The effects of coronavirus are clearly evident in the April unemployment rate spike in Miami-Dade as of April 1, 2020. At 11.95, the level of unemployment has yet to reach the 12.4% level reached in August 2009. Given the effects of coronavirus on commerce, however, the May 1 numbers, once released, will surely exceed that 2009 number.
Almost to the minute I posted about how commercial property inquiries had gone over a cliff, noting it as worthy of duh-chuckle categorization, inquiries began to rebound. This one could go in the category of “Whuuut?”
As I mentioned in that prior post, if you know me, you know I’m a data hound. I collect and manipulate data, including various types of selling activity, manually logged as a matter of habit, consistently imperfect. One is commercial property inquiries. These dropped off to near zero with COVID-19, no huge surprise. What is somewhat surprising, however, is that they’ve, at least for the moment, seemingly completely rebounded. To be sure, an inquiry isn’t a transaction, but is isn’t nothing either. Thus, this development is welcome.
The chart above shows the 20-day moving average of new commercial property inquiries. This is the sum of various kinds of new inquiries, which in actuality I track more specifically. The year had started off with a bang, as can be seen, which is more a culmination of my efforts over time than a statement of market conditions. Once coronavirus hit, however, this metric went into a dive, with the 20-day average dropping to about 10% of what it was pre-COVID. Since then, however, it has recovered to about the same as the average for the prior year. Go figure.
This second chart is exactly the same data, but with 2020 plotted over 2019 to compare period versus period. The red is 2020, which one can clearly see has of a sudden exceeded levels in 2019. The year of 2020 had been considerably stronger for me in this area, thus this isn’t really a fair comparison for 2019, but with coronavirus having such a negative effect otherwise it is nonetheless a welcome sight.
What do I make of this? I’d mentioned in the prior post that it seems safe to assume there will be some post-pandemic increase in inquires. I’m reasonably certain that is not what this is. Instead, this is likely a rebound to half or so of what this would have looked like absent COVID-19. Regardless, hey, I’ll take it at this point. As this very moment, it likely doesn’t mean much. It does mean there is room for optimism. I only hope that extends to everyone and all things. Here’s hoping.
Virgin Trains seeks $350M to build five stations in Miami-Dade
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Olympia Theater program puts preservation ahead of profit
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Video: May 20th Miami DDA Small Businesses Getting Back to Business Webinar
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At Zyscovich Architects’ headquarters in downtown Miami, returning to work will be a little different. Guided by arrows, employees and guests will enter the office one way, and exit another. Packages will be rerouted to a room on a separate floor to be unpacked and disinfected. And workers will be encouraged to eat their lunches at their desks. Like going to a…
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The Miami Downtown Development Authority (Miami DDA) held a webinar on May 20th, 2020, entitled Small Businesses Getting Back to Business. This was a presentation a video conference to allow professionals, entrepreneurs, and area residents to come together to network and to expand their knowledge of the best #HowToDWNTWN practices from some of the most successful business leaders and residents of Miami. The accompanying slides may be accessed at dropbox.
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Could COVID-19 Benefit the Industrial Real Estate Market?
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Warehouse Prices Jump 5%, Supply Expected to Exceed Demand Post-COVID-19 [Report]
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Construction industry looks for solid ground
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At Zyscovich Architects’ headquarters in downtown Miami, returning to work will be a little different. Guided by arrows, employees and guests will enter the office one way, and exit another. Packages will be rerouted to a room on a separate floor to be unpacked and disinfected. And workers will be encouraged to eat their lunches at their desks. Like going to a restaurant or entering a residential building, going to work after two months of…
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How Blackstone plans to keep its upper hand in the downturn
Seated in the New York State Capitol’s Red Room, Gov. Andrew Cuomo introduced the team that would restart the state’s economy. He knew them well. “In some ways it’s like putting the band back together,” Cuomo said in late March, introducing Bill Mulrow, a senior executive at the Blackstone Group, and Steve Cohen, executive vic…
Major housing development on US 1 advances
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Paycheck Protection Program loans require smart steps by recipients
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SeaVee Boats build new factory at right time
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Alex Sapir wants to take his firm private. This could be the right time
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Major restaurants and cafes seek rent cuts, irking landlords
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Pier 1 wants to close all its stores for good
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Zaragon pays $8 mil for industrial property near Hialeah
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Video: COVID-19 Effects on Downtown Miami Discussed in DDA Executive Committee ZOOM Meeting
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Report: Warehouse Prices Jump 5%, Supply Expected To Exceed Demand Post-COVID-19
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Mystery investor dumps big stake in real estate fund
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Notable Retail Leases Signed in South Florida Q1 2020
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Pandemic kills some retailers, but others could reboot
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Triarch Capital Lands $35M Refi for Aventura Asset
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Retail rent collection plunges to 58% in April
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Miami Industrial Sale-Leaseback Spearheaded
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Coral Gables developer Masoud Shojaee and daughters locked in dispute over rock mining rent
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Trust CEO: Hotel Operators Not ‘Receiving Any Income For The Remainder Of Year Of Any Kind’
Trust Hospitality CEO Richard Millard said the coronavirus has eliminated his company’s revenue. Trust operates 31 boutique hotels, and as an operator, he said 2021 might be the next time his company takes in revenue. “I don’t see most of us that operate hotels, certainly as a pure operator, are receiving any income for the remainder of the year of any kind,” he said…
Miami Commercial Real Estate Sales to List Price Ratio Holds Up in April ~ MLS Chart
Miami Association of Realtors Jan 2015 to Apr 2020 Property Types ‘Commercial, Industrial’ and ‘Land-Commercial, Business, Agricultural, Industrial’, Sales to List Price Ration Calculated from 15,543 Listings. Granted, one month does not a recession make. However it is worth noting that commercial properties traded at…
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Hawkins Commercial Realty is an entrepreneurial boutique commercial real estate brokerage helping business owners and investors in the Miami, Florida area navigate the processes of buying, selling, and leasing property, and providing M&A/business brokerage services. The company’s guiding principles are to always be responsive, to be effectively, steadily assertive, to continuously develop and utilize competency, to be sensibly creative, and to seek to add value to the process. The company was founded and is owned by a seasoned entrepreneur with more than 25 years of experience in commercial real estate as a broker or principal… (more)
James Hawkins lic. Real Estate Broker
In this Miami DDA Executive Committee meeting of May 15th, 2020, as one might imagine the talk is COVID-19 this and coronavirus that, and how it is expected effects on downtown Miami and the Miami DDA organization itself. The Executive Committee of the Miami DDA (Downtown Development Authority) guides the Miami DDA’s efforts to fulfill its mission to grow, strengthen, and promote the economic health and vitality of the Downtown Miami area. Meetings are open to the public and generally held on the third Friday of every month at 9:00 in the morning. Visit their calendar at MiamiDDA.com for a complete schedule of Miami DDA Board of Directors and Committee meetings.
Granted, one month does not a recession make. However it is worth noting that commercial properties traded at a somewhat normal price in relation to listing price in the COVID-19 troubled month of April, as can be seen in the chart above. Sure, this ratio is lower that the prior month, but only a bit, in a way that looks like a normal fluctuation, and in any case still well above lows set in prior years. Note this is for all sales in MLS entered as improved or commercial land, dubbed ‘Commercial/Industrial’ and ‘Land-Commercial/Business/Agricultural/Industrial’ in that system. Surely much of the effect of the coronavirus pandemic is visible in reduces volume of sales, with everyone for the moment in a “deer in headlights” state. What this does represent, however, is that sellers were not dropping prices in April sufficiently for it to nudge this data. Where we go from here is the trillion dollar question.
636-Unit Self-Storage Property in Miami Trades
JLL has arranged the sale of 21st Century Self Storage, a 636-unit facility in Miami. The 37,242-square-foot asset features climate-controlled units and 26 parking spaces. The building was originally constructed in the 1950s and was converted to self-storage in 2003. The building is located at 200 NW 79th Street eight miles north of downtown Miami. Steve Mellon…
Compass Self Storage Expands Miami Footprint
Self storage company 21st Century has finalized the disposition of a 37,242-square-foot property in Miami. Amsdell Cos., operating under its Compass Self Storage brand, acquired the property for $7.2 million, according to Yardi Matrix. JLL Capital Markets negotiated the transaction on behalf of the seller. As part of the deal, the new owner assumed an existing $5.2…
Miami Developers Tweaking Plans To Include Less Retail, Bigger Offices
Businesses and individuals have started to see some relief to get them through the coronavirus, but “there’s only so much the government can do,” said Deco Capital founder Bradley Colmer during a Bisnow webinar Wednesday. “There’s going to be sectors that are going to be [an] absolute bloodbath.” “Thankfully, we sold some of our retail holdings,” Colmer…
Hotel occupancy inches up in major US cities
It may not be saying much, but hotel fundamentals are up in some major U.S. cities. Overall, hotel occupancy in the U.S. has been improving since early April and last week hit 30.1 percent, up from 28.6 percent the week prior, according to the latest data from STR. STR’s Jan Freitag said that Transportation Security Administration checkpoint counts show that…
Report: Industrial Looks Like a Smart Play in the Current Environment
As national stay-at-home orders have shifted much of the economy toward a delivery model, the negative implications have been broadly felt, extending in the commercial real estate arena. However, Marcus & Millichap says industrial appears to be an exception to the rule. “Offices, restaurants, hotels and most other retailers have been forced to close…
Wynwood Site Claimed, Mixed Use Development Envisioned
A former medical manufacturing facility on a combined 2.27-acre assemblage in Miami’s vibrant Wynwood Arts District traded hands for $18.5 million… T6-8 and allows for higher density mixed-use development. The… sites included in the sale are at 2141–2127–2115 N Miami Avenue, 2150–2160 N Miami Avenue, 38 NW 22nd Street, and 2155 NW Miami Court.
