A healthy office market coupled with a need for multifamily housing in Coral Gables is fueling a new wave of mixed-use development in the city’s downtown, according to a panel of major real estate players.
While construction is booming, developers on a recent panel said the zoning and entitlement process can drag on for years, making building in the City Beautiful costlier and more time-consuming than it should be.
W. Allen Morris, chairman, president and CEO of The Allen Morris Company, also criticized the city’s actions when it came to deciding on a public-private partnership earlier this year. After first bidding on the site about six years ago and most recently being chosen as the top bidder along with its joint venture partner Related Group, the city decided to try to build a garage first on its own.
Morris referred to the decision as “developer repellant.”
Morris, along with fellow panelists Jose Antonio Perez Helguera of The Plaza Coral Gables; Melissa Rose, a managing director of Ackman-Ziff Real Estate Group; Teddy Childers, senior asset manager for USAA Real Estate Company; and Andrew Peach, senior general manager for the Shops of Merrick, said the city is primed for the current cycle of development. The event, the annual commercial real estate market update hosted by the Coral Gables Chamber of Commerce and moderated by The Real Deal’s deputy web editor Katherine Kallergis, was held at the Hotel Colonnade Coral Gables on Friday morning.
Rose and others said that the office market in Coral Gables is strong. Rents are still increasing and occupancy is low.
Corporate tenants and businesses leasing office space in Coral Gables are doing so because Miracle Mile has transformed into a walkable district and the traffic congestion is not as bad as other commercial districts in Miami-Dade, she said.
“Companies want office in Coral Gables because walkability exists there and the traffic flow is better,” Rose added.
Morris noted that the 195-foot height maximum in the city ensures developers can’t build gargantuan towers, but that Coral Gables lacks apartment rental inventory that can be filled by the mixed-use projects that have been proposed.
“Coral Gables can be moderate density,” Morris said. “The more mixed-use development we can bring within those constraints, it will bring more people to the community.”
Agave Holdings, a commercial real estate firm that includes the family behind the Jose Cuervo spirits brand, is building The Plaza, a 2.25 million-square-foot project with a 242-key hotel, 174 apartments, 161,000 square feet of retail space and more than 2,000 parking spaces.
Perez Helguera said the company wants to connect the project to Miracle Mile, which underwent a $21 million streetscape renovation completed last year. Some retail stores and restaurants closed as a result of the construction.
“We all believe Miracle Mile is going to come back,” Perez Helguera said. “We want to integrate with the area.”
Miami Beach developer Stephen Bittel recently jumped in with a proposal to build the Mile Hotel and Shops, a 120-key development at 220 Miracle Mile. Earlier this year, the city approved 100 Miracle Mile, a mixed-use project that will have a 14-story building with 135 luxury rental units.