Hawkins Commercial Realty

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Contact James Hawkins:
Direct 786-581-8990
Email james@hawkinscre.com

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 engage superior competency, to be sensibly creative, and to always 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

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May 20, 2020

Commercial Property Borrowing Cost Quarterly 2020 Q3: 5-Year Treasury Remains Naught-y

U.S. Treasury 5 Year Nominal Rates for the Five Year Period Ending September 30, 2020

Yields on 5-year U.S. Treasury Notes continue to remain at lows reached as we began the era of COVID. As can be seen in the chart above, these rates, most closely tracked for commercial real estate financing cost, plummeted from what were already considered low levels to under 50 basis points (0.5%), barely hovering over zilch, where they have been since. Though borrowing costs have not followed this point for point, they’re nonetheless lower.

This low interest rate environment is powerful for real estate as an asset class. There are of course ongoing concerns about vacancy rates and rent growth in a slower economy, but lower interest rates mean a lower cost of capital. Plus, real estate income becomes relatively more attractive to fixed income investments. Vacancy and rent growth effects remain unknown, but lower interest rates are known – now.

The interest rate environment has the ability to affect commercial property economics in a number of different ways (see 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.

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October 22, 2020

Miami Commercial Real Estate News October 21, 2020: Feasibility Study Approved for Monorail to Miami Beach; Sunny Isles, Medley Warehouses Trade; Office Rents Set Record; More…

South Florida Q3 office rents hit record high, despite higher vacancies

Despite record high office vacancies across South Florida, average asking rates hit new highs Despite record office vacancy rates across South Florida, average asking rents hit new highs in the third quarter, according to a newly released report. Miami-Dade had the highest average asking rate, at $41.68 per square foot, according to the report from Colliers International…

Miami Commercial Real Estate Sales to List Price Ratio Trails Off in September to Five Year Low ~ September 2020 MLS

The sales to list price ratio as reported by the Miami MLS for improved commercial property in Miami-Dade County from $1 million to $10 million dipped in September. September’s recorded ratio of 86.3% is the lowest level recorded since February 2015’s 84.9% number. This follows a dip two months prior that, though a slightly better number was itself then the…

Here’s What Could Happen To The EB-5 Program In A New Administration

The EB-5 immigrant investor program, which has been used to fund major development projects throughout the United States, has been limping along for the past few years, and some have even predicted its demise after rules were tightened last summer. How might the program, which awards U.S. green cards and visas to foreigners who put a minimum of $900K into…

Sunny Isles mayor sells Hialeah warehouse for $13 million

A company tied to the mayor of Sunny Isles Beach and a fellow South Florida real estate investor sold a 160,000-square-foot warehouse in Hialeah for $13.1 million. George “Bud” Scholl, elected mayor in 2014 and re-elected in 2018, and investor Steven M. Rhodes sold the industrial building at 1101 East 33rd Street, The Real Deal has learned. EverWest Real Estate…

Honeywell warehouse in Medley sells for $8M

South Florida real estate investor Leo Ghitis sold a warehouse near Medley for $7.5 million. Ghitis sold the nearly 50,000-square-foot building at 9315 Northwest 112 Avenue on 3 acres of land inside Flagler Station Industrial Park, according to records. The price equates to about $152 a square foot. The buyers are entities that share an address with Midtown Capital…

Miami Beach based Starwood scores $265M refi for portfolio of InTown, Uptown hotels

Starwood Capital Group secured $265 million in refinancing for a portfolio of 58 extended-stay and midscale hotels nationwide, representing a fraction of all the hotels it owns and operates. Miami Beach-based Starwood hopes to execute the first lien mortgage about Oct. 28, according to a report from Kroll Bond Rating Agency. Starwood will use the funds to pay off existing…

Seritage sells Hialeah shopping center for $21M

Seritage sold a 108,000-square-foot shopping center formerly anchored by Kmart in Hialeah for $21 million. A Daytona Beach-based publicly traded real estate company, CTO Realty Growth, bought the shopping center at 1460 West 49th Street, records show. The company changed its name from Consolidated-Tomoka Land Co. to CTO in May. The sale equates to $194 psf…

Rental project in MiMo District launches leasing

The developer of the American Legion property in Miami’s MiMo District launched leasing of the first phase and plans to break ground on the second phase next year. Private equity firm Asia Capital Real Estate, also known as ACRE, and QuadReal Property Group, the real estate investment arm of the British Columbia public employees’ pension, completed the first phase…

In “Billion Dollar Loser,” WeWork’s “epic rise” and Adam Neumann’s quiet enablers

Real estate executives had their doubts about WeWork, but many weren’t willing to risk missing out on its success. They and others who kept their criticism to themselves helped enable and then felled the co-working giant once it became clear that its crash would be just as extraordinary as its ascent. “They couldn’t explain WeWork’s valuation, but they were fearful…

10,566 SF Office Sublease Negoitated at Brickell City Centre

Cresa has negotiated a 10,566-square-foot office sublease for Pillsbury Winthrop Shaw Pittman LLP (Pillsbury) in Miami’s Brickell City Centre. Pillsbury, which focuses on the technology and media, energy, financial services, and real estate and construction sectors, has occupied the space at 600 Brickell Ave. since 2017 and will now lease the space until at least…

Dezer’s mega development project gets key approval

A rendering of the project with developer Gil Dezer Dezer Development’s plan to redevelop the Intracoastal Mall property into a massive mixed-use project cleared another hurdle. North Miami Beach commissioners approved ordinances for the complex on second reading in a 3 to 2 vote early Wednesday morning. Two commissioners were not present for the…

Edgewater-Midtown tower residences win Miami’s backing

A mixed-use residential development is being proposed for the area where Edgewater meets Midtown in the City of Miami, and not far from Wynwood. Called 27 Edgewater, the planned 18-story building would rise at 2728 NE Second Ave. and be home to 108 dwellings. The project by developer 908 Group Holdings LLC was recently reviewed by the city’s…

Rents fall in cities around the world

Across the country, rents are tumbling. Sales have surged in the New York suburbs, and prices with them. But Manhattan apartments are the cheapest they’ve been since 2013. The number of listings have tripled from a year ago while the median rent has dropped 11 percent, according to Bloomberg. Expensive cities have taken the biggest hit. In San Francisco, the median…

Jorge Pérez steps down as president of Related Group, handing title to son Jon Paul

Jon Paul Pérez was named president of the Related Group, taking over from his father, Jorge Pérez. Jorge, who founded the Miami-based real estate giant in 1979, will stay on as chairman and CEO when Jon Paul takes over in November, according to a release. Billionaire developer Jorge Pérez, known as the Miami condo king, has spoken about his succession plan in the past.

Blackstone Move Solidifies Miami Mayor’s Vision For A Global City

The dream of Miami Mayor Francis Suarez to have the city turn into a global destination for talent and investment is coming to fruition. Blackstone, a private equity investment firm, has set its sights on opening a Miami outpost as the nation’s largest investment managers continue to migrate to South Florida. Its plans surfaced as the city is in…

PortMiami dredging may rest on economic future of cruise lines

PortMiami continues to plan for more dredging, pandemic or not. As the coronavirus has plagued both Miami and the rest of the nation, there has been an increased focus on cruise ship travel and economic recovery.  Last year, Miami-Dade County commissioners authorized a three-year study. Now, after about a year and a half, US Army Corps of Engineers project…

Things To Consider When Leasing To A Medical Marijuana Dispensary

Some essential CRE steps when leasing to an essential business At the height of lockdowns and quarantines, it quickly became apparent that what was considered essential expanded far beyond first responders and hospital staff. Truck drivers working long shifts to get goods to supermarkets, and the employees stocking shelves with those products quickly rose to…

Can Proposed Seawalls Protect Miami From Storm Surges?

The Magic City could see walls become a permanent part of the downtown area if an Army Corps of Engineers plan comes to fruition Downtown Miami has one of the planet’s most spectacular coastlines, featuring buildings that seemingly jet from the ocean as you approach from the air or water.  This beautiful location comes with…

Bus Rapid Transit has inside track in East-West Corridor

After nearly three decades of studies, local transportation decision-makers are set – again – to choose a mass transit upgrade for a 14-mile commuting route linking West Miami-Dade to Miami International Airport and downtown Miami. Today (10/22), the Miami-Dade Transportation Planning Organization Governing Board is to vote on a preferred transit mode for…

Sandor Scher: Set to bring hotel, condos, retail to Beach’s Ocean Terrace

For almost two decades, Sandor Scher’s Claro Development has advised on more than 100 projects in over 60 cities, adding nearly 2,500 hotel rooms in South Florida and, according to firm figures, delivering more than $750 million of hospitality, commercial and historic restoration development. His entrée into real estate came through a restaurant startup that over 6½…

Miami-Dade approves interim contract for monorail to Miami Beach

A rendering of the monorail Plans for a monorail between the city of Miami and Miami Beach took a step forward on Tuesday. In spite of calls for a deferral from Miami Beach, the Miami-Dade County Commission approved a contract of up to $14 million with Genting Group and Meridiam Infrastructure North America Corp. to study the feasibility of building…

The REInterview: Reeves Wiedeman on the manic rise and fall of Adam Neumann and WeWork

Dream no small dreams, for they have no power to move the hearts of men — or venture capitalists. Adam Neumann, the co-founder and former CEO of WeWork, certainly wasn’t guilty of small dreams. From being a broke émigré living rent-free in his sister’s apartment to building one of New York’s largest real estate companies to becoming the head of one of the…

Related, Crescent Heights and Melo Group seek approval for Miami projects

The Related Group, Crescent Heights and the Melo Group are seeking approval from the Miami Urban Development Review Board for projects in downtown Miami and Edgewater. Related and its partner, ROVR Development, led by Oscar Rodriguez and Ricardo Vadia, are proposing The District at 225 North Miami Avenue in downtown Miami. The 37-story…

Mezz lender forecloses on Ocean Drive hotel in South Beach

The pandemic brought especially bad timing for the owner of a South Beach hotel, which purchased it last year, embarked on a multimillion-dollar renovation, and ended up losing its investment. Leste Group and its partner, Moto Capital Group, last month foreclosed on the newly renovated Lord Balfour Hotel at 350 Ocean Drive, The Real Deal has learned. The,,,

Former Uber CEO Travis Kalanick cooks up a real estate empire

Uber co-founder and ex-CEO Travis Kalanick has quietly amassed a real estate empire over the past two years. Companies tied to Kalanick’s CloudKitchens, a startup that rents available space to food delivery businesses, have snapped up more than 40 properties across the country for more than $130 million, the Wall Street Journal reported. Kalanick’s…

AMC faces serious cash crunch despite theaters reopening

Movie theaters are reopening across the country, but that may not be enough to save some of the biggest cinema operators. AMC Entertainment Holdings, one of the world’s largest movie theater operators, said it could run out of cash by the end of the year if it can’t find additional sources of liquidity, Reuters reported. The company said…

Buying distressed debt to get the underlying property – a litigation due diligence checklist

It’s beyond the scope of this blog to predict where the commercial real estate market is heading, but there are those who have predicted a downturn. If that turns out to be right, there may be more loans than usual going into default. If you are considering buying a commercial note that is in default because you ultimately want to foreclose to buy the property…

New York’s CRE woes could spread nationwide: investors

Investors are betting that trouble in New York City’s commercial real estate market will spread nationwide. Prices for debt backed by hotels, restaurants and retail in New York City — among the hardest-hit sectors as the pandemic emptied out tourist destinations this year — have fallen and new loans have slowed…

Here’s what tenants are paying at Shops at Merrick Park

Brian Kingston and Merrick Park Nordstrom and Neiman Marcus may be closing stores across the country amid the pandemic, but at the Shops at Merrick Park in Coral Gables, the retailers appear to be in for the long haul. Brookfield Property REIT owns the roughly 850,000-square-foot property at 358 San Lorenzo Avenue, which consists of a three-story open-air…

Family foundation pays $5M for land in Miami Shores, plans private Jewish school

Jamie Rose Maniscalco and Daniel Ades with the property A family foundation paid $5.3 mil… The Ades Family Foundation, the philanthropic arm of Aventura-based Kawa Capital Management’s managing partner and chief investment officer Daniel Ades, bought the assemblage at 855, 975 and 995 Northwest 95th Street and at 900, 910 and 920 Northwest 96th Street.

