Miami Commercial Real Estate News, Trends, Observations • Page 13 of 109

Negotiating: Unsolicited Offers Above Fair Market Value and the Appraisal Perception Loop

We regularly work with buyers to make unsolicited offers for commercial real estate, usually in situations where a property is not optimally utilized, if utilized at all, i.e. where the current use is not the property’s highest and best use. Owners of these properties frequently would sell for a premium price, and my buyers frequently will pay more than market value. That feels like a match.

But then…

Market value is notoriously tough to pin down on commercial properties. Consequently, in the absence of a genuine concept for market value an unsolicited offer to an owner instead becomes an appraisal. Thus, a property that is really worth $2 million on which an owner receives an offer for $2.3 million is worth, to an owner, $2.3 million. Most commercial owners have no real need to sell and owners of properties not on the market don’t typically want to sell. Given this, in the face of a new “appraisal” – in the form of the offer just received – they’ll internally register a lack of desire to sell at market value. Thus, in the process of making an offer, market value is established in the mind of an owner by the unsolicited offer received. Ugh.

This happens frequently. I have developed techniques over time to mitigate the effect, but overcoming it is nonetheless an ongoing challenge. Commercial property investors are a confident lot, so much so in their opinions that they’ve put their money where their mouth was by investing in a non-liquid asset. Thus, once they have opinions, even where developed so casually, it can be a challenge to get them to change them.

There are two counterpoints to the “why would I sell at market value” objection:

Highest and best use values may not exist in perpetuity. They can be challenged by developed property pricing, by a property being penned in by surrounding development, and by missed opportunities with premium specific purpose buyers.

When a property is considered for redevelopment, it generally is trading at land value. That is a good thing for a seller. Higher and better use values are like a jackpot for an owner of a property otherwise becoming less viable over time. Land values are volatile, however, as they essentially represent a call option on the difference between the cost of developing the land, with the value of the land (the option, if you will) a function of the spread between the market value of developed property and developed cost. When the market rolls over, this intrinsic value can drop precipitously, even go negative, at which point the land value is low as it is nothing more than an option on anticipated future intrinsic value (market value of developed property and developed cost). Also, a use today may be obsolete tomorrow; gas stations as electric cars become more prevalent would seem to be one we’ll be witnessing in the coming years.

As one of many examples, I presented an offer for an old multifamily property that was clearly nearly double what the property was worth as a multifamily property. This was for a developer interested in the land and how it would fit into its large development adjacent to that multifamily property. The development will happen, after which there will be no interest in the land by another, thus the property will just be worth its value as a multifamily property, about half what my buyer offered. This was an incalcitrant family, surely thinking my buyer and I were out to get his property on the cheap. I can imagine conversations amongst the family discussing about this offer and how well the investment in the property has performed, congratulating each other on the wisdom of not selling. The reality is that it will take a long time, perhaps decades, for the nominal value to inflate to the price offered, and the inflation adjusted value many not do so in that seller’s grandchildren’s lives. I see this happen all the time, though this was one of the more extreme ones.

Foregone Monetization

If you have a vacant piece of land with a market value of $5 million, you likely have a piece of land that could be monetized for around $250,000 a year. The reason your land has the value it does is because of this potential monetization. Additionally, in most cases, the highest and best use of the land has peaked, and is not going to get better. Thus, by keeping the land vacant, you are only forgoing the income that the property could be garnering, income you could be earning if you sold the property and purchased one already generating income.

This adds up over time.

The chart above consider $100 of income producing property at a 5% constant capitalization rate with 2% net operating income growth versus the same $100 in vacant land appreciating at 2%, in line with growth in its monetization potential (potential net operating income) growth, and with no net income.

Consider $5 million of income producing property at a 5% cap rate with 2% rent growth and assuming market value at a future date also at a 5% cap rate. Alternatively, consider $5 million of vacant land appreciating at 2% with no net income. The investor with vacant land will have more value later, and will likely be very proud of his fine investment, but look at what has been forgone over time.

This isn’t the whole story. Sometimes there is the potential for a rapid change in the potential use of a property, particularly if a property is near a central business district. Also, vacant land doesn’t have zero income, it usually has either a net carrying cost, principally property taxes, or a small net operating income from pylon signage or other partial monetization. Also, in this chart above, I’ve not taken into account earnings from reinvestment of net operating income, which would make vacant land look even less appealing to hold on a relative basis.

For properties near the central business district, highest and best use can improve fairly dramatically. Years back, I recall numbers of two story multifamily properties surrounding a popular happy hour spot I frequented, The Firehouse. Today, most of those properties have been scraped to make way for high rise developments, and those that haven’t surely will be. That area changed rapidly. I see that as the exception, however, as most properties are nowhere near downtown.

Then There’s Thanksgiving Dinner

When one has owned something for a long time, there is a built in gain that brings with it genius cred. When the line at Thanksgiving Dinner is “you really called it with that purchase,” it becomes one’s identity. Sell it, and that will fade away, just blend into a balance sheet somewhere. Though it is a smarter move to sell, reinvest, and accumulate income, it is nowhere near as sexy as “X times what you paid for it.” In my dealings, I’ve come to believe that this is a factor, at least subconsciously, in the decision making process of many owners.

God Forbid Don’t Let Me Be the Sucker!

Finally, there is the strong motivation not to be the sucker that sold for less than what something became worth later. The easy way to avoid that is to always agree to sell for well over market value. That is, unless someone wants to pay that elevated price. If that happens, then as mentioned above, market value is perceived as equal to that offer, and the asking price can again be elevated. Problem solved.

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Negotiating

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Video: LARC Analytics President and Co-Founder Ryan Meliker Presents Hotel Property Forecast 2022

Ryan Meliker, President and Co-Founder of Lodging Analytics Research & Consulting aka LARC Analytics, joins Michael, the show host, to discuss the hotel sector’s recovery from COVID, including drive-to and convention performance, major markets, and cap rate trends.

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Lodging

Video: Jesse Shannon of Branch Properties Discusses Grocery-Anchored Retail Sector Outlook and 2022 Predictions

Jesse Shannon with Branch Properties joins Americas Commercial Real Estate Show to discuss grocery-anchored retail property performance in 2022.

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Retail Properties

Miami Commercial Real Estate News March 23, 2022: 257 Unit Strata Wynwood Sold; New Rent Increase Notice Reqs; 1040′ Supertall Planned at Brickell City Center; More…

Trammell Crow proposes 324 apartments in Miami-Dade’s Coral Terrace, puts land under contract

Trammell Crow Residential wants to build a 324-unit multifamily complex on land it has under contract in the Coral Terrace neighborhood, marking the developer’s continued bet on Miami-Dade County’s apartment market. The Dallas-based developer proposes Alexan Ludlam on an 8.7-acre industrial site near the southeast corner of Coral Way and Southwest…

Landlords now required to give 60 days’ notice of rent hikes over 5% in Miami-Dade

Residential landlords in Miami-Dade County are now required to provide tenants with at least 60 days’ notice of rent hikes of 5 percent or more, as renting becomes increasingly more expensive in South Florida. The ordinance, introduced by Commissioner Eileen Higgins, passed unanimously at Tuesday’s commission meeting. Commissioners…

CIM Group Sells Strata Wynwood Mixed-Use Development in Miami

CIM Group, a commercial real estate developer, owner and lender based in Los Angeles, has sold Strata Wynwood, a mixed-use development in Miami’s Wynwood district. The buyer and sales price were not disclosed. The recently completed development spans a full city block and comprises two 12-story towers totaling 257 apartments, 27,040 square feet of retail…

CIM Group Sells Strata Wynwood

CIM Group has sold a Miami community after recently completing construction on it in the first quarter of 2022. CIM sold Strata Wynwood, located in Miami’s Wynwood Arts District, to an undisclosed seller. CIM co-developed the community with One Real Estate Investment, breaking ground on the project in August 2019 when it was known as Wynwood…

Stephanie Shojaee promoted to Shoma Group president

Stephanie Shojaee was promoted to president of Shoma Group, the real estate development firm led by her husband, Shoma Chairman Masoud Shojaee, The Real Deal has learned. Stephanie Shojaee, who joined Coral Gables-based Shoma in 2013 as chief marketing officer, eventually plans to expand Shoma in the U.S. and parts of Latin America, including…

Cohen family investors pay $31.5M for Kendall shopping plaza

A fully leased shopping plaza near West Kendall Baptist Hospital traded for $31.5 million. Husband-and-wife Yakov and Cheryl Cohen bought The Pointe Kendall Town Center at 9165 Southwest 162nd Avenue from The Centre at Kendall Town Center LLLP, according to records. The seller is tied to Richard Gertz Jr. The 11.9-acre plaza spans eight buildings totaling…

Chicago firm pays $31M for Opportunity Zone dev site for apartments in Edgewater

Trilogy Real Estate Group is continuing its bet on Miami’s Edgewater, paying $30.6 million for an Opportunity Zone site with plans for a multifamily project. Chicago-based Trilogy bought the 1.6-acre Edge 22 vacant property at 2201 Northeast Second Avenue, which allows for an up to 36-story tower with a maximum of 247 units, according to the…

MV Group to Redevelop Two Retail Centers in Downtown Miami Springs

MV Group USA, a Miami-based full-service construction company has plans to redevelop two retail centers in downtown Miami Springs. The redevelopments, which will exceed 30,000 square feet of retail space, are slated to be fully completed by the end of the year. The redevelopment projects include a modern redesign of the two retail centers…

Related Cos., the developer behind Manhattan’s Hudson Yards project, is making its first foray into the Miami office market. The real estate firm, led by billionaire chairman Stephen Ross, is working with Hong Kong-based Swire Properties to develop a supertall building in Brickell, a key commercial district in Miami, according to a person familiar with…

