The Weekly Dirt: Real estate’s highs and lows of 2023
Messi’s move, political scandals, soaring costs of insurance and financing dominated headlines
The Weekly Dirt will be on hiatus next weekend and back Jan. 7.
Here are some of the highs and the lows of what we covered in 2023.
A very brief recap: High interest rates put a freeze on investment sales. Construction delays were common. Alleged corruption (involving real estate) at city halls across South Florida reached a tipping point. Real estate agents who committed PPP fraud got caught, and in some cases, sentenced to prison. Gov. Ron DeSantis signed into law a controversial bill restricting foreign investment, which is being challenged in court, and also signed a $700 million-plus affordable housing package, which has its limitations.
Record sales continued, despite the slowdown in deals. The number of branded residential developments proliferated. Office and retail leases were signed. Super wealthy people kept moving to South Florida, including the most billionaire of them all, Jeff Bezos.
Insurance crisis worsened
Insurance was one of the top three headwinds property owners, buyers and developers cited in 2023. The other two were the costs of debt and construction. Insurance premiums soared for many, in some cases rising more than 300 percent, year-over-year. It also became harder to secure coverage, as companies stopped writing and renewing policies. Among the hardest hit are condo and townhome owners in communities grappling with new statewide legislation requiring associations to complete costly financial reserve studies, fully fund their reserves and bring their properties up to code. Some associations have had to institute special assessments just to cover the cost of insurance, more than two years after the deadly condo collapse in Surfside.
Real estate scandals hit City Hall
Miami Mayor Francis Suarez is being investigated for his role as a consultant for now embattled developer Rishi Kapoor, who had a project in Miami’s Coconut Grove, and for accepting gifts from hedge fund billionaire Ken Griffin, which he has said he paid back. Suarez, a real estate attorney who has long kept his client list private, reportedly received at least $170,000 from Kapoor in recent years. The bombshell allegations, some of which were first revealed as part of a lawsuit against Kapoor’s firm, opened up the floodgates. By December, Suarez was facing calls to resign by current and former elected officials.
Miami commissioner Joe Carollo and City Attorney Victoria Mendez are also facing pressure to step down for their alleged roles in separate scandals that involve real estate.
In May, a Fort Lauderdale jury found Carollo guilty of violating the First Amendment rights of real estate investors Bill Fuller and Martin Pinilla for directing code enforcers, police officers and other city staff to go after their Little Havana businesses. The jury awarded Fuller and Pinilla $63 million in damages. The city has been paying Carollo’s legal fees.
Méndez, who has worked for the city for nearly two years, and her husband were accused in a civil lawsuit of buying and flipping nearly three dozen homes previously owned by the county-funded guardianship program, WLRN reported. Méndez’s husband allegedly used his wife’s position at Miami City Hall to get code violations resolved that in some cases the previous owners were unable to resolve. The guardianship program cares for incapacitated people or those who can’t afford to care for themselves, then takes control of their assets and sells them to pay for their living expenses.
That doesn’t cover it all, but moving onto some less depressing news…
Messi moved to Miami
The news that soccer god Lionel Messi joined Inter Miami, the Major League Soccer team co-owned by David Beckham, was huge. Latin American investors, Argentinians in particular, were ecstatic. Another reason to invest in Miami. Messi and some of his new teammates purchased waterfront homes in private communities — a trend we also followed throughout the year. Developers used Messi to market their projects. I started paying attention (sort of) to fútbol.
What we’re thinking about: Last year I asked you all which projects may be shelved in 2023. Many developments seem to be on hold or delayed — more to come on that in January. What expectations, good or bad, do you have for South Florida real estate in 2024? Send me a note at firstname.lastname@example.org.
CLOSING TIME – 2023 EDITION
Our research team compiled the top sales and leases of the year. Check them all out here.
Residential: Car dealer Michael Cantanucci paid $170 million for the oceanfront estate at 589 North County Road in Palm Beach in April. Green Mountain Coffee Roasters founder Bob Stiller and his wife, Christine Stiller, sold the mansion eight years after buying it for just $25 million.
Commercial: Brookfield Property Partners sold the 1,000-room Diplomat Beach Resort in Hollywood to Trinity Investments and Credit Suisse for $835 million in February. Brookfield was asking $1 billion for the resort at 3555 South Ocean Drive.
— Research by Adam Farence
NEW TO THE MARKET The waterfront property at 4445 Sabal Palm Road in Miami’s Bay Point neighborhood hit the market for $92 million last week. Fatos Rosenberg owns the 1.7-acre estate, which includes a 20,500-square-foot mansion with 11 bedrooms, 12 bathrooms, four half-bathrooms, two docks and 400 feet of bay frontage. Stephanie Jourdan Pedron of Capital International Realty has the listing.