Commercial Real Estate

Commercial Real Estate Insights From NAR Convention in Boston

Prudential Building – Boston

NAR’s annual conference was held in Boston earlier this week, and there were several takeaways for those of us who buy, sell and own commercial real estate.  Like the light shining forth to the Prudential building pictured above, Florida’s economy is strong and the future for bright.

  1.  Florida was the top state in the country for job growth rates for the 12 months ending September 2018.  The 4.83% in job growth will result in more real estate sales across the board.   Florida is well over a full % point ahead of the second state.
  2. Opportunity Zones (OZ) are still the talk among investors.  With two distinct tax advantages, deferral of capital gain tax with a portion (10% or 15%) escaping the tax depending on how long (5 years or 7 years) investment is held, and no tax on the appreciation if the asset is held for 10 years or more, there will be a lot of money flowing into these areas. Clarification from the Treasury is needed on a variety of the nuances of investing in these zones.  If you are considering investing in one of the funds, remember that the fact that a property is in an OZ won’t make a bad project good or even better, but it will make a good project very good.

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What Happening in Miami-Dade Multi-Family Market? Sales Rise In Second Quarter


As reported in Vizzda’s Quarterly Report For South Florida Commercial Real Estate, the total dollar amount of multi-family sales in Miami-Dade County rose to $232,943,000 in the second quarter of 2018, up from $196,115,503 in the first quarter.  This is approximately half of the $462,372,302 worth of sales in the second quarter of 2017.

The largest transaction was for Sundance Village Apartments, a 304 unit complex at 11325 NW 7 St., which closed for $65,600,000 or approximately $215,789 per unit.

What will third quarter activity look like?  Stay tuned for our next report or subscribe to our blog, so you don’t miss it.  Mill Creek Residential just closed on a 127 unit apartment complex in Dania Beach for $37.2 million.  Will it make the top 5 list of largest transactions in 3Q2018?

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Florida Is The Top Destination For Foreign Buyers

Photo Credit – Rusty Diaz ProImage

In  a sign of Florida’s continued attraction as a place to visit, live, work and invest, the National and Miami Association of Realtors 2017 Profile of International Activity states that foreign buyers purchased $153 billion of residential properties last year, approximately $50 billion more than in 2016.  Though purchases were made throughout the U.S., Florida, Texas, California, New Jersey and Arizona accounted for 54% of the sales.

Out of Florida’s $24.2 billion of residential purchases by international buyers, South Florida accounted for $7.1 billion.  Although the majority of these buyers were from South America, France and Italy were also in the top buying countries followed by Canada, Israel, Mexico, Russia and Switzerland.  Increasing the diversity of South Florida’s population is great news and great for business!  The top purchasing country in Miami-Dade was Venezuela 12%, in Broward it was Canada also with 12%, and in Palm Beach County Canada accounted for 31% of all international purchases.

Buying Selling

What Do The Election Results Mean For Real Estate?



The long election  is finally over and the question I am getting asked a lot is, “What does it all mean for the real estate market?”  A recent video put out by the National Association of Realtors sums up the election as follows:

  • In Congress, not much has changed.  Republicans controlled the House and the Senate before the election and they control the House and the Senate after the election.  This will help NAR moving forward on flood insurance, tax reform, and the re-invention of Fannie Mae and Freddie Mac, since Realtors® had been working on these issues with the previous Congress, thereby providing continuity.
  • Flood Insurance:  The National Flood Insurance Program is $24 Billion in debt, which needs to be addressed.  States vary on the importance they give this program and how flood insurance should be covered.  Nevada has a different view than New Orleans and Florida and NAR is active in trying to negotiate a solution so that insurance is available and real estate transactions can continue taking place.
  • Tax Reform:  The mortgage interest deduction, property tax deduction, capital gains exemption and 1031 Like Kind Exchanges are all under consideration for reform.  No bills have been filed yet, but there are different proposals that have been floated by a variety of legislators.
  • Fannie Mae and Freddie Mac:  Their future is totally up in the air and NAR will keep an eye on any new proposals that are put forth.
  • Dodd Frank and the Consumer Protection Bureau:  These will be revisited.  Under Dodd Frank, regulations that affect smaller banks will probably be relaxed.  Since approximately half of current mortgage lending is being done by non-bank banks (on-line lenders), regulations may start addressing them.  Overall, the view is that federal regulations will be loosened and state and local regulations will increase.

Another topic that will be looked at is refinancing student loans, which would help get young people with a lot of student debt into mortgages and homeownership.  This is obviously a national overview.  I will go into more detail as to what the elections mean for us locally and for commercial real estate in future blogs.  Stay tuned!