8-story sister Wynwood office buildings get OK

As the popular Wynwood Arts District evolves it is enjoying a boom in new office space, including a large mixed-use project that will bring a working campus of two 8-story sister buildings at Northwest Fifth Avenue and 27th Street. WYN ON 5TH NORTH, at 2701 NW Fifth Avenue, and WYN ON 5TH SOUTH, at 2661 NW Fifth Avenue, are proposing together nearly 250,000…

Miami aims to accelerate Flagler Street revamp

The Flagler Street beautification process downtown is on track with its 30-month schedule. “Flagler Street is coming along beautifully,” Chairman Manolo Reyes told the Miami Downtown Development Authority board March 18. The project is divided in five sections from Biscayne Boulevard to Southwest/Northwest First Avenue, with work progressing from…

Third Avenue residential midrise wins OK

A midrise of residential units and ground floor commercial-retail is planned for property west of Brickell and I-95 in the city of Miami. The project, named SW 3rd Ave-Residences, is targeted for 1900 SW Third Avenue from owner-developer Blue Tevere Investments Inc. The city’s Urban Development Review Board recommended approval of the project…

Global private school targets ex-Archbishop Curley campus

A global private school network plans to build a school in the City of Miami near Little Haiti on property that for many years was home to Archbishop Curley High. Avenues – The World School is planned for 4949 NE Second Avenue. It will be a new school campus that will serve children from daycare through high school. The developer-applicant is identified…

Video: Intelligent Building Co-Founder Tom Schircliff on Hybrid Working vs Intellectual & Cyber Security

Revving up: Norman Braman acquires three Edgewater commercial properties for $13M

uto dealership mogul Norman Braman is gassing up his real estate portfolio in Miami’s Edgewater neighborhood, acquiring two warehouses and a parking lot for $13 million. An entity managed by Braman acquired the three adjacent properties at 106 Northeast 20th Street, 120 Northeast 20th Street and 135 Northeast 19th Terrace, according to records. The seller…

Lease roundup: Danish furniture chain, mobile bill payment firm lease in Miami’s Wynwood

The Gateway at Wynwood (R & B Realty Group) BoConcept I The Gateway at Wynwood | Miami Danish furniture chain BoConcept will open in a 3,000-square-foot ground-floor retail space in The Gateway at Wynwood. BoConcept plans to open in the fall. It designs, produces and sells contemporary furniture, as well as accessories and lighting…

BoConcept Signs Retail Lease at Gateway at Wynwood in Miami

BoConcept, a furniture retailer, has signed a 3,000-square-foot lease at The Gateway at Wynwood, an office building in Miami. Alex Cesar of CBRE represented the landlord of The Gateway at Wynwood, R&B Realty Group in the transaction. Drew Schaul of CBRE represented BoConcept. BoConcept is the first retail tenant at The Gateway at Wynwood and will occupy…

Multistory Warehouses Require Multistory Rents

New York is starting to get comfortable with the idea of growing its industrial warehouse space vertically instead of horizontally. Several multistory warehouses, which are common in Asia, are under development in the Bronx, Brooklyn and Queens. Rising on 14 acres in an Opportunity Zone in the Hunts Point neighborhood is the Bronx Logistics Center…

St. Louis Fed President Jim Bullard President Bullard Explains His Recent FOMC Dissent, Believes Bigger Rate Increase Appropriate

I dissented with the Federal Open Market Committee (FOMC) decision announced on March 16, 2022, to raise the target range for the federal funds rate by 25 basis points to 0.25% to 0.50%. In my view, raising the target range to 0.50% to 0.75% and implementing a plan for reducing the size of the Fed’s balance sheet would have been more appropriate actions.

Developer Releases New Details Of Complex Designed By Rafael Viñoly In Zoning Filing

The developer planning the massive Casa Forma complex designed by architect Rafael Viñoly has released new details of the project in an application for a zoning hearing, as it continues to move through the approval process. A request for a zoning hearing was filed with Miami-Dade County on March 10, and documents relating to the filing were…

Shoma completes Ten30 South Beach condo project near Lincoln Road

Shoma Group completed its latest condo development, a sold-out boutique project near Lincoln Road in Miami Beach. The developer recently completed Ten30 South Beach at 1030 15th Street and received final Fannie Mae approval for buyer financing, according to a press release. About 35 percent of buyers used Fannie Mae-conforming loans to finance…

Mast Capital, Starwood launch sales of planned oceanfront condo project in Miami Beach

Starwood’s Barry Sternlicht, Mast Capital’s Camilo Miguel Jr. and renderings of The Perigon (Getty, Binyan Studios) Mast Capital and Starwood Capital Group launched sales of The Perigon, a luxury condo development planned for an oceanfront site in Miami Beach. Coconut Grove-based Mast, led by Camilo Miguel Jr., formed a joint venture with Barry Sternlicht’s…

Alex Karakhanian sells Miami Design District retail building for $8M

Alex Karakhanian’s Lndmrk Development sold a fully leased Miami Design District retail showroom for $8.5 million. Investor Glenn Braswell Jr. bought the 4,500-square-foot building at 3740 Northeast Second Avenue. Kitchens by Studio Kaza, the local operating partner of Brazil-based furniture manufacturer Kitchens, leases the building, according to the broker’s…

Industrial Developers Shouldn’t Delay Construction As Demand Rages

Industrial developers would be wise to plan ahead—and carefully—as materials constraints continue to plague the building process and elongate delivery timelines. But what is the one thing they shouldn’t do? Delay construction. “Do not delay construction,” Cushman & Wakefield’s researchers say in a new analysis. “Demand will drive rents…”

Video: Real Page’s Carl Whitaker; Multifamily Keeps Rolling?

Carl Whitaker, Senior Manager – Market Analytics with Real Page, joins America’s Commercial Real Estate Show to discuss the current state and future of the multifamily sector. Carl starts by noting that rent growth is near 20% year over year nationally. He moves on to note that occupancy is running 97% and even increased from December to January…

Harbor pays over $400M for MiamiCentral apartments in record deal

Harbor Group International bought the pair of ParkLine Miami apartment towers at Brightline’s downtown station for roughly $450 million, marking a record for a single multifamily asset sale, The Real Deal has learned. The Norfolk, Virginia-based real estate investment and management firm bought the 44-story and 47-story buildings perched atop the…

Related Group won city approval to rebuild a beachfront community center and develop a downsized condominium tower on about 4 acres of city-owned land in Hollywood. Miami-based Related won approval to rebuild the outdated Hollywood Beach Culture and Community Center at 1301 South Ocean Drive and to develop a 26-story condo building on…

Related Fund Management, an affiliate of Stephen Ross’ Related Companies, and partner CP Group bought Las Olas Square in downtown Fort Lauderdale for $144.5 million. UPDATED, March 17, 4:29 p.m.: A joint venture among Apollo Global Management, Steelbridge Capital and Square2 Capital sold the two-building office and retail complex spanning…

Miami firm buys 154 Lauderhill condos in bulk $17M deal, plans revamp

In a bulk purchase, REO Asset Specialists bought the majority of the condos at an aging complex in Lauderhill for $17.4 million. The Miami-based company, through an affiliate, bought 154 units at One Circle Condominium at 2601 and 2611 Northwest 56th Avenue. The seller is Florida’s Attainable Home Company, managed by Meir Benzaken in Pompano Beach…

Father-and-son team sells Margate industrial complex for $11M

In an $10.7 million deal, a father-and-son team of real estate investors cashed out of an industrial warehouse complex in Broward County. An entity managed by Michael McCarty and Rory McCarty of Hillsboro Beach sold the nearly 5-acre property at 2200-2248 Mears Parkway in Margate, according to records. Tyler Kuhlman and Douglas Mandel…

Mortgage firm pays $17M for entire West Palm condo building

Mortgage lender NewDay USA doubled down on its commitment to West Palm Beach, buying an entire boutique condo building near its second headquarters. An entity tied to NewDay USA, which is based in Fulton, Maryland, bought the newly built waterfront Crystal condo at 3611 South Flagler Drive. The seller is Coordinates Solutions LLC, managed by…

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Video: Intelligent Building Co-Founder Tom Schircliff on Hybrid Working vs Intellectual & Cyber Security

In this video Tom Schircliff, co-founder of Intelligent Buildings, joins America’s Commercial Real Estate Show to discuss the challenges and solutions for property owners and business leaders as it relates to office workers becoming partly or fully remote. Today we want our people to be able to work from home, office or anywhere. We want to have smart, safe, well buildings bringing people together. We definitely need building and information cyber security as we must protect company information and intellectual property. Let’s also add our desire for effective productivity, recruiting, on-boarding, collaboration, training, and retention. Where do we turn?

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Office Property

Video: Moody’s Analytics Senior Economist Thomas LaSalvia Provides Retail Insight 2022

Surprising intel on the retail industry is provided by Moody’s Analytics Senior Economist Thomas LaSalvia. Discussions herein include retail sales and trends for rental rates, occupancy rates, and cap rates for retail properties.

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Retail Properties

Video: Real Page’s Carl Whitaker; Multifamily Keeps Rolling?

In 2021, 674,000 apartment units were absorbed, beating a prior record of absorption by a whopping 60%. Even challenged markets, he noted are experiencing double digit rent growth. His company has been surprised at how quick the central business district markets have come back.

Real Page is still forecasting strong rent growth but not like 21. Affordability is a hot topic at Real Page, but Carl thinks this concern may be overstated, noting that rent to income over past year is 23%, not too far out of line with what REITs are reporting. This is less than I think most would think.

This is an excellent and highly informative video for anyone interested in multifamily property investing.