Related Group pays $19M for Wynwood development site
The Related Group closed on a development site in Wynwood for $18.5 million. PRH Investments LLC, an affiliate of Miami-based Related, acquired a 2.27-acre assemblage of land at North Miami Avenue and Northwest 22nd Street, according to a press release from Cushman & Wakefield. The site is zoned T6-8, which allows for eight stories of mixed-use development.
Miami-Dade outlines proposed reopening plan to start Monday, but it’s far from a return to normal
Miami-Dade County Mayor Carlos Gimenez released a 184-page guide for reopening, with the first businesses opening their doors on Monday, pending approval from the governor’s office. The color-coded guide outlines proposed rules for retail, office buildings, shopping centers, trade and logistics, restaurants and hotels, as well as other businesses. The county’s…
Turbulence ahead as Covid-19 stimulus aid keeps rents afloat in SoFla CRE
Stimulus aid to small businesses has kept commercial landlords afloat since the coronavirus pandemic shut down most aspects of everyday life in South Florida. Yet, the future landscape remains uncertain amid an impending recession, according to brokers, bankers and lawyers. “So much stimulus money is backing up tenants,” said Lloyd Berger, president of Fort…
Miami’s Trendy Wynwood District Thrives On Small Business. How Can It Survive Coronavirus?
Daniel Levine stepped outside of his Wynwood ice cream shop, Dasher & Crank, this week to look at the neighborhood. “It’s an absolute ghost town,” he said. “I don’t see a single person around.” Sweet Spot, a candy shop that had opened just a few months ago, was gone. There was brown paper covering the windows at Laid Fresh. A gelato place was dark, as was every…
Rieber Developments Breaks Ground on 10-Story Mixed-Use Project in Aventura
Rieber Developments has broken ground on 12|12 Aventura, a 10-story mixed-use project featuring medical office, luxury senior residences and a food hall. The property is situated in Aventura, approximately 20 miles north of Miami. Arquitectonica designed the development, which will include a 30,000-square-foot gourmet marketplace and food hall, 25,000…
Project in Aventura Health District Breaks Ground During Pandemic
The developer of a 10-story mixed-use project in Aventura is breaking ground despite the coronavirus pandemic. 12|12 Aventura will include a 30K SF food hall, 25K SF of mostly medical offices and 160 luxury residential units for seniors. The offices are broken into 30 condos, 40% of which are already sold, developer Rieber Developments said. The…
Triarch Capital scores $35M refinancing for One Turnberry Place
Triarch Capital Group scored a $35 million loan to refinance One Turnberry Place in Aventura. Triarch Capital secured the loan for the office building at 19495 Biscayne Boulevard, in front of Aventura Mall from Nationwide Life Insurance, according to a spokesperson for CBRE. CBRE’s Paul Ahmed and Mackenzie Fry represented Triarch Capital Group in the deal, according to…
Here’s when Miami Beach is proposing to reopen non-essential businesses
The city of Miami Beach is proposing to allow non-essential businesses to reopen on Wednesday, May 20, two days after Miami-Dade County is considering entering the first phase of reopening. In the proposed phase 1A, 761 Miami Beach businesses could reopen in one week. That would include 602 retail stores, 18 museums, and 141 hair and nail salons and barber…
Small landlords call for rent relief package, fearing Wall Street takeover
Small landlords, such as Jan Lee, a New York landlord who owns two buildings, say Wall Street players will take their place unless rent relief comes soon. Calls for the government to bail out the rental housing market are getting louder, and they’re not just coming from tenants. As financial…
PortMiami working to redrawn agreements with multi-billion impact
Two months after cruise lines ceased operations worldwide, the “Cruise Capital of the World” and its industry partners are in talks to redraw details in their long-term agreements to adjust to post-coronavirus expectations. How those talks will affect four massive terminal deals PortMiami struck with Carnival Cruise Line, MSC Cruises, Norwegian Cruise Line and…
Coconut Grove Playhouse case heads to June hearing
The future of the Coconut Grove Playhouse remains in the hands of the Appellate Division of the 11th Judicial Circuit Court with a hearing set for June 16 – if the pandemic permits. With building permits and drawings set to begin construction at the playhouse property at 3500 Main Hwy., Miami-Dade County Department of Cultural Affairs Director Michael Spring…
Rolando Aedo: Preparing new Miami Shines campaign to rebuild tourism
South Florida was still reeling from Hurricane Andrew when Rolando Aedo began working with the Greater Miami Convention & Visitors Bureau, the region’s nonprofit promotional arm for hospitality and tourism. His role, developing a recovery marketing campaign to reattract interest here, was meant to be temporary. Twenty-six years later, he’s served in several…
Miami-Dade, Broward reopening expected May 18
Broward County is expected to start reopening May 18, along with Miami-Dade County, according to multiple news reports. Broward Mayor Dale Holness had a conference call on Monday with city mayors and there seemed to be consensus that May 18 would be targeted. “The sentiment is that, whether or not Miami goes on the 18th, we will go on the 18th…”
Mall free fall: Macerich collects just 26% of April rent payments
We know it is a bad time to own malls, but retail landlord Macerich’s Tuesday earnings call highlighted how dire matters are. Tom O’Hern, CEO of the Santa Monica retail real estate investment trust, reported that the company “collected about 26 percent of rent” from tenants at the 47 shopping centers Macerich owns throughout the country, malls replete…
WATCH: Sandeep Mathrani says WeWork paid 80% of its rent
As WeWork makes headlines for rental woes, disputes with members and co-founder Adam Neumann’s SoftBank feud, Sandeep Mathrani sought to assuage concerns in his first TV appearance since becoming CEO. The office-space giant paid rent at 80 percent of its locations in April and May and collected rent from 70 percent of its members, Mathrani said on CNBC’s…
North Miami Beach apartment project nabs $71M refinancing
A development group led by Eden Multifamily scored $71.3 million in refinancing for an apartment building in North Miami Beach. North MB Owner, consisting of Eden Multifamily, Florida Value Partners, and Hunt Companies, secured the loan for the 356-unit Lazul Apartments at 2145 Northeast 164th Street. Hunt Real Estate Capital provided the financing…
Hunt Real Estate Capital has provided a $71.3 million Freddie Mac refinancing loan for Lazul Apartments, a 365-unit multifamily community in North Miami Beach. The 11-year, nonrecourse loan features a fixed interest rate in the 3 to 3.5 percent range, a 30-year amortization schedule and interest-only payments for the full term. The borrower, a limited…
Hunt Real Estate Capital Provides $71M Refi for Miami Beach Rental Property
A joint venture partnership between EDEN Multifamily, Hunt Companies and Florida Value Partners has nabbed $71.3 million in Freddie Mac-backed debt from Hunt Real Estate Capital to refinance the Lazul Apartments in North Miami Beach, Fla., according to information released by Hunt. The 11-year, fixed-rate and interest-only loan from Freddie’s pre-stabilization…
JV Secures $71M Refi for Miami Beach Property
A partnership including borrower North MB Owner LLC, EDEN Multifamily, Hunt Cos. Inc. and Florida Value Partners has secured a $71.3 million Freddie Mac conventional loan via the pre-stabilization program, for Lazul Apartments, a Class A, 356-unit, mid-rise community in North Miami Beach, Fla. The LLC arranged for modified zoning to allow retail to become…
Simon says malls will reopen but some states say otherwise
Simon Property Group’s plan to reopen several dozen malls across the U.S. has not gone as smoothly as expected. While more than three dozen states have partially reopened to business — or will be soon — some cities within those states remain under quarantine. Simon has postponed the opening of at least seven malls in New…
Developer of Aman-branded towers in Miami Beach scores $35M loan
Billionaire Len Blavatnik’s Access Industries closed on a loan for the first Aman-branded development in South Florida. The developer, 3425 Collins LLC, secured $34.8 million in financing from Bank OZK for the site of the former Versailles Hotel in Miami Beach, property records show. Blavatnik and fellow billionaire Vlad Doronin plan to build a two-tower hotel and…
Does COVID-18 Provide an Excuse for Non-Performance of a Contract?
