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Economy Remains In Great Shape In Florida

While there are increased worries about a recession at the national level, the economy remains in excellent shape in Florida.

There are some signs of concern of course–including recent estimates that the state government will bring in around $867 million less in revenue than expected over the next two years–but mostly things are looking up in the Sunshine State.

Last month, unemployment in Florida slipped from 3.4 percent to 3.3 percent, well below the national average of 3.7 percent. Jobs continue to grow at a 2.8 percent rate in Florida, above the national average of 1.8 percent.

Tourism also continues to boom in Florida with Gov. Ron DeSantis announcing last week that a record-high 68.9 million tourists visited the state in the first half of the year.

The Florida Realtors just announced that single-family home sales were up 10.4 percent last month when compared to July 2018.

Now, this could all head south of course. Florida’s economy continues to rely heavily on tourism and real estate, two industries that often take major hits in an economic downturn–as the Sunshine State can attest from the damage it took during the Great Recession.  Continued trade tensions with China could impact logistics and agriculture.

Thanks in large part to efforts from former Governor and now U.S. Sen. Rick Scott and current Governor Ron DeSantis, Florida continues to have a strong business and tax climate which continues to attract new residents and businesses. Even as the nation experiences increased worries about a downturn, for the moment at least, the economy remains in good shape in Florida.

 

Source: Florida Daily

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All Of The Stocks Are Tumbling — Except Real Estate

While the U.S. markets are in fear of a recession, investors seem to know one place they want to park their money: real estate stocks.

Of the 28 real estate stocks tracked by The Real Deal — a sample of real estate investment trusts, mortgage companies, brokerages and other real estate services firms — 15 saw an uptick. That’s despite the S&P 500, Dow 30 and Nasdaq showing slight losses as of 1:45 p.m. Thursday, August 15.

The Dow plunged 800 points on Wednesday, August 14, after the yield on the two-year Treasury note pushed higher than the yield on 10-year Treasuries on early Wednesday — a sign investors think it’s riskier to make shorter-term investments than longer-term ones. Markets have been on edge since last week, after President Donald Trump escalated the trade war.

Of the 15 real estate stocks that were up, Realogy saw the biggest gains. The brokerage conglomerate’s stocks were trading at $6.03, up 2.29 percent. But not all stocks were up. Mortgage loan company Ocwen Financial Corporation recording the largest drop of 4.5 percent, trading at $1.40 per share.

The Real Estate Select Sector SPDR Fund, an index that follows real estate investment trusts and real estate management and development companies, was trading at $38.19, up less than 1 percent from the market’s close Wednesday, August 14.

As for only REIT stocks, their returns were up 0.91 percent as of 1:25 p.m. Thursday, August 15, according to the FTSE Nareit All REITs Index. But compared to last week, REITs overall may be losing: Last week the index’s domestic returns were up 1.67 percent, but so far this week they’re down 1.72 percent.

While a yield curve inversion may not always signal a recession, investors will be watching what the Federal Reserve does. Real estate stocks ticked up earlier this month when Fed chief Jerome Powell said there may be a possible cut in interest rates.

Last week, signs of an escalating trade war between the U.S. and China caused real estate stocks to dip but then largely performed well compared to the overall market.

 

Source: The Real Deal

Revised Plans For Delray Industrial Project Adjacent To Dakota Homes Don’t Appease Residents

The county zoning commission unanimously approved revised plans for an industrial-commercial project that will abut the Dakota Homes development west of Delray Beach despite strong opposition from area residents who fear the project will decimate their property values and destroy their quality of life.

Resident after resident told the zoning board they never would have bought in the 387-unit GL Homes development, currently under construction, had they known that the land adjacent to them was zoned industrial. Some of the homeowners paid as much as $600,000 for their homes.

“We knew something was going to be built there but not an industrial park,” said Monica Belisle, whose home on Salty Bay Drive is about 250 feet from the project.

At issue is whether West Delray Collision can move its operations across the street to a 10-acre site on the south side of Atlantic Avenue about .2 miles east of State Road 7. The 164,000-square foot project also calls for a 35-foot tall self-storage facility, a car wash, two warehouse buildings and a tire repair facility.

The Board of County Commissioners will decide the fate of the project Thursday, Aug. 22.

The Zoning Commission forced West Delray Collision to revise its plans so that its operations were farther away from Dakota Homes after residents pleaded for help at a July meeting. The revisions include:

  • Increasing the setback from 100 feet to 170 feet.
  • Increasing the buffer to 50 feet.
  • Reducing the size of the self-storage facility by 12,000 square feet.
  • Adding a second canopy of trees.
  • Building a 50-foot wall on the east side of the property next to Our Lady Queen of Peace Church.
  • Moving the dumpster from West Delray Collision farther away from Dakota.

