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Greater Downtown Miami Mid-Year Report

Market Study Update

Prepared for the Miami Downtown Development Authority (DDA)


by Integra Realty Resources (IRR)

August 2017
Greater Downtown Miami Mid-Year Report
Market Study Update

Prepared for the Miami Downtown Development Authority (DDA)


by Integra Realty Resources (IRR)

August 2017

For more information, please contact

IRR-Miami/Palm Beach
The Douglas Centre
2600 Douglas Road, Suite 801
Coral Gables, FL 33134
305-670-0001
dbowen@irr.com
Contents

2 Introduction
4 Greater Downtown Miami Market Submarket Map
5 Whats Changed Since Year-End 2016?
9 Submarket Analysis
11 Unit Sizes and Pricing Trends
13 Resale Condominium Pricing
16 Rental Market Statistics
19 Conventional Rental Market Supply
21 Condo Development Process Appendix
Introduction

Integra Realty Resources Miami/Palm Beach (IRR-Miami) is pleased to present the following
Mid-Year Residential Real Estate Market Study within the Miami Downtown Development
Authoritys (Miami DDA) market area, defined as the Greater Downtown Miami market. This report
updates IRR-Miamis findings on the local residential real estate market through July 2017.

Key findings from this mid-year study are as follows:

Three new condominium projects have delivered (Brickell Heights East and West and
Millicento
Biscayne Beach) comprising 1,089 units in total.

Downtown reached its midpoint in Q2 2017, with 5,180 new condo units delivered since 2012
and 5,078 units under construction. We project the Flatiron (549 units), Gran Paraiso (317),
and possibly One River Point (418) to deliver in 2019.

Project surveys indicate existing under construction supply in all submarkets is 70% pre-sold
on average.

Average condominium resale pricing has declined -5.4% year to date, hovering slightly
over $400 PSF.

IRRs review of trailing 4-year resales volume indicates that the downtown resale condo
market began accelerating in Q1-2017, with May 2017 recording the highest number of
closed and pending sales volume on record in the past 4 years.

Conventional apartment rents have remained steady with 1% - 4% rent growth year-over
year since last summer. Only Studio rents declined -1.6% since last year.

As a new addition to this report, IRR has surveyed new Class A projects delivered in the prior
18 months including Monarc at Met3 and SoMa Brickell. Class A rents are 25% - 35% higher
than IRRs historical conventional rent surveys downtown, demonstrating the premium for
newer well-located Class A apartments.

2 | Integra Realty Resources


Introduction

There are no markets that operate in a vacuum dislodged from larger economic trends.
The Miami residential market is growing, both in terms of new condominium product and
multi-family rental product. This growth and delivery of new product is bringing more product to
market at higher quality and price points. The resale inventory listed for sale has been growing
also, placing downward pressure on prices. The new conventional rental inventory is delivering
and stabilizing quickly with brisk absorption at rents 25% 35% higher than competitive older
apartment product, demonstrating the continued demand for downtown as a lifestyle. However,
these new conventional apartments are also competing for renters, many of whom occupied
some of the aforementioned condominium buildings as renters. This is placing downward
pressure on condominium units rents, which in turn has condominium owner-investors
deciding its time to sell. These market dynamics play out on a macro-economic stage currently
characterized by mixed consumer confidence, variable but slightly improving global economic
conditions, and an uncertain US economic outlook despite the otherwise vibrant local market
conditions in South Florida.

As of mid-year 2017 in downtown Miami, it wasnt the best of times, it wasnt the worst of times.

Respectfully,

Integra Realty Resources (IRR) Miami/Palm Beach

Anthony M. Graziano, MAI, CRE, FRICS


Senior Managing Director

Dan Bowen
Market Research Analyst

3 | Integra Realty Resources


Greater Downtown Miami Market Submarket Map

The map opposite


illustrates the
boundaries of the
Miami DDA, as well
as each submarket
within the Miami
DDA market.

4 | Integra Realty Resources


Whats Changed Since Year-End 2016?

T he new development market downtown continues to project strength in the wake of fewer
reported buyers. With 18% less inventory under construction resulting from recent deliveries,
each new project close-out is a success to be celebrated in favor of less competition among the
remaining projects.