Building up: Homebuilder confidence hits new highs

Homebuilders are feeling record levels of optimism, according to a new report. The National Association of Home Builders Housing Market Index reached 85 in October, seasonally adjusted, the highest reading in the monthly metric’s 35-year history. After experiencing a sharp decline in the spring, the NAHB index has been steadily rising — and…

How Does the Pandemic Recession Stack Up against the Great Depression?

Many observers have been comparing the COVID-19-induced recession with the Great Depression. An Economic Synopses essay published in August examined some key economic indicators during these contractions to consider their severity and duration. Group Vice President and Deputy Director of Research David Wheelock explained that the Great Depression…

Aventura office complex Optima inks new leases

Four companies signed leases for a total of 36,000 square feet at Optima, a three-building office complex in Aventura, including the first tenant of the complex’s 28-story tower that is still under construction. Blanca Commercial Real Estate, which brokered the deals, declined to disclose lease terms for space at the complex at 21500 Biscayne Boulevard.

Ransom Everglades sues developer Caroline Weiss over backyard boat dock

A pop-up private marina behind a commercial developer’s home in Coconut Grove is disrupting Ransom Everglades’ aquatic learning experiences, according to a recently filed lawsuit. The private school is suing Caroline Weiss, CEO of the Weiss Group of Companies, in Miami-Dade Circuit Court, in an attempt to stop her from allowing private boats from docking along…

State Of South Florida Commercial Real Estate Discussed

Paul Marko was recently appointed as principal of the South Florida Avison Young team, and he applied his 30 years of experience in office tenant representation, buyer broker services and portfolio administration to answer some questions about the South Florida and national commercial real estate markets.

“There’s a lot of money to be made”: IRS targets foreign real estate investors

The Internal Revenue Service is going after foreign real estate investors as part of a broader sweep to collect revenues amid the pandemic.  In the past month, the Internal Revenue Service has announced two new audit campaigns targeting overseas investors who own or hold interests in U.S. property. The campaigns focus on foreign investors selling their interests…

Fontainebleau Miami Beach’s $1B loan exits special servicing

Miami-Dade County’s largest resort is no longer in special servicing. The $975 million commercial mortgage-backed securities loan for Jeffrey Soffer’s Fontainebleau Miami Beach returned to the master servicer on Sept. 23 following successful negotiations with lenders, according to Trepp data updated this week. The loan was transferred to the special servicer…

Unibail-Rodamco sues Express over $30 million in missed rent

Act of God? Mall operator Unibail-Rodamco-Westfield said its lease agreements with Express cover such events, and still require the retailer to pay the rent. Now Unibail is suing Express, saying the retailer owes $30 million in skipped rent across 27 locations throughout the U.S. Fourteen of those stores are in malls in California, according to the suit, filed in Los…

Mast Capital wins initial approval for shorter Mid-Miami Beach condo project

Developer Camilo Miguel Jr. won initial approval for a shorter, 85-foot tall version of his planned 4000 Alton Road condo project in mid-Miami Beach. The Miami Beach City Commission on Wednesday passed on first reading three ordinances that will enable Miguel’s Mast Capital to build an 85-foot tall building with as many as 216 units. The proposal will be heard once…

Miami Beach approves zoning change allowing for Aman tower

Miami Beach commissioners approved a zoning change that would allow billionaire developers Vlad Doronin and Len Blavatnik to build their Aman-branded tower. Commissioners Steven Meiner and Micky Steinberg voted against the Faena district overlay ordinance on second reading, which will allow the developers to build a 250-foot tall tower, up from the previously…

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October 21, 2020

Chart: August Miami-Dade Unemployment Level Reaches Lowest Level Since March

Miami-Dade County, Florida Unemployment Rate Year Ending August 1, 2020

From its peak of 14.5% reached in only the prior month, the unemployment rate in Miami-Dade county plummeted in August (8/1) to 8.1%, the lowest level since March when unemployment had jsut started to creep up but was still in low single digits (3.7%). The continuing effects of COVID-19 on employment, and thus the economy, in the Miami area continue can bee seen, to be sure, but this is improvement, considerable. Though there is a new surge in infections, we seem to be figuring out how to navigate all this, thus hopefully any future effect will at least be muted.

Here’s hoping.

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October 21, 2020

Miami Commercial Real Estate Sales to List Price Ratio Trails Off in September to Five Year Low ~ September 2020 MLS

Miami Association of Realtors January 2010 to August 2020 Sales to List Price Ratio for Commercial/Industrial Property Type Classification within Miami-Dade County and Price from $1 Million to $10 Million

The sales to list price ratio as reported by the Miami MLS for improved commercial property in Miami-Dade County from $1 million to $10 million dipped in September. September’s recorded ratio of 86.3% is the lowest level recorded since February 2015’s 84.9% number. This follows a dip two months prior that, though a slightly better number was itself then the lowest ratio since February 2015.

Though these three months may mean little to nothing, it is reasonable to assume there is a COVID effect on this ratio, with the sales to list prior ratio seeming to now be hanging in the high 80 percent rate versus low 90s prior, thus about 5% lower. Nonetheless, this ratio remains in the middle of where it has been in the past decade, as can be seen in the chart.

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October 15, 2020

Miami Commercial Real Estate News October 14, 2020: Miami Beach Approves Zoning Mod for Aman Tower; County Approves Affordable Housing Projects; More…

Miami Beach approves zoning change allowing for Aman tower

Miami Beach commissioners approved a zoning change that would allow billionaire developers Vlad Doronin and Len Blavatnik to build their Aman-branded tower. Commissioners Steven Meiner and Micky Steinberg voted against the Faena district overlay ordinance on second reading, which will allow the developers to build a 250-foot tall tower, up from the previously…

Miami-Dade approves three affordable housing redevelopment projects for south Dade

Miami-Dade County approved short-term leases that will enable three developers — the Related Group, Centennial Management Corp. and Procida Development Group — to redevelop county-owned affordable housing projects in south Miami-Dade. Approving short-term, 11-month leases, during a commission meeting on Tuesday, was the first step…

Miami Beach raises red flags over county’s monorail push

Miami-Dade County officials may soon take the next step toward developing a “mass-transit solution” in Miami Beach, but city administrators have some concerns.  According to a memo to be addressed by Miami Beach commissioners today (10/15), county commissioners will consider on Oct. 20 legislation that would approve a two-step interim agreement with a…

Residents Fight Developer’s Takeover Of Miami Beach Marina, Monty’s Raw Bar

Despite Miami Beach’s reputation for sun, sand and cocktails, there’s hardly any place in the city where visitors can enjoy a waterfront view and a single-digit-priced drink, because most of its 7.69 square miles have been taken over by upscale restaurants and hotels or private, luxury condos. At Monty’s Raw Bar, though, one can still sit under a thatched roof and get a…

How Wynwood Became ‘Absolutely The Coolest Neighborhood In The Country’

Jessica Goldman Srebnick, CEO of Goldman Properties, remembered how her developer father, the late Tony Goldman, led the revitalization of New York’s SoHo in the 1970s, Miami Beach in the 1990s and the Center City District of Philadelphia. “And we came to this little wonderful neighborhood called Wynwood in 2005,” she said during a Bisnow Wynwood webinar…

Federal Realty Defaults On $61 Million Loan Backed By Miami’s Shops At Sunset Place

Federal Realty Investment Trust is in default on a $61M mortgage backed by an outdoor mall in South Miami. The publicly traded real estate investment trust owns The Shops at Sunset Place in a joint venture, which last year announced a major redevelopment plan for the property, which has struggled with vacancies for years. This year, the coronavirus pandemic…

Coral Rock Scores $54 Million Loan for Hialeah Project

Coral Rock Development Group has secured $53.5 million in construction financing for the residential segment of Pura Vida Hialeah, a nine-acre mixed-use project in Hialeah, Fla. Principal Real Estate Investors acted as the lender. The residential development will comprise three eight-story towers offering a total of 260 units, ranging from studio to three-bedroom…

Chart: Another Strong Month for Miami-Dade Commercial Real Estate Sales ~ September 2020 MLS

Embedded above is the chart for the trailing two years, specifically the period from October 2018 to September 2020, of closed sales of Miami-Dade commercial property, both improved commercial property (with buildings) and vacant commercial land, recorded in the Miami MLS. September 2020 was, again, a strong month, only a bit off from sales in August, which had…

The Slow Drip Folly of Holding Highest and Best Use Maxed Out Vacant Land

Save me from the pain of witnessing foregone monetization. A vacant land owner, where the property that has seemingly topped out its HABU (highest and best use) potential, is forgoing potential income from reinvestment of potential sales proceeds (of the vacant land) for no apparent benefit. In other words, if HABU is topped out, there is not a higher value HABU to…

Last Chance for Miami Wilds Water Park?

Next week is the last chance for the current iteration of the Miami-Dade County Commission to vote on the controversial Miami Wilds water park — but the development is receiving more and more opposition from conservationists and politicians. The nonprofit Bat Conservation International recently released the results of a 2019 ecological survey that…

Industrial Development Site In Doral Sells For Record Price

Brokers negotiated the sale of Doral Center Development Land, a pristine parcel in highly sought-after Doral, Florida, located at 10751 Northwest 25th Street. The broker acting as exclusive representative sold the land, which totals 162,325 square feet (3.72 acres), for $6,000,000 or $37 per square foot. The Seller, REMS Group, and its principals are family friends of;;;

We Company reverts name back to WeWork

In a throwback to a more innocent time — before anyone knew Adam Neumann packed a cereal box full of marijuana onto his private jet — the WeCompany is changing its name back to WeWork. The move is an attempt to return the company to its office-sharing roots, according to an internal memo cited by Reuters. “We want to be strategic. We want to be innovative.

Hudson’s Bay, Simon Property Group hit with $846M foreclosure lawsuit

Wilmington Trust is suing a joint venture between Simon Property Group and Hudson’s Bay Company for allegedly failing to make mortgage payments. Ten Saks Fifth Avenue and 24 Lord & Taylor locations are named in the lawsuit, which was filed earlier this month in Miami-Dade County Circuit Court, the South Florida Business Journal reported. The lawsuit…

Deauville Beach Resort loses court battle tied to $400K judgment

The Deauville Beach Resort’s (6701 Collins Ave)management company and a Miami attorney engaged in a “sham” court petition to transfer assets so the firm could avoid paying a six-figure judgment, according to a recent ruling by Miami-Dade Judge Michael Hanzman. Hanzman dismissed a 2018 petition filed by lawyer Felix Caceres seeking an assignment for the…

New South Beach image and rules on drawing board

“Anything goes” might have once been a slogan for South Beach promoters, but Miami Beach commissioners agree that the area known as the Mixed Use Entertainment District needs a new image – and some ground rules.  Hawking, lewd behavior, “quality of life” related offenses, misuse of vehicles such as scooters and loud noise are some of the issues they…

Highways nightmare stalls massive NW Miami-Dade American Dream Mall

Delays in the completion of freeway interchanges that will provide access to American Dream Miami, a mammoth entertainment and retail complex to rise in Northwest Miami-Dade, could push back the opening for about a year. “Our development agreement stipulates that the interchanges have to be in place before we can open, so we are tied to that,” said Miguel Diaz…

Quarter-billion dollar cruise industry bailout floated

As the US cruise industry enters its seventh month of inactivity due to Covid-19, Miami-Dade is eyeing a plan that could forgive more than a quarter-billion dollars that cruise lines would otherwise have paid PortMiami. A worst-case scenario in which cruise lines remain docked for two-plus years would see the port lose $271.5 million and be forced to…

Casino Giant Genting’s massive transit deal stalls bus terminal

Plans for a temporary bus terminal that would unlock a 3½-year-old joint development project are still on hold – and could possibly be canceled – as Miami-Dade considers a massive transit offering from Malaysian casino giant Genting. The makeshift station was to have served Metrobus riders while Genting subsidiary Resorts World Miami developed a new Omni…

Miami speeds to resolve Virginia Key Marina bid battle

With new players in the mix, the Miami City Commission has called for a special meeting next month to discuss the future of Virginia Key Marina. At last week’s virtual meeting, commissioners voted to hold a special meeting Nov. 16 to discuss, and potentially act on, the marina’s ongoing solicitation dispute.  The city administration asked for the commission to defer the…

