Miami Commercial Real Estate 2006

Miami’s commercial real estate market has been maintaining its momentum, despite the fact that property owners wrestle with escalating insurance costs due to Hurricanes Katrina and Wilma last year. The Miami commercial real estate sectors for office, retail, warehouse and rental apartments consistently declared increasing rents concurrently with decreasing vacancy rates for the first quarter, according to a real-estate research firm based in Boston.

As of the moment, real estate investors remain eager to immerse into the activity in the Miami commercial real estate market. Many of these investors are beguiled by Miami’s stable population growth over the year, as well by its continuously mounting international prominence. The population in Miami rose to 2.4 million in the first quarter of this year, which is about 1% higher than the same period in the previous year.

While Miami continues to be the center of gravity of Latin American finance, it also has been able to attract a growing volume of investment from Europe. This has made Miami a much more stable arena for investment, thereby reinforcing its potential to attract more investors even further.

Generally, the relatively diminishing hunt for condominiums has opened up more land available for new office developments that compete for occupants, thereby strengthening the office market. Meanwhile, larger corporate investors have been snapping up properties from smaller private investors, which effectively is capable of setting the level of Miami commercial real estate property sales higher than last year’s levels.

A New York real-estate research firm has concluded from their study that average sale prices of Miami commercial real estate retail properties climbed from $156 per square foot in 2005 to $221 per square foot this year through June 29. This figure is also well above the national average of $154 a square foot. The average sale prices for office properties also significantly scaled higher from $164 per square foot in 2005 to $213 per square foot this year. This figure slightly margins national average of $211 per square foot.

This year, a total of around 2.1 million square feet of retail space is projected for completion this year. The figure is 74% higher over the same period last year. Moreover, some office space projects are also being anticipated for completion within 2006. Rilea Group’ Alan Ojeda is currently undertaking negotiations for a project that was originally proposed as residential units. The project is set to construct a 580,000-square-foot office building located at 1450 Brickell Avenue at the heart of Miami’s financial district.

However, the pace of Miami’s economy appears to be downshifting because of a high cost of living which is 11% above the national average and slowing employment growth rate. Employment growth from May 2005 to this year also declined to about 1.5% from the 2.7% rate for May 2004 to May 2005 as evident from the data of the Bureau of Labor Statistics. Moreover, insurance premiums have also soared. Some commercial building owners have been experiencing difficulties in getting insurance coverage for the damages incurred from Hurricane Wilma. Espirito Santo Plaza, which is a 1.2 million-square-foot multi-purpose building used as office, condominium and hotel is paying $5.8 million this current year for 50% of the total wind insurance coverage it obtained last year at $1 million. The burden of insurance premiums on operating costs of commercial buildings can be quite heavy.

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Westchester Real Estate

New York real estate isn’t all about million-dollar condominiums. In fact, that type of real estate is usually found in New York City. In other areas of the state, home owners can get single-family properties at reasonable prices. Westchester County is one of the best examples. With Westchester real estate, you can get a single-family home for $400,000.

Now, many people may think that $400,000 is far from reasonable. However, in other parts of New York, such an amount would barely get a condominium. Plus, the single-families at this price tend to be very luxurious. But if the amount still seems out of reach, there’s always the option of getting another type of Westchester real estate… condominiums. They cost $150,000, a price that can be afforded even on middle-class budgets.

Of course, price isn’t the only reason why a person should consider Westchester real estate. There’s also the issue of being able to live a slower-paced, suburban lifestyle. And once a Westchester resident is ready to venture back into the city, they can hope on the Metro-North Railroad, which would take them to the Bronx. If they want to go to other parts of New York, they can use Amtrak. This would take them through Croton-Harmon, New Rochelle and Yonkers.

In conclusion, Westchester real estate is a good alternative for New Yorkers in need of cheaper housing. True, it’s not as inexpensive as other areas, but unlike other locations, Westchester County allows for suburban prestige and metropolitan excitement, (since it is so close to New York City).

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