Miami’s urban core is growing at a faster rate than most major US cities: CoStar

Construction of new apartments rose 66% since 2010

Downtown Miami (Credit: PxHere)
Downtown Miami (Credit: PxHere)

Office and apartment development in Miami’s urban core is outpacing other such areas in 11 major U.S. markets, according to recent data compiled by CoStar Group.

Miami’s urban core, which includes downtown, Brickell, Edgewater, Midtown Miami and Wynwood, accounted for 40 percent of new office construction in the city since 2010, which is higher than Boston, Chicago, Atlanta, Houston, Washington, D.C., San Francisco, Phoenix, Los Angeles, Dallas-Fort Worth and Philadelphia. During the same period, construction of new apartments ballooned by 66 percent in Miami’s urban core, far ahead of new construction growth in Chicago, New York City, Los Angeles, Washington, D.C. and six other major cities, according to the data.

CoStar senior market analyst Ben Braley presented the findings during the annual urban core report event hosted by the Commercial Industrial Association of South Florida this week. The event featured urban developers Joe Furst, Alex Karakhanian and Avra Jain, commercial broker Tony Arellano and investor Jonathan More.

Braley told the audience gathered in a conference room at the law firm Bilzin Sumberg that construction growth was largely fueled by more people and businesses moving into Miami’s urban core. Between 2010 and 2017, population growth soared by 43 percent in downtown Miami and surrounding neighborhoods compared to an 8 percent citywide population growth.

Arrellano, who recently left Metro 1 to form DWNTWN Realty Advisors with Devlin Marinoff, said the CoStar statistics shows development in downtown Miami and surrounding neighborhoods is being driven by a critical mass of people moving in. “That is really the trend we are seeing,” Arellano said. “All the reports and data confirms it. The densification of Miami will create enormous wealth and create an amazing sense of place.”

Jain, who is involved in developing projects along the Miami River, Little River, Overtown and the MiMo District, said her partners and clients remain positive about future development in the city. “We are all seeing interesting inquiries from new businesses seeking to expand space,” she said. “I think with the tax law changes, there will be more people moving here.”

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Other highlights from the CoStar presentation include:

From the fourth quarter of 2010 to the fourth quarter of 2017, Miami urban core office rent growth more than 40 percent, outperforming the current national average for urban cores.

During the same period, office sales per square foot grew from an average of $120 a square foot to $500 a square foot.

The pricing for multifamily developments also accelerated. In the fourth quarter 2010, the sales price per unit was $100,000. Today, it is more than $400,000.