Downtown Miami observation wheel prepares to roll

While plans were originally to have its grand opening back in March, downtown Miami’s observation wheel will soon be up and running for Bayside Marketplace visitors, operators say. Towering 176 feet over downtown’s skyline, the new observation wheel might open at the end of this month, said Charlene Leavitt of Skyviews Miami, the tourist attraction…

Midtown Miami development site in foreclosure hits the market

3601 North Miami Avenue with Francisco Arocha The developer of the planned Triptych project that straddles the border between Midtown Miami and the Design District is listing the site for sale. HES Group, which is facing foreclosure from its lender, is looking to sell or find a joint venture partner for the 1-acre property at 3601 North Miami Avenue, said Francisco…

Here are the South Florida real estate players who donated to candidates in 2020

As the presidential election nears, The Real Deal examined top South Florida real estate players’ political donations this year, and found they largely skewed in one direction. A number of developers supported Republican candidates and causes, including Craig Robins, Stuart Miller and Russell Galbut. Related Group developer Jorge Pérez and real…

Spirit Halloween reawakens to cannibalize stores

Autumn is a time for falling leaves, pumpkin pie and Spirit Halloween reappearing to take up unoccupied space in strip malls and commercial corridors. This year, even as trick-or-treating becomes an unknown, there are more Spirit Halloween locations to go around. The company has opened more than 1,400 storefronts nationwide, an increase from last year,

Investors heat up cold storage market

Investors are increasingly turning to the cold storage sector, which showed surprising resilience through the first few months of the pandemic. Lineage Logistics, the world’s largest landlord of temperature-controlled storage, pulled in $1.6 billion in a fundraising round that ended last month, according to the Wall Street Journal. Americold Realty Trust, the only…

Dollar General launches new brand targeting affluent customers

Dollar General is launching a new brand aimed at higher-income earners — and keeping the focus away from the “dollar” in its name. The new brand, Popshelf, will still sell inexpensive products in its stores, with most items priced at $5 or less, the Wall Street Journal reported. But the stores will carry fewer Dollar General staples (like food) and more nonconsumable…

Fewer than half of holiday shoppers will hit the mall this year

In a typical year, the holidays are peak season for malls — but this isn’t a typical year, and shopping centers that have already been hurt by the pandemic will continue to feel the economic crunch in the leadup to the holiday shopping season. Only 45 percent of shoppers plan to visit a mall to do some or all of their holiday shopping, down from 64 percent last year…

Target-anchored mixed-use project planned for North Beach advances

Aria Mehrabi and renderings of the projects Part of Aria Mehrabi’s planned development for North Beach got the OK to move onto permitting this week. And Miami Beach officials will review more of his plans in November. The Miami Beach Design Review Board on Tuesday gave the green light to the planned 12-story tower with 170 residential units anchored by a 25,000…

Now Microsoft is joining work from home forever club

Microsoft is joining the ranks of Facebook, Twitter, Zillow and other companies that have developed permanent work from home options for their employees. The tech giant unveiled “hybrid workplace” guidance that permits employees to work from home for less than 50 percent of their working week, or receive manager approval for permanent remote…

Southland Mall’s troubled $65M CMBS loan for sale

A $65 million CMBS loan on Southland Mall in Cutler Bay is being shopped, after its former owner defaulted on it earlier this year. JLL is marketing the loan, which is tied to the 990,000-square-foot indoor mall at 20505 South Dixie Highway. The mall’s former owner, Investcorp, defaulted in April and handed the keys over to its CMBS lenders this summer. The mall is…

How the COVID-19 Economy Impacts Property Improvements & Customized Offices

The changing tenant-improvement landscape due to COVID-19 Before the COVID-19 pandemic, it was common for tenants in “Class A” buildings to ask for significant improvements to office space as a part of their real estate lease. In essence, this practice allows companies to obtain a highly-customized office as part of their agreement.  The owners of…

Retail rent collection has nearly returned to pre-pandemic levels

While national chains still face financial woes, there are some signs of recovery within the retail sector — particularly in categories such as gyms and clothing stores. National retailers paid 86 percent of their September rent, according to the latest Datex Property Solutions report. That’s about 10 percent below what they paid in 2019, but slightly…

Blackstone to open office in South Florida

The Blackstone Group is planning to open an office in South Florida, as the region’s economic boosters work to attract financial and investment firms. The New York-based private equity giant plans to hire about 215 employees, most of whom will be back-office technology workers, according to Bloomberg. The news comes as the Miami-Dade County Commission…

Integra scores approval for waterfront workforce housing project in Florida Keys

Victor Ballestas and Wrecker’s Cay Integra Investments is moving forward with its plans to build Wrecker’s Cay Apartments, the largest workforce housing project to be built in the Florida Keys in more than 50 years. Miami-based Integra, led by developer Victor Ballestas, recently secured approval from Monroe County for the 280-unit development on Stock…

Doral DoubleTree owner sues architect for $4M, alleging design errors

The DoubleTree at 10250 Northwest 19th Street and Larry Beame (Credit: Google Maps) The owner of the 150-room DoubleTree in Doral sued the architect of the hotel, alleging design defects that cost millions of dollars in fixes and delays. Hospitality Doral LLC, which owns the six-story hotel at 10250 Northwest 19th Street in Doral, sued Beame Architectural…

Crust to Expand With Takeaway Concept

Klime and Anita Kovaceski are expanding into the carry-out business. The husband-wife team behind Crust will open a new takeout concept and market they’ve dubbed Crust2go. “We always had the idea for carry-out as a bigger component to Crust in the backburner,” Kovaceski tells New Times. “But COVID-19 has changed the way people eat and do things to the point…

Hollywood Publix with boat dock advances

Hollywood is another step closer to landing a rare Publix grocery store with a boat dock. The Hollywood Planning & Development Board approved plans and modifications for a 30,000-square-foot supermarket at 3100 South Ocean Drive during the board’s meeting Tuesday. The store still needs approval from the city commission. It would be the second Publix with…

Fort Lauderdale developers score $92M bridge loan for rental tower

4 West Las Olas Fort Lauderdale developers Scott Bodenweber and Tom Vogel scored $92 million in bridge financing for a newly completed apartment tower in downtown Fort Lauderdale. Benefit Street Partners Realty Trust, a New York-based mortgage real estate investment trust, provided senior debt of $76 million, while West Palm Beach-based…

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October 14, 2020

Chart: Another Strong Month for Miami-Dade Commercial Real Estate Sales ~ September 2020 MLS

Miami MLS Number of Sales from October 2018 to September 2020 in Miami-Dade County Property Types: Commercial, Industrial; Commercial, Business, Agricultural, or Industrial Vacant Land

Embedded above is the chart for the trailing two years, specifically the period from October 2018 to September 2020, of closed sales of Miami-Dade commercial property, both improved commercial property (with buildings) and vacant commercial land, recorded in the Miami MLS. September 2020 was, again, a strong month, only a bit off from sales in August, which had one of the strongest months in the prior two years. As has been noted previously, overall commercial sales do not appear to be severely affected, though it is likely that you would see variance by commercial property type if you dug deeper. Of course, the Miami Multiple Listing Service (MLS) does not record all commercial real estate sales, and thus cannot be said to be fully representative of the asset class. Nonetheless, given that it is representative of commercial property sales recorded in MLS before versus now, it should be fairly reliable as a tool, though imperfect, to compare periods.

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October 14, 2020

Miami Commercial Real Estate News October 7, 2020: Regal Cinemas Suspends Operations; Kendall Office Buildings Trade; More…

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Doral DoubleTree owner sues architect for $4M, alleging design errors

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Pinnacle scores $31M for south Miami-Dade senior affordable housing development

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Hotels pivot to office space to stanch losses

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Florida allows eviction moratorium to expire

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Principal Real Estate Investors Provides $53.5M Construction Loan for Apartment Complex in Metro Miami

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Miami Beach Trying To Shed Hard-Partying Reputation, But Businesses Are Pushing Back

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October 7, 2020

The Slow Drip Folly of Holding Highest and Best Use Maxed Out Vacant Land

Save me from the pain of witnessing foregone monetization.

A vacant land owner, where the property that has seemingly topped out its HABU (highest and best use) potential, is forgoing potential income from reinvestment of potential sales proceeds (of the vacant land) for no apparent benefit. In other words, if HABU is topped out, there is not a higher value HABU to come, thus there is no HABU upgrade benefit potential. In surely any reasonable modeling scenario that forgone income would accrue to more than the value of the land in around 15 years. Also, as time passes, there is always the risk that something will change in the market or specific to the location to cause prospective buyers of the property with its current HABU to evaporate, with the value being less to buyers for the next in line highest and best use.

In the above chart two straightforward scenarios are illustrated:

Blue line – The blue line, shows the climbing of value vacant land with net operating income of $0, which is better than reality as in most cases vacant properties have net operating losses principally due to property taxes. As for the value accretion, here we are assuming the potential net operating income grows by 2% annually, and the the value moves in line with this potential income as would be expected over time and with other factors, cap rates a notable one, being constant.

Green line – This shows the same starting point, but here for developed property earning income at an initial cap rate of 5%, with net operating income growing by (the same as above) 2% annually, and with the cap rate remaining constant.

Which line would you prefer?

Alas, it may not be exactly as simple as that. Developed property over time may become obsolete, such that the value is only that of the land underneath it, or rent growth may become compromised such that the cap rate moves for the property. Regardless, given that with developed property you are earning and accumulating net operating income over time, such an owner will get so far ahead over time that there would in all probability be no contest between the two outcomes. Taxes also are not considered here. In any case, though one should speak with his or her accountant for guidance, under current tax law and assuming one took advantage of IRS Section 1031 to defer gains, I think most advisers would say the outcomes remain similarly disparate, as depreciation on improved property would largely offset taxable income on developed property.

You might ask; given this, why is there any undeveloped property?

Yeah. I ask myself this all the time.

The truth is, the obvious HABU topped undeveloped properties are few and far between. Generally, these properties have been pursued, and owners have rationally arrived at a conclusion similar to the above. The math to get there may be somewhat different in path or assumptions, but it is so compelling few owners will resist in perpetuity. But there are exceptions. owners And, owners of properties for which HABU upgrades have increased values bask in their brilliance and thus are hard to reach with boring old “yeah but there’s no more” argument. This is reminiscent of an old Wall Street adage attributed to Humphrey Neill, the founder of the Contrary Opinion Forum; “Don’t confuse brains with a bull market.”

If you have a vacant piece of land with a market value of $3 million, you likely have a piece of land that could be monetized (rented) a bit more or less than $125,000 a year in this market, assuming it is land of interest to top quality credit tenants. The reason your land has the value it does is because of this potential income. Thus, by keeping the land vacant, an owner is only forgoing income that the property’s value could be garnering, income one could be earning if the property was sold and the proceeds were used to then purchase income generating property.

This adds up over time. Bigly. These stories likely live in family legends, but only in their best PR form. There surely are countless family legends that ring like “your brilliant grandfather multiplied his money ten times on a piece of land” that should instead be “your grandfather multiplied his money 9 times in a ten year period on a piece of land, then stubbornly held on for the next twenty years as the property increased in value a mere 2% per year thereafter.

Granted, 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. I would note, however, I’m not referring to properties like that. 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.

Returning to Wall Street thinking as with the quoted adage above, an efficient market proponent would say that the above disparity, as significant as it is, is impossible. That person would be right, but wrong. The above underperformance of vacant land is not due to disparity of returns, but instead is due to the active choice of an owner ~ no decision is a decision. These owners are the equivalent of investors accepting less income, not less income with less risk, just less income.

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October 5, 2020

Miami Commercial Real Estate News September 30, 2020: USAF Offers Miami-Dade New Airport Site; ShareMD Buys Medical Campus; Hialeah MF Sells; More…

Air Force offers county new airport site at Homestead

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On Eve Of NBA Finals, Miami Heat Player Scores Development Win

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CTO Realty Growth Acquires Shopping Center in Metro Miami for $21 Million

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Miami developer Metronomic files for bankruptcy

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50% of Miami International Airport passengers likely to return in 2020

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Medical co-working space operator ShareMD buys Miami medical campus

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Greenberg Traurig Assists ShareMD in $89 Million Financing of Medical Office Building Portfolio with Starwood Mortgage Capital

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ShareMD Acquires Three-Building Medical Office Campus in Miami to Add to Their Growing Healthcare Portfolio

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Investment firm tied to Baltimore Ravens owner buys South Florida car dealerships for $61M

The family office of two Maryland billionaires paid a total of $60.5 million for car dealerships in Margate and Tamarac owned by Arrigo Automotive Group. A company tied to Hanover, Maryland-based Redwood Capital Investments paid $34.5 million for the Tamarac Dodge, Chrysler, Jeep and Ram dealership at 5901 Madison Avenue in Tamarac.

