The high demand and profitability of commercial spaces have spurred foreign investments in South Florida, especially high profile clients from Latin America, interested in protecting and expanding their capital.
“With net rentals (or single tenant net lease), investors get an annual rate of return of 5% to 8%, while they do not need to stay physically in the United States or pay taxes on that property and no maintenance”, explained Alex Zylberglait, experienced real estate broker Marcus & Millichap.
In net rentals, all expenses are the responsibility of the tenant, including administrative expenses. In those cases are multinational companies such as Wallgreen, CVS, Burguer King, among others.
There is greater demand than supply in the commercial and office sector in South Florida. “In many cases the properties that investors are acquiring have the tenants before they are built or bought,” adds Zylberglait, who last year made transactions for 164 million dollars.
According to the Mortgage Banker Association’s, commercial loans for industrial properties, offices and retailers increased by 24% in the second half of 2015, compared to the same period last year.
For Alex Zylberglait, another advantage of acquiring commercial properties is that “the possibilities of obtaining a bank loan are increased by 50%, 60% and up to 70% of the value of the property”.
Fever for the office condo
One of the leading luxury real estate projects in Miami Dade’s commercial sector is Ofizzina, a 16-story construction started in 1200 of the Ponce de León boulevard in Coral Gables.
“This is the first luxury office condo in the county since 2004,” says Camilo López, CEO of The Solution Group.
The project will have almost fifty first-class offices that are “already reserved by diplomatic corps, multinational companies and other clients who have asked not to disclose their names. These types of spaces are scarce, so you will always have clients for them. ”
Additionally, the time needed to approve these projects is shorter. And the prices are “relatively cheap compared to the main cities of the world and the continent, such as Sao Paulo and Buenos Aires,” said Lopez.
Latin America is in a special political and economic situation, marked, among other factors, by the crisis of popularity of Brazilian President Dilma Rousseff, the elections in Argentina, the economic collapse in Venezuela and the protests against Ecuadorian President Rafael Correa.
In this context, Latin American currencies have lost strength against the dollar, so “there is no better time to invest their capital and protect them against inflation than now,” insisted Alex Zylberglait.
Venezuelan buyers, for example, have seen their currency capital halved in less than a year.