Cancellation of projects, or re-positioning continues with Auberge (298 units) now on indefinite hold,
and Chelsea (222 units) reportedly considering repositioning as retail use. Wynwood 26 (15 units) has
announced conversion from rental to condo, while 2000 Biscayne (393 units) announced conversion
from condo to rental.
Brickell House
In June 2017, Forbes reported improvements in the Brazilian economy, and a weaker US Dollar, are
bringing Brazilians back to Miami to buy. These early reports of stabilization in Brazil unfortunately
do not extend to many other key feeder markets in South America, and American foreign policy on
visas and immigration may be counter-productive to a full resurgence anytime soon. Increases in
European, Eastern European and Canadian buyers are reflective of strengthening economics in those
large markets.

Apartment developers remain active in planning new projects, and early reports of new potential
land deals signal continued appetite for downtown multi-family development. Apartment rental
absorption, rent levels, and demand all coupled with ample equity for apartment deals will continue
to drive the multi-family pipeline. The challenges will be feasibility and financing terms, which have
constrained all but the most well-capitalized multi-family developers in the past year.

The overall Miami economy remains relatively strong. Continued multi-family demand will correlate
to job growth and regional economic expansion, fundamentals that have been in question in the
broader US economy. Despite persistent expectations of a broader recession, the US and Miami have
weathered the storm. The real estate landscape continues to adjust to this potential uncertainty, but is
proceeding based on the current economic framework of continued expansion, albeit more cautiously.

5 | Integra Realty Resources


Whats Changed Since Year-End 2016?

Figure 1a
Greater Downtown Miami Current Growth Contracts and Reservations
Submarket Building Avg. SF Units Status
Brickell One River Point 1,284 418 Contracts
CBD Aston Martin Residences 2,000 390 Contracts
Edgewater Elysee 3,383 100 Contracts
Edgewater Gran Paraiso 1,549 317 Contracts
Edgewater Bentley Edgewater Condo-Hotel 905 207 Reservations
Edgewater Missoni Baia 2,950 146 Reservations
Edgewater Naranza 935 137 Reservations
Wynwood Wyn26 1,204 15 Reservations
# in Contracts 1,225
# in Reservations 505
Total/Average 1,682 1,730

Figure 1b
Greater Downtown Miami Current Growth Under Construction and Q2 Completions
Submarket Building Avg. SF Units Status
Brickell Brickell Heights - East 1,078 358 Complete
Brickell Brickell Heights - West (BH02) 983 332 Complete
Edgewater Biscayne Beach 1,305 399 Complete
A&E 1000 Museum 5,389 83 Under Construction
A&E Canvas 892 513 Under Construction
Brickell 1010 Brickell 1,283 387 Under Construction
Brickell Brickell Ten 1,050 155 Under Construction
Brickell Echo Brickell 1,510 180 Under Construction
Brickell Flatiron 1,334 549 Under Construction
Brickell SLS Lux 1,250 450 Under Construction
CBD Paramount Miami 1,793 512 Under Construction
Edgewater 26 Edgewater 645 86 Under Construction
Edgewater Aria on the Bay 1,317 647 Under Construction
Edgewater One Paraiso 1,682 272 Under Construction
Edgewater Paraiso Bay Tower I 1,360 360 Under Construction
Edgewater Paraiso Bayviews 1,044 388 Under Construction
Edgewater Spark 1,378 56 Under Construction
Edgewater The Edgewater 778 30 Under Construction
Midtown Hyde Midtown 944 410 Under Construction
# Completed Since Prior Report 1,089
# Under Construction 5,078
Total/Average 1,302 6,167

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Whats Changed Since Year-End 2016?

T he market reached the development cycle mid-point with about 50% of the total projects since
2012 now completed, and slightly less than 50% of units remaining under construction. The
contract/reservation pipeline remains relatively unchanged, notably with the Aston Martin project
converting reservations to contracts.

Figure 2
Current Greater Downtown Miami Condo Pipeline Q2 2017
Submarket Complete Since 2012 Under Construction Contracts Reservations Proposed Totals

A & E 0 596 0 0 1,834 2,430


Brickell 3,767 1,721 418 0 5,287 11,193
CBD 352 512 390 0 5,198 6,452
Edgewater 1,050 1,839 417 490 1,389 5,185
Midtown 0 410 0 0 195 605
Wynwood 11 0 0 15 478 504
Total (2017 Midyear) 5,180 5,078 1,225 505 14,381 26,369
Total (2017 Annual) 4,091 6,254 803 1,215 13,980 26,343
Total (2016 Q2) 2,790 7,499 879 673 15,606 27,447
Total (2015) 1,889 7,308 1,874 207 17,615 28,893
Total (2014) 1,044 6,019 2,070 1,598 12,543 23,274

These condominium project deliveries also coincided with 969 units of Class A apartment deliveries,
bringing the total number of multi-family units under construction below 3,600 units.