DiVosta family sells Palm Beach Gardens office towers for $80M

The Palm Beach Gardens office towers Investors Nader Shalom and Babak Ebrahimzadeh paid $80 million for the DiVosta Towers in Palm Beach Gardens, marking one of the biggest office sales to close in recent months. The DiVosta family sold the two 11-story Class A Towers at 3825 to 3835 PGA Boulevard to Gatsby Enterprises and Master Mind, according to a press…

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September 30, 2020

Miami Commercial Real Estate News September 25, 2020: 30-Acre North Miami Beach MXU Gets 1st Approval; Udonis Haslem Teams to Build Wynwood Apartments; More…

Dezer’s 30-acre megaproject in North Miami Beach gets first approval

A nearly 30-acre mixed-use development that would bring luxury condo towers, a harbor and public promenade secured a key approval from the city of North Miami Beach. Developer Gil Dezer’s plan to transform the Intracoastal Mall will return to the North Miami City Commission next month, after commissioners voted to pass zoning amendments and a…

Miami Multifamily Report – Summer 2020

Miami ended 2019 on a high note; In a study by financial advice website SmartAsset, the metro ranked fourth out of 500 U.S. cities ranked for economic growth. Miami joined the nation’s top “boomtowns” thanks to its gross domestic product and business growth, job creation and population change. However, rents started to moderate in late 2019 and early 2020.

South Florida construction starts rose in August

August construction starts rose in South Florida South Florida construction starts were up in August, according to a recently released report. Total construction starts for Miami-Dade, Broward and Palm Beach counties totaled $904.1 million, according to Dodge Data & Analytics, a Hamilton, New Jersey-based construction data analytics firm. That’s about 46…

10 Questions Your Litigator May Ask about Your Post-Covid Commercial Lease

Much has been written about commercial real estate in a post-Covid world. As real estate users consider how Covid will change their space needs, they should also consider what provisions will serve them in future lease-related litigation. Of course, every commercial lease is different, but there are provisions that most leases do or should have. Here are 10 questions your…

Magellan Housing and Miami Heat star Udonis Haslem to build Wynwood apartment project on city-owned land

Coral Gables-based Magellan Housing and its celebrity partner, Miami Heat star Udonis Haslem, scored a slam dunk with Miami’s Omni Community Redevelopment Agency. Miami city commissioners — acting as the agency’s board of directors — on Thursday approved a proposal submitted by the partnership to build a 12-story, mixed-use apartment project in the…

Colony sells most of its hotel biz to Highgate in $2.8B deal

Tom Barrack’s Colony Capital is selling the majority of its beleaguered hotel business to private investor Highgate Hotels in a deal valuing the properties at $2.8 billion. It’s the largest shakeup the hospitality sector has seen since being decimated by the pandemic. The publicly traded Colony signed an agreement to sell six of its seven hotel portfolios to Highgate for $67.5…

Builder involved in deadly FIU bridge collapse sues for $15M, alleges design firm botched review

The contractor behind the Florida International University bridge that collapsed in March 2018, killing six and injuring 10, filed a lawsuit seeking $15 million from the company responsible for reviewing the bridge’s design before its construction. The plaintiff and builder of the $14.2 million bridge at Southwest 109th Avenue and Southwest Eighth Street, Miami-based…

Report: Office market won’t return to glory until 2025

The office market won’t reach pre-Covid levels until 2025, a brokerage report has found. The analysis by Cushman and Wakefield predicts that office vacancies across the world will continue upward, reaching 15.6 percent in 2022, Bloomberg reported. About 95.8 million square feet of space will become vacant in the next two years. Before the coronavirus…

Kitchen And Bath Supplier Plans New 95,000 SF Warehouse And Distribution Center In Doral

Panda Kitchens has purchased a 28,800-square-foot industrial building located at 7800 NW 34 Street in Doral for $6,500,000 with plans to build a new 95,000 square foot warehouse and distribution center. The property is situated on one of the largest assemblages of industrial land, encompassing 4.20 acres, or 182,937 square feet, within the…

Brookfield and Namdar plan to hand over keys to struggling malls

Some mall owners have given up trying to revive their struggling malls and pay off their debt payments and are now seeking to hand over the keys to their servicers. Brookfield Properties and Namdar Realty are separately requesting they be allowed to give up their J.C. Penney-anchored malls to special servicers to avoid loan foreclosure, according to Trepp. The…

It’Sugar files for bankruptcy protection after sales sour

A Deerfield Beach-based candy chain is the latest retailer to file for bankruptcy protection due to Covid-19. It’Sugar, with about 100 candy stores in mostly tourist markets, has $500,000 in cash, with $6.2 million of secured debt and $10.4 million of unsecured liabilities, including unpaid rent, according to a press release. The company reported losses before…

Red South Beach signs $5 million lease for new space & other Miami restaurant news

Red South Beach Red South Beach is moving on from its Washington Avenue location of the last 10 years, but it’s not going too far. Chef and owner Peter Vauthy signed a 10-year, $4.5 million lease for the restaurant space at 801 South Pointe Drive, he told The Real Deal. The new location includes 6,000 square feet of indoor space and 3,000 square feet of,,,

Blackstone assembles biggest real estate debt fund ever

Blackstone Real Estate Debt Strategies’ Jonathan Pollack (Blackstone; iStock) PTA moms can look to Blackstone for fundraising inspiration. The giant firm gathered $8 billion for a property debt fund born last year and closed this month, making it the largest real estate credit fund ever raised. That’s thanks to low interest rates and the potential for high returns during the…

Hotel industry is in trouble and more lenders want out

As hotels across the U.S. continue to suffer — average occupancy is just under 50 percent — an increasing number of lenders are scrambling to sell their mortgages. Mack Real Estate Credit Strategies has hired Cushman & Wakefield to sell mortgages totalling $500 million tied to the Times Square Hotel in Manhattan and two St. Regis hotels in Washington…

Wynwood streetscape plan gets a thumb’s-up

A proposed vision for greener and more pedestrian-friendly streets in Wynwood is a step closer to being realized. The Planning, Zoning and Appeals board recommended approval of the Wynwood Streetscape Master Plan on Sept. 16. It sets guidelines that would dictate the build-out of Wynwood streets. The master plan focuses on increasing pedestrianism…

Famed Ocean Drive might become Ocean Walk

Pedestrians first, bicyclists and transit second, personal vehicles last is the mantra for officials looking to revamp transportation in Miami Beach’s Entertainment District. A permanently pedestrianized Ocean Drive was featured in a game plan that transportation staff presented at a city committee workshop last week.  The goal of such a makeover…

Common raises $50M, eyes housing for remote workers

With its eye on housing for remote workers, co-living startup Common has raised $50 million in new funding. The Series D was led by Kinnevik with participation from existing investors Maveron, 8VC and Norwest Venture Partners, CEO Brad Hargreaves wrote in a blog post Tuesday. The round brings Common’s total funding to more than $113 million at a time when…

Leaked bank documents show South Florida real estate’s alleged ties to money laundering

A group of South Florida property owners’ alleged ties to global money laundering are revealed in newly leaked bank documents. A family who owns a home worth more than $2 million in the Jockey Circle neighborhood in Davie and a man accused of buying an $850,000 Tudor cottage in Davie with drug money are among the property owners emerging from a trove…

Kitchen and bath supplier pays $7M for Doral land for distribution center

A kitchen and bath supplier paid $6.5 million for 4.2 acres of industrial land in Doral, with plans to build a distribution center. Panda Kitchen & Bath bought the property at 7800 Northwest 34th Street, according to a press release. The sale comes to $35.53 per square foot for about 183,000 square feet of land. The asking price was $8 million, according to an offering…

How do companies decide who should return to offices first? It’s tricky

Companies are relying on surveys and other data points to determine who will come back to offices first. (iStock) Companies are starting to bring employees back to offices after months of working from home, but deciding who should come back first is tricky — so firms are relying on surveys, apps and other tech to guide staffing decisions. International Business…

“That was a business decision”: Why real estate execs are backing Trump — or backing away

Sotheby’s International Realty broker Nikki Field was leading sales at Kushner Companies’ Puck Penthouses in Manhattan when, in 2016, the Kushners raised the idea of the brokerage getting involved in a fundraiser for Donald Trump’s presidential bid. Sotheby’s said it couldn’t because it was prohibited from donating to political campaigns…

Movie theaters might not come back after all

The release of Christopher Nolan’s “Tenet” was expected to be a return to some semblance of pre-coronavirus normalcy for movie theaters, but the industry might have a longer road ahead than some thought. Around 68 percent of movie theaters across the U.S. were open for the film’s debut over Labor Day weekend, but it made just $9.8 million over that weekend…

Firms dangle big bucks to lure employees out of big cities

In an increasingly work-from-home world, those with the means have also been moving out of big cities in favor of roomier, perhaps more suburban confines. Now, electronic payment company Stripe is offering employees $20,000 if they move out of cities including San Francisco, New York and Seattle, according to Bloomberg. But even that comes at a price.

Miami-Dade police said pre-Covid evictions could resume. Then came mayor’s stop order

The Miami-Dade Police Department announced on Thursday that pre-pandemic evictions could resume. But by the end of the day, county Mayor Carlos Gimenez had reversed the decision, causing confusion among landlords and tenants. Coronavirus-related evictions have been on hold in Florida for several months. Gov. Ron DeSantis’ two previous orders…

More multifamily may be coming to Overtown

Kelly Kite and 690 Northwest 13th Street (Google Maps) A landowner Miami’s Overtown neighborhood seeks city approval to turn a former chemical site into a multifamily or mixed-use development. Attorney Ines Marrero has applied for a zoning change on the site at 690 Northwest 13th Street on behalf of the landowner, a company tied to Vero Beach-based…

South Beach office building inks lease for record $92 psf

119 Washington Avenue Miami Beach Investment management firm J. Goldman & Co. signed a lease expansion at a South Beach office building for $92 per square foot, reportedly a record for South Florida. The company inked an eight-year lease for 3,318 square feet at the Yukon at 119 Washington Avenue. The six-story Class A office building is being…

British billionaires invest in Jeffrey Soffer’s Turnberry resort in Aventura

Jeffrey Soffer, Brett Mufson, David and Simon Reuben Reuben Brothers acquired a 25 percent stake in Jeffrey Soffer’s JW Marriott Miami Turnberry Resort & Spa. The private equity and investment firm, led by British billionaire brothers David and Simon Reuben, is partnering with Jeffrey Soffer’s Fontainebleau Development on other investments as well…

Off Lease Only sells two South Florida locations for $50M

Off Lease Only, the used car dealership, sold its Fort Lauderdale and West Palm Beach locations in a $50 million deal. Records show Off Lease Only Real Estate Holdings LLC sold both properties to Spirit Realty L.P. The Fort Lauderdale site at 827 South SR 7 sold for $27.5 million, and the West Palm property at 1200 South Congress Avenue sold for $22 million. Dallas…

Deutsche Bank: Employees can stay home until mid-2021

Deutsche Bank CEO Christian Sewing and Deutsche Bank’s Manhattan headquarters at 60 Wall Street (Getty) Employees at Deutsche Bank won’t have to replace sweats with suits any time soon. The German lender notified staff in New York, New Jersey and Connecticut this week that they can keep working from home until next July, according to Bloomberg.

