Boynton Beach Industrial Property Fetches $139 PSF

KVA Congress bought a Boynton Beach industrial building for $6.65 million, signaling growing interest in industrial properties in South Florida.

The Jupiter-based company bought the 47,626-square-foot property at 3600 South Congress Avenue for $139 per square foot, according to a press release from Cushman & Wakefield. Bridgeview, Illinois-based R.T. Milord Co. sold the property.

KVA Congress is managed by Peter Alevizos and Nancy Alevizos of Jupiter. Cushman & Wakefield represented the seller in the sale.

The building was developed in 1987 on a 3.3-acre site. The property was 100 percent occupied at the time of sale, according to the release.

Boynton Beach, located between Boca Raton and West Palm Beach, has seen a number of new developments in recent years. Among them, Gulf Stream Views, a 14-unit luxury townhome development, just launched sales this month.

In South Florida, overall investment in industrial properties is growing. Over the past five years, average prices per square foot for warehouse buildings in South Florida have increased by 65 percent, according to Colliers International South Florida’s third quarter 2018 report.

 

Source: The Real Deal

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So Many Opportunity Zones, So Many Questions For Developers, Investors

questions

Developers and investors are enamored enough with the federal Opportunity Zones program that they have been raising massive funds in hopes of taking advantage of the big tax incentive, but remain cautious enough over of the program’s many unanswered questions that few have deployed much of the capital raised.

Those dueling realities just played out in Washington, D.C., when the IRS’ first public hearing to solicit questions about the year-old program drew an overflow crowd. About 200 people gathered in a small room, and a couple of dozen speakers aired their concerns, according to three people who attended the hearing. The hearing had been scheduled for January, but was delayed because of the 35-day partial government shutdown.

Steve Glickman, a co-founder of Economic Innovation Group, was one of those in attendance. Glickman is credited with helping craft the Opportunity Zones program, which provides tax deferments and tax breaks for developers who invest in projects in designated low-income neighborhoods across the country. Also at the hearing were Michael Novogradac, a CPA and managing partner at Novogradac & Company; and Jill Homan, an Opportunity Zones adviser and fund manager.

“One of the biggest questions asked was about the amount of time that investment funds have to deploy capital raised for Opportunity Zones projects,” Glickman said. “Existing regulations give funds six months from the time the money is received. But many of the funds say they want to hold the cash for at least a year before deploying it.”

Numerous Opportunity Zone funds targeting hundreds of millions of dollars have been launched in recent months, by firms including Youngwoo & Associates, Somera Road, Fundrise, RXR Realty and EJF Capital. Skybridge Capital is targeting a $1 billion fund. That fund was rolled out in December with EJF as a subadviser, though SkyBridge later dissolved their partnership and found a new subadviser.

In October, the government released its first set of guidelines, but left many topics unaddressed. It did specify that a business will qualify for the program if 70 percent of the company’s property is located within a designated zone.

The Opportunity Zones program pushed forward in President Trump’s 2017 tax overhaul plan gives investors and developers the ability to defer and potentially forgo paying some of their capital gains taxes if they hold the asset for at least 10 years. But real estate investors often buy and sell assets after only a few years.

Given that fact, could an investor sell an Opportunity Zone asset after three years, then reinvest the money into another Opportunity Zone project for seven years? Would the total 10-year hold period still qualify for the program?

Another question: How much capital can an investor or developer take out of a project when refinancing an Opportunity Zone property? And after the refinance, how will the proceeds of the refinancing be distributed to investors?

Asked, but not answered. IRS officials only listened. Investors and developers will be looking for those answers when the government release its second round of rules, which is expected in the next two months.

 

Source: The Real Deal

South Florida Leaders Hope For Another Look From Amazon

amazon front door

South Florida officials have a message for Amazon and Jeff Bezos: Baby come back.

The Washington Post just reported that Amazon is reconsidering its decision to award New York City part of its HQ2 project, which the company has said would come with 25,000 jobs and billions in local investment. Amazon is facing what the Post calls a wave of opposition from local elected officials about the prospect of giving financial subsidies to the world’s most valuable company. Amazon has not yet leased any land there, the Post reported.

