Some residents are fleeing city centers. Crescent Heights is betting they’ll be back
%20Terra.jpg "Architectural rendering of the Canopy Park at the Canopy Club, a public park that will be part of the luxury tower at 500-700 Alton Road, developed by Terra and Crescent Heights.")
City dwellers nationwide may be fleeing urban density, but Edgewater-based developer Crescent Heights remains keen on Downtown Miami.
The firm’s current projects include a two-block mixed-use complex, Nema Miami, at 2900 Biscayne Blvd. (its tenants include a controversial Magic City Casino gaming room embroiled in legal proceedings) and a new residential tower and headquarters for Miami-Dade County Public Schools in the Arts & Entertainment District. It’s also partnering with Terra and New Valley on the 45-story residential tower 500 Alton and Canopy Park in Miami Beach.
It has developed apartments and mixed-use projects in cities nationwide including Atlanta, Boston, Chicago, San Francisco and Los Angeles.
Founder and managing principal Russell Galbut entered the real estate business as an accountant after graduating from Cornell University in 1974. He started developing condominiums and retail centers in 1976, working projects during the day while attending University of Miami Law School at night. He earned his degree in 1980 and opened Crescent Heights in 1989. Crescent Heights has 314 employees at the corporate level.
Most recently, Galbut partnered with Michael Leibowitz, a real estate investor who owns half of the Mondrian South Beach, to create a special purpose acquisition company. Galbut and Leibowitz raised $110 million and are looking to invest in start-ups in travel, hospitality, leisure, financial technology, insurance technology and property technology.
We recently asked him about his Miami projects.
.jpg)
Q: Crescent Heights has projects in the works in Downtown’s Arts & Entertainment District and Edgewater. Why?
Galbut: Over the last decade Miami has experienced a vibrant flowering of creative communities emerging along the Biscayne corridor, from Brickell in the south to Little River in the north. Significant cultural institutions and many vanguard lifestyle and entertainment venues have established the Downtown, Arts & Entertainment, and Edgewater axis as our city’s major cultural center. Living there provides residents with convenient access to extraordinary amenities that define what it means to live well in the urban core. As these amenities grow and become more numerous, we want to grow along with them. We want to provide housing as well as creative retail and office space to support these neighborhoods. Miami as a whole, although young in comparison, is taking its place among the great cities of the world — London, Paris, New York and Hong Kong.
Q: How has the pandemic impacted developers’ interest in investing and further developing in the urban core, and why?
Galbut: People will always want to live in urban communities for the social and cultural benefits they provide. How to do so in a healthy environment has become an increasingly critical conversation in the development community. The pandemic has made this question extremely urgent and is pushing developers to scrutinize every construction decision in relation to its impact on health and wellness. Some examples we are currently implementing are: high-efficiency A/C and air filtration units, bipolar ionization and UV lights in air handler units, domestic water protection systems, separate elevators between different spaces, operable open-air windows, movable exterior walls, retractable roofs, expansive balconies, keyless entry capabilities that don’t require surface contact, and limited carpeting. The protocols for health and wellness of a building are clear and many older buildings will not be able to satisfy these protocols. New construction will have significant marketing advantages to the existing stock of properties.
Q: What is the environment like for construction loans, obtaining materials and labor.
Galbut: It is a challenging environment for all three. Crescent Heights’s stellar track record of successful projects over three decades underlines our status as a pedigree borrower on Wall Street. The concern of delays due to unforeseen lockdowns needs to be considered in obtaining materials, but logistically smooth processes are achievable with appropriate due diligence given to sourcing, timing and coordination. Also we must be rigorous in maintaining the strictest standards of safety on construction sites to protect our workers from COVID-19.
We are very excited that 1901 Alton Road will be Whole Foods’ flagship store for Miami Beach and that the Urban Design Review Board has recently recommended Nema Miami, our 39-story, 588-unit tower on the corner of 29th street and Biscayne Boulevard, for approval. This amenity-rich tower will be a trailblazer for design, health and wellness in Miami and set a new standard for the city, like we’ve done with 10,000 Santa Monica in Los Angeles, Nema San Francisco, Nema Boston, and Nema Chicago, the tallest residential tower in Chicago today.
Q: How are buyers’ preferences, including home offices and outdoor space, influencing your approach?
Galbut: We are bringing fresh air into our living spaces with large balconies, sliding glass doors, operable open-air windows, and retractable walls and roofs for our amenity areas. We are also implementing home office areas — aka Zoom rooms — into many of our units, and making sure to provide expansive amenity areas for residents to be spaced with comfortable distance between each other. The dynamics may be new to some but not to us. We have always taken the health-and-wellness approach, creating lush and spacious amenities including co-working spaces where needed.
Q: You mentioned on CNBC in June that you are working on federal incentives programs that could help rebuild the economy. What programs are you working on and why? How might these programs impact South Florida’s commercial and residential real estate markets?
Galbut: Opportunity Zones have significant Federal tax advantages for both the developers and companies that reside or work there. Local Community Reinvestment Act offices offer significant economic advantages for development within those CRA areas. Both South Point and Lincoln Road [in Miami Beach] were local CRA’s that played a role in their gentrification and success as neighborhoods. Incentives such as tax increment and bond financing to support building new projects that contribute to creating jobs and affordable housing is another method that is available statewide and locally. While many of these programs were available previously, post COVID they will become more meaningful.
This story was originally published November 16, 2020 at 7:00 AM.