Estate Companies plans Soleste apartments in North Miami Beach

Estate Companies received approval for a waterfront 23-story apartment tower in North Miami Beach. The tower, dubbed Soleste NoMi, will have 367 units, 2,708 square feet of commercial space and 655 parking spaces. It will be on almost two acres at 16395 Biscayne Boulevard. Estate Companies expects to break ground toward the end of the year on the 686,000…

Landlords lost about $9B in rental payments last quarter: report

Almost 11 million households were behind on rent or mortgage payments during the first three months of the pandemic. Nearly 6 million of those households were renters, who reported either missing, delaying or paying reduced rent during the second quarter of the year, according to a report from the Mortgage Bankers Association. Just over 5 million households…

Aman tower planned for Faena Versailles site in Miami Beach advances

Billionaire developers Vlad Doronin and Len Blavatnik secured initial approval for a zoning change that will allow them to build a 250-foot Aman-branded tower in Miami Beach. Despite considerable opposition for the proposed zoning, Miami Beach commissioners on Wednesday voted to pass the ordinance on first reading, sending it to the Miami Beach Historic…

Shvo to hell: Inside the ugly dispute between Michael Shvo and partner pal

Michael Shvo’s rule-breaking had finally caught up with him. The controversial broker-turned-developer was sidelined on more than $2 billion worth of Manhattan condos when he pleaded guilty to evading $1.5 million in taxes in 2018. But just when it looked like Shvo was persona non grata to any major investors and lenders, he surprised everyone. His…

Where real estate’s investment giants stand on Biden vs. Trump

Private equity and other major investment firms have donated more to Joe Biden than President Donald Trump so far this election cycle, campaign filings show, despite the potential for higher taxes. And while some companies with a heavy focus on real estate have been keeping hush on their candidate of choice, at least one firm is bucking that trend. The…

Amazon’s plan for massive warehouse heats up Homestead industrial market

Rendering of the project About two months after Amazon secured approval for what could be its largest distribution warehouse yet in South Florida, commissioners will vote on whether to approve a second e-commerce development on Homestead-Miami Speedway land. Homestead’s Planning & Zoning Board approved plans Tuesday for a 145,000-square-foot…

Amazon to open 1,000 warehouses in the suburbs

Amazon is moving to the ’burbs. The e-commerce giant plans to open 1,000 warehouses in suburbs and cities across the U.S., according to Bloomberg. The expansion will allow the company to quicken deliveries as it competes with rivals such as Walmart. Although other efforts, such as hiring 175,000 new workers, have already sped up Amazon shipments, the company is…

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September 25, 2020

Miami Commercial Real Estate News September 16, 2020: River Landing Opens; UM Sells Land Near Zoo for Walmart Anchored Retail; More…

Investment Management Firm Expands Lease in Miami Beach, Breaking Florida’s Rental Rate Record Per Square Foot

J. Goldman & Co. LLP, an independent investment management firm, has signed an eight-year lease for 3,318 square feet of office space and a 700-square-foot covered terrace at The Yukon Miami at 119 Washington Avenue in Miami Beach. J. Goldman, which already leases 1,223 square feet on the fourth floor of the Class A office building, broke Florida’s per square foot…

Miami Commercial Real Estate Sales to List Price Ratio Recovers from July’s Slight Dip ~ August 2020 MLS

After dipping a touch, just enough to make some market players wonder what it might mean, the sales to list price ratio as reported by the Miami MLS, rebounded right back to around 92%, very much in line with where is has generally been for the past few years. This ratio has held up well since coronavirus emerged. That this measure continues to stay steady overall…

University of Miami sells land for Walmart-anchored project

Ram Realty bought land north of Zoo Miami for $9.6 million, for a mixed-use development under construction anchored by Walmart. Palm Beach Gardens-based Ram bought the site at 15601 Southwest 127th Avenue from the University of Miami, according to records. The development has been known by the names Coral Reef Commons, as well as Botanical. Retail…

The CDC Says Indoor Dining Is Risky. Miami Restaurants Are Scrambling to Adapt

When the managers at All Day cafe convened for their weekly meeting on March 11, co-owner Camila Ramos could sense that major changes were afoot in the food-and-beverage industry. Although it was 24 hours before the mayor of Miami-Dade County declared a state of emergency, Ramos and her team began hatching plans for what to do if cases of the coronavirus…

Years in the making, $425M mixed-use Miami River development opens

The massive mixed-use River Landing Shops & Residences development along the Miami River opened after years in the making, while other projects in the area remain on hold. The retail, multifamily and office River Landing project was completed earlier this year, but the owner, H&R Real Estate Investment Trust, held off on a grand opening due to the pandemic.

H&R REIT, Urban-X Open First Wave of Tenants at $452M River Landing Development in Miami

Toronto-based H&R REIT and Coral Gables, Fla.-based Urban-X Group have welcomed the first tenants to open at River Landing Shops & Residences in Miami, the first phase of the $452 million River Landing mixed-use development. The first tenants opening beginning this week include Hobby Lobby, Burlington, Publix, Five Below, Chase Bank and AT&T. Ross Dress…

Quiet dorms and distress storms: Student housing sector takes hit

Stay-at-home orders and virtual classes have asked serious questions of the once-booming market for student housing. (Photo: University of North Carolina at Chapel Hill via Getty) A few days into classes in August, students at the University of North Carolina at Chapel Hill were in panic mode. Covid-19 cases were breaking out in dorm rooms and frat houses at the…

Miami-Dade puts new airport in Homestead onto agenda

After years of negotiating, it’s time to make a deal to use Homestead Air Reserve Base land for Miami-Dade County aviation purposes, according to Commissioner Dennis Moss. Commissioners are to decide Oct. 6 whether to OK his resolution to direct Mayor Carlos Giménez to “expeditiously effectuate a joint use agreement with the United States of America to allow…

Idle arts center stages may become recording studios

With live and in-person performing arts productions at a halt, Cultural arts organizations are finding ways to put large empty theater stages to good use while fundraising initiatives continue. Doing everything possible to move forward and keep facilities operational, performing arts centers are consistently looking for permits, funds and grants to keep them afloat…

Beyond beetles and bats, is Miami Wilds deal best for us?

With Miami-Dade unemployment highest in 80 years and our visitor industry hurting as never before, a long-sought attraction that would add 300-plus jobs would seem heaven sent. Miami Wilds might be just that. But you can’t tell that from its press clippings. As a committee last week recommended a lease for the water park beside Zoo Miami for a full…

Flywheel Sports files for liquidation bankruptcy

Flywheel Sports and its affiliates have filed for bankruptcy, joining a list of fitness studio operators crushed by the coronavirus. The spin-cycle studio brand’s Chapter 7 filing would lead to liquidation of its assets. The documents were filed late Monday with the U.S. Bankruptcy Court in New York. Read more Dead weight: New York Sports Clubs owner files for…

Cushman partners with Industrious in bid to bring the office back

Cushman & Wakefield is betting big on co-working, even as millions of Americans have yet to return to the office amid the pandemic-imposed remote work revolution. The firm has teamed up with startup Industrious to help provide flex-office space for companies and individuals outside the corporate environment, according to the Wall Street Journal. The co…

South Florida by the numbers: Miami Heat back in the spotlight

“South Florida by the numbers” is a web feature that catalogs the most notable, quirky and surprising real estate statistics. Against the backdrop of a global pandemic and crackling racial tension, the Miami Heat find themselves back in the spotlight this month, with their first trip to the NBA Eastern Conference Finals since 2014. September…

The Compelling Math of Owning vs. Renting Commercial Property for Businesses

I find buyers commonly debating total monthly cash outlay to own versus that of renting in year one. Though I admire the cash-is-king disciple of this, I would submit that the projected net cost to own compared to that of renting is so attractive that is offsets they typically small differences in cash outlay at inception. After all, the difference, over time, tends to be…

Early economic effects from “safer at home” practices : What Census data from the Quarterly Services Survey can show us

Social distancing and “safer at home” practices have been in effect for many months now, so what do the data show us so far? These protective measures have had widespread effects across the economy; but some industries were affected much more quickly, as behavioral changes predated any official stay-at-home directives. Our first example is transportation revenue…

Developers buy land, score $25M loan for Target-anchored mixed-use project in Overtown

Michael Swerdlow and his partners’ planned Target-anchored, mixed-use development in Overtown is moving ahead, despite ongoing litigation. The developers, including Swerdlow Group, SJM and Alben Duffie, closed on the land for the mixed-use development at 249 Northwest Sixth Street in Miami, and scored $25 million to finance the purchase, according to a release.

“Anything and everything is negotiable”: Incentives for condo buyers mount in Miami

In early March, Residences by Armani/Casa’s developers hosted a blowout opening party, featuring a Giorgio Armani fashion show, a performance by Pitbull, and a fireworks display over the beachfront pool deck of the high-rise condo. Agents offered tours of the Sunny Isles Beach tower’s units and amenity spaces. Some attendees wore ball gowns, and the drinks flowed.

Amazon to open 100 more distribution centers this month

Amazon is riding the online-shopping boom brought on by the pandemic. The e-commerce giant plans to open 100 facilities, including fulfillment centers, delivery stations and sorting centers, in September, the Wall Street Journal reported. That’s on top of more than 75 others opened this year in the U.S. and Canada.

South Beach dev site with multifamily, retail hits market

A development site in the Flamingo/Lummus neighborhood of South Beach hit the market, and could sell for at least the mid-$30 million range, according to the listing brokerage. The site includes seven multifamily and retail buildings on 1.4 acres at the southwest corner of Washington Avenue and 16th Street in Miami Beach. It includes 98 apartments and about…

Authentic Brands in talks to join J.C. Penney takeover

Authentic Brands, one of the most active bidders on bankrupt retail, is joining a deal to take over J.C. Penney. The New York-based brand management company is reportedly in discussions with Simon Property Group and Brookfield Property Group to participate in their plan to rescue J.C. Penney, according to Business Insider…

DeSantis moves Miami-Dade, Broward counties into phase two

Florida Gov. Ron DeSantis announced Miami-Dade and Broward counties will enter phase two of reopening on Monday, but that doesn’t mean bars and nightclubs can open in South Florida. The move into phase two allows in-person schooling to begin in Miami-Dade and Broward counties, but does not force students to attend classes in person. For Miami-Dade County…

Mortgage rates notch new low

Mortgage rates sank to an all-time low — again. The average rate for a 30-year fixed-rate mortgage dropped .07 percentage points for the week ending Sept. 10, reaching 2.86 percent — a new low since Freddie Mac began conducting the survey in 1971. This time last year, the mortgage rates averaged 3.56 percent. Fifteen-year mortgages declined, too…

Drink up: Bars can reopen Monday in the Florida Keys — but not in rest of South Florida

Bar and brewery owners can drink to this: Florida will allow bars and breweries to reopen beginning on Monday at a reduced capacity. But the order, announced on Thursday evening, only applies to counties that have entered phase 2 of the state’s reopening, which excludes Miami-Dade and Broward counties. Bars and breweries in other counties in phase 2 will…

CMBS delinquencies fell, but hold the applause

The special servicing rate has increased each month since the coronavirus pandemic hit the United States, and clocked a 55 basis point increase to 10.04 percent in August (iStock) The delinquency rate for CMBS loans has fallen for two consecutive months. Save the party supplies for later, though, because there is still no reason to celebrate. Many CMBS lenders have…

Lender acquires TooJay’s out of bankruptcy

Florida restaurant chain TooJay’s Deli is emerging from bankruptcy with a new owner. The West Palm Beach-based deli filed for Chapter 11 bankruptcy in April as a result of the impact of the coronavirus pandemic, which forced restaurants to shut their indoor dining rooms down temporarily. When it filed for bankruptcy, the company had 28 locations.