Miami-Dade Mayor Carlos Gimenez says he hasn’t heard from Amazon since the e-commerce giant broke the news to him and other South Florida officials that the region came up short in its bid to land HQ2. Miami’s bid, jointly submitted with Broward and Palm Beach counties, did land the region on a short-list of 20 finalists.

In a statement, Gimenez said he is ready to start things up again whenever Amazon is.

“If Amazon is reconsidering getting out of its plan to open a headquarters in New York, as has been reported by the Washington Post, we welcome the opportunity to talk further with the e-commerce giant,” Mayor Gimenez said.

A spokesperson for Miami WorldCenter, which had been considered as a potential landing spot for a hypothetical Miami HQ2, said Amazon has not gotten back in touch about any new projects.

Amazon did not immediately respond to a request for comment. In November, the company announced the other half of the HQ2 project would be located in Northern Virginia. It also announced it planned to open an additional, 5,000-person office in Nashville, Tennessee.

The details of the package South Florida pitched to Amazon have still not been revealed. A spokesman for the Miami-Dade Beacon Council said a freedom of information request filed by the Miami Herald for the information is still being processed.

At a recent panel discussion about lessons learned from the process, Mike Finney, president and CEO of the Beacon Council, did not mention any specific feedback he’d received from Amazon officials about South Florida’s bid. The event was sponsored by the Miami Herald.

In a statement, Finney said the fact that the HQ2 project has been split into two now makes Miami even better positioned for it.

“The change in scope — given jobs and investment were ultimately divided among multiple communities — further enhances Miami’s opportunity to successfully deliver on the kind of partnership we know Amazon is looking for,” Finney said.

He confirmed that he has not engaged in conversations revisiting Amazon bringing any part of HQ2 to South Florida since Amazon’s final announcement was made.

Kelly Smallridge, president and CEO of the Palm Beach County Business Development Board, said she too would welcome Amazon back.

“We’re open for any new opportunities,” Smallridge said.

Miami Mayor Francis Suarez said he planned to reach out directly to Bezos to pitch the Magic City.

“We are the only global city in America with the talent, tax favorable environment and tactical position to fit a global logistics company like Amazon,” Mayor Suarez said in a statement.

And Boca Raton Mayor Scott Singer tweeted, “Hey , heard many NYS leaders oppose deal for your 2nd HQ. We have 0% income tax & lower property taxes in , so you can come to  for a lot less cost, stress & cold. Be happy in  like many HQs. See recent  reports & !”

A spokesperson for Gov. Ron DeSantis’ office did not immediately respond to a request for comment about whether he had reached out to Amazon officials. Following the Washington Post report, Crain’s Chicago Business reported that Illinois Gov. J.B. Pritzker had already reached out to Amazon officials asking them to reconsider Chicago as an HQ2 location.

 

Source: Miami Herald

Record Number of Multifamily Deliveries Predicted For South Florida

With healthy employment growth continuing, Berkadia predicts this year’s apartment market in South Florida will have the most deliveries in more than two decades.

Their 2019 South Florida Multifamily Market Outlook said construction was scheduled to be complete on nearly 12,000 units by year-end, up more than 18 percent from deliveries in 2018.

“Apartment leasing is expected to remain healthy too as employment growth – particularly in the professional and health sectors – is expected to outperform the national average in 2019,” the report found.

“South Florida’s apartment fundamentals continue to be exceptional thanks to sustained job and population growth combined with a trend away from homeownership,” said Charles Foschini, Senior Managing Director and Berkadia Florida Co-Leader. “There are an increasing number of ’lifestyle renters’ – people who could buy but want to live in a more dynamic, amenity-rich setting. Apartment owner/operators have been very creative in catering to that segment of the market.”

Added Mitch Sinberg, Senior Managing Director and Berkadia Florida Co-Leader, “The market for buying and selling apartment properties also remains healthy, although given where we are at the cycle, we anticipate deal volume to dip slightly in 2019. Interest rates have risen, but we anticipate a tightening of spreads will compensate for any price increase.”

