Commercial Property Borrowing Cost Quarterly 2020 Q2

U.S. Treasury 5 Year Nominal Rates for the Five Year Period Ending June 1, 2020

Yields on 5-year U.S. Treasury Notes remain at lows quickly reached as we entered the era of the COVID-19 pandemic. As can be seen in the chart embedded herein, 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, it would seem, over naught. Though borrowing costs have not exactly followed this point for point, it has nonetheless been an excellent development for those looking to finance; rates are indeed lower.

“Due to economic cutbacks, the light at the end of the tunnel has been turned off.”

~Author Unknown

This low rate environment is powerful for real estate as an asset class. To be sure, there are concerns about vacancy rates and rent growth in a slower economy, but lower rates, by way of cost of capital and as an alternative asset class comparison, have an offsetting positive effect. Further, vacancy and rent growth affects are as yet unknown, a known unknown. Lower interest rates, meanwhile, are a known known. One also has to wonder if some of the economic concerns in the current environment, namely the expansion of money supply, could attract money to commercial property as a store of value.

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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July 23, 2020

Miami Commercial Real Estate News July 22, 2020: Multifamily Near Airport, Miami Beach’s Paris Theater, Dev Site at Miami Worldcenter Trade; Office Market Evolving; More…

Parkway, KKR Complete $10M Renovation of Brickell Miami Office Tower, Sign Three Retail Tenants

Parkway Real Estate Services LLC and joint venture partner KKR have completed their $10 million renovation of Sabadell Financial Center, a 30-story, 524,000-square-foot office tower at 1111 Brickell Avenue. The waterfront property overlooks Biscayne Bay. Parkway Real Estate and KKR acquired the property for $250 million in 2018 and immediately…

Airport Villas apartment complex near Miami International Airport Sold

The owner of Cervera Real Estate Ventures acquired two apartment buildings near Miami International Airport for $13.2 million, with plans to redevelop the site for a future development project. Javier Cervera Jr. purchased the two-building, 90-unit complex known as Airport Villas at 4325 to 4335 Northwest South Tamiami Canal Drive for $147,000 per unit…

Dezer Development Settles ‘Hostile Workplace’ Suit Brought By Former COO

Father and son developer duo Michael and Gil Dezer have settled the lawsuit the former chief operating officer of Dezer Development brought against them following contentious testimony. The undisclosed settlement between plaintiff Andrew Chesnick, who worked for Dezer Development from 2013 until 2015, and the Dezers was confirmed in front of Circuit…

Doctor’s orders: developers increasingly tap medical experts, amenities

Amid the coronavirus pandemic, wellness services at developments have expanded to include an array of medical amenities, and gone far beyond luxury residential projects. Crocker Partners, one of Florida’s biggest office landlords, even hired a doctor to fill a new role for the company: director of environmental health. By hiring Dr. Walter Okoroanyanwu, Boca Raton…

“We’re moving into this new normal”: Retail landlords are finally getting paid

After months of skipping out on rental obligations due to the coronavirus pandemic, retailers are getting closer to making their landlords whole. Over 72 percent of national chain retailers paid their July rent as of mid-July, according to the latest report by Datex Property Solutions. That’s up from 62 percent just a month ago. “We’re moving into this new normal…”

Pair of mixed-use towers due in Wynwood

On the eastern side of growing Wynwood a developer plans a large mixed-use residential project that will also bring in new commercial tenants. PRH CHO Dragon Wynwood LLC plans to build the pair of neighboring buildings at 2804, 2810, 2819, 2828, and 2838 NW First Avenue. The city’s Urban Development Review Board considered the project at a virtual meeting…

Property appraisers seek to help landowners with taxes

Florida’s elected property appraisers are collaborating to help property owners throughout the state pay their taxes amid the greatest economic and housing crisis in a decade, according to Miami-Dade Property Appraiser Pedro Garcia. With the cooperation of state legislators, who have shown “100%” willingness to discuss solutions, he said, relief for those struggling…

Brightline might bypass five new rail platforms

New commuter rail in Northeast Miami-Dade would have up to five new platforms along Florida East Coast Industries’ line between downtown and an upcoming Aventura station but FECI’s Brightline won’t necessarily stop at any of them, a company executive says.  After local government committed five years ago to bringing Tri-Rail downtown, FECI Senior…

Midrise housing due in Miami Health District

A developer plans to construct an elegant mid-rise multifamily residential building near the City of Miami’s Health District. Applicant Jesus Gonzalez Pereda presented plans for The Spot, to rise on a vacant lot at 1510 NW 16th Terrace. The project is designed as an 8-story building with 38 dwellings and parking for 43 vehicles. The city’s Urban Development Review Board…

Forget coulda woulda shoulda and hail South Dade transit

There’s good news and bad news for South Dade’s commuters. The good news is that after years of wishing and begging, they’re about to get new, fast, comfortable, reliable mass transit that could save them an hour or more every workday. The bad news is that the transit system’s name contains the word bus. That’s been the issue for years: a 20-mile transit…

Wynwood Business Improvement District used Zika model

Since the start of the pandemic, the Wynwood Business Improvement District has been ahead of the game by preparing its business members and stakeholders for what was to come.  The improvement district already had an operating model: after the outbreak of the Zika virus back in 2016, leaders devised a game plan for what to do in the event of another…

Austin Hollo: Helping to direct family-created Florida East Coast Realty

Here’s a bit of trivia every Miamian should know: What is the tallest skyscraper in Florida, as well as the loftiest residential building south of New York? The answer: Panorama Tower, an 85-story, 868-foot-high marvel in Brickell boasting 821 luxury apartments, hotel and office space, and other commercial accommodations. Austin Hollo, senior vice president…

Gap claims it doesn’t have to pay rent at any of Brookfield’s malls

Gap Inc. is firing back at landlord Brookfield Property Partners, a month after the latter sued the retailer for withholding rent. Five of Gap’s chains — Gap, Athleta, Banana Republic, Old Navy, and Janie & Jack — sued Brookfield affiliates, claiming that its obligations to pay rent ended when government restrictions forced the company to close stores across the…

Biden’s tax plan would “pull the rug out” from under the real estate industry: insiders

Joe Biden went after one of the real estate industry’s favorite tax benefits Tuesday when he proposed funding a child- and elderly-care spending platform by closing off a loophole used by property investors. The presumptive Democratic presidential nominee proposed eliminating 1031 “like-kind” exchanges for investors with annual incomes greater than…

Knotel seeks to raise $100M in a serious down round

Knotel is reportedly trying to raise $100 million in funding in a round that would significantly lower its valuation, as the co-working firm grapples with plunging revenues and mass layoffs. The company has been in talks with a European firm for the funding since the beginning of the year, according to Forbes. The new investment would be at terms that could…

Massa Investment buys Paris Theater in Miami Beach for $13 Million

Massa Investment Group bought the Paris Theater on Miami Beach at 555 Washington Avenue for $13 million. Miami-based Massa Investment Group, led by Mathieu Massa, bought the 25,589-square-foot building for $508 per square foot, records show. Big Time Productions, led by Eugene Rodriguez, sold the property. The building…

State-level GDP losses during the pandemic : Mapping the range of economic decline across the U.S.

FRED has the latest state-level GDP data for 2020, and there’s a range of economic decline across the United States. This GeoFRED map shows regional differences in how state economic growth has been affected by the COVID-19 outbreak—from 8% declines in Nevada and New York to a 1.3% slump in Nebraska. What determines how a state’s economy is affected?

