MIAMI REPORT FEBRUARY 2013
TABLE OF CONTENTS 3
Welcome Letter
5
Standing Inventory
12
MLS Inventory
16
New Construction Inventory
20
The Myth Debunked
22
Report From the Ground
23
South American Market Report
24
In The News
25
In Their Words...
2 | ISG MIAMI REPORT
FROM THE ISG PRINCIPALS FEBRUARY 2013
Welcome to the 4 Year Anniversary Edition of ISG’s Miami Report. From inception, our goal has been to deliver accurate and interesting data regarding the state of The South Florida Real Estate Marketplace. We have monitored the “oversupply” of inventory that remained from the last development boom. We have debunked the myth of gloom and doom while identifying opportunities for the ambitious and entrepreneurial. Craig Studnicky & Philip Spiegelman
Business, as we knew it, is not the same. That is reason to rejoice. The old
ISG Principals
business model was not sustainable. We needed to create a NEW PARADIGM while selling the remaining condo units of standing inventory. We needed to establish a method of doing business that would allow the introduction of new construction in the absence of conventional financing. The ISG Miami Report has always told the story in a clear and concise manner. Today we discuss THE NEW PARADIGM. With the Related Group, ISG sold out the first new construction project to lead our industry into the new future. We successfully introduced the “Latin Sales Model” which requires the buyers to pay a substantial portion of the purchase price during actual period of construction. In our first endeavors, we secured 80% of the price during construction. Now the formula has settled at between 50% to 60%. This NEW PARADIGM is how business will be done going forward: only the strongest and most trustworthy developers will be selected to do business this way. Many will try but who will succeed? Today’s market is a “Brave New World” inhabited by the best and the brightest.
“BUSINESS, AS
ISG will continue to chronicle the evolution of The New Miami.
WE KNEW IT, IS
Thank you for the outpouring of interest and support in our Report.
NOT THE SAME. THAT IS REASON TO REJOICE.”
ISGWORLD.COM
ISG MIAMI REPORT
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May 2005
AS OF MAY 2005: 62,000 condo units
were proposed to be built in Downtown Miami and Brickell.
IN REALITY:
Only 17,502
condo units were built and finished.
AS OF NOW: ONLY 794 CONDO UNITS REMAIN While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this report and expressly disclaims liability for errors and omissions in its contents.
4 | ISG MIAMI REPORT
standing inventory AS OF DECEMBER 2012
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17 26 27 21 22 25 24 23
5
12 11
9
19 20
3 4 1 2
14 28 13
15
10 8
6 7
