anniversary of Surrounded Islands, Christo and JeanneClaude’s renowned 1983 installation, Pérez Art Museum Miami presented a special documentary exhibition from October 2018 – February 2019.

Source: The New York Times

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CULTURAL & ECONOMIC GROWTH

ART SPOTLIGHT

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Sports Already a sports haven and home to four major professional

David Beckham’s MLS team unveils name and crest

teams, including the Miami Dolphins, Miami Heat, Miami Marlins, and Florida Panthers, Miami is now home to the future Major League Soccer team Inter Miami CF, who’s ownership group is led by David Beckham. The team is slated to begin play in 2020 in a new training facility and stadium in Fort Lauderdale before relocating to its permanent home in Miami.

“Our mission to bring an MLS club to Miami is now complete and we are deeply satisfied, grateful and excited.”

David Beckham Inter Miami team owner and president of football operations

Inaugural season begins

2020

Source: Sun Sentinel

2019 MIAMI REPORT

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Super Bowl LIV South Florida hosts record-breaking 11th Super Bowl

diverse and dynamic. In a lot of ways, I think Miami is a curator for culture for the rest of the country, and in some ways for the rest of the world.”

Tom Garfinkel President and CEO of the Miami Dolphins and Hard Rock Stadium

Miami will host the Super Bowl in 2020, which will celebrate the NFL’s 100th centennial season. While the big game will be played at Hard Rock Stadium, downtown Miami will be transformed into the Super Bowl Live fan village.

Bayfront Park and Museum Park will become “Super Bowl Park,” hosting a full week of events including concerts, large-screen broadcasts and numerous activations.

NFL celebrating

100th Season South Florida

#1

in number of Super Bowls hosted Estimated

$500 Mil in economic impact

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CULTURAL & ECONOMIC GROWTH

“I think Miami continues to grow, and get more

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Education Year after year, Miami continues to top itself in terms of the quality and quantity of its educational offerings. The private schools are top-notch, the magnet schools have been ranked among the best in the U.S. and Florida International University, the city’s public research university, is breaking records for growth and performance.

As the wealthy flock to Miami, private schools report massive waiting lists

New Schools Coming to Miami’s Urban Core Southside Elementary K-8 expansion to be completed by 2021

An influx of wealthy out-of-state buyers seeking to avoid the effects of the recent tax reform is creating huge waiting lists at Miami’s most elite private schools. The schools are seeing a big increase in applications from families from New York, New Jersey, Chicago, Boston and California.

Miami schools say they are seeing a sharp uptick in demand as a result:

Mater Brickell Preparatory Academy New facility to be completed by 2021

• Palmer Trinity School says the number of families from New York and New Jersey have doubled in the past year.

• Miami Country Day School has seen an uptick in applicants from New York, Boston, Chicago, Los Angeles and Houston.

Avenues: The World School Manhattan-based private academy to open Miami location in 2022

• Gulliver Schools has seen a lot of interest from families moving to Miami both from high-tax states and around the world.

• Ransom Everglades School’s waiting lists are always full.

Source: Business Insider

2019 MIAMI REPORT

73

#1

Miami tops country in certified national magnet schools Miami-Dade County Public Schools is now home to 21 certified magnet schools, more than any other district in the U.S. Seven

in U.S. for total number of magnet schools

of those schools have earned the bonus “Demonstration” designation for exceeding the criteria outlined in the Magnet Schools of America (MSA) Standards of Excellence.

MAGNET SCHOOLS BY STATE #1 Florida

581

#2 California

529

#3 Texas

260

Source: Miami-Dade County Public Schools / Florida Department of Education

U.S. News & World report recently ranked Florida the #1 state for higher education for the second year in a row.

FIU second behind UF in new performance score New performance scores from the Florida Board of Governors of the state’s public universities ranked Florida International University (FIU) second in the state, just behind the University of Florida (UF) in Gainesville.

FIU’s increase in these key performance measures resulted in additional funding for the school.

Source: South Florida Business Journal

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CULTURAL & ECONOMIC GROWTH

Florida ranked

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New Construction Beyond mixed-use development Brickell City Centre, the neighborhood’s

ISG City Watch: Brickell

$1.05 billion anchor including two condo towers - Reach & Rise, office buildings, the EAST, Miami hotel and 500,000 square feet of retail, other major new developments to the area include Echo Brickell, SLS Lux and Brickell Flatiron.

With its booming population, surge of new condominiums and hotels and some of the hottest new bars and restaurants, the Brickell neighborhood has become one of the

Brickell City Centre

fastest-growing destinations in the country. A magnet for both business and tourism, this highly accessible and thriving district offers a true “live, work, play” lifestyle.

WHY BRICKELL?

