Growing Rapidly and Steadily

GROWING RAPIDLY AND STEADILY

January 2017MiamiReal Estate & Construction |

Alex Wertheim

Invest: Miami speaks with Alex Wertheim, President, SPACiO Design Build

What demand is currently driving design services?

Over the years, we have seen significant growth in residential demand. Developers can execute large-scale projects, as the cost per square foot in South Florida is still much less expensive to buyers than in many other major cities within the U.S. This region offers a competitive cost of living as well as an advantageous tax structure. Growth in the residential segment has caused growth in the commercial segment as well, to the point that we are seeing more activity in the commercial real estate sector than in the residential market when it comes to construction in Miami.

What are the main profile trends of the client base for contractor and design services in Miami?

There was an important change in the profile of the clients after the crisis of 2009. We have started to see more Latin American clients reaching out to us to build-out their recently purchased high-end condos since then. This is expected to continue, as Miami is a melting pot for Latin Americans. However, in the past few years, we have begun to see an increase in the number of clients from the U.S. retaining our services, which makes me think the domestic market is coming back. Miami is attracting many retirees from the Northeast that are looking to take advantage of the lower cost of living. We have also seen an increase from international clients from other regions of the world such as Asia and Europe.
Miami is growing rapidly and continuously. In 2017, we will continue to see such growth driven by international and American buyers. We are also going to keep seeing continuous repositioning of real estate properties. As we run out of developable land, developers are rapidly buying up existing Class B and Class C properties in up-and-coming neighborhoods to turn them into Class A properties, from hotels to retail space. As a full-service general contractor, we are seeing – and we will continue to see in 2017 – an increase in retail space construction. We are currently involved in building out Breitling and very soon Swarovski in Brickell City Centre. The demand is a direct result of Miami’s evolution as a high-end shopping and dining destination.

Which sectors are expected to be the growth engines for design and contracting services the upcoming years?

Even though both residential and commercial sectors are growing simultaneously, commercial will
start to see an important increase in the hospitality sector, especially restaurants. Miami has developed its culinary offerings extensively over the past couple years.  These new restaurants have made significant investments in design services because they understand the importance of aesthetics for their businesses. The Nobu restaurant in Miami Beach is a perfect example. Chef Nobu Matsuhisa sought the “best of the best” to build out the space.  For example, the stone flooring was imported from Italy, the oak flooring from Denmark and many other finishes are derived from around the world. Nobu truly adds an extra level of sophistication to the iconic Eden Roc. We were very fortunate to work under Chef Matsuhisa’s leadership building out that amazing space. Hotels – both new and existing – have also made important investments in design with an important emphasis on quality and that will continue to happen in Miami

What would you identify as the current major challenges in construction?

From a business perspective, one of the main challenges for the developers is making sure they hire the right architect and designer. Doing all the correct due diligence and pre-construction work is extremely important. Not many people realize the amount of work that goes into pre-construction and its importance. When done poorly, this ends up being a problem for developers as they execute their projects. The way to tackle this issue is by making sure their pre-construction work is handled by highly qualified professionals.  Another challenge is finding qualified construction workers, especially when you are working on high-end projects. We make sure we take good care of our people because we see value in loyalty and having an A team that we can move from job to job.

 

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Softening Your Exposure To Miami’s Fluctuating Real Estate Market

Softening Your Exposure To Miami’s Fluctuating Real Estate Market

MIAMI—With the condo construction market slowing down, general contractors are finding ways to soften their exposure to Miami’s fluctuating real estate market. That is key to a healthy market since they are an important generator of construction jobs. SPACiO Design Build president Alex Wertheim sat down with GlobeSt.com to discuss how his firm is adapting as Miami’s real estate cycle evolves.

GlobeSt.com: How are you adapting to a slowdown in the condo construction market?

Wertheim: As a boutique full-service general contractor, we benefit tremendously from an active condo construction market. But knowing how cyclical the Miami real estate market is has helped us diversify our operation so we can equally focus on commercial and residential projects. (Read about three safe construction bets during economic volatility.)

For example, when the condo market was very active, we were busy doing the build-out of sales centers, including the sales center for Residences at Armani Casa. As many of the new luxury condo high-rises are delivered, we are focusing on building out individual units at projects such as the Grove at Grand Bay, Oceana Bal Harbor and SLS Brickell. But as the condo construction slows down, our commercial projects keep us busy.