1. 500 Brickell East − 500 Brickell Ave 2. 500 Brickell West − 55 SE 6 St 3. 1060 Brickell −1050 Brickell Ave 4. 1050 Brickell −1060 Brickell Ave 5. Asia Brickell Key − 900 Brickell Key Blvd 6. Axis South − 79 SW 12 St 7. Axis North −1111 SW 1st Ave 8. Brickell on the River North − 31 SE 5th St 9. Brickell on the River South − 41 SE 5th St 10. Brickell Station Villas − 100 SW 10th St 11. Brickell View West − 1723 Sw 2nd Ave 12. Habitat One − 1701 SW 2nd Ave 13. Icon Brickell Tower I − 465 & 475 Brickell Ave
37 16
31
35
39 38
36
18 29
brickell
30
14. Icon Brickell Tower II −495 Brickell Ave 15. Infinity on Brickell Condo − 60 SW 13th St 16. Latitude on the River − 185 SW 7th St 17. Lofts on Brickell I −1528 Brickell Ave 18. Lofts on Brickell II − 1650 Biscayne Blvd 19. Los Suenos De Brickell − 145 SW 11th St 20. Neo Vertika − 690 SW 1st Ct 21. One Plaza West Brickell − 145 SW 11th St 22. Park View Tower − 115 SW 11 St 23. Plaza on Brickell North − 950 Brickell Bay Dr 24. Plaza on Brickell South − 951 Brickell Bay Ave 25. Solaris Condo Brickell Miami − 186 SE 12th Ter 26. The Emerald Condo Brickell − 218 SE 14th St 27. The Sail on Brickell − 170 SE 14th St 28. Viceroy Icon Brickell − 485 Brickell Ave
34
32 33
central business district
29. 50 Biscayne − 50 Biscayne Blvd 30. Capital Lofts − 117 NE 2nd St 31. Epic West − 200 Biscayne Way 32. Vizcayne South −253 NE 2nd St 33. Vizcayne North − 244 Biscayne Blvd 34. Flagler First Condo − 101 E Flagler St 35. Ivy Miami Condo − 90 SW 3rd St 36. Met One Condo − 300 S Biscayne Blvd 37. Mint Condo − 92 SW 3rd St 38. The Loft Downtown II − 133 NE 2nd Ave 39. Wind by Neo − 350 S Miami Ave 40. City 24 − 350 NE 24th St
*Representing Buildings Built From Mid 2005 through Dec. 31, 2009. While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG th
6 | ISG MIAMI REPORT
DOWNTOWN MIAMI & BRICKELL BUILDING BY BUILDING THE REALITY IS: 62 BUILDINGS. 96% SOLD. ONLY 794 UNITS REMAIN.
43
42 45 44
40
41
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61 62
media & entertainment
41. Opera Tower − 1750 N Bayshore Dr 42. 900 Biscayne − 900 Biscayne Blvd parkwest
43. Marina Blue − 888 Biscayne Blvd 44. Marquis Condo − 1100 Biscayne Blvd 45. Ten Museum Park − 1040 Biscayne Blvd wynwood
- edgewater
46. Cynergi − 2700 N Miami Ave 47. Edgewater Lofts − 2200 NE 4th Ave 48. Gallery Art − 333 NE 25th St 49. Midblock −3250 NE 1st St
50. Midtown II (Mid-rise) −3451 NE 1st Ave 51. Midtown II (Mews) − 3449 NE 1st Ave 52. Midtown II (High-rise) − 3470 E Coast Ave 53. Midtown IV − 3301 NE 1st Ave 54. Moon bay − 520 NE 29th St 55. New Wave − 725 NE 22nd St 56. Onyx on the Bay − 665 NE 25th St 57. Palermo − 425 NE 30th St 58. Paramount Bay − 2066 N Bayshore Dr 59. Platinum − 480 NE 30 St 60. Quantum on the Bay − 1900 N Bayshore Dr 61. Star Lofts on the Bay 712 NE 25th St 62. The 1800 Club − 1800 Bayshore Dr
100% SOLD OUT 75-99% SOLD OUT 50- 74% SOLD OUT UNDER 49% SOLD OUT RENTAL
herefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.