45%

of Greater Downtown Miami’s population resides there

15 Mil

visitors go to Brickell every year

#1

concentration of international banks in the U.S. & second-largest financial hub outside of New York’s City’s financial district Source: Forbes

2019 MIAMI REPORT

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Just north of Brickell, residents and visitors can enjoy the city’s best

Connectivity

cultural destinations, from premier performance and entertainment venues like the Adrienne Arsht Center for the Performing Arts, to

Get everywhere you need to go in Miami with

world-class art and science museums like Pérez Art Museum Miami.

Brickell’s easy access to public transportation including the Metromover, Miami Trolley and Virgin Trains, as well as a variety of ridesharing options.

Metromover

Wellness Lifestyle Staying fit and active is a breeze in Brickell. Take a jog around beautiful Brickell Key, or enjoy a yoga class in downtown’s Bayfront Park.

Phillip and Patricia Frost Museum of Science

Baywalk

Delicious eats From top-rated Italian, Asian and Latin cuisines, to some of the best sushi in the city, Brickell offers an extensive list of trendy Pubbelly Sushi

and tasty restaurants including Casa Tua Cucina, NAOE and Quinto La Huella.

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CULTURAL & ECONOMIC GROWTH

Creative Culture

76

Landscape of the Future

SkyRise Miami

Biscayne Green

The 1,000-foot observation tower and entertainment center is a revolutionary structure that will capture Miami’s energy and exhilaration.

The Biscayne Green project will convert sections of Biscayne Boulevard into a grand promenade with sitting areas, green spaces, and “activations” including art exhibits and activities.

Status: Under construction

Status: Planning phase

Greater Downtown Miami is rapidly evolving into a world-class neighborhood.

A wave of transformational new developments is coming, adding to its accessibility, pedestrian-friendliness, retail and tourism offerings, and changing the landscape of Miami forever.

PortMiami

Bayside

Museum Park Pérez Art Museum Miami

Baywalk Virgin Trains USA Metromover Metrorail 2019 MIAMI REPORT

77

Miami Worldcenter

The Underline

The $802 million project will completely reconstruct the existing interstate, create a signature bridge that will span 1,025 feet and transform the area beneath I-395 into 55 acres of open communal green space.

The $2.7 billion mixed-use development is the biggest in the U.S. after New York’s Hudson Yards and will include 450,000 square feet of retail and a condo tower complete with a flying cars SkyPort.

The 10-mile linear park, urban trail and living art destination will connect communities, improve pedestrian and bicyclist safety and create over 120 acres of open space.

Status: Under construction

Status: Under construction

Status: Under construction

Brickell City Centre

Bayfront Park

AmericanAirlines Arena

Freedom Tower

Phillip and Patricia Frost Museum of Science

Adrienne Arsht Center for the Performing Arts

Source: Miami Downtown Development Authority, Florida Department of Transportation, Miamiworldcenter.com, Miami Today News, Bisnow

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CULTURAL & ECONOMIC GROWTH

I-395 Signature Bridge

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On the Ground Expert Insights on the South Florida Real Estate Landscape Alex Vidal

President RelatedISG International Realty

Q: The Miami Report is highlighting shockingly low

Q: What impact has the 2017 change to the federal

Are you seeing any similarities in the MLS/resale

Florida?

levels of developer condo inventory in South Florida. market for single-family homes?

A: In Miami-Dade and Broward counties, there are

tax law had on the general real estate market in South

A: We’ve seen an immediate impact on the ultra-

luxury market as a result of this recent change to the

approximately 13,000 active single-family homes

tax law. As an example, for single-family homes above

available for sale. This may sound like a large number,

$5 million, total sales volume jumped from $103.8

but it’s actually less than 1% of total housing units in

million in Q1 2018 to $224.6 million in Q1 2019. For

these markets.

condos above $3 million, total sales volume increased

MLS has reported that Miami-Dade and Broward have sold close to 32,000 homes per year over the last 3

from $235.6 million in Q1 2018 to $254.7 million in Q1 2019.

years, largely driven by our surging population growth.

Most of this activity is fueled by tax refugees from

Therefore, the 13,000 active single-family homes

high-tax states like New York, New Jersey, Illinois and

represent only five months of supply. So, yes,

California.

single-family home resale inventory is following the same trend as the low developer condo supply.

Q: At the moment, what are the most active

neighborhoods for resales for both single-family

Q: What are you seeing in terms of condominium

homes and condos?

resales on the MLS?

A: There are currently 21,000 condos active on the MLS between Miami-Dade and Broward counties.

MLS has reported annual resales of condos equaling 24,800 per year over the last 3 years. That means there is approximately one year of condo inventory on the

A: When it comes to resales of single-family homes, the most active submarkets are currently Fort Lauderdale, Pembroke Pines and Miramar.

For condo resales, the most active submarkets are Fort Lauderdale, Miami Beach and Brickell.

market.

Condo resale inventory is following a similar trend as that of single-family homes, for the same basic reasons.

In fact, we expect condo resale velocity to accelerate as developer inventory continues to shrink.

2019 MIAMI REPORT

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