By Deidra Funcheon
In 2010, when LeBron James announced during a televised ESPN special that he would be “taking his talents to South Beach” and joining the Miami Heat, Floridians chuckled, because while South Beach is the main tourist drag on a barrier island, the Heat’s stadium is actually located across a causeway, on the mainland in downtown Miami.
Today, the script has flipped. Parts of South Beach are struggling with vacancies, and the action is downtown. The biggest project of all is Miami Worldcenter, a $2.7B mixed-use concept spearheaded by developers Art Falcone and Nitin Motwani on 27 acres right at the crossroads of Biscayne Boulevard and major highways.
With four residential towers, a 1,700-room Marriott Marquis hotel and conference center, a 45-story office tower and 450K SF of high-street retail, it is the biggest project underway in the U.S. after New York City’s Hudson Yards. A media tour last week, which included a visit to the 43rd floor of the Paramount Miami Worldcenter condo tower, offered an incredible vantage point to witness the city’s transformation.
Downtown Miami was for decades a blighted area with crumbling parking lots and homeless people blanketing the streets. The area was dead except for a 9-to-5 influx of downtown office workers.
But developers saw opportunity. Falcone said he had a vision for a master plan when he bought the first big parcel for what would become Miami Worldcenter back in 2003, at an auction of city-owned land. Motwani joined him in 2005. Potential partners thought, “These guys are crazy,” Falcone said. It took them 10 years and 40 contracts to assemble their site.
They held on through the Great Recession, when land was essentially on sale, and foreign buyers had huge appetites for luxury condos. Towers by other developers went up, and between 2010 and 2016, the downtown population rose 30%. More recently, city officials and planners have begun to focus on transit-oriented development, coworking and a burgeoning tech scene. Despite some voices predicting another real estate bubble and the drumbeat of warnings about climate change, developers have been bullish.
In 2013, the Perez Art Museum Miami, founded by developer Jorge Perez of Related Group, moved into a prominent new building designed by Pritzker Prize-winning architects Herzog & de Meuron on the main drag, Biscayne Boulevard.
Next door, the Frost Science Museum opened last year. Cranes are everywhere, including at the site of One Thousand Museum, designed by late, famed architect Zaha Hadid. There are also efforts underway to activate the waterfront promenade, the Baywalk, and David Beckham is spearheading plans for a soccer team and stadium.
There are also hopes that mass transit will improve. A new train station, Miami Central, opened last week just steps from Miami Worldcenter. Service on a new luxury railway, Brightline, starts there next weekend and will eventually go to Orlando. Another train service, Tri-Rail, is also slated to come into downtown, and a downtown elevated rail service, Metromover, also operates locally.
Motwani marveled at how Miami is transforming from car-centric to pedestrian-first thinking. “Ten years ago, the county code for pedestrians was ‘non-automotive units,'” he said.
In total, the Downtown Development Authority says that there are currently 32,221 condos, 16,290 apartments, 20,000-plus hotel rooms, 6.1M SF of office space and 6.1M SF of retail in the development pipeline. (See an interactive map here.)
Of course, the focus is on luxury living — units at one of Miami Worldcenter’s residential towers, Paramount, start at $700K. Miami will have to contend with the same challenges facing many major cities. The Miami Herald reported this week that teachers can’t afford 91% of area homes and the city is experimenting with building staff housing on campuses. The homeless population is losing protections, and the middle class is, as always, getting squeezed.
Most transit in America is run by the government. In car-swamped south Florida, Brightline is trying a different model, with its high-speed trains that will eventually connect Miami, Orlando, and Fort Lauderdale.
Every weekday, Mike Kovensky of Delray Beach, Florida, wakes up at 4:30 a.m. and drives 50 miles to Miami, where he runs sales and marketing for the InterContinental Miami Hotel. “So what I do is I come to the hotel, work out, shower, and get ready here,” Kovensky says. “Because if I do that all at home, then I’m stuck in the middle of the morning rush and it would take me two hours to get there.”
South Florida is dominated by cars: I-95 runs through Palm Beach, Fort Lauderdale, and Miami, and closely intersects with the main passage out of Orlando to the north. In 2016, the region’s traffic was ranked fifth worst in the nation, with a congestion rate of 8.7%, which means drivers spend an average of 8.7% of their time sitting in gridlock (Los Angeles, the most congested city in both the U.S. and the entire world, scores at 12.7%). New development in the region is only exacerbating the issue.