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INTRODUCING
EAST PALM BEACH 3,899
1,681 950 352 TOTAL INVENTORY BUILT SINCE 2005
REMAINING AS OF JANUARY 2009
REMAINING AS OF JANUARY 2012
REMAINING AS OF JANUARY 2013
Total Available Developer Inventory for New Condos Built From 2005-2010 8 | ISG MIAMI REPORT
DAYTONA BEACH Total Available Developer Inventory for New Condos Built From 2004-2010
2,938 2,076
687
TOTAL INVENTORY BUILT SINCE 2004
REMAINING AS OF JANUARY 2009
REMAINING AS OF JANUARY 2012
389 REMAINING AS OF JANUARY 2013
GREATER FORT LAUDERDALE Total Available Developer Inventory for New Condos Built From 2005-2010
5,135
1,681
TOTAL INVENTORY BUILT SINCE 2005
REMAINING AS OF JANUARY 2009
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142
SOLD OUT
REMAINING AS OF JANUARY 2012
REMAINING AS OF JANUARY 2013
| 9| ISG ISG MIAMI MIAMI REPORT REPORT
9
DOWNTOWN MIAMI & BRICKELL
Total Available Developer Inventory for New Condos Built From 2005-2010
17,502 10,130
2,497 TOTAL INVENTORY BUILT SINCE 2005
REMAINING AS OF JANUARY 2009
REMAINING AS OF JANUARY 2012
794 REMAINING AS OF JANUARY 2013
THE MIAMI BEACHES Total Available Developer Inventory for New Condos Built From 2005-2010
10,001
5,009 1,020 TOTAL INVENTORY BUILT SINCE 2005
10 | ISG MIAMI REPORT
REMAINING AS OF JANUARY 2009
REMAINING AS OF JANUARY 2012
234 REMAINING AS OF JANUARY 2013
STANDING INVENTORY SUMMARY Total Available Developer Inventory for New Condos Built From 2005-2010
(Downtown Miami/ Brickell, The Miami Beaches, Greater Fort Lauderdale and East Palm Beach)
36,537
18,501 4,609 TOTAL INVENTORY BUILT SINCE 2005
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REMAINING AS OF JANUARY 2009
REMAINING AS OF JANUARY 2012
1,380 REMAINING AS OF JANUARY 2013
| 11 | 11 ISG ISG MIAMI MIAMI REPORT REPORT
mls shadow inventory AS OF DECEMBER 2012
12 | ISG MIAMI REPORT
DOWNTOWN MIAMI & BRICKELL
New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active
$500 $375
$340
$352
$387
1,300
$428
975
$250
650
$125
325
$0
1,235
1,161
1,058
728
18 Months Ago
12 Months Ago
6 Months Ago
Currently Active
Price PSF
0
Active Listings
THE MIAMI BEACHES
New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active
$781
$800
$618
$641
4,000
$657
$600
3,000
$400
2,000
$200
1,000
$0
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3,154
2,112
991
733
18 Months Ago
12 Months Ago
6 Months Ago
Currently Active
Price PSF
Active Listings
0
| 13 | 13 ISG ISG MIAMI MIAMI REPORT REPORT
GREATER FORT LAUDERDALE New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active
$500
$420 $356
$375
600
$289
$256
800
$250
400
$125
200
$0
768
484
288
160
18 Months Ago
12 Months Ago
6 Months Ago
Currently Active
Price PSF
0
Active Listings
EAST PALM BEACH
New Condos Built Since 2006 & Available for Sale 18 Months Ago, 12 Months Ago, 6 Months Ago and Currently Active
$300
$225
$263 $189
$188
$204
500
375
$150
250
$75
125
$0
408
339
179
91
18 Months Ago
12 Months Ago
6 Months Ago
Currently Active
Price PSF 14 | ISG MIAMI REPORT
Active Listings
0
DAYS ON MARKET(DOM) MLS ANALYSIS FOR CLOSED SALES IN 2011 & 2012
180
Downtown Miami & Brickell
225
300
147
East Palm Beach
2012 Avg DOM
0
2011 Avg DOM
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42
174
Greater Fort Lauderdale
150
55
112
The Miami Beaches
75
35
30
75
150
225
3
2012 Avg DOM
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new construction
16 | ISG MIAMI REPORT
inventory AS OF DECEMBER 2012
DOWNTOWN MIAMI & BRICKELL TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE
DOWNTOWN MIAMI
DOWNTOWN MIAMI
BRICKELL
BRICKELL
BRICKELL
100% SOLD
96 UNITS 300 UNITS
95% SOLD 99% SOLD
374 UNITS