Here’s how much Covid has crushed global RE investment

Global real estate investment was slammed over the first six months of the year, falling by a third compared to the same period last year. But amid the coronavirus-fueled hurricane a couple of sectors have been holding up, according to a new report from Savills, cited in Bloomberg. First the bad news: The Asia-Pacific region, where the virus first flared…

Downtown Fort Lauderdale dev site hits market for $12.5M

A development site sandwiched between Fort Lauderdale’s Flagler Village and the New River hit the market for $12.5 million. The property at 150 North Federal Highway includes a two-story 9,653-square-foot office building that was built in 1985. The site, near Virgin Trains USA’s Fort Lauderdale station, is listed with Native Realty founder and CEO Jaime…

COVID-19 South Florida Real Estate Market Segment

South Florida economic and real estate market fundamentals were very strong when the stay home orders took effect in March. Market performance in March and in the first quarter of 2020 exceeded that of the same period in 2019 despite the COVID-19 interruption. Positive factors such as negligible delinquencies, lack of a subprime mortgage crisis…

US sports teams carry on with real estate projects, 2020 season or not

One Cardinal Way Over the last several years, sports teams across the country have spent big money developing real estate around their stadiums with the goal to attract visitors — and their money — for more than just games. While the coronavirus pandemic has halted large spectator sports events across the world, sports franchise owners are staying the course…

Flexible leases, greater services: Covid accelerates shifts in office market

In the office market, the pandemic has proved the “great accelerator.” That’s according to Susan Freeman, a London-based partner in the real estate department at Mishcon de Reya, who joined Nelson Mills of Columbia Property Trust to discuss the future of office for a recent episode of TRD Talks Live. The executives said that in both the U.K. and U.S. markets…”

Integra, partners pick up waterfront dev site next to Jockey Club for $16 million

Integra Investments and two partners purchased an 8.2-acre waterfront development site just north of Miami Shores for $15.5 million. The Miami-based real estate firm, along with Andrew Korge of Korgeous Group and David Larson of DCL Capital, acquired the site at 11295 Biscayne Boulevard for $43 per square foot, according to a release. Jockey Segal LLC, led by…

Developer buys Miami Worldcenter site for mixed-use project

Miami Worldcenter’s developers sold a site at the megaproject for $18.85 million to Akara Partners, which plans to build a mixed-use project. Miami Worldcenter sold 36,273 square feet of developable land to the Chicago-based development group, and another 8,227 square feet of undevelopable land underneath the Metromover. The two pieces of land total 1 acre…

Bridge Investment wants to raise another $600 million for its Opportunity Zone funds

Bridge Investment Group said it plans to raise another $600 million through its Opportunity Zone funds between now and the end of this year. The company announced this week that it had already raised $1.3 billion through the funds since launching in October 2018 with a $500 million target. Most of that money has already been deployed to projects around…

Miami-Dade approves $35 million aid package for restaurants, employees

Miami-Dade County restaurants and employees in financial straits could see some additional help from the federal government. Miami-Dade County commissioners on Thursday approved a $35 million aid package for restaurants and their staff, which includes providing $500 checks for laid-off workers, according to the Miami Herald. The plan is to use about 7…

Co-living execs offer glimpse at occupancy rates

Before the pandemic, co-living executives were looking to capitalize on demand for shared, low-cost accommodation — specifically targeting young professionals in major cities. But now, with thousands of units in the pipeline, the pandemic has called the sector’s business model into question — and executives are predicting a tough 12 to 24 months, according…

Hotels’ comeback stalls nationally, skids in NYC and Miami

Hotels’ recovery appears to have stalled. From mid-April through June, occupancy rates climbed steadily following their historic coronavirus plunge. But they fell in the week ending July 4 and last week they were essentially flat, according to newly released data from industry tracker STR. Occupancy rose by 0.3 percentage points to 45.9 percent in the week…

Retail sales increased in June — but surge in infections could signal trouble ahead

Retail sales increased in the U.S. by 7.5 percent in June, exceeding expectations as stores across the country began to reopen. The total estimated value of the sales was $524.3 billion, statistics released Thursday by the Department of Commerce show. The figures follow a record 17.7 percent jump in May, and June’s dollar volume is the closest to January’s…

Coral Gables Adopts Emergency Order Expanding Temporary Use Permits Due to COVID-19

In recognition of the impacts of COVID-19 on the local economy, the Coral Gables City Commission recently tasked staff with finding additional creative ways to support businesses and encourage individuals to participate in the local economy. On Tuesday, July 14, 2020, the City Commission adopted an emergency ordinance adding a section to the…

Triple Five, Terra, Starwood sue Miami-Dade property appraiser over tax bills

Affiliates of megamall developer Triple Five, along with Terra and Starwood Capital Group are crying foul over property tax bills from Miami-Dade County. A number of developers and investment groups have recently filed lawsuits against Miami-Dade Property Appraiser Pedro J. Garcia for their tax appraisals for the 2019 tax year. Others include the owners of…

Don Peebles’ diversity capital call: Developer says push for equal economic opportunity is “not going away”

Don Peebles Developer Don Peebles founded his eponymous firm in 1983. Since then, the Peebles Corporation has built out a portfolio that totals $6 billion and spans more than 7 million square feet in Boston, Los Angeles, Miami, New York, Philadelphia, San Francisco, Washington, D.C., and Charlotte, North Carolina. Peebles has long been outspoken about the…

Commissioner Pushes Miami Water Park Project Despite Environmental Concerns

Once upon a time, Miami-Dade County almost had a major amusement park meant to rival Disney World and Universal Studios. The plan to construct a theme park on Zoo Miami property near environmentally sensitive land was seemingly killed by a beetle around 2016. But the project didn’t die. Instead, it has morphed into a plan to build a water park on top of a…

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July 22, 2020

Miami Commercial Real Estate News July 15, 2020: Broward’s Largest Office Tower Trades; Cold Storage Spec to be Built; Hialeah CVS Sells; More…

Bridge Development, PGIM to Develop 312,103 SF Cold Storage Facility Near Miami

Bridge Development Partners and PGIM Real Estate will develop Bridge Point Cold Logistics Center, a 312,103-square-foot cold storage facility in Hialeah. The joint venture expects to deliver the speculative property in fourth-quarter 2021. The 20.1-acre site is situated at the intersection of NW 162nd Street and NW 102nd Avenue, 18 miles northwest of Miami…

Bridge and PGIM buy Hialeah property to build spec cold storage facility

Bridge Development Partners and PGIM Real Estate bought a 20-acre site in Hialeah, with plans to build a spec cold storage facility. The joint venture bought the property between Northwest 162nd Street and Northwest 102nd Avenue for $11 million, according to sources. Section 17 LLC, led by Lloyd Moriber of Bal Harbour, sold the…

Atlanta Fed: Beige Book Reflects Ongoing Pandemic-Related Difficulty

Economic conditions remained generally challenging across the Southeast, though some Atlanta Fed contacts reported gradually rehiring laid-off workers and retailers noted rising sales as businesses reopened, according to the Beige Book summary of regional economic activity from mid-May through June. Although some retailers said uncertainty still clouds their…

Simon Property Group sics the lawyers on deadbeat tenants

Simon Property Group has kept its promise to sue mall tenants who aren’t paying their rent. On Tuesday, the country’s biggest retail real estate investment trust filed a lawsuit against Eddie Bauer, seeking to recover $6.2 million in missed rent payments. The outdoor clothing store chain has not paid rent since April, according to records filed in federal court. Last…

Video: The Top Ten Issues Affecting Commercial Real Estate 2020-2021

In these videos CRE Counselors Global Chair Michel Couillard discusses his firm’s report on the Top Ten Issues Affecting Real Estate with the host of America’s Commercial Real Estate Show. As you might guess, (1) COVID-19 is at the top of this year’s list. Other top issues discussed that affect commercial real estate are (2) economic renewal, (3) capital markets…

Armageddon on hold: 88% of tenants paying rent

Survey finds 87.6 percent of tenants paid some rent this month With enhanced unemployment benefits set to expire this month, 87.6 percent of tenants paid some rent through July 13, according to a national survey of market-rate units. The number of renters paying at least some of the month’s rent was only slightly lower than the 90.1 percent during the…