The question of almost every party to a contract that remains to be fully performed is whether Covid-19 is an act of God that will excuse performance by the party who has yet to complete performance. The starting point in any such inquiry is the written agreement between the parties-assuming there is a written agreement. If there is no written…
Jimmy Resnick sells Alton Road retail building for $9 million
Miami Beach investor Jimmy Resnick sold a retail building on Alton Road for $9.25 million. Hibiscus Alton Inc. sold the 16,441-square-foot building at 955 Alton Road in South Beach to 955 Alton Road MIA LLC, property records show. The building was previously home to Coco Bambu, a Brazilian seafood restaurant that closed more than a year ago. Resnick bought…
WeWork’s rental woes slam CMBS market
WeWork’s efforts to renegotiate several of its leases and skip rent payments is causing the price of bonds backed by payments from the company to plummet. Many WeWork tenants have requested rent relief or the termination of their contracts since the onset of the coronavirus pandemic, which has hurt the commercial mortgage-backed securities that rely on…
Coronavirus could set back the pro-density movement
The movement toward dense, transit-adjacent development picked up steam over the last few years, but the coronavirus pandemic might prove to be a big setback. The pandemic has forced a quick national pivot toward telecommuting, which some think could undercut the utility of living near transit, according to the New York Times. If you don’t need to go into…
Bars and music venues across America worry they’ll never reopen
The coronavirus pandemic has forced scores of small bars and clubs across the country to shut their doors and some owners fear they won’t open back up. Entertainment operators, both corporate-backed large companies like Live Nation and small independent proprietors, are feeling the crunch of the coronavirus pandemic. But many smaller outfits don’t have the…
Will insurers cover coronavirus-related business losses? We may soon find out
CNA Financial CEO Dino Robusto A business insurer’s position that it isn’t required to cover coronavirus-related losses is set to face a legal litmus test. A Las Vegas-based company with a CNA Financial’s subsidiary’s policy filed a class-action lawsuit against the company in a Chicago federal court on Monday, according to Crain’s. The company, Vegas Image, owns a…
Brookfield Property’s Q1 losses come as retail tenants miss payments
Brookfield Property Partners is now negotiating with 2,400 of its retail tenants across the country who have been unable to come up with the rent. That inability to pay has cut deeply into Brookfield’s bottom line. Its first quarter was dismal. The real estate wing of the Canadian giant Brookfield Asset Management had a net loss of $373 million from January through…
What April’s record-high unemployment means for real estate
Following an unprecedented 20.5 million drop in payroll last month, the April unemployment rate reached a record 14.7 percent, the U.S. Bureau of Labor Statistics reported Friday. That figure is the highest unemployment percentage on record, since seasonally adjusted data became available in 1948. The unemployment rate is estimated to have reached about 25…
“Unlawful” and “hypocritical”: WeWork members threaten legal action over fees
A group of WeWork members is threatening the co-working giant with legal action if it continues to collect fees even though the coronavirus has prevented them from using the space. In a letter to WeWork’s general counsel on Thursday, an attorney for the members said WeWork’s collection of fees was “unlawful” because state and local authorities have directed…
Virus will leave lasting impact on retailers and their landlords, industry pros say
The near-total shutdown of New York City shops and restaurants during the coronavirus crisis will likely be felt for years to come in the retail real estate world. In the short-term, landlords and tenants will have to come up with creative solutions to help commercial tenants back on their feet, according to some of the city’s top retail brokers who discussed the state of the…
Gov. DeSantis discussing next steps for South Florida
Gov. Ron DeSantis is in discussions with South Florida officials about the next step for the three counties, which were left out of the first phase of statewide reopening. At a press conference on Wednesday, the governor said officials were monitoring an easing last week that saw parks, marinas and golf courses reopen—“they want to see how that’s going.” There has…
After submitting a winning bid in bankruptcy court, investor Moishe Mana has closed on the $16.5 million sale of two McArthur dairy sites, including prime property in Little Haiti. The McArthur Dairy plant in Little Haiti Mana plans to build and expand the McArthur brand to have both dairy and non-dairy milk products, saving the company from total liquidation…
Russell Galbut’s Crescent Heights wants a rooftop movie theater at 1212 Lincoln project
Rendering of Rooftop Cinema Club at 1212 Lincoln and Russell Galbut Russell Galbut’s Crescent Heights wants to open an outdoor rooftop movie theater at its 1212 Lincoln Road project on Alton Road in Miami Beach. Miami Beach’s Land Use and Sustainability Committee on Wednesday moved to have the Miami Beach City Commission vote on a proposal…
What Sam Zell is offering renters to keep occupancy rates high
Sam Zell’s Equity Residential had a collection rate of about 97 percent for April despite widespread concerns that tenants would be unable or unwilling to pay their rent amid the pandemic, the company reported on its first quarter earnings call. Equity Residential held its call on Wednesday morning, and CEO Mark Parrell maintained that the company was…
Florida restarts plans for bridge at FIU, two years after deadly collapse
The Florida Department of Transportation will begin the design process for a pedestrian bridge at Florida International University, more than two years after the bridge’s fatal collapse. FDOT announced it would manage and oversee the new project for the intersection at Southwest Eighth Street and Southwest 109th Avenue in Sweetwater, connecting the city to FIU’s…
Resort-town hotels bounce back in reopening states, providing industry with hope of a return
Hotels bounced back last week at tourist destinations in states like Florida and Texas which have begun reopening — a sign that the industry could rebound once more states relax pandemic restrictions. Texas cities like Galveston and Corpus Christie led the boost in occupancy last week, alongside Florida destinations…
Even Sam Zell isn’t ready to dance on graves
The investor has made a fortune playing the distressed game. But even he’s on the sidelines for now. When the markets begin to melt, people usually look to see what Sam Zell is up to. The billionaire real estate investor made his fortune and reputation by acquiring distressed assets on the cheap and disposing of properties at the zenith of the market. He sold Blackstone…
The days of long-term retail leases may be over
As retailers and other businesses seek relief from landlords, one potential long-term fix to rent woes is on the horizon. Michael Phillips, who leads real estate investment manager Jamestown, told the Wall Street Journal that the days of reliance on standard long-term leases with fixed payments in retail are done.
Welcome back to your post-corona office. You probably won’t recognize it
Thermal cameras, bacteria-fighting HVAC systems and contactless coffee machines. Welcome back to the office – you may not recognize it. As New Yorkers gear up to go back to work, landlords are scrambling to cater to a totally different set of priorities. Over the past few years, office spaces have been designed to maximize social interaction. Now, however, minimizing…
Neiman Marcus Files For ‘Prepack’ Bankruptcy, Joining J Crew
Just three days ago, we reported that Neiman Marcus – aka “Needless Markups” – was on the cusp of striking a deal with creditors for financing that would help tide it over through bankruptcy. Well, it looks like the big day has finally arrived. Bloomberg reports that Neiman Marcus Group has officially entered into a Restructuring Support Agreement with a…
Hotels Are Being Impacted by COVID-19. What Can Owners and Lenders Do to Limit the Fallout?
COVID-19 is causing tangible disruption throughout the hotel industry. Daily decreases in travel and cancellations of meetings lead to quick drops in occupancy, followed by hotel pricing decreases (often irrational) that further exacerbate market jitters. A hotel market rate and occupancy shopping app, MSight, estimated downtown Los Angeles hotels had a…
Fortune and Château score $119 million refi for Sunny Isles condo project
Fortune International Group and Château Group scored $119 million in refinancing from Bank OZK for their planned La Playa de Varadero condo development in Sunny Isles Beach. The developers are planning to build two 56-story condo towers on the vacant site at 18801 Collins Avenue. The site is approved for 490 residential units and 1.15 million square feet…
Moishe Mana closes on acquisition of McArthur Dairy
Developer and investor Moishe Mana closed on his acquisition of McArthur Dairy for $16.5 million, expanding his business empire into milk production. Mana is partnering with Jay and Robert Schneier, owners of Florence, New Jersey-based Cream-O-Land, to operate the processing plant and delivery aspect of the business, said Mana’s attorney, Bruce Fischman.
Self-storage facility in Little River sells for $7 million
In both good times and bad times, self-storage remains one of South Florida’s hottest asset classes. Mitsukoshi Miami LLC, tied to 21st Century Storage, sold a self-storage facility and parking lot at 200 Northwest 79th Street and 7751 Northwest Second Avenue in Miami to Amsdell Companies for $7.23 million, records show. The two properties total 48,435 square…
Chart: Commercial Sales Transaction Metric Declines in April as Sales to List Price Ratio Holds
Miami Association of Realtor’s MLS commercial sales, charted above, may not be representative of all commercial sales, but they are representative of a level of sales such that one period can be compared to another. In the accompanying chart, one can see that closed transactions declined by 2/3 in April 2020, to 40, from a run rate of about 120. Obviously, this is COVID-19…
On today’s episode of TRD Talks Live, associate publisher Hiten Samtani will discuss the future of retail with TSCG and SCG Retail’s David Firestein, Newmark Knight Frank’s Jeffrey Roseman and Meridien Retail Leasing’s James Famularo. Long before coronavirus kept shoppers off the streets, retail was struggling to adapt…
Cresting Wave of Job Losses Upends Miami Multifamily Sector
How will the COVID-19 fallout impact the Miami multifamily market? Although many investors are approaching markets known for leisure travel and cruise industries with caution these days, RED Mortgage Capital research posted last week indicates Fort Lauderdale/Broward County may offer a more attractive risk and reward profile than is commonly…
The head of the largest real estate-focused venture capital fund is advocating for a $30 billion government bailout of the retail industry, warning that it is on the brink of systemic collapse. Brendan Wallace, managing partner and co-founder of Fifth Wall Ventures, has a proposal: Get the five biggest retail landlords in a room with the federal government…
Fortune International Group and Château Group have received a $119 million loan for the refinancing of La Playa de Varadero, an oceanfront condominium development site in Sunny Isles Beach, a barrier island about 20 miles north of Miami. Located at 18801 Collins Avenue, the 4.7-acre site boasts beach frontage of 435 feet directly on the Atlantic Ocean. Plans…
The Pandemic Is Changing How The Next Wave Of Apartment Amenities Will Be Designed
Some social distancing built into the design is going to need to be an option, though the exact nature of changes isn’t clear yet. “The open-plan hospitality vibe has been central to marketing to a millennial demographic,” The Architectural Team principal Michael Liu said. “But in the present pandemic, it may also be ideal for communicating disease.” Meshberg…
Commercial Borrowing Cost: Rate Watch for April 30, 2019
At the end of April of 2019, intermediate yields remain at lows reached in recent weeks. This has, of course, been driven by reduced economic activity due to the COVID-19 pandemic. As can be seen in the accompanying chart, five year rates, which are most closely tracked for commercial property borrowing cost, found themselves under 0.5%, flirting with negative rates.