Real estate donors backing Biden over Trump

As the pandemic continues to wreak havoc on real estate, industry donors are siding with Joe Biden over President Donald Trump, records show. They have so far given $17.1 million to the former vice president’s campaign and political action committees backing him, and $15.6 million to Trump, according to the Center for Responsive Politics, a nonpartisan research…

Estate Companies scores $36M construction loan for Soleste Spring Gardens

The Estate Companies scored a $36 million construction loan for an eight-story apartment complex in Miami’s Health District. Bank OZK provided the financing for Soleste Spring Gardens at 1033 Spring Garden Road in Miami, according to a press release. The 240-unit complex will offer studios, one- and two-bedrooms from 400 square feet to 1,100 square feet…

JPMorgan is calling employees back to the office

JPMorgan is heading back to the office. The bank, one of New York City’s largest employers, told senior employees in the sales and trading division that they and their teams are to return to the office by Sept. 21, the Wall Street Journal reported. By directing employees to return after months of working from home, JPMorgan’s message is clear: It’s safe to head back…

Bad breakup? Developer Vlad Doronin sues ex Naomi Campbell

Real estate developer Vlad Doronin is suing his ex-girlfriend, supermodel Naomi Campbell, for millions of dollars. Doronin, who develops projects in South Florida and New York, filed a summons in New York County Supreme Court on Friday. He alleges that Campbell wrongfully refused to repay loans that Doronin made to her and failed to return personal property valued…

Century 21 Stores files for bankruptcy, blames insurers

Century 21 Stores is the latest retailer to file for bankruptcy, and it blames insurance providers for its collapse. The New York-based off-price retailer filed for Chapter 11 bankruptcy on Thursday and announced it will wind down operations to close its 13 stores across New York, New Jersey, Pennsylvania, and Florida. The company said it was forced to file for…

Remote work threatens cash flows for office REITs

The rise of remote work puts cash flows for U.S. office real estate investment trusts at risk in the near and long term, according to a recent report from Fitch Ratings. Trepidation about the future of the U.S. economy has led companies to sign fewer and shorter leases, which hurts cash flows for office REITs in the near future. Moreover, the broader shift toward…

What is Going to Happen with Rent Payments?

The economic impacts of COVID-19 won’t be fully measured for quite some time, but one thing is clear: many commercial real estate owners aren’t receiving rental payments from tenants. Even as communities reopen, numerous restaurants, personal-service providers, and retailers don’t do enough business to pay their bills. Restaurants operating at 25% of…

Trump’s fair housing repeal roils multifamily developers

This summer, President Donald Trump put low-income residents on notice: The suburbs would be off-limits to them. His administration repealed an Obama-era rule known as Affirmatively Furthering Fair Housing — a moment amplified by a series of tweets from the president declaring victory for suburbs across the country. “I am happy to inform all of the people…

America’s Largest Landlord To Make $550 Million Bet On Trailer Parks

A decade ago, Blackstone Group Inc. became America’s largest landlord, purchasing tens of thousands of single-family homes during the foreclosure crisis. Now the private equity firm has spotted the next big opportunity as the virus-induced recession crushes the working poor, that is, betting on mobile-home parks.

Behind a Former South Miami Mayor’s Idea For Real Estate Climate ‘Restoration Bonds’

Politicians and developers in South Florida love to cheerlead about how great the region is, often brushing off concerns about climate change to instead talk about beautiful beaches and tax advantages. But Philip Stoddard, a Florida International University biology professor and the former mayor of South Miami, has a darker take. “My biggest concern is…”

Luxury Esgewater Condo Association Sues Airbnb While Platform Cracks Down On Parties

The condominium association of a luxury tower in Miami’s Edgewater neighborhood has filed a civil lawsuit against Airbnb, and several additional lawsuits against Airbnb hosts, over short-term rentals at the property. Transient renters have led to problems including a shootout in an elevator and increased costs for security, maintenance and insurance…

South Florida Shutts Attorney Martha Rabbitt Comments on Commercial Real Estate Deals during COVID-19

Four South Florida attorneys discussed the impact of COVID-19 on commercial real estate deals in an article titled “Wuhan, Florida: COVID-19 Slashes Commercial Real Estate Deals in Stricken South Florida,” published by the Daily Business Review. South Florida commercial real estate deals have decreased in sales and dollar value. “Lenders are being cautious…”

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September 16, 2020

The Compelling Math of Owning vs. Renting Commercial Property for Businesses

I find buyers commonly debating total monthly cash outlay to own versus that of renting in year one. Though I admire the cash-is-king disciple of this, I would submit that the projected net cost to own compared to that of renting is so attractive that is offsets they typically small differences in cash outlay at inception. After all, the difference, over time, tends to be staggering.

Consider an example, the detailed calculations for which are above, using a property that would rent for $8,300 per month gross, plus sales tax, thus $8,839.50 total. Assume this same property could be purchased for $1,299,000, and that total expenses of owning are $40,000 per year. Also, assume 90% financing at 3.5%, which I believe is available now by way of SBA financing. Finally, let’s assume rent escalates 2% per year, as is somewhat typical in leases, that expenses also increase 2% per year and that the property will appreciate by this same 2% per year.

Calculating the all-in costs of renting is easy. It is just total rent and tax, escalated by 2% each year. This adds up to $1,161,481.

Calculating net cost to own is a bit more complicated, but not overly so. It does, however, rely on assumptions to estimate a number. The formula for this is: debt service + expenses – loan amortization – appreciation. The “minus appreciation” aspect is often overlooked. If you occupy a building for a number of years that you then sell for more, that gain should be considered as reducing cost of occupancy over the term. Likewise, a loss should be considered an increase in the cost of occupancy, thus this can cut both ways.

Continuing with this same example, net cost of owning over 10 years would net out to $503,905.59, as can be seen above. Notice that net cost to own is half the cost of renting in this example? Yeah. That is somewhat typical, by the way. Owner users (as buyers) commonly “step over dollars to pick up nickels” as they pay attention to right now without running calculations for a longer term.

Granted, the assumptions to get to cost of ownership are only that. Generally, however, any number a buyer might reasonably plug in results in the same favorable comparison for buying versus renting. It should also be noted that this does not take into account taxation. Under current tax rules, however, I believe that would only make ownership yet more attractive, as the gain may be taxed at lower capital gains rates.

IMPORTANT: This is provided on a best efforts basis only. It does not take into account all factors, notably income tax implications and costs to sell, and relies on assumptions that may not be correct or representative. Review with your accountant or professional advisor for specific guidance. Do not rely on this to make an investment decision. Finally, don’t hesitate to contact me if you notice any glaring errors, as I’d want to correct such.

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September 15, 2020

Miami Commercial Real Estate Sales to List Price Ratio Recovers from July’s Slight Dip ~ August 2020 MLS

Miami Association of Realtors 10 Years Ending August 2020 Sales to List Price Ratio for Commercial/Industrial Property Type Classification within Miami-Dade County and Price from $1 Million to $10 Million

After dipping a touch, just enough to make some market players wonder what it might mean, the sales to list price ratio as reported by the Miami MLS, rebounded right back to around 92%, very much in line with where is has generally been for the past few years. This ratio has held up well since coronavirus emerged. That this measure continues to stay steady overall, almost as-if-nothing, would seem to bode well for commercial property prices, but of course is negative news for any buyer hoping to take advantage of stress created opportunities.

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September 10, 2020

Miami Commercial Real Estate News September 9, 2020: $750 Million Miami Beach MXU Redevelopment Gets Approval; Doral Office Towers Trade; More…

Michael Shvo’s proposed Miami Beach tower gets haircut and approval

The Miami Beach Historic Preservation Board approved developer Michael Shvo’s plans to add a residential tower behind the landmark Raleigh Hotel. But that tower won’t be 200 feet tall, as Shvo had proposed. Instead, following community outcry and a passionate plea from board chairman Jack Finglass during a meeting on Tuesday, the board shortened the…

Miami Beach’s Historic Preservation Board Approves $750M Mixed-Use Redevelopment Project

The Historic Preservation Board (HPB) of the City of Miami Beach has approved the three-acre master plan for the redevelopment of the historic Raleigh, South Seas and Richmond hotels. Real estate owner and developer Michael Shvo plans to fully restore the three properties and unify them as one site to be operated as a luxury hotel and condominium building.

Banyan Capital buys Doral office towers for $43M

A company with ties to Miami-based Banyan Street Capital bought a Doral office complex for $43 million, marking a discount from its last purchase price four years ago. The real estate investment firm bought the twin office buildings near the intersection of Northwest 36th Street and Northwest 87th Avenue, along with some adjacent properties, according to records.

Homestead Among Cities In At Least 25 States Vying for Headquarters Of U.S. Space Command

Space Force got all the attention when President Donald Trump announced it in June 2019, but there’s another federal military agency that was announced last year: U.S. Space Command. Whereas Space Force is a brand-new agency that will be part of the Air Force (like the Marine Corps is a part of the Navy) and have wide latitude, Space Command is technically a…

Miami Beach Trophy Building Signs Record-Breaking Office Lease

The Yukon Miami, a class-A commercial office building at 119 Washington Avenue in Miami Beach’s affluent South of Fifth neighborhood, has shattered office leasing records in Florida despite the Covid-19 pandemic and economically-challenging times – as reported by The Company Real Estate and The Global Consulting Organization. J. Goldman & Co., LLP, an…

Chart: Miami-Dade Commercial Property Sales Reach Highest Level of Year ~ August 2020 MLS

Looking at the chart of two year trailing closed sales of Miami-Dade commercial properties, both improved and vacant land, thus for the period from September 2018 to August 2020, sales reached the highest level of this year. Given that COVID really began to impact markets in February, these numbers thus could be said to exceed pre-pandemic levels. It must be…

Starwood loses control of US mall portfolio

It’s over for Starwood Capital Group’s U.S. mall portfolio. The real estate investment firm lost control of seven shopping centers after defaulting on Israeli bonds earlier this year, according to the Wall Street Journal. A ratings downgrade on the debt triggered a clause that allows bondholders to take control of the properties. Six parties — including Starwood…

J.C. Penney saved by Simon and Brookfield

J.C. Penney is saved. The retailer will be acquired by mall operators Simon Property Group and Brookfield Property Partners, avoiding liquidation. Simon and Brookfield will pay about $300 million in cash and assume $500 million in debt to buy J.C. Penney, according to the New York Times. Some of the stores and distribution facilities will be divided into two property…

Market-rate rent payments sink to lowest level since start of pandemic

September rent payments for market-rate apartments nationwide fell, the largest drop since the pandemic began in March. A survey of 11.4 million market-rate units found 76.4 percent of those households made a rent payment in the first week of September. It marked a 4.8 percent-point drop from the same time last year, representing 552,796 fewer households…

Miami-Dade mayor: Bars and nightclubs won’t reopen until there’s a vaccine

Bars, nightclubs and movie theaters will remain closed in Miami-Dade County, though some outside activities can restart, and the curfew has been extended an extra hour. Miami-Dade Mayor Carlos Gimenez announced that more outdoor activities will be allowed beginning next week, two weeks after indoor dining was allowed to resume. Zoo Miami and Jungle…

Sign of the times: Developers want to add industrial to redevelopment of Pompano casino

Two companies redeveloping the 232-acre Isle Casino property in Pompano Beach want to make a pandemic-based pivot to industrial space and shrink the office component. Cordish Companies and Caesars Entertainment want to change the zoning and approved land use for Isle Casino so they can include 1.5 million square feet of industrial space in their mixed-use…

Miami Beach, minus 80,000 Art Basel visitors, vows to save Art Week

The cancellation of Art Basel will cost the City of Miami Beach and Miami-Dade County millions in lost tax revenue and economic activity, but officials are working to ensure that some form of Art Week will still take place. Art Basel was scheduled for Dec. 3-6 at the Miami Beach Convention Center, but organizers announced Sept. 2 that it would be cancelled due to Covid-19…

Brew pub with shipping container on top targets historic building

One of downtown’s most historic staples, the Alfred I. duPont Building, could soon be home to a microbrewery and brewpub that would boast a cantilevered shipping container. The City of Miami’s virtual Planning, Zoning and Appeals Board heard plans last week for the 11,000-square-foot brew hub that would also feature an outdoor beer garden built atop the…

Series of snags adds four months to Miami-Dade courthouse construction

More than half a year after breaking ground, the builders of the new civic courthouse in downtown Miami have hit several snags that have added at least four months to the project’s timeline. A July report from Plenary Justice Miami, the development team behind the courthouse project, notes several setbacks that have pushed back the building’s opening from…

Miami River condo association alleges $10M in defects: lawsuit

The condo association for a Miami River project is suing a group of developers and subcontractors, alleging $10 million in design and construction defects. Terrazas Riverpark Village Condominium Association filed suit last month in Miami-Dade Circuit Court against more than 80 parties. The association alleges that unit owners only discovered the…

Miami Wilds water park near zoo flows toward county deal

A long-sought deal for a water park beside Zoo Miami is near, with terms between Miami-Dade and developers awaiting signatures. A county commission committee Friday is to review a lease with Miami Wilds LLC, the team behind Miami Wilds park, hotel and retail spanning 27.5 acres near the zoo and two museums. If it advances, the lease is subject to a…