In the last five years, Miami has become a destination for high-end shopping and dining. As a result, we are increasingly getting involved in building out retail stores for Breitling and Swarovski in Brickell City Centre.

We have also turned our attention to hotels and restaurants such as Nobu Restaurant, Nobu Hotel, Marriott Stanton South Beach and others. Also, emerging areas like Little Haiti are generating a significant amount of work as old warehouses are being turned into trendy spaces to accommodate businesses relocating from Wynwood, where rents have skyrocketed.

GlobeSt.com: How did you survive the last recession?

Wertheim: SPACiO was created during those dark years as a response to market demands at the time. As newly-built buildings were sitting empty with buyers unable to come to the closing table, developers began to convert unsold condos into rental units. Back then, the units were sold ‘decorator ready,’ which means the buyer was responsible for building out the units in terms of flooring, wall finishes, closets, et cetera.

So when the developers had to turn the units into apartments, they called us to do the build-out of their high-end units. Since then, we have built out nearly 1,600 luxury units in the Greater Downtown Miami area. The work was interesting and challenging. While developers were putting tenants in those condos, their exit strategy ultimately was to sell the units when the market came back so our work had to meet pretty high standards.

Tere Blanca is pointing to one big trend in Downtown Miami. Read about it here.

Nobu Hotel Lobby and Bar

Construction and Design Trends to watch in 2017

With 2016 behind us, general contractors are heading into the new year with increased optimism despite the fluctuating real estate market. As a full-service General Contracting firm based in Miami, SPACiO Design Build has benefited tremendously from an active condo construction market. Yet, as the real estate cycle evolves, new opportunities and trends will arise in 2017. Here are a few trends that will be important drivers in the general contracting space this year. 

Retrofitting Existing Spaces
In South Florida, there is a lack of developable vacant land. As a result, in 2017 SPACiO expects to see owners increasingly reposition and retrofit older properties, many of which have historic value – this especially holds true in South Beach and Downtown Miami.

In the last two years, investors have acquired $1.5 billion of real estate along the historic Flagler Street in downtown Miami, where properties have been neglected for decades.

A significant number of investors are coming from New York and are familiar with the process of preserving and restoring buildings in an effort to create trendy districts. Due to these recent acquisitions, SPACiO predicts an uptick in construction retrofits. Investors proactively are looking for specialty retailers and concepts that will require more experiential designs, ones that dictate a high level of creativity and innovation in the build out.

The Hospitality Industry is on Fire
Miami-Dade County has approximately 50,000 hotel rooms in its existing supply. About 5.3 percent of those rooms are currently under construction, and an additional 7.8 percent are in the final planning stages.

This year, general contractors will be busy building out the new rooms and upgrading existing hotels in order to compete with the newer generation of hotel rooms.

Many of the hotels delivered in 2016 resulted from the repositioning of historic buildings that were previously office buildings. This trend began last year when the former Miami National Bank in downtown Miami was turned into The Langford, a 126-key boutique hotel.

Further north in Miami Beach, Hyatt Hotels acquired and rebranded the former 363-room Thompson Hotel and added the property to its roster of the upscale Unbound Collection, The Confidante.

The repositioning and rebranding of hotels has kept us busy in the last two years. In 2016, SPACiO worked on the renovation of the world-renowned Eden Roc hotel in Miami Beach and turned a portion of the existing rooms into the Nobu hotel. This represents an evolving trend of “building hotels within hotels.”

We also renovated 224 hotel rooms at the Marriott Stanton South Beach and upgraded its amenities to refresh their look and keep the property competitive. The renovations transformed the hotel’s meeting rooms, two pools, the main deck overlooking the pool, the main lobby and check-in area, the entry driveway, and the spa and gym. We replaced several ground-floor rooms to bring new amenities to the hotel, including three concept-driven restaurants.

Continued Evolution of Miami’s Architecture
As starchitects like Bjarke Ingels, Herzog & de Meuron and Jean-Louis Deniot’s and luxury brands like Armani, Aston Martin, Fendi and Porsche enter the South Florida market to design and develop properties, we anticipate an evolution of Miami’s architecture into an exponentially greater level of sophistication.

