At South Florida real estate functions, it’s fairly common to run into brokers who’ll gnaw your ear off about #longmiami. Aside from being a hashtag on X (formerly Twitter) that is used to share anecdotes and data points about the region’s hot real estate market, #longmiami has become a slogan for local boosters eager to convince you that South Florida has entered the global stage.
They’ll point to the arrival of Citadel founder Ken Griffin and his plans to build a $1 billion, 1,000-plus-foot headquarters on a waterfront lot in Miami’s Brickell financial district that he bought for $363 million in 2022. They’ll note that down the street, Swire Properties teamed up with Steve Ross, the billionaire chair of New York-based Related Companies and the new office king of downtown West Palm Beach, to build another planned supertall office tower, called One Brickell City Centre.
And they’ll boast about New York-based developers such as Witkoff, Kushner Companies and Naftali Group spearheading an unprecedented construction boom of planned condominiums, apartment buildings and mixed-use projects along South Florida’s coast. Don’t get them started on Amazon founder Jeff Bezos, the third-richest man in the world, coming home to Miami, where he grew up.
Meanwhile, South Florida-based developers are aiming to keep pace with their out-of-town counterparts. For instance, Key International — a Miami-based developer led by brothers Inigo and Diego Ardid — is competing with Griffin, Swire and Ross in Brickell. Key is partnering with Chicago-based Sterling Bay to develop 848 Brickell, a planned 51-story office tower.
Edgardo Defortuna, who leads Miami-based Fortune International Group, remains at the forefront of luxury condo development with a slate of oceanfront condominiums on tap in Brickell, Sunny Isles Beach and Pompano Beach.
His next slate of projects includes a Casa Tua-branded tower in Brickell, the St. Regis Residences in Sunny Isles Beach and the Ritz-Carlton Residences in Pompano Beach. On the brokerage front, his firm partnered with Christie’s International last year and is working to expand in the luxury resale business.
Broker Fredrik Eklund, subject of this month’s Closing interview, moved to South Florida last year to help sell the boom with Douglas Elliman Florida CEO Jay Parker. They have picked up exclusive sales and marketing for the upswell of new developments.
But holes appear in the #longmiami narrative.
Last year, a data analysis by CompStak showed that office leasing activity had slowed significantly, and the average price per square foot for office space had dropped by $30. Another CompStak report deflated assertions that Miami was a magnet for tech firms seeking to relocate from California. Instead, tech leasing has been on the decline since 2021, CompStak’s data showed.
The residential market is also showing signs of a correction. Single-family homes and condos continue to rise in price, marking record sale prices in neighborhoods across the tri-county region. Yet by the third quarter of last year, South Florida’s apartment rent growth had slowed and multifamily landlords faced higher vacancies as a result of more competition, a Lee & Associates report showed. In the first nine months of 2023, developers completed 13,388 apartments in South Florida, compared to more than 13,210 units completed during all of 2022.
Since December, South Florida development sites hitting the market for sale have been on the rise, as some builders are unable to lock down equity partners or secure construction financing with favorable terms, or face a diminished return on investment because of rising construction costs.
South Florida is also facing existential dual threats. While Palm Beach has more “trophy” residential listings (defined as homes priced at over $50 million) than any other city in the U.S., the region is in severe need of more affordable housing. It is also dealing with the impacts of climate change, like severe flooding in dense urban neighborhoods and homeowners insurance premiums skyrocketing because of the threat of more hurricanes.
In December, the University of Florida released a study showing most Miami-Dade County families with incomes below $75,000 struggle with housing costs and are paying more than 30 percent of their income for housing. In Broward County, 62 percent of renters are cost-burdened, paying more than 30 percent of their income for rent, a separate assessment by Florida International University found.
Flooding and property insurance could further drive residents away from South Florida, according to a December study in the journal Nature Communications, perhaps erasing the #long part of the hashtag. The report predicted that dozens of neighborhoods prone to flooding in Miami-Dade and Broward will experience a mass exodus starting this decade. Miami-Dade and Broward could see resident flight as soon as 2028 and 2032, respectively, the study found.