Hialeah CVS sells for $11 million

Eastern Industrial Development Corp. snagged a Hialeah CVS building for $10.5 million, as drugstore properties continue to sell during the coronavirus pandemic. The Bronx, New York-based real estate investment group, led by Scott and Mandy Milchman, bought the 12,735-square-foot building at 101 Hialeah Drive, according to sources. It sold for $824 per…

Blackstone says goodbye to CMBS fund

Blackstone Group is throwing in the towel on a mortgage-backed securities fund. The company is winding down the Blackstone Real Estate Income Master Fund, which realized a 24 percent decline when the coronavirus struck in March, according to Bloomberg. In a filing, Blackstone said closing the fund would provide its shareholders with cash and the “best path…”

Miami Beach shuts down short-term rentals due to coronavirus

The city of Miami Beach ordered all short-term rentals to stop operating effective Wednesday at 12:01 a.m. due to the record number of coronavirus cases. Miami Beach updated its emergency order to close and prohibit short-term rentals, a week after Miami-Dade County Mayor Carlos Gimenez issued restrictions on restaurants, gyms, fitness centers and short-term…

Office supply rising across South Florida, rents not dropping

Even with an onslaught of new office supply and the economic impacts of coronavirus, landlords did not give tenants a rent break during the second quarter, according to a new report from JLL. Miami-Dade County’s office market was hit hard by the pandemic, due partly to its exposure to the hospitality industry. Interval International, a vacation and timeshare…

South Dade bus rapid transit finally hits the runway

The money is in. A developer is on deck. Two years after decision-makers voted to upgrade Miami-Dade’s longest commuting route with “Gold Standard” bus rapid transit (BRT), it’s close to rolling ahead. Commissioners Sept. 1 are to finally green light a $300 million overhaul of the 20-mile, two-lane busway linking Kendall and Florida City. It’s the first of six high…

Former Wynwood tow yard ticketed for new tower

A developer has won positive reviews from City of Miami officials for a large mixed-use residential project in Wynwood. The development would result in the reuse of the former site of the Downtown Tow Yard, which ceased operations several years ago. EEFC 2400 NMA Owner LLC intends to construct a 12-story building and enclosed garage on the site, bringing…

Long-awaited Underline sets opening date this fall

The Underline was always an ambitious concept, a $120 million 10-mile linear park that will weave through several municipalities, invigorating the space beneath the Metrorail. Now the Underline is preparing for another bold move: opening during a pandemic. Meg Daly, president and CEO of Friends of the Underline, shared at a recent Downtown Development…

Judge Rules Against Affordable Housing Investor In LIHTC Dispute With Big Ramifications

A Massachusetts-based real estate firm invested about $400K into a Miami-area affordable housing project in 2014 and was gunning for a multimillion-dollar payout on the exit last year, but its nonprofit partner foiled the plan. An affiliate of HallKeen Management had lined up a deal to sell the project, called Aswan Village, for $21M, and split profits with its…

Local Court Win Is a Victory for Affordable Housing Communities Nationwide

On July 7, the Circuit Court of the 11th Judicial Circuit in Miami-Dade County ruled to preserve the housing needs of low- to moderate- income families in one of South Florida’s most historic yet distressed cities, Opa-locka. In Case No. 2019-CA-016913, the plaintiff, Opa-Locka Community Development Corporation (OLCDC), asked the court to recognize its non…

Two-nation team powers ahead to build Florida-Mexico sea trade

With the US-Mexico-Canada agreement taking effect this month, the newly formed Florida/Mexico Working Group is looking at ways to expand maritime trade between the two economies. The group, which formed as a result of a letter of intent signed in November by the Florida Ports Council and Mexican Coordinadora de Puertos, consists of six members from…

Scaled down PortMiami cruise terminal deal adds Disney

MSC Cruises and Miami-Dade are close to redrawing an agreement that would give the company more time to finance its planned “mega terminal” that now, under the new terms, would also homeport Disney Cruise Line vessels. The amendment to MSC’s existing 62-year berthing deal, expected to generate $2.03 billion for the county, was one of two changes to long…

Life-sciences sector proves safe haven for landlords

The search for a cure for Covid-19 is lining the pockets of some landlords. While the pandemic wreaks financial havoc on hotels and retailers, landlords who cater to biotech and pharmaceutical tenants are seeing increased demand as companies research treatments for the coronavirus, according to the Wall Street Journal. The work of those tenants, too, is…

Dezer Development’s plan to remake Intracoastal Mall moves forward

Rendering of the proposed redevelopment of the Intracoastal Mall and Gil Dezer Dezer Development can move ahead with its plans to transform Intracoastal Mall in North Miami Beach into a high-rise, mixed-use community. Despite opposition from several nearby homeowners, the North Miami Beach Planning & Zoning Board approved Dezer…

New York & Company parent files for bankruptcy

New York & Company’s parent company is the latest chain to file for bankruptcy as the coronavirus has piled additional pressure on an already challenging retail landscape. RTW Retailwinds, whose other brands include Fashion to Figure and Happy x Nature, filed for Chapter 11 protection Monday, and has already kicked off liquidation sales, CNBC reported.

Morgan Stanley Signs New 44K sf Tenant at Medley Warehouse

Morgan Stanley has signed a 44,259-square-foot lease with engineering firm AmePower at Flagler Station II, a 171,944-square-foot industrial facility in Miami-Dade County. The tenant is scheduled to occupy the property in the town of Medley in December. The lease includes 36,759 square feet of warehouse space along with 7,500 square feet of office space and 14 dock…

Colony Capital may lose control of 2 largest CMBS hotel portfolios

When Colony Capital revealed in May that it was in discussions with lenders after having defaulted on $3.2 billion in hotel loans, the Tom Barrack-led firm cautioned “there can be no assurances that the company will be successful in such negotiations.” In fact, at the time the Los Angeles-based investment firm had already defaulted on a forbearance agreement…

Party’s over: Clevelander South Beach closes after employee tests positive for Covid

Clevelander South Beach The Clevelander South Beach closed over the weekend after an employee tested positive for Covid-19, a month after reopening. The closure comes as the commercial mortgage-backed securities loan backing the hotel is in special servicing. A spokesperson for the 60-key hotel at 1020 Ocean Drive in Miami Beach confirmed that…

Industrious taps banker Osei Van Horne to round out its board

Jamie Hodari Flex-office startup Industrious is beefing up its board, the company’s latest step toward a potential public offering. The New York-based startup said it added Osei Van Horne, a managing director at Wells Fargo, as its first Black board member. Van Horne, an alum of Goldman Sachs, co-founded Wells Fargo’s Strategic Capital Technology Division…

Yes in God’s Backyard: How building affordable housing could be a lifeline for churches

Churches, whose already declining attendance plummeted during the pandemic, are now looking to development for extra cash. Places of worship are offering up their excess land to developers, Bloomberg reported. The prospect is a particular draw for institutions looking to combat homelessness. Before the coronavirus hit, more than 550,000…

WeWork on track for profitability by end of 2021, says chairman

WeWork’s business model may have been called into question by the coronavirus pandemic, but its executive chairman says the company is now near profitability. The flexible-office startup, founded in 2010, is now on track for positive cash flows by the end of 2021, Marcelo Claure told the Financial Times. In fact, Claure said the pandemic has sent the firm’s…

South Florida’s Largest Off-Market Freezer Warehouse Sells For $13.25 Million

CBRE Senior Vice Presidents Larry Genet, Tom O’Loughlin and Senior Associate Jake Zebede negotiated the purchase of an ±80,000-square-foot freezer facility located at 650 NE 185th Street in Miami. Genet led the team in representing the buyer, Ivy Realty, which paid $13,250,000 in the off-market deal. Stuart T. Kapp of Kapp Morrison LLP represent Ivy Realty…

Miami Freezer Warehouse Sold

An 80,000 sq ft freezer warehouse sold for $13,250,000 or about $165 psf. The property is located at 650 NE 185th Street in Miami, Florida. The seller, Best Freezer Holding, was represented by Edward Redlich, SIOR, CCIM along with the ComReal Miami Industrial Team and Michael Weihl with Sirius Business Advisors. The buyer, Ivy Realty, was represented by Larry…

