On Tuesday night I attended a ULI Young Leaders steering committee meeting at the Wynwood Kitchen and Bar with about two-dozen local real estate professionals. Transit Miami friend Andrew Frey has organized this group in an effort to bring together forward-looking professionals with diverse backgrounds.
Some of the industries present at the meeting were land use and real estate attorneys, urban planners, developers, architects, commercial real estate brokers, private bankers, and an FEC representative. As diverse as the backgrounds were, there was a common trait among these professionals: They all want to see their city develop into a transit-friendly, mixed-use and walkable metropolis. They also want to see Miami grow-up to become a non-auto centric world-class city that attracts businesses and entrepreneurial professionals alike.
This group will continue to meet once every couple of months and in the very near future will organize panels (as well as a networking happy hours) to discuss topics such as:
- Streetscapes; why they should be improved and their economic benefits
- The effect of gambling and casinos on Miami
- The link between jobs and transportation
Elected officials and developers should take note and tap into the resources that this highly energized, educated, and entrepreneurial group has. They are not living in the Miami of yesteryear and they want to help build a more competitive city that will encourage businesses to relocate to the Magic City.
Check out Pimco’s June 2010 US Commercial Real Estate Project. Looks like there will continue to be trouble ahead. U.S. consumers have curbed their unsustainable spending habits and increased their savings rate. Continued high employment will also help drag down CRE. According to this report, we may not see peak 2007 prices again until 2020.
Certain retail properties could also struggle in the New Normal. Many retail properties built in anticipation of large housing development will simply suspend operations, because sustained reductions in the home ownership rate mean that many planned housing developments will not restart for years.”
Some bad economic news was reported yesterday. According to the New York Times article new home sales dropped by 33% in May:
The new housing market has never been this bad, at least not since the government started tracking such things in 1963.”
New homes declined by a record amount in May to a new low.”
In a separate report, New Urban News reviewed William Lucy’s new book, Foreclosing the Dream: How America’s Housing Crisis Is Reshaping Our Cities and Suburbs. Mr. Lucy is a professor of urban and environmental planning at the University of Virginia.
According to New Urban News, Lucy’s analysis of data he collected suggests:
• “As the percentage of households with children declines, and that of singles, empty-nesters, and elderly increases, housing demand will increase in cities and inner suburbs, and demand in outer suburbs and exurbs will level off or decline nationally.”
• “Suburban decline will accelerate in middle-aged housing, but that won’t be uniform; demand for housing in some inner suburbs will rise.”
• “Demand will increase for transit serving more areas more frequently.”
• “Demand for more mixed use and walkable neighborhoods will increase, and prices in these areas will escalate as supply lags behind demand.”
He (Lucy) rejects the idea that rapid, continuing, outward development is inevitable because of the nation’s growing population and a scarcity of room for development in cities. If we choose to make it happen, he says, “a tremendously high proportion of our future growth as a nation could easily occur within already developed areas: in, or on the edges of, big-city downtowns; on busy corners of city streets away from downtown; and in new urban villages close to high-speed transit stations in suburbs.”
How each region responds to the challenges of transit and development will vary, producing contrasting results. Greater Atlanta and greater Washington, DC, illustrate the two extremes, in Lucy’s view. “Washington, DC, and some suburban cities and counties planned for transit-oriented development, and use of transit rose to the second-highest level in the United States,” he notes. “Atlanta’s transit use lagged, which may be one reason why Atlanta has the most declining suburbs in the country.”
I don’t think the decline in new-home sales is a total anomaly. New home builders, particularly those that build single family homes in new suburban and exurban communities are going to have a difficult time going forward. Real estate developers that focus on infill and mixed use development as well as TOD should perform better. We are reaching the tipping point; people are leaving the suburbs and returning to the cities.
”My opinion is that this development is doomed…”
“This developer went bankrupt in the 1980’s and I think we’ll see a repeat performance within the next 6 months. What do I know, though? I’m no real estate oracle.”
I believe this whole thing has been blown disproportionately out of the water, starting with an exorbitant $25 million for defamation. How can anyone quantify that much in damages to begin with? Luckily for Lechuga, the lawsuit likely won’t hold much water in court according to herald interviews with local attorneys. From what I can tell, this has the appearance of a glorified publicity stunt amid a crumbling housing market. Who am I to say anyway? Only time will tell…
View of Biscayne Boulevard beautification project:
I was most in shock to see the size of the houses rising beneath the massive NBC radio guyed mast tower. These houses make the houses built in the 1970’s in cocaine alley look like shacks (no, I’m not implying that these houses too are funded by illegal activities.) The fact that anyone would spend the kind of money to construct these multiple thousand square feet houses miles from nowhere was shocking. I took a few pictures which failed to capture the magnitude of these houses, but luckily I found an ebay listing for the lots next door, selling for over $800k and touting the absurd immense houses rising in full view of the property. Here are some pictures and quotes from the listing:
BUILD YOU DREAM MANSION OR TWO ON THIS 5 ACRE PARCEL OFFERED AT $819,000.00, LOCATED IN MIAMI (REDLAND), FLORIDA. INVESTOR’S DREAM! OWNER FINANCING AVAILABLE…MULTI-MILLION DOLLAR MANSIONS ON EVERY CORNER! THIS VACANT AND FLAT 5 ACRE LOT IS ZONED AGRICULTURE AND YEARLY TAXES ARE $244.00. INCOME FROM PROPERTY CAN EARN $250,000/YEARLY IF USED AS A NURSERY, ACCORDING TO NEIGHBORING NURSERY OWNERS. THE LOT ALSO ALLOWS ZONING FOR TWO HOMESITES TO BE BUILT, AS SEEN IN NEIGHBORING PROPERTIES. PROPERTY IS LOCATED MINUTES FROM EXECUTIVE AIRPORT, PRIVATE GOLF&COUNTRY CLUB, MIAMI-HOMESTEAD MOTORSPORTS SPEEDWAY & THE FLORIDA KEYS.
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