Podcast - Miami and Broward Real Estate: Growth, Land Scarcity and What's Ahead

Mamie Joeveer: My name is Mamie Joeveer. I'm an attorney in Holland & Knight's Real Estate Practice Group, the Miami office. And I focus on land use, real estate and commercial litigation. The litigation side is really like leasing, neighboring property disputes, contract disputes, regulatory advice, zoning violations, enforcement proceedings and things of this nature. But today, more excitingly, I am joined with my guest, Mr. Andrew Ansin. He is the CEO of Sunbeam Properties and Sunbeam Development, real estate development companies in Florida and Indiana owned by the Ansin family. And so Andy, today, our goal really is just to speak informally, have a conversation just about South Florida real estate, the market, and kind of just get your insights since you have been a part of the market for several years  — I guess I say a homegrown developer  — so it'd be great to get your insights, the good, the bad, and how things are in the future. But just to really kind of kick it off, we'll just slow down a bit and unpack everything. And maybe you can just get into your background and how you got into real estate. I know you're wearing a couple hats, so if you want to just get into that.

Andy Ansin: OK, Mamie, nice to be here. Thank you for inviting me. So actually our family has been involved in real estate in South Florida since really just after World War II. Where my grandfather, who at that time was living in the summer still in Massachusetts, would come down and he was a big land acquirer. And then later he and my father were building homes after World War II for veterans and they were taking advantage of the VA loans, so it was very economical for the veterans. And then he also was acquiring the property in Miramar, which is now our main development down here, Miramar Park of Commerce, and will soon be the home to Miramar Cove, our mixed-use lifestyle center. He also got the license ultimately for Channel 7, the Fox affiliate, and now with Channel 18, and also the ABC affiliate in town. And then my father was really the one who expanded our operations into Indiana and outside of Indianapolis. So I grew up with it from a little kid, both the broadcast side and the real estate side.

When I was a junior — so I guess a rising senior in college — my dad and I went to lunch and he, I guess, made me an offer I couldn't refuse. He said he really wanted me to come and work with the family business and didn't want me to work on the television side. He felt that was kind of an ongoing business and it was really just management. Instead, I thought the real estate side would be more interesting for me, particularly then we were just  — I don't even know if they were scraping the dirt yet out here in Miramar for the business park  — and I thought I would really learn all aspects of business by becoming the developer and also doing the leasing and management of the business park. I had to build a team to do it. And then, all the interesting things, learning about development and leasing, and maintaining the quality that we have here. So that's what I did. He didn't want me to go to business school. I would have otherwise, if not for that conversation, I would probably become a investment banker of some sort. [Had] a B.A. in economics and a B.S. in computer science and a lot of friends who are going into that world in New York City and pretty much had jobs lined up at a number of banks if I wanted to pursue it. But he thought it would be good to just have more instinctive training, kind of on-the-job training and not be kind of the formalized type of thing that you might learn in business school and to have my mind maybe a little more open and not as structured. So that's where I am and have been doing that for over 40 years now.

Mamie Joeveer: So I think that gives you just a really interesting perspective. One, you mentioned Miramar. I'd like to talk about that first because it's in Broward County and that's where I do have a lot of matters and properties there that I'm working with in Broward County. You mentioned the Miramar business park, but this year is a very big year for you. Expanding on that, like the lifestyle. So can you talk about that in terms of like, you know, how this type of development is going to really shape that neighborhood and that community in South Florida?

Andy Ansin: OK, well, our business park is 5 million square feet. We have about 160 companies out here. We figure somewhere between 10 and 15,000 employees. And it's done very well. The distribution part of the market is very, very strong and continues to be, particularly for the size [of] units that we have, which is smaller than a lot of the very large boxes that have been built recently. We have a lot of office space out here too, probably about a million square foot of it. [It] is kind of single-story flex space. We parked it very heavily many times, some per thousand, if not more, which has allowed a lot of back-office operations to come out here. It's economical space. They control their own unit. But at the same time, we're very aware that there has been less demand. A number of our tenants have retrenched for various reasons. We've been fortunate that there are others that have been expanding. So we haven't seen a big increase in our vacancy rates, although we certainly could have, if not for those existing tenants.

And when we started thinking about what we were going to do with our final acreage, which is about 100 acres, including some of the wetlands and FPL easements my dad had given, and we had given some thought to doing apartments many years ago, but decided not to. The land really had become too valuable for industrial, certainly for us to make the numbers work. So we probably would have done what we had been doing with our other vacant land, which was selling it to ever-increasing prices to residential developers. And then their typical pattern was to do a retail shopping center on the corner and then have the apartments wrapping around it in the back. Very common, what you'd see all throughout southwest Broward these days. But in the course of figuring out what to do with our North Bay Village property, which we can talk about later, I hired a man, had 15 years' experience as an architect, 15 years working for Vornado, and then more recently Seritage, so he really understood the world of lifestyle centers and the feeling that that is where a lot of the retail world is going. So he then gave me a tour of lifestyle centers around the country, went to Texas, went to California, so you can get a little bit of an understanding of that. Interestingly enough, when I was in college, in addition to getting the two degrees, I kind of had this thread every year of urban studies. So I had a pretty good intuitive sense of what we were looking at, and that was helpful.

