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Commercial Property Sales Up 183% Across South Florida

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Commercial property purchases have shown few signs of slowing down after a banner year, according to a recent report from JLL Capital Market’s Miami office.

South Florida commercial real estate transactions rose to $25 billion in 2021. That’s a 183% increase from the $8.8 billion in transactions across Miami-Dade, Broward, and Palm Beach counties recorded the year before.

The momentum has spilled over into this year. In the first three months of 2022, JLL recorded $6 billion in commercial real estate transactions completed across the tri-county area industry-wide, up 51% from the first quarter of 2021. (Data from the first quarter of 2022 is preliminary and subject to change, a JLL spokeswoman told the Business Journal.) This sharp rise in deal activity could be found across the industrial, multifamily, office and retail sectors.

Danny Finkle, senior managing director of JLL’s Miami office, credits the new wave of transactions to Florida’s “business-friendly environment and excellent quality of life.”

“Institutional investors have recognized this cultural shift and are tailoring their investment criteria to target markets like South Florida,” Finkle stated in a recent JLL release.

A significant portion of the property sales centered on multifamily housing. In 2021, there were $14.69 billion in real estate transactions involving residential rentals, an increase of 277% from the previous year. In the first quarter 2022, there have been $2.75 billion in trades involving South Florida apartment buildings, a 76% hike compared to the year-ago quarter.

In the office sector, there were $5.38 billion in trades in 2021, a 235% jump from the year prior. In the first quarter of this year, there have been $1.05 billion in office sales, a year-over-year increase of 10%.

Meanwhile, retail property transactions rose 136% in 2021 year over year to $3.88 billion in South Florida. Then another $1.28 billion of retail transactions took place in the first quarter of this year, a 186% hike compared to the year-ago quarter.

As for industrial, sales volume increased 63% from the previous year to $2.3 billion in 2021. In the first quarter of 2022, a total of $908.29 million in industrial transactions took place, a 76% leap from the year-ago quarter.

Companies and well-off individuals have been migrating to South Florida in greater numbers due to the region’s popularity, weather, and lack of income taxes, brokers and developers have told theĀ Business Journal.Ā It’sa trend that’s expected continue through the rest of 2022, making South Florida a prime spot for investment. Multifamily properties likely saw the biggest increases becauseĀ rents are surging at a faster rate in the Miami area than almost any other metro in the U.S.

The migration has tipped e-commerce into overdrive, creatingĀ a shortage of warehouse and distribution spaceĀ as companies seek to fulfill the orders of a humming economy amidst a continuing supply-chain crunch.

JLL stated that its Miami office handled 121% more investment sales, debt, and equity transactions in 2021 than the year before. To accommodate that growth, JLL promotedĀ Cody Brais,Ā Kenny CutlerĀ andĀ Max La CavaĀ to director status.

Headquartered in Chicago, JLL has 3,000 capital market specialistsacross 50 nations. The data in JLL’s report was supplied from Real Capital Analytics, a New York-based real estate analysis company that has recorded $40 trillion in commercial real estate transactions since its founding in 2000.

 

Source: SFBJ

 

This Converted Fort Lauderdale Warehouse Is Now 100% Leased With Retail, Office Tenants

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A recently converted warehouse in Fort Lauderdale’s Progresso Village is now 100% leased with retail and office tenants that will altogether employ about 100 people.

Called Fabrick, the former industrial space at 801, 807, 815, and 819 N.E 2nd Ave. has 24,000 square feet of office and retail. The developer, BH3 Management, moved its headquarters from Aventura to the project’s office component in April. It’s larger than BH3’s previous office in Aventura, which was only 5,000 square feet.

The other seven businesses leasing space in Fabrick will employ an estimated 75 people. The final employee count for all tenants will not be known until they have completed their build outs and are open for business, Freedman stated in an e-mail to theĀ Business Journal.

A subsidiary of BH3, BH3 DJ Flagler LLC, bought the warehouse in November 2017 for $2.8 million, according to online records from the Broward County Property Appraiser office. Another subsidiary, BH3 DJ Sub LLC, purchased the warehouse from BH3 DJ Flagler LLC for $1.64 million in May 2020.

After receiving $350,000 in incentives from the Fort Lauderdale Community Redevelopment Agency in December 2020, BH3 launched an adaptive reuse project of the warehouse building.

Besides the incentives, the project was financed through a $5.1 million loan from New York-based Maxim Capital Group.

 

Source: SFBJ

Palm Beach County Could Allow Thousands Of Apartment Units To Be Built In Agricultural Reserve

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Palm Beach County officials could approve a land use change that would permit more than 2,100 apartments in the Agricultural Reserve to address the lack of workforce housing in the area.

The County Planning Commission approved on April 8 the future land use change to facilitate ā€œessential housingā€ in the Agricultural Reserve west of Delray Beach and Boynton Beach. The application was initiated by county staff, not a particular landowner. However, the application would apply to five specific parcels covering a combined 269 acres in the area.

The Agricultural Reserve is one of the largest markets for single-family home development in all of South Florida. The development rules encourage low density and a certain portion of land must be set aside for agriculture and open space for every acre developed. Using density of 2.5 units per acre, nearly 11,000 homes have been developed there, according to the county memo.

Given the low-density development pattern in the Agricultural Reserve, there are almost no housing opportunities for most people employed in the workforce, the county memo stated. The median sales price of a home on less than one acre in the area was $880,000, according to the Palm Beach County Property Appraiser. Less than 3% of the homes sold for under $500,000.

ā€œCreating a higher density category with both a significant workforce housing requirement and a preserve requirement will help to address this imbalance while continuing to support the preservation objective,ā€ the county memo stated.

The staff recommendation for the essential housing land use category is eight units per acre and a requirement to preserve 60% of the site and develop 40%. In addition, 25% of the units must be workforce housing.

That land use category would be restricted to locations fronting major roads, like Atlantic Avenue and Boynton Beach Boulevard, in close proximity to Floridaā€™s Turnpike. Under the essential housing proposal, these five sites could be developed with a combined 2,152 units. However, that number could increase to 5,379 units if the owners of these properties are able to preserve land in other locations within the Agricultural Reserve, thus being able to build apartments on the entirety of their land within the essential housing district.

Developers such as GL Homes frequently buy land in the Agricultural Reserve for preservation in order to build home communities in other locations in the area. One of those five locations already has a pending development application.

The essential housing land use plan would need approval from the County Commission at a later date.

 

Source: SFBJ

 

Industrial Park Breaks Ground Near West Palm Beach With $53M Loan

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An affiliate of Vecellio Group broke ground on an industrial park near West Palm Beach after obtaining a $52.65 million construction loan.

United Bank of Charleston, West Virginia provided the mortgage to 101 Sansburys Way LLC, an affiliate of Vecellio Group, a construction materials firm and contractor. It covers the 32.8-acre site at the same address, which is on the north side of Southern Boulevard, just west of Floridaā€™s Turnpike.

Fort Lauderdale-based Hernandez Construction recently filed notice with Palm Beach County that it started work on the project. The site was approved for three warehouses for a combined 435,800 square feet. The first phase is a 165,000-square-foot warehouse with 32-foot clear height.

The developer is working with Fort Lauderdale-based Helms Development on the project.

According to the fourth quarter report from Colliers, the Palm Beach County industrial market had a 3.2% vacancy rate, down from 3.6% a year earlier, amid 949,211 square feet of positive absorption over the year. There was 548,824 square feet under construction, so there was certainly room for more buildings based on the pace of absorption.

 

Source: SFBJ