Trends Include 2.1 Percent Employment Growth

Berkadia’s Florida Investment Sales and Mortgage Banking teams collectively completed over $4.5 billion in multifamily and commercial property sales and financings in 2018.

Trends cited by Berkadia:

  • Employment growth of 2.1 percent should drive leasing activity higher than inventory growth.
  • Healthy demand should shift average apartment occupancy up 50 basis points to 95.5 percent by the fourth quarter, which is slightly above the five-year average.
  • Average effective rent is forecast to rise 3.7 percent to $1,606 per month.

 

Source: GlobeSt.

South Florida Commercial Real Estate Transactions Increase in 3Q 2018

South Florida total retail transactions increased 7.5 percent year-over-year in 3Q 2018, according to the 3Q 2018 The Quarterly Report – South Florida Commercial Real Estate released by data firm Vizzda (Visual Data) and the MIAMI Association of Realtors Commercial (MIAMI Commercial).

Miami-Dade, Broward and Palm Beach counties registered 216 combined retail transactions in 3Q 2018, up 7.5 percent from the 201 retail transactions posted in 3Q 2017. It marked South Florida’s second consecutive quarter of retail transactions growth and the first time since 3Q 2017 South Florida retail has recorded more than 200 transactions in a quarter.

“Retail follows rooftops,” said MIAMI Commercial President Jennifer Wollmann, an associate with EWM Realty International in Coral Gables. “South Florida’s population boom, a strong housing market and booming tourism are driving South Florida retail growth. As Broward and Palm Beach counties residential population grows, many retailers are finding opportunities in Broward and Palm Beach.”

Miami-Dade County and Broward County Retail Transactions Each Jump More than 15 Percent

Miami-Dade County’s 83 retail transactions in 3Q 2018 represent a 15.2 percent increase from 2Q 2018 and tie the second-highest quarterly total for the past five quarters. Dollar volume for retail property also enjoyed its second highest value from 3Q 2017.

At $477 per square foot, Miami retail valuations for retail property are nearly 67 percent above the average realized in 2Q 2018 and represent the first quarterly average above $400 in over a year.

Broward County retail sales increased to the highest level in more than year, recording 83 transactions with strong quarterly and annual growth.

Palm Beach, meanwhile, posted 50 retail transactions in 3Q 2018, up 6.4 percent year-over-year. The figure tied with 2Q 2018 for the most sales in over a year. Consistent transaction volume of about 50 sales has yielded a wide range of dollar and square footage volumes over the previous year.

Broward County Industrial Average Price Increases to $131 per Square Foot

Average price per square foot in Broward County rose to $131 per square foot in 3Q 2018, the highest for the market since 1Q 2018.

In Miami-Dade County, the total square footage of industrial transacted continued its growth from 2Q 2018 and registered a total above 3.5 million square feet for the first time since 3Q 2017.

Palm Beach industrial sales were down for a second straight quarter resulting in declines in square footage and dollar volume transactions. But the magnitude of the reduction of the latter two metrics was roughly the same, resulting in per square foot valuations that were unchanged from 2Q 2018.

Miami-Dade County Multifamily Dollar Volume Jumps 133.6 Percent 

Miami-Dade County multifamily dollar volume increased by more than 133.6 percent, from $232.9 million in 2Q 2018 to $544.2 million in 3Q 2018.

Broward County saw substantial increases in both dollar volume transacted and units sold on transaction volume that was consistent with the previous two quarters. Broward multifamily realized its highest per unit valuation in more than a year at just over $203,600 per unit in 3Q 2018.

Palm Beach multifamily total dollar volume hit its lowest point in five quarters. Dollar per unit fell by 34.6 percent to $153,000.

Click here to read the complete 3Q 2018 The Quarterly Report – South Florida Commercial Real Estate.

 

Source: PRWeb

Pompano Beach Business Industrial Park Acquired For $62.3M

Stockbridge Capital Group has acquired Powerline Business Park, an industrial park in Pompano Beach, for $62.3 million.

Cushman & Wakefield negotiated the deal on behalf of the seller, Industrial Development Co., as well as arranged $31.1 million in acquisition financing through State Farm Insurance Co., for the buyer.

