Greater Downtown Miami Market Study Update

Transcription

1 Greater Downtown Miami Market Study Update Mid-Year Report Prepared for the Miami Downtown Development Authority (DDA) by Integra Realty Resources (IRR) July 2016

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3 Greater Downtown Miami Market Study Update Mid-Year Report Prepared for the Miami Downtown Development Authority (DDA) by Integra Realty Resources (IRR) July 2016 For more information, please contact IRR-Miami/Palm Beach The Douglas Centre 2600 Douglas Road, Suite 801 Coral Gables, FL

4 Contents 2 Introduction 4 Greater Downtown Miami Market Submarket Map 5 What s Changed since Year-end? 10 Submarket Analysis 12 Unit Sizes and Pricing Trends 14 Resale Condominium Pricing 16 Rental Market Statistics 19 Rental Market Supply 21 Condo Development Process Appendix

5 Introduction Integra Realty Resources - Miami Palm Beach (IRR-MIami) is pleased to present the following mid-year update to our Residential Real Estate Market Study covering the Miami Downtown Development Authority s (Miami DDA) market area, defined as Greater Downtown Miami market through June Findings during our Mid-Year update: Global and domestic headwinds continue to affect the market depth and velocity. Nonetheless, area professionals remain optimistic that while current sales paces are not on par with 2014, current activity is at a more normalized pace and remains strong. Millicento Condominium resale pricing in Greater Downtown is down YTD 4% since year-end. This average price decline is coupled with increasing inventory availability. The pricing retreat follows a five year period of double-digit increases. Despite retreats in the resale pricing, the pre-construction market pricing remains solid. Projects nearing close out are holding pricing, or even increasing pricing as the current wave of project deliveries is substantially sold out. Sales offices reporting a slow January and February sales indicate that sales in April and May were above trend. Given the declines in the reservation/contract phase, it is unlikely the that these projects will commence fast enough to refill the under construction pipeline. The lack of inventory entering the pipeline today will lead to less competition heading into late Average condo rental pricing has leveled off year-to-date in all unit types except 1 Bedrooms; where rents are growing 1.5%+. A similar trend appears in the conventional rental data, with studio rents growing 4.4%, while all other unit types are nominal or slightly negative rent growth. IRR Miami expects that the development environment in the coming months will require much stronger developers/sponsors with higher levels of equity as availability of conventional financing wans. Larger projects will contemplate a rental format, or other form of development. Not every project is going to fit into the conventional rental pipeline, and the current direction of rents suggests that the rental market is going to favor the tenant for the balance of Integra Realty Resources

6 Introduction Therefore, the patient land investors will be rewarded in the next demand cycle for residential condos. The mid-year 2016 report is optimistic that the major new developments in downtown have met with success over a very robust 4+ year period of gains. The market continues to mature, but general housing market statistics suggest a reset is occurring in the broader market. Inventory is up, and pricing may respond. Rental market availabilities will favor the tenant in the coming 6 months. In the balance of supply and demand in real estate, the good news is that affordability may come back in vogue. The greater downtown market emerged as a vibrant force in Miami s economy as young people populated the city when rents were less expensive. Some near term rent stability will assist in keeping the inflow of urban professionals needed to continue with the growth of Downtown Miami. Respectfully, Integra Realty Resources (IRR) Miami/Palm Beach Anthony M. Graziano, MAI, CRE, FRICS Senior Managing Director Dan Bowen Market Research Analyst 3 Integra Realty Resources

7 Greater Downtown Miami Market Submarket Map The map opposite illustrates the boundaries of the Miami DDA, as well as each submarket within the Miami DDA market. 4 Integra Realty Resources