100% SOLD 382 UNITS 100% SOLD
192 UNITS
1,344 UNITS TOTAL - 99% SOLD
AVENTURA
TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE
48% SOLD
51% SOLD
190 UNITS
70 UNITS
*The Villages- Currently Being Redesigned
Developer Units Sold ISGWORLD.COM
260 UNITS TOTAL - 49% SOLD Developer Units Unsold ISG MIAMI REPORT
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THE MIAMI BEACHES TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE
MIAMI BEACH
MIAMI BEACH
MIAMI BEACH
SUNNY ISLES
SUNNY ISLES
SUNNY ISLES
SUNNY ISLES
SUNNY ISLES
HOLLYWOOD BEACH
HOLLYWOOD BEACH
48% SOLD 21 UNITS 90% SOLD
50 UNITS 114 UNITS
56% SOLD 70% SOLD
84 UNITS
87% SOLD
79 UNITS
50% SOLD
132 UNITS
80% SOLD 59% SOLD 100% SOLD
230 UNITS 39 UNITS 49 UNITS
25% SOLD 24 UNITS
822 UNITS TOTAL - 70% SOLD
Developer Units Sold
18 | ISG MIAMI REPORT
Developer Units Unsold
NORTH MIAMI, KEY BISCAYNE & COCONUT GROVE TOTAL NEW CONSTRUCTION CONDO UNITS AVAILABLE FOR SALE
NORTH MIAMI
KEY BISCAYNE
COCONUT GROVE
36% SOLD
234 UNITS
96% SOLD
154 UNITS
80% SOLD
95 UNITS
483 UNITS TOTAL - 64% SOLD *Marina Palms - Tower I Only [Tower II Currently Unavailable]
NEW CONSTRUCTION SUMMARY
TOTAL NEW CONSTRUCTION CONDO UNITS TO BE BUILT, SOLD AND CURRENTLY AVAILABLE FOR SALE IN DOWNTOWN MIAMI/BRICKELL, THE MIAMI BEACHES, AVENTURA, NORTH MIAMI & COCONUT GROVE/KEY BISCAYNE
Project Units [Total]
2,909 Developer Units Sold
2,338 Developer Units Unsold
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SALES MADE IN THE LAST 18 MONTHS
571
| 19 | 19 ISG ISG MIAMI MIAMI REPORT REPORT
THE MYTH: DEBUNKED Recent rumors and articles are comparing Miami today to Miami in 2005, sighting another boom and a slate of new inventory entering the market…but the numbers are telling another story.
20 | ISG MIAMI REPORT
MYTH: SUPPLY IS ON THE RISE
V
THE REALITY: Number of new condo units built in Downtown/Brickell, the Miami Beaches, Greater Fort Lauderdale and East Palm Beach from 2005-2008: 36,537 condo units
V
Number of condo units remaining for sale from the above boom: 1,380 condo units
Number of new construction condo units in Downtown/Brickell, the Miami Beaches, Greater Fort Lauderdale and East Palm Beach currently listed for sale today: 2,909 condo units
Number of condo units from the above sub-markets remaining for sale: 571 condo units
Total number of condo units remaining for sale from previous boom + total number of new construction condo units for sale today: 1,951 condo units CONCLUSION: THERE IS NO CURRENT THREAT OF OVER SUPPLY
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ISG MIAMI REPORT
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MIAMI REPORT | THE MYTH DEBUNKED
Report from the Ground T H E N E W PA R A D I G M
the General Realty point of view, what is Q: From The New Paradigm?
A:
The real estate bust and subsequent financing changes resulted in an almost four year gap in new construction, creating a New Paradigm of inventory flow. We explain to our clients that in today’s market, you have to move fast— South Florida developer existing and new-construction inventory is much less than everyone realizes; in fact we may face a supply shortage.
Q: How does this affect your clients and agents on a daily basis? are mostly affected by the misconception of buyers A: We believing that there is still an abundance of inventory and a plethora of new inventory on the way. However, the amount of South Florida’s developer existing inventory is smaller than everyone believes; it has nearly dried up completely.
Deborah Golden
Managing Director of Sales & Operations RelatedISG International Realty
do you overcome the misconception that there is a surplus Q: How of inventory?
