Presented at CREW Miami’s Luncheon Meeting, April 17, 2018
Moderator: Sebastian Juncadella, Advisor, Fairchild Partners
Panelists: Jorge Guerra, President and CEO, Real Estate Sales Force (RESF);
Ana Maria Rodriguez, Vice Mayor, City of Doral; Juan Ruiz, Executive Vice President, Blanca Commercial Real Estate, Inc.; Brian J. Smith, Managing Director, JLL
Doral’s founders, Doris and Alfred Kaskel (Dor + Al = Doral) named the area after themselves when, in 1962, they bought 2,400 swampy acres for $49,000 to build a golf course and resort as a destination for guests at their Miami Beach hotels. Kaskel and Lennar added residences in 1980, but growth stalled from 1983 to 1985 when Miami-Dade County imposed a building moratorium to protect the area’s water wells. Once the ban was lifted, Doral experienced rapid growth; soon residents, dissatisfied with the services received for tax dollars paid, began lobbying for incorporation. It took a while, but Doral was incorporated as a municipality in 2003.
Rodriguez: Armando Codina’s development of Downtown Doral (the former Koger Center) marked a turning point in Doral’s evolution by supplying a needed anchor for the community. Today it is a finalist for Amazon’s new headquarters and the former Pepsi property, now owned by Terra Group, is a potential site for Miami’s Major League Soccer stadium.
Juncadella: Doral business used to be dominated by industrial uses, but today it is a tiered investment market. What makes it so successful?
Smith: Industrial uses in West Dade began with Hialeah’s textile manufacturing. Like Hialeah, Doral is close to the airport, and Doral’s infrastructure meets today’s transportation access demands. It has industrial, retail, office, and residential properties — and all are high end. Doral’s rental rates for industrial all are near the top of the scale, but users want their warehouses to be located where valuable employees will stay and be happy. The residential, retail, and restaurant mix now competes with Coral Gables. All types of companies, not only manufacturers, need industrial space, and third-party logistics companies specializing in last-mile distribution are booming.
Juncadella: Doral’s Airport West office market is the largest in Miami Dade, with more square footage than Downtown or Brickell. What makes it so desirable?
Ruiz replied that the area’s central location, airport access, and recent urbanization are key factors. Now that Doral has residential properties in all price ranges, into the millions of dollars, decision-makers want to live there. It has the amenities they want and is near their work. Another reason office space is succeeding is the co-working trend, a dense office configuration that packs more people into office spaces. This puts a strain on parking which, unlike in Downtown or Brickell, is free in Doral. The availability of free parking substantially reduces overall rent for office users, and that is a draw.
Juncadella: Who is moving to Doral to live?
Guerra: “When I began selling residential real estate in Doral 20 years ago, my first home was $127,000. The average condo price now is $297,000 and rising. Single family homes listed at $500,000 are taking six months to find buyers, but sale prices represent a 20 percent increase over the previous year. The first wave of Doral homebuyers were Venezuelans, including political refugees with flight cash. A second wave arrived after that country’s next election. Now Brazilians are choosing Doral. A variety of expatriates have made Doral their community, and this sense of community is one of Doral’s most powerful draws. It’s a good work-play-live environment that compares well with Coral Gables, but has the benefit of much newer construction.”
Juncadella: Giving the example of a block that contains a warehouse, a school, and a medical building, he asked, “How do we ensure a community’s positive synergy, when land uses are blended so radically in a single block?”
Rodriguez: “At city council meetings citizens protest every proposed zoning change. Mixed use is winning out over the old suburban model restricting certain uses to defined locations.” She believes that elected officials must look forward, never back, and noted that “we have all A-rated schools, and the second-lowest tax rate in Miami-Dade.” The city might annex nearby areas of unincorporated Miami-Dade County, and entertainment and media are looking at Doral.
Juncadella: Talk about Doral’s live-work-play environment.
Ruiz: When JP Morgan heard Codina’s plans for Downtown Doral, they were onboard. The city had no plans for mixed use before that project. Current traffic congestion is the result of people’s desire to live near their jobs. “Years ago when someone moved to Doral, they wanted to print Miami as their business address. That trend has reversed and now they prefer a Doral address over Miami. Various city rankings have listed Doral among the fastest growing cities and best places to live.
Juncadella: What about adaptive reuses of warehouses like what’s going on in Wynwood and Hialeah? Are non-traditional uses a trend in Doral, and will that affect rental rates?
Smith: Already NBC Universal/Telemundo Enterprises has put a huge new headquarters into a space across the street from Doral’s boundary line. (Smith led the team that inked the transaction.) “But Doral’s old product is still functional. You will see case-by-case reuses eventually, but few are happening right now. We’re seeing limitations on industrial zoning, and that’s bad for those uses. I’m in favor of flexibility.”
Juncadella: Parking is an issue. Will structured parking be recaptured for office and other uses or will Doral’s abundant parking remain a strength?
Ruiz: Public transportation in Miami is still very limited, and does not exist in Doral, so conversion of parking for other uses is unlikely.
Juncadella: What does Doral mean to its users, and what must it address in order to grow?
Guerra: Public transportation and great leadership.
Ruiz: Transit is needed everywhere in Dade
Smith: A hospital (Panelists said Jackson Health System purchased land in Doral to build a new campus there)
Rodriguez: Forward-thinking leadership.
Juncadella: When a Doral office or industrial tenant runs out of space, how does that affect other markets?
Smith: Doral has no more land, so tenants are going to Medley, Sweetwater, and Hialeah Gardens because those communities have access to Doral’s amenities. He commented that Codina and Fairchild Partners are leading the new cycle of industrial and office development in the area.
Juncadella referred to a parcel of open land in use as a radar field. Given that this technology could change, what do you think will happen in Doral in ten years?
Rodriguez: The tile district is sinking and has brownfield issues, but she predicts that slice of Doral will become an art district similar to what is in Wynwood.
Smith added that as pieces of empty land are developed, schools and roads will be affected, depending on how the land is used.
Ruiz: The Terra-owned former Pepsi property at 79th St. will change. It is being considered for soccer stadium, and 4,500 new homes are coming. He believes Doral will be a leader in the use of automated trucks and cars.
Asked by an audience member whether a real estate bubble could develop in Doral, panelists unanimously said no.
Smith: Not in industrial, because that sector’s growth is very carefully controlled.
Ruiz: New office construction has to be preleased to obtain financing, so speculation cannot create a bubble.
Guerra: International buyers flush with cash are dwindling. Their presence kept the quality high for residential real estate in Doral. This has attracted locals to Doral living, so when the supply of international buyers dries up, locals will take up the slack.
— Susan Cumins, CREW Miami member since 1998