The key takeaway is that the under construction pipeline is getting thinner in both the for-sale new
condominium projects and the future rental pipeline, which could provide stability into 2018 provided
no material adverse changes in the broader economy.

7 | Integra Realty Resources


Whats Changed Since Year-End 2016?

Figure 3
Greater Downtown Miami Condo Market Size Q2 2017
Submarket Current Market Current % Potential Long % Growth
Size [1] Growth Growth Term Growth Longterm

A & E 4,052 596 15% 1,834 45%


Brickell 23,610 2,139 9% 5,287 22%
CBD 6,640 902 14% 5,198 78%
Edgewater 5,102 2,746 54% 1,389 27%
Midtown 978 410 42% 195 20%
Wynwood 111 15 14% 478 431%
Total (2017) 40,493 6,808 17% 14,381 36%

[1] Includes all 2014-2017 deliveries.


[2] Long-Term Growth is the remaining Conceptual units, net of current growth.
[3] Current Growth is all Under Construction, Contracts and Reservations.

The large-condominium projects under construction are concentrated primarily in Brickell and
Edgewater, with A&E and CBD providing the biggest long-term growth markets. Conversely,
the conventional rental projects in CBD and A&E are offering for rent housing options in
those submarkets.

In prior reports, IRR projected smaller projects would proceed in niche underserved submarkets,
and Wynwood 26 announced its conversion from rental to condo. We expect to see an increase in
smaller-scale project announcements in the coming 12-18 months as developers capitalize on the
slack in the broader market in favor of in-fill projects. The future completion of Hyde Midtown will
leave no condominium development occurring in Midtown, while the major rental expansion of
Midtown 6, 7 and 8 will continue the submarkets measured residential growth.

8 | Integra Realty Resources


Submarket Analysis

A summary of the key changes to date:

Brickell
There have been two new deliveries in Brickell as the two Brickell Heights towers
have been completed; Brickell Ten is likely only weeks away from being turned over
to its buyers and work has begun on MaiZon, a 262-unit Class A rental project. The
completion of Brickell City Centre in Q4 2016 was a major milestone, although it also
represents the first project to deliver without being substantially (90%+) sold out upon
TCO. Swire has confirmed publicly they do not intend to rent the developer units, and
will proceed to selling the balance of the standing inventory. The Panorama Tower
topped off in Q2-2017, marking a major milestone for the mixed-use rental and hotel
project with expected delivery in late 2018.

CBD
Work is continuing on Paramount MWC condominium with expected delivery in 2019,
and on the 7th Street Promenade, Vice, Met Square, and MiamiCentral apartment
projects all slated for 2018-2019 delivery.

Arts and Entertainment


Auberge has been once again put on hold, deducting 298 units from the pipeline.
The under construction pipeline includes Canvas (513 units) which topped of in Q2 2017
and 1000 Museum (83 units) both of which are expected to deliver in late 2018.

9 | Integra Realty Resources


Submarket Analysis

Edgewater
Biscayne Beach (399 units) has completed. There have been a variety of unit count
revisions. The 2000 Biscayne project has been converted from a 450-unit condo to
a 393-unit rental. The submarket will see the largest balance of deliveries in 2017 as
Relateds three major projects (Paraiso Bay Tower, One Paraiso and possibly Paraiso
Bayviews with a combined 1,020 units are expected to deliver by year-end 2017.

Midtown
Progress continues on Hyde Midtown, and work is ongoing at Pearl Midtown 29.
Significant proposal activity is occurring in the rental pipeline, with Midtown 6, 7,
and 8 being proposed with near-term plans to reportedly commence construction
on Midtown 6.

Wynwood
The Wynwood 29 project has moved from rental to a proposed condo; Wyn26 (15 units)
remains in the reservations. Wynwood is known for its vibrant boutique art and gallery
scene, and its hip restaurant and bar culture. New retail continues to emerge in the
submarket, but the market has not seen any measurable residential development in
this cycle. Mana Wynwood remains the largest potential catalyst in the western areas
of Wynwood with a critical mass sufficient to attract large-scale investment.

Overtown
The land sale needed to complete the Miami Beckham United stadium was agreed
upon in early 2017. Although located outside of the DDAs borders, this project is
the largest and most transformative currently in the pipeline with long-term positive
implications for the Overtown neighborhood.

10 | Integra Realty Resources


Unit Sizes and Pricing Trends

T he active projects in the construction phase commenced construction generally 55% 60%
presold. New average quoted pricing in Brickell is in the $600 $700 per SF range, with
notable luxury projects at One River Point and Echo Brickell over $1,200 per SF.