Spain’s richest man owns $17B in real estate, includes Miami tallest office tower

Amancio Ortega, the richest man in Spain, owns more than $17.2 billion in real estate across the world. The founder of fast fashion label Zara brought in 621 million euros through his real estate assets last year, according to Bloomberg. Ortega’s company, Pontegadea, revealed its holdings for the first time this week. Ortega spent nearly $2.4 billion on property last year…

Miami-Dade approves $10M emergency rent relief program

Miami-Dade County approved a $10 million rent relief fund for families impacted by the pandemic. The county commission voted to pass the Emergency Rental Assistance Program, which will provide a one-time payment to eligible renters. Families can apply beginning on Tuesday and ending Friday, July 17, according to a press release. To qualify, a renter’s…

US hotel occupancy falls for first time in 11 weeks. Blame Covid again

Coronavirus spikes and subsequent closures snapped 11-week streak of rising hotel occupancy rates The 11-week climb in U.S. hotel occupancy rates ended ahead of the July 4 holiday, in part because of the spike in coronavirus cases led states to roll back their reopenings and close beaches. New hotel rooms that came online also tamped down overall demand…

Amazon wins approval to build massive facility in south Miami-Dade

Amazon secured approval to build what could be its largest distribution facility in South Florida. Miami-Dade County commissioners voted unanimously on Wednesday to sell a vacant lot at 13200 Southwest 272nd Street in south Miami-Dade to Amazon, according to the Miami Herald. Amazon will pay the county $22.1 million for the site, which will allow…

Bidders line up to buy Brooks Brothers out of bankruptcy

Two suitors are competing to take over suiting stalwart Brooks Brothers after it filed for Chapter 11 bankruptcy this week. An entity tied to Authentic Brands Group and mall owner Simon Property Group are considering a bid to buy the retailer out of bankruptcy, the Wall Street Journal reported. WHP Global, which is backed by Oaktree Capital and…

Can a Rational Case be Made for Irrational Exuberance?

In my commercial real estate brokerage business, I’ve noticed a trend of some buyers expecting lower prices on properties, sometimes even clearly taking offense at a seller not budging on price. There seems to be, with them a sense that they know better to such a degree that they are disgusted by the gall and ignorance of some seller that can’t see what they know…

The impact of social distancing on leisure and hospitality : State-level data from the BLS

The FRED Blog has discussed the impact of the COVID-19 pandemic on national retail sales and employment. And Leibovici, Santacreu, and Famiglietti index the contact-intensity of a range of occupations and estimate the economic impact of their reduced activity. Their work ranks several leisure and hospitality occupations in the high-contact category.

Restaurateurs to protest restrictions in Miami-Dade. In Broward, it’s a different story

It’s a tale of two counties, as restaurateurs and gym owners in Miami-Dade and Broward face new restrictions due to rising Covid-19 cases. The cutbacks have led to outrage among many local businesses, with a march planned Friday in downtown Miami. In Miami-Dade, Mayor Carlos Gimenez on Monday initiated…

Knotel’s Q2 revenue plunged 20%

Flex-office startup Knotel said its revenue plunged 20 percent during the second quarter, offering a glimpse of the economic toll the pandemic is having on the office market. CEO Amol Sarva said the preliminary numbers reflect a “really hard” quarter that forced Knotel to cut jobs and slash expenses. “What we saw in Q2 was really difficult,” he said during a…

CRE Broker CEO predicts “exodus” from cities to last two years

New York City is reopening, but Marcus & Millichap’s CEO is not predicting a return to form anytime soon. Hessam Nadji told CNBC in an interview this week that demand was surging in suburban areas as people fled cities, a trend he predicted would continue for up to two years. “I think the next 18 to 24 months are going to show a lot of exodus out of central business…”

JV Buys Broward County’s Largest Office Tower

Along with co-general partner Somerset Properties, Ten Capital Management has acquired Bayview Corporate Tower, a 413,833-square-foot Class A office building at 6451 N. Federal Highway in Fort Lauderdale, Fla. The 12-story property reportedly is Broward County’s largest office building. The acquisition’s price was not disclosed, but local media…

Bridge Investment sells Fort Lauderdale office building for $83M

Bridge Investment Group sold the Bayview Corporate Tower in Fort Lauderdale for $82.5 million, marking one of the largest commercial real estate deals in South Florida during the pandemic, The Real Deal has learned. Somerset Properties bought the 12-story, 413,833-square-foot office building at 6451 North Federal Highway, according to sources. The price…

Bed Bath & Beyond to close 200 stores

Bed Bath & Beyond may have to rethink the ‘beyond’ part. The retailer said Wednesday that it will close 200 stores over the next two years. Although online sales more than doubled during April and May, the company’s total sales fell by nearly half during its latest quarter. As a result, Bed Bath & Beyond will begin to permanently close a portion of its locations…

How Climate Change Could Affect CRE Valuations

MSCI, the financial services company formerly known as Morgan Stanley Capital Investment, used its own model to assess that risk.
“Many assets investors own can only figuratively be underwater when a company becomes insolvent or a stock loses all its value. But for real estate, with long-life fixed assets, there is — literally — a real possibility a…

The Landmark South Holds Topping Out Ceremony in Doral

The Landmark South held a topping out ceremony in Doral, Miami on Friday to recognize the final phase of its apartment development construction. Targeting a Summer 2021 opening, this second and final phase will add 213 residential units to the existing 418 units which were constructed in 2017 and are currently leasing. The eight-story…

Outdoor Meeting Spaces And Better Tech: Design Changes Post-Pandemic

Steve Jobs was famous for conducting meetings while strolling around Palo Alto. Jeff Bezos would walk in Central Park to discuss his idea for an online store. Fresh air, pumping blood and strolling shoulder to shoulder can eliminate the stress that might otherwise come from staring down a person across a table in a boardroom. When architect Andrew Burnett, now…

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July 15, 2020

Can a Rational Case be Made for Irrational Exuberance?

M2 Money Stock vs. Real Gross Domestic Product January 2000 to June 2020 (last GDP datapoint is Q1 2020) – Shaded Areas Indicate Recessions, Current One Ongoing

In my commercial real estate brokerage business, I’ve noticed a trend of some buyers expecting lower prices on properties, sometimes even clearly taking offense at a seller not budging on price. There seems to be, with them a sense that they know better to such a degree that they are disgusted by the gall and ignorance of some seller that can’t see what they know for sure to be the case. Maybe they are right, but then I’d direct them to the stock market.

Here is another angle.

Numbers of years ago, as a financial advisor at Morgan Stanley, I recall pulling up a chart of the Venezuelan Stock Market on my Bloomberg terminal. They were going through difficult times, including a nasty devaluation of the Bolivar, their national currency. Thus, I was momentarily disoriented to see their stock market ascendant. A couple of seconds later it hit me, “duh, that’s in Bolivars.” Indeed it was. In dollars, the market was down, as one might expect, but in Bolivars, it was up, way up. I can imagine in post WWI Germany, when the price of a loaf of bread went from a few Papiermarks to hundreds of billions of them, that the stock market in local currency would have performed really well. What you can buy with the proceeds is what matters, however. It is surely more obvious at the extremes, but it always matters.

That brings me back to commercial property. The aforementioned self-professed wiser than thou buyers that claim to know that property prices should be lower will mention the printing of money as one of their indicators of impending disaster. One can indeed see the effects on money supply of the Fed’s actions in the chart of M2 embedded in this post. Actually, though, that could indicate higher prices in dollars. That is the rational case I allude to in the title of this post.