But the concessions did nothing to appease the residents.

 “It’s like dying by cyanide or electrocution,” he said. “We feel like we are being bulldozed,” said Boca Raton cardiologist Steven Pollack, who like Belisle also lives on Salty Bay Drive:

Pollack and others claim traffic congestion is a nightmare on Atlantic Avenue, which is only one lane in each direction. The state has plans to widen the heavily traveled highway but that project is not expected to start until sometime in 2022 and may take two or more years to complete.

It is a big mistake to put more traffic on Atlantic Avenue before it is widened, he said, noting that people may not get to nearby hospitals in time for treatment because of the traffic congestion.

“Moving the auto repair operation 70 feet away won’t make a difference,” said Matthew Belisle.

He was concerned with the 7 a.m. to 7 p.m. operations Monday to Saturday as well as noise issues.

“This is fundamentally unfair,” Belisle said. “It will financially ruin us.”

But Greg DiMaria, the owner of West Delray Collision, said he is trying to be as neighborly as he can be. As for noise, he said all of the auto-body repair work will be done inside a concrete building.

The vacant land, which is in the Ag Reserve, had been zoned agricultural-residential but in 2017, at around the time GL began selling homes at Dakota, the county approved a zoning change to light industrial.

Donald Bryan said his family has owned the land for more than 50 years. He said future land use maps have designated the parcel as industrial ever since 1980.

“This property has right to be developed based on property rights,” Bryan said. “What is fair is fair.”

The opposition to the project is intense. Zoning staff received 66 comments in opposition; only 1 comment in support. Petitions with more than 515 signatures opposing the project were presented to the zoning board from parishioners at the nearby church and an on-line petition from 231 Dakota Homes’ residents.

Four Seasons HOA President Art Goldzweig testified against the project in July. He told The Post on that he was disappointed with the zoning commissioners. He said he can’t understand how the board could ignore the outcry of the residents and the parishioners of Our Lady Queen of Peace.

“This is shameful behavior,” Goldzweig said. “They should all resign.”

He was also disappointed with Alliance of Delray Residential Associations for supporting the project as long the concessions were made. This is not a project that the association should be supporting, he noted.

 

Source: Palm Beach Post

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Report: South Florida Investors Are Still Wary Of Investing In Opportunity Zones

opportunity zones

Months after the Treasury and the Internal Revenue Service released the latest round of regulations for Opportunity Zones, South Florida investors and developers are still wary enough about the rules to prevent them from investing.

A report by Bilzin Sumberg and the Urban Land Institute found that only 28 percent of respondents surveyed said that they intend to invest Opportunity Zones and only 7 percent have already done so.

The reason: investors still do not understand basic questions about the program. Nearly one third of the respondents cited uncertainty as their top reason for not investing in Opportunity Zones. The report surveyed 72 developers, investors and other professionals in June who specialize in real estate and finance in Florida.

One of the biggest questions that participants still have is around refinancings. Although the most recent regulations clarified how developers in an Opportunity Zone can refinance a property and qualify for the tax benefits, the report shows that the rules around refinancings are not understood by some members of the real estate industry.

“A lot of people still hadn’t fully digested the second set of regulations,” said Josh Kaplan, a corporate and tax attorney at Bilzin Sumberg, a Miami-based law firm.

Another reason that investors are avoiding Opportunity Zones is due to the rapid price appreciation of land in designated zones in South Florida, according to Kaplan.

Kaplan said he’s seen reports that land prices in South Florida Opportunity Zones have increased by as much as 30 or 40 percent, making it much more difficult for deals to pencil out for investors.

The Opportunity Zones program allows developers and property owners to defer and possibly forgo paying some of their capital gains taxes, or taxes resulting from the sale of certain assets. To reap the full tax benefit, those who invest in the more than 8,700 Opportunity Zones around the nation must hold the asset for at least a decade.

In Miami-Dade County, Opportunity Zones span distressed areas such as Opa-locka, parts of Overtown, North Miami Beach and Carol City, along with areas where major development is already taking place, like parts of Aventura, Edgewater and the Design District.

From April through September 2018, property sales in those areas tallied $942 million, a 25 percent increase from the same period a year earlier. Several of the Opportunity Zone tracts encompass some of the wealthiest enclaves and megaprojects in Miami, such as Turnberry Associates’ Aventura Mall and the Magic City Innovation District, a planned $1 billion development in Little Haiti.

The report shows that multifamily, however, is the favorite asset class for Opportunity Zones investors. About 82 percent of respondents view mixed-use and multifamily as the asset class most ripe for redevelopment.

Kaplan said he also expects to see more Opportunity Zones deals to close by the end of the year, as investors look to take advantage of the biggest tax benefits, which expire at the end of 2019.

 

Source: The Real Deal