How the real estate sector is adapting to regulatory and economic changes
Matt Allen Executive Vice President & Chief Operating Officer – The Related Group
With the slowing of economic growth across Latin America, Miami’s traditional real estate buyer, what has been the main impact on the market?
These kinds of market fluctuations are normal parts of the industry, and so it is key for developers to do their due diligence and only launch projects in line with the existing demand. Over the past couple of years, we’ve definitely seen less buyers from Latin American countries such as Venezuela and Brazil, but we’ve also seen a significant uptick in buyers from other, overlooked pools. Ultimately, this slowdown has ensured that only those projects with a strong development team, desirable location and bullet-proof financing structure will get built. This is key marker of a healthy industry and will ensure the continued growth of our city.
The new administration implied that we may see some changes in regulations affecting real estate financing. How can developers prepare for this?
There will be some lessening in the regulations surrounding residential and commercial lending. This will result in increased opportunities for both banks and builders. That said, it is critical both parties continue to do their due diligence and show sound judgment before embarking on new projects. The only other regulation in real estate that changes with every administration is the affordable housing incentives. Tax credits have been different under every president, and we are confident that the new administration will provide business friendly rules. Still, we need to wait and see what regulations will be put into place to include how corporations are affected by changes in the tax structure.
What areas of Miami-Dade present the most growth potential for the upcoming years?
Brickell and Downtown Miami are rapidly growing and have proven to be prime locations for not only renters, but also investors looking into the condo market. Nearby in Edgewater, we were one of the first developers to invest in the area and are expected to deliver one of four Paraiso towers this year, with the three towers following in the next 15 months. In Wynwood, we forsee the potential for the micro-condo market to thrive as the millennial population continues to flock to the neighborhood and surrounding areas. We are also currently witnessing huge demand for retail space in some of the city’s most overlooked areas, such as Miami Gardens and Doral. Doral, especially, is becoming the go-to place to live, work and play, which makes the opening of our CityPlace Doral project so exciting for us.