Prologis To Buy Rival Logistics Firm For $13B

Warehouse giant Prologis is purchasing its rival Liberty Property Trust for $12.6 billion, creating a massive new player in the industrial real estate business.

Prologis aims to use the acquisition to bolster its presence in the United States amid a boom in e-commerce, according to Reuters. The company cited markets including New Jersey, Southern California and Chicago as places where the Liberty acquisition would help it establish a stronger foothold.

The deal will likely close during the first quarter of next year and help the firms save about $120 million. Prologis also plans to sell about $3.5 billion worth of its assets.

 

Source:  The Real Deal

 

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Opportunities Ahead: Three Developers Pick The Hot Spots

Panelists spoke at the RealInsight’s Florida Commercial Real Estate Summit at the Hyatt Regency Miami on Wednesday, October 16, highlighting the potential for distribution centers, hotels, shopping malls, technology hub and sports stadiums in Florida’s major cities.

Despite years of continuous activity, Florida’s industrial and multifamily sectors still have room for growth,  said Crocker Partners Managing Partner Angelo Bianco, Mitchell Property Realty President Ed Mitchell and Merrimac Ventures President and CEO Dev Motwani.

“Industrial is where we get our stuff,” said Mitchell.

His company recently bought industrial warehouses in Fort Lauderdale and Tampa, and is soon closing on one in Miami.

“Capital lenders are all over you. It’s nice. Everybody wants to do industrial now,” Mitchell said when asked how capital partners influence his acquisition strategies. “But land costs present a challenge. It costs more to get land in Miami than to build.”

The average land acquisition price per square foot costs $60 to $70 a square foot.

In Boca Raton, Crocker is creating a campus with a food court and STEAM lab maker space, hoping to draw a tech company.

“The idea is to make the workplace like a hotel.” Bianco credited WeWork for the concept. “Their loss is our gain,” referring to the company’s recent woes.

The retail category drew little enthusiasm from panelists, especially at this time when national chains are flailing.

“The spaces are of interest only when there is a big box that you can tear down and add multifamily,” said Motwani. “Multifamily developments continue to generate strong returns, especially in the luxury market.”

As for why affordable projects don’t draw greater interests, Motwani pointed to the financial realities.

“Concrete costs what it costs. Land costs what it costs,” said Motwani. “From a financing perspective, it makes sense to get luxury condos done, not affordable housing.”

But municipalities can encourage affordable housing development through incentives, including fee relief, parking ratios and adding density bonuses, agreed Motwani and Bianco.

 

Source: Miami Herald

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Hollywood Attracts New Opportunity Zone Investments With 3 Major Projects In The Planning Stages

With two well-situated Opportunity Zones, zoning changes and a robust street improvement program, the City of Hollywood is attracting major commercial real estate developers and investors.

“Our strategic location and public investments – coupled with the tax benefits of the federal Opportunity Zone program – have set the stage for new developments that benefit our community,” said Herb Conde-Parlato, economic development manager, City of Hollywood. “We are now reviewing three new projects that could add vitality to our local economy by creating new jobs, while offering a wider array of housing, dining and shopping options to our residents.”

Those Opportunity Zone projects include:

  • Parc Place, the former “Bread Building” at 1745 Van Buren Street just south of Young Circle Park. Redevelopment stalled about a decade ago, but has been revived by developer BTI, said Conde-Parlato. Plans call for a 25-story tower mixed-use luxury apartment complex development in one phase. The project consists of 433 new apartments, 560 parking spaces and 17,000 square feet of commercial retail space. “This development would bring residential and retail vitality to our city and contribute to the walkability of our downtown core.”
  • Soleste, a residential-retail project at 2001 Hollywood Boulevard in the downtown area. Miami-based Estate Investment Group is planning the development, which would include 350 apartments, 30,000 square feet of retail space and 497 parking spaces.
  • A new hotel and restaurant at 2801 Greene Street in the South Florida Design and Commerce Center, a 150-acre mixed-use business park along Interstate 95. This $35 million investment would include 242 rooms and 162 parking spaces.

“We have many other new retail, office, multifamily and industrial real estate projects in the pipeline, but not all are seeking tax benefits under the Opportunity Zone program,” said Conde-Parlato.

Established by the U.S. Tax Cuts and Jobs Act of 2017, Opportunity Zones are designed to spur economic growth by reducing capital gains taxes on qualifying investments in designated geographic areas. The City of Hollywood moved quickly to capitalize on two large-scale Opportunity Zone designations, one in the downtown that includes all of Young Circle and the area between two major corridors, Federal Highway and Dixie Highway, and another on both sides of I-95 between Sheridan Street and Stirling Road.

By creating Opportunity Zone funds, investors can acquire and improve properties in these areas, while deferring any taxes on capital gains until Dec. 31, 2026. If the investment is held for five years, the original capital gains taxes are reduced by 10 percent; after seven years that deduction increases to 15 percent.

“Those opportunity fund investments must be entitled before year-end 2019 in order to take advantage of the 15 percent deduction,” said Raelin Storey, director of communications, marketing and economic development for the City of Hollywood. “That’s one reason why our city is seeing an upswing in development activity in the past few months. The City of Hollywood was ahead of the curve in marketing its Opportunity Zones, drawing a wave of interest among property owners, developers and investors. The tax advantages have helped make new projects more feasible, since the funds can be included in the development team’s capital structure. It’s an innovative approach to creating new business and real estate opportunities. Now, the city is working with the real estate investment community to bring forward well-designed projects that meet the standards of the city’s commercial and mixed-use zoning codes.”

Looking ahead, the city’s Opportunity Zones hold a potentially even bigger benefit for long-term investors – a permanent tax break.

“If you sell your investment after holding it for 10 years or longer, you would not have to pay any capital gains on the increased value of the property,” said Storey. “That’s really the ultimate advantage to investing in our Opportunity Zones.”

 

Source: SFBJ