With decades enjoying a fairly stable economy, we’ve lost track of the fact that stocks are a hedge against inflation. This is the same for real estate. Imagine inflation was to indeed rear its ugly head and triple the price of goods over the coming years. With cash in the bank, you’d be able to buy a third of what you could previously. Would AT&T phone billing amounts remain at the same levels? No. They’d triple, more or less, and managed properly so would their earnings. Would rent on a building you own remain the same? No. Again, it would triple, more or less. The real rate of return on property might be more or less than it has been historically, indeed it might be lower. However, compared to cash, with inflation considered, it would in all likelihood be much better than owning cash or fixed income instruments.

Will Rogers once famously quipped that he was more interested in a return of his money than a return on his money. That advice serves one well when you one count on the value of money. Absent that, it is worth considering the definition of money, if not replacing the word “money” with the phrase “buying power.” Thus, restated, “more interested in a return of your one’s buying power than a return on one’s buying power.”

I don’t know the answer on all this. I don’t think anybody does, even the Fed Chairman. We are in uncharted waters. We’ve had recessions, we’ve had pandemics, and we’ve seen growth money supply, but to my knowledge we’ve not seen all of these together on a global basis coordinated to this degree. Strap in.

In thinking about this coronavirus situation since it first arose, however, I’ve come to realize that the variance of outcomes is wide, and that possible outcomes include some with positive returns on a nominal basis. Stated more statistically, though I recognize a recession is not good for business and thus not good for commercial property, the implied standard deviation of possible outcomes in my head has increased.

Going further with this, one could perhaps make a case for Nassim Taleb styled tail risk (black swan risk to use Taleb’s term) with regards to inflation, i.e. currency devaluation, which in turn makes a case for securing commercial property for the hedging aspects of it, as investors do with gold. Thus, the rational case for commercial real estate could be an embedded dollar put option benefit in the context of unprecedented actions by the Federal Reserve in a likewise unprecedented environment, and the associated risk of inflation. Those not budging on selling price and the buyers that are choosing to meet their price expectations may get there by accident, but they might be right. I’m not saying they’re right, but I am saying they are not clearly wrong.

Time will tell.

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July 10, 2020

Video: The Top Ten Issues Affecting Commercial Real Estate 2020-2021

Video 1 of 2:

Video 2 of 2:

In these videos CRE Counselors Global Chair Michel Couillard discusses his firm’s report on the Top Ten Issues Affecting Real Estate with the host of America’s Commercial Real Estate Show. As you might guess, (1) COVID-19 is at the top of this year’s list. Other top issues discussed that affect commercial real estate are (2) economic renewal, (3) capital markets risk, (4) public and private indebtedness, (5) affordable housing, (6) flow of people, (7) space utilization, (8) technology and workflow, (9) infrastructure, and (10) environment, social, and governance, aka ESG.

CRE Counselors Top Ten Issues Affecting Real Estate 2020-2021 Part 1

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July 9, 2020

Miami Commercial Real Estate News July 8, 2020: Industrial Freezer Trades for $13 Mil; Chapter 11 for Brooks Brothers as AMC Avoids; 12-Story Multifamily to be Built in Wynwood; More…

Ivy Realty snags industrial freezer in Miami for $13M

Ivy Realty snagged an 80,000-square-foot industrial freezer facility in north Miami-Dade County for $13.25 million. Montvale, New Jersey-based Ivy Realty bought the property at 650 Northeast 185th Street in Miami for $165 per square foot, according to a press release. The seller, Best Freezer Holdings LLC, is tied to Clement Zanzuri of Miami. The property is 100…

East End Capital to Build 12-Story Multifamily Project in Miami’s Wynwood District

East End Capital has received civic approval to build Foyer Wynwood, a 12-story multifamily project planned for Miami’s Wynwood neighborhood. The project marks the debut of the developer’s co-living brand Foyer, which will operate the co-living segment of the 375,000-square-foot development. The property will feature 236 multifamily residences in both micro-unit and…

Brooks Brothers files for bankruptcy

Brooks Brothers, which has 500 stores across the globe, filed for Chapter 11 bankruptcy protection Wednesday. The move had been expected as the 200-year-old clothing chain struggled first with a shift from a formal dress code in the workplace to a more casual one, and then ultimately the coronavirus. Brooks Brothers will use the bankruptcy process to find a buyer for the…

AMC nears deal to avoid bankruptcy

AMC is trying to stave off the final curtain. The movie theater chain is close to hammering out a restructuring deal that would save it from bankruptcy, according to the Wall Street Journal. The deal involves bondholders providing a $200 million senior loan and exchanging their unsecured claims for second-lien debt at an undisclosed discount. Meanwhile, Silver…

Will The Pandemic Kill Demand For Micro-Units?

For the past five-plus years, micro-units have been an intriguing subplot in the grand saga of commercial real estate. As demand for housing has boomed, especially in rent-burdened cities like New York and San Francisco, developers gambled that tenants would tolerate tiny units — some as small as 220 SF — for the chance to access cool neighborhoods…

Florida Commercial Real Estate News Roundup 2020 H1

While 2019 was a fruitful year in Florida’s CRE market, particularly in South Florida commercial real estate, we now focus on the challenges presented in early 2020. Despite the current pandemic, new, major developments took place and many property refinances were sealed in several locations. Meanwhile, domestic and international investors contributed to the….

Zara founder unveils $17.2 billion global real estate empire – including Miami’s tallest office tower

After making a fortune in clothing, Amancio Ortega turned his attention to real estate. The Spanish billionaire’s property holdings have soared to $17.2 billion, his firm revealed Tuesday for the first time, giving him the largest real estate portfolio among Europe’s super-rich. Ortega, 84, the founder and owner of fashion label Zara, invested 2.1 billion euros in real estate last…

Retailers paying more of their rent but Covid surge prompts caution

The amount of rent Burger King paid in June compared to May was a whopper. The fast-food chain forked over 100 percent of what it owed landlords last month, compared to 63 percent the month before. The same went for Dave & Buster’s, where the new motto could be “Eat, Drink, Play…”

Mall owners team up with “dead-celebrity dealmaker” but can they rescue moribund retailers?

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$7 Mil Miami-Area Retail Asset Refi Closed

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Bayside Marketplace sues to evict Bubba Gump, Hard Rock Cafe and three other tenants

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Gym owners flex their muscles: Miami-Dade reverses decision to close facilities

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TRD Insights: Hotel CMBS delinquencies jumped in June

Lodging delinquencies among commercial-mortgage-backed-security (CMBS) loans rated by Kroll Bond Ratings Agency reached 21.6 percent last month, up from 13.6 percent in May. Hotels’ occupancy rates have been rising, but their loan troubles are through the roof. Hotel delinquencies among commercial mortgage-backed security (CMBS) loans rated by…

ZOM buys land in Coral Gables, West Palm for senior living projects

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Restaurants, gyms to close again in Miami-Dade

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TRD Insights: Little evidence that Opportunity Zone program helps poor communities

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Retail-to-residential conversions are in cards at America’s doomed malls

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WeDone: South Beach landlord seeks to evict WeWork for unpaid rent

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More tech firms eye Miami as Covid carries on

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Inside South Florida’s mall, retail and restaurant reopenings

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Submerged in securities: Many CMBS hospitality loans may be underwater soon

Hotel operators trek into special servicing and it may take years before they get out (iStock) Carlos Rodriguez Sr. set off from Costa Rica nearly 25 years ago for what seemed like a surefire bet: developing and operating hotels in Florida, where both tourism and business travel were in perpetual demand due to the area’s warm weather, white sand beaches and proximity to…

The breakdown: Inside Virgin Hotels’ $330M vision for South Beach and how it vanished

Virgin Hotels had been looking for the right redevelopment opportunity in South Beach for years, and appeared to have found it a few months ago in HFZ Capital Group’s Shore Club. An offshoot of Richard Branson’s Virgin Group, Virgin Hotels created a proposal to purchase the 309-key beachfront hotel…

Trump tweets that he “may END” Obama-era fair housing regulation

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New Florida Law Cracks Down On Emotional Support Animals