A:
We advise our sellers to take advantage of this prime moment in real estate—now is the time to sell. We encourage our agents to always have a pipeline of well qualified buyers. Furthermore, agents simply must return to the basics of the real estate business; they need to rely less on technology and much more on the resources that they may not realize are right under their noses. Things like picking up the phone and having a meaningful conversation with someone, going through old client lists (remember the Rolodex?), and “hitting the pavement” to gather information that can’t necessarily be found on the internet are just a few resourceful ways to master our ever-changing market. It is imperative for any agent to be aware of what properties are available, pending and sold on a daily basis because that is how fast our market is changing.
MARKET FA
CT:
AVERAGE DAYS ON THE M ARKET FO R LISTINGS 40
DAYS
22 | ISG MIAMI REPORT FEBRUARY 2013
SOUTH AMERICAN MARKET REPORT SERGIO PINTOS Executive Vice President, Latin American Specialist - ISG World
“We can say today that this is the first time that all of the Latin American markets are performing at the same time.”
Real Estate in Miami has dynamically changed in the last four years. This change allows us to predict the future in a much more exciting way than the recent past. During the boom years, from 2002 to 2007, we saw an international market that was dominated by two countries. The two main sources of sales in the condominium sales business were Venezuela and Colombia. Mexico was also performing but in a distant third place. We didn’t find that Brazilians or Argentinians were buying, which was logical since they were recovering from a recession that started in Brazil in 1999 and another that started in Argentina in 2001. After 2009 as a result of political unrest and growing economic over heating, we started seeing changes in the behavior of the Latin market. Argentines, Brazilians and the traditional markets of Venezuela, Colombia and Mexico started buying again. In addition, markets that were not traditional such as Ecuador, Uruguay and Peru began entering the mix. We can say today that this is the first time that all of the Latin American markets are performing at the same time. With housing prices skyrocketing above those of both disappearing standing inventory and new construction offerings in South Florida, it is no wonder that we are experiencing a resurgence of activity in the Paradise that we call home. When we analyze these new purchasers, we find that they are not speculators but instead are second-home buyers and long term investors that want to park their wealth in a city with a unique sophistication and want to be closer to home. Along with excellent choices in architecture and location, new purchasers from Latin America find a city that is safe to enjoy their success and raise their families. ISG reaches these markets and develops long-term relationships to maximize sales for its Developer clients.
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ISG MIAMI REPORT | 23
IN THE NEWS ’t n o D t u B , g in m ir F ry e v co e R Housing . .. th w ro G s si ri -C re P To rn tu e R Expect A FORBES • 1/29/2013
Miami Pending Sales Rise 52 Percent In November Miami Realtor Association | miamire.com • 1/14/2013
Argentines Turn Cash Into Condos in Miami New York Times • 9/13/2012
Miami Market Races intoMia2mi 0Asso1cia3tion of Realtors • 1/12/2013 “The downtown area, of course, is the most unique recovery story given the fact that the
majority of existing residential inventory was built during the last development cycle with recovery driven by an international buyer market unique to Miami and the corresponding
availability of housing and urban lifestyle environment attracting young working-age households employed in the downtown area as well as college and graduate students.”
“A Look Ahead At Miami’s Residential Market” • Posted 12/11/2012, miamiherald.com
24 | ISG MIAMI REPORT
IN THEIR WORDS... “Over the last year, Miami-Dade County has seen improvements in its economy. We have seen an increase in the number of companies that have shown interest in Miami as a place of business. Recent expansion announcements include Univision and Sapient. In 2012,The Beacon Council assisted about 27 companies who decided to expand or establish
Although many employees will be hired locally, some of the international companies will bring staff to Miami, thus creating the need for housing.”
operations in Miami-Dade County, creating about 2,000 new jobs.
