New Frontiers

New Frontiers

Fortune International Group President and CEO Edgardo Defortuna discusses Miami-Dade’s complex zoning landscape and the impact on luxury real estate development


One of your major projects at the moment is JADE Signature, located in Sunny Isles. What advantages does Sunny Isles offer to developers?

Oceanfront property has become increasingly scarce in South Florida. Sunny Isles is one of the few remaining areas where a developer can secure large parcels of land with a water view. Our Jade Signature project – designed by Herzog & de Meuron – the architects that created the Perez Art Museum Miami (PAMM) – sits on 2.5 acres of land right on the beach.

Sunny Isles is attractive to developers because it allows the space for creativity – literally. There are no other locations on the beach that permit you to build structures up to 650 feet tall. That sparks innovative thinking in design and presents an exciting opportunity for developers like Fortune International Group to have a significant impact on the skyline.


How would you describe the landscape for zoning and other regulations affecting real estate development?

The regulatory landscape in the region is complex, and in Miami, it is as diverse as the city itself. Twenty years ago when Fortune began developing here, there were zoning and land use guidelines in Miami and in Dade County. Over time, many smaller towns and municipalities started to form independent governments, each with its own set of zoning regulations.

For example, today the zoning rules in North Miami and Key Biscayne are different, just as they are in the Broward County cities of Hollywood and Hallandale. From a developer’s point of view – that kind of change significantly impacts your business strategy. You must be extremely knowledgeable of the area and the regulatory nuances from project to project.

In the City of Miami, where development now is fairly limited, you have one set of zoning guidelines, Miami 21, which is quite favorable to commercial developers because it is primarily a business district. However, it is challenging to find waterfront sites within the city. While in Miami Beach, the challenges arise due to the various historic designations and related restrictions. In many areas, existing structures cannot be demolished to make room for new development. You can refurbish a historic building, but you must maintain the existing structure.


How does this fragmentation impact development? Do you see the situation changing in the near future?

It’s important to understand that the main revenue stream for all of the cities and counties in South Florida today is real estate tax. The municipalities thought that taxes were unfairly distributed when they were concentrated into one place, so I don’t see the situation changing. There might be some agreements made between one area and another, but it would be difficult to create a unified government; if anything, more areas are going to break apart and try to generate their own pockets of zoning.

Not having a strong unified effort for infrastructure, transportation and other services needed for a major city like Miami to function presents a challenge. Hopefully the public sector can integrate a little bit more, and really create comprehensive plans for the major needs of the city as a whole so as to support the growth we are experiencing.


What are some of the comparative advantages Miami offers when it comes to real estate?

Prices here are competitive when compared to other major cities in the U.S. and the world. Prices in New York are three or four times what it is here, and the same goes for San Francisco and Los Angeles. From a U.S. investment proposition, Miami is still very attractive to outside investors, which is why we are seeing the high volume of individual buyers, as well as funds and groups, willing to invest equity in the different projects being developed here.

Miami has much to offer culturally as well. The museums have done marvels to the city. Art Basel has significantly changed the cultural aspect of Miami, as have the Adrienne Arsht Performing Arts Center and the New World Symphony. If you like sporting events, you have The HEAT and the Dolphins, and hopefully David Beckham can bring soccer here.

All of these things impact the overall perception of the city. Previously, higher-end Latin Americans would say, “Yes, I love Miami. I spend a few days there, but my apartment is in New York.” Now, they might still have their apartment in New York, but they are spending a significant amount of time in Miami, and they all want an apartment here.


What risks are present within the real estate market?

People talk about bubbles all the time, but it’s really a question of managing supply and demand, and the timing of when you launch the supply. As a developer, it’s important to be disciplined and mindful of what the market is like before moving forward.

Today, most prudent developments are supported by 50 percent deposits from the buyer; you don’t start construction until you have a significant number of presales. With all the money the buyers have put into the construction, it’s very difficult for them not to close at the end, which is what happened in the past when they were speculating with 10 percent or 20 percent.

As long as we keep this structure in place, we should avoid some major risks. But now that financing is becoming more available, this could create a temptation for developers to require reduced deposits of, say, 30 percent and get the remaining 70 percent from the bank. That’s when problems could potentially start.


