Growing Rapidly and Steadily

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GROWING RAPIDLY AND STEADILY

January 2017, Miami, Real 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 with shop front installers 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.

I challenge you, what colors go well with dark green at home? What do you think?.

 

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Softening Your Exposure To Miami’s Fluctuating Real Estate Market

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Softening Your Exposure To Miami’s Fluctuating Real Estate Market

JANUARY 17, 2017 | BY JENNIFER LECLAIRE

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.

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

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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.
 

 

Grove Condominiums at Grand Bay

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

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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.