A modest regional train system, Tri-Rail, runs between the state’s more southern counties, but it doesn’t extend into downtown. There are also buses and smaller rail networks, but ridership levels are uninspiring: County bus ridership dipped across the region by as much as 10%, and Tri-Rail, which ferries around 15,000 riders a month, saw trips decline by .1%. Most people blame Uber. As Pinecrest resident David Auslander told the Miami Herald: “Traffic is nearly untenable now and rapidly getting worse. My daughter’s generation already uses Uber all the time.”
What will effectively change the culture, he added, would be good, high-quality train service. That was three years ago, and this spring South Floridians are finally getting their wish: Brightline, the new high-speed regional commuter rail, began service between West Palm Beach, Fort Lauderdale, and downtown Miami on May 12. Since January, the train has been running between West Palm Beach and Fort Lauderdale, but will now extend into MiamiCentral, a new transit hub and development in Downtown Miami. Eventually, Brightline will extend as far north as Orlando, and reach around 6 million residents along a 235-mile corridor. Once fully up and running, Brightline estimates it will help remove 3 million private vehicles from local roads.
It’s certainly a necessary upgrade for the South Florida transit scene, but also quite unique in a national context: Brightline is entirely privately funded. Unlike the vast, public regional rail networks that extend through the northeast, for instance, Brightline was conceived of and funded exclusively by All Aboard Florida, a subsidiary of Florida East Coast Industries, the state’s oldest and largest commercial real estate and transportation company. FECI was acquired by Fortress Investment Group, a N.Y.C.-based private equity firm, for $3.5 billion in 2007.
Brightline is the first private rail service to take root and operate in the U.S. in over a century. All told, the project will cost over $3 billion. While All Aboard Florida, under the shell of FECI and Fortress (which, last year, was acquired by the Japanese telecoms company SoftBank) invested around $2 billion to get phase one up and running, they expect to continue to finance the project by selling private bonds to developers. Annually, the company expects to draw in $300 million in ticket sales.
For commuters like Kovensky, the project is a relief. “I grew up in New York, and I miss the mass transit,” he says. He hates sitting in traffic, and would rather sacrifice sleep than subject himself to the gridlock.
Brightline, he says, will help him keep a less nocturnal schedule. It will still take him around 45 minutes to reach the InterContinental hotel in Downtown Miami, but he’ll be able to wake up at 6:30 a.m. and get ready at home before heading out.
When completed, the trip between Orlando and Miami should take around three hours; the drive could take as much as five in rush hour.
All Aboard Florida has spared no expense trying to make the Brightline as attractive as possible. There’s free Wi-Fi aboard, and customers can order cocktails for their journeys. “It’s meant to be a destination,” says Bob Swindell, CEO of the Greater Fort Lauderdale Alliance. But luxury services like this put up obvious barriers to lower-income people. A one-way ticket on Brightline between Miami and West Palm Beach will cost around $15. Tri-Rail costs between $2.50 and $7 for a one way, and gas for that drive would cost over $8. It would be encouraging to see the company offer discount passes to people at a socioeconomic disadvantage, but there are currently no plans in the works to do so.
However, the addition of this transit network, while privately funded, is adding a public benefit to the region. Despite an enormous need to reduce car usership in South Florida to curb the impending threats of climate change, Florida is not exactly progressive on funding mass transit projects. Out of the state’s $10.8 billion transportation budget for this fiscal year, just $618 million went toward mass transit projects–a fraction of what it cost to get the Brightline up and running.
The state’s low taxes make raising revenue for public projects notoriously difficult, and the conservative government does not exactly track with the needs of the more urban centers of South Florida. “When you’re in Miami, you see a real desire for transit-oriented and pedestrian development,” says Nitin Motwani, a local real estate developer. “The vast majority of Florida is not like that. If you go up to Tallahassee and start talking about investing billions of dollars in dense, transit-focused environments in an urban core, that’s not just where their priority is.”
At one point, the state proposed a high-speed rail corridor between Tampa and Orlando, and eventually extending through South Florida. It never received funding. So the Brightline instead dug back into Florida’s roots and repurposed the freight rail tracks that Henry Flagler, founder of Florida East Coast Industries, privately built a century ago.
