Quaint And Sleepy Hollywood Beach Is Poised For Major Redevelopment

Hollywood, sandwiched between Miami and Fort Lauderdale, has seemed quaint and sleepy compared to its big-city neighbors, despite impressive community assets.

The 30-square-mile municipality’s amenities include an airport, a walkable downtown, 7 miles of oceanfront and a beachfront pedestrian walkway called the Broadwalk that’s lined with independent restaurants and hotels. Inland are golf courses, residential neighborhoods and the Seminole Hard Rock Resort & Casino. Port Everglades is partly within the city limits.

“Soon, a new wave of development is poised to transform Hollywood. The city currently has $1.2B in real estate development planned or under construction,” City Manager Wazir Ishmael said during a Bisnow webinar last week.

Ishmael outlined some of the major projects around Young Circle, the downtown city center with a 9-acre outdoor amphitheater and arts park, where Hollywood’s main east-west corridor meets north-south artery US 1.

On the southwest quadrant of Young Circle, the $60M Block 40 project is planned from GCF Development. It will have 166 residential units and 103 hotel rooms. On the southeast quadrant, a mixed-use project by BTI Partners will bring 366 luxury rental units and ground-floor retail. The east side of Young Circle is slated for matching towers with two levels of restaurants and retail, also by BTI. South of Young Circle, Hudson Village, a 108-unit mixed-income affordable project by Housing Trust Group, broke ground last year, and Pinnacle at Peacefield, a senior housing community, was recently completed.

Further east, on Hollywood Beach, Related Group last year completed the 41-story Hyde Beach House on the Intracoastal Waterway. In 2019, voters approved a $165M general obligation bond to finance more than 30 projects.

 “Beachfront properties farther south in Miami-Dade County are bloody expensive,” said Continuum Co. Chairman Ian Bruce Eichner, who has been looking to develop a 4-acre beachfront site in Hollywood. “But in Broward County, there’s still an opportunity in Hollywood for a beach that is certainly as beautiful as anything south, at a different price.”

Webinar moderator Raelin Storey, Hollywood’s director of the Office of Communications, Marketing and Economic Development, said the city has two opportunity zones — one downtown and one between Sheridan Street and Stirling Road near I-95. Storey said that over the past few years, the city adjusted its zoning to encourage development along its commercial corridors.

Keith Poliakoff, partner at law firm Saul Ewing Arnstein & Lehr, said that his client, BTI, is about to break ground on Block 58, formerly known as The Hollywood Bread Building in the downtown opportunity zone. It’s planned to include approximately 366 apartment units with 15K SF of retail.

“Construction prices had risen about 10% since the project got underway, but the opportunity zone designation was helping them draw investment to offset the increased costs,” Poliakoff said. “If you do it right, that savings, that potential tax savings in the future, can actually offset the higher construction price.”

Inigo Ardid, co-president of Key International, which owns the Eden Roc and Marriott hotels in Miami Beach, has been exploring possibilities in Hollywood and said he was very bullish on leisure hospitality.

“What we’re seeing is in places that people can get to, mostly drive markets, the hotel markets have come back stronger than ever… Our average stay has gone up well in excess of 60% from where it was before,”  said Ardid.

Related Group Managing Director Eric Fordin said that the once-stunning but long-neglected Hollywood Beach Resort might be redeveloped in time.

“We had the majority of the unit owners under contract to redevelop that property,” Fordin said. “But the ownership structure is complicated. Not only is there a condo-hotel but an estate owns the land and the parking garage. A tentative deal he’d made with it fell through at the last minute.

That’s not all that makes it complicated.

“There’s a separate owner who owns the commercial unit on the first floor and a separate owner that owns the commercial unit on the second floor, plus 360 unit owners and 36 timeshares,” Fordin said.

But that’s not to say the project won’t happen.

“It’s a site that I am laser-focused on,” Fordin said.

Fordin lives in Hollywood himself. He said some residents love Hollywood’s slow vibe, independent stores and two-story motels that cater to Canadian snowbirds. They don’t want Hollywood to be like Sunny Isles, lined with tall towers that create a canyon-like feel. But the quaintness comes with blight.

“Hollywood is always going to be more of a boutique-friendly development opportunity experience,” Fordin said. “I believe once we’re able to assemble some properties along the Broadwalk, you’ll see some great development impacts for the city, but it’s a matter of really aligning all the stars for those things to take place.”

The panelists called for more public-private partnerships, but that hasn’t always worked out great for Hollywood’s taxpayers. For a Margaritaville Resort developed in 2015 by developer Lon Tabatchnick’s Lojeta Realty and Starwood Capital Group, the city invested $23M in the development and left the city potentially liable for $84.3M in bond payments for a connected parking garage, the Sun-Sentinel reported.

 

Source: Bisnow

Industrial Construction Takes Off In Florida Markets

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As industrial took off in 2020, so did new construction in Florida markets. In many of those areas, completions have reached historic levels.

In the second half of 2020, large-scale speculative construction projects or expansions at existing industrial parks were announced in multiple Florida markets, according to Cushman and Wakefield’s “Florida Industrial Construction” report.

There was 15.4 million square feet (MSF) under construction at the end of 2020. In addition, another 29.7 MSF is poised to come online in the next three years.

Out of this new construction, speculative building dominated. At the end of 2020, 5.8 MSF of speculative building had been completed. C&W says Build-to-Suits accounted for 43% of all completions. Many of those speculative projects under construction have yet to attract tenants. By the end of 2020, only 56% achieved any pre-leasing.

“In several cases, developers moved ahead with entitlements hoping to land a sizeable build-to-suit for a new-to-market or expanding tenant,” according to C&W.