A new law signed by Gov. Ron DeSantis last week, which took effect immediately, amended Florida’s Fair Housing Act to address the problem. With the internet making it easy for dishonest tenants to get around pet restrictions by mail-ordering certificates saying that Fang and Rambo are emotional support animals, property managers often acquiesced, lest…

Miami-Dade Restaurant Owners Organize to Oppose Dining-Room Closure

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Miami Settlement With Duplex Developer Draws Opposition Over Setback Violations

Miami’s Coconut Grove takes pride in its eclectic look and character, so it’s no surprise that community opposition blossomed after a duplex developer was accused of breaking setback rules… 3384 Day Avenue Investments Inc. was in the midst of building a duplex with interior work remaining when the city issued a hold on the building permit a year ago, citing setback…

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July 8, 2020

Chart: Miami Commercial Real Estate Sales to List Price Ratio Strong in June ~ MLS

Miami Association of Realtors January 2018 to May 2020 Sales to List Price Ratio Property Types Land-Commercial/Business/Agricultural/Industrial, Commercial/Industrial Miami-Dade County Calculated from 8,338 commercial property listings

The sales to list price ratio strengthened in June to nearly 96.5%, not a bad number even pre-pandemic, but a great one within it. A statistically minded person might note that list prices might have come down, thus making this ratio less insightful, less positive. If so, then the closing price to original price should be declining. Here is the chart for that.

Miami Association of Realtors January 2018 to May 2020 Sales to Original Price Ratio Property Types Land-Commercial/Business/Agricultural/Industrial, Commercial/Industrial Miami-Dade County Calculated from 8,338 commercial property listings

OK, scratch that idea. So far, likely fueled by the low cost of financing, commercial property prices remain strong.

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July 3, 2020

Chart: Miami-Dade MLS Commercial Property Sales Rebound to Normal Level

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

In the above chart one can see that the number of commercial property sales in Miami-Dade county, aka the Miami, Florida metro area, for both improved and vacant land that were recorded in the Miami Realtors MLS, rebounded in the month of June to the lower end of a band that sales fluctuated within pre-pandemic. MLS only picks up some, but not all, commercial property sales, and thus is not fully representative, but it nonetheless can be utilized to view trends. Closed transactions declined by about two-thirds in April, then rebounded a bit in May, then more powerfully in June.

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July 3, 2020

Chart: May 1 Miami-Dade Unemployment Level Dips After April COVID-19 Surge, Remains Below 2009 Peak

Miami-Dade County, Florida Unemployment Rate Year Ending May 1, 2020
Miami-Dade County, Florida Unemployment Rate January 1, 1990 to May 1, 2020

The effects of coronavirus on employment in the Miami area continue and are clearly evident in the May 1 unemployment rate of 11.3%. This is a drop, however, from the prior month’s level of 11.95%, and remains below the unemployment rate of 12.4% reached in August 2009. I think most people would have anticipated the effects of coronavirus on commerce would have resulted in a further increase in the May 1 number, thus this surely counts as a surprise development for those following.

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July 2, 2020

Miami Commercial Real Estate News July 1, 2020: Wynwood Co-Living Project Approved; Prominent Developer Civil Trial This Week; More…

East End Capital scores approval for co-living project in Wynwood

Foyer Wynwood and Jonathon Yormak East End Capital secured approval for a co-living development in Wynwood. The Miami Urban Development Review Board this week approved Foyer Wynwood, a 12-story, 236-unit project on North Miami Avenue, between 24th and 25th streets, according to a press release. Rents at Foyer Wynwood are expected to start at about…

Millions At Stake In Trial Over Profits, Workplace Hostility At Dezer Development

More than $10M is at stake as one of the East Coast’s most prominent developer families faces a civil trial this week. Andrew Chesnick, the former chief operating officer of Dezer Development, is suing founder Michael Dezer; his wife, Neomi, in her capacity as trustee of a family trust; their son, Gil, CEO of the company; and several corporate entities that the family…

Restaurants, bars in a “scary situation” as restrictions ramp up

Faced with heightened restrictions due to a surge in Covid-19 cases, coupled with a desire to keep employees safe, some Miami restaurants are calling it quits. Other eateries are mulling closing their dining rooms, temporarily shutting down, or changing their business models entirely. If the state or local governments order another shutdown, it could mark the “nai…

Bid to slow soccer stadium on Melreese golf course stymied

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Miami construction jobs hit record high

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Miami-Dade advised to sue over forever chemicals

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My New Normal: Coral Gables Based Location Ventures Founder Rishi Kapoor

Location Ventures CEO Rishi Kapoor leads a multifaceted real estate company that handles investment, development, management, and sales and marketing for residential and mixed-use properties, mostly in South Florida. The company has a development portfolio worth more than $500M, which includes a boutique condominium, a new coworking concept…

Westchester Cultural Arts Center on the way

West Miami-Dade residents will soon have a cultural arts center that will offer educational, recreational and community activities. At a groundbreaking June 26, the Westchester Cultural Arts Center continued a long journey that began 16 years ago. Located at the main entrance of Tropical Park, it is to provide cultural programming focusing on Hispanic…

Miami Beach moves toward banning chain restaurants and stores in Sunset Harbour

A ban on chain retail stores and restaurants in South Beach’s Sunset Harbour is moving forward with the backing of three Miami Beach city commissioners. The Miami Beach Land Use and Sustainability Committee — made up of commissioners Mark Samuelian, Michael Gongora, and Ricky Arriola — unanimously backed a proposed ordinance banning “formula…”

DeSantis again extends foreclosure and eviction ban

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Brookfield seeks to evict Diane Von Furstenberg at Merrick Park

A company tied to Brookfield Properties alleges the Diane Von Furstenberg store owes over $200,000 in unpaid rent at Shops at Merrick Park, and is seeking to evict the retailer. Merrick Park LLC, tied to Brookfield Properties, is suing the retailer for breach of its lease agreement, alleging the company owes $206,000 in unpaid rent as of June. In the suit filed last week…

Video: Iron Hound Principal Robert Verrone discusses fixing loans broken by Covid-19

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For Sam Zell, it’s all about “foreclosures and opportunities”

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Affordable housing experts talk systemic change

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“Alligator Ron” Bergeron sells properties near Miami airport to Prologis

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“It’s a need, not a want” for many residents: Investors eye long-term gains in senior housing

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Freddie Mac extends multifamily loan forbearance relief to landlords

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South Florida by the numbers: Focus on fair housing

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Nearly 140,000 businesses on Yelp remain closed since coronavirus hit

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Some 2.2 million of the world’s restaurants could close

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“Our HQ will be in the cloud”: What if remote-first work is an opportunity, not a compromise?

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Searching for land: Bruce Eichner, Two Roads vie to buy out aging Bal Harbour condo for over $100M

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Rebuilding the construction industry in the age of the coronavirus

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DeSantis announces $250M rental, mortgage assistance fund

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Blackstone nears $1.4B deal with HPP to build out production studios

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South Florida construction starts plummet again in May

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Macy’s cuts nearly 4K jobs as it reopens hundreds of stores

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Privé at Island Estates developer sues Suffolk Construction over defects

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Miami-Dade searching for more hotels to isolate Covid-19 patients as cases surge

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RK Centers alleges restaurant refused Covid relief, vacated Collins Avenue property

A Sunny Isles Beach landlord said a restaurant refused relief and vacated the property. Many tenants are seeking relief from landlords due to the pandemic, but a Sunny Isles Beach landlord said a restaurant refused relief and instead vacated the property. In a lawsuit filed Tuesday, RK Centers alleges La Barra Restaurant “willfully disregarded relief programs as…

Chuck E. Cheese parent, GNC file for bankruptcy

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Simon v. Taubman could be ready for trial in November: Judge

The debate over whether Simon Property Group should honor its $3.6 billion deal to buy Taubman Centers might be among real estate’s Thanksgiving dinner table discussions this year. That’s because the lawsuit pitting the mall giants against each other could be ready for trial by mid-November, according to the Michigan judge overseeing the case.

