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Heavy hitters at UM real estate conference; new concept for CocoWalk revealed

Feb. 10, 2017
Heavy hitters at UM real estate conference; new concept for CocoWalk revealed 02/10/2017 HTML CODE

The University of Miami brought together some of the nation’s biggest real estate players to discuss how they’re dealing with rapidly changing trends, and a major revamp for CocoWalk was among the biggest news.

Over 550 people gathered in the Four Seasons Brickell for the UM Real Estate Impact Conference on Friday to highlight both local and national trends. It was headlined by Lennar Corp. CEO Stuart Miller and David Simon, CEO of mall owner Simon Property Group (NYSE: SPG).

The event came at a time when commercial real estate prices have increased in South Florida, although federal regulators have warned banks that the commercial market has become more risky with low capitalization rates. Meanwhile, home sales slowed in the region during 2016, especially the Miami condo market. There remains a robust pipeline of condo and apartment construction. Some traditional retailers such as Sports Authority and the Limited have gone out of business while others are struggling.

One of the highlights of the meeting was  Michael Comras ,head of retail brokerage/developer Comras Cos., unveiling the conceptual plans for redeveloping CocoWalk, a retail center in the heart of Coconut Grove. Comras and his partners have been preparing a redevelopment plan for the property since buying it in 2015.

The renderings Comras showed the audience were conceptual and subject to change. The third-floor of retail and the building in the center of the plaza would be demolished. Comras plans to add 60,000 to 70,000 square feet of creative office space. The office space in Coconut Grove is almost completely full and the neighboring Mayfair building has converted from retail to office, so Comras believes there’s plenty of demand.

The conceptual plans for CocoWalk show neighborhood-oriented tenants such as a grocery store, fitness and a farmer’s table.

“There is a reason why the Grove is coming back because people don’t want to commute anymore,” Comras said. “They don’t want to be stuck in their cars. We can’t live with single-purpose destinations like this. They need to be more mixed use.”

Comras also presented his plan to redevelop the Shops at Sunset Place in South Miami with a new hotel and apartments, plus the removal of some retail buildings to create more public space. Comras and his partners bought that mall from Simon.

While some people have said that traditional malls are dying, Simon doesn’t think so. When his company bought Sawgrass Mills in Sunrise in 2007 it had a net operating income of $55 million. Now it’s over $130 million, he said.

“If you can diversify the mix and bring in the right retailers and make it a part of the community and bring in tourism, you can grow your business,” Simon said.

Malls don't fail because of internet retailing, but because of changing demographics, he added. The biggest physical challenge for malls is they rely too much on department store space. In one South Florida mall Simon owns, he said a department store space will be converted into a community wellness center with multiple tenants.

"If we invest in our product, the consumer will come," Simon said. "We've got to reduce the reliance on apparel and bring mixed-use."

Innovative architecture

Gregg Pasquarelli, principal and co-founder of SHoP Architects in New York, discussed his innovative designs, including the Barclays Center in Brooklyn and the American Copper buildings nearly completed on the East River. By using computer-rendered designs, he has cut tens of millions of dollars off the costs of building. The Barclays Center has a facade with 12,000 panels of cut steel that were hung in a warehouse and sprayed with rainwater 15 times a day. American Copper has an elevated pool on the bridge between the two towers.

While he wouldn’t provide specifics, Pasquarelli said he has a couple clients in Miami. He’s working on a project in the proposed Innovation District along Interstate 395 north of downtown and potentially another building downtown. SHoP designed a pavilion for Art Basel that will be incorporated into Dacra’sDesign District.

Pasquarelli said his biggest challenge in designing buildings is the financial industry. Banks want to underwrite projects with the same formula that has worked before, so that makes it hard to innovate.

“Being a generalist architect is the best thing to be because we constantly come to any project given to us with a fresh set of eyes,” Pasquarelli said. “It’s not a formulaic response to everything. The formulas get tired very quickly. You have got to be experimenting and testing things out."

Some of Shop’s innovations have become spinoff companies. It created Helioptix, which is developing see-through solar panels so entire sides of towers can generate energy. The panels should also reduce air-conditioning costs by reducing sunlight.

Buildings could increase energy efficiency much better than solar panels by being designed to the right size and in a sustainable way that doesn’t require major renovations every 10 years, he added. Tech companies, including his clients Google and Uber, prioritize green building.

Mixed-income housing should be another hallmark of residential development, Pasquarelli said. He’s built many of buildings in New York that combine lower-income and upper-income housing and they help improve neighborhoods and reduce crime.

Redeveloping a community

Mixed-income housing is a crucial part of the Liberty Square Rising plan, said Albert Milo, senior VP of Miami-based Related Urban Development Group, which was selected by the county to redevelop a 55-acre public housing project in Liberty City. Not only will it keep the 600 families on the site with new public housing, it will build affordable housing, workforce housing and for-sale townhouses, plus a host of amenities, such as a grocery store, a school, a community health center, retail and more green space.

“Public housing should not be in perpetuity,” Milo said. “The idea is to provide economic growth opportunities for people to have upward mobility and still enjoy the neighborhood they like."

Milo said construction of $300 million-plus Liberty Square should begin in three to four months and continue for five years. RUDG would manage the community for 75 years under its revenue-sharing lease with the county.

Milo said he’s encouraging the county to invest its portion of those revenues into the neighborhood surrounding Liberty Square. That includes improving the connection to public transit.

Arnaud Karsenti, managing principal of Miami-based 13th Floor Investments, and his partners will invest more than $500 million in a mixed-use project that will capitalize on public transit. The 2 million-square-foot Link at Douglas along the Douglas Road Metrorail Station, on a ground lease with the county, would combine residential, office space, retail and restaurants.

The Link at Douglas will include a large screen in the public area that gives people transportation information, such as when the next train or trolley is approaching, he said. The first building will be micro-unit apartments. Karsenti studied micro units as small as 300 square feet in Boston and found them surprisingly spacious thanks to their efficient design. These buildings often have larger amenity areas, he said.

Karsenti is willing to bet that people will trade living space for less time in traffic.

“Transit-oriented developments can give you that time back,” Karsenti said. “Focus on time that is really important, your time with family and time with friends and time at work and what you really want to be doing."

Brian Bandell

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