Related Group honored for bevy of awards
Last year executives and projects of The Related Group, a leading developer of metropolitan living in Florida as well as one of the country’s largest real estate conglomerates, won several accolades. Based on these recognitions, Miami Today’s Gold Medal Awards judges chose the company as one of this year’s winners for an institution. The specific award level – bronze, silver…
Yardi Matrix April National Office Report: So Far, It’s a Waiting Game
COVID-19 has drastically reshaped life and the economy, but the pandemic’s full effects on the U.S. office market have yet to come to light in the data. The latest Yardi Matrix office report shows that national full-service equivalent listing rates held steady through March. Moreover, in terms of sales, Q1 2020 was on par with the first quarters of the two previous years…
Della Heiman: Shifting from former Wynwood Yard to a new Doral Yard
Fresh out of Harvard Business School in 2014, Della Heiman was whittling down her list of where to launch her healthy, plant-based culinary concept, Della Bowls. She wanted to start in a city where demand and awareness of such an offering was high but supply was limited. It ultimately came down to two cities, Chicago and Miami. Weather was the pivotal factor at first…
Unfortunately, new rail transit likely to be Covid-19 victim
There are a number of reasons to carefully heed Miami-Dade Commission Chairwoman Audrey Edmonson’s concerns about planning a Metrorail extension from downtown Miami to the Broward County line. Just look around and you’ll see them. As she noted at a recent transportation planning meeting, Metrorail is the most expensive transit we could get…
Video: Ian Lis of Tripp Scott Law Firm Discusses Navigating the PPP
On Monday, May 4th, South Florida Business & Wealth hosted a live Virtual Connect webinar “Navigating the PPP.” Our moderator, CEO and Chairman Gary Press, interviewed Ian Lis of Tripp Scott Law Firm on the Paycheck Protection Program, a loan from the SBA designed to provide a direct incentive for small businesses to keep their workers on the payroll. View…
JLL predicts coronavirus’ impact to extend past 2020
As the coronavirus crisis cripples property sales and leasing, JLL’s latest financials may offer a glimpse of what’s ahead for the first-quarter earnings season. The commercial brokerage reported a net operating income of $5.3 million during the first three months of 2020, compared to $21.3 million a year ago, Crain’s reported. JLL said global leasing fell 22 percent year…
Retail fallout: Victoria’s Secret sale scrapped, Neiman Marcus nears restructuring deal
Victoria’s Secret’s parent company has canceled its deal with private equity firm Sycamore Partners, while Neiman Marcus is nearing a restructuring deal with a Pimco-led group. (Andrew Chin/Getty Images; Noam Galai/Getty Images) With their stores still closed, these struggling retailers are pursuing new plans. L Brands, the parent company of lingerie retailer Victoria’s…
J. Crew Files for Bankruptcy Protection
J. Crew Group Inc. filed for bankruptcy with plans to hand control to its lenders, unable to revive its preppy clothing line amid the pandemic and crushed by debt rooted in a long-ago leveraged buyout. While J. Crew’s struggles pre-dated the coronavirus outbreak, it’s the first major retailer to go bankrupt during the ensuing economic shutdown, which has pushed…
Sam Zell’s office REIT won’t commit to a specific coronavirus strategy just yet
Sam Zell’s Equity Commonwealth has not had many problems collecting rent so far, but the company was very light on details about the pandemic’s impact apart from that in its first quarter earnings call on Tuesday morning. The office real estate investment trust had 98 percent of its contractual rents paid for the month of April, and just 3 percent of that…
Investments Limited scores $67M loan for 13 SoFla properties
Investments Limited nabbed a $67 million loan to refinance 13 of its commercial properties in South Florida. The Boca Raton-based commercial real estate firm secured the loan from Miami-based Ocean Bank for office and retail properties in Boca Raton, Deerfield Beach, and Plantation, according to a press release. The law firm Holland & Knight’s Josias…
Warren Buffett questions the need for office space
The Oracle of Omaha foretells an existential challenge for office space. At Berkshire Hathaway’s annual meeting on Saturday — held this year via live stream from an empty arena — CEO Warren Buffett quipped that it had been more than seven weeks since he had put on a tie. And the extended period of remote work may affect more than just clothing choices.
57 Ocean in Miami Beach scores $59M construction loan
Multiplan Real Estate Asset Management closed on a $58.5 million construction loan for 57 Ocean, a luxury condo project in Miami Beach. The developer, led by Brazilian billionaire José Isaac Peres, secured the loan from Bank OZK. The Little Rock, Arkansas-based bank is still lending in South Florida during the pandemic, and recently received the final…
St. Louis Fed: How will COVID-19 Affect Financial Assets, Delinquency and Bankruptcy?
There will be economic losses from the COVID-19 pandemic, and knowing how those losses are distributed across the population is just as important as the overall amount.1 Our previous posts in this series have uncovered a troubling pattern. Communities with the highest financial distress—which are the least able to weather economic losses—both: Tend to rely more…
Key COVID-19 metrics improve in South Florida
South Florida was cut off from the rest of the state in a phase one reopening on Monday, but key health metrics show progress. Florida Department of Health charts show a steady downward trend in Broward, Miami-Dade and Palm Beach counties for emergency room visits for people with COVID-19 and flu-like symptoms. The trend line is similar to statewide figures.
Landlords Sue Ross Stores, Other Commercial Tenants
In the past 24 hours, landlords have filed at least two lawsuits against major retailers over nonpayment of rent. And South Florida lawyers say these are just the start as brick-and-mortar retail faces a new and unexpected hurdle: the coronavirus. The lawsuits follow the Florida governor’s executive order requiring store closures and mandating social distancing restrictions.
CMBS debt relief inquiries fall in late April, but worst is yet to come, new report says
After facing a tidal wave of relief requests in the first half of April, loan servicers saw a dip in inquiries during the last two weeks of the month. But that probably won’t last. Over the two-week period ending April 26, the four largest commercial mortgage-backed securities master servicers (Wells Fargo, Midland, Keybank and Berkadia) received a total of 1,301 inquiries…
Miami-Dade judge tosses Avra Jain’s $15M lawsuit against former attorneys
Miami-Dade Circuit Judge Michael Hanzman has derailed developer Avra Jain’s efforts to collect $15 million from a law firm that represented her in an unsuccessful court case. Hanzman dismissed Jain’s complaint on March 13 by granting summary judgment for Buchanan Ingersoll & Rooney and its shareholder Richard A. Morgan. The firm had represented the Vagabond…
Private clubs like Soho House keep collecting dues, add perks to keep members happy
Private clubs including Soho House continue to collect steep dues from members, even though many have had to close up shop because of the pandemic. Soho House is offering only in-house credits for the months the club is inaccessible as it tries to keep cash flowing to cover expenses, according to Bloomberg. Not everyone is happy, but other members say…
Half of mall-anchored department stores could close within a year
If you’re looking for some post-lockdown retail therapy, your choices may be limited. More than 50 percent of department stores anchoring shopping malls could permanently close within the next 12 months, according to a Green Street Advisors report cited by CNBC. Anchor department stores are themselves key to the financial viability of mall properties, but closures…
Who are the tenants of today and tomorrow?
