🔥 Storage Wars

Miami warehouses are hot. Plus: Jeff Bezos finds a half billion

Happy Friday Highest & Best! Stroll through a cavernous warehouse with me as we explore the the South Florida real estate week. Here’s the playlist:

📦 Can you believe I’m writing about warehouses?
💰 New Florida man Jeff Bezos gets a half billion dollar welcome gift
🤺 Miami homebuyers are getting jostled by investors
 💵 A $55 million condo pre-sale

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OK, let’s get to it!

Miami’s Storage Space Scramble

You thought buying a home in Miami was competitive? Try leasing space in a warehouse.

The area’s population boom has sent retailers and logistics firms scouring for places to store more stuff that South Floridians want to buy. Builders and home improvement contractors are also vying for space to warehouse their materials.


Food and beverage firms need repositories for their growing stockpiles, which go to hotels, restaurants and supermarkets. And those mega cruise ships? They too have large items that need a place to wait.

So there’s a race on in Miami for the the choicest, best located (and available) warehouses. And those foraging for storage are paying up big:

  • Rents for warehouse space in Miami set a record in the fourth quarter of 2023, at $17 per square foot, according to a report by brokerage JLL. The rents are 14% higher than they were a year earlier.

  • Miami warehouse vacancies also set a record: they were the lowest ever, with a vacancy rate of 1.6%.

  • There are currently 50 potential tenants seeking to lease over 100,000 square feet of warehouse space in the area, brokerage CBRE said in its own report.

“Miami really tends to be the hub because that’s where the majority of the population is,” said Brian Smith, executive managing director at JLL in Miami, who oversees the firm’s industrial leasing business in South Florida.

Warehouse leasing has a multiplier effect, Smith said. When Amazon, for example, takes up space in one storage facility, suppliers of cardboard boxes, angling for business, will seek to locate warehouse space nearby.

Miami’s outsized demand for storage is also inspiring investors, who are wagering that now might be a good time to buy a warehouse and lease it out to tenants.

In December, the founder of clothing retail chain Zara paid $113 million for a cold storage warehouse in Hialeah, Florida, near Miami. (See our Dec. 31 issue: “Financing and Fridges”).

The month before, Boston-based private equity firm Rockpoint paid $183.8 million for a development site in Pompano Beach, with plans to build a 1.5 million square foot warehouse. At the time, it was the sixth-most expensive development site to be sold in 2023 across all of southeast Florida.

Catch up on recent Highest & Best issues:

Jeff Bezos’ Miami Move Makes Him $600 Million Richer

Jeff Bezos got richer by moving to Florida

Amazon founder Jeff Bezos announced last year that he’s moving to Miami to be closer to his parents and to his rocket company, Blue Origin.

But there’s another perk to his leaving Seattle for the Sunshine State: $600 million in tax savings.

Bezos said this month that he plans to sell 50 million shares of Amazon stock by January 31, 2025. That’s about $8.7 billion worth, based on the stock price from earlier this week, CNBC reported.

If Bezos were still living in Seattle, his home of 30 years, those proceeds would be subject to Washington State’s new 7% capital gains tax on profits from stock sales of more than $250,000.

And now, they’re not.

Florida has no state income tax nor a tax on capital gains. So Bezos —the ultimate “Florida man” —will save $610 million in taxes on the entire sale of those 50 million shares, CNBC reported. That tally is based on Amazon’s share price from this week. He’ll save even more should the company’s stock value climb.

Bezos has sold billions in Amazon shares nearly every year for two decades to fund his philanthropy, his space company, his mega yacht and his real estate purchases, CNBC said. He stopped selling shares in 2022, the year Washington’s capital gains tax took effect.

But he’s making up for that now. Bezos sold 36 million shares— or $6 billion worth — in the past week.

Miami Homebuyers Getting Jostled by Miami Home Investors

Say you’re scrolling Zillow for a home in South Florida. You spot something cute in Miami— for less than $1 million! You bookmark it and maybe even schedule a showing.

Chances are an investor will beat you to it.

Investors bought 31.5% of all homes that sold in Miami in the fourth quarter of last year, according to a report by brokerage Redfin. That’s the highest share of any city in the U.S.

And it’s nearly double the national rate. Investors— defined as any entity that buys a property with the aim of renting it to others — purchased 18.5% of all U.S. homes that sold in the final three months of 2023, Redfin said.

Most investors in Miami’s home market are “seeking short- and long-term rental opportunities,” said Rafael Corrales, a Redfin broker in the city. And they “tend to pay all cash, making it harder for financed buyers to compete,” he said.

Below, see a Redfin list of U.S. cities where investors accounted for the largest share of home sales in the 4th quarter of 2023:

Share of 4Q23 investor home purchases in the U.S. (Source: Redfin)

A New Condo Price Record for Sunny Isles Beach

St. Regis Residences pool deck, Sunny Isles Beach (Photo: Binyan Studios)

The St. Regis Residences in Sunny Isles Beach — under construction and not complete until 2028 — secured a buyer who’s committed to pay $55 million for a penthouse, the developers said.

The agreed-upon sale price would make this the most expensive condo ever sold in Sunny Isles Beach, according to Jonathan Miller, president of appraiser Miller Samuel. It would be the second-highest price ever paid for any condo in Miami-Dade County.

The buyer of the penthouse— which has over 9,800 interior square feet—is from South America, according to Edgardo Defortuna, president and CEO of Fortune International Group, which is co-developing the project with Chateau Group.

The condo project, consisting of two 750-foot towers, will be the tallest residential property on Sunny Isles Beach, after a local zoning change allowed for higher buildings, Defortuna said.

The southern tower, on which construction began six months ago, has buyer commitments for 80% of its units. The second tower is launching sales now for its 170 units.

About 65% of the purchasers at the St. Regis are from the U.S., Defortuna said — a contrast to previous Miami condo ventures in which Latin American second-home investors were the backbone of the buyer pool.

“The buyer is increasingly more of a user today than they used to be,” Defortuna said. “They’re looking for either a permanent residence or a significant residence where they’ll spend longer periods of time in South Florida.”

The St. Regis Residences will be the tallest towers in Sunny Isles (Photo: DBOX)

That’s it for today!

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