Paramount pricing in the CBD at Miami World Center reports increased asking prices in the
$700+ per SF range, with Aston Martin Residences over $1,000 per SF, the latter slated to break
ground shortly.

The Edgewater market has the highest level of diversity in pricing, with some projects like Spark,
Naranza, Paraiso Bayviews, Biscayne Beach and Aria on the Bay offering well-located units in
the $400,000 $800,000 range ($450 $600/SF), with luxury projects Missoni Baia Elysee, Gran
Paraiso and One Paraiso between $700 $950 per SF ($1.2 $3 Million excluding penthouses).

Interviews with major brokerage houses indicate that developers are seeking the right buyers, and
market participants would not confirm any specific trends on discounts or incentives except to say
that price discounts are not moving the market. Brokers confirmed that the market is measurably
slower, and despite expectations that pre-election malaise was slowing buyer confidence, the first
half of 2017 showed only a minor uptick in traffic and activity in the pre-sale market.

Market metrics indicate that 2016 and 2017 (to date) have demonstrated about 50% of the sales
activity experienced in 2015, which was down 25% 50% from 2014 activity. While these metrics
are not entirely uniform by price point, the higher-priced product downtown has far fewer units per
project, and expectations on unit sales per month are much lower hurdles. The larger mid-priced
product generally needs 6-10 contracts per month to reach feasible sell-out, and many market
participants indicate that this threshold sales pace is not achievable in the current market.

For under construction product that started 55% 65% sold out, the slower absorption is not
necessarily creating distress. In terms of new project feasibility, it remains unlikely that new
projects will commence for the balance of 2017. Absent those projects outperforming the market
on absorption/sales.

11 | Integra Realty Resources


Expected New Condo Deliveries by Year

Figure 4
Projected Condo Unit Delivery by Year
Submarket Name/Location # Units Year Quarter
A&E 1000 Museum 83 2018 Q4
Canvas 513 2018 Q1
Brickell Flatiron 549 2019 TBD
One River Point 418 Contracts TBD
Echo Brickell 180 2017 Q4
1010 Brickell 387 2017 Q4
Brickell Ten 155 2017 Q3
Brickell Heights - East 358 Completed 2017
Brickell Heights - West (BH02) 332 Completed 2017
SLS Lux 450 2017 Q4
CBD Paramount Miami 512 2019 TBD
Aston Martin Residences 390 Contracts TBD
Edgewater Aria on the Bay 647 2017 Q4
Biscayne Beach 399 Completed 2017
26 Edgewater 86 2017 Q4
Bentley Edgewater Condo-Hotel 207 Reservations TBD
Elysee 100 Contracts TBD
The Edgewater 30 2017 Q4
Gran Paraiso 317 Contracts TBD
Paraiso Bay Tower I 360 2017 Q4
One Paraiso 272 2017 Q4
Missoni Baia 146 Reservations TBD
Spark 56 2018 TBD
Paraiso Bayviews 388 2017 Q4
Naranza 137 Reservations TBD
Midtown Hyde Midtown 410 2017 Q4
Wynwood Wyn26 15 Reservations TBD
Projected New Total 2017 Jul-Dec 3,365
Condo Deliveries Total 2018 652
Total 2019 1,061
Total 2020+ 0
Total 5,078

12 | Integra Realty Resources


Resale Condominium Pricing

Figure 5
Average $/SF Sale Price Trend Greater Downtown Miami Resale Market

$500
$457
$431 $426
$403
$372
$400

$305
$300
$240
$221 $224
$200

$100

0
2009 2010 2011 2012 2013 2014 2015 2016 2017

YoY Rent Change 5% 5% 4% 4% -6%

Timeline

End of Wynwood First Delivery Perez Second 1,500th condo 2,500th 5,180
Recession Walls and (23 Biscayne) Art Condo unit delivered condo unit condo
(June 2009) Doors open Launch of Museum Delivery 1,000th rental delivered units
Miami Trolley opens (MyBrickell) unit delivered Construction delivered
Presidential Flagler on Weakening peaks at 5,078
election year the River in many 7,499 condo under
(rental non-USD units in Q2 construction
delivered currencies, Presidential
IRR reports including election year
4,458 Colombian
condos Peso, Euro,
under and Russian
construction Ruble

13 | Integra Realty Resources


Resale Condominium Pricing

T he resale condominium market, which includes all projects delivered from 2001 to the present,
saw a significant increase in average unit price in 2012 (27%) 2013 (22%), 2014 (16%) and 2015
(6%). Pricing has continued to decline from the 2015 peak of $457/SF down to current mid-year 2017
pricing at $403 PSF. We forecasted early in 2016 that the condo re-sale inventory was accumulating,
and pricing would likely adjust accordingly. At this lower pricing, sales volume is increasing rapidly;
with May 2017 marking the best month for closed sales in two years and the strongest in the past
three years, with 142 closings and 160 pending in May 2017.

