Opportunity Zones, luxury residential pricing, the diversity dilemma and more at TRD Miami’s Showcase & Forum

TRD MIAMI /
Oct.October 21, 2019 09:45 AM

Grant Cardone jumped on stage, bringing along an entourage to The Real Deal’s Sixth Annual Miami Real Estate Showcase & Forum, waving 10X flags and claiming they made thousands of dollars listening to his message.

The investor, author and motivational speaker who talks to aspiring entrepreneurs around the world focused his conversation on real estate. For Cardone, who focuses on the multifamily market, the dream of homeownership will be dead. People want apartments and they want to live in warm places like South Florida.

“This economic concept of saving money has failed the American people,” Cardone said. “$5.3 trillion is sitting dead in equity in homes. Imagine if that money was reinvested.”

When TRD Publisher Amir Korangy asked what markets Cardone would not invest in, he answered quickly.

“California. I despise the place,” said Cardone. “I fly in and use it like a toilet because they [politicians] are going to turn it into one.”

New York is another place he avoids. “New York is going to feed Florida for years to come. They’re going to come. They’re going to come running down here,” Cardone added.

Cardone was among the dozens of speakers – including HUD Secretary Ben Carson, Michael Shvo, Lissette Calderon, Jerome Hollo and Mike Pappas – and thousands of attendees who packed Mana Wynwood for TRD’s event on Thursday.

Guests entered the venue through Michael Shvo’s The Raleigh jungle installation — featuring a gorilla sculpture — that led to a showcase with more than 100 sponsors. Attendees listened in on four panels and two talks covering the state of the market, new development, Opportunity Zones, diversity in the real estate industry, the future of housing, and how to get ahead in business.

Sponsors included Fortune International Group, Berkshire Hathaway HomeServices EWM Realty, the Estates at Acqualina and Sonder, among others. The Estates at Acqualina booth featured a sandy beach, models of the towers and lounge chairs.

High residential pricing, the sluggish condo market and the hot multifamily market were among the recurring themes during panels.

During the “Bucking the Buyer’s Market,” panel discussion, Phil Gutman, president of Brown Harris Stevens Miami, said that when he reads a news headline about a luxury property selling for a 30 percent discount, he thinks, “It shouldn’t have been listed at that [high] price in the first place…you wonder what were they thinking? What were they smoking?”

Oren Alexander, co-founder of Douglas Elliman’s The Alexander Team, said there are a lot of badly priced properties and few condominium projects that appeal to high-net worth individuals, citing one project as an example.

“Eighty Seven Park got launched at the worst time in the market,” Alexander said. “Now it is almost 100 percent sold out. That speaks to the actual product.”

Shvo also said as long as you have the right site and project, the overall market’s performance is irrelevant.

“It doesn’t really matter what the market is. You build something special in the right location, you’re not competing with something in Brickell or in Wynwood,” Shvo said. “I don’t lose sleep at night over oversupply or undersupply.”

Shvo spoke on the panel, “The next wave of South Florida development,” with Laurent Morali of the Kushner Companies; Florida East Coast Realty’s Jerome Hollo; and developer Lissette Calderon.

With the exception of Shvo, the other panelists are all building rentals.

“Renting is good for everyone now,” Hollo said. “Wherever they are in their life cycle, they love renting.”

During a keynote address, Secretary Carson spoke primarily about his agency’s work involving Opportunity Zones, a federal program that provides tax incentives to developers who invest in designated zones throughout the country. He countered criticism that the program won’t incentivize investment in low-income areas.

“People complained that Opportunity Zones are just a way for rich people to get richer,” he told the audience. “The fact of the matter is that the rich are going to get richer anyway.”

Later on, during a diversity in real estate panel moderated by developer Don Peebles, speakers John Gomes, Peggy Olin and Melissa Rose discussed what can be done to give minorities and women more opportunities to climb the real estate development corporate ladder.

Peebles said that minorities and women only represent 1.3 percent of the $69 trillion in global financial assets under management across mutual funds, hedge funds, real estate, and private equity.

Rose, a managing director at Ackman-Ziff, said the absence of minorities and women in leadership positions at major real estate firms is a leading cause of the disparity, in addition to lack of access to capital.

During a fourth panel, “Smaller, faster, easier,” a group of developers and operators said competition is growing in the co-living space.

“I would say competition is high in the alternative accommodations space. Short-term rentals, co-living, housing as a service – there’s a variety of products that are going after somewhat the same real estate,” said Marley Dominguez, managing director of real estate at Sonder, which offers vacation apartments with hotel-style services.

Andy Levin, of Ollie, said the competition is adding credibility to the type of multifamily housing.

“It allows us to provide more data points to show this is not just a fad, it’s actually here to stay,” he said. “It’s just an extension of multifamily.”

Keith Larsen contributed reporting.


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