JAAP DONATH, PH.D. Senior Vice President Research & Strategic Planning The Beacon Council
Q: When you came into your current position, downtown’s condos were ghost towers, and real estate soothsayers predicted it would take years for them to fill. Now the place is buzzing. What caused the change? A: “We owe our thanks to the private sector that had the foresight to build vertically and create the level of urban development we have today. More than $13 billion was invested in
Many criticized Miami for its overbuilding but the old adage of ‘if you build it, they will come’ certainly rang true.... Today, [condo occupancy] stands at more than 95 percent, with more new construction underway in the urban core than anywhere else in South Florida.” housing and commercial development during the real estate boom.
ALYCE ROBERTSON
*Excerpt from the Miami Herald | DDA’s Alyce Robertson: Promoting downtown Miami
Executive Director Downtown Miami Development Authority (DDA)
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ISG MIAMI REPORT
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4
Celebrating Years
miami report
26 | ISG MIAMI REPORT
ISG provides Miami’s most comprehensive and in-depth analysis of South Florida’s New Condominium Inventory
PRINT EDITION
miami report u p d At e d t h r o u g h A p r i l 3 o th 2 0 1 2
An in-depth AnAlysis of south fl oridA’s new developer Condominium inventory
miami report U P D AT E D T H R O U G H D E C E M B E R 3 1 ST 2 0 1 1
AN IN-DEPTH ANALYSIS OF SOUTH FL ORIDA’S NEW DEVELOPER CONDOMINIUM INVENTORY
miami report u p d AT E d T h R O u g h s E p T E m B E R 3 0 Th 2 0 1 1
A n i n - d E p T h A n A ly s i s O f s O u T h f l O R i d A’s n E w d E v E lO p E R CO n d O m i n i u m i n v E n TO R y
TORONTO
MIAMI
BOGOTÁ
MIAMI’S
SHaDoW iNVeNtorY A LOOK At WHAt’S LEFt
A LOOK AT HOW MIAMI PRICES MEASURE UP
HoW DoeS it
Compare?
RIO DE JANEIRO SAO PAULO
BUENOS AIRES
miami
A lO O K AT T h E fuTuRE Of dO OW wN n tT O OW wN n M m Ii A AM m Ii D
Also: dAys on the mArKet fACts
MAY 2012 2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com
L 33180 | 305.931.6511 | www.isgworld.com
ALSO: PRE-CONSTRUCTION SALES ARE BACK (PG 10) JANUARY 2012
2020
miami
FUtURE OF A LO O K At t H E
i n T R O d u C i n g d Ay TO n A B E A C h
2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com
MIAMI REPORT
MiaMi RepoRt
The Real Estate Recovery
The Real Estate Recovery
OCTOBER 2011
miami report u p d At e d t h r o u g h m Ay 3 1 , 2 0 1 1
An in-depth AnAlysis of south fl oridA’s new developer Condominium inventory
the
NeXt ChAPteR BeGINS
Quarterly Update, AprilFL 33180 2010 2875 Ne 191st stReet, suite 200 | aveNtuRa, | 305.931.6511 | www.isgwoRLd.coM
January 2010
®
2875 NE 191st Street, suite 200 | Aventura, FL 33180 | 305.931.6511 | www.isgworld.com
MiaMi RepoRt perception vs. Reality
at noon, the isg Today miami report everyone downtown will be
AN IN-DEPTH ANALYSIS OF SOUTH FLORIDA’S NEW DEVELOPER CONDOMINIUM INVENTORY UPDATED THROUGH DECEMBER 31, 2010
JUNE 2011 | isgworld.com
MYTH VS REALITY
THE SOUTH FLORIDA CONDO MARKET AS OF SEPTEMBER 2010.
FL 33180 | 305.931.6511 | www.isgworLd.com
September 2009
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looking up here. JANUARY 2011 | ISGWORLD.COM
An in-depth analysis and presentation of facts, prepared by:
ISG MIAMI REPORT
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28 | ISG MIAMI REPORT