Florida East Coast Realty (FECR) Chairman and President Tibor Hollo shares his vision on how to create buildings within an urban center
In 2014 FECR’s Panorama Tower was announced as the City of Miami’s first EB-5 designated development. Could you speak on the significance of that?
Foreign direct investment has been a key element of the Miami story. Fidel Castro played a major role in the first phase of this movement, which was the influx of Cubans to Miami. This was followed by the mass migration of South Americans from various countries, who saw this city as the capital of Latin America. To-day, international companies wanting to access Latin American markets are coming here as well.
The US Citizenship and Immigration Services’ (CIS) EB-5 program promotes job creation and capital investment through a special visa for qualified foreign investors. The City of Miami needed an iconic project, and Panorama Tower – a mixed-use project with 820 rental units, a 208-suite hotel and dining and retail options – was the perfect candidate.
What informs the decision to develop rental property versus condominiums?
We wanted to leave a legacy building for the city, which is why we chose to develop apartments. There is too much fragmentation in a condominium because there are multiple owners. Moreover, condominium developers in this market are in large part dependent on foreign capital inflows, as international buyers have driven growth in that segment. They are more negatively impacted by economic crises because they have to make sure they can sell all the units. It is much easier to get people to rent out an apartment during an economic downturn than it is to get them to commit hundreds of thousands of dollars towards buying a condominium. As a result, empty condo buildings fail to garner the necessary funds to maintain the facility and provide basic services, such as garbage disposal. This turns people away even more, leading to an adverse cyclical effect.
Other factors remain similar between the two types of buildings. Urban residents opt to live in the city center so that all of their needs – work, social, leisure, shopping – can be met in one place.
Many of the projects under construction today, from Brickell City Centre, to FECR’s Panorama Tower, are mixed-use buildings, combining residential, commercial and retail elements. What has informed this trend towards mixed-use developments?
When you create buildings where residents can, not just live, but also work and play, you create gathering spaces and develop social communities. Although it seems like a recent trend, we have developed mixed-use buildings since the 1970s. The Grand – formerly the Venetia and which I consider my greatest project – was one of Miami’s first mixed-use developments. Both Panorama Tower and One Bayfront Plaza will be mixed-use developments.
It is not enough to simply have the retail, the residential and office components; the buildings themselves have to be appealing for the residents. The key is to create top-notch amenities –social spaces, game rooms, multiple swimming pools, gyms, etc.
– to make buildings addictive so that residents don’t need to leave the building to meet their needs, whether that is dining, shopping or socializing. This is especially important today as we continue to see more people opting for the urban lifestyle, where they don’t rely on their automobiles. Panorama will offer more than 50,000 feet of retail in addition to other amenities such as a cyber room, a community dining room, and a muse room where musicians can have jam sessions whenever they want. We will also have a kennel because, let’s face it, for most people pets are like family – sometimes more important than a spouse or a boyfriend. We pay attention to small details like that because that is how you create addictive buildings.
FECR has been active in this market for over six decades. What are the most notable changes you have witnessed over the years?
Needless to say, much has changed in the real estate mar-ket. Back then, you would not want to wander the streets of downtown after 6pm. The area was dominated by office buildings, and at night the workers would rush back to their homes in the suburbs. Downtown after six was not a safe place. Today we have something close to a 24-hour city. You see lots of activity at night – people walking around, frequenting restaurants and bars. Much of this transformation can be attributed to Bayfront Park, which has been a huge asset for this community.
Because I am an architect by training, I have also paid attention to how building structures have evolved over time. In the early 1960s, we developed a 22-story residential building that at the time was the tallest building in Miami. We recently broke ground on Panorama, which at 83 stories, will be the tallest building in the State of Florida upon its completion. Vertical development has been a major part of development story in Miami because it is impossible to develop east and west here due to the geography and there is only so much room north and south. There is greater emphasis on mixed-use development and developers are also competing to come up with the most attractive amenities.
What are the greatest concerns facing developers?
The greatest concerns for the real estate market are national and global in nature, whether this is related to politics or the markets or climate issues. Developers must execute projects while dealing with the volatile nature of real estate. The market is doing well now but not so long ago, in 2009, Miami suffered from a real estate crisis that affected most markets. I knew back then that the market would bounce back, but I also know that the today’s success cannot last forever.
That said, when developing in the urban center, the challenge lies in designing how your building will best interact with the city – not just on the inside but the exterior as well. This is why, for instance, we have placed the waste management facilities of the Panorama Tower underground, in the belly of the building, so that passersby do not have to interact with smelly garbage. This is also why we are developing a pedestrian walkway on the building’s north end that would connect Brickell to Brickell Bay Drive to provide a pleasant walking experience and encourage exercise.
What is FECR’s strategy for the medium term?
We will continue to do what we have always done: develop amazing buildings. Our strategy is always to look at the big picture and have a long-term view, rather than be fixated on what is happening in the present, or what today’s market conditions are like. We are a family company and we have always been conservative in our business approach. We will only work on one or two projects at a time so that we can give each the proper attention it deserves, and to ensure that we can fully execute the project regardless of what is going on in the market.