3/9/21 Miami Mastermind Group Meeting

Key Take Aways from Miami’s March Meeting!

• EisnerAmper’s Carol Surowiec is knee deep in tax season, and unlike last year, the April 15^th deadline is unlikely to be pushed back.  She is spending a lot of time working with clients to capture the Employee Retention Credit and new tax credits related to R&D.
• First time attendee Brigette Lumpkin, also with EisnerAmper, commented on a large number of investors looking at the South Florida market.
• Rob Mitchell with Whiting-Turner advises prices continue to increase – likely 10% each month for the next three months.  In response to a question about if it is inflation or the pandemic causing pricing spikes, Rob believes it is tied to the pandemic, but that the anticipated level of increases are project killers if they continue.  Rob further commented that the increases are broad based – across all products, not just isolated to one material (i.e. steel).  Avison Young’s Donna Abood also added that the increase in construction cost has an impact on tenants proceeding with deals, attorney’s papering deals, slow down in development due to lack of tenant demand – there is big and broad economic impact.
• CBRE’s Josh Bank stated that their internal conversation has changed from ‘when’ people will return to the office to ‘who’ will return.  In the last year, it has been proven people can work remotely, and it is unlikely everyone will return.  He sees space being more event or collaborative focused.  From a deal flow point of view, he has seen a pick up in activity across all sectors since the start of the year.  Josh also commented about CBRE’s 35% acquisition of Industrious.
• Donna Abood and the team at Avison Young have a different view on the return to the office, with a mandate (with limited exceptions) to return to the office by April 6^th, though individuals might not be in every day.  In working with her clients, she is advising all of them not to make any long term decisions at this point.  She is also seeing a ton of growth in the market – especially with tech and fintech companies.  And lastly, although vacancy rates have increased in the office sector, rental rates have held up.  Josh added that that the office sublease market isn’t as large as everyone expected and that most of the big blocks of space on the sublease market where already on the market prior to the pandemic.
• CoStar’s Erin Amon-Surlis shared a wide array of market statistics which were circulated to the attendees.

Lillian Peters with PNC Wealth Management advised they are opening their Miami headquarters in April in Coral Gables and that they are in expansion mode – organically and with the pending acquisition of BBVA.  They are also working with a number of clients on trusts and estate planning documents.