How has the consumer profile for luxury properties changed in the current building cycle? 

In the past, the market was dominated by Latin Americans responding to the political and economic situations in their home countries. Today Europe is becoming a very strong player – England especially – because the exchange rate makes Miami prices attractive. Investment from the Asian market, which was previously almost nonexistent, is starting to pick up as well.

Brazil and Argentina continue to be key markets for us – as they have been for a long period of time – for different reasons. Brazil has been doing well for the past five years, while Argentina’s economy has been going the other way. People are attracted to Miami when their countries are either doing very well or very poorly. If they’re doing very well, then they’re diversifying and buying in Miami and if they’re doing poorly, then they’re taking the money out of their countries and buying in Miami. We’re also looking at Mexico because of the growth and wealth creation happening there.

I’m particularly excited about our new relationships in London because the market is so vibrant there. People are making significant amounts of money there and they all love the natural conditions of Miami. They just need to get more exposure to this type of product because they’re used to buying in Orlando or in the islands and they are just now really discovering Miami.


Invest: Miami speaks with Armando Codina, Chairman, Codina Partners

Invest: Miami speaks with Armando Codina, Chairman, Codina Partners

Alex Wertheim
Doral’s growth story is linked to the growth story of Miami-Dade. The highest employment concentration in Miami-Dade County is Airport West, the area where Doral lies. Carnival Corporation is headquartered in Doral, along with major media companies like Miami Herald and Univision, as well as the Federal Reserve, U.S. Southern Command, and a thriving logistics sector. Employment opportunities have brought an influx of residents into the city – as have greater affordability and a strategic location – both foreign and domestic. In recent years, Venezuelans, fleeing political and economic crises in their country, have come to Miami-Dade and settled in Doral. For them, and for many Latin Americans, the proximity to the airport is a great attraction and a reason to buy homes and start businesses here.
If Doral was to become a great city, it needed a heart, and a downtown is the heart of any city. This is why we’re building Downtown Doral. Doral is the first city in Dade County that offered the opportunity to build a core – a downtown – from the ground up, and for a developer, this is truly special. We are creating a master-planned community that includes high-end shopping, dining and living options, as well as the supporting infrastructure – bike paths, sidewalks, public green spaces etc. With so many businesses that also call Doral home, we have taken special care in developing the new office space that will be included in the project, creating a modern campus feel.
This project also features a great example of a public-private partnership (PPP) – Downtown Doral’s collaboration with Miami-Dade County Public Schools to build a charter school. In this arrangement, developers provide the land and finance the construction, while the school board administers the school. Private sector execution allows for greater efficiency, while public sector management allows all parties to benefit from the expertise and accomplishments of the county’s award-winning school board. The new school will be an added draw for prospective residents seeking an affordable community with strong infrastructure, while it allows the county to earn additional revenue from operating the school.

Growing rapidly and steadily

Growing rapidly and steadily

Alex Wertheim

Invest: Miami speaks with Alex Wertheim, President, SPACiO Design Build

What demand is currently driving design services?

Over the years, we have seen significant growth in residential demand. Developers can execute large-scale projects, as the cost per square foot in South Florida is still much less expensive to buyers than in many other major cities within the U.S. This region offers a competitive cost of living as well as an advantageous tax structure. Growth in the residential segment has caused growth in the commercial segment as well, to the point that we are seeing more activity in the commercial real estate sector than in the residential market when it comes to construction in Miami.

What are the main profile trends of the client base for contractor and design services in Miami?

There was an important change in the profile of the clients after the crisis of 2009. We have started to see more Latin American clients reaching out to us to build-out their recently purchased high-end condos since then. This is expected to continue, as Miami is a melting pot for Latin Americans. However, in the past few years, we have begun to see an increase in the number of clients from the U.S. retaining our services, which makes me think the domestic market is coming back. Miami is attracting many retirees from the Northeast that are looking to take advantage of the lower cost of living. We have also seen an increase from international clients from other regions of the world such as Asia and Europe.