8 What s Changed since Year-end? Beyond the statistical changes in supply-demand, the downtown market is strongly tied to global high net worth investment demand. By far, the hottest topic in this period in the financial markets was Brexit, with the UK voting to leave the European Union. While some speculate this pivot will result in increased capital inflows into the US, it remains unclear whether the US economy can resist GDP contraction against these larger global events. Brickell House Before Brexit, Brazil s President Dilma Rousseff was under impeachment proceedings, her defense against impeachment continuing into July 2016, all under a political cloud of uncertainty due to weak economic conditions. Rioting and food shortages continue in Venezuela with far less media coverage than Brexit, but more important to global stability. Commodity, and particularly petrol prices, continue to drag on global economies. IRR Miami has concluded many times that the state of the Miami market rests heavily on global output, coupled with a strong domestic economy. To be sure, the middle of 2016 continues to deliver uncertainty globally, and far less enthusiasm domestically heading into a US Presidential election season heavy on rhetoric, and light on encouraging policy pronouncements. The city continues to evolve as a global destination, and its maturity will be tested in the coming 6-12 months in the face of many economic changes. The long-term outlook is strong for Miami as the rental market will continue to activate the downtown urban market. This in turn improves the urban experience, which drives future for-sale demand. Miami should rejoice in the 2016 delivery of Brickell City Centre, one of the nation s largest urban development projects that not only has forever changed Miami s urban landscape, but the project is a testament to the resiliency of the downtown Miami market. The addition of new units to the under construction pipeline coincides with the delivery of downtown Miami s greatest urban assemblage, the residential phase of Brickell City Centre, which removes 773 units from the construction pipeline. Both phases of BCC (Reach and Rise) and Le Parc (128 units) received their Temporary Certificates of Occupancy (TCO), and are therefore considered completed. The highly-anticipated first phase of Miami World Center (512 units) broke ground in the past six months, as did Flatiron (549 units), adding over 1,000 units to the under construction pipeline. 5 Integra Realty Resources

9 What s Changed since Year-end? For the first time in 5 years, the average resale pricing dipped in the first half by 4%. However, after 3 years of double digit price growth ( ), the current retreat from 2015 pricing may be temporary. After five years of double-digit growth, last year s trend showed the first half with 0% increase, only to close the 2015 year up 6%. A review of the rental price changes within the past 6 months helps to explain some of the pricing retreat. After (3) consecutive IRR-Miami reports signaling that rent stability was imminent, we finally reached equilibrium in the rental market following the delivery of Melody, Soma, Brickell View Terrace, and Met3. Conventional rent growth was nominal or negative in all unit types except studios, which grew 4%. The condo leasing prices also moderated, with overall mid-year rent growth at 3.7%, basis points behind prior years. Pre-construction pricing continues to hold. Some projects even increased pricing this quarter, most notably those closest to sellout. Developers and brokers report a continued expectation that pricing will hold on new product, and remain bullish that slowing construction and normalizing traffic and sales will deliver a soft landing. There is a fair amount of market speculation that new construction debt is getting too expensive and may become inaccessible for new construction in the coming quarter. IRR Miami notes that this level of banking discipline will force more deals to move deeper into the equity stack, which supports a slower construction cycle into Few projects continued to be announced and planned, and some observers and media continue to issue dire predictions as to the future of the downtown market. However, most downtown developers are taking a wait and see approach. New entrants to the market include Missoni Baia (168 units) and Spark (56 Units). New completions in the coming 6 months will likely include Centro and the Crimson. 6 Integra Realty Resources

10 What s Changed since Year-end? Figure 1.0 and 1.1 list the active projects currently selling, contracting, or under construction representing what we defined as current growth in the market. Figure 1.0 Greater Downtown Miami Current Growth Contracts and Reservations Submarket Building Avg. SF Units Status Brickell One River Point 1, Contracts Edgewater Elysee 3, Contracts Edgewater Gran Paraiso 1, Contracts Edgewater Spark 1, Contracts A&E Auberge 1, Reservations Edgewater Bentley Edgewater Condo Hotel Reservations Edgewater Missoni Baia 2, Reservations Total/Average 1,591 1,552 Figure 1.1 Greater Downtown Miami Current Growth Under Construction and Q2 Completions Submarket Building Avg. SF Units Status Brickell Brickell CityCentre - Reach 1, Complete Brickell Brickell CityCentre - Rise 1, Complete Brickell Le Parc 1, Complete A&E 1000 Museum 5, Under Construction A&E Canvas Under Construction Brickell The Bond Under Construction Brickell Flatiron 1, Under Construction Brickell Echo Brickell 1, Under Construction Brickell 1010 Brickell 1, Under Construction Brickell Brickell Ten 1, Under Construction Brickell Brickell Heights East 1, Under Construction Brickell Brickell Heights West (BH02) Under Construction Brickell SLS Lux 1, Under Construction Brickell SLS Hotel & Residences 1, Under Construction Brickell Cassa Brickell 1, Under Construction CBD Paramount Miami 1, Under Construction CBD Centro Under Construction Edgewater Aria on the Bay 1, Under Construction Edgewater Biscayne Beach 1, Under Construction Edgewater 26 Edgewater Under Construction Edgewater The Crimson 1, Under Construction Edgewater The Edgewater Under Construction Edgewater Paraiso Bay Tower I 1, Under Construction Edgewater One Paraiso 1, Under Construction Edgewater Paraiso Bayviews 1, Under Construction Midtown Hyde Midtown 1, Under Construction Total/Average 1,250 8,400 Excluding Completed 1,238 7,499 7 Integra Realty Resources