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July 1, 2020

Video: Iron Hound Principal Robert Verrone discusses fixing loans broken by Covid-19

Iron Hound Management’s Robert Verrone talks about distressed loans amid the economic slowdown in this virtual interview by TRD. He talks about deals that didn’t close in the middle of COVID-19, then moves on to the process of dealing with existing loans that are distressed due to effects on the commerce in the respective properties. This is a pretty candid discussion of the lending environment before and during the pandemic to the date of this interview in late April.

The Interview: Robert Verrone talks fixing loans broken by Covid-19

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July 1, 2020

For Sale: 27,536 sf / 0.63 acre T5-O Little River Development Site; 70 NE 80 Terrace, Miami, FL 33138; just off N Miami Avenue at NW 79 St

Property at 70 NE 80 Terrace listed for sale, aerial view looking south over the property

Related Resources:

Google Map of 70 NE 80 Terrace, Miami, FL 33138:

Google Satellite View of 70 NE 80 Terrace, Miami, FL 33138:

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July 1, 2020

For Sale: 266 Palermo Avenue, Coral Gables, FL 33134 ~ Offering Memorandum, Property Features, HD Pics, Related Resources, More

Information & Related Resources

This is a nicely appointed 3,967 square feet free-standing office building located in the desirable Coral Gables central business district one block west of The Plaza Coral Gables development. Previously utilized as a surgical center, the property is ideal for medical or dental use with sinks in numerous exam rooms, or could easily accommodate other professional uses such as attorneys, architects, and accountants. Property possesses a complete surgical room and an enclosed garage/storage area.

An Unusual Find

  • 1 of only 17 freestanding properties that exist at all
    • Located in zip code 33134
    • Between 3,000 and 4,000 sf
    • Miami-Dade land use “1913 – PROFESSIONAL SERVICE BLDG : OFFICE BUILDING”
    • Of the 17, is the only one for sale on Commercial MLS as this is being typed; check yourself now
  • 1 of only 34 freestanding office properties that exist at all
    • Located in zip code 33134
    • Between 3,000 and 4,000 sf
    • Of the 34, is the only one for sale on Commercial MLS as this is being typed; check yourself now

Features

  • 3,967 sf per Appraisal, BOMA Standards
    • 3,464 +/- sf office area
    • 503 sf +/- enclosed garage
  • Exam rooms with sinks
  • Vaulted ceiling waiting area with full height windows
  • Surgical room
  • Multiple skylights provide natural light
  • Elevator
  • Music system throughout
  • Modern design

Google Streetview & Map:

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June 30, 2020

Charts: Atlanta Fed Graphically Represents What You Already Know; Business is Down, Uncertainty is Up

At least when compared with sales growth, capital investment and employment growth look stable.
Sales growth is also the most uncertain, by far, as compared to employment growth and capital investment rate.
In summary, and no surprise here, business expectations are down as uncertainty is up.

Certainly these could be characterized as the “duh charts” in this environment. Business is obviously down, and uncertainty is up. That is not news. It is nonetheless interesting to see this all graphically represented. It also serves to remind one that that uncertainty means only what it means, not certain. Put differently, it simply means the there is a wider than normal range of potential outcomes, and half of those are better than the median of them.

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June 27, 2020

Miami Commercial Real Estate News June 24, 2020: Renowned NY Developer Plans MXU for Wynwood; CCIM Chief Econ on Economy, CRE; More…

Video: CCIM Chief Economist K.C. Conway on What to Expect Moving Forward for the Economy, Commercial Real Estate

In this two part video series, CCIM Chief Economist K.C. Conway, CCIM, MAI, CRE, joins the host of America’s Commercial Real Estate Show to discuss what to expect move forward. Among the discussions expectations for jobs, property values, and economic recovery timing. He notes he is particularly concerned about leisure and travel, which he notes is 10% of global GDP…

The Developer Behind Some Of Manhattan’s Biggest Projects Plans First Miami Project In Wynwood

Two New York developers have formed a joint venture to redevelop a 3-acre assemblage in Miami’s Wynwood Arts District, they announced Wednesday. L&L Holding Co. and Carpe Real Estate Partners envision a mixed-use development with a Class-A office tower, indoor-outdoor retail space, a luxury residential apartment building and large public and private outdoor open spaces. The assemblage, at the northeast corner of NW…

$1 Billion Miami Soccer Stadium Project Takes Step Forward, But More Challenges Lie Ahead

Seven years into their quest to establish Major League Soccer in Miami, David Beckham and his business partners finally launched their team, Inter Miami CF, this year. But because of holdups building a stadium in Miami, the team was ready to begin play in Fort Lauderdale, 34 miles north. It was about to host its first game against the LA Galaxy in March when the…

164,432 SF Lease Renewal in Miami Negotiated for Logistics Company

Colliers International has negotiated ECU Worldwide’s 164,432-square-foot industrial lease renewal in Miami. The space at 2401 NW 69th Street has been ECU’s long-term home. The new lease is for a period of a little more than eight years and is valued at more than $10 million. ECU specializes in global multi-modal transport and warehousing services. The property is…

$4.9 Million Medley Storage Asset Sale Arranged

CBRE has completed the $4.9 million sale of A Storage Place, a 56,000-square-foot property at 7450 NW 74th Avenue in Medley, Florida. Senior Vice Presidents Tom O’Loughlin and Larry Genet and Senior Associate Jake Zebede represented both the seller and buyer, two private investors. The new owner financed the purchase with a $3.9 million acquisition loan…

164K SF Lease Signals Resiliency Of Miami Industrial Market

ECU Worldwide’s lease renewal with landlord Realterm and institutional investors advised by J.P. Morgan Asset Management at 2401 NW 69th Street in Miami signals the resiliency of the South Florida industrial market. Colliers International Florida’s Executive Managing Director Jonathan Kingsley and Director of Industrial leasing Ryan Goggins…

Industrial Real Estate Sees Promising Future As Sector Benefits from E-Commerce During Pandemic

COVID-19 pandemic? Oil price crash? During this unprecedented time with unprecedented events, DFW industrial real estate—if you can believe it—is cruising into a promising future with even more upside potential. Coming into March, our market was as strong as ever, highlighted by “peak” rental rates, building values, occupancy, absorption, and 30 million square feet…

Blackstone’s Stephen Schwarzman forecasts “big V” recovery

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For future pandemics, Miami Worldcenter plans $60M health center

Dan Kodsi and Legacy Hotel & Residences To attract guests, hotels have long bragged about pools, spas and banquet space. But in the age of the coronavirus pandemic, one Miami developer is including a medical center with ventilators as part of its marketing pitch. Dan Kodsi’s Royal Palm Companies announced plans to develop a 100,000-square-foot health…

Luxury office, resi project planned for former Rubell museum in Wynwood

L&L Holding Company is expanding outside of Manhattan for the first time, partnering with Carpe Real Estate Partners in Miami to build a mixed-use project in Wynwood. The two firms are under contract to buy a 3-acre assemblage anchored by the former Rubell Family Collection property on Northwest 29th Street and First Avenue, according to Erik Rutter and…

Simon Property Group, Brookfield might bid on J.C. Penney

Two of J.C. Penney’s landlords are trying to buy their way out of trouble. Mall owners Simon Property Group and Brookfield Property Partners are said to be considering a joint bid to buy the beleaguered department store chain, the Wall Street Journal reported. Talks were first reported last week, and at the time, brand management company Authentic Brands Group…

Here’s how much tenants pay for space at Blackstone’s massive industrial portfolio

Blackstone’s Jonathan Gray When Blackstone Group shelled out $18.7 billion last year for 179 million square feet of industrial space, it was one of the largest real estate deals in history. So it’s not surprising that when Blackstone tapped the securitized debt market to finance a large chunk of that portfolio it acquired from Singapore’s GLP, it ended up being one…