Miami is growing rapidly and continuously. In 2017, we will continue to see such growth driven by international and American buyers. We are also going to keep seeing continuous repositioning of real estate properties. As we run out of developable land, developers are rapidly buying up existing Class B and Class C properties in up-and-coming neighborhoods to turn them into Class A properties, from hotels to retail space. As a full-service general contractor, we are seeing – and we will continue to see in 2017 – an increase in retail space construction. We are currently involved in building out Breitling and very soon Swarovski in Brickell City Centre. The demand is a direct result of Miami’s evolution as a high-end shopping and dining destination.

Which sectors are expected to be the growth engines for design and contracting services the upcoming years?

Even though both residential and commercial sectors are growing simultaneously, commercial will start to see an important increase in the hospitality sector, especially restaurants. Miami has developed its culinary offerings extensively over the past couple years.  These new restaurants have made significant investments in design services because they understand the importance of aesthetics for their businesses. The Nobu restaurant in Miami Beach is a perfect example. Chef Nobu Matsuhisa sought the “best of the best” to build out the space.  For example, the stone flooring was imported from Italy, the oak flooring from Denmark and many other finishes are derived from around the world. Nobu truly adds an extra level of sophistication to the iconic Eden Roc. We were very fortunate to work under Chef Matsuhisa’s leadership building out that amazing space. Hotels – both new and existing – have also made important investments in design with an important emphasis on quality and that will continue to happen in Miami

What would you identify as the current major challenges in construction?

From a business perspective, one of the main challenges for the developers is making sure they hire the right architect and designer. Doing all the correct due diligence and pre-construction work is extremely important. Not many people realize the amount of work that goes into pre-construction and its importance. When done poorly, this ends up being a problem for developers as they execute their projects. The way to tackle this issue is by making sure their pre-construction work is handled by highly qualified professionals.  Another challenge is finding qualified construction workers, especially when you are working on high-end projects. We make sure we take good care of our people because we see value in loyalty and having an A team that we can move from job to job.

For more information on Spacio Design Build, visit:

Modernizing transport network

Modernizing transport network

Invest: Miami speaks with Charles Scurr, Executive Director, Transportation Trust

What have been the main achievements of the People’s Transportation Plan in 2016?

The Transportation Trust has an important role in developing the funding plan for the Tri-Rail Downtown Miami Link project. The Downtown Miami Link is a transformative public transit project that will provide riders in Miami-Dade County with a direct commuter rail connection with 26 direct Tri-Rail trains per weekday between Downtown Miami Broward and Palm Beach County. In downtown, Miami commuters can walk to their place of employment or conveniently transfer to the Metromover, Metrorail, the Miami Trolley or Metrobus to get to their final destination. This new service would significantly improve Miami-Dade’s mass-transit system. The Trust is proud to participate in this historic effort and we urge all of the funding partners to approve and find their respective portions of the project. Implementing this project presents a unique public-private partnership opportunity to use innovative funding techniques to fund this transformations project.

What other complementary sources of financing are there to enhance the public transportation network besides the ½ penny sales tax of Miami-Dade approved in 2002?

The People’s Transportation Plan (PTP 1.0) is the coordinated programs of transit and roadway projects that was approved by voters in 2002 and funded by the half-percent surtax.  Accomplishments of the PTP include: funding the Metrorail Orange line extension to the Airport, purchase of new Metrorail and Metromover vehicles, free rides for seniors and eligible military veterans with the Golden Passport/Patriot Passport Program, new buses added to the Metrobus fleet and the countywide traffic signalization system, which has been upgraded with an Advanced Traffic Management System (ATMS).

Recognizing this, the Trust initiated a series of special studies, projects and initiatives to advance major transit investments in Miami-Dade County.  A number of these initiatives were collaborative efforts with Miami-Dade County, the Greater Miami Chamber of Commerce, the Downtown Development Authority and the Miami-Dade League of Cities.  

The outcome of this partnership has been the development of the PTP 2.0, which offers a new approach for using innovative funding, technology and delivery mechanism to invest Surtax dollars tailored to each corridor. PTP 2.0 emphasizes innovative financing options and multiple transit technology alternatives in each corridor. In addition to PTP and FDOT funds, potential funding sources could include: tax incremental financing, contributions from municipalities, public-private partnerships, special assessment districts, USDOT TIGER grants, developer investments, naming rights and joint development. PTP 2.0 and it presents a vision and strategic plan for financing Miami-Dade County’s rapid transit projects.

