Letter from the CEO
I’d like to personally thank you for participating in Miami’s transformation with us. The last year and a half has been an exciting and eventful period for our young company. We identified neighborhoods in transition, acquired 3 multifamily residential assets, and are currently in the process of acquiring a historic trophy asset in the heart of Downtown Miami. In addition to all of this, we have had the privilege of working in a unique real estate market that continues to show positive signs for the future. We are grateful that you have made us your trusted partner.
In the Miami Modern (MiMo) Historic District, stretching from 50th St. to 77th St. along Biscayne Boulevard, we recognized a neighborhood on the cusp of becoming a vibrant cultural center the way it was in the 1950s. The restoration of historic motels like The Vagabond and the opening of new restaurants and shops has made this an attractive neighborhood in which to live, work, and socialize. With more people relocating to this historic district, our three multifamily rental projects are uniquely positioned to meet the increased demand. Our apartments designed to attract busy professionals looking for a turnkey living arrangement will be fully furnished (studio and one-bedroom) . With these projects we are striving to offer modernity while preserving the historical integrity of the buildings.
Downtown Miami was also identified as a neighborhood on the brink of a major transformation. This area is set to see approximately $10B worth of real estate investment by 2020 including major projects like Miami Central Station and Miami Worldcenter. Another major component to Downtown Miami’s transformation during this cycle is the adaptive reuse of historic buildings from the 1920s real estate boom. We have been working over the last eight months to purchase one of these historic properties, which will standout as a landmark asset for our growing portfolio.
The current state of the Miami market gives us reasons to remain positive. A new study from the Downtown Development Authority revealed that Miami’s downtown condo market is cooling as the high volume of work has driven construction costs up, reducing the number of new projects planned. However, the slowdown is actually the sign of a healthy market according to one of the report’s lead authors. As development slows, construction costs should stabilize once subcontractors begin fighting for work again. Just as any organism needs to breathe to survive, a market needs time for demand to catch up to supply in order to remain healthy. While climate and tax benefits have long driven demand in South Florida, more investment in transportation, education, and jobs will be necessary in order to make Miami a truly in-demand, world class city. A series of large investments in transportation infrastructure give us further reasons to be bullish about Miami’s future. A good example is All Aboard Florida.
All Aboard Florida, the privately owned high-speed rail line designed to connect Miami to Fort Lauderdale to West Palm Beach to Orlando, has plans to create multimodal hub stations at each of these stops. Miami Central Station as it’s been named, is set to break ground this year. The entire project will create approximately $6B in direct economic impact to Florida’s economy over the next 8 years. Additionally, Governor Rick Scott has announced plans for more than $10B worth of investment in transportation statewide.
While the reasons to remain bullish are clear, we are constantly thinking about the potential challenges we may face. It is the duty of every investor and every person who wants to see Miami become a world-class city, to continue building the infrastructure that will support that goal. As a city, we must focus on population growth and that means addressing the challenges associated with education and employment. The key questions to ask at this time are the following. “How can we improve the education system through the creation of new schools and through partnerships between private and public education?” “How can we attract new businesses and grow wages to attract the best talent?” “How can we better leverage our position as a telecommunications hub and attract more technology jobs?”
If you love Miami like we do, try to ask yourself these questions and ponder potential solutions. We would be happy to work with you to continue improving this wonderful city.
Best of luck for the future and thank you again for your trust,