Near-zero fed interest rate offers opportunities

The near-zero fed rate can present a special opportunity to some, but it comes at a time of uncertainty, according to one local banker.  Bert Lopez, chief financial officer at US Century Bank, said the federal reserve rate is extremely important to how the bank, as well as the rest of the world, does business. The fed rate cut  is especially impactful on short-term rates…

Florida Grand Opera shares home with aviation company

Florida Grand Opera’s search for a new headquarters has been temporary stalled due to the coronavirus pandemic shutdown. The opera sold its 35,000-square-foot Doral Center building at 8390 NW 25th Street for $7 million back in October 2019, according to Cushman & Wakefield real estate services, which represented the opera company in the sale. The opera…

Three-judge panel weighs Coconut Grove Playhouse future

A panel of three judges from the Appellate Division of the 11th Circuit Court will determine the fate of the Coconut Grove Playhouse, which is considered one of the Miami-Dade’s historic landmarks. At a June 16 hearing held through Zoom, the three-judge panel consisting of Lisa Walsh, Daryl Trawick and Angelica Zayas heard oral arguments about…

Property values, Covid-19 cut vast hole in Miami Beach budget

The City of Miami Beach has held its first budget meeting for the next fiscal year and the financial outlook is dismal – and not just because of Covid-19. Nearly all commissioners and the mayor participated in the meeting last week, in which Chief Financial Officer John Woodruff walked the elected officials through the outlook for the 2021 fiscal year. While the impact…

Main Street Lending Program downsizes targets

Recent changes to the Main Street Lending Program will make the Federal Reserve-backed loans more appealing to small and mid-sized businesses that were relatively stable before the pandemic took its toll, local experts say. The Fed announced June 8 that the Main Street Lending Program would cover loans as low as $250,000 (down from $500,000) and extend the…

Presidential election may turn spotlight back to Opportunity Zones

November’s presidential election may turn the spotlight back on the Opportunity Zone program, which has faded from view after the initial rush to invest capital into properties and projects ahead of a key deadline late last year. And Steve Glickman, the former Obama administration adviser who helped map out the federal tax break program, thinks…

Alex Karakhanian sells Wynwood property for $17M

Developer Alex Karakhanian sold a Wynwood building leased to Revlon and Scripps Network for $17 million. Karakhanian’s 3704 NE 2nd Ave LLC, a 90.1 percent owner, and Chaim Cahane’s FCM 48 NW 25 LLC, a 9.9 percent owner, sold the 20,730-square-foot office and retail building at 48 Northwest 25th Street in Miami. Property records show the buyer is 3 CI…

Rent Control in Florida? Exploring the Issue

Rent control is one mechanism proposed to address affordable housing issues. Here are some pros, cons, and compromises Long before COVID-19, countries around the world were facing a common crisis: affordable housing. The post Rent Control in Florida? Exploring the Issue appeared first on Commercial Real Estate South Florida….

Church near Flagler Village to be redeveloped into mixed-use project

A Miami developer bought the Fourth Avenue Church of God near Fort Lauderdale’s Flagler Village, with plans for a mixed-use project that will have a food hall. Eduardo Pelaez’s Wellmeaning Investments acquired the 1.2-acre site at 1219 and 1239 Northeast Fourth Avenue for $2.4 million. The property includes a 6,721-square-foot building and a 12,508-square-foot…

Foundry Commercial scores construction loan on Hialeah Gardens industrial complex

Foundry Commercial scored a $26.3 million construction loan to build two industrial warehouses in Hialeah Gardens. Wells Fargo provided the debt for the development at Northwest 146th Street and Northwest 107th Avenue. Orlando-based Foundry recently secured approval from Miami-Dade County for the project. The warehouses will be 164,567 square feet…

By the numbers: Viral and volatile times for business

Businesses and individuals are taking stock of their losses stemming from the coronavirus pandemic, as reopenings begin in major cities across the country. The full impact has yet to be seen, as office buildings, stores and hotels open back up at reduced capacities and people slowly adjust to new routines. But for the first time since the pandemic hit, the U.S reported…

Care Resource buys Little Havana office building

Miranda Health care nonprofit Care Resource paid $5.4 million for an office building in Little Havana, as the neighborhood continues to attract medical providers. Mohammad Siddiq Khan and Ghazala Bilqees sold the 32,408-square-foot building at 1800 Southwest First Street to Care Resource Community Health Centers, property records show. The four-story…

Unemployment filings stabilize — but at record highs

Another 1.5 million Americans filed for unemployment benefits last week, about one-third fewer than the week prior. The number suggests that the rate of job loss in America has stabilized, even though businesses continue to hemorrhage employees at unprecedented levels. The Department of Labor’s unemployment report for the week ending June 13 showed 20.5…

The breakdown: Inside Virgin Hotels’ $330M vision for South Beach and how it vanished

Virgin Hotels had been looking for the right redevelopment opportunity in South Beach for years, and appeared to have found it a few months ago in HFZ Capital Group’s Shore Club. An offshoot of Richard Branson’s Virgin Group, Virgin Hotels created a proposal to purchase the 309-key beachfront hotel for $235 million, The Real Deal has learned. It put together a…

Half of deadbeat chains start paying rent again

As retailers reopen for business, their landlords can take a breath of fresh air. Their tenants are starting to pay rent. At this time last month, 18 major retail chains had not paid May rent in any of their locations. This month, only nine out of the 127 retailers in a mid-month Datex report were total deadbeats. H&M made one of the largest…

Miami Developer Harvey Hernandez’s firm alleges RealPage stole trade secrets, poached employees

Fresh off of a settlement with Airbnb, Miami real estate developer Harvey Hernandez’s NGD Homesharing is suing RealPage, alleging the popular property management software company stole trade secrets and employees from Hernandez’s firm. NGD Homesharing is suing RealPage, an affiliate and three of Hernandez’s employees for allegedly misappropriating…

Taubman claims Simon scuttled $3.6 billion merger due to buyer’s remorse

Simon Property Group called off its $3.6 billion merger with Taubman Centers due to a classic case of buyer’s remorse, the spurned seller claims. Taubman submitted a new legal filing in the mall landlords’ court battle that claims the larger rival Simon tried to renegotiate the terms of their deal once the coronavirus pandemic hit, Bloomberg reported. Simon had…

Brian Kingston on Brookfield’s long game

It’s been an especially busy few months for Canadian investment giant Brookfield, which is upping its bets on everything from struggling chain stores to distressed real estate. Brian Kingston, CEO of Brookfield Property Partners, spoke to The Real Deal in June about the company’s rent negotiations with mall tenants, its plans to launch a $5 billion retail…

US hotel occupancy surpasses 40%. And prices are rising

National hotel occupancy crept back up above the 40 percent mark last week as leisure travelers continued to head to tourism spots in states that are reopening. Occupancy hit 41.7 percent for the week ending June 13, according to STR. With more people staying in hotels in these tourist destinations, operators are beginning to feel confident they can start…

Crescent Heights hits a snag with plan to develop high-rise Edgewater project

A city of Miami board narrowly rejected Crescent Heights’ application to close 10-foot-wide alleyways for a future 3-acre development site in Edgewater. Though rejected by the city’s Planning Zoning & Appeals Board during a virtual meeting held Wednesday evening, the decision to close the alleyways will ultimately be up to the Miami City Commission. The…

HTG scores financing for Hollywood affordable housing project

Housing Trust Group secured the financing for an affordable housing development in Hollywood. HTG also broke ground on Hudson Village, an eight-story, 96-unit project planned for 901 South Federal Highway. It will have both affordable and workforce housing apartments. HTG expects to complete the building by August 2021. The Miami-based developer…

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June 24, 2020

Video: Miami Downtown Development Authority Executive Committee Meeting 06/18/2020

Miami DDA Executive Committee Meeting 06/18/2020

The Executive Committee guides the Miami DDA’s efforts to fulfill its mission to grow, strengthen, and promote the economic health and vitality of Downtown Miami, which of course benefits area commercial real estate investors. This is a video recording of its Executive Committee virtual meeting held on June 18, 2020.

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June 19, 2020