Broward College Offers Land In Exchange For Partnership

Broward College wants to work with developers to build a commercial project on 15.5 acres of its Davie campus.

The college issued an Invitation to Negotiate (ITN) with private parties on April 17. The deadline to respond is May 29.

The available property is at the southeast corner of its campus along Davie Road, including Seahawk Lake and several parking lots. A deal would require approval of the college’s Board of Trustees. Development could take place as early as 2021.

“Real estate partnerships are certainly not new to us,” said Broward College President Gregory A. Haile. “In recent years, we have looked to partner with the private sector to leverage college assets, and thus reduce our reliance on tax payer funding. Resources derived by this enterprising model will serve to enhance the lives of our students and our contributions to the Broward County community.”

The ITN doesn’t include a requirement that the development on the BC campus include an educational component. It states the responses will be evaluated based on the experience of the developers and the project’s ability to “maximize the college’s financial return.” It also says enhancing the “student/faculty experience” on campus will be a factor.

BC has over 27,000 students on that 150-acre campus, which is near campuses for Nova Southeastern University and Florida Atlantic University.

Seahawk Lake could be relocated as part of a new stormwater master plan BC could work on with the developer, according to the ITN.

In addition to the 15.5-acre development site, proposals in the ITN could include the redevelopment of BC Buildings 1 and 2 and a test track used by law enforcement, according to BC. There is a significant amount of deferred maintenance on those buildings and the college would not need to replace them. However, it would probably need to relocate the test track.

“We look forward to the development opportunities this endeavor can offer,” said Broward College Board Chair Gloria Fernandez. “In addition to improved infrastructure, it will help us generate revenue to offset costs, keep tuition affordable, and prioritize student success initiatives.”

Zaida Riollano is BC’s point of contact for ITN submissions.

Several years ago, BC approved a similar deal with Stiles Corp. to build a mixed-use tower on its downtown Fort Lauderdale campus.

 

Source: SFBJ

Will Commercial Real Estate Ever Return To The Way It Was Before COVID-19?

questions

COVID-19 deepens its hold on cities around the country, the question is increasingly becoming when it will peak in each city and for how long?

By now, U.S. cases have risen to top 600,000 despite a recent plateauing of cases in some areas. Even once the worst of it is officially behind us, we may continue to see the virus pop up here and there, menacing populations that may have thought they were safe.

One commercial real estate professional we spoke to, an asset manager at a major real estate investment firm, is conservative and practical in her recovery expectations. She said in a conference call that “if we shed 10 million jobs in March, we have never created more than 200 thousand jobs in a month. Even if we double that, it will take a lot of time to recover.”

Even after that recovery eventually, inexorably occurs, though, what will the world look like? We keep talking about a return to the way things were, but is that even within the realm of possibility? Or will this period of disruption be so destabilizing to our systems that it will completely change our social, economic and political norms?

While recovery may still be a long way off, it is not too early to estimate the impacts of the crisis on the activity within the commercial real estate industry. That’s why propmoda recently conducted an in-depth survey, in which we collected responses from industry professionals across the country and the world, working in fields from development to architecture to brokerage across a diverse range of property types. The resulting deep-dive report, The Commercial Real Estate Industry’s Reaction to the COVID-19 Threat, uncovered responses and sentiment about the affects of the pandemic on the industry.

Many respondents chimed in commenting on a need for a moratorium on commercial mortgages, and others just pointed to the dire need for an effective treatment or vaccine. One respondent, a leader at an office landlord in Turkey, said that “I don’t think the commercial real estate industry will recover to pre-crisis levels since both employers and employees will be accustomed to new business processes which make use of less office time. People will not change their habits.” So what kind of habits will change?

Will remote work become more commonplace now that we have all started growing accustomed to it? By the time this pandemic ends, all of us will have had a crash course in Zoom video conferencing. What about the way we cluster on city streets, take public transit, or shop at the grocery store? In many ways, COVID-19 seems to be shining a light on trends that were already bubbling under the surface. Online shopping for groceries, for instance, was already growing, by as much as 35 million U.S. consumers between 2018 and 2019.

