In 2008, downtown Miami was a largely vacant a so-called “condominium canyon” of 23,000 new construction units. Downtown Miami was seen by many as a ghost town by night, and most predicted it would take years, if not a decade, to fill the new space. Today, 93 percent of those new condos are occupied, according to a new study on downtown by Goodkin Consulting/Focus Real Estate Advisors. But what’s next for Miami, and how will it adapt to this new growth? The Real Deal talked to Alyce Robertson, the executive director of the Miami Downtown Development Authority, which commissioned the report, to find out.
What stood out to you most from this report?
When we first did this report in 2009, everybody said it would take years to absorb all of these condos, and we have 93 percent occupancy now.
What drove that increase in occupancy?
I think Miami has experienced an urban renaissance that it has not ever seen in its young history, something that has been growing. We can’t necessarily grow out much more; we’re by the Everglades and Biscayne National Park, so building the vertical environment and the 23,000 condos that were built during the boom years created an opportunity, especially for a young demographic, to get into downtown. The recession might actually have helped make the new condominiums more affordable for a younger demographic.
What is the biggest challenge for the city in adapting to this influx of residents?
I think we have to learn how to sustain this. We went from 39,000 people in 2000 to 70,000 people today. So you have to learn how to have a mature community, with the retail infrastructure in place, the social infrastructure, venues for people to go to. We have a really vibrant cultural hub that was already developing here. We have two new museums that are opening up. We have new investment going on with international business, in properties like Brickell CitiCentre by Swire, as well as Genting. Downtown Miami has become a destination in its own right.
Did you expect this growth to happen the way it did? What surprised you?
Well, the first year we did the study, 2009, we had 62 percent occupancy, and we knew that people were here, but we didn’t know the numbers. It wasn’t the 93 percent we have today. What I think did surprise me about it was how early the strength was shown, and how quickly it moved. Because the wisdom at the time was that we would be sitting on a surplus that would take at least 10 years to absorb.
Given this growth, what should be the priority as downtown Miami moves forward?
One of the immediate changes is livability — how do you make the streets more livable. We’re looking at more shade, wider sidewalks, more opportunities for sidewalks restaurants, along the lines of that kind of thing.
We’ve recently seen an increase in condo prices, driven in part by strong rental demand — which made investors willing to buy condos as rental properties. But it has also driven up rent prices. Is there a risk that some of these new residents may eventually be priced back out of the city?
A couple of new housing projects have broken ground, and I think [developers] are starting to realize that this is not just something where we had to eat up 23,000 condos, but we’re actually having sustained demand for urban living. So affordability is here. Obviously, if it gets more expensive, that’s going to become a problem, but I do see other developers looking at the opportunity to capitalize on that new residential market.
Is there a neighborhood of downtown Miami that has outperformed your expectations?
Well, the area north of what is formerly known as the Omni, the Arts and Entertainment District. That has a new Publix going in, as well as all those new condos around the area. So that area and how strong it’s been has been the biggest surprise to me, and the fact that Genting has chosen to purchase their property in the same vicinity, that’s giving it a boost in the arm, as far as values in the area.
Where do you see downtown Miami in five or 10 years?
Our goal is to be the epicenter of the Americas. And that’s no small task, but it’s a tropical waterfront city and I think it’s the combination of a great place to live and have business, especially businesses that link to our South American neighbors.