MIAMI –- (RealEstateRama) — The MIAMI Association of REALTORS® Commercial Alliance (RCA MIAMI) analyzed the impact of self-driving cars, the rise of e-commerce, the growth of industrial real estate and the largest proposed mall in the United States at its fifth annual RCA MIAMI Midyear Update held recently in Coral Gables.
“The way we did business 30 years ago or 20 years ago or even 5 years ago is changing,” said RCA MIAMI panelist Jose I. Juncadella, an office and industrial Miami broker and principal of Fairchild Partners. “It’s important for all (brokers) to understand that we have to move on because technology is improving.”
New Technology Disrupting Real Estate
Real estate is one of three industries ripe for technology disruption, according to RCA MIAMI keynote speaker Geoffrey Kasselman, the executive managing director at the Chicago office of Newmark Grubb Knight Frank. New technology, automation and digitization will also impact banking and healthcare.
Real estate will be impacted by the proliferation of self-driving cars as they would significantly reduce the need for today’s parking garages and surface lots. The structures, which often sit in prime real estate locations, could be reimagined in new ways (housing, retail, commercial and healthcare).
Self-driving cars would also allow passengers to travel hands-free and stay connected, increasing personal productivity and the amount of time that commuters are willing to spend in the car. Development in rural or suburban areas could increase as passengers adapt to long commutes.
Growth of E-Commerce
E-commerce comprises just 8.1 percent of U.S. retail sales, but the industry is growing fast. U.S. e-commerce sales in 2016 totaled $394.9 billion, a 15 percent increase from 2015.
Amazon.com is the big leader, posting increased net sales of 27 percent to $136 billion in 2016 with a $2.4 billion net profit compared with a $596 million profit in 2015. The rise of e-commerce has led some to believe it will bring the death of brick and mortar shopping malls. Malls, such as the proposed American Dream Miami mall, argue physical stores continue to be the core of the shopping experience.
American Dream Miami
If approved, American Dream Miami would be the largest theme park and mall in North America. The proposed complex in northwest Miami-Dade County which would house an indoor ski slope, water park, movie complex and more. Officials say it could be completed by 2022.
American Dream Miami would total 6.2 million square feet, including 3.5 million square feet of retail, plus 2,000 hotel rooms. American Dream Miami estimates it would receive 40 million projected visitors and create 14,500 permanent jobs.
“It’s an opportunity for the commercial world to interact with consumable world directly,” said Robert Gorlow, who is managing American Dream Miami for Triple Five Group.
Industrial Real Estate: The Hottest Asset Class
Absorption for industrial real estate hit a new record nationally and locally last year. The growth of Amazon, a globe-spanning retail giant that is the fourth most valuable firm on the U.S. stock market, is a major reason why.
Amazon will soon have 1.4 million square feet of space in the Miami area, Juncadella said. About 20 to 30 percent of all industrial absorption around the world was by Amazon.com, Kasselman said.
Population growth has propped up all real estate sectors but has favored the industrial sector specifically. The booming tourism industry has also helped fill the region’s warehouses. Nearly 60 percent of the goods sitting in local warehouses end up in South Florida.