Market participants are seeking correlations between the resale pricing and pricing of new projects.
But the level of inventory in the resale market is increasing, and the inventory of new product is
declining. This fact, coupled with developer resolve to push through this slowdown, is decoupling
resale and new product pricing.

A review of Figure 6 demonstrates the year over year inventory build-up, but also offers encouraging
signs that early 2017 was a recovery in total sales and pended sales. This return of condo sales
activity was offset by continued increases in the available for sale inventory.

The key takeaway on resale pricing is that the market average pricing was increasing when total
inventory available per month was less than 2,500 units, and average sales velocity was 120 150
units per month. As monthly velocity dipped below 125 units per month, and inventory approached
3,000 units per month on average, pricing started to decline. To reach pricing equilibrium, the market
needs to clear an additional 500 700 resale units currently listed.

14 | Integra Realty Resources


Resale Condominium Pricing

Figure 6
Greater Downtown Miami Condo Listings (Built 2001+) by Month
(Zip codes: 33127, 33128, 33129, 33130, 33131, 33132, 33136, 33137)

Date For Sale New Listing Sold Pended Date For Sale New Listing Sold Pended
Jul-13 1,535 446 218 274 Jul-15 2,568 438 130 144
Aug-13 1,588 432 224 230 Aug-15 2,546 410 126 128
Sep-13 1,710 429 218 213 Sep-15 2,619 465 136 139
Oct-13 1,845 477 190 195 Oct-15 2,726 511 128 108
Nov-13 1,908 388 183 166 Nov-15 2,792 396 104 109
Dec-13 1,904 356 182 166 Dec-15 2,747 346 126 100
Jan-14 1,987 535 158 227 Jan-16 2,859 536 90 84
Feb-14 2,045 499 134 213 Feb-16 2,976 528 83 123
Mar-14 2,184 552 216 218 Mar-16 2,980 431 111 121
Apr-14 2,272 521 200 202 Apr-16 3,045 469 95 110
May-14 2,292 496 206 212 May-16 3,041 412 88 136
Jun-14 2,292 441 181 205 Jun-16 3,057 454 120 100
Average 1,964 464 193 210 Average 2,830 450 111 117
Jul-14 1,939 345 132 120 Jul-16 3,032 374 92 86
Aug-14 1,932 340 118 155 Aug-16 2,990 396 105 114
Sep-14 1,931 356 135 147 Sep-16 3,064 457 86 85
Oct-14 2,006 410 131 140 Oct-16 3,121 407 81 77
Nov-14 2,078 342 114 104 Nov-16 3,167 389 88 82
Dec-14 2,152 357 124 99 Dec-16 3,124 353 94 104
Jan-15 2,127 399 109 136 Jan-17 3,198 553 68 90
Feb-15 2,146 408 106 153 Feb-17 3,258 452 85 100
Mar-15 2,264 499 140 143 Mar-17 3,304 530 114 142
Apr-15 2,428 518 112 155 Apr-17 3,264 403 111 109
May-15 2,481 413 152 139 May-17 3,277 467 142 160
Jun-15 2,539 452 133 124 Jun-17 3,251 422 117 120
Average 2,169 403 126 135 Average 3,171 434 99 106

Source: Trendgraphix, compiled by Integra Realty Resources, Inc.

15 | Integra Realty Resources


Rental Market Statistics

IRRs reporting in Summer 2016 provided in-depth analysis of the rental demand and pricing for both
conventional rental properties and the shadow condo market. Since then, rental rates in condominiums
have declined somewhat, reflecting new deliveries and better affordability for Miami residents. Average
rental price declines in the condominium sector range from -2% to -6% by unit type.

Figure 7
Average Condo Leasing Price Greater Downtown Miami
Studio 1 BR 2 BR 3 BR
Year Overall $/Unit $/SF $/Unit $/SF $/Unit $/SF $/Unit $/SF
2012 $2,255 $1,421 $2.64 $1,804 $2.33 $2,625 $2.13 $4,340 $2.25
2013 $2,371 $1,504 $2.67 $1,926 $2.30 $2,819 $2.21 $4,427 $2.51
2014 [1] $2,481 $1,632 $2.92 $2,008 $2.48 $2,908 $2.32 $4,346 $2.60
2015 [1] $2,582 $1,698 $3.03 $2,139 $2.62 $3,008 $2.45 $4,773 $2.89
2016 [1] $2,677 $1,683 $2.97 $2,165 $2.66 $3,009 $2.46 $4,675 $2.72
2017 [1] $2,522 $1,628 $2.96 $2,008 $2.49 $2,942 $2.38 $4,573 $2.77
[1] Midyear.