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Multifamily Property

Miami Commercial Real Estate News March 16, 2022: 816-Unit MF Parkline at Miami Central Trades; Rental Portfolio Sells for $82M; More…

Harbor Group International Acquires 816-Unit ParkLine Miami Luxury Apartment Community

Affiliates of Harbor Group International (HGI) have acquired ParkLine Miami, an 816-unit luxury apartment community in downtown Miami. The purchase price was not disclosed, but news outlets reported last fall that the asking price was $500 million. The seller, Florida East Coast Industries (FECI), completed construction of the property in 2020. The development…

Carpe secures approval for North Miami Beach mixed-use apartment project

Carpe Real Estate Partners secured approval from a North Miami Beach board for a 440-unit apartment tower, which will head to the commission next month for final approval. The city’s planning and zoning board Monday… approved the site plan and variances for Venus, a 26-story, 660K sf project planned for the 1.1-acre site at 2050 NE 164th Street.

Russia’s war stalls US real estate deals

Long before Russia invaded Ukraine, supply chain challenges were driving up construction costs and inflation concerns were setting the stage for higher mortgage rates. Now, just as recovery from the pandemic seemed within reach, Vladimir Putin’s war has the U.S. real estate industry bracing for its impact. Prices are rising further — reinforcing the Federal…

Wynwood investor Link pays $15M for Little River office-retail property

Link Real Estate, which owns a mixed-use portfolio in Wynwood, is expanding to nearby Little River, scooping up an office-retail property for $14.9 million. The Miami-based company bought the almost fully leased buildings at 7101 and 7111 North Miami Avenue from an entity led by John and Alan Matthews, according to the broker’s news release.

Miami Market Update: Office Vacancy Increases

As of January, Miami’s office vacancy increased to 13.4 percent, marking a 90-basis-point jump compared to the prior month, according to CommercialEdge data. The metro’s vacancy is still significantly below the national average of 15.7 percent. In January, the Magic City consolidated its third position among gateway cities with lowest vacancies…

Developer Files Plans To Build Major Supertall Tower In Brickell

Plans for a new Brickell Supertall tower called Major have been formally filed with Miami-Dade County Planners. Major is proposed to rise 1,049 feet above sea level, or 82 stories, according to the newly filed plans. The 1,049-foot height is the maximum that the Federal Aviation Administration has approved for Miami thus far. Major is proposed to include: 259…

Miami Multifamily Report – February 2022

In 2021, the Miami market had one of its best years in decades, with some fundamentals hitting records. High demand coming from a steady inflow of high-wage workers pushed up rents at a dizzying rate. Last year, rates increased by 23.5 percent, placing Miami in the third spot nationally among major metros. The average rent clocked in at $2,133, while the U.S. figure…

Chart: Inflation Watch 2021 Intra-Quarter Update; Inflation Expectations Climbing

The 5-year TIPS spread, after almost calmly sitting a bit elevated over pre-pandemic levels in late 2021, has now spiked of a sudden spiked to the highest level in a number of years and to a level about 70% higher than where it was generally hovering pre-pandemic. There has been much talk in the financial press of inflation pressures in recent weeks, and the…

Miami construction costs soaring as land, materials, labor prices surge

Despite supply chain issues and increases to the cost of labor, land and building materials, local contractors say demand for construction is still high. “In the past 12 months, the cost of a typical construction project in Miami probably increased by 20%,” said Chris Kennedy, vice president of preconstruction for Suffolk Construction. But, he said, “It’s almost like…”

Barrington scores $60M construction loan for El Portal multifamily project

Barrington Brothers scored a $60 million construction loan for The Kavista multifamily project in El Portal, as the hot apartment market prompts development in traditionally single-family enclaves. The Miami-based family owned and run company will build the eight-story, 282-unit project on almost 2 acres at 495 Northeast 83rd Street, according to the lender’s…

Aimco teams up with Brooklyn firm to develop mixed-use project in Miami’s Edgewater

A Brooklyn real estate firm is partnering with apartment real estate investment trust Aimco to develop a mixed-use project in Miami’s Edgewater. The… site is on the same block where Aimco has been assembling land and gut-renovating the Hamilton on the Bay apartment tower. Beitel Group paid $45M… at 3333 Biscayne Boulevard, two…

The Numbers Behind South Florida’s Multifamily Boom

With investors and renters continuing to flock to South Florida, the region has proven itself to be a promising real estate market and the multifamily sector has been strong. There were 603 multifamily properties sold in South Florida during 2021, totaling $11.4 billion. This is more than double the previous $5.5 billion annual sales record set in 2016. Not to mention…

Weak federal commercial real estate rules will hamper seizing Russian assets

Lax disclosure regulations that have made the U.S. a global hot spot for money laundering via real estate holdings will make it difficult for officials to seize properties from Russian oligarchs. Russian oligarchs have likely staked a large part of their wealth in U.S. commercial real estate properties in purchases that are easier to conceal than high-profile luxury…

Mavik Capital, partners pay $82M for Miami-Dade & Broward rental portfolio

A joint venture of two New York-based companies and a Miami-based firm scooped up a three-property apartment portfolio across Miami-Dade and Broward counties for $82 million, The Real Deal has learned. Mavik Capital Management, which put in the majority of the capital, along with Triangle Capital Group and Corinthian Capital Real Estate Partners, bought…

Lease roundup: Cold storage firm leases Bridge Industrial’s Hialeah facility

FreezPak I Bridge Point Cold Logistics Center | Hialeah Bridge Industrial leased the entirety of its cold storage speculative project in Hialeah to food logistics company FreezPak. New Jersey-based cold and dry-storage provider FreezPak leased the entire 312,103-square-foot Bridge Point Cold Logistics Center, which is under construction and is expected to…

Trump Group, Suffolk Construction sue each other over Estates at Acqualina

Affiliates of Trump Group and Suffolk Construction filed dueling lawsuits over the delayed Estates at Acqualina, a sold-out, $1.8 billion condo development in Sunny Isles Beach. A3 Development, led by brothers Jules and Eddie Trump, filed a lawsuit in Miami-Dade Circuit Court against Suffolk Construction last month regarding the two-tower…

Voters will decide fate of Dream Hotel-anchored riverfront project on Wharf Miami site

Voters will decide whether a joint venture between MV Real Estate Holdings and Driftwood Capital can move forward with a Dream Hotel-anchored mixed-use project along the Miami River. The Miami City Commission authorized City Attorney Victoria Mendez on Thursday to draft an amendment to the city’s charter that residences will vote on…

Patrinely, USAA Begin Renovations at 263,000 SF Office, Retail Center in Coral Gables

Patrinely Group has begun renovations at Columbus Center, a 263,000-square-foot office and retail complex in Coral Gables. USAA Real Estate, Columbus Center’s majority owner, has partnered up with Patrinely Group to remodel the building’s common areas. Renovations will include updating the front entrance and main lobby, activating the outdoor terrace…

Brickell Station Partners Sells Retail Building in Downtown Miami for $20.1M

Brickell Station Partners has sold a retail property in Miami to Gazit Horizons for $20.1 million. Hector Antunez and Juan Andres Nava from Metro 1 represented Brickell Station Partners, and Fabian Graff of Metro 1 represented Gazit Horizons. The building, located in downtown Miami’s Brickell neighborhood, is currently home to Toasted Bagelry & Deli…

Wynwood office, retail and parking portfolio hits market for $28M

A Wynwood real estate investor is looking to cash out of an office, retail and parking portfolio in Miami’s hottest neighborhood. An entity managed by Steve Rhodes is listing a three-story office and retail building at 2121 Northwest Second Avenue and a one-story retail building at 2085 Northwest Second Avenue, as well as a parking lot at 172 Northwest 21st Street…

Brooklyn buyer sues industrial firm O’Donnell over failed Hialeah deal

California industrial real estate investor and developer The O’Donnell Group was slapped with a lawsuit alleging it tried to inflate the sale price of a Hialeah property (6501 Northwest 37th Avenue) above the prospective buyer’s agreed amount. The buyer, Brooklyn-based Sound Around, sued two O’Donnell Group ownership affiliates, Hialeah Last Mile Fund VII…

Mastercard Renews Miami Office Lease

Nuveen Real Estate has signed Mastercard International to a 53,700-square-foot lease renewal at 801 Brickell in Miami, ensuring that the global payment technology solutions company stays put at the iconic 415,000-square-foot building that has been its home since 1986. With the assistance of Colliers South Florida, landlord Nuveen negotiated a long-term…

Wynwood’s growing pains

Miami’s Wynwood, the artsy neighborhood that has become a hip office, retail and dining destination, is experiencing growing pains, creating a dichotomy in the district. Office and retail vacancy rates have skyrocketed beyond 50 percent in some cases, as new and planned mixed-use projects compete with older, adaptive reuse properties for tenants that are…

South Florida Retail Real Estate Summary: Leases, Sales & Construction Projects

Market Snapshot for South Florida Retail Real Estate: A summary of the statistical highlights, latest retail transactions, vacancy / lease trends, and current market activity for South Florida commercial real estate focusing on Miami-Dade County. The retail real estate report is updated every quarter by our CRE experts. The analysis is derived and compiled…

Miami investor Enrique Manhard scoops up MiMo District land for $8M

Miami investor Enrique Manhard bought 1.2 acres of land in the MiMo Biscayne Boulevard Historic District, near the Brightline train tracks. Manhard, who purchased the development site along with investment partners, currently does not have plans to either build on the property or flip it, although prospective tenants have expressed interest in a…

Miami Beach to seek development proposals for 41st Street surface parking lots

Miami Beach Mayor Dan Gelber and City Commissioner Kristen Rosen Gonzalez with the Roosevelt Theater at 770 West 41st Street: Miami Beach leaders want to kickstart redevelopment along the city’s 41st Street commercial corridor by asking developers to propose mixed-use projects on six city-owned parking lots. The Miami Beach City Commission…

Canadian firm buys condo-hotel dev site in Pompano Beach for $18M

A Quebec-based company paid $17.7 million for a mixed-use property in Pompano Beach that is approved to be redeveloped with condominiums and hotels. A limited partnership led by Efstathios Tsatas bought the properties spanning almost a full city block on the southwest corner of East Atlantic Avenue and South Ocean Boulevard. The seller is Atlantic 3350…

