National Real Estate Heavyweights Talk About Miami CRE
Despite signs that the South Florida condo market is slowing down, Blackstone Group, Prudential Real Estate Investors and Federal Realty Investment Trust executives remain bullish on the Miami commercial real estate market, according to a recent article in the South Florida Business Journal.
Low capitalization rates have driven up real estate prices in recent years but that probably won’t last as Treasury yields rise, said Alfonso Munk, chief investment officer of Americas with Prudential Real Estate Investors. He believes values will drop 12 months from now at a normal pace, he said.
“If it goes down 10 percent, then it’s not bad compared to the equities. We will be fine as long as we aren’t over-leveraged. Those crazy cap rates will get back to normal because they are unsustainable.”
Jon Gray, global head of real estate for the Blackstone Group, which manages close to $175 billion in real estate assets worldwide, is optimistic. He states that market fundamentals are too strong to see a steep decline.
Don C. Wood, president and CEO of Federal Realty Investment Trust, which recently bought CocoWalk and the Shops at Sunset Place, expects Miami to continue to grow in the next 10 to 20 years and expand its employment base.
Many experts believe that South Florida’s industrial market is a great investment because of its growing demand. The demand is fueled by e-commerce as online companies like Amazon seek centralized distribution centers near urban areas that facilitate same-day delivery.
“Warehouse is a great business in Miami because of the amount of commerce and the inability to find space,” Blackstone’s Jon Gray said.