With another monthly rent payment coming due, both commercial tenants and landlords are evaluating their prospective futures. A potential surge of bankruptcies raises an important question: who will be the tenants of today and tomorrow? Some recent developments in pending bankruptcy cases and likely filings provide some insight into the possibilities and how both…
Small businesses in high-rent cities balk at PPP loans
Small business owners in high-rent cities like New York and Los Angeles are balking at PPP loan money, and calling for more flexibility in how they may distribute the funding. (Photo by John Nacion/NurPhoto via Getty Images) Small business owners in high-rent cities like New York, Los Angeles and Chicago are finding the federal government’s $660 billion Paycheck…
South Florida deli chain TooJay’s files for bankruptcy
The popular Florida deli chain TooJay’s declared bankruptcy as a result of the impacts of coronavirus. TooJay’s Management, which opened its first restaurant in Palm Beach in 1981, filed for Chapter 11 bankruptcy earlier this week in federal court in the Southern District of Florida. The company owns and operates 28 locations in Florida, including in Hallandale Beach…
J. Crew nears bankruptcy, Brooks Brothers seeks buyer
J. Crew and Brooks Brothers are among the latest retailers on the brink of bankruptcy. J. Crew, which has 322 stores, is seeking $400 million in financing to fund operations during bankruptcy, CNBC reported. And Brooks Brothers is seeking to sell itself, a deal that could potentially be part of a bankruptcy filing, according to…
Macy’s prepares to unlock the doors
In the latest sign of a post-coronavirus retail world, Macy’s will reopen all its 775 locations by the end of June. The company will begin on Monday with 68 stores in Georgia, South Carolina, Tennessee and Texas, according to the New York Times. CEO Jeff Gennette said in a presentation that the retailer expects to only bring in about 20 percent of its typical business…
Investors who shorted malls stand to make out big
The coronavirus pandemic may be the final nail in the coffin for some retailers and shopping malls. For certain investors, that’s a good thing. Those who shorted the mall-heavy CMBX 6 index are seeing their bets pay off faster than they thought as tenants come up short on rent and mall owners miss mortgage payments, according to Bloomberg. MP Securitized…
Miami commission approves rent, utility assistance for low-income households
Miami low-income residents who recently lost their jobs can start applying for rent and utility assistance at noon on Monday. But private contractors, or those who already are receiving rental subsidies, or are behind on their payments are not eligible. The Miami City Commission on Thursday unanimously approved allocating $6.9 million in COVID-19-related…
Hotel occupancy rises as essential workers, homeless fill rooms
The hotel market is improving across the country but that comes with a caveat. The uptick is likely a result of coronavirus-related response measures cities have undertaken throughout the U.S. Nationally, hotel occupancy inched up to 26 percent for the week ending April 25, from about 23 percent the week before, according to data from hospitality…
SoftBank anticipates $6.6B loss on WeWork investment
SoftBank’s bet on WeWork is causing more pain for the conglomerate. The group said this week that it is expecting a $6.6 billion loss for the year ending March on a portion of its investment in WeWork held outside SoftBank’s Vision Fund. The announcement comes two weeks after SoftBank told investors that its annual operating losses would reach…
Real estate is waking up to pandemic insurance. But is it too late?
Hotel owners nationwide have likely deployed teams of lawyers to scour their insurance policies, hoping to find a clause that covers a portion of the monumental damages inflicted as a result of Covid-19. Most of them have been sorely disappointed. But a very small number may be holding a trump card. In New York City, Rotem Rosen’s Hotel Indigo Lower East Side…
Video: Miami’s COVID-19 Recovery Plan Reviewed in Brickell Alliance Virtual Town Hall
This video is a recording of theApril 30th Brickell Alliance’s virtual town hall conversation with Miami City Commissioner Ken Russell on the City of Miami’s Recovery Roadmap. Reviewed are various phases of recovery and the orders to be issued within them, the expected timelines for such, and criteria for deciding when milestones are met. This is a must view video…
Business as Unusual – Habitus Furniture, Javier Malik, owner
Business backstory: The contemporary furniture store, launched in 2003, works with designers and manufacturers in Europe, Asia and South America to develop its own unique furniture collections. Habitus has locations in Aventura and Doral. (habitusfurniture.com) The impact: “Our showrooms in Aventura and Doral closed to the public due to…
Miami Association of Realtor’s MLS commercial sales, charted above, may not be representative of all commercial sales, but they are representative of a level of sales such that one period can be compared to another. In the accompanying chart, one can see that closed transactions declined by 2/3 in April 2020, to 40, from a run rate of about 120.
Obviously, this is COVID-19 related. Though at any given point there are storm clouds on the horizon of one sort or another, all was going along swimmingly in the world of commercial property until coronavirus tipped arrows started flying. Ditto, well, about everything else…
Some of this slowing is surely closings that are delayed. To the degree that is the case, the effect would appear exaggerated. However, also true is that these closings likely are for contracts entered in before the pandemic, which would mean we’re not seeing the worst of it. Anecdotally speaking, I would say general transaction related activity dropped nearly 100% for about a one month period, but seems to be recovering as I write this.
Active commercial listings are stable if not elevated. Though I’ve an idea this may be numbers of smaller AirBnB type properties hitting the market quickly. To check this, I looked at listings volume to see if indeed the volume number was declining as listings quantify was stable to increasing (indicating smaller properties hitting the market):
Indeed, this appears to be the case. In my practice, which doesn’t deal with those smaller AirBnB type properties, I’ve not felt any mad scramble to sell by owners. I’ve run into buyers purporting to be ready to snap up the deals – I say purporting as talking is one thing, stroking a check is another – but I’ve not run into the desperate sellers they are seeking.
Finally, it is worth noting that the ratio of closing price to list price has yet to budge. In fact, in the month of April, it was over 97%, in the upper end of a range of 95-ish to 98-ish percent. The counter to this would be that any effect here would likely be delayed. That is true, to be sure, but this ratio would indicate in the closings that did happen they appear to have largely done so at the contracted price. One would think that if there had been a renegotiation of price on numbers of transactions that closed in April, this would surely budge this ratio to the lower end of its range.
At the end of April of 2019, intermediate yields remain at lows reached in recent weeks. This has, of course, been driven by reduced economic activity due to the COVID-19 pandemic. As can be seen in the accompanying chart, five year rates, which are most closely tracked for commercial property borrowing cost, found themselves under 0.5%, flirting with negative rates. Though this would generally bode well for borrowing costs, at the moment things are so locked up it is a matter of being excited about rates at which you can’t borrow. But, that will pass…
This low rate environment is powerful for real estate as an asset class. There are reasonable concerns about occupancy rates in a slower economy, but lower rates, by way of cost of capital and as an alternative asset class comparison, will have an offsetting positive effect. How this battle will play out remains to be seen.
The interest rate environment has the ability to affect commercial property economics in a number of different ways (see this, this, and this). Borrowing costs are, of course, affected directly, as higher interest rates increase the cost of borrowing and thus negatively affecting demand. Cap rates tend move over time with interest rates, but not in lockstep, with considered analyses generally concluding that capitalization rates on average move in the same direction as 10-year rates, but only about a third as much, and again not in lockstep. Interest rates also affect the economy, which in turn affects vacancy and rental rates.
This video is a recording of theApril 30th Brickell Alliance’s virtual town hall conversation with Miami City Commissioner Ken Russell on the City of Miami’s Recovery Roadmap. Reviewed are various phases of recovery and the orders to be issued within them, the expected timelines for such, and criteria for deciding when milestones are met. This is a must view video for commercial property owners and tenants as it allows some idea of what to expect in terms of resumption of commerce.
