Top South Florida Real Estate News in 2023

In 2023, the relocation of soccer sensation Lionel Messi and Amazon founder Jeff Bezos to Miami captured global headlines. At the same time, the South Florida real estate market demonstrated resilience amid challenges faced by other U.S. regions, factors such as higher interest rates, construction costs, and insurance premiums limited deal volumes across various sectors.

Despite these challenges, several noteworthy sales set records, including car dealer Michael Cantanucci’s $170 million purchase of an oceanfront estate in Palm Beach, marking a record residential sale in Florida. The commercial sector saw a milestone with Trinity Investments and Credit Suisse acquiring the 1,000-room Diplomat Beach Resort in Hollywood for $835 million, establishing a new benchmark for hotel sales in the region.

Developers proposed numerous apartment buildings and office projects. Still, signs of strain emerged in the office and multifamily sectors, notably in aging suburban office stock and projects where initial underwriting no longer aligns with current market conditions due to the rise of remote work.

The rise of branded residential developments from Coconut Grove to West Palm Beach fueled interest among potential buyers. However, uncertainties lingered about how many of these projects would come to fruition.

In response to market challenges, some developers sought additional equity or new partnerships, while others hoped to weather the storm until debt market conditions improved.

Real estate continued to intersect with politics, evidenced by scandals at Miami City Hall and other South Florida cities. Miami Mayor Francis Suarez faced investigations revealing payments of at least $170,000 from ex-Location Ventures developer Rishi Kapoor, linked to a stalled project in Coconut Grove.

On the legislative front, Governor Ron DeSantis signed a significant affordable housing bill into law, allocating hundreds of millions of dollars and offering incentives for developers incorporating workforce housing. The Live Local Act’s full impact remained uncertain, with some municipalities attempting to establish guardrails due to its superseding local height and density regulations.

DeSantis also signed a controversial law that nearly banned Chinese national real estate purchases and restricted buyers from select countries, a move currently under federal court challenge.

The insurance crisis, exacerbated by difficulties securing coverage, particularly impacted condo owners and associations. New statewide legislation required associations to undertake costly financial reserve studies, fully fund reserves, and bring properties up to code, with some associations resorting to special assessments to cover insurance costs.

Allegations of fraud at condo and townhouse communities emerged in the wake of the multimillion-dollar fraud at the Hammocks, one of the state’s most significant associations, unfolding in court. Despite the Federal Reserve’s announcement of planned interest rate cuts, further distress in the real estate market is anticipated in the coming year.