During the four-year period between 2012 and 2016, land prices in Wynwood more than quintupled and lease rates more than doubled, raising the question: Is the trendy arts and entertainment district growing too fast for its own good?
The answer is no, if investors and property owners can strike a balance between making immense profits with nurturing creative retail establishments and affordable housing so the neighborhood can retain its edgy character, according to a panel of developers discussing the 2017 Wynwood market report presented by the Commercial Industrial Association of South Florida, or CIASF, on Friday.
“My biggest nightmare is if it became fast food alley or retailers were brought in that don’t keep in the spirit of what Wynwood is,” said panelist Tony Cho, founder and CEO of Metro 1. “We need to be responsible in how we curate our buildings and our projects. We have to protect Wynwood’s integrity.”
Fellow panelist and Goldman Properties Managing Director Joseph Furst agreed. “We can’t get complacent,” he said. “We can’t lose sight of how much work it took to where we are now.”
Indeed, Wynwood’s evolution into one of Miami-Dade’s most visited destinations has led to the success of local businesses such as Zak the Baker and Panther Coffee, and has attracted hip national brands like Kit & Ace, Bonobos and Scotch & Soda to the neighborhood.
As Wynwood has grown, prices for land and rented space have skyrocketed. According to the CIASF report, the maximum lease price per square foot increased from $40 in 2012 to $100 in 2016. The average land price in 2016 was $300 per square foot compared to $50 per square foot in 2012. The average building price jumped from $200 per square foot in 2012 to $1,000 per square foot in 2016.
Nevertheless, Wynwood remains a bargain compared to Lincoln Road or Coconut Grove, said panelist and BM2 Realty Partner Gaston Miculitzki. “Obviously rents are going up, but Wynwood is still about 50 percent cheaper,” he said. “My biggest concern are owners of properties or land who are just holding onto it and not activating it. That worries me.”
Alex Karakhanian, founder and CEO of LNDMRK Development, said Wynwood could also benefit from more office buildings. “Most of the offerings on the ground floor will eventually be unaffordable for businesses that are not retail oriented,” Karakhanian said. “I do think Wynwood is approaching some level of maturity. I think a little settling or plateauing of rents is a good thing.”