The new rail service–which tops out at 110 miles per hour–will provide much-needed connectivity through the region and now, “people are talking about transit in ways they never have, how to link everything to Miami,” Motwani says.
Motwani’s current 27-acre project, Miami Worldcenter, will soon open right next to the Miami stop on Brightline. The development will comprise retail, office, hotel and residential properties, and Motwani sees potential for building more housing and commerce by the train line to drive down dependence on cars and boost mobility through the counties.
Worldcenter is not without controversy: The development is the harbinger of gentrification for the historically black neighborhood of Overtown, where some residents have expressed concern about its effects on their community. Residents have called for jobs completing the center to go to locals at livable wages, and for revenues from the development to go toward much-needed upgrades to infrastructure like water mains and sewer lines. Worldcenter has so far committed to $100 million in infrastructure upgrades and has created 4,000 jobs, 75% of which have gone to Miami-Dade residents.
Likewise, Brightline will intersect with communities along the socioeconomic spectrum, so it will be important for the train company to ensure it is financially accessible to all.
That should not be too much to ask: All Aboard Florida is confident that the train will be able to quickly recuperate its up-front investment by capitalizing on the state’s tourism numbers–68 million people visit Orlando each year, and more than 15 million come to Miami–while also pulling in revenues from the approximately 4 million square feet of development that will spring up around the stations.
Private investment in mass transit projects is something that’s been ramping up over the past few years–we see Elon Musk attempting to build a tunnel under the 405 in Los Angeles to transport cars, bikes, and pedestrians, and the startup Transit X is angling to replace cars and subways with networks of solar-powered, elevated pods. In a way, it’s refreshing to see private money funding a mass transit project that’s essentially still just a train, albeit a fancy one. If Brightline works (and if it figures out a way to equitably serve low-income passengers), it could serve as a model for other localities to overcome state-level recalcitrance and get mass transit networks up and running.
It’s certainly creating a bit of a culture shift in South Florida already. “Nearly every conversation you have with people has to do with traffic and the lack of transit and the desire for more,” Motwani says. “Now, it feels like at least 50% of conversations you’re having with people have to do with this train.”
The $2 billion Miami Worldcenter project is quickly sprouting out of the ground in downtown Miami, and the first building is set to open later this year.
The Business Journal was part of a media tour of the project encompassing about 27 acres. It comes at a crucial time, as more people are moving to the urban core and the Brightline passenger train opened nearby to boost regional mobility.
“Miami Worldcenter’s master plan has been in the making for more than a decade, and we’re only months away from our first tower opening its doors,” Motwani said. “From this point forward, we’re going to see a steady stream of project elements delivering to market – residential, retail, office and hotel – as our vision for a ‘city within a city’ in Downtown Miami becomes reality.”
The 569-unit Paramount Miami Worldcenter has reached the 48th out of 60 stories on its way to completion in the first quarter of 2019, the developer said. Daniel Kodsi is spearheading the condo project. The media garnered a look at a model unit that’s been furnished inside the building.
About 140,000 square feet of retail is currently under construction at Miami Worldcenter, with most of it in the parking deck of Caoba and Paramount. The developer declined to disclose any information about leases in the retail space. An additional 160,000 square feet of retail is planned at the project. Forbes Co. and Taubman are collaborating with Miami Worldcenter Associates on the retail component.
ZOM hopes to break ground on a 434-unit, 40-story apartment tower called Luma at Miami Worldcenter by the end of this year. It should be ready in 2020.
MDM Group plans to break ground on the first phase of its Marriott Marguis Miami Worldcenter Hotel & Expo Center by the end of this year. It would have 1,700 hotel rooms, 500,000 square feet of meeting and exhibition space, and another 350-room boutique hotel.
Hines hopes to break ground on a 500,000-square-foot office building at Miami Worldcenter in 2019. It would be the largest office building delivered in Miami since 2010.
Source: Brian Bandell, South Florida Business Journal
The tour shows what the 27-acre, Miami development will look like once it’s finished
Unlike Metropica, a $1.5 billion mixed-use project by Joseph Kavana that aims to transform Sunrise’s corridor in Broward County into a city within a city, the Miami development boasts an impressive transportation hub for commuter mobility.