This transformation is being reflected in extremely complex designs and in how the space is built out. Another trend that will gain momentum in 2017 is the introduction of imported design-driven materials favored by many renowned international architects and designers. SPACiO became familiar with this movement when we built out the celebrated Nobu restaurant in Miami Beach last year. That project required using products from Japan, stone flooring from Italy and oak flooring from Denmark. In many instances, we were required to gain approval from city planners and officials to utilize the newly introduced products and materials.

The evolution of Miami’s architecture scene has added a layer of challenges that will require general contractors to be experts at troubleshooting complex issues. This skill will be paramount to meeting clients’ strict deadlines.

For example, we received the opportunity to work under the leadership of the legendary fashion and design icon Giorgio Armani to build out the sales center at the Residences at Armani/Casa. In this instance, we had to replicate one of the most expensive units in this high-end condo tower. When working with luxury designers, it’s critical to protect their brand while managing costs and executing a highly detail-oriented design.

The materials used in these projects are often very expensive, requiring general contractors to hire highly skilled artisans. This is unique to what we’ve experienced in the past, as this was our initial foray into working with designers of this caliber.

As the real estate cycle evolves, we will witness an array of trends arising in the market. It will be up to us, the general contractors, to capitalize on the new opportunities.

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Alexander Wertheim is founder and president of Miami-based SPACiO Design Build. The full-service general contractor is behind some of Miami’s most defining commercial projects, custom homes and condo build-outs.

USO Tour with Scarlett Johansson and Ray Allen

JOINING SCARLETT JOHANSSON, RAY ALLEN ON A USO TOUR

USO Tour with Scarlett Johansson and Ray AllenEvery year, the USO (United Service Organizations) follows its tradition of supporting the US troops stationed abroad by arranging a holiday tour with some of America’s most talented celebrities [think Marilyn Monroe 1954.]

This year, the USO Holiday Tour teamed up with Scarlett Johansson, Ray Allen, Chris Evans, and our very own SPACiO president Alex Wertheim. We sat down with Alex to talk about what it meant to him to see what the Military really does day to day in bases around the world, including Ireland, Turkey, Qatar, Afghanistan, and Germany.

“We as Americans have no idea of what these Troops do on a day in and day out basis,” Alex said. “They are true heroes and we don’t give them enough credit and respect for them putting their lives on the line each day to help keep our country the safest in the world.”

The experience has made Alex prouder to be an American and changed his outlook on life.

“We take it for granted that we are over here and don’t have a worry in the world, while the Soldiers are fighting for us each day risking their lives. Spending time with them taught me to live life to the fullest because life isn’t guaranteed and, often, it comes at a great cost to those protecting our nation.”

BRAVO’S MILLION DOLLAR LISTING BROKER CHAD CARROLL DISCUSSES 2017 TRENDS AND TIPS ON FIXER UPPERS

Chad Carroll Broker

Guest contributor broker Chad Carroll, who starred on Bravo’s Million Dollar Listing Miami and is one of Douglas Elliman’s Top Producing Agents in South Florida, sat down with SPACiO for a Q&A on trends we will see in the luxury residential market in 2017 and tips on fixer-upper homes in exclusive neighborhoods.

How do you expect buyers to react to the economic environment as it shapes up for 2017?

Buyers are going to be more cautious with their purchases. Interest rates are on the rise and a slowdown of foreign capital will definitely affect pricing. Sellers are going to have to adjust their prices to the new market conditions. Inventory levels are high and demand is relatively low compared to a year or 2 ago.

In terms of home decorating and renovation, what are some of the interior design trends your high-end clients are gravitating towards?

While they continue to prefer the modern interior design, they are increasingly introducing a touch of ‘home’ by incorporating different shades of warmer colors and finishes. Before, it was all about glass and white throughout the house but that style can feel a little stark. Now, I am seeing a lot more woods / artificial woods used alongside fabrics to soften everything up. Many of my high-end clients want their houses/condos to be a combination of ‘art’ and ‘home’.

Based on your years of experience selling homes in Coral Gables, the Brickell area and Miami Beach, what tips can you give us about buying a fixer upper?

Buyers need to be cautious that the house doesn’t have structural or roof issues. Often buyers don’t look into those things well enough and after closing problems appear and dip into their profit. Buyers also need to hire architects and general contractors who have experience working with similar types of properties. A house is not just a house. There are many types of construction and each requires a specific set of skills. Doing due diligence is key to the success of the project.
 

