Does LeBron James Leaving Affect Miami Real Estate?
Miami real estate is enjoying an incredible surge in value and volume of new investments. It’s the King of Florida real estate and the hottest market destination for international capital. LeBron James is nicknamed ‘the King’ of the NBA . He is a global icon and athlete that is larger than life – someone that brings much more to the game of basketball than just his role on the floor. LeBron James was the leader of the Miami Heat. He is a phenomenal athlete that has brought the Heat four consecutive NBA finals appearances and two NBA World Championships. Miami loved LeBron and LeBron loved Miami. However, on Friday, July 11th, things changed in a big way.
LeBron James announced via a Sports Illustrated article that he is leaving the Miami Heat next season in favor of going back to the Cleveland Cavaliers. Miami sports fans were quite devastated by the news. After all, who leaves the incredible beauty of South Beach for Cleveland? It’s completely normal to hear of people leaving from Cleveland to Miami, but vice versa??? The Heat ownership and coaching staff, like the fans, were devastated by the news. Should owners and potential buyers of Miami real estate worry? Will they be affected at all by LeBron’s move to Cleveland?
LeBron James has Strong Impact
LeBron James is the most popular star in the NBA. His jersey is the top seller in the league and his departure to Cleveland will impact Miami retail business sales on a multitude of different levels. In 2010, Forbes Magazine estimated that LeBron’s migration to the Miami Heat cost the Cleveland Cavaliers $50million. Since James took his talents to South Beach, the Heat franchise more than doubled in value from $364 million in 2010 to $770 million in 2014. Now, with the latest news happening, the Miami Heat is expected to lose $100 million in value.
Celebrities Loving Miami Real Estate
It just so happened that the timing of James coming to Miami was inline with the ascension of Miami real estate from the depths of the Great Recession. Over the last four years, the Miami real estate market has caught fire again. And Miami Heat basketball games have become must-see events for celebrities of all sorts. Miami led the league with prime television coverage, and celebrities such as the Victoria Secret girls, David Beckham, The Rock and Rihanna all frequented the games. Yes, Miami was already cool, a blissful paradise for visitors, but the success of LeBron James and the Miami Heat drove an incredible flow of celebrities into Miami. They came in and enjoyed the city, were followed by the celebrities…and lots and lots of them bought real estate. Who wants to stay in hotels, when you can have your own mansion on the water anyway?
Miami will be OK without James
Economist Kwame Donaldson, who analyzes Florida for Moody Analytics, said Miamians shouldn’t fret about the James factor on the financial front.”LeBron James’ decision to take his talents back to Cleveland will not impact the Miami economy in any discernible respect,” Donaldson said. “Basketball fans in the area will merely shift their spending and attention to other entertainment venues.” What’s bad for the Heat could be good for the Florida Panthers or the local movie theater, he said.
The Big Picture
In looking at the big picture, I feel that the value that LeBron James provided for Miami Real estate came at just the right time. Four years ago, our markets really needed the boost and attention. We certainly got it, and the market responded quite positively. I previously have discussed, for example, condo units nearly doubling in price at Icon South Beach during that time period. Additionally, median sales prices on Miami Beach increased by 35.4% during the period. We received the boost that we needed from LeBron. Things are much different now, a fragile and unbalanced market has morphed into a juggernaut – a global titan. Thanks for the memories Lebron; it was great while you were here…however, Miami real estate is poised to do exceptionally well without you. Enjoy Cleveland – we’ll be thinking about you in January while sipping a drink poolside.