Twenty three percent of our survey respondents said that they would be using remote working arrangements more, after the COVID-19 outbreak. We are not alone in picking out this trend. In another recent study of 317 CFO-type professionals, Gartner found that almost three quarters of finance leaders will be increasing the number of remote workers within their organizations by at least 5%. Not only that, but their survey also found that 4% of respondents would be transitioning fully half their company’s staff members to a permanently remote plan. 17% of respondents said they’d be sending 20% of their workers home. These numbers could be disastrous to the office market.

Beyond just office space use, COVID-19 is opening up entirely new questions that point to the very heart of the real estate industry. How will retail landlords survive when their tenants cannot welcome shoppers into their stores? How will industrial owners keep their warehouses humming with activity when huge numbers of non-essential goods aren’t being sold? How will apartment landlords respond when their residents can’t pay rent, but regulations prevent them from evicting non-paying tenants? According to the NMHC, April rent payments are down only 7% from March, before the worst of the outbreak came to the country, but that’s just one month. What happens next?

Social distancing is something that will likely come to an end, whether it is in two months or a year and a half. Hopefully, we can end it sooner than later, but the memories of the danger present in close human contact will likely stay fresh for a long time. The economy may get its engine running and wheels turning late this year or some time next year. But will it even be the same kind of car?

 

Source: propmoda

Silver Lining: Where The Commercial Real Estate Industry Sees Opportunity From COVID-19 Outbreak

silver lining

The COVID-19 outbreak and widespread response to slow its spread has thrown cold water on what had been a healthy U.S. economy. Nearly all sectors, including real estate, has seen immediate impacts.

Even so, those in the Milwaukee-area commercial real estate industry see a number of opportunities coming as a result of the pandemic. Opportunities will come in the form of buying opportunities, a healthy industrial sector through growth in e-commerce and repatriation of supply chains, remote-work related investments and more lease and expansion opportunities due to newly vacated space.

These musings from local real-estate professionals were compiled in a recent survey conducted by six area industry groups: Marquette University Center for Real Estate, NAIOP Wisconsin, the Commercial Association of Realtors Wisconsin, Wisconsin CREW, Building Owners & Managers Association of Wisconsin and IREM Milwaukee. The survey asked respondents what impacts they were seeing from the outbreak and what strategies they were using to address them. It generated nearly 350 responses. The full results were released last week.

One of the most commonly mentioned things is the rise of buying opportunities, due to variables including low interest rates, distressed assets, foreclosures, increasing supply and lower property values.

As one respondent noted, opportunity could lie in “potential distressed sellers looking to recapitalize or sell at a discount to replacement cost and prior value.”

Respondents also noted two opportunities in the realm of industrial real estate. Some predicted accelerated growth in the e-commerce sector as more people become comfortable with using home-delivery services. Others noted that supply chains could be re-focused domestically, as the outbreak caused global disruptions. The thought is that the industry would be better equipped to handle a similar pandemic in the future if more operations were located in the U.S.

“Manufacturing growth in U.S. as more companies repatriate their supply chains,” wrote one respondent.

They also noted several opportunities in the retail sector. More space will be made available due to businesses closing, which will create opportunities for tenants to relocate or expand. Landlords will also settle for lower rental rates as they look to make deals with replacement tenants.

This all could be viewed as a silver lining, since retail has been hit particularly hard due to state and local shutdown orders.

” … I believe some businesses will not be able to reopen or will fail, that more retail space will become available, and that asking rents will come down as landlords look to do deals with good replacement tenants,” said a respondent.

Builders noted opportunities to do more renovation work on buildings that are now vacant or have limited occupancy. They also predicted more demand coming from the health care sector, with users looking to upgrade facilities. On the other hand, a number of respondents suggested the rise in virtual health care could also harm their business due to less need for services at brick-and-mortar locations.

Many respondents pointed out that many companies have had to quickly adapt to remote work. This would have long-term impacts on the way people work, they said.

Things traditionally done in-person that are now being done virtually include team meetings, property showings and remote notarization.