11 What s Changed since Year-end? Related s Auberge has resumed reservations with a reduced unit count of 298 units. Elysee and Missoni Baia enter the contracts/reservations phase with substantially larger units and smaller overall project sizes. A total of 1,591 units are in the contracts/reservations phase as of mid-year, a further reduction from the 2,000+. The under construction pipeline nudged up 191 total units by mid-year, although this total will come down significantly as other projects deliver in Q3 and Q It is unlikely that projects in reservations/contracts will commence fast enough to refill the under construction pipeline by This will leave remaining projects under construction with less competition by late Figure 2 Current Greater Downtown Miami Condo Pipeline Q Submarket Complete Under Construction Contracts Reservations Proposed Totals A & E ,758 2,652 Brickell 2,218 3, ,952 10,922 CBD ,040 6,904 Edgewater 561 2, ,183 5,875 Midtown Wynwood Q ,790 7, ,606 27,447 YE ,889 7,308 1, ,615 28,893 YE ,044 6,019 2,070 1,598 12,543 23,274 8 Integra Realty Resources

12 What s Changed since Year-end? Figure 3 Greater Downtown Miami Condo Market Size Q Submarket Current Market Current % Potential Long % Growth Size [1] Growth Growth Term Growth Longterm A & E 4, % 1,758 43% Brickell 22,061 3,752 17% 4,952 22% CBD 6, % 6,040 96% Edgewater 4,613 3,131 68% 2,183 47% Midtown % % Wynwood % % Q ,103 9,051 24% 15,606 41% YE ,202 9,389 25% 17,615 47% YE ,357 9,687 27% 12,543 34% [1] Includes all new deliveries. Net change of 1,227 units in 2015, 566 in 2014, and 96 in [2] Long-Term Growth is the remaining Conceptual units, net of current growth. [3] Current Growth is all Under Construction, Contracts and Reservations. As mentioned in the year-end report, the Wynwood submarket has the largest long-term growth potential, and the mixed use projects in this submarket are likely to emerge in the coming months. The overall annual supply growth (U/C; contracts; reservations) has held relatively constant at about 27% (2014) of existing market supply, declining slightly in 2016 to 24%. IRR Miami has reviewed published and unpublished pricing, interviewed various sales and brokerage offices, and continues to monitor back to back quoted pricing. On balance, the pre-construction pricing has held relatively constant. Sales offices reported an extremely slow January and February season, but report more active April and May contracting. 9 Integra Realty Resources

13 Submarket Analysis A summary of the key changes to date: Brickell A temporary certificate of occupancy was granted to the 773 condominiums in Brickell City Centre, although not all of the complex is open (the office tenants opened first), and Le Parc (128 units). Brickell Flatiron broke ground, adding 549 units to the neighborhood s total. The 76 market-rate units in Brickell View Terrace were delivered in the first quarter. CBD Miami World Center s Paramount tower broke ground with 512 units in the second quarter. Although sales have not yet begun for the former Epic Marina site at 300 Biscayne Boulevard Way, the site s owner has filed plans for a sales center and 384-unit condominium. Arts and Entertainment After a brief hiatus, Auberge has resumed marketing reservations. Melo has completed their Melody rental tower and is moving on to 14 Plaza, with up to 760 units. Edgewater Missoni Baia moved immediately to begin reservations within one quarter of its announcement; another project, Spark, has moved into contracts; however, it will only contain 56 units. 10 Integra Realty Resources