Watch the video below:
Homestead salmon farm reels in $210M construction loan
An under-construction salmon farm in Homestead just reeled in $210 million in refinancing. Atlantic Sapphire secured the construction loan for the four-phased development at 22275 Southwest 272nd Street from DNB Bank, according to a spokesperson for Holland & Knight. Attorneys Alberto Hernandez and Elena Otero and associates Faisal Kraziem, Brittany Fox…
Private Equity Investor Looking To Buy Up To Half Billion Dollars of Distressed Loans
Since 2005, Miami Beach-based Safe Harbor Equity has been purchasing distressed, nonperforming loans secured by real estate, usually in the $2M to $20M range, usually from regional and community banks. Last May, the private equity firm announced it was raising a $100M fund to pick up more distressed assets. With that, it began… Managing Director Rafael Serrano…
Miami Workforce Housing Exec: ‘I Don’t See Rental Rates Dropping’
Economic downturns are also called “corrections” for a reason — they enable peak-level prices to come back down to a reasonable level. Given its scope, one might expect the coronavirus crisis to harshly correct Miami’s long-rising prices. But workforce housing developers in Miami doubt rents will drop, because their own costs remain high and tenant demand…
Owner of CMX Cinemas files for bankruptcy, hopes to get help from landlords
The owner of the movie theater chain CMX Cinemas filed for bankruptcy due to the financial impacts of coronavirus. Miami-based Cinemex Holdings USA filed for Chapter 11 bankruptcy on Saturday in Miami. The company is owned by Mexico-based Grupo Cinemex SA de CV, which controls CMX Cinemas with 41 locations in the Midwest, Northeast and the South…
Miami-based Theater Chain Files for Bankruptcy
Cinemex Holdings USA, Inc. and Cinemex USA Real Estate Holdings, Inc. filed for bankruptcy protection and reorganization under Chapter 11 of the U.S. Bankruptcy Code in Miami, where the companies are based. It is reportedly the first theater chain, or retailer, to file for Chapter 11 as a result of the COVID-19 pandemic. The company indicated the filing will…
It may seem like a bad time to pitch a series of luxury lifestyle development projects around the world. But SixRock Group — a Rockefeller family-led real estate services firm — believes the global coronavirus crisis has created opportunity for low-cost land and construction deals. It has partnered with Miami-based Brands Lab International to make a push…
Pressure Mounts To ‘Commandeer’ Hotels For Coronavirus
Homelessness in the U.S. was already at crisis levels before the coronavirus hit. When it did, some cities began arranging for people experiencing homelessness to stay socially isolated in empty hotels. Fort Lauderdale has been doing the opposite. In March, city commissioners voted to crack down on the homeless, moving to extend a ban on camping, which now covers…
Fed “not in any hurry” to raise interest rates: Powell
The Federal Reserve won’t push up interest rates any time soon, the central bank’s chairman said Wednesday as the U.S. economy shrank the most in over a decade. The Fed’s Federal Open Markets Committee said it was keeping the range of its benchmark interest rate between 0 percent and 0.25 percent after slashing rates twice in recent weeks as part of sweeping…
Ritz-Carlton Residences Sunny Isles developers pay off $212M loan
The developers of the Ritz-Carlton Residences, Sunny Isles Beach paid off their $212 million construction loan after shifting to virtual sales over the last month. Fortune International Group and Château Group paid off their lender, Little Rock, Arkansas-based Bank OZK, which provided the loan in September 2016. The 52-story, 209-unit luxury condo tower was completed…
Gio Midtown Opens During Pandemic: ‘Going Great, All Things Considered’
The 39-story, 447-unit Gio Midtown was built to be one of Miami’s trendiest new apartment buildings. There’s a fifth-floor pool deck, a 4,500 SF gym, a basketball court and a Himalayan salt room. After 31 months of construction, the building at 3101 Northeast First Ave. began leasing in January, with studios starting at $1,695 per month and three-bedrooms…
Here’s how South Florida’s office market is changing in the coronavirus era
Developer Avra Jain, one of the first believers in revitalizing dilapidated motels in Miami’s MiMo neighborhood, is used to taking chances. And now, despite a widespread belief that the workplace will change post-pandemic, she’s still betting big on the office market. Jain is pushing forward with plans to build a major mixed-use project on the Miami River – anchored…
Simon will use tech to track occupancy for mall-reopening strategy
Simon Property Group intends to reopen 49 malls in 10 states across the country, and has a detailed plan that includes deploying tracking technology to welcome shoppers while adhering to prescribed safety measures. The giant mall REIT will start opening its shuttered shopping centers on Friday, according to the New York Times, which obtained…
Miami Hotelier: Numbers Won’t Bounce Back Until ‘2023 At The Earliest’
Miami saw record tourism numbers when it hosted the Super Bowl in January, and February was likewise gangbusters for the hospitality industry. Then coronavirus hit. “We lost about 30% of asset values overnight,” said Miami investor and developer Robert Finvarb during a Bisnow webinar Thursday. His Robert Finvarb Cos. owns a portfolio…
Miracle Mile gears for a new bounce-back
Even before the Covid-19 health crisis crippled the economy, from a global to a hyper local reality, Miracle Mile – the commercial soul of Coral Gables – was dealing with vacant storefronts and other challenges. But even in the face of unknown factors brought on by the pandemic, business leaders and officials are striving to proclaim positivity. The message is: The long-term…
Plans for Metrorail line headed north may be going south
At least one prominent Miami-Dade official is having second thoughts about pursuing a northern Metrorail extension, citing figures from a new report that favor two cheaper, easier alternatives. County Commission Chairwoman Audrey Edmonson said she saw “nothing but issues” with building new Metrorail, which transportation decision-makers here…
A safe bet: South Florida’s industrial market could boom after pandemic
Industrial developer Jose Hernandez-Solaun of The Easton Group has seen Amazon spur the rise of e-commerce over the last few years. But now, he sees the coronavirus pandemic rapidly ramping up that growth — putting it on steroids. “What we are finding now is the coronavirus effect,” said Hernandez-Solaun. “If the Amazon effect was strength training, this was…”
Opinion: The future of commercial real estate
The world of commercial real estate is getting turned upside down by the coronavirus pandemic. We’re seeing the first signs of stress in the industry as clients are seeking to move out of office spaces they can no longer afford and the number of accounts receivable ticks up. While some semblance of normality could return by early next year, there’s likely to be a lot of pain…
Restaurateurs have ideas on how to get cooking again
Who isn’t longing for a meal at a favorite eatery? Michael Stillman of Quality Branded — the restaurant group behind Quality Meats, Park Avenue and Smith & Wollensky New York — is craving a meal at classic Upper East Side Italian restaurant Elio’s. Bill Bondrest, COO of TAO Group, is missing the food at any of the hospitality company’s many restaurant…
AOC claims rent strikers have no choice
Rep. Alexandria Ocasio-Cortez — progressives’ rock star from New York — threw her support behind rent strikers Monday. In a virtual town hall hosted by New York tenant coalition Housing Justice for All, Ocasio-Cortez called for Gov. Andrew Cuomo to cancel rent and mortgage payments at the state level and expressed support for those who do not pay rent because…
Where can Haim Chera take Vornado’s retail business?
The retail apocalypse delivered a one-two punch to Vornado Realty Trust last year when a pair of its largest retail tenants filed for bankruptcy. The first came in May 2019, when British apparel company Topshop announced it was closing all of its U.S. stores, including two locations, on Fifth Avenue in Midtown and Broadway in Soho, owned by Steven Roth’s publicly…
Warning: An Ownership Pledge In a Mortgage Transaction May Be Dangerous
Over the last few years, certain nontraditional lenders and a few banks have asked for a pledge of the ownership interest in borrowers as additional security to their mortgage on the property. The typical reason provided is that this allows the lender to avoid a long and costly foreclosure if the borrower fails to make its mortgage payments. While the above is…
The federal government was launching round 2 of the paycheck protection program to aid small businesses, but the SBA’s computer system was experiencing glitches at times on Monday. The money also was expected to run out quickly. There was widespread unhappiness with the first round with some major companies returning money after negative publicity.
Office landlords finding out which tenants are paying up during lockdown
Public office landlords are starting to report their first-quarter earnings — and investors and analysts are paying close attention to just how much rent they were able to rake in as tenants like law firms and advertising companies complete nearly a full month of working remotely. Empire State Realty Trust — whose biggest property is the Empire State Building…
Tom Barrack says RE industry verging on collapse over rent, mortgage waivers
The country’s real estate market is in chaos and on the verge of collapse. That’s according to Colony Capital CEO Tom Barrack, who said the industry was in such dire straits because the government is letting renters and homeowners skip payments due to the coronavirus. He made his comments in an interview with Bloomberg Television Friday. Lenders and landlords…
Fisher Island’s homeowners’ association was approved to receive a $2 million loan through the federal government’s Paycheck Protection Program, and now the association is asking its residents whether it should accept the funds. The $349 billion PPP program was created by Congress to help small businesses, providing loans of up to $10 million to cover rent…
CARES Act Offers Help for Investors, Small Businesses
As we go through the coronavirus crisis, we are all, first and foremost, concerned about the health of our loved ones and communities. But the economic implications of the virus have also weighed heavily on our minds. However, if you’re an investor or a business owner, you just got some help from Washington – and it could make a big difference, at least in the short…
J.C. Penney in talks for $800 million plus bankruptcy financing
J.C. Penney is in advanced talks for bankruptcy financing as it faces financial pressure from the coronavirus pandemic. Struggling retailer J.C. Penney is in advanced talks with its lenders to reach a bankruptcy agreement. The department store chain is in discussions for a debtor-in-possession loan between $800 million and $1 billion with its lenders…
City of Miami could provide $2M in rent, utility assistance in May
The city of Miami could offer rent and utility assistance to residents who lost their jobs, starting as early as May, possibly becoming one of the first cities in the U.S. to do so. Mayor Francis Suarez announced the program during a virtual press conference on Friday. It’s subject to city commission approval at a meeting next week. Using federal money, the city would…
Major South Florida Lendar Bank OZK’s Q1 earnings fall 90%, but sees lending opportunities ahead
Bank OZK, one of the most active construction lenders in Miami and New York, is bracing for losses from the coronavirus pandemic, but says that it sees opportunities ahead as competitors back out of the market. Little Rock, Arkansas-based Bank OZK reported its first quarter earnings on Friday, and increased its provision for credit losses to $117.7 million, up from $6.6…
Emerald Construction sues for $4 million in unpaid work at South Beach Kimpton hotel
A month after Ronny Finvarb completed a Kimpton Hotel in Miami Beach, a general contractor is accusing the developer of skipping out on more than $4 million in unpaid construction work. Hollywood-based Emerald Construction Corp. sued Finvarb’s Sobe Alton LLC for nonpayment… The Kimpton Hotel Palomar South Beach at 1750 Alton Road opened in early…
China City’s Brickell development site under new ownership
A full block of vacant land in Brickell is under new ownership, court records show. The development site, at 1420 South Miami Avenue, was previously owned by CCCC International USA, an affiliate of China City Construction Holding Group Co. It is now controlled by entities tied to Rega Group, a California developer. The land has been vacant since before…
‘We’re going to have to redesign everything’: Flex-office heads discuss industry’s survival
When we finally leave our apartments, pale and scruffy after months at home, what will going back to work look like? It’s a concept that feels far off in a city like New York, but it’s a daily consideration for the leaders of flex-office companies, who are trying to reshape their businesses to reach the next wave of workers — a cohort likely to be hyper-alert about density…
Releated CEO Jeff Blau predicts “wave of defaults” on commercial and hotel loans
Related CEO Jeff Blau says he anticipates there will be a wave of defaults on commercial and hotel loans as the implications of the pandemic become clearer. In an interview with Bloomberg this week, Blau said that with the beginning of May looming, landlords are again wondering what will happen with rent payments. “Landlords use those rents to pay their…
Blackstone: “We don’t need financing to get things done”
BlaBlackstone wants investors to know that it is ready to pounce on investment opportunities. In a first quarter earnings call Thursday, the company reported a net income loss of $2.6 billion — or $1.58 per share — but highlighted the ample dry powder it’s ready to deploy. Distributable earnings were $557 million…
Architecture firm billings suffer record drop in March
Billings from architecture firms plummeted in March at a rate not seen in 25 years. The Architecture Billings Index dropped 20.1 points in March to a score of 33.3. Any score below 50 represents a decline. “This is by far the largest single month decline the index has seen in its nearly 25-year history, far surpassing the declines of 9.4 points seen at the start of the 2001…”
Remember that Casino Project in Edgewater? Saga Continues as Perez takes Legal Action
Famed local developer Jorge Perez, CEO of The Related Group, has taken his opposition to an approved Miami casino and jai alai fronton in Edgewater up a notch. The namesake behind the Perez Art Museum Miami (PAMM) joined forces with Norman Braman, owner of the Braman car dealership chain, along with two Miami neighborhood homeowner associations to file a lawsuit that aims to block a settlement agreement between the owner…
Fannie, Freddie will buy loans in forbearance — for a pricey fee
Struggling mortgage firms have been thrown a lifeline. The Federal Housing Finance Agency announced Wednesday that firms saddled with loans they would usually offload can now sell them to Fannie Mae and Freddie Mac. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending,” Mark Calabria…
Can You File a Business Interruption Insurance Claim to Survive COVID-19?