Several even suggested this would lead to changes in the office market, such as the reduction of needed office space.

This particular point caught the attention of Andrew Hunt, director of the Marquette University Center for Real Estate, one of the groups involved in the survey.

He said respondents were surprised how easily and quickly their firms adjusted to remote-work tools such as Zoom and Microsoft Teams. Many of them wondered how this would change the way people work, both inside and away from the office, even after the outbreak subsides.

“I think what they’re trying to say is, ‘We know that there’s a way people work, we think it is probably likely to change from this,’” Hunt said in a recent interview.

He later added, “How that impacts office space in the future, how that impacts just the way people do work and maybe even how efficient they are in doing work, is something that we all need to continue to watch. But a lot of people think that is going to have an impact.”

Other takeaways from the survey include:

 

Source:  BizTimes

Commercial Real Estate Market Navigating Uncharted Waters In Dealing With Coronavirus Outbreak

uncharted waters

It is reasonable to presume that no South Florida business will emerge entirely unaffected by the pandemic and subsequent economic downturn.

As companies figure out how to get back on their feet, commercial real estate brokers and property managers are helping them adapt to the possibility of staff reductions and structural changes to their businesses. The big picture will be a mixed bag of positives and negatives for owners, investors and tenants.

On the positive side for owners, low-interest rates will mean an attractive environment for refinancing quality loans. For domestic and international investors who still consider America the world’s safest place to invest, the time will be right to return to the market in search of new buying opportunities. Tenants who are hit hard by months of interruption and serious revenue shortfalls will scrap plans to expand.

The commercial real estate sector as a whole is navigating this evolving crisis through uncharted waters. Tenants have reached out to us to report the early impact of the coronavirus, or COVID-19, on their businesses. We are sympathetic to the economic uncertainty they are facing and are pointing them toward the various federal, state and local programs being deployed to help businesses recover.

Facing immediate fiscal challenges, landlords are not in a position to extend financial relief. Some are offering hope that when the crisis ends a comprehensive review of tenants’ circumstances can be performed and a response provided in due course.

We also are urging tenants to examine their own resources, including the terms of their insurance policies. For example, if coronavirus losses are sufficient to trigger business interruption coverage according to the terms of their policy, some tenants may be covered for income losses resulting from disruption of their operations.

No one knows the timeline for recovery, so until the pandemic is under control and the economy recalibrates, my staff and I are focusing on the things we can control. We moved rapidly to transition our firm to remote mode and are proactively taking the following steps to keep our team engaged and our customers reassured:

  • As the pandemic became imminent, we fast-tracked the companywide installation, training and roll-out of stay-at-home technologies. It was a substantial investment, but well worth the long-term benefits it will deliver to our business. We also made sure everyone had a laptop and video conferencing capabilities, and adapted our phone system for the seamless offsite handling of calls.
  • We hold mandatory virtual staff meetings every day to talk shop, share news, observations and suggestions. We challenge everyone to present fresh ideas to benefit our company, our clients and our community. In addition, for as long as the health authorities permit, two people per day go to the office to support the stay-at-home team by forwarding mail and other documents, as needed.
  • Each of us stays in touch with clients to share updates and assure them that we are taking care of everything in our power on their behalf. We visit their properties to make sure they are being properly maintained, and although we no longer can go inside tenant spaces, we make sure everything is being maintained as planned on the outside.
  • Working from home can offer quiet periods during the day to sit and think about what we can be doing differently. We are encouraging our brokers, property managers and administrative staff to carve out time every day to think about challenges and opportunities for moving our business forward and ultimately making it more successful than ever before.
  • Several members of our staff are using this time to hone their skills with online training
  • Most of us have that folder full of miscellaneous notes that might be useful someday but never make it out of the pile. With some extra time temporarily on our hands, most of us are getting more organized, filing all those business cards we’ve collected or reading those industry articles we’ve meant to read for months. It’s time well spent.

Instead of wasting precious time worrying about how and when the commercial real estate market is going to recover from the impact of COVID-19, we are preparing to hit the ground running when it does.

 

Source: SunSentinel