Mamie Joeveer: And so Miramar was like, the place?

Andy Ansin: Well, in the sense that, mixing the uses, the residential, the commercial, the entertainment, the office, the business part is kind of where the world was going. And really historically, it's what humans kind of like. They like the ability to walk. They like the ability to walk to restaurants and eat outside, and while you're doing that, maybe you go shopping, or if you're waiting for the restaurant, you go shopping. And we found in the pandemic, particularly coming out of the pandemic to get people to come back to work, the financial districts, which don't have that mixed-use element and don't have the residents living there or the restaurants on the street level, they've been the slowest to get the companies and the employees to come back, whereas the newer neighborhoods, the employees have come back because they can get an experience that they can't get working from home and they have a place to go with their co-workers for lunch, have a space to go and have that camaraderie after work, maybe a bar or go to a restaurant and have the type of thing that you just don't get at home. So those types of locations have come back much stronger. Which I've seen that personally, like in Boston, which, kind of a second city for us, you have three examples. You have the financial district, which has not really come back at all. Much, much more slowly. You have Seaport, which has the mix of uses and has come back the strongest, and then you have other areas at Newbury Street and whatnot, which don't have as much of the office, but those have come back pretty well, too. But the pure office location, particularly a pure suburban office location, kind of like what we've had at Miramar Park of Commerce to some extent, we saw that in the long term as possibly not being able to be so viable. So really for the long-term viability, is to build a mixed-use lifestyle center. So you have, I think we have permission to build about 2,800 apartment units, plan for it to all be apartments. Now at the base of it there's a couple hundred thousand square feet of retail, and it's all centered around manmade water bodies. It's the blue basin you do see at like Downtown Disney, or you can see the Hard Rock has an example of it. But we've taken it a step further in that we've created boardwalks with restaurants right on the boardwalk. There'll be large fountain shows like you kind of see at Bellagio, and an entertainment aspect for people to come and to draw from a large area, particularly with our road network with the Turnpike and I-75 and being so central, and not having a lot that's similar to that, certainly not in southwest Broward, maybe go up to the Hard Rock.

Mamie Joeveer: Right. Speaking of that, do you think that that was just a unique shift, because you mentioned the pandemic, or do you feel like that's kind of where the industry right now is leading towards? That's going to be like a trend.

Andy Ansin: Well, I think if people can put together the sites, which isn't easy to do because you need to have a large site to do it and you need critical mass because you'll need a lot of restaurants and so forth to kind of open up at the same time, but it seems like it's done very well. Downtown Doral is a good example of it. We just kind of felt for the long-term vitality of our business park and also to help Miramar in general. We're very close to the Hard Rock Stadium, so there'll be some synergies there. We're really very excited about the possibility of doing it and really making Miramar kind of the epicenter of north Dade and southwest Broward. If you wanted to take your kids somewhere for a couple of hours, not too many places you can do that other than you can go to a park in southwest Broward. You can go to the mall, I guess, but there's no place where you have a combination of both. Both the outdoor space, which is enjoyable, the restaurants and some shopping. So we feel there's kind of a niche there.

Mamie Joeveer: All right. And so this kind of just flows right into more of South Florida, but we're heading south now into North Bay Village. And I know there are some developments there, I think, like, in August of last year, but talk about North Bay Village and how it's revitalizing that neighborhood. Obviously, they're both different neighborhoods, but both were sort of, I guess, at one point, kind of going dormant.

Andy Ansin: Well, I don't think Miramar went dormant, but North Bay Village has certainly kind of been in a time capsule for maybe 30 years, if not more. The part of the problem they had there is their zoning was very restrictive. So it's a wonderful location. It's in the middle of Biscayne Bay, halfway between Miami and Miami Beach. You're just a little north of Wynwood. You have great access to the ocean and the sand. Very quiet, you can only get there by going over the bridge. It has been very easy for them to secure a great police department there. So it creates a completely different environment than what you see developing in Edgewater or Wynwood or Midtown, much less urban, much less congested. You don't have all the traffic and kind of the street life for better or worse that you find in some of those neighborhoods. But what happened was North Bay Village had this very restrictive zoning, so the high-rise development all went other places. You know, Downtown, Brickell, and, coming up, Edgewater. And it just didn't come to North Bay Village. But North Bay Village got to a point where they couldn't pay to maintain the infrastructure. You had a lot of flooding of streets, you have issues with the sewer system, and they finally realized that they had to modernize their development code and allow for higher buildings and greater density and they could sell some of that density to the developers and raise money that way as well in order to raise the money to be able to make the capital improvements that were needed in the neighborhood, and there's a way of doing it without greatly increasing the property taxes for the residents. So by working with developers and now a number of developers have come in there and bought sites and are planning to build. Some of them started construction. It really will be able to uplift the city, and we're very excited. Channel 7 is there, it'll be moving to Miramar, which will free up that site, and then we purchased a lot of property adjacent to it and have now aggregated 13 acres with about half a mile of bayfront.

