5 Questions With Bradley Colmer of Deco Capital
Deco Capital Group spent years getting approvals for Eighteen Sunset, a mixed-used building at 1769 Purdy Avenue in Miami Beach. Now that the project is under construction, Deco Capital is reeling in tenants.
New York financial firm Pretium Partners has leased 11,591 square feet of office space at Eighteen Sunset, while restaurant chain Uchiko has taken 6,000 square feet of ground-floor retail space. The project includes 40,000 square feet of office space and 17,000 square feet of ground-floor retail and restaurant space.
Bradley Colmer is founder of Miami-based Deco Capital. He spoke to Commercial Observer about his business strategy.
This interview has been edited for length and clarity.
Demand for office space has been a hot topic since the pandemic made virtual work a viable option. What are you seeing on that front?
Bradley Colmer: It’s a different question if you’re talking about South Florida versus the rest of the country. In South Florida, there’s a huge amount of demand for the Class A, Class A-plus space we’re delivering with Eighteen Sunset. We’re intentionally targeting the best-in-class companies that want a presence in financial hubs. Miami has now emerged.
The kind of space people want has also evolved. It’s no longer massive floor plates, with internally focused space. Our space has quite a bit of indoor-outdoor connectivity. That type of highly amenitized space was what Pretium was looking for. The fact that we have this work-live-play dynamic in Sunset Harbor is a huge appeal to decision-makers. One of the things that’s great about Sunset Harbor is not just its proximity to multimillion-dollar homes, but it’s also a short drive to Edgewater and Brickell. Most of our employees and employers will live within five miles.
For years, South Florida boosters touted the region as an alternative to California and New York, but nobody seemed to listen until recently. Why the sudden momentum?
You probably know the answer to that question, but there’s no question the pandemic was an accelerator of a trend that had already been going on. A big part of it is the political climate in the Northeast and California. Those places have higher taxes and have more liberal politics in general. Miami has zero state tax, and also has a handle on crime. It’s the right political climate for the moment. It’s not just taxes — it’s also the lifestyle Miami offers. It’s a beautiful city on the water. You’ve got the weather, you’ve got the lifestyle. It’s an exciting international destination. We appeal not just to New York but also to much of Europe and South America.
What’s your biggest challenge?
With Eighteen Sunset, the project came with a myriad of challenges just in terms of entitling the building to the point where we were ready to go. The City of Miami Beach is not known for being friendly to development. We had to go through a multiyear process of doing an upzoning and a neighborhood overlay. Going forward, Miami is the epicenter of a lot of growth. Now you’ve got property owners and other developers driving up prices of land. There was over the last year or two years a little bit of a frenzy that took place. It’s a market dynamic that’s challenging to develop in, in addition to what’s going on in the capital markets.
How is the housing affordability squeeze affecting you as you recruit tenants?
As Miami continues to grow, there is a stress being put on housing. On the one hand, what you’re seeing is a chicken-and-egg thing. You’ve got a huge number of people who want to be in South Florida and Miami. On the other hand, when companies are considering moving here, they’re looking to see that their executives and employees can afford suitable housing. It’s certainly much more expensive to buy something in Miami than it was a couple years ago, let alone a decade ago. The double whammy is that mortgage rates have gone from 3 percent to 6 percent.
What’s your next project?
We own a large tract and a series of buildings in Allapattah right next to the medical district in Miami. We’ve been working on various concepts there and recently completed an upzoning of that site. We’ve been working on some additional projects in Sunset Harbor. Not ready to announce anything there, but that’s certainly an area where we want to continue to develop and see grow. We’re starting to look at multifamily.
Jeff Ostrowski can be reached at firstname.lastname@example.org.