The Weekly Dirt will be closed next weekend and will resume on January 7th.
Below are some of the highs and lows for 2023.
To summarize very briefly, high interest rates have frozen investment sales. Construction delays were common. Allegations of corruption in real estate at city halls across South Florida have reached a tipping point. Real estate agents who committed PPP fraud have been arrested and, in some cases, sentenced to prison. Gov. Ron DeSantis signed into law a controversial bill restricting foreign investment that is being challenged in court, as well as a $700 million-plus affordable housing package with limits.
Despite the slowdown in transaction volume, record sales continued. The number of branded housing developments has skyrocketed. Office and store lease agreements have been signed. The ultra-wealthy continue to move to South Florida, including billionaire Jeff Bezos.
Insurance crisis worsens
Insurance was one of the top three headwinds cited by property owners, buyers and developers in 2023. The remaining two were debt and construction costs. Insurance premiums soared for many companies, in some cases by more than 300 percent compared to the previous year. Securing coverage also became difficult as companies stopped writing and renewing insurance policies. Hardest hit are area condo and townhome owners, who are asking their associations to complete costly reserve reviews, fully fund reserves, and bring their properties up to code. We are working on a new statewide law that would require compliance. More than two years after the deadly apartment collapse in Surfside, some associations have had to conduct special assessments just to cover insurance costs.
Real estate scandal hits City Hall
Miami Mayor Francis Suarez accepts a gift from hedge fund billionaire Ken Griffin and his role as a consultant to developer Rishi Kapoor on a project in Miami’s Coconut Grove. He is being investigated on suspicion of paying the money back. Mr. Suarez, a real estate lawyer who has kept his client list private for years, reportedly received at least $170,000 from Mr. Kapoor in recent years. Some of the bombshell statements first came to light as part of a lawsuit against Mr. Kapoor’s company, opening the floodgates. By December, Suarez was facing calls for his resignation from current and former lawmakers.
Miami City Commissioner Joe Carollo and City Attorney Victoria Mendez are also under pressure to resign for their roles in separate real estate scandals.
In May, a Fort Lauderdale jury found that Carollo directed code enforcers, police officers and other city officials to go after businesses in Little Havana, including real estate investors Bill Fuller and Martin Pinilla. He was found guilty of violating his First Amendment rights. The jury awarded Mr. Fuller and Mr. Pinilla $63 million in damages. The city is paying Carollo’s legal costs.
Mendez, who has worked for the city for nearly two years, and her husband are accused in a civil lawsuit of purchasing and transferring nearly 30 homes owned by a county-funded conservatorship, WLRN reported. . Mendez’s husband allegedly used his wife’s position at Miami City Hall to resolve code violations that the previous owners had failed to resolve. Guardianships take care of people who are helpless or cannot afford to care for themselves, managing their assets and selling them to pay their living expenses.
This doesn’t cover everything, but let’s move on to some less depressing news…
Messi moves to Miami
The news that soccer god Lionel Messi has joined Inter Miami, the Major League Soccer team co-owned by David Beckham, was huge. Latin American investors, especially Argentinians, were overjoyed. Another reason to invest in Miami. Messi and some of his new teammates purchased waterfront homes on private land. We also tracked this trend throughout the year. The developer used Messi to promote the project. I started paying attention to football (in a way).
What we think: Last year, I asked you which projects could be shelved in 2023. Many developments seem to be on hold or delayed. Further details are expected to be announced in January. What are your expectations, good or bad, for South Florida real estate in 2024? Send a note to kk@therealdeal.com.
Closing time – 2023 edition
Our research team has compiled this year’s top sales and leases. Check it all out here.
Residential: Paid by car dealer Michael Cantanucci In April, it invested $170 million in waterfront property at 589 North County Road in Palm Beach. Green His Mountain His Coffee His Roasters founder Bob Stiller and his wife Christine Stiller purchased this mansion just eight years after he sold it for $25 million.
commercial: In February, Brookfield Property Partners sold the 1,000-room Diplomat Beach Resort in Hollywood to Trinity Investments and Credit Suisse for $835 million. Brookfield was seeking $1 billion for the resort at 3555 South Ocean Drive.
— Research by Adam Farens
newcomer to the market A waterfront property at 4445 Sabal Palm Road in Miami’s Bay Point neighborhood went on the market last week for $92 million. Fatos Rosenberg owns his 1.7-acre estate, which includes her 20,500-square-foot mansion with 11 bedrooms, 12 bathrooms, four half-bathrooms, two docks, and 400 feet of bay frontage. doing. Stephanie Jourdan Pedron of Capital International Realty owns the listing.