Figure 7a
Average Condo Leasing Price Year-over-Year Changes
Studio 1 BR 2 BR 3 BR
Year Overall $/Unit $/SF $/Unit $/SF $/Unit $/SF $/Unit $/SF
2013 $5.1% 5.9% 1.4% 6.8% -1.4% 7.4% 4.0% 2.0% 11.8%
2014 4.6% 8.5% 9.4% 4.3% 7.5% 3.1% 4.8% -1.8% 3.5%
2015 4.1% 4.0% 3.6% 6.5% 5.8% 3.4% 5.7% 9.8% 11.1%
2016 3.7% [2] -0.9% -2.0% 1.2% 1.5% 0.0% 0.4% -2.0% -6.0%
2017 -5.8% -3.3% -0.3% -7.3% -6.4% -2.2% -3.3% -2.2% 2.0%

16 | Integra Realty Resources


Rental Market Statistics

Conventional Apartment Rents

Within conventional rental communities, the picture is generally one of stability, although
one-bedrooms continue to reach new highs at $1,831 per month and 3.4% annual rent growth
through June 2017.

Figure 8
Overall Downtown Conventional Rental Rent Survey (2,474 Total Units, Class A- and B)
$/Unit Studio 1 BR 2 BR 3 BR
Average SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF
Q3 2014 $1,976 638 $1,585 $2.49 864 $1,605 $1.86 1,221 $2,106 $1.73 1,752 $2,622 $1.50
Q2 2015 $2,121 638 $1,856 $2.91 864 $1,774 $2.05 1,221 $2,241 $1.84 1,752 $2,707 $1.55
Q2 2016 $2,123 638 $1,937 $3.04 864 $1,772 $2.05 1,221 $2,257 $1.85 1,752 $2,652 $1.51
Q2 2017 $2,116 638 $1,906 $2.99 864 $1,831 $2.12 1,221 $2,274 $1.86 1,752 $2,378 $1.36
Q3 2014 -
Q2 2015 7.3% 17.1% 10.5% 6.4% 3.2%
% Change
Q2 2015 -
Q2 2016 0.1% 4.4% -0.1% 0.7% -2.0%
% Change
Q2 2016 -
Q2 2017 0.7% -1.6% 3.4% 0.7% 3.6%
% Change

New to this 2017 mid-year report is IRRs survey of new Class A communities delivered in the past
12 months. We then compare these new projects to the prior conventional apartment surveys which
indicate that new projects are achieving a 25% 35% premium (one and two bedrooms); and a
75% premium in the three bedroom. The studio premium shows the smallest premium, but notably
the older multi-family product has fewer studios, and therefore a premium is already priced into the
studios based on lower overall monthly pricing.

17 | Integra Realty Resources


Rental Market Statistics

Figure 8a
Overall Downtown Conventional Rental Rent Survey (2,474 Total Units, Class A- vs. B)
$/Unit Studio 1 BR 2 BR 3 BR
Average SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF SF $/Unit $/SF
Q2 2017 $2,164 638 $1,906 $2.99 864 $1,831 $2.12 1,221 $2,274 $1.86 1,752 $2,751 $1.57
Class A- & B
Q2 2017 $2,360 516 $1,615 $3.13 775 $2,064 $2.66 1,095 $2,711 $2.48 1,437 $3,960 $2.76
Class A
Class A 9.1% 4.8% 25.7% 33.0% 75.5%
Premium (%)

Figure 9 shows average asking and achieved rents, as well as velocity, by submarket in greater downtown
Miami. There has been almost a 21% year-over-year increase in monthly volume, from 258 to 318 signed
leases indicating that demand for rentals continues to grow, and lease turn-over is up.

Figure 9
Average Current Asking vs. Achieved Leasing Price and Velocity (2016 YTD)
Overall Overall Year-over-Year Total # Leases/ Year-over-Year # of Households
Submarket Asking Achieved Price Change Month Volume Change (2016 est.)