250-truck concrete pour key step on I-395, Signature Bridge project

A parade of 250 trucks pouring concrete in a 12-hour span later this month will mark the next big step as the Florida Department of Transportation and the Archer Western – de Moya Group Joint Venture continue to make good progress on the I-395/SR 836/I-95 Design-Build Project. “Work continues around-the-clock on all three project corridors,” said Oscar Gonzalez III…

Retail rent payments inch back toward normal in August

A report shows major retailers paid 83 percent of August rent (iStock, Andy C via Wikipedia Commons) Retail landlords can celebrate as rent collections are slowly but surely returning to normal levels after months of lackluster payments. Major chains paid 83 percent of August rent, a new record, and only 14 percent below the nearly 97 percent that they paid during the…

Wall Street calls BS on apartment landlords’ rosy projections

Wall Street isn’t buying the rosy rent and occupancy predictions that many apartment landlords have been offering up. (iStock) Many apartment landlords across the U.S. maintain that tenants are paying rent, that occupancy remains high and all is going well. Understandably, investors are skeptical, according to the Wall Street Journal. The FTSE Nareit Equity…

Mondrian South Beach unit owners sue condo association and companies tied to Russell Galbut, alleging securities fraud

Russell Galbut, Mondrian South Beach A group of unit owners at the Mondrian South Beach sued the condo association and companies tied to developer Russell Galbut, alleging securities fraud. Fifty-one unit owners are each seeking $600,000, for a total of $30.6 million. They allege that a group of entities raised assessments and special assessments for…

David Martin’s Miami Beach Marina proposal heads to voters in November

David Martin and a rendering of the project Voters will decide if developer David Martin can redevelop the Miami Beach Marina into a high-rise, mixed-use tower. The Miami Beach City Commission on Wednesday agreed to send the proposal to a referendum in November. Martin’s Terra is proposing a tower of up to 385 feet in height, or about 38 stories tall.

Office is out, school is in: Co-working operators try to lure students into workspace

Laura Kozelouzek, CEO of Quest Workspaces, and a Quest classroom Office is out, but school is in session. Quest Workspaces, a co-working operator with 12 locations in Florida and New York, is turning some of its enclosed office space into small pods where groups of students can gather for virtual learning. The move comes as many school districts are opting to forgo…

Record-breaking surge in Covid cases spells trouble for South Florida’s hotel market

Jeffrey Soffer’s iconic Fontainebleau Miami Beach was among the first of the city’s hotels to reopen on June 1, after the majority were shut down for the entire month of May. The sponsors of the 1,500-room oceanfront resort — whose hallways have been graced by Elvis Presley, Lucille Ball, and more recently, Jennifer Lopez and Kim Kardashian West — spent hundreds…

Hot commodity: Investors bet on mobile home parks

As returns fade and uncertainty reigns in traditional commercial real estate sectors, investors are moving money into mobile home parks. More than $800 million worth of mobile home parks traded during the second quarter, according to Bloomberg. That’s 23 percent more than the volume sold in the second quarter of 2019. Meanwhile, total commercial trades declined 68…

Retail adds nearly 250K jobs in August

The retail sector added nearly a quarter-million jobs in August, notching the highest growth among private industries. General merchandising stores added 116,000 workers, while automobile and appliance sales each added about 20,000 positions. (Related: Fifth Wall’s Brendan Wallace on the need for a retail bailout) Overall, the American economy continued its recovery…

CRE is doing better in cities where tech dominates

In smaller U.S. metros, big tech can mean the difference between boom and bust for commercial real estate. That’s according to a recent report from the commercial mortgage-backed securities data provider Trepp, which tallied the top secondary metro areas using several key industry metrics. Trepp ranked those markets by average occupancy rate, CMBS loan delinquency…

Developers land loan for Dania Beach multifamily project

Merrimac Ventures brought on another developer and secured a $4.7 million loan, with plans to bring an eight-story, mixed-use multifamily project to Dania Beach. Fort Lauderdale-based Merrimac is now joined by Miami-based high-end apartment developer The Estate Companies. The 340-unit project, at 4 North Federal Highway, has been renamed Soleste…

TikTok, Clarice: Why the government’s moves against Chinese firms could hurt real estate

Trump’s crackdown on TikTok and WeChat could further chill Chinese investment in U.S. real estate. Daniel Chang’s phone wouldn’t stop lighting up. It was the night of Aug. 6, shortly after President Trump signed an executive order banning the ubiquitous Chinese social media platform WeChat. Chang, a prominent broker at Sotheby’s International Realty…

Saks Fifth Avenue countersues Bal Harbour Shops for defamation

Saks Fifth Avenue is striking back at Bal Harbour Shops for attempting to evict the luxury retailer over alleged missed rent payments. On Tuesday, the department store chain countersued Bal Harbour Shops and Matthew Whitman Lazenby, president and CEO of Bal Harbour Shops’ owner Whitman Family Development, for defamation, breach of contract…

Nearly 70% of CEOs expect to downsize offices: KPMG

The pandemic has drastically changed the way CEOs around the globe see the future of work. More than two-thirds said they may reduce their office footprint in the coming years, according to a recent survey. Out of 315 CEOs answering the survey published in KPMG’s “2020 CEO Outlook: Covid-19 Special Edition,” 69 percent checked the “We will be downsizing office…”

The pandemic’s impact on North American GDP: Checking on the neighbors

An earlier FRED Blog post discussed the global scale of the ongoing pandemic. Today, we focus on some recent GDP values in North America, comparing inflation-adjusted growth for Canada, the United States, and Mexico. The data shown in this FRED graph are from the Organization for Economic Co-operation and Development (OECD), which uses the label…

As stocks rally, real estate investors try to pick winners

Stocks have surged as the government and Federal Reserve has acted to stabilize corporate debt and sustain consumer demand. But returns for real estate investors have ranged from robust to wretched. Major U.S. indices climbed during August, with the Nasdaq and S&P 500 reaching record highs Wednesday despite a slower than expected comeback in the labor market.

Landlords and tenants blast CDC eviction ban

Jaime Cain, a real estate attorney in Rochester, New York, nabbed one of the first court dates for a pre-Covid eviction as trials slowly picked up after a months-long shutdown. But just two days before the scheduled conference, the federal government may have dashed those plans. “Is it still happening? Is it canceled? I don’t know,” Cain said of her day in court. Washington’s…

Simon Property Group livestreams merchandise in new partnership

Simon Property Group is going virtual. The nation’s largest mall operator is partnering with ShopShops, a livestream shopping app, according to the app’s founder and CEO, Liyia Wu. Read more Simon’s rent collection inches up in Q2 while profits plummet Rent relief for retailers is expiring. Now what? Mall owner CBL Properties nears bankruptcy “With experience and…

Miami Company Introduces ‘Virtual Coworking’

For people skittish about signing full-term office leases, coworking was supposed to be a flexible solution. Now, with an airborne pathogen complicating all aspects of life, people are even skittish about coworking. A number of coworking operators are experimenting with their formats. CommonDesk is offering virtual memberships for $75 to $150 that offer…

CVS, drive-thru bank in Margate fetch $7M

A CVS pharmacy and adjacent drive-thru bank building in Margate sold for $7 million. A company connected to Aleksandr and Ekaterina Dolganov of Osprey bought the properties near the intersection of State Road 7 and Coconut Creek Parkway, according to records. The seller — a company tied to Lawrence A. Freeman of Boca Raton — paid $6.85 million for the…

Developer plans multifamily project in Dania Beach

A rendering of the project A developer plans a 79-unit apartment building with ground-floor retail space in west Dania Beach. A vacant restaurant will be demolished to make way for the market-rate multifamily development to be called Griffin Living. It will be built on about 2 acres along the south side of Griffin Road, west of I-95. Dania Beach commissioners greenlighted the…

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September 9, 2020

Chart: Miami-Dade Commercial Property Sales Reach Highest Level of Year ~ August 2020 MLS

Miami MLS Number of Sales from September 2018 to August 2020 in Miami-Dade County Property Types: Commercial, Industrial; Commercial, Business, Agricultural, or Industrial Vacant Land

Looking at the chart of two year trailing closed sales of Miami-Dade commercial properties, both improved and vacant land, thus for the period from September 2018 to August 2020, sales reached the highest level of this year. Given that COVID really began to impact markets in February, these numbers thus could be said to exceed pre-pandemic levels. It must be noted that the Miami Multiple Listing Service (MLS) does not record all commercial real estate sales. Therefore, this is not fully representative of the asset class. Nonetheless, given that it is as representative now as before periods of time can be considered on a relative basis.

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September 9, 2020

Miami Commercial Real Estate News September 2, 2020: J.C. Penney’s May Liquidate, Other Retail Woes; Opa-Locka Multfamily Project Gets Financing; More…

Redwood JV Lands Financing for Opa-Locka 112-Unit Townhome Project

A gated lakefront townhome project that will offer affordable homes received a $19 million construction loan. Redwood National Properties, an affiliate of BAS Holdings Investments LLC, alongside its joint venture partner Winston Capital Partners LLC, received the financing from City National Bank of Florida. DWNTWN Realty Advisors’ Andrew Kurnit…

Beige Book: Pandemic Continues to Shape Southeast Economy

The latest summary of economic conditions in the Southeast paints a mixed picture, with the COVID-19 pandemic and accompanying mitigation measures heavily influencing the region’s economy. In the labor market, for example, conditions improved as some firms rehired laid-off employees, according to the Federal Reserve’s August Beige Book summary. Yet…

Businesses Organize To Push Brightline Expansion With 5 New Stops In Miami-Dade

The eastern side of Miami-Dade County has long been starved for commuter rail, but a private-public partnership could finally bring service to five neighborhoods between Aventura and downtown, including North Miami, the Upper East Side and Wynwood. The administration of outgoing County Mayor Carlos Gimenez has been negotiating with private train…

South Dade seeks formal Metrorail-ready program

When Miami-Dade’s transportation board voted to upgrade the South Dade Transitway with bus rapid transit (BRT), Metrorail advocates were assured that when ridership gets high enough, the corridor will be converted to rail. Now they want it in writing. County commissioners Monday passed a resolution by Dennis Moss cosponsored by Esteban “Steve” Bovo, Daniella…

To fill vacant stores, Lincoln Road seeks pop-up businesses

Cultural institutions and new retail shops may find temporary homes on Lincoln Road this winter, as the Lincoln Road Business Improvement District is hoping to bring in a series of pop-ups to boost business and fill vacancies.  The improvement district’s executive committee has unanimously voted to support and promote pop-ups during the…

Macy’s to open smaller stores, bigger fulfillment centers

Who ever said bigger is better? Macy’s has unveiled a plan to open smaller, off-mall stores and fulfillment centers, while consolidating its current locations. “Everything on the digital agenda has been accelerated,” CEO Jeff Gennette said on the retailer’s second quarter earnings call Wednesday. The department store’s flagships have been hit hard by the pandemic as…

Art Basel cancels Miami Beach fair in December

Art Basel Miami Beach is canceled this year, delivering an economic blow to South Florida hotels, restaurants, stores and other venues. The renowned art fair takes place each year in early December at the Miami Beach Convention Center, but will not be held this year due to the pandemic, Switzerland-based Art Basel announced on Wednesday. The annual fair…

Developers land $19M construction loan for Opa-locka affordable housing

A joint venture closed on a $19 million construction loan for a $26 million Opa-locka development geared toward affordable housing. Redwood National Properties, a subsidiary of BAS Holdings Investments, in a joint venture with Winston Capital Partners, paid $5 million for a 10-acre site at 1719 Northwest 143rd Street within the existing Mirage at Sailboat Cove…

Coronavirus-Resistant Offices May Have An Advantage In The Market

Jonathon Yormak, founder and managing principal of East End Capital, was in the middle of renovating a more than 100-year-old, 120K SF office building in New York when the coronavirus hit. He’d already decided to completely overhaul the air and ventilation system in the building. “It’s only a 26-story building, so it wasn’t so big as to make it impossible, but we…”

Coral Gables looks at how to fund city hall upgrade

Coral Gables city commissioners are still debating whether funds from selling a municipal parking lot should be allocated toward a general park trust.  Vice Mayor Vince Lago proposed half of the potential fund proceeds from the parking lot, on the northwest corner of University Drive and Pisano Avenue, should go into a park trust to continue acquisitions of…

