National developers Witkoff, Kushner, PMG, Crescent Heights talk betting big on South Florida at TRD’s Miami event
Steve Witkoff compares South Florida to buying in New York City in the 90’s
The panel topic at The Real Deal’s South Florida Real Estate Showcase and Forum on Wednesday was national development, but the panelists wanted to talk about South Florida.
The panelists — Nicole Kushner Meyer, Steve Witkoff, Russell Galbut, and Kevin Maloney — have projects in other markets, such as New Jersey, New York and California. Yet, they said the warm weather and cultural institutions in South Florida are hard to compare to anywhere else today.
Steve Witkoff said the South Florida market is similar to buying in New York City in the 1990s, prior to the massive flow of institutional capital into the city. He said rents in South Florida, which already have risen across asset classes since the start of the pandemic, are only going up more.
“We have a big call on Florida,” he said of Witkoff, the New York-based development firm he leads.
In the panel moderated by TRD’s Erin Hudson, held at Mana Wynwood in Miami, the developers touted Florida’s pro-business environment, and also the millions of dollars companies have invested in the state in recent months.
Russell Galbut, who is one of South Florida’s most active developers, said remote work spurred on by Covid-19 is a game changer, making real estate values even more attractive since people can work outside of the office.
“You are seeing a generational shift,” said Galbut, CEO of Miami Beach-based Crescent Heights. “South Florida is a recipient of that.”
But there is a world beyond South Florida.
The developers said they target areas with population growth. Many highlighted cities such as Nashville, Tennessee, or Louisville, Kentucky as desirable cities for real estate acquisitions. Maloney, the founder of New York-based PMG, added that developers seek out certain neighborhoods or “sub-markets” for growth.
“There are dozens and dozens of submarkets that will be so successful in the next several years,” Maloney said. “That’s where you want to be looking.”
Nicole Kushner Meyer, the newly appointed president of New York-based Kushner Companies, said her team recently expanded into Kentucky, Georgia, and Alabama.
“When you are looking at those markets it opens up your mind for opportunities,” she said.
Galbut said life has returned to normal in most cities after the pandemic forced people to hunker down and left city centers barren. The lone exception is San Francisco, he added. But this has also led to buying opportunities. He recently purchased a parcel for $40 million that he said five years would have sold for $110 million.
“San Francisco will come back, whether its two years or three years,” Galbut said.
Returning to the topic of South Florida, the panelists said they were not interested in buying the site of the collapsed Champlain Tower South condo building in Surfside. The building collapsed in late June, leading to 98 deaths. The cause of the collapse is still under investigation.
“That is not for us,” Maloney said. “I go by there probably a few times a week. It makes me want to cry.”
The site is heading to auction next year, with proceeds to be allocated to victims’ families and survivors. Damac Properties, a Dubai-based developer, made a $120 million stalking horse bid to buy the property in September.
“As a developer, you have to appreciate where land is,” Galbut said. “This particular property — it’s so terrible as to what’s happened there. As an individual, I would not want to buy that.”