How Miami’s growth is changing the demands of the real estate market
Ken Krasnow Executive Managing Director, South Florida Region – Colliers International
What changes has Colliers made to adjust to Miami’s fluctuating market?
Miami is no longer a homogeneous market, it is a true global city, maturing and diversifying. It has many unique micromarkets that require professionals that are embedded in these areas. This is why we made this our strategic focus. We are no longer product-specific, but now also a neighborhood expert, understanding Miami on the microlevel. Miami is becoming a self-sufficient microcosm. Within three or four ZIP codes, you have an entire ecosystem of office, retail and multifamily that all talk to each other. Investors and occupiers need to understand this ecosystem to a degree that wasn’t necessary before. What we are finding is that new investors or occupiers can only find generic data. They are not well-equipped to know exactly what to build or where to locate; however, we are now providing that level of detailed data.
What kind of products are most in demand in Miami?
The Miami market is now calling for true mixed-use development. Companies and people want to be in self-contained, micro markets. Before, multifamily or condo developments were built with the retail and office component as an afterthought. Now, the market demand dictates that retail-office be planned and designed alongside the residential components. This is a paradigm shift in the way that we are approaching the business. The amount of information that is needed increases as pricing continues to escalate, something we foresee continuing for the years to come. What is happening in Miami is very similar to what happened in New York City: demand keeps coming from all over the world – not just from Latin America. Yet, our physical space is constrained, limiting the amount of building that can occur. When demand keeps increasing and supply has a limit, prices can only go up in the long term.
What can be done to increase amount of affordable housing in the county?
Affordable housing is a huge issue in Miami, and to address those concerns, we launched an affordable housing division in 2016. People should continue to be able to afford to live in Miami. We need to be able to provide workforce housing because if we want to continue to attract employers, we need to be able to attract and retain employees. When we look into all areas of the market, we need to take into account job, population and tourism growth. For the retail and condo segments, when you add in all of these factors our ratio is still at the low end. This means that there is much more to be built.