Key Take Aways from Miami’s January Meeting!

• Whiting Turner reports pricing is going up 3 to 4% related to materials; not seeing anyone building in anticipated increases related to tariffs.
• Carol Surowiec with EisnerAmper has been busy keeping up with the new legislation and working with clients on year end planning. The PPP1 loans that covered payroll and other items are considered expenses that are tax deductible. She is also seeing a lot of debt restructuring activity. When asked about the future of 1031 exchanges, she doesn’t forecast any changes in 2021 due to other items that will take priority, but believes it will be on the table by the new administration in 2022.
• “The Best of Times and The Worst of Times” is how George Pincus with Stearns Weaver describes the market. Many people are busy, institutional equity is available, industrial and multi-family remain white hot and quality office buildings are trading. On the flip side, leasing activity is slow and many tenants are not needing as much space as currently leased and are looking at suburban low rise buildings. Hospitality is a nightmare. He also sees a lot of focus not on partitioning spaces back from open layout, but on renovations related to HVAC, air filtration and electronic ionization – but these are all very expensive.
• Tom Wood of Thomas D. Wood & Company remains very busy with the life companies, but doesn’t foresee distressed assets coming to the market until the end of 2021. There is also a heavy amount of concern with lower quality multi-family assets that have been propped up with stimulus money; when the evictions start, it is going to be a tidal wave and we will need to watch what happens to Fannie and Freddie.
• State Street Realty’s President George Pino said there is not much of a hotter market than industrial right now. REITs are interested in investing in that space, and demand is being driven from e-commerce but also related to reverse logistics – the returning of goods bought online. It has been reported that 3 in 10 orders get returned, causing increased demand for space. On the office side of things, he worked with an office tenant who went from 90k sf down to 30k sf, related to employees working from home and expects to see more downsizing.
• The single family market is also quite hot and there is generally a lot of money in the market looking for good deals per Danielle Price with Holland & Knight.
• CIM Group’s Regional VP of Leasing Scott DeMyer is active with several new developments and redevelopments across the southeast, including projects in Wynwood and at Miami Worldcenter. He is also seeing an influx of people moving into the region – in particular Miami – from the northeast and west coast.