Brickell $2,619 $2,535 -3% 177 44% 19,053


CBD $2,337 $2,259 -11% 70 3% 8,180
A & E $3,958 $3,875 -7% 15 63% 8,188
Edgewater $2,515 $2,435 -13% 43 -6%
Midtown $2,643 $2,529 -2% 13 17% 7,852 [1]
Wynwood - - - - -

[1] Wynwood, Midtown, and Edgewater were not broken out 318 21% 43,273
in the 2016 population report.

18 | Integra Realty Resources


Conventional Rental Market Supply

Figure 10a
Greater Downtown Miami Rental Pipeline - Under Construction and Complete Projects
Submarket Building 2017 Q2 Status # Units Completion Date
A&E Square Station Under Construction 710 Q4 2018
Brickell Solitair Brickell (former Brickell Bayview Center) Under Construction 438 Q4 2017
Brickell Panorama Under Construction 821 Q4 2017
Brickell MaiZon at Brickell Under Construction 262 Q4 2019
CBD Avant at Met Square Under Construction 391 Q4 2017
CBD MiamiCentral Apartments (up to 5 towers) Under Construction 800 Q4 2018
CBD Vice Under Construction 464 Q3 2018
Figure 10
CBD 7th Street Promenade Tower 1 Under Construction 450 Q3 2018
illustrates the current
CBD 7th Street Promenade Tower 2 Under Construction 413 TBD 2019
status of Miamis
under construction Edgewater 2500 Biscayne Under Construction 156 Q3 2017
rental pipeline. Edgewater Biscayne 27 Under Construction 330 Q3-Q4 2019
There has been a Edgewater Modera Edgewater Under Construction 297 2019
wave of completions, Midtown Pearl Midtown 29 Under Construction 309 Q1 2018
comprising Midtown Midtown 6 Under Construction 447 TBD
Broadstone at
A & E Melody Complete 500 Q1 2020
Brickell, Midtown
Brickell SoMa Complete 418 2015
5, and Eve at the
District, as well as Brickell Broadstone at Brickell Complete 372 2017
groundbreakings Brickell Brickell View Terrace Complete 76 2016
on the second CBD Flagler on the River Complete 250 2014
tower of 7th Street CBD Monarc at Metropolitan 3 Complete 462 2016
Promenade, MaiZon Midtown Midtown 5 Complete 400 2017
at Brickell, Biscayne
Midtown Eve at the District Complete 197 2017
27, and Modera
Total # of Units Under Construction 6,288
Edgewater.
Total # of Units Completed in 2016-2017 1,545
Total # Units Completed 2014-2015 1,130

19 | Integra Realty Resources


Conventional Rental Market Supply
Figure 10b
Greater Downtown Miami Rental Pipeline - Proposed Projects
Submarket Building 2017 Q2 Status # Units
A&E 17 Edgewater Proposed 240
14 Plaza Proposed 760
School Board Proposed 1,000
Melody II Proposed 630
The Arts Proposed TBD
Art Plaza Proposed 667
Miami Plaza Proposed 437
Resorts World Omni Terminal Proposed TBD
Brickell One Brickell II Proposed 500
Brickell Market Place Proposed TBD
TBD Allen Morris/Related Proposed TBD
Megacenter Brickell Proposed 57
1111 Brickell (Yacht Club Phase II) Proposed 897
Brickell Fire Station Proposed 196
CBD Luma at Miami World Center Proposed 434
Lynx Tower Proposed 900
Miami World Center Block E Proposed 418
Miami River Village Proposed TBD
Cultural Center Garage Redevelopment Proposed 432
Grand Station Proposed 300
Nexus Riverside Proposed 462
Nexus Riverside Central Proposed 900
54 West Flagler Proposed 391
225 SE 2nd St Proposed TBD
M-Tower Proposed 440
Miami Station Tower f/k/a Krystal Proposed 153
200 NMA Proposed 328
533 NE 2 Ave Proposed 150
Apartments at Yotel Proposed 188
One Bayfront Plaza (RENTAL) Proposed 1,100 (approx)
Edgewater 1900 Biscayne Proposed 429
1836 Biscayne (Possible Condo) Proposed 352
700 Edgewater Proposed TBD
AR Edgewater Proposed 171
Quadro 3900 Biscayne Proposed 198
Ellipsis Proposed 34
The Village Proposed TBD
Miami 18 Proposed 1,200
2000 Biscayne (Rental) Proposed 393
Midtown Midtown East Phase 1 Proposed 208
Midtown East Phase 2 Proposed 492
Midtown 7 Proposed 391
Midtown 8 Proposed 387
Wynwood 2801 NW 3rd Avenue Proposed 264
Wynwood 25 Proposed 289
222 NW 24th St Proposed 80
Wynwood Plant Proposed 306
Wynwood 26 Proposed 176
222 Wynwood Proposed 35
2110 N Miami Ave Proposed 163
Total # of Units Proposed 17,548

