Venture Capital Stacks Up in South Florida


South Florida venture capital is heating up.

According to reports from eMerge Insights, so far for 2019, over $1.5 billion has been invested in 60 startups and later-stage companies in South Florida. That’s more than the $1.38 billion invested in all of 2018.

“We always envisioned Miami would be a hotbed of entrepreneurial activity, and we now have the comparative data to trace how much this ecosystem has evolved and the transformational impact we are making as a community,” added Melissa Medina, president of eMerge Americas.

Now the majority of that number was put into place by the estimated $900 million round into the SoftBank-backed  REEF Technology (formerly ParkJockey), and $280 million into AR unicorn Magic Leap. But still with those numbers the Miami metro area ranks 7th in the nation.

Here are some other findings of the mid-year report: source: eMerge Insights.

  • South Florida startups snagged three-quarters of the state of Florida’s venture capital in dollar value and half of the deals in the first half.

  • Palm Beach County companies snagged the most deals in South Florida – 42% of the pie. Miami-Dade startups took 38% and Broward drew 20%.

  • Florida is also in record-setting territory with more than $2 billion invested in 117 startups throughout the state. Like in South Florida, three quarters of the dollars were from mega-rounds: In addition to the REEF and Magic Leap rounds, Clearwater’s KnowBe4 raised $300 million in the first half.

  • South Florida’s top venture industry sector was healthcare. Health-tech, medical device and life science companies encompassed a third of the deals in South Florida, up from 23% for all of 2018. Recently, Startup Genome also identified healthcare as a significant sector for South Florida’s ecosystem.

  • About 63% of the 2019 South Florida deals so far have been angel and seed stage, about the same rate as in 2018, and significantly higher than the rate nationally.

Vegas Leads YOY and Monthly % Gains Across The U.S (again) Corelogic Case-Shiller Reports

The Las Vegas real estate market continues to lead the nation in year-over-year price gains two years in a row with the uptick in all economic verticals.

Although across the board home sales seem to be softening at what some are calling the peak of markets the S&P CoreLogic Case-Shiller 20-city home price index increased 2.4% in May from a year earlier, according to a Tuesday report. Price growth decelerated slightly from the 2.5% year-over-year gain in April.The strongest price gains were in Las Vegas at 6.4%, Phoenix at 5.7% and Tampa at 5.1%.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covers all nine U.S. census divisions.”

EB-5 Investment Thresholds Change (Nearly Doubling)

The U.S immigration investment visa program EB-5 was introduced in 1990 as a “fast track'“ route for foreigner nationals to obtain legal immigrant visa/green cards for themselves and their derivative family. The general rules have always been known for the direct investment of $500,000 into a business located in TEAs (targeted employment areas) defined as high unemployment regions and $1,000,000 for non-TEA areas. The most challenging part of the program was creating and maintaining 10 full-time jobs per business.

These rules announced by the USCIS are increasing these baseline requirements as follows.

Minimum EB-5 investment amounts will be raised from $1M to $1.8M, or from $500K to $900K in a TEA. Minimum investment amounts will also automatically adjust for inflation every five years.

357 Investments has worked directly with projects raising both debt and equity through the EB-5 investment visa program. We were most actively involved during the years of 2010-2013 as we worked on several deals ranging from singular investments e.g restaurant concepts which involved both the acquisition of brick and mortar real estate and the implementation of the retail business itself to limited partner participation in much larger development projects which required very specific, customized operating agreements to allow for the job credit qualifications.

Overall the EB-5 program is a challenging program to select, oversee and navigate which often requires significant additional legal, transactional and sometimes carrying costs on top of the base investment. However, it has proven to also be a win-win for developers looking for competitively priced debt and for foreign investors looking for a way to obtain legal status in the U.S albeit an expensive one.

Approximately 10,000 green cards are available through the EB-5 program each year.

For the formal details check the USCIS website here.

Mapping New Developments (Las Vegas)

We’re putting together a simple interactive map which we’ll continuously update as new projects are announced. Over time the aggregation should have an attuned focus on the up and coming Art and Gateway districts ( Main Street and Commerce Street). Keeping a pulse on new developments help gauge the mapping of retail foot traffic, residential rental unit density/rates and both retail/office absorption rates all of which help the broad and narrow rolling forecasts for any prospective or existing investments in the immediate areas. Two multi-family complexes in our portfolio are equidistance between Summerlin and the Arts District, accessible right off the W Charleston Blvd corridor.

Downtown Miami and Lemon City Pipeline ( projects underway)

Although soaked with all the chitter chatter of the future wrath of mother nature, Miami’s commercial developments seem to be stubbornly unweathered. With over 200 major commercial developments underway just in the Greater Downtown Miami area, this is one of the major coastal metropolitans with continuous magnate dollar draw and a forever-changing skyline. Economic spillover continues to happen from East to West and North West of the Biscayne, most of which is helmed by the unanimous speculation on higher ground ground up and redevelopment buy-hold plays due to the unabated sea level rise along the beaches and bay. We are most focused on the North Western activities and for good reason, already the past two years there has been buzzing buyer activity within Lemon City aka Little Haiti just west of Bay Shore area of Biscayne. Now with the recent approval of the major (and controversial) commercial project known as Magic City (video below) this anchor is sure to ramp up the orchestration of fellow developer exertions.

We’ll be providing a series of blog posts on spec neighborhood profiles in which we are continuing to survey for all rezoning and development opportunities in the form of existing multi-family, retail, office and industrial flex space. For the current downtown pipeline check out the Esri interaction Map for more details.
and the Crane Watch Interactive Map.

GOOGLE + Henderson Las Vegas

Google just broke ground on their new $600MM data center set to open in Henderson, Las Vegas. The swath of new servers will be located on Warm Springs Road between Boulder Highway and the 5-15.

The direct economic impact brings an estimated 50 new full time jobs with the tech giant and $1M in donations to local charities by Google.

This is Google’s largest foot print in the state of Nevada, and in Las Vegas which already hosts the other mega data center on the other side of town SWITCH’S Super Nap. Per Wikipedia: “In 2017, LAS VEGAS 10 opened adding approximately 350,000 square feet of data center space.[20][21] “The Core Campus located in Las Vegas consists of eleven operating data centers spanning over 2 million square feet. At completion of construction, The Core Campus will measure more than 2.3 million square feet with 12 buildings completed”

Las Vegas continues to attract corporate expansions from different industries with it’s robust economic versatility. Being one of the most popular conference destinations in the world, the city has created a vital economic crutch in its conference hosting and ancillary services. The YOY trends have been on the uptick since 2009. 357 Investments proudly continues to hold our investments in multifamily complexes within the city and will keep a pulse on the continued growth with the new coming attractions in queue such as the NFL Raider’s stadium, AREA 15, redevelopment of the Art’s District and the other major casino developments under construction e.g Resorts World, The Drew and downtown’s new Circa by the Stevens Brothers.