Developer wins approval for cultural center, park on city-owned site in Fort Lauderdale’s Flagler Village

City commissioners approved a restaurant and music venue operator’s proposal to build and operate a new park with a cultural center on municipal land in the Flagler Village area just north of downtown Fort Lauderdale. The city commission voted 4-1 at their meeting Tuesday night to approve a 50-year agreement with Damn Good Hospitality Group LLC…

Developer Jimmy Tate’s proposed Bahia Mar project faces more controversy with filing of new lawsuit

Developer Jimmy Tate’s plan for a high-end, mixed-use project by Fort Lauderdale’s Bahia Mar marina just hit another snag. The Fort Lauderdale International Boat Show, held annually on part of the 39.5-acre site Tate wants to redevelop, has long opposed the project, partly arguing that it would cut the space allotted for the show. Now, boat show organizers…

Palm Beach timeshare resort sells out of bankruptcy for $10M

Copperline Partners paid $9.8 million for a former timeshare resort on Palm Beach’s waterfront. In a bankruptcy sale, an entity controlled by Copperline Managing Principal Adam Schlesinger bought the Palm Beach Resort & Beach Club at 3031 South Ocean Boulevard, according to records. West Palm Beach-based Copperline, a commercial real estate firm…

Lennar buys 188 acres for homesites at Arden near Wellington

Stuart Miller’s Lennar paid $7.4 million for 188 acres of land within the Arden community near Wellington. The Miami-based homebuilder bought acreage at 1445 Wandering Willow Way that stretches along the northern edge of the larger Arden master-planned development, according to records. The seller is an affiliate of Boston-based Freehold Capital…

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Chart: The Stunning Pandemic Driven Plunge in the Labor Participation Rate

US Labor Force Participation Rate 10 Years Ending January 2, 2022

With news of Starbucks unionizing and personal experiences we have all had with unavailability of workers, this chart should come as no surprise. Nonetheless, it is a stunning thing to see it visually in a chart like the one above. The peak just before the plunge was 63.5%. Two months later, it bottomed out at 60.2%. That is a difference of 3.3%, and a difference of 5.2% of the pre-decline number (3.3% decline / 63.5% before the decline). Labor has thus been in control, at least for the moment.

This is contributing to increasing inflation expectations as can be seen in the TIPS spread. Though still down, the labor force participation rate is rising from its mid-pandemic lowers, however. Thus this plainly evident stress point of worker shortages may improve in coming months.

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Economy

Chart: Inflation Watch 2021 Intra-Quarter Update; Inflation Expectations Climbing

Federal Reserve Bank of St. Louis, 5-Year Breakeven Inflation Rate, commonly referred to as the TIPS Spread, a measure of expected inflation derived from 5-Year Treasury Constant Maturity Securities and 5-Year Treasury Inflation-Indexed Constant Maturity Securities, for the 5 years ending 3/9/22

“There are two main drivers of asset class returns – inflation and growth.”
~Ray Dalio

Real Money at Stake

Real money is at stake with these spreads. TIPS pay interest every six months, based on a fixed rate that is calculated by multiplying the adjusted principal by one-half the calculated interest rate (i.e. half a year’s worth of inflation at that rate). Thus, a “bet” that an investor makes in with these bonds has real financial implications. If actual inflation is higher than priced in the markets, a TIPS buyer will make more that a straight treasury buyer. If it is lower, that TIPS buyer will make less. How much money is at stake? In 2017 Morningstar pegged the market at $1.2 trillion. Thus, every 1/10% difference (10 bp) is a $1.2 billion swing. That is real money by my count.

Generally on Inflation and Commercial Real Estate

What is the impact of inflation on commercial real estate? In the near term, higher inflation tends to bring higher interest rates. Higher interest rates are a negative for commercial real estate in the near term. Higher rates means larger debt service payments, reducing the buying power of purchasers and negatively impacting deal economics. It also means makes fixed income investments a more competitive investment, likely pulling capitalization rates (cap rates) up, thus pricing down. Over a longer period, however, the prospect of inflation leads to a principal benefit of commercial property investment, that of its potential as a hedge against inflation. After all, more inflation should lead to higher rent, at least in time.

MIT published an excellent whitepaper on real estate’s ability to keep pace with inflation with data to 2016. They looked at then tendency of retail, multifamily, industrial, and office income and values to keep pace with inflation. The best at keeping pace income-wise was retail, with rent growth of 102% of inflation. Office was the worst performing at a quite dismal 18%. Values across the property types were more consistently kept pace, with retail again doing the best appreciating at 107% of inflation, office again the worst at 74% of inflation. I’ll speculate that the fairly drastic difference between income and value keeping pace with inflation is driven by vacancy. If you’re interested in the topic, read the paper.

Expectations for inflation also come into play with lease structure and due diligence. A lease structure with a fixed rent increase becomes less attractive for a landlord with higher inflation expectations. Similarly, a commercial property being acquired with existing leasing in place that have fixed or capped rent increases looks less attractive as inflation expectations increase. Also, a property being purchased with fixed rate financing will look increasingly attractive if a buyer anticipates inflation fueled increases in income. Inflation, in short, is very important to commercial property investors.

Considering commercial real estate for its inflation hedging possibilities? Check out Miami area listings in this HawkinsCRE.com site. You can view all the properties listed on the commercial MLS in Miami-Dade county, or view only certain types: industrial ; multifamily ; office ; retail ; vacant land . You can also view properties filtered for their municipal zoning code or view properties by zip code or by their general location/region in Miami-Dade. Also available are office condo listings by building and multifamily properties displaying and sorted by price per unit. Even better, contact us to help you find the right property to acquire with the benefit of our commercial real estate subscription resources, our proprietary database of off-market properties, and proprietary systems for identifying and securing acquisition candidates for select buyers.

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Economy

Miami Commercial Real Estate News March 9, 2022: 382 Units Proposed for North Miami, 140K SF Class A Office for Wynwood; South Miami-Dade Booming; More…

Cipriani Residences Miami 80-story condo tower planned for Brickell site

Cipriani is expanding its footprint in Miami with plans to brand Mast Capital’s luxury condo tower in Brickell, joining a handful of new projects in the neighborhood. For the Cipriani family, the planned Cipriani Residences Miami adds to a growing portfolio of properties. The family operates the Mr. C Miami hotel and is branding the Mr. C Residences…

Westside Capital Buys Coral Gables Office Building for $14M

Westside Capital Group has bought the 85,000-square-foot 2000 Ponce, an eight-story office building in Coral Gables, Fla., from a private long-term owner, for $14 million, in an off-market transaction. Berkadia secured a $14.6 million, five-year bridge loan with 24 months interest-only, at a 74 percent loan-to-cost ratio. Valley National Bank provided the…

South Dade boom: D.R. Horton wants to build townhouses in Homestead, another developer proposes apartments in Naranja

Two developers are proposing new housing projects in south Miami-Dade County, showing the area has caught the eye of builders amid high demand linked to population growth. Major homebuilder D.R. Horton, based in Arlington, Texas, wants to build a 67-townhouse complex in Homestead, and D.E.V. & Associates proposes a 202-unit multifamily building…

Eighty Seven Park condo association, construction firms added to Surfside collapse lawsuit

Surfside collapse The survivors and families of the victims of the deadly Surfside condo collapse sued Eighty Seven Park’s condo association and additional companies involved in the construction of the luxury condo tower next door to Champlain Towers South. The third amended complaint names the architecture firm Stantec, vibration monitoring firm…

Blank canvas: Van Gogh exhibit inks long-term lease on Lincoln Road

The Van Gogh Immersive Exhibit inked a long-term lease on Miami Beach’s Lincoln Road, The Real Deal has learned. Lighthouse Immersive, the Toronto-based company that runs the experiential art exhibit, signed a nearly 23,000-square-foot lease at 420 Lincoln Road, a property owned by Paul Cejas’ PLC Investments, according to Brandon Charnas…

Barlington Group sells Brickell retail building for $20M

Gazit Horizons, the U.S. subsidiary of Tel Aviv-based Gazit Globe Group, paid $20.1 million for a Brickell retail building across the street from its proposed 504-unit apartment tower. Gazit Horizons bought the fully leased property at 83-97 Southwest Eighth Street, with no immediate plan for redevelopment, according to CEO Jeff Mooallem. Records show…

Supply chain issues — not oversupply — could slow Miami’s condo boom

Financing is plentiful, buyers are signing contracts with nonrefundable deposits, and developers in South Florida are keeping their sales launches rolling and their condos selling. Miami’s condo market, known for its booms and busts, is in the middle of a big boom that would typically be threatened by, inevitably, an oversupply of condos. But the dreaded…

Deal can clear runway to add Watson Island seaplane base

The Miami City Commission is considering legislation to authorize a utilities deal with Miami-Dade County that is necessary for construction of a new seaplane base on Watson Island. Commissioners are set to vote today (3/10) on approving the utilities deal. The city owns the man-made island that connects mainland Miami with Miami Beach via the MacArthur Causeway.

Coral Gables project would add live-work units

Coral Gables commissioners got to hear Tuesday a newly proposed mixed-use project for the city’s Craft Section. The Planned Area Development would take up about a city block at 300 Catalonia Ave. Called “Alexan Crafts,” the project consists of 22 live-work units on the ground level, 263 residential units on upper levels and 364 parking spaces onsite.

