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.