 

Marriott Stanton Hotel South Beach Miami

THE MAKING OF A “BEACH CHIC” SOUTH BEACH HOTEL

Marriott Stanton Hotel South Beach MiamiWith the conclusion of the Marriott Stanton South Beach renovation, hotel guests will now experience the confluence of historical and modern casual.  As the general contractor, renovating and repositioning the oceanfront hotel has been one of our favorite projects.

The main goal was to change the feel of the hotel to offer a modern take on beach chic. In order to remain competitive, hotels reposition themselves every few years to meet the guests’ evolving preferences and demands.

To refresh the hotel’s ambiance, Marriott Stanton used a lot of wood and natural products including bamboo, rattan, reclaimed wood, stone and tile with beach colors such as greens, blues, yellows and pinks.

The renovations transformed the hotel’s meeting room, two pools and decks, the main deck overlooking the pool, main lobby and check-in area, entry and driveway and the spa and gym. We replaced several ground-floor rooms to bring new amenities to the hotel, including three concept-driven restaurants.

A small section of the hotel has been designated historic so we are diligently working with the City of Miami Beach to protect the historic façade while converting the structure from wood to steel and concrete. That part of the hotel will house, once again, Starbucks. The work has been challenging but rewarding as we are honored to play a small part in helping protect and preserve a piece of Miami Beach’s history.

Working at Marriott Stanton isn’t new to us. Back in 2013, we renovated 224 rooms and the corridors from floors 4 to 11. We are looking forward to the opening of the additional restaurants that we are currently building out. Stay tuned for more information.

Nobu Restaurant Miami

BEHIND THE SCENES OF BUILDING OUT NOBU MIAMI

Nobu Miami at the Eden Roc in Miami Beach celebrates its first-year anniversary this month. Under the leadership of Chef Nobu Matsuhisa, SPACiO was fortunate to be part of the team that made it happen.

In retrospect, we can proudly say that building out Nobu was one of our Top-10 projects in terms of complexity and sophistication.  One part of the design, for example, involved converting a previous outdoor dining space into an exquisite indoor dining area.  This included fabricating and installing curved wood screens that would separate areas of the restaurant, then installing a complex system of 10-foot wide wood-and-glass doors that open and stack to provide an inside/outside feel to the dining room. Now, when the wood-and-glass doors open, Nobu Miami becomes the largest Nobu restaurant in the world.

Chef Matsuhisa sought the “best of the best” to build out the space.  For example, the stone flooring was imported from Italy, the oak flooring from Denmark and many other finishes are derived from around the world. Nobu truly adds an extra level of sophistication to the iconic Eden Roc.

If you haven’t done so already, we suggest that you visit Nobu to enjoy the exclusive Teppan Room and signature dishes such as Yellowtail and Jalapeno and Black Cod Miso.  We are positive that the superb cuisine and ambiance will create an unforgettable dining experience for you and your guests.

Grove Condominiums at Grand Bay

DECONSTRUCTING THE STARCHITECT’S VISION BEHIND THE GROVE AT GRAND BAY

Congratulations to the iconic Grove at Grand Bay, which has closed on most of its luxury units. The innovative project, in the heart of Miami’s Coconut Grove, highlights the evolution of Miami as a global real estate market. Danish starchitect Bjarke Ingels is the designer behind the twin towers built by developer Terra Group.

Recently Ingels told The Real Deal New York “the design is a combination of ‘rational Scandinavian’ meets Miami. He said the latter favors a ‘Caribbean interpretation of modernism,’ which he described as rounded, feminine architecture that puts a premium on balconies with impressive ocean views. The project also features a lush landscape — designed, no kidding, by a landscape architect named Raymond Jungles — and a canopy that winds ‘like an umbilical cord’ between the two buildings. “

As SPACiO completes the build-out of one of the Grove at Grand Bay condos, we are fortunate to experience this unique development on a daily basis. One high point is the opportunity to  incorporate Bjarke Ingels’ vision in the finishes we select for our client.

It is astounding to see how far Miami has progressed in less than a decade. Grove at Grand Bay has 98 magnificent units ranged from $2.95 million to $25 million, working out to an average of $1,100 per square foot. The last remaining unit — the penthouse — is currently on the market for $28 million, according to The Real Deal.