14 Submarket Analysis Midtown Midtown has remained predominantly a rental submarket with the groundbreaking of Midtown 29. Currently under construction, Midtown 5 and District 36 advancing; the latter could be complete by year-end. Wynwood Similar to Midtown, Wynwood s current growth has been static, with few major condo or rental proposals. Overtown There has been little change this cycle in the DDA portion of Overtown east of Interstate 95. David Beckham has proposed a Major League Soccer stadium in the neighborhood; however, that lies outside of Greater Downtown s borders. 11 Integra Realty Resources

15 Unit Sizes and Pricing Trends Figure 4 Greater Downtown Miami New Condominium Pricing Metrics Submarket Name/Location # Units Avg. Price Avg. SF Avg. $/SF Arts & Entertainment 1000 Museum 83 $6,937,775 5,389 $1,287 Auberge 298 $703,463 1,203 $585 Canvas 513 $462, $518 Brickell Le Parc 128 $593,309 1,272 $467 The Bond 328 $570, $595 Flatiron 549 $812,000 1,160 $700 One River Point 406 $1,059,428 1,284 $825 Echo Brickell 180 $1,900,000 1,510 $1, Brickell 387 $833,333 1,283 $650 Brickell Ten 155 $420,000 1,050 $400 Brickell Heights - East 350 $600,000 1,078 $557 Brickell Heights - West (BH02) 332 $600, $610 SLS Lux 534 $745,000 1,250 $596 SLS Hotel & Residences 450 $521,759 1,117 $467 Brickell CityCentre Reach 390 $889,200 1,368 $650 Brickell CityCentre Rise 383 $923,400 1,368 $675 Cassa Brickell 81 $627,500 1,060 $592 CBD Paramount Miami 512 $1,365,778 1,793 $762 Centro 352 $308, $439 Edgewater Aria on the Bay 648 $958,950 1,317 $728 Biscayne Beach 399 $688,723 1,305 $ Edgewater 86 $312, $485 Bentley Edgewater Condo - Hotel 207 $601, $665 Elysee 100 $2,935,000 3,383 $868 The Crimson 90 $623,194 1,143 $545 The Edgewater 30 $340, $437 Gran Paraiso 317 $1,205,100 1,549 $778 Paraiso Bay Tower I 360 $782,000 1,360 $575 One Paraiso 272 $1,201,627 1,682 $715 Missoni Baia 168 $2,750,000 2,950 $932 Spark 56 $686,251 1,378 $498 Paraiso Bayviews 398 $586,900 1,044 $562 Midtown Hyde Midtown 410 $632,500 1,100 $575 Total/Average 9,952 $892,640 1,303 $ Integra Realty Resources

16 Unit Sizes and Pricing Trends The new construction pricing models are adapting to the market. As developers see slower sales velocity and less traffic, they are increasing pricing where projects are substantially sold. Despite having one building 90% sold out, and the other 40% pre-sold, Brickell City Centre raised prices on average 9% this past quarter expecting the market to react favorably to existing new inventory ready for delivery. However, for sale inventory increases across all condo segments and price points will compete for buyers in the market, which could extend sell-out times on remaining projects irrespective of the pricing strategy. 13 Integra Realty Resources

17 Resale Condominium Pricing Figure 5 Average $/SF Sale Price Trend Greater Downtown Miami Resale Market $500 $400 $372 $431 $457 $438 $300 $221 $224 $240 $305 $200 $ YTD For the first time 5 years, prices retreated 4% in the resale market comprised of buildings constructed after A review of MLS statistics indicate the broader condo market pricing declines are deeper, indicating that the new product pricing is outperforming older product. Last year demonstrated a similar pattern, where the first six months showed nominal change, and the back-end 6 months closed higher. This is unlikely to repeat for 2016 given that in the prior (3) 6-month periods, the market closed approximately 750 condominium units in the market (excluding developer sales), and this current 6 months period closed nearly 550. A review of monthly listings indicate a large increase in the level of inventory offered for sale. As inventory increases, Figure 6 demonstrates that resale pricing will adjust. This will likely continue if for-sale inventory remains at a level exceeding 2,500 units per month. 14 Integra Realty Resources

