By now it should be obvious, Miami has hundreds of projects proposed, planned, in the pipeline, and under construction. At least half of them are high rises over 25 stories in height. But, almost every last one, is residential. Since when has a city undergone such a boom in high density development activity and had it remain almost exclusively residential? Throughout skyscraper history, most of the skyscrapers built were commercial. Now, in Miami, almost all of the dozens of new skyscrapers, 40 stories and higher, are residential. What happened to tradition? Where are all the commercial skyscrapers? Both New York City and Chicago have residential skyscrapers, but their tallest towers are commercial. Every city in the U.S. shares the same urban attribute. Historically, the tallest buildings on Earth have always been commercial. Then why are all of Miami’s new skyscrapers residential? Does this mean that a large scale commercial boom will never come to the city? Or that if it does, it will not manifest itself vertically? In other words, will large corporations chose the outlying Coral Gables or Doral areas instead of downtown Miami? Will the city’s poor infrastructure keep them out? In the long term, it is doubtful. In the short term, with little new desirable commercial space in Miami, and plenty of existing unimpressive vacant space, and little new commercial developments, company’s will stay to the west of the Central Business District (while the CBD becomes increasingly residential and less commercial). However, the outcome of all the large scale high density residential development in and around the city center will tip the scales of development in favor of the commercial side.
Consequently, the chance of a commercial boom happening in Miami is dependant upon the positive outcome of Miami’s existing residential boom. In order to consider the potential occurrence of a large scale commercial boom, one must first realize that there is an existing massive high density residential boom that will not bust. This boom is no mirage. The cranes, construction sites, and buyers are real. The billions being invested is no illusion. Secondly, one must consider the effects of such an explosion in high density residential development activity. Only then, can one surmise, more or less, the probability of a commercial development boom, or lack thereof.
Some say that many of Miami’s proposed residential towers will not get built. It is an interesting claim. However, it conflicts with certain undeniable truths and implications. Much of the growth occurring in Miami is being spearheaded by internationally established and well financed development firms (based out of places like Mexico City, New York City, Hong Kong, Turkey, Tel Aviv, Silicon Valley, Brazil, Greece, etc). Some of them headed by people that are considered among the wealthiest on Earth. It conflicts with common sense to claim that no one will move into these residential towers or that most will not be built, because then one is implying that not only is there an insufficient buyers market for these units, but also that these developers have seriously and collectively miscalculated the value potential of Miami’s real estate market. That is to say that these extremely competent and immensely wealthy firms are all wrong! That they are all clumsily clammering to capitalize off of a fictitous real estate gold rush. In analyzing this claim, serious doubts inevitably arise.
Miami Bob’s Claim: There is a massive high density residential boom in Miami, and the buyers market for Miami’s condo market exceeds not just the city’s boundaries, but the country’s, and the hemisphere’s, and will therefore support this massive urban development
The reasons for the presence of such a motivated and expansive buyer’s market are economic, cultural, and geo-political, but the outcome will be that most of these projects will get built and Miami’s newly acquired vast resources and new identity will trigger a strong commercial development reaction. This subsequent commercial boom will occur as the residential boom subsides and will far surpass the former boom in it’s scale and scope.
To be continued…