What are the most important transport infrastructure projects planned for the upcoming years?

The Strategic Miami Area Rapid Transit Plan (SMART) was developed by Miami-Dade County and the Miami-Dade Metropolitan Planning Organization as a shared vision and strategic plan to improve mobility within Miami-Dade County. The design of the SMART plan connects areas like the North, Miami Beach, East-West, South Miami-Dade, Northeast and Kendall with six rapid transit corridors and a supportive bus network. All of the corridors are connected to the Metrorail system, the backbone of the transportation system in Miami-Dade County.

The six SMART line corridors were part of the original rail expansion plan approved by voters in 2002 and would be advanced to the Project Development & Environment stage to evaluate the implementation of a cost-effective, rapid transit system and infrastructure as part of an overall interconnected premium transit network.

The Trust believes that PTP 2.0 has the potential to be a major funding partner for the SMART Plan and implementation of these projects is a critical step forward in developing and implementing the community’s vision for a comprehensive and coordinated mass transit system.

What are the main environmental benefits of the new hybrid Metrobus fleet?  

Hybrid technology is becoming an increasingly vibrant segment in the public transportation arena to help lower greenhouse gas emissions and address climate change. The Miami-Dade Department of Transportation and Public Works has moved towards introducing new, state-of-the-art technologies that can help its bus fleet reduce emissions, as well as fuel consumption.

To learn more about the Citizens’ Independent Transportation Trust, visit their website:


Big investments: Florida Governor Rick Scott discusses Miami-Dade’s economic significance and the impact large public investments will have on the county

Big investments: Florida Governor Rick Scott discusses Miami-Dade’s economic significance and the impact large public investments will have on the county

Invest: Miami speaks to Florida State Governor, Rick Scott

How do the public and private sectors work together to advance growth in counties like Miami-Dade?
In Florida, government is always doing business with the private sector. We have Enterprise Florida, an organization that promotes economic development in the state and that is funded by both public and private dollars. Some of the major infrastructure projects in Miami-Dade, like the PortMiami Tunnel or the Deep Dredge Project, are conducted through public-private partnerships (PPPs). The private sector undertakes considerable risk to complete these projects on time and on price, which has led to better outcomes. Moreover, the Florida State Legislature passed a bill in 2013, which streamlines the procedures and expands the opportunities for PPPs to other areas, such as higher education.
What is the state’s strategy to ensure that transportation infrastructure keeps pace with rapid growth, especially in Miami-Dade? 
Today we have the largest transportation budget in the state’s history – over $10 billion. We are investing where we are seeing growth. For instance, we are putting massive dollars into our ports and PortMiami is the biggest beneficiary of that. Moving forward we must continue investing in airports and seaports because that is how people first enter our state. We are already the number-two state in the U.S. for trade infrastructure.
Given Miami-Dade’s cultural and geographical proximity to Cuba, do you foresee increased economic opportunities in light of the recent thaw in the U.S.-Cuba relations?I think it would be a mistake right now to stop the embargo. I am optimistic that someday the Castro brothers will not be in power and we will see freedom and democracy there, and at that point, we will see opportunities evolve for Floridians to do business in Cuba, and vice versa. Until then, I don’t think much will happen until we have a regime that believes in freedom and democracy.
What is your medium-term outlook for Miami-Dade?
Miami-Dade is doing really well in a number of areas, for instance, trade, education and professional services. In the last 12 months, the county added 42,000 jobs and brought unemployment down to 5.8 percent. Miami is also an important destination for tourism, which is still our largest industry in Florida. Tourism generates tens of thousands of jobs and contributes 24 percent to our sales tax.
I am very optimistic about the future of Miami-Dade. It is a very exciting economy. People from around the world want to live there, to visit there and do business there.  Miami speaks a lot of languages and it is clearly one of the best melting pots in the world. These factors will help Miami to continue its growth.

Bringing benefits of Short Term Rentals to the communities

Bringing benefits of Short Term Rentals to the communities

Invest: Miami speaks with Tom Martinelli, Public Policy Director, Florida, Airbnb



To what extent does Airbnb produce economic benefits to communities in which you operate?