18 Resale Condominium Pricing Figure 6 Greater Downtown Miami Condo Listings (Built 2001+) by Month (Zip codes: 33127, 33128, 33129, 33130, 33131, 33132, 33136, 33137) Date For Sale New Listing Sold Pended May-14 1, Jun-14 1, Jul-14 1, Aug-14 1, Sep-14 1, Oct-14 2, Nov-14 2, Dec-14 2, Jan-15 2, Feb-15 2, Mar-15 2, Apr-15 2, May-15 2, Jun-15 2, Jul-15 2, Aug-15 2, Sep-15 2, Oct-15 2, Nov-15 2, Dec-15 2, Jan-16 2, Feb-16 2, Mar-16 2, Apr-16 3, May-16 3, Source: Trendgraphix, compiled by Integra Realty Resources, Inc. 15 Integra Realty Resources

19 Rental Market Statistics This mid-year report is the first period when condominium rent levels held steady with only increases demonstrated in the studio segment. Two bedroom rents remain largely unchanged, three bedroom rents declined slightly, and one bedroom rents are up 1.5%. Prior annual rent changes by unit type ranged from 4% - 10% per year since mid-year Figure 7 Average Condo Leasing Price Greater Downtown Miami Studio 1 BR 2 BR 3 BR Year Overall* $/Unit $/SF $/Unit $/SF $/Unit $/SF $/Unit $/SF 2012 $2,255 $1,421 $2.64 $1,804 $2.33 $2,625 $2.13 $4,340 $ $2,371 $1,504 $2.67 $1,926 $2.30 $2,819 $2.21 $4,427 $2.51 % Change 5% 6% 1% 7% -1% 7% 4% 2% 12% 2014 [1] $2,481 $1,632 $2.92 $2,008 $2.48 $2,908 $2.32 $4,346 $2.60 % Change 5% 8% 9% 4% 8% 3% 5% -2% 4% 2015 [1] $2,582 $1,698 $3.03 $2,139 $2.62 $3,008 $2.45 $4,773 $2.89 % Change 4.1% 4% 3.6% 6.5% 5.8% 3.4% 5.7% 9.8% 11.1% 2016 YTD [1] $2,677 $1,683 $2.97 $2,165 $2.66 $3,009 $2.46 $4,675 $2.72 % Change 3.7% -0.9% -2% 1.2% 1.5% 0% 0.4% -2% -6% [1] Midyear. This leveling off of rent levels in the condominium market is largely due to increased supply of units in the downtown conventional category. IRR Miami believes rent levels will remain relatively constant through year-end as more rental inventory is expected to deliver by the close of Integra Realty Resources

20 Rental Market Statistics Conventional rent levels were also muted, with studios showing the greatest gains, but one, two and three bedroom units competing for tenants without much increases, and in some cases, slightly decreasing conventional rents. Figure 8 Overall Downtown Conventional Rental Rent Survey (2,474 Total Units) Studio 1 BR 2 BR 3 BR SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF Q $1,585 $ $1,605 $1.86 1,221 $2,106 $1.73 1,752 $2,622 $1.50 Q $1,856 $ $1,774 $2.05 1,221 $2,241 $1.84 1,752 $2,707 $1.55 Q $1,937 $ $1,772 $2.05 1,221 $2,257 $1.85 1,752 $2,652 $1.51 Q Q % 10.5% 6.4% 3.2% % Change Q Q % -0.1% 0.7% -2% % Change This survey omits the Filling Station Lofts from SF and pricing analysis because of the loft style layout of their units as well as the ultra-luxury status of the building. The units are included in the overall unit count. 17 Integra Realty Resources