Accessibility to historic Vizcaya under microscope

In March, just before the pandemic prompted closures and stay-at-home orders in South Florida, residents from Gran Via Apartments, an elderly housing community in Outer Westchester, took a trip to the Vizcaya Museum and Gardens. Once they got there, they ran into a multitude accessibility issues.  The floors of the estate, built nearly a century ago…

Lincoln Road seeks to cut back renovation plans

The Lincoln Road District Master Plan, which aims to revitalize the iconic Miami Beach shopping and entertainment street, may be redrafted to allow for less disruptive construction as local businesses recover from the economic impacts of the coronavirus.  Tim Schmand, executive director of the Lincoln Road Business Improvement District, told Miami Today…

Michael Davey: Key Biscayne mayor targets infrastructure, shoreline work

The next two years will be pivotal for the Key Biscayne, both in addressing issues that need fixing, from infrastructure and shoreline preservation projects to helping residents and businesses rebound from the pandemic. Mayor Michael Davey knows how important his second and final two-year term will be, but if engagement from the community is any indication…

Restaurants’ more palatable menu: 50% indoors plus on-street dining

Restaurant owners are breathing a sigh of relief after getting the OK to welcome more patrons back with indoor dining and still take advantage of closed portions of streets as an outdoor dining option.  Miami-Dade County restaurants are once again allowed to invite people for indoor dining at 50% capacity, along with the expanded outdoor dining permit option…

Evictions banned through December for most US tenants

The Trump administration today announced sweeping eviction protections in light of the health crisis. The public health order, a draft of which the Centers for Disease Control posted Tuesday afternoon, will halt evictions from Sept. 4 through the end of the year for tenants who qualify. To be eligible, tenants must file a form to their landlord declaring they cannot…

Miami Beach Senior Housing to Undergo $78M Rehab

Council Towers Senior Apartment Homes, a two-building, 250-unit, age-restricted affordable housing community in Miami Beach, Fla., will undergo a $78 million redevelopment thanks to a financing package including a $30 million construction loan under the HUD 221(d)(4) program provided by Greystone. The HUD-insured loan was originated by Greystone Senior…

Greystone Provides HUD-Insured Construction Financing as part of $78 Million Affordable Housing Development Project for Seniors

Greystone, a leading national commercial real estate finance firm, has provided a $30 million construction loan under the HUD 221(d)(4) program for the $78 million redevelopment of Council Towers Senior Apartment Homes, an age-restricted affordable housing community located in Miami Beach, FL. The transaction was originated by Jon Morales, Senior Vice…

Why Saks Fifth Avenue Is Suing Bal Harbour Shops

The legal battle between Saks Fifth Avenue and Bal Harbour Shops is heating up. Today in the 11th Judicial Circuit Court of Florida, the high-end department store filed a lawsuit against Bal Harbour Shops and Matthew Whitman Lazenby, president and CEO of Whitman Family Development, which owns the mall, over statements that allegedly breached the…

25% of U.S. malls are expected to shut within 5 years. Giving them a new life won’t be easy

Coresight Research estimates 25% of America’s roughly 1,000 malls will close over the next three to five years. The coronavirus pandemic has accelerated a demise that was already underway. “Just because retail space has gone vacant or remained fallow does not mean that it is automatically a good candidate for repurposing into industrial space,” Moody’s Analytics…

Working from home saved Americans $90 billion in commuting costs: analysis

During the pandemic, many companies implemented a work-from-home policy to comply with local rules and to keep their employees safe. The policy — which has rocked the office real estate market — has also resulted in huge savings on commuting costs: Americans collectively saved $90 billion by not commuting by car in the months since the pandemic…

South Florida multifamily sales fell 50% in first half of year: report

Multifamily sales declined 50 percent during the first half of the year, according to a mid-year report and forecast by Cushman & Wakefield. Total sales volume for 2020 could also fall by half, compared to last year, as the economic effects of Covid-19 linger, the report shows. Ninety-one multifamily projects sold in South Florida during the first six months of…

J.C. Penney’s lenders could take it over, liquidate assets

J.C. Penney’s lenders are preparing to take control of the struggling retailer after discussions with its bidders have hit a dead end, Bloomberg News reported. J.C. Penney filed for bankruptcy May 15 and has since been in talks with large mall and retail operators, including Simon Property Group and Brookfield Property Partners. But those discussions have reached…

Flood of retail evictions expected as courts reopen

For months, retail landlords have been negotiating lease modification and rent breaks with tenants. But talks that reached a stalemate may soon end in litigation. A wave of retail evictions among big tenants and small businesses is expected to flood in as courts reopen and eviction moratoriums across the country expire, according to the Wall Street…

Facebook exec expresses confidence in office real estate

The future of office properties has been in question since the pandemic emptied out Manhattan. But Brian Rosenthal, a senior executive at Facebook, told Business Insider that having a physical space in New York is critical for the social media giant. “So much of what we do is collaborative,” Rosenthal said. “[Software is] like writing a book together where all the…

Dogfish Head to take over Concrete Beach social hall in Wynwood

Concrete Beach Brewery Concrete Beach Brewery closed the doors to its Wynwood social hall for good. The brewery, which opened its 11,000-square-foot space in 2015, announced the permanent closure on its social media accounts, citing the “unprecedented global crisis.” Concrete Beach is part of A&S Brewing Collaborative, an independent subsidiary of the…

Report shows how much commercial real estate has fallen

The economic toll on commercial real estate shows no signs of abating as the health crisis lingers. Indexes for office, retail and lodging properties were all lower in July than they were a year ago, according to analytics firm Real Capital Analytics, Bloomberg reported. Deals were also down, with transaction volume across all sectors plunging 69 percent to $14…

Developers score $22M construction loan for Westchester senior living and medical office project

Alberto J. Pérez, Juan Carlos Mas, and a rendering of the project A group of developers scored a $22 million construction loan for a mixed-development in Miami’s Westchester neighborhood that will include a medical office building and senior living facility. Commercial real estate developers AJP Ventures and Mas Group, along with equity partner OCTA, expect to…

Fed signals low rates are here to stay

The Federal Reserve has shifted its strategy for setting interest rates, allowing inflation to rise higher than previous targets. The change codifies what the Federal Reserve has been practicing for the past 18 months, and signals that interest rates will remain low, the Wall Street Journal reported. As the Federal Reserve allows inflation to rise above 2 percent, the target…

AIMCO Acquires Miami Apartment Tower

AIMCO has acquired Hamilton on the Bay, a community located in the Edgewater neighborhood of downtown Miami. The sale was facilitated by the Hussami Rockson Group of Marcus & Millichap, which represented the seller, SunTrust Community Capital, and procured the buyer. The price was $89.6 million, which was a portfolio sale that included Hamilton on the…

Sale of 28-Story Waterfront Apartment Complex in Miami Arranged

Marcus & Millichap has arranged the sale of Hamilton on the Bay, a 28-story, 275-unit apartment complex in Miami. The property, which backs up to Biscayne Bay, is situated at 555 34th St., four miles north of downtown Miami. Built in 1985, the property offers studio to four-bedroom floor plans. Communal amenities include a dog park, fitness center, bike storage…

Thor Equities sues to evict Stefano Ricci from Miami Design District

Thor Equities is seeking to evict luxury fashion retailer Stefano Ricci from its store in Miami’s Design District. The New York-based real estate firm alleges the luxury retailer owes more than $133,000 in rent at 118-120 Northeast 39th Street, according to a lawsuit filed in Miami-Dade County Circuit Court last week. Stefano Ricci’s lawyers fired back, filing a…

Behind Miami’s Largest Upcoming Office Project, 830 Brickell

The office landscape is currently going through one of the biggest transformations in recent history, as property managers and developers alike are making significant adjustments for offering tenants a safe and healthy environment. Recent development data showed improved construction activity in the summer, but with the economy expecting…

Two Roads Development lists Elysee sales center for $6M

The sales center, David Restainer and Reid Boren Two Roads Development is taking a different path with its sales gallery for Elysee Miami, a luxury condo project under construction in Edgewater. The developer had planned to lease out or sell the commercial condo, which has been used as Elysee’s sales center, to a restaurant. Then the pandemic hit. The 5,481-square-foot…

Class B malls face collapse as retail bankruptcies pile up

Second-tier malls are at increasing risk of collapse as retail bankruptcies and store closures add up across the country. The category of malls — known in the industry as Class B — are in a vulnerable middle ground: more secure than their Class C and D counterparts but not as safe as high-end, Class A malls, which are considered likely to make it out of the…

Black-led banks combine, focused on multifamily housing

Two banks have merged to form the country’s largest Black-led lender. The combination of Broadway Federal Bank in Los Angeles and City First Bank in Washington will focus on multifamily affordable housing, the New York Times reported. “We need to scale up our impact,” said City First CEO Brian E. Argrett, who will lead the new lender of the same name.

South Florida construction starts show short-term recovery in July

South Florida construction starts showed a monthly recovery in July, but were still a far cry from life before Covid-19, according to a recently released report. In July, total construction starts for Miami-Dade, Broward and Palm Beach counties totaled $619.1 million, according to Dodge Data & Analytics, a Hamilton, New Jersey-based commercial construction project…

Rent relief for retailers is expiring. Now what?

With millions of U.S. stores remaining shuttered, property owners have handed out billions of dollars of rent relief. In recent earnings calls, some landlords gave hints as to who got tentative relief and how these negotiations went down. Simon Property Group’s David Simon alluded to the mall owner abating rent for thousands of local retailers during…

These multifamily, Miami among, and office markets are more vulnerable to Covid distress

Since the early days of the coronavirus crisis, distressed real estate investors have been gearing up for the opportunity to scoop up assets at rock-bottom prices. So far, even in the hard-hit hospitality and retail sectors, deals have been slow to materialize as buyers and sellers continue to wait each other out. Signs of distress in the office and multifamily…

Wood Partners Lands $86M Refi for Miami Tower

Wood Partners, the developer behind the Miami luxury tower Yard 8, has secured a $86.3 million refinancing loan from Asia Capital Real Estate. The Atlanta-based owner, developer and manager will use the first mortgage loan to place permanent financing on the Class A multifamily property. Completed in May 2019, the 387-unit community is located in…

SBA Disaster Assistance for May 2020 Flood that affected City of Doral

The U.S. Small Business Administration (SBA) is offering low-interest disaster loans in response to the May 26th & 27th flood that affected several areas including the City of Doral. Businesses of all sizes, Private Non-Profit organizations, Homeowners and Renters and with physical or economic damages stemming from this disaster, are encouraged NOT to wait for…

Motley Fool: Here’s Why Warehouses Will Be a Good Investment in the Near Future

The retail apocalypse was a major concern before the COVID-19 outbreak took hold. In 2019, an estimated 9,500 stores went out of business, according to Coresight Research. But now, a lot of major retailers are making plans to close stores as the effects of the pandemic rear their ugly head. According to the company, bankrupt retailer J.C. Penney…

Lauderdale Lakes affordable housing complex fetches $17M

Affordable housing developer the Cornerstone Group sold a 246-unit Lauderdale Lakes apartment complex for $16.9 million. Peak Capital Partners, a Provo, Utah-based affordable housing owner and manager, bought the St. Croix Apartments complex at 4075 to 4201 Northwest 34th Street, according to records. The price comes out to $68,699 a unit.

Jenco Properties pays $68M for Flagler Village apartments

Apartment giant AMLI Residential sold a rental complex in Fort Lauderdale’s Flagler Village for $67.5 million. Chicago-based AMLI sold the 218-unit development at 450 Northeast Fifth Street to two affiliates of Jenco Properties, a Hialeah-based property management firm, records show. The deal breaks down to $310,000 per unit. The companies tied to Jenco…

Seagram scion pays $38M for West Palm affordable housing

A company tied to a member of Seagram’s Bronfman family bought a 264-unit, waterfront West Palm Beach affordable housing community for $38 million. Malibu Bay Preservation Limited, the buyer of the Malibu Bay Apartments at 750 Malibu Bay Drive, is managed by Jeremy Bronfman, a partner and founder of investment group Lincoln Avenue Capital…

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September 2, 2020