Not all developers are in an exclusive relationship with Miami.
Some have wandering eyes, finding new markets elsewhere in the state, country and world, where projects are easier to pencil, and there are more opportunities for growth, panelists said Thursday at The Real Deal Miami Real Estate Forum at the Mana Wynwood Convention Center.
Dan Kaplan, managing partner at Property Markets Group, said his firm is developing outside the city “not because we’re not incredibly bullish on Miami, but because there are a lot of products.”
While Miami is plagued by land scarcity, high construction costs and an exploding development pipeline, other markets provide the opportunity for selective expansion, Kaplan said.
PMG is developing the Waldorf Astoria Residences in Denver, Colorado, and St. Petersburg. Kaplan said that while branded projects in Miami are often simply about “keeping up with the Joneses,” they’re necessary to attracting buyers in new markets.
“When you look at condo living outside of Miami, it’s the ugly stepchild of single-family homes,” he said during the “Miami on the Move” panel moderated by TRD’s Keith Larsen, senior reporter and investigations editor. “The brand has pushed [buyers] to make a decision that 15 to 20 years ago, they might otherwise not have considered.”
Straying outside of Miami comes with its challenges.
When KAR Properties CEO Shahab S. Karmely began developing in Hallandale Beach, people thought he was crazy, he said. In late 2021, the firm completed 2000 Ocean, a 38-story, 64-unit residential building. One mother later, KAR closed on a $128 million condo inventory loan, TRD previously reported.
“The hallmark of an entrepreneur, not just a developer, is there are always naysayers, and you have to cut through that,” Karmely said. “After four or five years in the trenches, you have a product that’s beautiful and great, so you get there, but you have to hang in there for the process.”
Kaplan said every location is unique, and “it’s a lot of trial by fire.”
In Denver, construction costs rival New York City, and the subcontractor pool “isn’t great,” he said. Projects can take longer because there aren’t enough people to build them, and finding contractors and lenders in new markets can be difficult.
But Karmely said the struggles are worth it if it means he gets to do what he loves. KAR is also developing in Utah and Iceland, both places he enjoys spending time in.
“My guiding principle has always been … would I live here myself? Would I design here myself?” he said. “I only do what I enjoy. Developing is so tough. There are easier ways to make a living. You have to love what you’re doing.”
Karmely and Kaplan haven’t abandoned Miami just yet.
Last month, KAR Properties and Fortune International Group scored an $817 million construction loan from private lender Tyko Capital for Faena Residences Miami, marking the largest condo construction loan ever in Florida.
PMG wore that badge in 2024, when the firm and its partners nabbed a $668 million construction loan for the Waldorf Astoria Hotel & Residences in downtown Miami. Last year, PMG secured a $413 million construction loan for One Twenty Brickell Residences.
Kaplan said PMG builds “wherever we think there’s a margin,” and the firm is constantly looking for development opportunities and ways to stay ahead.
“We don’t want to be the guys chasing the market,” he said. “We want to be the guys figuring out what the next market is going to be.”
Read more
Faena Residences on the Miami River scores $817M construction loan
PMG, partners score record $668M construction loan for Waldorf Astoria supertall
Shahab Karmely nabs $128M condo inventory loan for new Hallandale project
