In disruption there is opportunity as well, and the Counselors of Real Estate’s annual list of the Top Ten Issues Affecting Real Estate certainly goes heavy on disruption.

It’s also not a list of items that can be ticked off and dealt with one by one: in announcing the 2017-2018 CRE Top Ten list earlier this month, Scott Muldavin, chair of the invitation-only Counselors, noted that many of the issues are interconnected and reflect both global uncertainty and seemingly relentless disruption in the economy and multiple real estate sectors.

Heading the list is a hydra-headed issue that has an impact on all of the others because, as FTI Consulting’s Michael Hedden points out, it makes reaching decisions on anything more difficult. The issue is global uncertainty and political polarization, as exemplified by recent elections in the US, the UK, France, Austria and other countries.

The Counselors see “resurging nationalism, testing existing diplomatic and trade relationships around the globe as exemplified by Brexit and NATO.  Potentially devastating military conflicts seem more likely in Asia and existing conflicts in the Middle East are more volatile.” Within the US, its scope isn’t limited to Washington, DC by any means, but carries through to the local level as well.

For real estate, the negative implications are immediate, according to the Counselors: “Uncertainty about changes to trade, travel and immigration policy threaten cross-border investing, hospitality properties, retail, and manufacturing supply chains, among other effects. Rising interest rates and retail inflation will make middle-class homeownership that much more difficult.”

Longer-term implications, the Counselors warn, “could be much more severe, as polarization prevents long-term fixes to issues such as infrastructure, affordable housing, local and state pension liabilities, and education. And so, one or both of these trends affects virtually every issue on this year’s list and a host of others that didn’t make the cut.”

On a brighter although no less disruptive note is the second item in CRE’s list, the technology boom. This boom encompasses everything from the tech start-ups that are revolutionizing commercial real estate operations to ecommerce and the trend toward autonomous cars that may eventually render parking garages obsolete.

In retail, according to the Counselors, “the question has shifted from ‘Do you shop online?’ to ‘How many deliveries did you have today?’ Online retail continues to drive warehouse demand—but each foot of new warehouse space leased by online retailers translates into eight feet of vacant retail. Smart lenders and investors are already insisting that new construction reflect future demand patterns, not those with which we are currently familiar.”

Third on the list is generational disruption. A few years ago, Baby Boomers (formerly the largest generation by population) and Millennials (who now outnumber them) were perceived as by and large going their own ways.

 “The generations are crossing paths everywhere: in the workplace, in housing and at the local bar and grill, intersecting and sharing spaces, despite their often disparate priorities when it comes to the built environment.” the Counselors say. “Studies project that Millennials will ultimately behave in a fashion similar to Boomers—but do so 10 years later.”

Other issues on the latest CRE Top Ten list include retail disruptions, infrastructure investment, housing: the big mismatch, lost decades of the middle class, real estate’s emerging role in health care, immigration and climate change. Issues to watch include tax reform and monetary policy, various other policy matters and cannabis.

Under the direction of research executive and author Peter C. Burley and Victor Calanog, chief economist and SVP with Reis, the Counselors’ 1,100 members globally undertook an extensive collaborative dialogue on current issues and trends to compile the final list.

 

Source: GlobeSt.

Michael Rauch and Tom Robertson, Senior Managing Partners with CRE Florida Partners, represented the seller in the sale of an office/medical building located at 8333 W. McNab Road in Tamarac, Florida.

The property sold on May 23 for $3,800,000, equating to $89 per square foot on a 6.9% capitalization rate.

The ±42,481-square-foot asset has been owned and operated by the current owner since about 2005. This multi-tenant building offers tenants a variety of office solutions for both Medical and Professional uses.

Tom Robertson

“This medical/office building is well located for tenants, given its immediate access the Sawgrass Expressway, I-95, and Florida’s Turnpike, as well as the asset’s close proximity to University Hospital,” commented Robertson.

According to Robertson, quality assets like this are in demand. CRE Florida Partners is currently working with several buyers looking for similar assets in Broward and Palm Beach counties.

Michael Rauch

“Well-located medical office properties with strong occupancy rates continue to perform above market expectations,” added Rauch.

The brokerage company is also seeking leasing and investment sales professionals for its growing commercial real estate expansion in Miami-Dade, Broward and Palm Beach counties. Multiple positions are available within these and other Florida markets, which offer a unique ground floor career opportunity to work closely with the firms Founder’s Tom Robertson and Michael Rauch to move their vision for the CRE Florida Partners brand forward. Commission and benefits are commensurate with experience. A Florida Real Estate License and Commercial Real Estate experience are required. Only qualified candidates should apply by forwarding resumes to mail@crefloridapartners.com.

When Florida lawmakers vote Friday on sweeping legislation expanding access to medical marijuana, they’ll also be approving a sweetener for the state’s citrus industry.

Tucked into the legislation, which establishes a system for patients to buy cannabis, is language that requires the state’s Department of Health to give preferential treatment to companies that promise to convert orange juice factories and other citrus processing facilities into marijuana grow sites.

The reason, lawmakers say, is to replenish Florida’s signature citrus industry. It has struggled to combat the greening that has devastated its crops and shaken the rural communities that depend on groves and the factories that process oranges and grapefruits.

“Why don’t we just take a close look at turning some of those factories into something new where jobs can be created and it can be a Florida business?” said Sen. Rob Bradley, R-Fleming Island.

But just who is that going to benefit? And who demanded it be in the bill? Lawmakers haven’t been clear.