New-to-market tenants spur Wynwood office demand

Wynwood is becoming Miami’s busiest office submarket as demand for space is far surpassing current supply due to its attractive live-work-play environment, with more than 80% of its recently leased office tenants being new-to-market and a million square feet of office space in the pipeline. Coming up new-to-market tenants in Wynwood in the first quarter…

Miami easing way to add Brickell City Centre residences, retail

Miami city commissioners are being asked to approve a special easement for Brickell City Centre that would clear the way for the next phase of development of the sweeping mixed-use project, including construction of a temporary fire station. The next phase of construction is also to include about 350 new residential units, 106,828 square feet of new…

Norwegian fish food manufacturer plans South Miami-Dade plant

Skretting, a Norwegian global manufacturer and supplier of fish feed to land-based aquaculture companies, plans a new feed facility in South Miami-Dade close to Atlantic Sapphire, one of its largest customers. Atlantic Sapphire raises land-based salmon at its Homestead Bluehouse facility. The announcement fulfills an earlier agreement between the two…

Hopes for a Byron Carlyle cultural center rise

Hopes for the advancement of a possible Byron Carlyle cultural center are up as the city of Miami Beach gets closer to coming up with a conceptual design. After the city agreed to budget a placeholder sum of up to $400,000 for conceptual design for the Byron Carlyle movie theater cultural center last September, in late January Commissioner David Richardson…

City of Sunny Isles Beach Acquires Navarro Pharmacy Building from MMG for $16M

In a unique transaction MMG Equity Partners donated a property located at 18500 Collins Ave to the City of Sunny Isles in exchange for transfer development rights (TDR’s). In a land donation agreement executed in 2018, the City granted to Navarro TDR’s in the amount of 126,615 square feet and the city agreed to sell the TDR’s on Navarro’s behalf. The total…

Jorge Pérez’s Related Group has put a portion of the former Johnson & Wales University in North Miami under contract… proposing… a 382-unit apartment project. Related Group is seeking approval from the city of North Miami for the eight-story Manor Biscayne building with 9,335 square feet of ground-floor retail on 2.3 acres at 1650 Northeast 124th Street, according…

Miami Design District to get its first new office building

Developer Craig Robins plans to build his first Class A office building in the high-end Miami Design District… Miami Design District Associates, a partnership of Robins’ Dacra, L Catterton Real Estate and Brookfield Properties, revealed plans for The Ursa, a 15-story office building at 30 Northeast 39th Street. Leasing is underway and led by the developer…

Ugo Colombo’s CMC Group sells Coconut Grove office building for $11M

Ugo Colombo’s CMC Group sold a Coconut Grove office building for $11 million. Cofe Properties, through an affiliate, bought the five-story building at 2950 Southwest 27th Avenue from an entity tied to Miami-based CMC Group, records show. The 39,761-square-foot Grove Professional Building is almost 53 percent vacant, with 21,030 square feet of unleased space…

Lease roundup: Sandals Resorts affiliate moving to Burger King’s former Miami HQ

Unique Vacations I Waterford Business District | Miami Unique Vacations, an affiliate of Sandals Resorts, is moving and expanding to a new office at the Waterford Business District near Miami International Airport. Unique Vacations signed a long-term lease for 53,119 square feet at the 5505 Waterford building, at 5505 Blue Lagoon Drive. It is moving from…

Goldman Properties to Build Class A Office Building in Miami’s Wynwood

The real estate company that put Wynwood on the map is back, with plans to leave its mark on the Miami neighborhood. Goldman Properties unveiled plans for Core Wynwood, a Class A office building located at 390 NW 25th Street. The property is slated to open in 2024 with construction commencing this December. The 140,000-square-foot development…

CGI Merchant Group Refis Miami Office, Hotel with $102M from Madison Realty Capital

Madison Realty Capital has originated two refinancing loans totaling $101.9 million for CGI Merchant Group. Surya Capital Partners brokered the transaction. The two loans include a $35.5 million loan for 3480 Main, a Class-A office building in Coconut Grove, and a $66.4 million loan for The Gabriel Miami, a luxury hotel located in downtown Miami. 3480 Main…

Judge pushes forward demolition of historic Deauville hotel in Miami Beach

The demolition of the historic Deauville hotel in Miami Beach is expected to move forward, following a contentious court hearing. Miami-Dade Circuit Court Judge Michael Hanzman on Friday denied a motion by the city of Miami Beach that could have forestalled the demolition by requesting additional evaluation of the structure and other measures. The judge…

Harvey Hernandez’s condo company files for bankruptcy to stave off foreclosure

Facing the threat of a foreclosure auction, Harvey Hernandez’s condo company filed for bankruptcy protection to save nine units at Centro Miami, a downtown Miami tower the developer built. Last month, Centro NGD Holdings submitted a Chapter 11 bankruptcy petition in Miami Federal Bankruptcy Court, two days before the nine units were scheduled to…

Miami Beach apartments mired in ownership dispute slapped with $1M foreclosure

A pair of apartment buildings near Miami Beach’s Lincoln Road that are mired in litigation over ownership were slapped with a $1.2 million foreclosure claim. Bay Harbor Islands-based private lender Metropolitan Mortgage Company, led by Milton Raijman, filed the foreclosure suit over the buildings at 1560 Drexel Avenue and 1568 Drexel Avenue against…

The pandemic’s effects on nonstore and e-commerce retail sales : A temporary boost did not change the trend

The FRED Blog has discussed how the COVID-19 pandemic changed the sale volumes of different products, from groceries and alcohol to men’s clothing, sporting goods, pharmacies and drug stores. The social distancing required to manage the pandemic also impacted how people shopped, boosting online sales. Today, we compare nonstore and e-commerce retail…

As Russians seek a haven for assets, access to U.S. real estate won’t be easy

News reports from Russia this week show people lining up at ATMs and banks in a rush to withdraw cash as sanctions from Europe and the United States plunge the Russian Ruble to record lows. Some are now seeking to move their money overseas. An attorney who has worked with Russian buyers said many wealthy people — not oligarchs, but people…

Pinecrest retail building sells for $6M

The Lombardi family’s real estate company sold a fully leased Pinecrest retail building for $5.8 million. Miami-based Lombardi Properties, through an affiliate, sold the one-story property at 12441 South Dixie Highway to Carbonell Property Management, managed by Javier and Claudia Carbonell, according to records. The buyers borrowed $3.7 million from…

North Miami apartments sold for $10M in 1031 exchange

Javier Cervera Jr.’s real estate company sold three North Miami apartment buildings for a combined $10.1 million, part of a 1031 exchange tied to its recent purchase of Tropical Park Plaza… Cervera… sold the two-story adjacent properties spanning 1.2 ac. at 1505 and 1525 Northeast 135th Street, as well as at 1530 Northeast 136th Street. The buyer…

Berkadia Arranges Acquisition Financing for 104,356 SF Office Property in Coral Gables

Berkadia has arranged acquisition financing for 2000 Ponce, an eight-story, 104,356-square-foot office property in downtown Coral Gables, about five miles from Miami. The seller was an undisclosed private family owner. Charles Foschini, Chris Apone and Robert Iudice of Berkadia’s Miami office secured the undisclosed amount of financing on behalf of the…

More than half of workers back to the office in downtown Fort Lauderdale: report

Downtown Fort Lauderdale’s return to the office is outpacing that of major markets such as New York, San Francisco and Austin, as well as the national average, a new report shows. From 50 percent to 55 percent of workers were back to working in the office in February in downtown Fort Lauderdale, a 10 percentage point…

Falcone Group, Kaufman Lynn win bid to develop $149M mixed-use project in Oakland Park

Oakland Park selected a partnership of Falcone Group and Kaufman Lynn Construction to redevelop 4 city-owned acres, plus 2 adjacent privately-owned acres, into a massive mixed-use project featuring a woonerf. The Oakland Park City Commission on Wednesday approved authorizing city staff to begin negotiations on a development agreement with Falcone…

Assisted living facility in Margate sells for $16M

A Margate assisted living facility traded hands for $16 million. Property records show an entity led by Yanir Shrmaryou, president of Livewell Senior Living, sold the facility at 5850 Margate Boulevard. The buyer is an entity led by Hector Fernandez who heads Miami-based Reign Senior Residences. Fernandez financed the purchase with a $12.9 million…

Boca Raton investor allegedly concealed $3M warehouse sale from minority partner: lawsuit

A Boca Raton-based real estate investor allegedly kept a minority partner in the dark about a $3.2 million warehouse deal to avoid sharing the sale proceeds, according to a recently filed lawsuit. The partner, 1112 Development, is suing Mark Spillane, who owns the commercial real estate firm The Eire Companies; real estate attorney Mitchell McRae…

Doubling down: Grover Corlew buys another office building in Boca Raton

Grover Corlew paid $25.2 million for a downtown Boca Raton office building adjacent to another commercial property the company acquired eight months ago. The Boca Raton-based commercial real estate firm, led by Mark Corlew and Anuj Grover, bought Palmetto Park City Center at 120 East Palmetto Park Road, according to a press release. Completed in 1996…

Eretzor Group buys West Palm Beach apartments for $6M

Boca Raton-based Eretzor Group bought West Palm Beach apartments for $6 million, marking an exponential price jump in eight months, as investors’ appetite for South Florida multifamily projects continues unabated. Eretzor Group investment fund IV bought the 10-unit property at 2700 Broadway from a Boca Raton-based entity led by Rhahime Bell…

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Video: MSCI & Real Capital Analytics Chief Economist Provide Office Sector Update

Jim Costello, Chief Economist with MSCI and Real Capital Analytics, shares his views on the office property market, including cap rates, impact of COVID-19, hybrid work, and rising interest rates.