Located at 4100 Powerline Road, the property comprises 443,720 square feet spread across 24 small-bay buildings. The assets were constructed on a 26.4-acre site between 1983 and 1994.

Powerline Business Park offers features including dock-high truck loading and grade-level, air-conditioned office space, electric roof ventilators in shop areas, city-served water and sewer, skylights, overhead 12- by 14-foot doors, 16- to 20-foot clear heights, illuminated parking, heavy duty three-phase electrical service to each bay and professional landscaping and exterior maintenance. Major tenants at the 96.8 percent-occupied park include First World Imports, Bernoti Corp. and CMC Bakery.

The buildings provide convenient access to Interstate 95, Florida’s Turnpike, Fort Lauderdale-Hollywood International Airport, Palm Beach International Airport, Miami International Airport, Port Everglades, PortMiami and Port of Palm Beach.

The Cushman & Wakefield Capital Markets team of Vice Chairman Mike Davis, Executive Directors Scott O’Donnell, Rick Brugge and Michael Lerner, Managing Director Dominic Montazemiand Senior Associate Greg Miller represented the seller. Senior Director Jason Hochman of Cushman and Wakefield’s Equity, Debt and Structured Finance Group secured the low fixed-rate loan. Earlier this month, members of the same team negotiated the $12 million sale of a five-building industrial portfolio in West Palm Beach and Riviera Beach on behalf of The Silverman Group.

“The South Florida industrial market remains a target for investors with demand driven by the exceptional performance of existing assets, the scarcity of for-sale product and limited development opportunities,” Scott O’Donnell said in a prepared statement.

 

Source: Commercial Property Executive

Coming Up Quickly For CRE In 2019: Three Trends

Miguel Pinto of APEX Capital Realty just signed the first two tenants at their Little River listing, known as an innovative warehouse complex that illustrates some of what he views as the top three trends/predictions for next year.

The Little River project at 300-320 NE 75th Street is an innovative warehouse complex that has been developed into a flexible multi-business space concept offering tailored tenant build-outs in 24 industrial spaces. They can be easily built-out and tailored to meet different space needs of each tenant and their particular individual business.

APEX Capital Realty founded in 2017 as a local boutique brokerage within a year began adding staff and expanding to a national market. Their focus continues to specialize on the urban core of Miami as well as other major cities throughout the US.

What are those three trends that he predicts for GlobeSt.com?

1. Tokenization, a new method of financing real estate deals.

“It will change how commercial real estate is done for the better in 2019,” he says. It makes ownership easier by using cryptocurrency into tokens that are stored on the blockchain. The effect is to allow virtually anyone to invest in a new and unique real estate asset class.

“For real estate investors, tokenization will be a new way to raise equity or debt on deals,” he says. It will also reduce a traditional reliance on banks and financial institutions for capital.

2. Opportunity Zones.

“This versatile program has the potential to stabilize and revitalize distressed neighborhoods and surrounding communities by unlocking private investment capital through a series of tax benefits,” he says.

The provision allows individual and corporate investors to defer capital gains tax until 2026 if those gains are reinvested into new construction or major rehabilitation of projects in economically depressed areas via designated opportunity funds.

“The expectation is that the added tax incentives will make investment in these disadvantaged areas just a little more enticing and add another option to the capital stack,” he says.

3. Industrial development/ecommerce is on the rise.

“The expansion of e-commerce is far from over, and the need for facilities to accommodate a denser distribution network is acute and will only increase over time,” he says.

He sees the redevelopment of infill properties becoming distribution facilities to increasingly meet market needs.

“I see investment in industrial space as a good bet for 2019 in all markets in the region. Last-Mile distribution centers will keep being built and filled as communities grow and expand and delivery time keeps shortening,” he says.

 

Source:  GlobeSt.

Former Office Depot HQ In Delray Beach Sells For $33M To Make Way For Mixed-Use Project

A joint venture led by 13th Floor Investments, Key International and CDS International just bought the former Office Depot headquarters in Delray Beach for $33 million, with plans to redevelop the property into one of the biggest projects in the city’s history.