21 Rental Market Statistics Based on the 2014 household density, the market turnover of units represents approximately 10% of households annually. The spread between asking rents and achieved rents has narrowed significantly, indicating the landlord market is pricing aggressively and getting reasonably-set asking pricing. Figure 9 Average Current Asking vs. Achieved Leasing Price and Velocity (2016 YTD) Overall Overall Total # Leases/ # of Households Submarket Asking Achieved Month (2014 est.) Brickell $2,649 $2, ,338 CBD $2,502 $2, ,482 A & E $4,395 $4, ,725 Edgewater $2,742 $2, Midtown $2,672 $2, ,756 [1] Wynwood $3,133 $3,100 1 [1] Wynwood, Midtown, and Edgewater were not broken out in the 2014 population report. 18 Integra Realty Resources

22 Rental Market Supply Figure 10a Greater Downtown Miami Rental Pipeline - Proposed Projects The following is the list of under construction and planned apartment complexed in the Greater Downtown submarkets. Submarket Building 2016 Q2 Status # Units A & E 17 Edgewater Proposed Plaza Phase II Proposed 760 Melody II Proposed TBD School Board Proposed TBD Brickell TBD Allen Morris/Related Proposed TBD Brickell Market Place Proposed TBD Megacenter Brickell Proposed 57 One Brickell II Proposed 500 MaiZon at Brickell Proposed 262 CBD River Tower Proposed West Flagler Proposed 391 M-Tower Proposed 440 Cultural Center Garage Redevelopment Proposed 432 Grand Station Proposed SE 2nd St Proposed TBD Miami River Village Proposed TBD 7th Street Promenade Tower 2 Proposed 413 Lynx Tower Proposed TBD Luma at Miami World Center Proposed 429 Miami World Center Block E Proposed 418 Edgewater AR Edgewater Proposed Biscayne Proposed Biscayne (Possible Condo) Proposed Edgewater Proposed TBD Biscayne 27 Proposed 330 Midtown Midtown East Proposed 700 Midtown 6 Proposed 447 Midtown 8 Proposed 387 Wynwood 2801 NW 3rd Avenue Proposed 264 Wynwood Central Proposed N Miami Ave Proposed NW 2 Ave Proposed TBD 222 NW 24th St Proposed 80 Total # of Units Proposed 8, Integra Realty Resources

23 Rental Market Supply Figure 10b Greater Downtown Miami Rental Pipeline - Under Construction and Complete Projects Submarket Building 2016 Q2 Status # Units Arts & Entertainment Melody Complete 500 Brickell SoMa Complete 418 Brickell View Terrace (Market Rate) Complete 76 CBD Monarc at Metropolitan 3 Complete 462 Arts & Entertainment Square Station (14 Plaza Phase I) Under Construction 710 Brickell Broadstone at Brickell Under Construction 372 Panorama Under Construction 821 Solitair Brickell (former Brickell Bayview Center) Under Construction 438 CBD MiamiCentral Apartments (up to 5 towers) Under Construction 800 7th Street Promenade Tower 1 Under Construction 450 Vice Under Construction 464 Avant at Met Square Under Construction 391 Edgewater 2500 Biscayne Under Construction 156 Midtown District 36 Under Construction 197 Midtown 5 Under Construction 400 Pearl Midtown 29 Under Construction 309 Total # of Units Under Construction 5,508 Total # Units Completed ,456 Total # Units U/C or Proposed 13,991 Despite delivery of over 500 units in the past two quarters, the rental construction pipeline expanded to top over 5,500 units under construction as of June 2016, with the largest concentration in the CBD. This rental pipeline will deliver over the next months, so rent growth will remain constrained in the coming months. IRR Miami has discussed the impact of the conventional rental market extensively on the condo market, but it is no surprise that as rental growth has retreated, and inventory of for-sale units has increased, that we see the first signs of prices retreating on the resale product. Overall, the downtown market continues to demonstrate strong household growth, owing to net job creation in the CBD and Brickell corridors. The launch of the Brightline connecting Miami to Ft. Lauderdale and Palm Beach Counties (expected in late 2017) could positively alter the rental landscape. 20 Integra Realty Resources

