Miami Land Banking: Is The Party Over?
When the condo market glowed red hot in Miami, condo developers were some of the most active buyers of development sites. They would buy rundown motels, office buildings, retail centers, and anything else that could be demolished to make room for a new condo tower. A good example is the office building on Biscayne Boulevard and 14th Street in downtown Miami that I marketed to office investors in 2014. The property ended up selling to the Related Group for $57.7 million and today is home to the planned 60-story tower Auberge Residences & Spa Miami.
Is that trend ending as condo projects don’t sell out quickly or are scrapped due to a weaker demand? The appetite for development sites won’t wane in the near future, based on what I see and hear in the industry. Prolific condo developers such as Terra Group, Dezer Group, Key International and others are still hunting for land that could be turned into condos in the next cycle. Case in point: Gil Dezer recently told The Real Deal he has about three acres of waterfront land under contract from Publix in Sunny Isles. The deal has at least two years left to close since his firm is not rushing to sell out their remaining projects and launch a new building. Gil Dezer is the developer of the luxurious Porsche Design and Armani/Casa towers under construction in Sunny Isles.
Inigo Ardid, who oversees the day-to-day operations of development projects as well as the acquisition of new properties for Key International, recently told The Real Deal that his company does a lot of buying when the real estate market slows. Key International, through various partnerships, are renowned for buying income-producing properties that can carry their cost until the site – and the market – is ready for redevelopment. A Key International partnership is building the luxurious 1010 Brickell, The Harbour, and Hyde Beach House.
Land banking isn’t over and I am not sure it will be in the near future. We have learned many lessons from the last recession, including buying land when no one else is interested.