Does business interruption coverage provide protection during a pandemic? As commercial property owners and their tenants continue to seek new ways of coping in a COVID-19-weary world, they are looking at ways to recoup some of the losses incurred as a result of preventative shutdown and isolation measures. The post Can You File a Business… Interruption Insurance Claim to Survive COVID-19? appeared first on Commercial Real Estate South Florida….
The CEO and Chairman of Integra Realty Resources, Anthony Graziano, appears on a commercial real estate show to discuss his firm’s (Integra’s) annual Viewpoint report. Topics include economist’s perspective on the economy, local and national market growth, and expected performance for the major commercial sectors. This is presented in two parts, the first concentrating more on office, retail, and industrial properties…
I considered setting up a new topic category for this called “duh.” Chuckle.
If you know me, you know I’m a bit of a data hound. I collect and manipulate data as a tool. One set of data I maintain is various types of selling activity, which I log throughout each day. It isn’t perfect, but I’d say it is consistently imperfect, and thus good enough to compare one period versus another. In general, I utilize this data for goal setting, assigning points to various metrics so as to weight different activities for business contribution. Given a noticeable change in activity with COVID-19, I thought it might be interesting to look at commercial property inquiry trends.
The chart above shows the 20-day moving average of new commercial property inquiries. This is the sum of various kinds of new inquiries, which in actuality I track more specifically. The year had started off with a bang, as can be seen, which is more a culmination of my efforts over time than a statement of market conditions. Once coronavirus hit, however, this metric went into a dive, with the 20-day average now about 10% of what it was pre-COVID.
Willikers.
This second chart considers the same data, but plotting 2020 versus 2019. There had been a early part of the year surge in 2019, as well, but 2020 was running about 70% higher than 2019. Again, I would guess that this is all specific to me, as, speaking anecdotally, I’d say the market environment versus the prior year was similar, if not a touch muted. Also standing out here is the drop in activity during the holiday season. Bah humbug.
Keep in mind these are all 20-day moving average numbers. Thus, that last dip in the red line for 2020 represents 20 days of low inquiries.
What does this mean? As this very moment, it likely doesn’t mean much. This pandemic hit so quickly, everyone is just stunned. Market participants are trying to make sense of it all. I can tell you anecdotally there are buyers circling, purporting to be interested in snapping up properties at depressed prices. Meanwhile, sellers almost universally seem to be in a wait-and-see mode, generally in no rush to sell barring necessity.
One last point. There is a notable surge in such activity as the new year begins. There are likely multiple reasons for this, but one of the principal ones surely is pent-up interest during the holiday season. This begs the question of whether there will be a surge as we exit this pandemic environment. It seems safe to assume there will be some post-pandemic increase in inquires. How much of a surge there will be is more the question.
Retailers exposed: Who’s paying rent and who’s not
As commercial landlords receive requests for rent relief, discerning whether the call for help is driven by hardship or strategy has been weighing on many. A new report titled “Who’s paying rent and who’s not” provides some insight. It documents which national retail and restaurant chains paid rent and costs related to triple-net leases to landlords so far…
KAR Properties CEO Shahab Karmely: Don’t Be Too Cautious
As we navigate through the coronavirus crisis, KAR Properties CEO Shahab Karmely cautions people about one thing: being too cautious. “Some of the great real estate fortunes of today were built right after the global financial crisis,” he said on a Bisnow webinar Thursday. “I was like a deer in headlights in 2008, 2009, asking my mommy where my safety blanket was.”
REIT launches $2M rental assistance program
Long Island-based Arbor Realty Trust has launched a $2 million interest-free loan program for its borrowers’ tenants. The real estate investment trust, which is headquartered in Uniondale and is a multifamily and commercial lender, will contribute $1 million to the fund, representatives for the company said. Landlords — who must be Arbor borrowers to…
Co-working firms are still open. For some tenants, it’s a deal breaker.
Mark Macias took space at a WeWork office on Fifth Avenue “before anyone knew what WeWork was” — growing his eponymous public-relations firm from two employees to four, then six. But with the co-working giant keeping its U.S. locations open during the pandemic, Macias wants out. He’s one of many customers angry that WeWork is charging fees even though most…
Downtown-Florida International University transit pick due
A nearly three-year project to determine what rapid transit upgrade bests fits the route between downtown Miami and Florida International University is rolling toward the finish line –most likely on rubber tires. Today (4/23), the Miami-Dade Transportation Planning Organization Governing Board is to choose the county’s preferred transit mode for…
Wreckage of Airport City may yield Miami International Airport hotel
A Brazilian construction giant whose mixed-use development at Miami International Airport (MIA) failed after years of planning may soon see one component find daylight. The project: Airport City, a 33.5-acre business park with hotel, office, retail and restaurants proposed by conglomerate Odebrecht. In 2016, negotiations with Miami-Dade soured amid issues…
How COVID-19 might change the insurance market
COVID-19 will change our world in many ways, some good and some bad. The same holds true for the insurance marketplace. While in the midst of the crisis, it is hard to predict, but the following considerations should be noted. Anita Byer is president of Setnor Byer Insurance & Risk Property policy and the corresponding business interruption coverage terms will…
Prologis granted rent relief to just 7% of tenants that asked
Prologis, one of the largest owners of industrial real estate, granted rent deferrals to just 7 percent of its tenants who asked for help because of the coronavirus. “This relief is targeted at our smaller customers with legitimate needs stemming from Covid and not for opportunistic requests,” said Chief Investment Officer Gene Reilly, speaking at Tuesday’s first…
Fontainebleau Miami Beach’s $1B loan enters special servicing
The $975 million commercial mortgage-backed securities loan for Jeffrey Soffer’s Fontainebleau Miami Beach has entered special servicing, presenting new challenges for Miami-Dade County’s largest resort. The CMBS loan is backed by 846 hotel rooms at 4441 Collins Avenue. It went into special servicing on March 30, according to data provider Trepp. Brett…
“We had to turn investors away:” Distressed RE funds raising cash at breakneck pace
The coronavirus pandemic has put billions of dollars worth of commercial real estate loans on shaky ground. Distressed debt funds are having no trouble raising money to scoop them up. Some even have to turn investors away. Florida-based firm Kayne Anderson just raised $1.3 billion for a distressed debt fund in just two weeks. It normally takes…
The Saudis have made a major bet on Related
Related’s Stephen Ross and Saudi Arabia’s Mohammad Bin Salman Al-Saud Stephen Ross’ Related Companies has landed a major investment from the Public Investment Fund, the sovereign wealth fund controlled by Saudi Arabia’s crown prince Mohammad Bin Salman Al Saud, according to a new report. Related closed on the deal with PIF in the first week of February…
Office, Retail, and Industrial: Multifamily and Hospitality: The CEO and Chairman of Integra Realty Resources, Anthony Graziano, appears on a commercial real estate show to discuss his firm’s (Integra’s) annual Viewpoint report. Topics include economist’s perspective on the economy, local and national market growth, and expected performance for the…
The decline in industrial production: One for the ages
On Tuesday, April 15, the Federal Reserve released the industrial production (IP) index for March. You have to go to the very far right data point in the FRED graph to see it, but industrial activity plunged in March because of the economic effects stemming from social-distancing orders in response to the COVID-19 pandemic. Millions of businesses have closed or been disrupted…
Industrial sector is rare commercial real estate bright spot
The industrial sector appears to be the only asset class in commercial real estate poised to weather a devastating downturn caused by the coronavirus, said Rebel Cole, Ph.D., a finance professor in Florida Atlantic University’s College of Business. Rebel Cole, Ph.D., a finance professor in Florida Atlantic University’s College of Business Demand for distribution…
He’s back: Adam Neumann to sue SoftBank for bolting WeWork bailout
Adam Neumann isn’t going gently. The former WeWork CEO plans to sue the company’s chief financial backer, SoftBank, for pulling out of its $3 billion bailout deal, according to Bloomberg. Had that deal gone through, Neumann stood to receive hundreds of millions of dollars from the sale of his shares. SoftBank attorney Erik Olsen informed the board of We…
Struggling SoFla retail market faces $6B in CMBS payments
As South Florida’s shuttered retail market struggles due to the coronavirus pandemic, the industry faces billions of dollars in commercial mortgage-backed securities debt coming due. South Florida’s retail market has an outstanding CMBS loan balance of $6.3 billion, according to data provided by Trepp. It is the third highest CMBS exposure of any metro…
Russian Bay Harbor developers ran California cannabis business into the ground, lawsuit alleges