Mamie Joeveer: And which is the first building that's going to come out of the ground?

Andy Ansin: We're hoping the market will support all of our buildings to be rentals, but the first building is a 250-unit rental, 39 stories, 450 feet tall, and has terrific views south of downtown, has two restaurants on Biscayne Bay and then some dry retail on the dry side of the site.

Mamie Joeveer: So that sounds great. You know, and just looking at both your projects and you're obviously in these communities and you have an opportunity to positively impact the communities. I mean, what excites you the most about that? I mean, that can run the gamut, obviously like schools, different things like that. Like, how do you feel like you can impact the communities?

Andy Ansin: Well, I think in Miramar, particularly with the water and the fountain would just kind of create this wonderful amenity and the shows will be terrific with the fountain show. I think, in North Bay Village, we've worked with Arquitectonica and really have come up with what we think is a breathtaking building, one that'll redefine the skyline of North Bay Village, and the way that it opens up to the street and the water, you'll see the restaurants when you come over the bridges from Miami. And it'll really be very inviting for people to come and go to the restaurants, go out there on the balconies and terraces and be able to see downtown and be outside, having a drink or having dinner, watching the sunset from 30 feet up in the air, which is very rare to find in Miami. So we hope that'll help kind of revitalize North Bay Village and kind of instill that excitement and youthfulness that's been missing there. A lot of young families have moved to North Bay Village.

Mamie Joeveer: Right, I was going to say in proximity to Miami Beach, so...

Andy Ansin: But they haven't had the nightlife there. And I think a lot of people miss Shuckers being there, one of the few waterfront restaurants that you could go to. So we're hoping to be able to kind of tap into that demand and the type of place that people like to go.

Mamie Joeveer: And your project will have restaurants open to the public, not just for the residential guests.

Andy Ansin: That's right. Yeah, the restaurants on the bay, there's two on the water level. And then there's one large one above it with a big terrace overlooking downtown.

Mamie Joeveer: So when we first started talking, you mentioned you had properties in Florida and Indiana, which you mentioned that your dad had started those properties. But now since you have them and you're in those different markets, are there big differences? I know Indiana is mostly like warehouse, industrial versus Miami. I mean, how do you see the differences just in terms of either anything from the municipalities or just the market itself?

Andy Ansin: They're very different. For us, our main developments have been industrial. We have, I think, about 9 million square feet, mostly these big box modern warehouses, a lot of third-party logistics companies, as well as end users renting them. But very common to have a half-million-square-foot tenant, which would be almost unheard of down here, are very, very rare. Million-square-foot buildings, which again are very rare down here. Much smaller market. Indianapolis is very central, as I think six different interstates that come in to the ring road. So you can get product out any direction very, very quickly. And a tremendously helpful business environment, particularly with the governments. They have terrific TIF programs with the taxes go to pay for the infrastructure and the ability and tax abatement programs with new buildings. And a lot of land, that's the other big difference. For better or worse, there's a lot of corn land and corn farms and other farms in Indiana with all these highways and interstates. So there seems to be a never-ending ability to keep building buildings. And in fact, the constraint oftentimes isn't the land, but rather the labor availability. So it seems like the development world keeps finding little pockets where there's labor, there's already good road networks, and that's where the development happens. As opposed to here, you're always just searching to find a pocket of land. There, they're searching for pockets of labor.

Mamie Joeveer: So you wouldn't open probably to the industrial side here?

Andy Ansin: There's so little land available. Almost anything you're doing is going to be some type of brownfield or redevelopment of an existing building or something, if you can accumulate something large enough, but very expensive.

Mamie Joeveer: And would you see that land as one of the primary challenges facing the Miami community today in terms of real estate in South Florida?

Andy Ansin: I don't think that's the biggest constraint. I think it's the biggest constraint when you start talking about schools, right? Well, if you're talking about office, apartments, industrial, I don't think that's constraining the economy at this point. I mean, certainly the easier things were less expensive, but seems to be doing well with the supply that we have.

Mamie Joeveer: What do you see are going to be some kind of issues to navigate in terms of the future in this market right now?

Andy Ansin: I think the Partnership for Miami nailed it. It's affordability, education and transportation. And, in my opinion, is that the affordability and transportation issues are somewhat tied together as a hook between the two, because you could have, as we do now, more development along the transportation corridors and Metrorail and so forth, and try to keep people from having to drive to get to work. I think the affordability issue, to the extent we have Live Local and the ability to have tax abatements related to affordable housing. Construction costs are high and interest rates aren't wonderful. But it seems like with the right government inducements, more affordable or at least workforce housing can be delivered. And now, with Live Local, a lot of sites that were not available for those or certainly not available at the densities or the heights, are now available. So I think the government's doing its part to try to help make more housing available for the workforce.

Mamie Joeveer: And do you think that more developers would tap into some of these incentives?

Andy Ansin: I think they have been. I don't think it's easy, but I think they have been, we've certainly seen a lot of projects proposed. I think a lot of cities oppose them, and it's not easy to get them built, even though the state statute provides for it.

Mamie Joeveer: I really appreciate, you know, you spending the time to talk to me today about the market and what's in the future. And I just want to thank you for joining me, and I want to give you some last-minute words if you have anything additional you want to add in terms of what we should be thinking of.

Andy Ansin: I do. I want to talk about education a little bit. I'm very exposed to education. I've been on the board at Ransom Everglades. I think it was my 16th year, I was board chair. And even as of a few years ago, we would get the phone calls that families from New York wouldn't move down unless they could get their kids into one of the top schools, right? And we continue to hear that to this day. A lot of companies continue to want to move down here, but they're concerned about getting their kids into school because all the top-tier private schools are full and very hard to get into. And it's really become the constraint on families moving here. And to that extent, the companies coming down here. And the other thing that's happened is most of the top schools are clustered in the southern part of the county. So you have Ransom, Carrollton, Pinecrest, Gulliver, University of Miami, they're all in that southern part of the county. So what it's doing is it's creating traffic for the people who are coming from other parts of the county to bring their kids down and to pick them up in the afternoons and so forth. And then it's also driving up the price of real estate. You're seeing, I mean, just unimaginable prices being paid for schools in Coconut Grove, because it's convenient for the sons and daughters in the families to go to school nearby. So it's causing part of the affordability problem, particularly on the top end. So my perception is that we need an additional one or more middle school/high schools to help take some of that pressure and to have more good classroom seats, private. I don't think that the families that are looking to come down here feel comfortable with some of the other options that are available, and they really want a named school that they feel is going to be equivalent to the schools that [they] would normally send their kids to, or are sending their kids to up in the northeast or in California or the Midwest, Chicago. So it needs to be a school that has gravitas, has a reputation. I think it wants to be in the northeast part of the county —

Mamie Joeveer: Are you thinking that because of land issues, like we were talking about before in terms of where to build?

Andy Ansin: I think it's better to be in the northeast than to put another school in the south because putting another one in the south isn't going to help with the traffic problems, it's not going to help with the affordability of housing or the affordability of the housing for the teachers. Whereas if you put one in the northeastern part of the county, there is more affordable housing in those areas. There's a lot more options for people in that area and the families that otherwise might be driving from Surfside, North Miami, Bay Harbor, Bal Harbour, Morningside, would not have to drive south to take their kids to school or wouldn't have to move south because they don't want to make that drive. We see a lot of that happening. So I think it would be much better and it would allow families to live in between, in between meaning they could still work on Brickell, but their kids could go north to go to school so the parents could go south.

Mamie Joeveer: Are you thinking of like opening that door on your own, expanding into that type of project?

Andy Ansin: That's what I've been working on. I determined that this is a real estate problem, right? Because sites are very, very expensive. The middle school/high school is going to need somewhere, 11 to 15 acres if it's going to have all the outdoor facilities. And so it's kind of been my mission to identify a site of that size. I figure most schools aren't going to be able to afford the prices at a site like that if you can find one. So that's where the philanthropic part of this comes in, has been to acquire a site and then figure that I would make it available, subsidize it for a good school to come in and provide the good classroom seats. And hopefully in the course of that, to improve the educational offerings in general in the northeastern part of the county. So I pursued four. I'm on my fourth one right now. Hopefully we will get that done.

Mamie Joeveer: And all in the northeast part of the county.

Andy Ansin: All in the northeast part of the county, yeah.

Mamie Joeveer: So again, thank you so much, I really appreciate that. And I do think there's a lot to look forward to in South Florida and things just keep moving forward in terms of this market. It doesn't look like it's starting to simmer down at any time. So, again, thank you so much for joining me.

Andy Ansin: Thank you, Mamie.