Real estate industry experts pushed back on the theory that a bubble is forming in Miami that’s about to burst.
“This market is built on cash,” said market analyst Ana Bozovic, founder of Analytics Miami, at The Real Deal’s Miami Real Estate Forum. Bozovic spoke on a panel about how developers can survive the market crunch in Miami in a conversation moderated by TRD’s Editor-in-Chief Stuart Elliott.
Bozovic said a UBS report that named Miami as the most vulnerable city to a bubble was an “egregious misrepresentation of truth” because it’s such a heavy cash market.
“Usually when assets collapse, it’s because there’s a collapse. The bubble pops when the underlying assets can no longer sustain the debt, and it all goes away, kind of like a flammable house of cards,” she said. “We don’t have this setup.”
Dan Kodsi, CEO of Royal Palm Companies, said Miami isn’t overbuilt like it was in 2008.
“The issue is we’re building product that’s expensive, and because of construction costs, when you’re building high-rise especially, you have to sell it at a very high price per foot,” Kodsi said.
The lack of affordable housing is pushing locals to markets like Orlando, Kodsi added.
“Every part of Florida, you’re seeing grow,” he said.
The panelists also address the expected wave of migration of New Yorkers to South Florida following Zohran Mamdani winning the mayoral race in New York.
“I think the expectation that you’re going to see something immediately, like, the press keeps kind of glorifying like, ‘oh, tomorrow, there’s gonna be a million people moving here,’” said fellow speaker Brad Meltzer, president of Two Roads Development. “That’s not going to happen, but it’s going to happen after a matter of time. Some people have families. They have kids. You don’t just pick up and move tomorrow, but the investigation process is going to start to happen.”
Kodsi and Meltzer both suggested resolutions ahead for separate projects they’re involved in that are tied up in litigation.
For Two Roads, the Florida Supreme Court recently denied the developer a request for a rehearing in a condo buyout case involving the Biscayne 21 building in Miami’s Edgewater, effectively ending the developer’s legal options. The group of holdout owners, who Meltzer called “a little bit greedy,” successfully challenged the developer’s amendment to lower the condo termination requirement once it had control over the association.
Meltzer insisted the Edition Residences project that’s planned for the site “will happen.”
“It’ll take a little bit more time,” he said. “There’s been discussions behind the scenes with that, but it’ll get resolved. It has to resolve itself. When something is valuable enough, parties have to compromise like anything else in life, and there’ll be a compromise that takes place, and everybody will feel that they can get a good deal, and we’ll move on.”
Kodsi is tied up in a foreclosure lawsuit over the Legacy Hotel & Residences project at Miami Worldcenter. He told the court in July he is working on a $390 million refinancing for the project.
A court order bans Kodsi from talking about the lawsuit, but he said it’s “on a path for starting construction again.”
“That ugly dumpling, let’s say, is going to be a beautiful swan when she’s built, a great project,” Kodsi said.
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