Located at 1010 Northeast Second Avenue, Miami Worldcenter is the most connected development in South Florida offering access to five transit systems: Brightline’s high-speed rail launching next month; Tri-rail; Metrorail; Metromover, and the Brickell and Biscayne trolley.
The development’s signature condominium tower, Paramount Miami Worldcenter, will soon have a 5,000 square foot skyport for flying cars and airplanes in Spring 2019.
The mixed-use project’s first phase will include 300,000 square feet of retail space, a 58-story condo that boasts over 40 amenities, a 45-story office building, new public plazas and promenades, and two residential apartment buildings across 27 acres.
Paramount Miami Worldcenter, the development’s sole residential condo tower, has 569 units and is slated for completion in 2019. Once the tower is completed it’ll stand at 60 stories.
It’s no surprise that Miami Worldcenter is being billed as one of the largest private real estate developments underway in the United States. The ten-block project once completed will include world-class retail, hospitality, commercial, and residential uses in the center of Miami’s urban core.
The mixed-use project’s first towers will go up this year. Many of the project’s components will be developed by Forbes Company, Taubman, ZOM, Hines, CIM Group, and the MDM Group.
60-story Paramount Miami Worldcenter is already past the 45th floor
The $2 billion Miami Worldcenter project will create its own mini Miami skyline when it’s done. The development, spearheaded by Art Falcone and Nitin Motwani, will include a street retail component, along with an office tower, two apartment buildings and the Marriott Marquis convention center in partnership with the MDM Group.
Construction of the mega project’s crown jewel, the 60-story Paramount Miami Worldcenter, is already past the 45th floor. Developer Dan Kodsi said the tower’s 530 units and 30 guest suites are about 73 percent presold.
The mixed-use project‘s other buildings are in various stages of progress, and will eventually include retail, commercial and residential components. Some buildings are poised to break ground, while others are nearly finished.
To get a better sense of when construction will be finished, The Real Deal took a look at each project’s expected completion date. For a closer look at the megaproject, check out the above slideshow.
Scheduled for completion this fall, CAOBA will feature a wide array of amenities, including private balconies with views of Biscayne Bay and the downtown skyline.
CIM Group and Falcone Group have topped off CAOBA, a 444-unit apartment tower within the 27-acre Miami Worldcenter, a mixed-use development in downtown Miami.
The 43-story building is the first tower to top off at the $2 billion master-planned project. CAOBA is slated for delivery in the fall of 2018, with apartments set to open for preleasing in the summer.
Located at 698 NE First Ave., the rental tower’s apartments will range from studios to three-bedroom units between 500 and 1,300 square feet. Features will include in-unit washers and dryers, nine-foot ceilings and private balconies with views of Biscayne Bay and the downtown Miami skyline. CAOBA will offer a pool deck, fitness center, clubroom and an outdoor dog-walking lawn. Additionally, the City of Miami has approved plans for an adjacent 40-story, 429-unit tower.
“Residents of this complex will value being able to walk out their door and be in the heart of a ten-block ‘city within a city’ complete with offices, shopping, dining and entertainment. And our proximity to Miami-Dade’s primary transit systems, including the new Brightline high-speed rail, means residents will be able to jump on a train and beat the traffic to anywhere in South Florida,” said Nitin Motwani, managing partner of Miami Worldcenter Associates, in prepared remarks.
Formerly known as the first phase of Seventh Street Apartments, CAOBA will include more than 20,000 square feet of ground-floor retail space for shops and restaurants.
Earlier this month, Miami Worldcenter Associates secured additional financing for Miami Worldcenter. Fifth Third Bank provided a $43 million mortgage for the on-going construction of the project’s retail component.
Images courtesy of CAOBA Miami Worldcenter
Nitin Motwani, managing partner of Miami Worldcenter Associates, talked to CPE about the 27-acre master-planned development taking shape in downtown Miami and how the project will transform the city’s urban landscape.
Miami Worldcenter, a $2 billion master-planned development in Miami’s central business district, will span 27 acres and encompass 10 city blocks upon completion. The mixed-use project will boast as much as 450,000 square feet of retail, 600,000 square feet of office and 500,000 square feet of convention space; a 1,700-key Marriott Marquis; the 513-unit PARAMOUNT Miami Worldcenter Condos; as well as 4.5 acres of open space.
Miami Worldcenter Associates Managing Partner Nitin Motwani spoke to Commercial Property Executive about the project’s current status and how it will transform downtown Miami.