The language appears to favor some major agricultural interests. As they evaluate who to award two of five new competitive licenses to grow and sell pot, health officials would give preference to companies that plan to use facilities “used for the canning, concentrating or otherwise processing of citrus fruit or citrus molasses,” according to a key clause.

That could apply to some of the nation’s largest brands, like Tropicana and Coca-Cola; less recognizable ones such as Louis Dreyfus Citrus and Tampa Juice Service; and sugar companies that grow citrus or produce molasses, such as U.S. Sugar. They would have to apply for a medical marijuana grower’s license and convert their facilities, and it’s not yet clear which companies have interest in doing so. The Florida Citrus Processors Association did not respond to a phone call Thursday.

If passed and signed into law by Gov. Rick Scott, the legislation would give them a major advantage in what will be a hotly contested bid to enter the Florida medical marijuana market, which could generate $1 billion a year in sales by 2019, according to industry analysts.

While the intent with voters that approved legalization of pot was on patient access — 71 percent supported it in November — the citrus carve-out was the latest example of how legislative deals are driven by money and potential profits.

Democrats expressed outrage Thursday, accusing Republicans of cutting a deal to help select special interests.

“It’s clear the language is written to benefit specific groups and specific companies,” said Sen. Jeff Clemens, D-Lake Worth. “They know who is going to benefit. We don’t. And they are writing a bill that benefits these groups.”

Senators pushed for the language during closed-door negotiations in recent weeks with the House. Asked which member of the Senate wanted it put in the bill, Bradley said the idea came about “organically.” And, he said, it wasn’t done on behalf of any specific companies. “I’m not aware of any specific companies,” Clemens said.

In a statement Friday, U.S. Sugar spokeswoman Judy Sanchez said the company has nothing to do with the language.

“Our company has NOT been engaged in any way with any member of the Florida Legislature regarding medical marijuana,” Sanchez said.

He also said that because it is a preference, not a guaranteed license, the department could give zero licenses to a citrus company.

House Majority Leader Ray Rodrigues, R-Estero, who was also involved in the negotiations, said he had “no knowledge” of whether any citrus processing companies wanted to enter the medical marijuana industry.

Lawmakers see overlap between citrus and marijuana because both are plants and require agricultural experience to grow them well. That misses the point, though, said Amy Margolis, a lawyer with Florida-based law firm Greenspoon Marder who also founded the Oregon Cannabis Association.

“Language giving preferential treatment refers to the people who turn oranges into juices and jams, not those who grow them,”  Margolis said. “What’s more, cannabis is unique among plants. They’re growing citrus and making it into juice. That has no relation to cannabis cultivation or cannabis processing.”

Some citrus processors make essential oils, she acknowledged, but even those processes are different from creating many cannabis products. Orange juice companies aren’t the only groups that could benefit from lawmakers’ bill. A third license has been reserved for members of the Florida Black Farmers and Agriculturalist Association.

The bill also grants a license automatically to five growers who applied under a more limited medical marijuana program established by lawmakers in 2014. They are: Loop’s Nursery and Greenhouses in Northeast Florida; Treadwell Nursery in Central Florida; and 3 Boys Farm, Plants of Ruskin and Sun Bulb Company in Southwest Florida.

 

Source: Miami Herald

Sugar is Palm Beach County’s biggest agricultural product, and exports from the Port of Palm Beach  have been one of the port’s top exports over the years.

Sugar exports increased 43 percent for the fiscal year ended Sept. 30, 2016, port officials said  this week. The raw sugar is transported to refineries by barge. Sugar cargo rose to 783,690 tons from  544,780  in one year. The average sugar barge’s load equates to 735 20-ton truckloads.

Transporting the sugar by barge from the Riviera Beach-based port to New York, as opposed to sending it by  truck,  eliminates approximately 93 million miles of truck traffic annually off of Interstate 95. Unlike most ports, the 162-acre port is an export port, with approximately 80 percent of its cargo consisting of exports.

The information was included in the port’s audited comprehensive financial report for fiscal year 2016, approved by the port commission in May. The commission authorized the port’s executive director, Manuel Almira, to submit the report to the Auditor General of the State of Florida. (To view the complete FY 2016 financial report, click here.)

“The Port’s continuing growth and increased financial strength over the past decade can be attributed to our Board of Commissioners’ unwavering commitment to securing new business for the Port, partnering with our existing tenants by supporting their operational needs at the Port, and maintaining a focused effort on controlling the Port’s costs,” said commission chairman Blair  Ciklin.

Overall cargo at the port was up 16 percent to 2.519 million  tons. The Port received 24 percent  more vessel calls in 2016 versus 2015.

With Bahamas Paradise Cruise Line’s 1,800-passenger Grand Celebration calling at the Port every other day, passenger counts rose 43 percent to 502,876.

While container tonnage in 2016 remained consistent with tonnage in 2015, break-bulk cargo saw the highest year-over-year increases within the general cargo category of 84 percent, to 98,801 tons from 53,546  tons in 2015. Fuel oil was up 85 percent, to 98,354 tons from  53,045 tons. The port processed 37,122 tons of recycled steel, a 39 percent increase from 2015.

Net operating revenues of $16.6 million are at a 10-year high, up $5.5 million from their lowest point in 2009 during the recession and up 10 percent or $1.6 million from FY 2015. This was primarily due to increases in wharfage and dockage revenues.

As one of the largest employers in Palm Beach County, the Port of Palm Beach and its more than 30 tenants employ more than 2,850 people. Through the contribution of more than $185 million in business revenue and $17.5 million in tenant-contributed state and local annual tax revenue, the Port of Palm Beach is one of the largest economic engines in South Florida.

 

Source: Palm Beach Post