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Miami Commercial Real Estate News March 2, 2022: $240M Brickell Church Sale may be Blocked by Member; Ryder Selling HQ; 327-Unit Dev Planned for North Bay Village; More…

Ryder Puts Miami Corporate Headquarters Up for Sale

Logistics company Ryder System hopes to sell its corporate headquarters near Miami, saying it needs less office space in a post-pandemic world. Ryder System, a member of the Fortune 500, paid $42 million for the 16.8-acre campus at 11690 Northwest 105th Street in unincorporated Miami-Dade County in 2014, according to property records. Two years into…

Shoma Group to Develop 327-Unit North Bay Village Waterfront Community

Shoma Group has revealed plans for Shoma Bay, a 327-unit waterfront community in North Bay Village, Fla. The development designed by MSA Architects will break ground this summer and is slated for completion in 2023. The Shoma Bay apartments will be located in the Upper East Side submarket of Miami, an area with roughly 1,611 units in various stages…

Brickell church sale holdout could scuttle $240M deal with 13th Floor, Key International

Arnaud Karsenti’s 13th Floor Investments’ plan for an 80-story condominium tower on a church parking lot and school – the last developable waterfront Brickell site – could be scuttled by a congregation member who opposes the deal. 13th Floor and the Ardid family’s Key International, both based in Miami, want to purchase 2.2 acres that are…

Developers plan revamp of The Cloisters UM student housing with additional units

The Cloisters Miami student housing near the University of Miami is getting both a revamp and additional units. Atlanta, Georgia-based Landmark Properties will develop 36 townhouses with 168 bedrooms next to the existing Cloisters community at 5830 Southwest 57th Avenue in Miami. The Winter family’s Miami Beach-based investment firm W5 Group and…

Miami firm buys Coral Gables office building for $14M

A Delaware entity tied to a Miami firm paid $14 million for a Coral Gables office building with plans to update and lease out the mostly vacant property. In an off-market deal, 2000 Ponce Owner bought the seven-story building at 2000 Ponce de Leon Boulevard, according to records. The seller, 2000 Ponce de Leon Square, managed by Edmundo Kronfle, paid…

Cain International’s Justin Oates Talks 830 Brickell and Miami’s Office Stock

Perhaps the most buzzed-about address in Miami today is 830 Brickell. A partnership between Cain International and OKO Group is the force behind the 55-story trophy office tower, which so far has attracted mega-tenants including Microsoft and Canadian asset manager CI Financial (which doubled its space last month). The draw is clear: 830 Brickell offers…

MG3 buys Walmart Supercenter, adjacent retail in Miami-Dade for $70M

Fontainebleau Park Plaza at 9191 West Flagler Street in Miami with MG3 Group’s founders and Principals Marcelo Saiegh, Gustavo Bogomolni, and Hernan Leonoff: MG3 Group’s real estate investment trust bought the fully leased Fontainebleau Park Plaza with a Walmart Supercenter for $70 million. MG3 REIT bought the property at 9191 West Flagler Street in…

Self-storage firm buys Wynwood redevelopment site in Miami for $11M

A New York-based self-storage developer picked up a three-property assemblage in Miami’s Wynwood that is primed for redevelopment. Buyer Storage Deluxe, led by firm founder and chairman Steven J. Guttman, paid $11.3 million… consists of two adjacent warehouses repurposed as office space and a parking lot at 328, 330 and 342 Northwest 29th Street.

Developer Vlad Doronin distances himself from Russia’s war on Ukraine

Russian-born developer Vladislav Doronin denounced Russia’s invasion of Ukraine, distancing himself from Russia and President Vladimir Putin. Doronin, owner of OKO Group and the high-end hotel group Aman Resorts, was born in St. Petersburg when it was part of the former U.S.S.R. and started his real estate career developing properties in Moscow. Doronin…

Jackie Soffer’s Turnberry proposes office/retail project near Aventura Mall

Jackie Soffer’s Turnberry Associates wants to build a 14-story office and retail project near Aventura Mall — and link it through a pedestrian overpass to a future Brightline station… asking the city of Aventura for conditional use approval for the extra 2 stories of height from the currently allowed 12 stories on the 3.4 acre site at 2750 Northeast 199th Street…

San Francisco firm makes first South Florida office bet with $49M Wynwood Annex deal

Making its first real estate bet in South Florida, Brick & Timber Collective bought the Wynwood Annex office building in Miami for $49 million. The San Francisco-based commercial real estate firm closed on the 65,000-square-foot building at 215 Northwest 24th Street in an off-market deal, according to a press release. Sellers Related Group and New Yo…

Stellar Communities proposes 204-unit apartment project in Ojus

Developer Stellar Communities wants to build a 204-unit multifamily project in Ojus, south of Aventura Mall and near a future Brightline station. Dania Beach-based Stellar, through an affiliate, proposes an up to 15-story building on 1.6 acres at 18801 West Dixie Highway. It would have 13,326 square feet of ground-floor commercial space, according to an…

Progress of six legs of transit Smart Plan updated

The promise to improve Miami-Dade transit through six corridors of the Strategic Miami Area Rapid Transit (SMART) Plan, which the Miami-Dade Transportation Planning Organization Governing Board adopted in 2016, rolls on as state and local officials negotiate contracts, seek more funds, and design and construct phases of the six projects. The design phase of…

Major Overtown affordable housing project wins OK

The first phase of a major project to bring affordable housing to Overtown has won unanimous approval recommendation from Miami’s Urban Development Review Board. Culmer Place is to rise at 800 NW Fifth Ave. and provide attainable mixed-income housing on property owned by Miami-Dade County. The county bid out the first part of construction…

Danish Luggage Hero moving its home to Miami

With now more than 30 locations in Greater Miami and more than 1,100 locations in 45 cities worldwide, a luggage storage company from Denmark that is facilitating flexible traveling with more than 3 million hours of stored luggage is moving to Miami. Copenhagen-based Luggage Hero has for five years offered travelers a safe place to leave luggage for any…

Miami sidetracks funds to restore Miami Marine Stadium

The Miami City Commission has put off reauthorizing bond funding to restore historic Miami Marine Stadium for several months. The commission was to vote Feb. 24 to reauthorize issuance of bonds to help pay for long-awaited restoration. Instead, Commissioner Joe Carollo successfully deferred the vote after a lengthy explanation of why he wants to wait…

Javier Cervera Jr. buys Tropical Park Plaza near Westchester for $25M

Commercial real estate investor Javier Cervera Jr. bought the Tropical Park Plaza near Westchester for $25.3 million. Cervera, owner of Miami-based Cervera Real Estate Ventures, bought the 74,294-square-foot shopping center at 7971 Southwest 40th Street from Tropical Park Plaza LLC, according to a news release. The property, which spans 5 acres…

Talonvest Capital Arranges $21.4M Loan for Self-Storage Facility in Miami

Talonvest Capital has arranged a $21.4 million loan for a new self-storage facility in Miami. Situated near Interstate 95 and Miami’s Wynwood district, the seven-story property spans 106,940 square feet and comprises 1,100 climate-controlled units. An unnamed private investment firm based in New York provided the loan to the borrower, SpareSpace Storage…

Redevelopment play: Constellation Group buys Coral Gables office buildings for $10M

Constellation Group picked up a pair of small Coral Gables office properties for $10 million, where the seller previously planned a mixed-use project. An entity managed by Miami-based Constellation’s managing principal, Eduardo Otaola, bought adjacent office buildings at 4225 Ponce De Leon Boulevard and 4311 Ponce de Leon Boulevard…

Lease roundup: Blockchain.com opening HQ on two floors at Cube Wynwd in Miami

Blockchain.com I Cube Wynwd | Miami Blockchain.com, a major player in tech, is opening its Miami headquarters on the top two floors at Cube Wynwd in Miami, bringing the building to full occupancy. Blockchain.com, which provides consumer crypto products, signed a 22,000-square-foot lease at Cube Wynwd, at 222 Northwest 24th Street, according to…

Crypto-talk: NFT Real Estate Through Propy

Last year, NFTs (Non-fungible Tokens) exploded in popularity. NFTs, or non-fungible tokens, are cryptographic “tokens” that represent a unique asset such as a piece of art, music, or other collectibles and certify ownership digitally. Most of this was related to tokenized digital art, but most people don’t know that NFTs have many more use cases. One of these is…

Alta plans waterfront North Miami condo project, pays $15M for apartment building on site

Raimundo Onetto’s Alta Developers plans to build a boutique waterfront condominium project in place of the closed Mid Bay Club Apartments in North Miami. The Miami-based company bought the 0.8-acre site at 11950 North Bayshore Drive for $15 million from Mid Bay Miami LLC, according to Alta’s broker. Alta is envisioning a 50-unit to 90-unit high-end…

Montreal investor picks up another Miami Beach Art Deco apartment building

Shortly after buying a Miami Beach Art Deco apartment building, a Canadian real estate investor purchased another similar property for $5.9 million. An entity managed by Michael Fischer and Chaim Gurman bought the 23-unit apartment building at 1319 Meridian Avenue, according to records. Fischer, who is based in Montreal, is president of Moteli…

Adam Neumann scores construction loan for Miami Worldcenter apartments, revealing site ownership

A company linked to WeWork co-founder Adam Neumann scored a construction loan for a new apartment tower at Miami Worldcenter, which will rise next to another building he recently acquired. Neumann has been investing in commercial real estate, with a focus on multifamily, since his exit from the New York-based coworking giant. A week ago, he paid…

AJ Capital Partners picks up Little River warehouse portfolio for $17M

AJ Capital Partners founder and CEO Benjamin Weprin and properties at 7133 Northwest Second Court and 7122 Northwest Second Avenue: In three deals totaling $17.3 million, an entity with ties to a Nashville-based real estate investment firm picked up a seven-warehouse portfolio in Miami’s Little River neighborhood. An entity managed by Benjamin Weprin…

Crane Arrives In Brickell To Begin Building 640-Foot Miami River Tower

The first pieces of a tower crane have arrived at the Brickell site where a 54-story tower called Miami River is now under construction. The cranes are planned to rise 760 feet above ground, according to a filing with the FAA in September. Arrival of the crane likely indicates that vertical construction will begin soon. Construction of a sea wall on the property also now…

Photos: Foundation Work Continues At Block 55 Vertical Retail & Residential in Overtown

