By Tony Wilbert
CoStar News
Developer Camilo Miguel Jr. is so confident that demand for luxury housing in South Florida will continue to grow that he's making a big bet on a site where two other groups couldn't get their plans off the ground.
Miguel, CEO of Coconut Grove, Florida-based Mast Capital, has teamed up with private equity firm Rockpoint Group to acquire a 2.8-acre site in Miami's Brickell financial district where Mast plans to develop 1,250 residential units, including 400 units in an 80-story condominium tower. There, the developers plan to sell nearly $1 billion worth of residences.
Mast and Rockpoint last week paid $103 million for the site at 1420 S. Miami Ave., and have submitted site plans for a development totaling 2.6 million square feet of residential space with street-level retail.
In addition to the condo tower that would be managed by a lifestyle brand, Mast is planning to build two multifamily towers, one with 50 stories and one with 60 floors, that would contain a combined total of 850 luxury apartments.
In the past 15 years, two other developers had big plans for the 1420 S. Miami Ave. site. In the mid-2000s, a team planned to build Capital at Brickell, a project with two towers that were to contain a mix of residential, office, hotel and retail space. While initial work started in 2007, the Great Recession killed that development. In 2014, a China-based corporation acquired the site and got entitlements for a project with 75- and 73-story towers, but those plans were shelved because of uncertainty about their viability.
Mast believes the timing is right now. The firm had been seeking space for the development during the coronavirus pandemic, which Mast said dramatically accelerated the trend of people relocating to the area because of its warm weather, cosmopolitan vibe and the lack of state income tax.
”While South Florida was seeing strong growth prior to the pandemic, it became evident to us early on that the pandemic would result in further tailwinds for South Florida," Miguel said in a statement. "We worked hard to identify attractive investment opportunities and as a result have had a very active 18 months."
Several large New York-based financial giants such as Blackstone and Goldman Sachs have set up or are considering new offices in South Florida. Blackstone is hiring now to fill positions at its new technology hub in downtown Miami.
The Miami multifamily market ended 2021 on a strong note, David Kahn, a director at CoStar Market Analytics, said in a recent report.
"Apartment demand has surged over the past several months, and the region’s vacancy rate has dropped below 4% for the first time in nearly 15 years," Kahn said. "Owners are capitalizing on the tighter than usual housing market in Miami and are raising rents at a brisk pace. Rents are up more than 15% year to date, outpacing the national average in that time."
However, Kahn said, South Florida likely will face "significant supply-side pressure over the next few quarters." The amount of new multifamily supply "remains a near-term concern, particularly in downtown Miami, which is home to one of the largest supply pipelines in the entire country on a nominal basis," he said in the report.
Despite the potential oversupply, Miguel, who founded Mast in 2006, is bullish on the prospects for his firm's new project. “We believe Brickell will continue to outperform from the ongoing demographic shift," he said.
As for when Mast and Rockpoint plan to start the new development, a Mast spokesperson said the team would release details later this year about its design, development timeline and when sales will start.