The winds of change may start blowing through the South Florida real estate market.
What once was a fair breeze could soon turn foul, according to Scott and Belinda Sime, my most recent guests at Fried On Business.
But if anyone can help us navigate what’s coming, it would be the Simes. Scott is President and Chief Executive Officer of Sime Realty Corporation, a commercial and residential brokerage company. Prior to that, he was the Managing Director of CB Richard Ellis (CBRE) in Miami-Dade County.
Belinda is No. 1 in Coral Gables by number of homes sold. She has 97 homes sold (valued at more than $100,000,000) in the last 24 months. She works with buyers and sellers in Coral Gables, Pinecrest, Coconut Grove, South Miami and the surrounding areas.
“We’re very cautious right now. We’re actually advising our clients to stay on the sidelines, quite candidly,” Scott said of the commercial market. “We think the next move will be flat, at best, and we’re looking for a dip here in the next 12 to 18 months.”
In addition to brokerage, the Simes invest for their own account, so they see the market from all sides.
“We don’t want to do every deal. We don’t want to have every building. We’ve really been more selective. We’ve kind of created a model that works for us,” Scott said, adding that they like to work with private clients with a net worth in the $1 million to $20 million range.
So, with caution in mind, what do the Simes like? Well, the Simes like Coral Gables a lot. Residential real estate prices per square foot are up 21% in the last year, Belinda said, and Scott said there are 69 commercial projects now under way in the market.
“There’s a lot of people making big bets on The Mile. Some of the recent price points have been in the $800-plus per square foot range,” he said.
Part of the reason, as I see it, is people’s desire to live in “vertically integrated” communities – basically live-work-play environments.
I’ve said it before: People want to live in South Florida, but they don’t want to drive. They want to live in self-contained communities that have essential services and amenities nearby.
There aren’t many of these areas available. In addition to Coral Gables, we discussed:
– Lincoln Road
– Wynwood near Panther Coffee
– Coconut Grove, specifically Commodore Plaza
– Pinecrest
– Kendall
– Doral West
Another good commercial location, Scott said, is the Offices at Palmetto Bay Village Center on Old Cutler Road.
Totaling 300,000 square feet on 80 acres, “that project, at first look, might seem like it’s a bit south because it’s down on Cutler, down around 176th.
“With the traffic and the population growth, there’s a reverse commute at that project,” he said.
“I took another broker down there. The traffic was literally backed up from the project to the Coco Palms Circle. What used to be a 15- or 17-minute drive from Palmetto Bay to let’s say the Gables or even Brickell has now become 45 minutes – approaching an hour.”
When you consider the recent property sales, Scott said, US 1 from Brickell to 57th Avenue will be undergoing a transformation.
“It’s going to look a lot different in the next 24 to 36 months,” he said.
We covered a lot more ground, including:
– What an attractive commercial investment would look like?
– Why there’s more opportunity in the single-family housing market right now.
– A discussion on The Roads area of Miami.
– Why Palmetto Bay is a sleeper city.
Click here to listen to the full interview with Scott and Belinda Sime of Sime Realty Corporation.