We look at it from two angles: from the host perspective and from the guest perspective. From the guest perspective, this is an incredible benefit to them because they are able to have choices. At the end of the day, they put the value on the product. From the host perspective it is even better, because now they are able to optimize their asset. There are other companies that optimize services and time, but we optimize what is often one’s greatest assets: their home. A specific segment of the population that benefits from Airbnb are empty nesters, senior citizens sand those on fixed income. As it relates to our Seniors, they are not only staying active, which is important considering what we know about the effects of isolation, but they are also gaining a revenue stream. Airbnb not only produces an economic impact, but also a societal one. We are very proud of this.


Miami ranks in Airbnb’s top five markets in the U.S., behind New York, Los Angeles, San Francisco and Boston. What has been the company’s strategy to achieve such an impressive growth? What are the main differences in terms of market performance between Miami-Dade and the other top markets?

I don’t think it has as much to do with what Airbnb has done, rather it is a testament to the great community and destination that is Miami. According to the last census, we have 800 people a day moving into Florida, in net terms. Those are the ones moving in permanently. We are breaking tourism records every single quarter. And as much as I would love to take credit for that, the credit goes to South Florida and, in particular, the Greater Miami Conventions and Visitors Bureau (GMCVB), which ensures national and international visibility through their marketing efforts. We have amazing weather, the best beaches in the world and great food. There is no reason not to come to Florida 12 months of the year.  We are the Gateway to the Americas.  If you’re flying in from Europe, Africa, South America, North America, or anywhere else, you’re going to stop in Miami. And we have options for everyone’s tastes and purpose – whether you’re traveling for business and need wifi and a printer, or you are in need of medical assistance and must be close to your hospital, we offer all the options. With such affordable rooms offered on Airbnb, who is not going to want to stay an extra couple of days?


Some cities across the U.S. have embraced the short-term rental service, while others have fought Airbnb head on. How is Airbnb finding Miami-Dade to do business when it comes to regulation?

Miami-Dade has 34 municipalities. When you look across the county, there are some cities that are excited about it, while other cities that simply don’t know about us. When we came to Florida, we came to educate, advocate and make sure that the communities came out benefiting from Airbnb. There is a lot of educating to do. Airbnb is part of the new economy, and as the communities learn about home sharing, I am confident they will be more comfortable with it. That is why we are not rushing. We want to do the right thing, which is paying our taxes, and have common sense regulations that ensure our host are operating safely, legally and fairly. We have had very important meetings with municipal authorities across the county because we want them to look at us as a partner.


How has Airbnb impacted an already competitive hotel market in Miami-Dade?

The GMCVB produces a report where they describe the state of the market. And their numbers are growing. This supports our position that we are not taking a piece of their pie. Instead, we are making the pie bigger.


What can be done to avoid speculation in Airbnb? What has been the impact of this speculation on gentrification effects?

We have to look at it in a case-by-case base scenario. Every city has its regulations. However, it is also true that the studies show that short-term rentals have very little impact to the affordability of housing. Even so, in the cases where there has been speculation, we need to work with the authorities and the communities so this doesn’t become an issue. However, when we think about Florida, we know that second homes are part of the fabric and tradition of our State since the days of Henry Flagler.



Strong fundamentals fueling growth in Miami’s financial industry

Strong fundamentals fueling growth in Miami’s financial industry

Invest: Miami speaks with Abel Iglesias, President and CEO, Professional Bank


How has Professional Bank evolved since its opening in 2008?

Professional Bank opened in 2008, right in the middle of the financial crisis. Despite the economic downturn, the timing was actually advantageous for us. As financial institutions were inward-looking, spending time and money cleaning their balance sheets, we were one of the few banks that were able to increase our activity by taking an outward-looking approach. We did not take on any bad loans or take on any toxic assets, but rather grew strong accounts enabling us to be highly rated by Bauer.

We began our journey as a full service commercial banking institution that caters to the professional community. However, we have evolved to also include residential lending, construction and commercial real estate financing, commercial business financing and SBA lending. Today, we are at roughly $400 million in assets with a diversified portfolio of assets. Technology, an area that we heavily invest in, has played an important role in leveraging our bank and has enabled us to cater to a growing number of clients with fewer offices. That said, we are planning to open a Palm Beach branch by summer 2017 and are actively looking at other markets in South Florida.