24 Condo Development Process Appendix Proposed Reservations Contracts Under Construction Completed The proposed phase is the initial phase of the development process; a conceptual plan for a new building or project is initiated by a developer or property owner. The developer may release a press release or a news story with an initial rendering to gauge the interest in the project, but the project size may change over time to conform to market demand and/or as site due diligence constrains the process. The reservations phase is the second phase of the development process; the developer and architectural/ design team produce additional renderings and floor plans; the sales centers are opened and the finishes, amenities, and features of the project are disclosed. The developer files with the State of Florida to be able to take reservations and deposits for units during this stage. This begins the pre-sale phase during which reservations are taken. The contracts phase is when the initial proposition and reservation of a completely undefined development idea meets the actual contracting for sale upon the receipt of further deposits. The architectural and construction drawings are completed; the developer obtains government permitting and approvals. The final unit floor plans are defined as the reservations are converted to sales contracts with additional buyer deposits upon filing of the Master Declaration of Condominium. Changes to these documents are costly, and therefore the development plan tends to be more static following this phase. The Contracts stage is typically the make-or-break stage of development as the project was either well-received by buyers, investors, and lenders, or it was not. If the developer has as a sufficient number of sale contracts, buyer deposits, and a commitment for financing, the project s construction will most likely commence. If the project was not well-received, either by a lack of pre-sales, or insufficient equity from initial investors or debt financing, a project may be scrapped, shelved, or significantly altered in another future attempt (either later in the cycle or in the next one). Projects which fail the Contracts stage may move all the way back to Proposed during this process. The site improvements and vertical construction have commenced. At this stage of development, the project has secured sufficient pre-sales with significant deposits and most likely a financing commitment. These projects will enter the market under a reasonably definitive timeline of months, depending upon the scale of the project and surrounding infrastructure requirements. This is the final stage of the development process; as the construction of the units is completed, CO s (Certificates of Occupancy) are issued, and the closing of the unit sales are finalized. 21 Integra Realty Resources

25 Disclaimer & Acknowledgment The information provided herein is for informational purposes. This publication does not render legal, accounting, appraisal, counseling, investment, or other professional advice. Should such services or other expert assistance be needed, it is recommended that the services of a competent person or firm, having access to the details of the situation, be employed. 22 Integra Realty Resources

26 Images Cover: Photo courtesy of Robin Hill. Page 2: Photo credit: 2015 IRR-Miami/Palm Beach. Page 4: Photo credit: 2015 IRR-Miami/Palm Beach. Map courtesy Miami DDA. Page 5: Photo credit: 2015 IRR-Miami/Palm Beach. Page 10: Brickell, artist s rendering of Brickell CityCentre used by permission of Swire Properties Inc. CBD, photo courtesy Miami DDA. Arts and Entertainment, photo courtesy Miami DDA. Edgewater, photo credit: 2015 IRR-Miami/Palm Beach. Page 11: Midtown, photo courtesy Miami DDA. Wynwood, photo credit: 2014 IRR-Miami/Palm Beach. Overtown, by Ebyabe, Wikimedia Commons. Page 12: Photo credit: 2015 IRR-Miami/Palm Beach. Page 14: Brickell, artist s rendering of Brickell CityCentre used by permission of Swire Properties Inc. Page 16: Photo credit: 2015 IRR-Miami/Palm Beach. Page 19: Photo credit: 2015 IRR-Miami/Palm Beach. 23 Integra Realty Resources

27 About Integra Realty Resources With corporate headquarters in New York City, Integra Realty Resources (IRR) is the largest independent commercial real estate market research, valuation, and consulting firm in North America, with 66 offices and more than 200 MAI-designated members of the Appraisal Institute who are among its more than 900 employees located throughout the United States and the Caribbean. Founded in 1999, the firm specializes in real estate appraisals, feasibility and market studies, expert testimony, and related property consulting services. Many of the nation s largest and most prestigious financial institutions, developers, corporations, law firms, and government agencies are among its clients. For more information, visit or blog.irr.com.

28 Contact Information: 200 S. Biscayne Blvd, Suite 2929 Miami, Florida T F W - MiamiDDA.com