Drilling down into individual markets, Miami leads the way with 8.7 million square feet of industrial space proposed. Tampa Bay (6.0 million), Lakeland (5.8 million), Jacksonville (3.7 million), Broward (2.4 million), Orlando (2.0 million) and Palm Beach (1.2 million) are next.

Tampa Bay leads with 3.4 million square feet of industrial space under construction. It is followed by Miami (2.7 million), Broward (2.2 million), Orlando (2.2 million), Jacksonville (1.9 million), Lakeland (1.7 million) and Palm Beach (1.4 million). The highest preleasing was found in Lakeland (91%), Jacksonville (84%), Orlando (60%) and Miami (50%).

In a recent report focusing on Jacksonville, Colliers International found that construction, which represents about 1.9% of the current industrial stock, created a “trickle-up” effect where industrial users are shedding dated space for quality new construction product. The trend has produced a combination of rising industrial vacancy—which hit 5.4% in the fourth quarter—and rising rents—which increased to $5.21 per square foot.

While other asset classes are closely monitoring the vacancy rate—typically because a rising rate leads to tempered if not negative rent growth—Colliers says that increased vacancy is actually a welcome relief in the Jacksonville industrial market. In 2018, the local vacancy rate reached lows of 2%, giving users limited options. Today, the increased rate of 5.4% still points to healthy market conditions, and new construction activity is well matched to demand.

Nationally, industrial space is getting absorbed. In a recent report, Moody’s Analytics said the warehouse/distribution space absorbed 35.4 million square feet in Q4, its highest mark since Q1 2019 when 70.7 million square feet were absorbed.

Construction for the new warehouse/distribution space fell to 25.8 million square feet in Q4 after hitting 38.2 million square feet added in Q3, according to Moody’s Analytics. The space has posted an average of 36.8 million square feet of new inventory added per quarter in the prior six quarters.

 

Source: GlobeSt.

Construction Firm Plans Industrial Park Near West Palm Beach

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An affiliate of Vecellio Group plans to redevelop its construction materials site near West Palm Beach to build distribution warehouses.

The Palm Beach County Zoning Commission will consider several applications for the 32.8-acre site at 101 Sansburys Way on Feb. 4. The property, owned by Vecellio Group subsidiary 101 Sansburys Way LLC, currently has about 66,000 square feet of warehouses and storage yards for the company’s construction equipment. It’s on the north side of Southern Boulevard, just west of Florida’s Turnpike.

(IMAGE CREDIT: HELMS DEVELOPMENT)

The applicant wants to rezone the southern portion of the property from “commercial” to “industrial” and have a site plan approved for three warehouses totaling 435,800 square feet. There would be 535 parking spaces and 130 loading spaces.

Scott Helms, of Fort Lauderdale-based Helms Development, represents Vecellio Group as the development partner of the project.

 

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2021 Could Deliver Strongest Growth Since 1984

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Many economists aren’t just expecting a recovery this year—but one with the potential for significant economic growth.

In a new research video, John Chang, SVP and director of research services from Marcus & Millichap, gives a positive outlook for the economy and the commercial real estate sector based on new reports from leading economists.

“Over the last year, we have navigated numerous, very serious challenges, but the outlook for 2021 holds great promise for the economy and for commercial real estate,” Chang says in the video. “Looking at the economy, the outlook is strengthening dramatically. In fact, most economists are now forecasting that 2021 will deliver the strongest growth since 1984.”

Chang outlines three underlies as the catalyst for growth this year. Stimulus is at the top of the list. Following the $2.2 trillion CARES Act package in March 2020, Congress passed an additional stimulus bill in December valued at $900 billion. Now, a third round of stimulus is being discussed. President Biden is pushing a $1.9 trillion round, but Chang expects the ultimate bill to be lower.

“There is considerable debate over whether there is enough congressional support for that much of an infusion,” says Chang, saying that a smaller package totaling around $760 billion could be negotiated.

Still an additional round of stimulus will come with major economy-boosting benefits.

“The new round of stimulus would likely include stimulus checks. They are suggesting about $1,400 on top of the $600 already in process,” says Chang. “I am just speculating here, but the new stimulus could expand or extend federal unemployment benefits.”

Although the debate over the stimulus package has focused on stimulus checks, there is more value in expanding unemployment benefits.

“Janet Yellen, the former chairman of the Federal Reserve and the expected Treasury Secretary, has already indicated that she believes the federal unemployment benefits will deliver the biggest bang for the buck,” says Chang. “Additional stimulus checks and more unemployment benefits will give the economy another boost, increasing consumption and helping people that were hit the hardest by the pandemic to cover their expenses.”

The vaccine is another reason that growth is on the horizon.

“We are making substantive headway toward inoculating the US population. Although there have been setbacks and the process is not going as quickly as hoped, many believe the Biden Administration will more aggressively pursue measures to get the pandemic under control,” says Chang.

Finally, renewed economic confidence will also help give the economy a boost. According to Chang, there is $4.5 trillion in savings and money market accounts that represent the pent-up demand in the market. This funding will help to increase consumer spending once people feel safe again.

“As these three factors align, the potential impact on the commercial real estate market could be enormous. In the second half of 2021, assuming that we achieve a critical mass of vaccine distribution, we could see stores, hotels and entertainment venues reopen,” says Chang. “That would bring back jobs and spending, and in turn unlock household formation, creating demand for apartments.”

The economic growth will also help to drive shopping center and travel demand, and as the economy strengthens, companies will launch new office strategies.

All asset classes are set to benefit.

“If the economic growth gets even close to the 5%, 6% or 6.5% growth rates that I am seeing from many well-known economists, then the prospects of a major real estate revival in 2021 will be very positive,” says Chang. “That would set the stage for 2022 and beyond.”

 

Source:  GlobeSt.