2nd Quarter Little Havana Review
The market reached full confidence in the recovery some time ago, but now certain areas of concern are beginning to appear on the horizon. The recent volatility of the stick market has shaken some nerves both domestically and internationally. This could lead to a softening of the economy, but potentially can also compel more people to move their funds to real estate, which they might continue viewing as the safest option. Other threats exists, such as interest rates rising by year end, and possible oversupply of lux condos and retail.
The historic Little Havana neighborhood, uniquely positioned centric to all the city’s major employment centers, and adjacent to some of its most promising developing neighbrohoods, poses an alluring proposition for investors.
Multi-Family
- An ongoing trend, demographics are shifting, and people continue migrating away from stale suburbs back into the vibrant urban cores of cities. In Little Havana, there is a second migration which is of people being priced out of Brickell and Downtown, but still desiring the access to jobs and superior lifestyle amenities of the area. Although rental rates have slowed in their increases, in a sense taking a moment to “catch their breath”, the upward pressure on rents continues building.
- There is a general understanding of Miami’s special position in the world, and that it is quickly transitioning into a first tier global metropolis. This places much positive emphasis on buyer’s forecasting, thus lowering the need of short-term returns in favor of strong future appreciation
- Competition for deals keep buildings, and although there has been a subtle plateau as the market has “caught its breath” on values, the cap rates have remained incredibly compressed.
Retail
- The major commercial corridor of 8th street has seen by far the most intense demand.
- As demographics shift to the urban core, retailers are increasingly taking note and following their customers, and re-adapting their space needs to more constrained urban proportions. We’re increasingly seeing national retailers display blatant interest in opening sites in Little Havana.
- More interesting, local home-grown business are benefitting from improved economic conditions and becoming more willful in their development. The neighborhood is slowly becoming an area more capable of fostering unique new retailing concepts and ideas.
- Flagler, which has not nearly received as much interest as 8th street, is drawing more subtle interest. It’s position just outside downtown, with favorable zoning and just across the river from major developments, will fuel growing interest.
- Secondary corridors such as SW 7 st, 12ave, 17av etc are starting to churn more interest.
- The River is increasingly becoming a major destination, and object of interest. Expect new hotels, restaurants, and lifestyle amenities to populate this exciting waterway.
Land
- Land in Brickell has run out, with all vacant parcels traded and in some phase of planning. Little Havana, which lies only a few blocks away from Brickell and is centric to most of the city’s employment centers, is a clear target for the next wave of development. Local zoning would not permit for the skyscrapers of further east, but will be ripe for medium density development.
- The greatest demand is disproportionately for T6
- Proposals that may upzone parks of east little Havana, and remove parking requirements on small buildings, may spur interest in small lots and finally unlock the key to their development
-Carlos Fausto Miranda
September 25, 2015
