Legal Guide: The Miami Commercial Real Estate Development Process

The commercial real estate development process involves multiple phases, each with its own set of challenges. Throughout this journey, you need the guidance of an experienced commercial real estate attorney to keep you on track toward your goals and minimize the financial risks.

For more than 70 years, our Miami commercial real estate attorneys at Galbut, Walters & Associates LLP have been guiding clients through each step of the process. We handle commercial and residential real estate developments valued in the millions and billions of dollars, from conception to completion.

What Are The 3 Main Steps In The Commercial Real Estate Development Process?

Many business owners and investors are unsure where to start, but the Miami real estate development process typically follows these stages:

1. Site selection: The initial phase of real estate development involves identifying and acquiring suitable sites for a project. An attorney plays a pivotal role in this phase by examining title documents, zoning laws, environmental regulations and land use restrictions to assess the feasibility of the proposed development.
2. Development/construction: Once a site is secured, the development and construction phase begins. Attorneys continue to play a crucial role by navigating an array of legal matters, including contracts, permits and regulatory compliance. They draft and negotiate contracts with architects, contractors and other stakeholders, ensuring that the terms are fair and protective of the developer’s rights.
3. Closeout/operation management: The closeout phase marks the completion of the construction and the transition to the operational stage. Commercial real estate attorneys continue to be instrumental in finalizing any outstanding legal matters, including the resolution of construction liens, compliance with warranty obligations and the negotiation of lease agreements. In the operational phase, attorneys assist with ongoing legal matters such as property management agreements, lease disputes, and compliance with evolving regulations.

In short, if you want the commercial real estate development process in Miami to go smoothly, get an attorney on your side early.

Frequently Asked Questions

Commercial real estate transactions and development can be complex. Here are a few of the questions our firm sees often.

What are the tax implications of Opportunity Zones in Miami?

Opportunity Zones in Miami give investors in commercial real estate unique options that they won’t find elsewhere. When investors agree to hold for at least a decade, they do not have to pay taxes on the capital gains they accumulate.

As the value of that investment increases, this can create significant savings. The same construction or development project outside of an Opportunity Zone could trigger significant taxes on these capital gains. The way the law is structured makes these areas highly attractive to those looking for long-term investments.

Exactly how the tax laws apply depends on the situation. For instance, if someone sells an asset and then invests the proceeds in one of these zones within 180 days, they can defer capital gains taxes for the next two years. If they maintain that investment for a decade, their capital gains tax liability is reduced by 15%, and they don’t have to pay any taxes on appreciation within the Opportunity Fund.

How can construction delay risks be mitigated?

Delays are always a risk, but there are steps that can be taken to reduce the likelihood. It’s very important to have a detailed project schedule in place from the very beginning.

In some cases, developers can anticipate potential delays, such as material shortages or worker shortages. Proper scheduling and advance planning can help avoid these issues.

It’s also important to have a realistic timeframe, which may mean building a contingency plan into the schedule rather than anticipating the shortest possible timeline. A flexible plan allows for adjustments to address delays in real-time, helping to keep the project on track.

Recent Miami zoning changes: What are the impacts?

Many of the recent zoning changes in Miami have focused on mixed-use development. For example, the T4 zone is in a medium-density area, and it focuses on buildings for multiple families or for mixed-use, such as buildings with both residential and commercial spaces.

These are called transect zones, and each has its own regulations that developers need to be aware of. These regulations include:

• Permitted activities within the zone
• Lot size requirements
• Building height restrictions

Our experienced team can help you explore the different zones across Miami and determine which may be right for your project.

Get Experienced Legal Guidance With Your Real Estate Development Goals Today

Speak to a commercial real estate attorney with generations of experience in the Miami area. With Galbut, Walters & Associates LLP, you get exceptional service that is tailored to your unique needs. Send us an email or call us at 305-701-9811 to get started.