Real Estate Developers Wanted for Miami International Airport

October 10th, 2007 · Comment Here · News

The Miami-Dade Aviation Department wants real estate developers and investors.

The department is looking for developers to create projects on the 190 total acres of land that the agency owns at Miami International and Kendall-Tamiami Executive airports. It looks like they want some big money projects too - from $4 million to $50 million dollars and possibly even larger projects than that. The department desperately needs revenue to continue funding the aviation department.

Logo of air travel at Miami Intl Airport in South Florida - MIA “We have got to increase our non-aeronautical revenues,” said JosÃ© Abreu, who is the director of the aviation department. “We have debt from the North Terminal project, and we need to create investment opportunities for property that is now non-productive.” Mr. Abreu notes that, “I don’t need developers â€” I need investors.”

The situation is that since the airport is in dire need of funding, they would not generate the amount of revenue they would need just by having the property leased out. They would need the higher returns where they get a percentage of the revenue raised by the development.

What type of businesses are they targetting? What do they want to see?

They’ll look at all offers and consider most, but they really prefer those projects that have the potential to bring big money and revenue. What’s the reason? More revenue means big money for the airport. These projects will be the first in the queue for consideration. Potential revenue is the biggest consideration in this matter.

What’s the current state of the Miami International and Kendall-Tamiami Executive airport area? Is it suitable for commercial and investment projects?

All areas in Miami that are on the East side are definitely hot. And we know land in desirable areas is dwindling fast. So since there’s great growth in that area and it doesn’t look like that growth will stop any time soon, there’s going to be demand. Population keeps rising in Miami-Dade county and that demands to have the necessary facilities to serve the booming growth of people joining the Miami area.

What are the office rental rates and vacancy rates in the Miami International Airport area? What are the commercial rental rates and vacancy rates in other areas?

In the Miami International Airport area there’s an office space vacancy rate of 8.5% (down from 19% at the beginning of 2004). Industrial rental rates in the area have been rising from $6.41 per square foot in 2004 to a current rental rate of $9.14 per square foot. Compare that to Kendall, that has office rental rates averaging $25.36 per square foot with a vacancy rate of 3.2%.

What kind of impact will this have in the surrounding Miami and Kendall airport community?

You can expect this to really help with Miami employment. “Obviously, we’d also like the development to generate jobs,” said Miguel Southwell, who is a development specialist for the aviation department. “We’ll be seeking the highest and best use for these properties.”

Are there any limits on what can be built on that land?

What’s being offered is a mix of existing properties that need renovation and undeveloped land parcels. Projects are open to both aviation relation and non-aviation related.

Is this open to speculators that want to sit on the property?

Those that want to get in this project just to get into “land banking” should not bother according to Mr. Southwell who says, “We would like to see these properties developed in some minimal amount of time. If certain milestones are not met we will take action to permit access by others to that property.”

What is the definition of land banking?

Land banking is when you purchase land and you have the intent to hold onto that property until it’s going to be very highly profitable for you to sell to others for much more than you originally paid.