After he was sued for allegedly not repaying a $3 million loan, Sunny Isles Beach cannabis entrepreneur Paul King is accusing the Russian developers who lent him the money of ruining his California marijuana venture. Last week, King filed a lawsuit in California’s Monterey County against Roman Temkin and Dimitry Romantsoff, five other individuals and six…
“The firewood had been stacked,” Oaktree Capital Management said in a recent presentation to investors. And the coronavirus pandemic was the igniter. Companies had been levering up and it is time to take advantage of the situation, Oaktree said in its presentation, which was viewed by Bloomberg. Oaktree, which is majority-owned by Brookfield Asset…
Some retail landlords have collected just 15% of April rents: Report
Retail landlords and mall owners have collected just 15 percent of what they were owed (Credit: background by Erin Lefevre/NurPhoto via Getty Images) The fight over commercial rent payments looks like it may be ugly. So far in April, some retail landlords and mall owners have collected just 15 percent of what they were owed, according to Bloomberg, citing a Marcus…
5 things to know about supertall condo developer Michael Stern
JDS Development Group’s Michael Stern Michael Stern is one of the boldest luxury developers in the United States. Projects under his JDS Development Group include the skinny supertall at 111 West 57th Street and Walker Tower at 212 West 18th Street in New York City, and Monad Terrace and Echo Brickell in Miami. A new in-depth profile of Stern in the Financial…
Commercial Real Estate Tenant Bankruptcies: Issues and Strategies
This Article discusses the issues a landlord confronts when its commercial tenant files for bankruptcy protection. It also considers pre- and post-bankruptcy options available to a landlord to mitigate the impact of a tenant’s bankruptcy filing. Section 365 of the Bankruptcy Code allows commercial tenants, as debtors, to take actions on their leases that…
9 Reasons to Invest in South Florida Commercial Real Estate
On a national and global level, Florida has historically been one of the strongest commercial real estate markets, with continually solid returns and safety for the capital of global & domestic investors. In fact, US News & World Report currently ranks Florida #2 in terms of fiscal stability and #9 with its economy nationwide. Within…
7 Key Metrics About the Miami Commercial Real Estate Market
Miami’s commercial real estate market offers a wide range of projects and property types due to its pivotal access as an Atlantic coastal town. Miami has distinct cultural influence as a transportation node between North America, Central America, South America, and Europe. It also possesses economic diversity with many opportunities illustrated by a variety of…
McDonald’s real estate strategy could help it weather storm
Fear not, America: The Golden Arches are positioned to endure the coronavirus pandemic. The real estate and franchising structure used by McDonald’s may provide more protection from the economic downturn than those of its rivals, according to National Real Estate Investor. The fast-food behemoth owns a good chunk of the real estate beneath its eateries…
Morgan Stanley on firm’s future: “Much less real estate”
In a terrible economy, Morgan Stanley CEO James Gorman appears to have found a silver lining. “We’ve proven we can operate with effectively no footprint,” Gorman told Bloomberg Television in an interview Thursday. The $60 billion investment bank has moved about 90 percent of its 80,000 employees to a work-from-home model, a process Gorman said had…
David Martin proposing mixed-use tower at Miami Beach Marina
Terra’s David Martin hopes to develop a 23-story tower at the Miami Beach Marina in the city’s South of Fifth neighborhood. Martin spoke before the city’s Finance and Economic Resiliency Committee on Friday, which met via video conference, kicking off a process that would require residents to eventually vote on ballot questions tied to extending and amending…
Bill seeks rent and mortgage forgiveness across U.S.
A Minnesota member of Congress is calling for a suspension of rent and mortgage obligations across the country through the end of the coronavirus pandemic. Democratic Rep. Ilhan Omar on Friday proposed a bill that would cancel rent and mortgage payments starting April 1 until 30 days after the end of the federal state of emergency. The measure would create…
Fortune sues Chetrit over stalled Miami River project
The new development sales arm of Fortune International Group is suing the Chetrit Group for alleged breach of contract tied to the stalled Miami River development. Edgardo Defortuna’s Fortune Development Group filed the lawsuit against CG Miami River LLC this week, alleging that it’s owed a $200,000 termination fee, plus other costs incurred. The Chetrit Group…
Hotel industry wants $10B stimulus carveout to avert “snowball effect” of foreclosures
Embattled hotel owners are looking for a $10 billion cut of the federal bailout package, after the government’s paycheck lifeline program dried up within a matter of days. Industry groups representing more than 55,000 hotels across the country asked Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell to carve…
Private real estate investment deals tumble worldwide
The number of private real estate investment deals plunged worldwide last month, the latest example of the coronavirus’ all-consuming effect on the global economy. And so far, April has been even worse. Commercial real estate deals were down nearly 43 percent in March year over year, according to data from research firm Preqin. North America was…
Coronavirus portends a less dense world, Sam Chandan says
The coronavirus pandemic is causing the future of real estate to arrive ahead of schedule, according to Sam Chandan, dean of NYU’s Schack Institute of Real Estate. Greater space between office workers. More working from home. Less business travel and fewer hotel rooms. And, most worrisome for places like New York City, perhaps a shift away from…
These are the real estate execs Trump tapped to help restart the economy
In a bid to restart the economy, President Trump this week tapped prominent business leaders from across industries to help advise him, including some of the highest-profile real estate executives in the country. The roster of names chosen to help steer the economy in a post-coronavirus world include longtime supporters of Trump’s presidential…
MV Group plans $26M Town Center Killian Park retail project
MV Group USA filed plans for a town center retail project in south Miami-Dade County. The Miami-based development firm and builder, led by Manny Varas, is proposing to build Town Center Killian Park, a 42,000-square-foot project on a 5-acre plot of land near the intersection of U.S. 1 and Killian Parkway, Varas said. His company is under contract to…
Banks get extraordiary 120-day deferrals on appraisals
In an extraordinary move meant to keep real estate lending flowing, regulators are permitting banks to move ahead with closing loans without having an appraisal completed in advance. Federal banking agencies released an interim ruling Tuesday that will allow financial institutions to temporarily close on certain commercial and residential loans without…
What to expect in the Main Street Lending Program
Through the Main Street Business Lending Program, the U.S. Treasury will make a $75 billion equity investment to enable up to $600 billion in new financing for medium-sized businesses. The program is designed for businesses with up to 10,000 employees or $2.5 billion in 2019 revenues. The program encompasses two types of loans, both with interest rates…
COVID-19’s impact on tenants, landlords and brokers
The commercial real estate industry was relatively unprepared to manage the COVID-19 crisis. Landlords, tenants, property managers and brokers have honed their skills and protocol with regard to natural disasters and terror attacks, but a worldwide health pandemic was in very few catastrophe plans and playbooks. Fortunately, we are a resilient…
Major South Florida airports get $378 million in funds, $207 Million for MIA
Federal grants to support airports will provide $207 million for Miami International Airport, $135 million for Fort Lauderdale-Hollywood International Airport and $36 million for Palm Beach International Airport, the Federal Aviation Administration announced. “We are extremely pleased with the $207 million in relief funding for MIA,” said Miami-Dade County…
$2.3M Sale Arranged of Industrial Building in Opa-Locka
Lee & Associates has arranged the $2.3 million sale of a 32,897-square-foot industrial and office building in Opa-Locka. The property is situated at 4600 NW 128th Street, two miles from the 850,000-square-foot Amazon Mega Distribution Center and nine miles north of Miami International Airport. The building comprises 22,620 square feet of warehouse space and 10,277…
Private Lending Trends in South Florida
Commercial and multifamily mortgage originations ended 2019 with the strongest quarter on record since the second quarter of 2007, according to the Mortgage Bankers Association. With a tax-friendly business environment and highly educated tenant pool, South Florida is a preferred destination for both investors and developers. Although it launched only…
Freddie Mac extends loan forbearance period on multifamily landlords
Freddie Mac is extending the forbearance period for multifamily borrowers and beefing up the eviction ban requirement for landlords who receive the relief. The program, which offers landlords forbearance on multifamily loans if they can show coronavirus-related hardship, will be extended to the end of the year or the end of the federal emergency period, whichever…
Within these pages, you will find infomation related to Miami area commercial real estate, Miami-Dade County commercial property. Most specifically, you will find information about retail, multifamily, office, and industrial property in the Miami, Florida area. This will include information about lease rates, price trends, closed transactions, rumored transactions, economic statistics, capitalization rates, vacancy rates, rental rates, and development related to commercial real estate in the Miami area.
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