Escarra: Developers continue to buy real estate in Miami’s rising neighborhoods
Measures to contain the spread of coronavirus are still shifting by the day — and so are responses by investors, developers, builders, banks and buyers. To track the impact in real-time, RE|source Miami is asking area real estate professionals in various sectors for on-the-ground reports.
Today we hear from Iris Escarra, co-chair of Greenberg Traurig’s Miami Land Development and Zoning Practice. She’s aided landowners and developers on their respective South Florida projects and development processes, from the Melo Group to fashion designer Naeem Khan.
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Q: What kind of real estate activity are you seeing now?
From a zoning perspective, our work has remained consistently busy. We still have an active pipeline of new projects coming in, as developers know that the zoning and site plan approval process takes an average of six-to-eight months to get through all the steps needed at the local government level. As such, we continue to work on new proposed developments, while servicing the projects that were already in the pipeline. We are still moving projects through reviews with city administration as we have been fortunate that the cities have been forward-thinking and quickly adapting to remote access, but the slowdown comes when a project reaches the public hearing stage.
We have seen no change this year in the volume of activity during March and April 2020 regarding building permits, compared to the same period during 2019. Among many developers, there was definitely a rush right before the cities were shutting down in early March to get building permits approved so they could have construction crews in place and continue to keep working on their projects. Now, everyone knows that permits are taking longer to obtain, and that we must be patient.
Q: How has the pandemic influenced the discussion around land use in South Florida?
Cities in Miami-Dade County are typically still holding commission meetings to serve their constituents and address business matters, but in the City of Miami and most other jurisdictions, the planning and zoning approval hearings have been basically at a standstill until recently. Because we are in an unprecedented situation, most local governments have understandably been reluctant to schedule virtual hearings due to the public notice requirements that accompany all zoning hearings and the need to ensure that ample opportunity is provided for public comment — something that is more challenging during remote meetings. This has led to delays in processing those applications which require public hearings. Most recently, the Village of El Portal and Coral Gables have established procedures for hearing zoning items and allowing public comment through various virtual means.
Clients have had to adjust their projections for when they expect to obtain these approvals. These timetables are already about 60 days behind and that will likely soon grow to 90 days or more, depending on when cities decide to restart these public hearings. Once these boards are scheduling hearings again, there will be a backlog of projects for consideration and there may be challenges or additional delays in getting room on the city’s agenda. This also presents an opportunity for new developments — to the extent a developer is considering submitting a proposal, the sooner they submit and get in the queue, the more it will help to minimize delays.
Q: How has the pandemic impacted projects that were in the pipeline but had yet to break ground?
From a zoning perspective, projects that were in the pipeline are still moving forward, but progressing at a slower pace. We are still completing and filing permitting applications for projects, which is typically being done now using an online system. For example, the City of Miami has converted to a complete online acceptance and review procedure, taking advantage of the Eplan system that had already been in the works since the fall of 2018. As part of the Eplan roll out, the city has done an excellent job of scanning all the old documents, creating a process to be able to inspect buildings, and informing the public about projects using the city website.
Q: Where are developers looking to invest?
Developers are still looking for emerging neighborhoods and good deals on land. The factors that they are considering today in evaluating potential development sites and project placement are much the same as before the COVID-19 pandemic. The key factors they evaluate in looking at a project’s viability, include the site’s location, development capacity and the surrounding community.
Q: What are you hearing from clients about their forward-looking intentions? Are they looking for investment opportunities or are they planning to hold tight for the remainder of the year?
Developers are still very actively looking at opportunities. As we have seen in Miami during other real estate cycles, distressed markets are when developers with strong balance sheets and track records look for opportunities. Many developers are in the process of doing due diligence on sites throughout Miami-Dade County. Popular up-and-coming areas are in Allapattah and Little Havana, and Coconut Grove remains of strong interest.