Miami Worldcenter broke ground in 2016. Was it difficult to secure financing for such an elaborate project?
Motwani: Our ability to secure approximately $500 million in total financing for Miami Worldcenter thus far in today’s tightening lending environment underscores the project’s key strengths: its location in the center of downtown Miami’s thriving urban core, the credibility of our development team and partners, and the strong demand from a growing downtown population seeking well-connected, urban lifestyles where they could live, work and play.
Our first phase, which is now under construction, will include high-street retail, luxury condos, market-rate apartments, Class A office space and an expo center and convention hotel. The second phase will include additional residences, hotel guestrooms and retail space, and when everything is finished, we’ll be creating about 100,000 square feet of new public space.
Miami Worldcenter will feature an expansive retail promenade as well. What is the progress on that component so far?Motwani: Miami Worldcenter’s high-street retail component—the centerpiece of the mixed-use development’s master plan that will include up to 450,000 square feet of total retail space—is now rising out of the ground. Developed in collaboration with The Forbes Co. and Taubman, the pedestrian-friendly concept takes full advantage of downtown Miami’s growth as one of the nation’s most densely-populated, walkable and well-connected neighborhoods.
The project’s open-air shopping promenade will connect to a large public plaza that will be surrounded by shops and restaurants, creating a central gathering place and outdoor event space. More than 140,000 square feet of retail is currently under construction.
What is the status of the development’s first apartment tower and what amenities will it offer?
Motwani: We recently celebrated a major milestone at CAOBA, Miami Worldcenter’s first apartment tower, which just topped-off construction at 43 stories. The 444-unit market-rate rental building is anticipated to be completed in the fall of this year, with apartments set to open for pre-leasing this coming summer.
CAOBA will feature amenities such as a resort-style pool deck, a fitness center and an outdoor dog-walking lawn. The tower will also include more than 20,000 square feet of ground-floor retail space for shops and restaurants, connecting to Miami Worldcenter’s retail promenade and plaza. It’s just one block away from Miami Central, downtown’s new transportation hub and Brightline’s high-speed rail terminal. The tower’s proximity to a variety of public transit systems within walking distance will make owning a car optional for residents.
Speaking of transportation, Miami Worldcenter is among a new breed of transit-oriented projects coming to South Florida. What are your plans for connecting to mass transit?
Motwani: One of the things we love most about our site—and something that’s appealing to retailers, shoppers, residents, office users, tourists—is its connectivity. We’re midway between the airport and South Beach, easily accessible from the region’s major expressways and connected to five different modes of mass transit: Brightline’s high-speed rail, the Tri-Rail commuter rail, Metrorail, Metromover and the Brickell/Biscayne trolley.
You’ll be able to take the Metrorail to Miami International Airport from your hotel, ride the train to Orlando, take the Metromover to Brickell or hop on the trolley to Wynwood, Midtown and the Design District. Miami Worldcenter will be the missing link in the downtown Miami landscape, connecting all corners of the urban core.
The development will also feature hospitality and office space. When will work commence on those components?
Motwani: Miami Worldcenter will be home to the Marriott Marquis Miami Worldcenter Hotel & Expo Center, developed by MDM Group. It will feature approximately 1,700 hotel guestrooms and 500,000 square feet of meeting and exhibition space. Amenities will include a pool deck with views of the bay, the AmericanAirlines Arena and the downtown Miami skyline, as well as an 80,000-square-foot outdoor event deck. MDM expects to break ground on the project in the fourth quarter of 2018.
Hines has announced plans to develop a 500,000-square-foot office-led, mixed-use tower within Miami Worldcenter. The 45-story building will include premium Class A office space atop street-level retail and is expected to break ground in the fourth quarter of this year.
Vertical construction of PARAMOUNT, Miami Worldcenter’s signature luxury condominium tower, is moving along quickly. When is the building expected to be completed and how are sales going?
Motwani: Construction at our 60-story PARAMOUNT tower has already exceeded the halfway point, with crews currently working on the building’s 38th floor. It’s expected to top off this summer, with completion slated for spring 2019. With nearly 70 percent of the building’s 500 luxury residences under contract for a total of over $380 million in sales, PARAMOUNT Miami Worldcenter has enjoyed consistent sales success with buyers hailing from more than 50 different countries around the world.