Foundation work is continuing at the Block 55 project in Overtown, according to photos this week by Ryan RC Rea. Groundbreaking took place in June 2021, and foundation work has been ongoing since then. Block 55 will include: 578 affordable apartments for seniors; 250,000 square feet of retail space; 1,050 parking spaces; A 1,400 square foot police…

New York developer pays $146M for newly built Morea Apartments in Pompano Beach

The Benjamin Companies bought the newly built Morea Apartments in Pompano Beach for $145.5 million, underscoring the robust market for multifamily investment in South Florida. Garden City, New York-based Benjamin bought the property at 601 North Federal Highway from an entity tied to San Diego-based Fairfield Residential, according…

San Francisco investment firm pays $10M for Plantation office building

An entity with ties to a San Francisco-based investment firm bought a Bank of America-anchored office building in Broward County for $10.3 million. The entity, managed by Harvest Properties Associates, acquired the two-story, 34,890-square-foot building at 3800 West Broward Boulevard in Plantation, according to records. Harvest Properties Associates has…

Morgan Group, partners plan 452-unit Sunrise rental development with affordable housing

Morgan Group plans a rental development with 452 units, including 68 with below-market rents, on a Sunrise site with an abandoned ice-skating rink. Investors who assembled the 22.5-acre development site near the intersection of Oakland Park Boulevard and Pine Island Road have entered a joint venture with Houston-based Morgan Group to build the project…

Dynamic City Capital pays $74M for newly built AC Hotel by Marriott in Fort Lauderdale

A Utah-based hotel firm paid $74.3 million for the just completed AC Hotel by Marriott near the beach in Fort Lauderdale. Dynamic City Capital bought the 171-unit property at 3029 Alhambra Street from the hotel’s developers, Key International and Wexford Real Estate Investors, according to a joint Key-Wexford news release. Nick Plasencia of The Plasencia Group…

Beverly Hills firm forays into Florida with Boca Raton office and retail complex purchase

A Beverly Hills real estate firm plunged into Boca Raton’s office and retail market with a $12.6 million acquisition. Brickstar Capital bought Spanish River Plaza at 500 Northeast Spanish River Boulevard, according to a press release. The deal equates to $226 per square foot for the 56,034-square-foot, mixed-use complex with office and retail. That’s a bargain in Boca Raton…

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Miami Commercial Real Estate News February 23, 2022: Miami-Dade Plans Huge Redev in Downtown Miami; 3-Tower Brickell Dev Gets OK; More…

Miami-Dade plans massive redevelopment in downtown Miami

County authorities are working to redevelop over 20 acres of the downtown Government Center to include a transit terminal, affordable housing, and community cultural facilities and schools. Procurement for the first phase is expected during or after summer, but many details are still being discussed as the project encompasses many county departments. The purpose…

3-tower Brickell residential blockbuster wins quick OK

An entire city block in Brickell that’s remained vacant more than a decade is targeted for a large three-tower mixed-use development. With a current project name of 1420 S Miami Avenue, the owner-developers are promising more than 2.7 million square feet of floor area and 1,255 residential units, a mix of condos and rental apartments. The project was considered…

Mathieu Massa buys Miami Beach development site for $14M

Developer and restaurateur Mathieu Massa bought a development site in Miami Beach for $13.5 million. Property records show that an entity linked to Enrique Colmenares sold the lots at 427 22nd Street and 2206 Park Avenue to an entity led by Massa. The buyer took out a $6 million loan from City National Bank of Florida and a $2.5 million loan from the seller…

AMLI Residential keeps betting on Edgewater, pays $104M for apartments

AMLI Residential is betting again on the booming multifamily market in Miami’s Edgewater and Midtown neighborhoods, paying $104.2 million for an apartment tower. Chicago-based AMLI bought the Midtown 29 apartments at 180 Northeast 29th Street from Mesirow Financial and Morgan Group, according to records.

Rotem Rosen snags refi in Israel for Miami site, Manhattan hotel

Rotem Rosen’s MRR Development scored a loan worth $113 million to refinance the Hotel Indigo on Manhattan’s Lower East Side and purchase a site in Miami. Rosen along with his partner, Indian billionaire businessman Anand Mahindra, secured the loan through the Israeli bond market, marking one of the largest Israeli bond raises by a U.S. real estate…

Sea-level rise to prompt displacement of Miami’s low-income, minority communities, study finds

Sea-level rise and the resulting climate gentrification are expected to hit low-income, minority communities in Miami-Dade County the hardest, according to a new report. The county, as well as several of its cities and neighborhoods, have comprehensive policies to tackle the two issues at the nexus of climate gentrification — sea-level rise and housing…

Cheesecake Factory inks lease on Miami Beach’s Lincoln Road

The Cheesecake Factory inked a lease on Miami Beach’s Lincoln Road in the former Sushi Samba space, The Real Deal has learned. The publicly traded Cheesecake Factory, based in Calabasas, California, plans to open this fall at 600 Lincoln Road, according to Terranova Corporation Chairman Stephen Bittel. The restaurant group signed a 20-year lease, with renewal…

Sprouts Farmers Market Plans New Location in Miami’s Grove Central Development

Sprouts Farmers Market has released plans to open a 24,014-square-foot location at Grove Center, a mixed-use, transit-oriented development underway in Miami’s Coconut Grove neighborhood. Sprouts’ new location will be the Phoenix-based grocer’s third store in Miami-Dade County. Slated for delivery in 2023, the Grove Center will include a 23-story…

Lease roundup: Breitling opens in Miami Design District, Sprouts leases in Coconut Grove

Breitling I Design 41 | Miami Swiss watch manufacturer Breitling opened a 1,832-square-foot store in the last available retail space in Miami Design District’s Northeast 41st Street corridor. Breitling rented the space at Design 41, at 112 Northeast 41st Street, according to a news release from the brokers. Tony Arellano and Joe Fernandez of…

County negotiates to trim Beach monorail line price

Miami-Dade expects a final price proposal in March for the Trunkline segment of the Miami Beach Corridor monorail, which exceeded its previously negotiated price of $586.5 million to reach almost $1 billion, to develop a final recommendation for county approval. The county is still negotiating with MBM Partners LLC regarding pricing on the…

Biggest sand pour in decade restoring Miami-Dade beaches

With sea turtles out in the ocean and permits approved, a major sand renourishment project is set to begin spreading over 10.5 miles of beach in Sunny Isles, Bal Harbour and Miami Beach. The Army Corps of Engineers delivered 830,000 cubic yards of sand for the decade’s largest spread, a $40.5 million project. “We have four hot spots that take the width…

New Tri-Rail snafu: locomotives may not fit platform

The $70 million project to bring Tri-Rail into a downtown Miami station has added to its long list of problems a new one: locomotives may hit the platform. Engineers are back on site to measure again the public system’s locomotives and determine what can be done to fix the problem. “The cantilever portion of the platform is what appears to interfere…

Public-private Riverside Wharf heads for groundbreaking

A major mixed-use project, Riverside Wharf, is on schedule to break ground this year in downtown Miami and open in 2025. Everything has been on track and moving forward since the project launched at the end of 2021, said the developer in an email to Miami Today. In December, Miami developer Alex Mantecon of MV Real Estate Holdings…

Miami Market Update: Transaction Volume Increases

In 2021, Miami’s office market saw $1.7 billion in office transactions, according to CommercialEdge. The metro’s sales volume has expanded significantly compared to 2020 levels, when it reached $345 million. The average price per square foot has also increased, from $184 year-to-date through December 2020 to $295 by the end of 2021, mirroring a…

Seagis Closes On 5.75 Acre Site In Doral, Plans To Add New Building To Transal Park Holdings

Seagis Property Group LP (“Seagis”)… continues its expansion across South Florida with its latest acquisition. The company announced it closed on a 5.75-acre development site located adjacent to Seagis’ Transal Park facility, which spans 113,000 square feet and is located at 8305 NW 27th Street. Seagis plans to break ground by year’s end on a modern, new 117,790…

Developer Bill Fuller wins appeals court ruling against his longtime foe, Miami commissioner Joe Carollo

Little Havana developer Bill Fuller and Miami commissioner Joe Carollo A federal appeals court handed developer Bill Fuller a key victory against his nemesis, Miami commissioner Joe Carollo, in a ruling that could affect how government officials crack down on the local real estate community. Earlier this month, the U.S. Court of Appeals denied Carollo’s petition to…

Miami-Dade Commissioner Files Legislation Requiring Notice of Rent Increase

On February 15, 2022, Miami-Dade County Commissioner Eileen Higgins announced on Twitter that she filed an ordinance in Miami-Dade County to protect renters countywide, in response to calls throughout Miami-Dade to protect tenants from rent increases with little to no notice. Earlier in February, the Miami Beach City Commission approved an ordinance…

Dan Kodsi plans mixed-use project with high street retail as “alternative to Aventura Mall”

Developer Dan Kodsi plans a major mixed-use project with apartments, offices, and high street retail in Aventura. Kodsi’s Miami-based Royal Palm Companies, through an affiliate, paid a reported $39.1 million for 9.6 acres on the northwest corner of Biscayne Boulevard and Northeast 213th Street. Reuven Tako and Jacqueline Tako of North Miami sold the properties…

Shoma Group to Develop 327-Unit Miami Waterfront Community

Gazit Globe proposes 504-unit apartment tower in Brickell

Tel Aviv-based Gazit Globe Group wants to build a 504-unit apartment tower in Miami’s Brickell, steps from Metrorail and Metromover stations. Gazit Globe’s U.S. subsidiary, Gazit Horizons, wants to develop the 642.8-foot tall — or more than 50-story — Brickell Gateway tower on a half-acre lot at 90 Southwest Eight Street…

Video: Deloitte’s John D’Angelo Discusses his firm’s Commercial Real Estate Outlook 2022

Terreno Realty pays $73M for two warehouses at Countyline Corporate Park

Terreno Realty bought two newly built, fully leased warehouses at Countyline Corporate Park for a combined $73.2 million, marking the investor’s ongoing shopping spree for South Florida industrial real estate. Terreno Realty bought the buildings totaling 407,000 square feet on 19.8 acres at 4281 and 4341 West 108th Street in Hialeah from an…

Video: CCIM Chief Economist K.C. Conway on Trends in Office Use & Values; highlights Miami at 23:50

In this video, CCIM Economist K.C. Conway shares his thoughts on how office use trends will impact the (office property) sector going forward. Discussion topics include vaccine requirements, square footage per employee, impact of remote / work from home trends, profitability of tenants, and opportunities for office property tenants, landlords…

How are disputes handled in your contracts?

