The first piece of one of the largest real estate projects in the U.S. is ready and open for tenants. Caoba, a 43-story apartment tower located at 698 NE First Ave., marks the initial phase of completion of Miami Worldcenter, the 27-acre mixed-use development that sprawls across 10 city blocks in downtown Miami
The building houses 444 apartments ranging in size from 500 to 1,300 square feet. 60 percent of the units are studios and one-bedrooms. Rents range from $1,775 to $4,275. The rental office will open later this month and move-ins start January 31.
Miami Worldcenter managing principal Nitin Motwani, who has helped guide the $4 billion project since its inception 15 years ago, said the apartment building is being pitched at a wide range of potential tenants.
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“It’s everything from corporate workers to fresh-out-of-college young people to families to empty nesters,” he said. “We’re not just targeting one demographic. We’re running the gamut.”
Caoba is located one block east of the MiamiCentral station, which services Brightline, Metrorail, Metromover and Tri-Rail. The proximity to mass transit is one of the main selling points of the apartments, which arrive during a surge of new multifamily construction in the downtown area.
According to the Dec. 2018 Market Insights report by the Miami Downtown Development Authority, there are 4,480 rental apartments currently under construction in the greater downtown area (which includes Edgewater, Overtown, Wynwood and Brickell). That’s nearly twice the number of the 2,317 condos currently in the pipeline, and many of those target the ultra-high-end luxury market.
The competitive multifamily market means developers are having to make concessions to lure tenants. Stephanie Mathieu, general manager of Bozzuto Management, the third-party company that will oversee leasing and operations at Caoba, said new tenants will receive one month’s free rent on a 12-month lease with only a $500 deposit required to move in. The building will also offer other amenities such as 24-hour concierge service.
“There’s a lot of Worldcenter construction in the vicinity, and of course some of that is going to be visible from inside the apartments,” she said. “But early adopters are understanding of that. We already have a wait list of 200 people who want to tour the building and see the units.”
Despite the growing competition, rents in Miami-Dade continue to climb — in large part becausea lot of the apartments hitting the market are brand-new construction. According to the 2019 Rental Affordability Report, the annual study by ATTOM Data Solutions that compares rents and home prices across the U.S., it’s still cheaper to rent a three-bedroom apartment than to own a home in 59 percent of the biggest counties in the U.S., including Miami-Dade.
The study, which uses data from the U.S. Department of Housing and Urban Development and the Bureau of Labor Statistics to calculate market rent and wages, also found that average market rents are rising faster than median home prices in Miami-Dade.
Meanwhile, the average weekly wage in Miami-Dade in the second quarter of 2018 showed a three percent increase over the same period in 2017 — a relatively weak gain compared to similarly sized markets such as Marin County (San Francisco), which grew 11.3 percent, or King County in Seattle, where wages jumped nine percent.
According to Apartment List, South Florida has the highest percentage of cost-burdened renters in the U.S., with 62.7 percent of households paying more than 30 percent of their income on rent.
But industry experts say the apartments fetching higher rents in the urban corridor target a different renter than previous generations who prized living space above all else.
“Miami has matured to the point that you now have a central business district with food and beverage offerings and other amenities, so there are a lot of things to do in downtown after work,” said Peter Mekras, managing director of Aztec Group, an investment and merchant banker. “There has also been a change in demographic and housing culture. Rental housing has become a more appealing living concept for a lot of young people — renting not just for the intermediate term, but the long term. It’s a lifestyle choice for a lot of them.”
Two other major components of the Miami Worldcenter project are scheduled to come online in the first half of 2019:
▪ The 60-story Paramount Miami Worldcenter luxury condo tower, located at 1010 NE Second Avenue, is due for completion in spring. Motwani said the 569-unit building is 85 percent sold, with buyers from 52 countries. Prices range from $750,000 to $5 million.
▪ 60,000 square feet of retail and entertainment spaces are scheduled to receive their Temporary Certificate of Occupancy by the end of May. Motwani declined to name the specific retailers, but he said the stores will be “more akin to Lincoln Road than the Design District and Bal Harbour, a mix of national and international brands.”
Another 240,000 square feet of retail is planned for the future.
Also due in 2019 for Miami Worldcenter: Groundbreaking on a citizenM hotel, a 45-story Class A office tower, a 1,700-room Marriott hotel and a 434-unit rental tower by the apartment development firm Zom.