South Florida real estate players gear up for recession, but remain optimistic!
Top brokers, landlords and developers doing business in South Florida’s real estate market are gearing up for an economic recession, although they believe deal flow and new construction will hold steady in the coming year. That was the consensus among panelists and attendees at The Real Deal’s South Florida Showcase + Forum on Thursday. The all-day event — TRD’s largest ever — was headlined by a fireside chat between TRDfounder and Publisher Amir Korangy and Compass CEO Robert Reffkin.
Douglas Elliman’s Haleh Gianni, one of the roughly 4,500 attendees at Mana Wynwood in Miami, said that with the economy shifting to a recession, she’s felt “a lot of tension about how to respond.” But after listening to the panel speakers, “there is a lot to be motivated about and a lot to look forward to,” Gianni said. “It’s time to step up our game.” The showcase featured more than 100 exhibitors, including booths for luxury developments such as The Edition Fort Lauderdale, the Bentley Residences Miami and 1428 Residences at Brickell. Some exhibitors provided sustenance to the throngs of real estate professionals. Fortune International Group poured Bellinis, courtesy of Cipriani Residences Miami. Compass kept event goers caffeinated with espressos. Prop-tech company Courted.io handed out a little something stronger: sample size bottles of tequila.
At the booth for Title Brothers and Dr. Mortgage, a long line of famished attendees formed in front of two sushi chefs making fresh rolls. Inside the VIP lounge, bartenders mixed bourbon cocktails for special guests and panel speakers. Alicia Cervera Lamadrid with Cervera Real Estate said the showcase is an opportunity to give people a quick look at projects her firm is promoting, touch base with old friends, make new friends and remind them South Florida’s residential market is very active. “We have four new projects that we are showcasing here,” she said. “They are coming in and making appointments.”
During the event’s first panel, The Agency’s Mauricio Umansky was blunt with the audience about the nation’s economic condition. “We are 100 percent in a housing recession,” he said. “I think today, companies have to be fiscally responsible.” Ryan Serhant, also with The Agency, advised agents in the audience to be smart, efficient and keep track of what’s happening with the markets. The discussion’s third panelist, Corcoran Group’s Pam Liebman, said South Florida brokers need to have straightforward conversations with sellers about price reductions. After the panel, Liebman stuck around to hear what Reffkin had to say about Compass’ recent troubles.
Headlines about Compass losing money are misleading, Reffkin said during his chat, noting that “Compass decided to invest more in the future of the agent than other companies — that’s all it’s saying.” During the developers’ panel, Ian Bruce Eichner, Arnuad Karsenti and Carlos Rosso acknowledged they are working in a tough environment due to rising construction costs and inflation. But they insisted South Florida’s residential real estate market is nowhere near facing the catastrophic collapse that occurred in 2008. Developers are focusing more on building luxury condominiums that cater to high net worth buyers, as opposed to “bread-and-butter” residential buildings for the middle-income investors’ market, Rosso said.
During a panel discussion about the office market, billionaire Jeff Greene said the commercial real estate sector will experience more distress in the next two to five years. “I am not super bullish on office buildings at all,” Greene said. “I think we are going to have a major, major correction happen.” Michael Shvo, the New York-based developer and investor whose projects include the redevelopment of Miami Beach’s Raleigh Hotel, joined Greene on the panel. Shvo said he’s focused on buying top-of-the-line office properties, like the Solow Building on 57th Street in Manhattan. Shvo is rumored to be a potential bidder for the property. After the panel ended, Shvo mingled with exhibitors and attendees for about an hour.
Developers Rishi Kapoor and Alex Witkoff expressed a rosier outlook for the South Florida market during their Next Generation panel. The migration of people from other states during the last two years is “creating demand up and down the spectrum,” Kapoor said. Miami is “much more stable” after going through years of boom-and-bust cycles, Witkoff added. During the hospitality panel discussion, restaurant landlord Robert Rivani and nightclub mogul Marc Roberts also downplayed negative impacts of a recession. “When recessions happen, opportunities happen,” Rivani said. “If you are well prepared, that separates you as a good investor.”