Which business lines are expected to rise faster in South Florida in the upcoming years?

Despite a strong dollar and the headwinds we are currently facing in Latin America, Miami continues to offer a strong business environment with expectations of growth in 2017. Our main growth driver in South Florida, commercial real estate, will continue to be a part of every community bank’s product set in Miami.  One area in this space that will continue to grow and do well will be construction loans for the middle market homes. We see a lot of opportunity in areas like West and South Miami-Dade. On the other hand, high rise condominium construction that you see predominantly in Downtown and Brickell is starting to see some saturation, and, therefore, we will start to see some pull back on lending activity in those markets.

As Miami businesses continue to grow and expand, we see great opportunity in commercial lending. SBA lending is at an all-time high and we anticipate this will continue to grow in 2017.

Lastly, we just recently opened our insurance agency and are quite excited and optimistic about growing this business in 2017.

What are the expectations of the performance of the mortgage lending segment in Miami-Dade County and South Florida for 2017?

Mortgage lending is an area where Professional Bank has done exceptionally well. Even so, I like to say that we are cautiously optimistic as the rates are increasing. While homes priced under a million dollars are doing very well and are expected to continue to do so, rising rates, higher inventories and a stronger dollar have caused a slowdown in the upper end of the market.

We are carefully watching the bond market, observing capital flow out of the bond market and into equities, which forces interest rates upwards. This is important as we don’t know how much higher rates will grow. This ultimately affects how many people will be able to afford mortgages. However, by historical standards, rates continue to be very low, and if people are in the position to purchase a home, this is still the right time to do so.

We are very bullish on bank profits as they are poised to do well with the anticipated Fed increases. Banks may see an increase in their profit margins, which would be good news for the sector.  This might cause an increase in M&A activity, as investors will be willing to pay greater multipliers now that banks’ profits are expected to rise.

What is the impact and challenges of the current regulatory framework on South Florida’s banking industry?

One item the banking industry anticipates is the possibility of some regulatory relief in the near future. Modifying the Dodd-Frank Act would be very welcomed by the banking sector as a whole, and by smaller- and medium-sized institutions in particular. Dodd-Frank has some good aspects, but it has also been very onerous on the residential lending front. We would like to see some common-sense modifications to diminish the difficulties associated with compliance. Unintended consequences and costs occur because of these difficulties, such as the distortion in the burden of compliance between big banks and small banks. The former has armies of people working on compliance, the latter does not.

In 2015, Florida banks grew loans at more than twice the average percentage growth of other U.S. financial institutions. What are the main differences in such growth for the different type of institutions?

With over 1,000 people coming to our state a day, Florida is one of the fastest growing states in the country. This fuels our economy. This has benefited the banking industry because, as the economy expands, so does the banking sector. In South Florida in particular, the resurgence of real estate values has fueled a lot of our growth. International banks have seen a slowdown due to currency devaluations, a strengthening dollar, regulations and socio-political issues they are currently facing in areas like Latin America.

Domestically, the banking industry overall has cleaned up their balance sheets, building strong reserves, allowing them to be more aggressive in business. However, in general terms, the current banking growth has not been accompanied by an increase in nonperforming loan thus far, so it is safe to say that what we are seeing is healthy growth.

Taking into account that the banking industry is quickly embracing technological advances, what are the main challenges and opportunities regarding security?

Cyber security is one of the main subjects that concern every bank. We can never be ‘too safe’ because there are always new ways of experiencing attacks and new threats. This is why investment in software security is a top priority not only for us but also for every bank. Small- and medium-sized banks have an advantage over big banks because security issues are handled by third party, specialized professionals that produce state-of-the-art security systems designed specifically for the bank. Larger banks struggle with this because of their size. Another challenge is the possibility of a high-tech game changer in the banking industry, like Uber has been to the transportation business. That being said, it is also important to underline the fact that technological advances have allowed us to grow exponentially with a smaller footprint. To be able to operate in Miami with only two branches is something that I find remarkable.

For more information on Professional Bank, visit their website at: