Why MXD May Change This Year

Gunster attorney Brian Belt has his eyes on South Florida commercial real estate,

MIAMI—Interest rates. Brexit. The Zika virus. There is no lack of X factors—and no predicting with certainty how these and other issues will pan out. For now, Miami’s commercial real estate is still hitting on all cylinders. GlobeSt.com caught up with Gunster attorney Brian Belt to get some answers to the tough questions in this exclusive interview. In previous installments, he discussed eight key trends to watch , answered the multifamily vs. condo question, and offered good news in three key Miami commercial real estate sectors. GlobeSt.com: How will the rise in interest rates impact development projects in the hospitality industry in Florida?    Belt: Since interest rates have risen by only a small amount so far, there seems to be a very minimal effect on activity as a result. Most of our clients do not seem to anticipate significant rate changes in 2016, given the state of the global economy and the high value of the dollar. If interest rates increase significantly we anticipate that multifamily rental projects might be the most significantly affected given the low cap rates presently existing in the market, particularly if rental demand does not continue to increase. GlobeSt.com: Will demand for mixed use projects continue to increase in 2016? Any new trends in that space?   Belt: We are seeing a number of clients propose new mixed-use projects throughout South Florida, and some of them are very large in size and scope. We believe that a variety of demographic factors will continue to create a strong demand for mixed-use projects. However, the residential composition of some of these projects may change, as the condominium market cools. Additionally, we are noticing a greater appetite for mixed-use projects in the smaller urban core areas or busy “suburban environment,” as well as projects in close proximity to transportation facilities. GlobeSt.com: What is the outlook for hotel projects in Latam and will demand continue to increase this year?  Belt: This is a subject of some debate within the industry.  We believe the answer will vary depending on the specific geographic area and that it does not pay to look at the Latin American environment as a single market. In general, most predictions are for continued, but more modest growth and there is some concern that new capacity may exceed demand increases. The Zika virus is also a great unkown.  We do have reports of booking cancellations, particularly in Brazil.