Commercial Real Estate Investment Real Estate Restaurants

Top 3 Retail ‘Buy’ Markets Are In South Florida


Ten-X’s U.S. Retail Market Outlook listed the top five markets for investors to consider buying retail real estate.  Three out of those five were Miami, Fort Lauderdale, and West Palm Beach.  Robust employment and increasing population in all three cities are pushing the demand for retail space in all of their respective counties.

Buying Commercial Real Estate Luxury Real Estate Selling

New FIRPTA Rules Take Effect February 17, 2016


1450 BrickellTwo changes made to the  U.S. Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) will go into effect February 17.  While one affects foreign investment in publicly-traded real estate investment trusts (REITs) and should make commercial property in the U.S. more attractive to foreign buyers, the second one affects foreign buyers of residential properties.

The change relating to ownership of U.S.  REITs is the doubling of the maximum amount of stock a foreign investor may have in REITs from 5% to 10% and allowing foreign pension funds to invest in REITs withoug having FIRPTA apply.  Ralph W. Holmen, associate general counsel for the National Association of Realtors® (NAR) states that these changes “… are conservatively estimated to boost foreign investment in U.S. commercial real estate by $20-$30 billion per year'”.

In order to cover the costs associated with the two commercial provisions, the withholding amount for residential properties will increase from 10% up to 15% on properties that are over $1 million, whether it is used as a primary residence or not.  For properties $300,000 or less or $300,000 to $1 million, the rules don’t change.  Under $300,000, no FIRPTA tax is paid if it is to be used as a primary residence.  From $300,000 – $1 million, the current 10% FIRPTA tax will not change as long as the property is used as a primary residence.

Buyers need to know that although most settlement agents do withhold the FIRPTA tax, if they do not, the buyer is the one that is legally responsible for the tax owed if it is not withheld.



Buying Commercial Real Estate Investment Real Estate Renting in Miami

Majority of Millennials Cite Cost of Living as a Concern


Downtown Chicago - Chicago IL #24 of Forbes 25 top cities for Millennials
Downtown Chicago – Chicago IL #24 of Forbes 25 top cities for Millennials

Bank of America/USA Today Better Money Habits® Millennial Report, provides great insight into the financial concerns of the millennial generation.  As the mother of three millennials, ages 21-25, and a Realtor I am always interested in what reports say drive this group of young adults.

Of great interest is the correlation between jobs and housing in areas where millennials like to live, which tend to be cities with plenty of cultural and social activities, strong public transportation, high percentage of others in their age group (18-34) and ethnic diversity.

According to the B of A study, “No matter where they live, the cost of living is a concern for a majority of millennials. More than half are also concerned about their ability to save based on where they live.”  This is also one of my concerns for my children.  My youngest is already thinking about where she is going to move once she graduates.  Although she realizes it will depend where she finds a job in film editing, she is looking at cities that have both a large film/television production industry and a lower cost of living than some of the big cities, such as Los Angeles and New York.

Given the top Forbes’ Best Cities for Millennials in 2015, it is not surprising that cost of living is such a large concern.  Eleven of the top 25 cities have rents at or close to $1300 per month.  If you go by the rule of thumb that no more than 30% of your annual income should go to rent, then millennials in these cities would have to make a minimum of $52,000 per year.  Miami rents have gone up significantly as well and though we didn’t make Forbes’ cut as top 25 cities, I think that is changing with the emergence of a strong tech entrepreneurial center.


Florida Home Prices Projected to Increase 9.3% in 2016

CoreLogic, is projecting overall U.S. housing prices to rise 5.2% next year.  Florida is projected to increase by 9.3%, which is the second highest increase in the nation, just behind California at 10.8%.


Buying Market Summary Selling

Condos Accounted For Almost 45% of September Sales In Miami

Spurred by downsizing baby boomers and other age groups wanting to be close to dynamic urban cores, the market share of condo sales has increased nationwide from 8% to 11-12%, according to Lawrence Yun, Chief Economist for the National Association of Realtors .  In Miami, that number is closer to 45% of home sales in September.  Although the level of inventory increased from September to October, so did the number of units that went pending and we are getting into our busy winter selling season.  Based on our current level of condos listed on the MLS, we are still in a stable market with 6-8 months of inventory.  What would help move the market would be an easing of financing restrictions so that Millennials and first time buyers could get into the market.


Miami's Condo Market
Miami’s Condo Market

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Miami’s Busy Winter Real Estate Season Is Off To a Roaring Start At EWM Realty

Faena HouseAs we start to get into the busy winter buying season, EWM Realty International has gotten off to a strong start.  The company had a $70 million week between our offices in Miami-Dade and Broward Counties. The breakdown for our Miami-Dade offices are:

  • Brickell $1.3 million
  • Coconut Grove $1.5 million
  • Coral Gables/ South Miami $24 million
  • Key Biscayne $1.2 million
  • Miami Beach $30 million
  • Pinecrest $1.4 million

The highest sale in our Coral Gables office was for a unit at the Faena House, pictured above, for $5.5 million .