Miami real estate mostly spared from Irma’s fury, industry players say

Two cranes went down and streets flooded, but it could have been worse

Sep.September 13, 2017 05:45 PM

Downtown Miami and Hurricane Irma (Credit: Lexi Pilgrim for The Real Deal)

UPDATED Sept. 14, 4:10 p.m.: Just days after Hurricane Irma lashed downtown Miami and the neighboring Brickell financial district with vicious winds and surging water that took out two construction cranes and flooded major streets, industry players told The Real Deal that the deadly storm largely spared the city’s urban core and coastal communities from catastrophic damage.

Suzanne Amaducci, who leads the real estate group at commercial law firm Bilzin Sumberg, said 1450 Brickell Avenue, the office building where her firm is headquartered, reopened Tuesday morning. “The power is on and we have air conditioning,” she said. “If you look at new construction, it withstood the storm very well.”

Carlos Melo, co-founder and principal of the Melo Group — which has developed 12 condo and apartment towers in Miami’s Edgewater, Little Havana and Allapattah neighborhoods — said he weathered Irma at his corporate office, which is on the second floor of his company’s rental building at 425 Northeast 22nd Street.

“We had about one foot of water at ground level,” Melo said. “It only affected the parking area, but it never reached the building. And about an hour-and-a-half after the hurricane passed, the water had receded.”

Melo said none of his buildings sustained extensive damage and that the only major problem is a lack of electricity. “Nine of our rental buildings are without power and using generators,” he said. “The biggest problem is that there are too many downed trees and power lines to pick up.”

The Melo Group currently has two new projects under construction. Aria on the Bay, a 53-story, 648-unit luxury condo tower at 1770 North Bayshore Drive, topped off in May and is scheduled for completion later this year. The firm is also building Square Station, twin 34-story towers at 1424 Northeast Miami Place. Melo said both sites are intact and did not sustain damage.

“Aria is all glass windows,” Melo said. “And none were damaged. The building is intact. The same goes for our neighbors.”

Square Station, where three construction cranes are currently in operation, was also unscathed. “After inspecting the Aria construction site yesterday, we are fully operational again,” Melo said. “But work has not begun again at Square Station because we don’t have power there.”

But a pair of projects will have to contend with damage caused by falling cranes. Irma took out the boom from a crane tower at Property Markets Group’s 300 Biscayne Avenue development in downtown Miami and another crane collapsed at the Related Group’s GranParaiso condo tower at 480 Northeast 31st Street.

Ryan Shear, a principal of New York-based PMG, declined comment. Carlos Rosso, president of Related’s condo division, said he couldn’t comment because he was not in Miami to assess the situation at GranParaiso.

A third crane in South Florida also fell at Related’s Auberge Beach Residences and Spa in Fort Lauderdale.  A spokesperson for the project said the crane is “fully contained within the job site,” adding that there was no damage to the tower structure and that power has been restored. The developer and contractor, Moss Construction, are working on a plan to remove the damaged jib, the representative said.

On Wednesday, Moody’s Analytics released a report estimating between $64 billion and $92 billion in property damage and immediate economic lost output caused by Irma, though specific assessments for much of South Florida have not yet emerged. The Florida Keys were battered, with the federal government estimating 90 percent of buildings sustaining damage, but the storm mostly drifted west of Miami.

Chad Warhaft, director of construction and operations for brokerage CREC, said the company’s portfolio of 13 million square feet of commercial space across Florida held up well during Irma. “Mainly, we are dealing with landscape damage and minor roof leaks,” he said. “There was a little bit of facade damage at two properties. Other than that, we have been in really good shape.”

Residential developers who spoke to TRD said their projects in Miami were relatively unscathed, and don’t believe the aftermath will have a profound negative impact on their bottom line or construction schedules.

Nir Shoshani, co-founder and principal of NR Investments, which is developing the Filling Station Lofts in Miami’s Arts & Entertainment District, said the 10-story, 81-unit apartment tower at 1657 North Miami Avenue had some stucco fly off and some water intrusion. “But nothing too severe,” Shoshani said.

His company is also developing Canvas, a 513-unit condo building at 1630 Northeast First Avenue, that has two cranes on site hovering at 425 feet in the air. “When we started preparing for Irma, we were supposed to be right smack in the middle of its path,” Shoshani said. “There is nothing you can really do to secure those things. On the contrary, you have to let them spin.”

He said crews assessed the site on Monday and he hopes construction on the tower, which has a projected $221 million sellout, will renew before the end of the week.

Shoshani said he doesn’t think Irma will cause a major downturn in Miami’s real estate market.

“Miami remains a very attractive place,” he said. “I also think people forget quickly and it won’t have long term effects on real estate here.”

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