An arbitration agreement serves as an effective tool, providing important benefits and protections to companies seeking dispute resolution involving customers. Working with an arbitrator who likely is a former judge or attorney who has extensive experience in the field, the parties will present their side of the story to the arbitrator in an effort to win their case.

Seagis buys industrial dev site in Doral for $16M

Seagis Property Group paid $16 million for a warehouse development site next to its Transal Park facility in Doral, marking the company’s ongoing bet on South Florida industrial real estate. The Conshohocken, Pennsylvania-based company plans to build a 117,790-square-foot building on 5.8 acres at the northeast corner of Northwest 27th Street and 84th Avenue…

Atlantic Pacific Cos. Opens Affordable Senior Community in Miami

Miami-Dade County Public Housing and Community Development and Atlantic Pacific Cos. have opened the 180-unit Northside Transit Village II Apartments in Miami. The property offers affordable housing to senior individuals earning between 22 and 60 percent of the area median income. According to Yardi Matrix data, Wells Fargo Bank provided $20.8 million…

Natural disasters caused $57B in property damage in 2021

Fire, water and freezing temperatures last year posed increasingly dangerous — and expensive — concerns for homeowners across the U.S. Natural disasters caused $56.9 billion in property damage in 2021, according to a new climate change catastrophe report from CoreLogic. Wildfires, floods, twisters and winter freezes hit nearly every major…

Adam Neumann pays $17M for retail at Las Olas Riverwalk in Fort Lauderdale

WeWork co-founder Adam Neumann bought a retail property in Fort Lauderdale, adding to his expansive South Florida holdings, The Real Deal has learned. An entity tied to Neumann paid $17 million for the retail component of Society Las Olas, a roughly 16,500-square-foot space at 301 Southwest First Avenue, according to sources. Scott Sherman and…

The Shvo Must Go On: The Bad Boy of Luxe Residential Has Become a Force in CRE

Michael Shvo is sitting in his office, high above Fifth Avenue, dressed in his signature black Armani T-shirt, singing the praises of chef Daniel Boulud. He’s the best, Shvo said. A great chef and a terrific person. To wit, Boulud is creating a residents-only dining space at Shvo’s new Mandarin Oriental condominium on Manhattan’s Fifth Avenue and in the…

AC Hotel by Marriott in Fort Lauderdale scores TCO

A 171-key AC Hotel by Marriott in Fort Lauderdale obtained its temporary certificate of occupancy. Developers Key International and Wexford Real Estate Investors scored the TCO for the property at 3029 Alhambra Street, near the beach, according to a joint Key-Wexford news release. The rooms at the 10-story property feature contemporary…

Hallandale Beach self-storage facility sells for $23M

The self-storage facility at 450 Ansin Boulevard in Hallandale Beach with City Line Capital’s President and CEO Rick Schontz and Boundary Companies’ Managing Partner John Wilkinson: Boundary Companies bought a Hallandale Beach self-storage facility for $23 million. Records show an affiliate of Bethesda, Maryland-based Boundary bought…

Avi Dishi drops $21M for Presidente Supermarket-anchored shopping center in West Palm Beach

Avi Dishi jumped into the South Florida grocery store-anchored shopping center frenzy with a $20.7 million purchase in West Palm Beach. An entity managed by the New York-based retail real estate investor bought the Shoppes at Cresthaven at 2675 South Military Trail, according to records. Dishi’s acquisition is anchored by a Presidente Supermarket store.

Harry Macklowe to Build Resi Development Near Dadeland Mall

Yet another New York-based developer is coming to Miami. This time, it’s one of the Big Apple’s most prominent players. Harry Macklowe’s Macklowe Properties is planning a mixed-use development near the Dadeland Mall in Miami-Dade County, a spokesperson for the developer confirmed to Commercial Observer. The project, designed by Miami-based firm…

Stephen Ross’ Related continues downtown West Palm office shopping spree with $35M deal

The two-building office complex at 400 and 450 South Australian Avenue in West Palm Beach with Wexford Real Estate Investors’ co-founder and President Joseph Jacobs, Key International’s founder Jose Ardid and Related Companies’ Stephen Ross: Stephen Ross’ Related Companies, already the biggest Class A office owner in downtown West Palm Beach, is…

JV plans downtown West Palm Beach office building, renovated retail project

Brand Atlantic Real Estate Partners managing partners Andrew Dance and Adam Demark, and renderings of the two buildings at 300 Banyan Boulevard and 111 Olive Avenue: A partnership led by Brand Atlantic Real Estate Partners unveiled plans for a new office building and renovated retail project in downtown West Palm Beach. West Palm Beach-based…

Multifamily real estate magnate pays $9M for Palm Beach commercial building

Multifamily real estate mogul Joseph “Jay” Biggins, and his clothing and furniture store owner wife, Letty Biggins, paid $8.8 million for a vacant commercial property in Palm Beach. The Bigginses, through an affiliate, bought the L-shaped building and smaller outbuilding at 353 Peruvian Avenue from Steve & Linda Horn Inc., according to records. This was…

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Video: Deloitte’s John D’Angelo Discusses his firm’s Commercial Real Estate Outlook 2022

Navigating the Terrain: A Discussion of Insights from Deloitte’s 2022 Commercial Real Estate Outlook

In the ever-evolving landscape of commercial real estate, staying ahead of the curve is essential. One valuable resource in this pursuit is Deloitte’s annual Commercial Real Estate Outlook report, which provides a comprehensive view of the industry’s trends, challenges, and opportunities. Recently, America’s Commercial Real Estate Show had the privilege of delving into the insights from the 2022 edition of this report in a conversation with John D’Angelo, a Real Estate Solutions Leader at Deloitte. Note that this discusses commercial real estate nationally. While considering the national commercial real estate property market, it’s vital to recognize that trends may differ substantially in specific regions, such as Miami. Here are some key takeaways from the discussion.

Optimism Amidst Uncertainty: Revenue Projections

Despite the uncertainties stemming from the lingering effects of the COVID-19 pandemic, there’s a notable sense of optimism among industry participants regarding revenue projections for 2022. According to the Deloitte report, over 80% of respondents anticipate an increase in revenue compared to the previous year. This positive outlook is particularly pronounced in sectors such as digital real estate, including cell towers and data centers. However, it’s essential to acknowledge variations across different subsectors, with each facing unique challenges and opportunities.

Adaptation and Transformation: Navigating the New Normal

The pandemic has accelerated the need for adaptation and transformation within the commercial real estate sector. Respondents emphasized the importance of reevaluating core business operations and embracing innovative approaches to meet evolving market demands. A significant shift highlighted in the report is the transition to hybrid working environments, with two-thirds of respondents expected to adopt this model in the foreseeable future. This shift underscores the imperative for companies to optimize digital and hybrid work environments while also addressing challenges such as talent acquisition and skill development.

Portfolio Strategies: Embracing Sustainability and Flexibility

In response to changing market dynamics and tenant preferences, commercial real estate firms are reevaluating their portfolio strategies. Enhancing sustainability and energy efficiency emerged as top priorities, reflecting the growing emphasis on environmental, social, and governance (ESG) initiatives. Additionally, there’s a renewed focus on dynamic building designs, particularly in office spaces, to facilitate flexibility and adaptability. The integration of smart building technologies is also gaining traction, although there’s room for further investment and innovation in this area.

The Office Conundrum: Balancing Optimism and Challenges

While optimism prevails in revenue projections for most sectors, the office segment presents a nuanced picture. Despite widespread optimism regarding leasing activity, a notable proportion of respondents expressed concerns about revenue declines in office properties. This sentiment underscores the ongoing uncertainty surrounding the future of office spaces in a post-pandemic world. However, there’s also evidence of resilience and adaptability, with firms exploring strategies such as adaptive reuse and automation to revitalize office assets.

Embracing Diversity, Equity, and Inclusion (DEI): A Growing Imperative

One encouraging trend highlighted in the report is the increasing focus on diversity, equity, and inclusion (DEI) within the commercial real estate industry. Many respondents recognized the importance of fostering diverse and inclusive workplaces, acknowledging the positive impact on business performance and innovation. This heightened awareness underscores a broader commitment to creating more equitable and inclusive environments across the sector.

Looking Ahead: A Sense of Optimism and Opportunity

As we navigate the complexities of the commercial real estate landscape in 2022 and beyond, there’s a prevailing sense of optimism tempered by the recognition of ongoing challenges. From embracing sustainability and innovation to prioritizing diversity and adaptability, industry stakeholders are charting a course toward a more resilient and inclusive future. By leveraging insights from reports like Deloitte’s Commercial Real Estate Outlook, stakeholders can stay informed and proactive in addressing evolving market dynamics and emerging opportunities.

The Survey

Deloitte surveyed 400 senior executives of various companies all over the world with assets over $100 million. In this show host Michael interviews John D’Angelo, Real Estate Solutions Leader with Deloitte, on the top takeaways from the results of this (Deloitte) survey. He notes that more that 80% of respondents expect business to be up in 2022, a general sense of revenue optimism, with the exception being office property respondents. Efforts toward sustainability are also discussed, as are things being done to improve the tenant experience.

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Video: Deloitte’s John D’Angelo Discusses his firm’s Commercial Real Estate Outlook 2022

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Thousands of Pages of Original Content

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