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Condo Development Process Appendix

Proposed Reservations Contracts Under Completed


Construction
The proposed phase The reservations The contracts The Contracts stage The site This is the final
is the initial phase phase is the phase is when the is typically the improvements and stage of the
of the development second phase of initial proposition make-or-break stage vertical construction development
process; a conceptual the development and reservation of development have commenced. process; as the
plan for a new process; the of a completely as the project was At this stage of construction of the
building or project developer and undefined either well-received development, the units is completed,
is initiated by architectural/ development idea by buyers, investors, project has secured COs (Certificates
a developer or design team meets the actual and lenders, or sufficient pre-sales of Occupancy) are
property owner. produce additional contracting for sale it was not. If the with significant issued, and the
The developer may renderings and upon the receipt of developer has as a deposits and most closing of the unit
release a press floor plans; the further deposits. sufficient number likely a financing sales are finalized.
release or a news sales centers are The architectural of sale contracts, commitment.
story with an initial opened and the and construction buyer deposits, These projects will
rendering to gauge finishes, amenities, drawings are and a commitment enter the market
the interest in the and features of completed; the for financing, under a reasonably
project, but the the project are developer obtains the projects definitive timeline
project size may disclosed. The government construction of 24-48 months,
change over time to developer files permitting and will most likely depending upon the
conform to market with the State of approvals. The commence. If the scale of the project
demand and/or as Florida to be able final unit floor project was not and surrounding
site due diligence to take reservations plans are defined well-received, either infrastructure
constrains the and deposits for as the reservations by a lack of pre-sales, requirements.
process. units during this are converted to or insufficient equity
stage. This begins sales contracts from initial investors
the pre-sale phase with additional or debt financing,
during which buyer deposits a project may be
reservations are upon filing of the scrapped, shelved, or
taken. Master Declaration significantly altered
of Condominium. in another future
Changes to these attempt (either later
documents are in the cycle or in the
costly, and therefore next one). Projects
the development which fail the
plan tends to Contracts stage may
be more static move all the way
following this phase. back to Proposed
during this process.

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Disclaimer & Acknowledgment

The information provided herein is for informational purposes. This publication does not render legal,
accounting, appraisal, counseling, investment, or other professional advice. Should such services or
other expert assistance be needed, it is recommended that the services of a competent person or firm,
having access to the details of the situation, be employed.

22 | Integra Realty Resources


Images

Cover: Photo courtesy of Miguel Gonzalez.


Page 2: Photo credit: 2015 IRR-Miami/Palm Beach.
Page 4: Photo credit: 2015 IRR-Miami/Palm Beach. Map courtesy Miami DDA.
Page 5: Photo credit: 2015 IRR-Miami/Palm Beach.
Page 9: Brickell, artists rendering of Brickell CityCentre used by permission of Swire Properties Inc.
CBD, photo courtesy Miami DDA.
Arts and Entertainment, photo courtesy Miami DDA.
Page 10: Edgewater, photo credit: 2015 IRR-Miami/Palm Beach.
Midtown, photo courtesy Miami DDA.
Wynwood, photo credit: 2014 IRR-Miami/Palm Beach.
Overtown, by Ebyabe, Wikimedia Commons.
Page 11: Photo credit: 2015 IRR-Miami/Palm Beach.
Page 13: Brickell, artists rendering of Brickell CityCentre used by permission of Swire Properties Inc.
Page 16: Photo credit: 2015 IRR-Miami/Palm Beach.
Page 19: Photo credit: 2015 IRR-Miami/Palm Beach.

23 | Integra Realty Resources


About Integra Realty Resources

With corporate headquarters in New York City, Integra Realty Resources (IRR) is the
largest independent commercial real estate market research, valuation, and consulting
firm in North America, with 66 offices and more than 200 MAI-designated members of
the Appraisal Institute who are among its more than 900 employees located throughout
the United States and the Caribbean. Founded in 1999, the firm specializes in real
estate appraisals, feasibility and market studies, expert testimony, and related property
consulting services. Many of the nations largest and most prestigious financial institutions,
developers, corporations, law firms, and government agencies are among its clients. For
more information, visit www.irr.com or blog.irr.com.
Contact Information:
200 S. Biscayne Blvd, Suite 2929
Miami, Florida 33131
T - 305.579.6675
F - 305.371.2423
W - MiamiDDA.com