Design District land prices soar
Written by Susan Danseyar on November 19, 2014
Land prices for commercial land are definitely rising in the Design District and will continue upward bound along with real estate values, say those familiar with the booming neighborhood.
Tony Cho, president and CEO of Metro 1, said the last transaction he brokered was for $2,200 per square foot of land at 80 NE 40th St., adding that prices for land have increased dramatically in the district over the past few years.
“There will be other transactions that will be higher,” Mr. Cho said. “It’s a limited market with only so many parcels left.”
The current valuations seem right, he said. Although Mr. Cho said he does not believe land prices will continue to rise at the same pace, he predicts continued demand and appreciation.
“The real estate in the Design District is very valuable,” he said. “It’s a unique, urban high-street retail destination with distinct advantages over others – the location and urban concept.”
Land prices are driven by what developer Craig Robins of Dacra is doing in the Design District, said Jack Winston, principal at Goodkin Consulting and adjunct professor of real estate development at the University of Miami.
“Craig had a vision of what it could be years ago,” Mr. Winston said. “He then merged with a European company a few years ago that owns all major luxury retail brands and is repeating those stores in the Design District.”
Mr. Robins was a pioneer and is turning this part of the city into a shopping area that will rival Bal Harbour Shops and the forthcoming Brickell City Centre, said Mr. Winston. “Because of what Craig has done, other developers are seeing the possibilities and are trying to buy high-density luxury condo sites for residential,” he said.
Mr. Winston expects land prices will keep going up in anticipation of Mr. Robins’ whole Design District project of luxury retail.
He said it will be primarily Latin Americans and Europeans who will actually make purchases in the high-end retail stores, but tourists and Americans will go to look and then go to nearby restaurants, thus making the Design District a destination.
At one time, Mr. Winston said, the Design District was mainly comprised of shops catering to the interior design market – thus the name.
Moreover, he said, the area was not considered safe.
Now, Mr. Winston said, more people on the street will create security and that all adds up to more valuable real estate.
Originally known as Buena Vista, the Design District today has its own distinctive character. In the late 1990s and early 2000s, art and design stores started to open and the district grew in popularity with heavy public and private investment in the neighborhoods, streets and sidewalks redone and new trees planted.