New York-based TransAmerica Life sold the 43-acre site at 2100, 2300 and 2350 South Congress Avenue and 2200 Old Germantown Road. Avison Young’s Keith O’Donnell represented the seller in the deal.

“The developers plan to build about 600 apartments and about 150 for-sale townhomes along with 100,000 square feet of retail and restaurant space,” said Arnaud Karsenti, managing principal of 13th Floor Investments.

Apartment rents will average about $2 per square foot, or about $2,000 a month for a 1,000-square-foot apartment.

Key International and 13th Floor will be handling the residential component of the development, while Boca Raton-based CDS International will be in charge of the commercial space, according to Karsenti.

“CDS already owns the Arbors office building nearby on a 7-acre property that will be incorporated into the project,” Karsenti said. “The as-yet-unnamed development is expected to break ground later this year. First, however, the developers will need to demolish three existing buildings on the site that have been vacant for a number of years.”

Karsenti expects the project could be finished about three years from the time it breaks ground.

“The center point of the development will be a park, which will attract people who have dogs, children or just want some green space,” Karsenti said.

The project was designed by RLC Architects. The plans were recently confirmed by the Delray Beach City Commission.

Delray Beach has experienced a rush of interest from developers who are attracted to the Palm Beach County city because of its walkable downtown and its proximity to the ocean. Among them, six bidders are trying to transform downtown’s West Atlantic Avenue’s 600 to 800 block into a bustling mixed-use project and National Realty Investment Advisors plans Ocean Delray, a 19-unit boutique condo development.

 

Source: The Real Deal

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Golf Anyone? Anyone? Developers Reimagine South Florida’s Money-Losing Courses

The Carolina Club, an 18-hole championship golf course in Margate, has served as a qualifying site for the PGA Honda Classic and is known for its fast, well-manicured greens and contoured fairways.

But the semi-private club, built in 1971, isn’t making the cut. Miami-based developer 13th Floor Homes plans to acquire the 140-acre facility and completely transform it into a 350-unit residential community, with single family homes and townhouses.

The proposed homes would cost about $300,000 to $400,000 each, meaning the developer stands to make more than $120 million in total sales. The current owner, J&D Golf Properties, would also stand to profit from the sale. It purchased the club in 2002 for $5.3 million.

The Carolina Club conversion is just one of several planned golf course redevelopments in South Florida, as golf operators weigh the rising expense of maintaining fairways and greens against the diminishing revenue. Couple that with the game’s waning popularity nationwide, and owning a golf course is now a risky proposition.

“Less people play golf, and those who do play are playing less rounds,” said Mike Nunziata, president of 13th Floor Homes. “Operators are having to cut rates to attract players. The industry is now in a place where the revenue just isn’t enough to cover the costs to maintain itself.”

His company has developed a niche business statewide for building residential communities on former golf courses. From the 1970s to the 1990s, the game experienced a rise in golf course construction — spiking in Florida — along with some residential communities nestled alongside. Nunziata said that development far exceeded demand.

Despite several closings, Florida still has the highest number of 18-hole golf courses in the country. And just in Miami-Dade, Broward and Palm Beach counties, there are 177 18-hole equivalent golf course facilities, according to the National Golf Foundation. That’s down from 189 in 2007. But many others are barely hanging on, industry pros said.

“The golf courses were purely being built to sell the homes and support neighboring residential communities,” Nunziata said. “It was really more a real estate play and not so much a strategy that was centered around golf.”

In addition to his plans for Carolina Club, the developer is converting an 18-hole course in Delray Beach into Avalon Trails, a 521-unit residential community geared toward people 55 and older. Other projects in the works include a single-family home community over what are now two 18-hole golf courses in Tamarac.

In Hollywood, the Pulte Group is building 645 homes — including townhouses and single-family homes — at the former Hillcrest Golf & Country Club. The area covers 160 acres, and will rise over the 18- and 9-hole courses.

Atlanta-based Pulte is also developing 152 homes on nine of Woodmont Country Club’s 18 holes. It paid $10.2 million for the property in 2016.

But just as Tiger Woods appears to be on the comeback trail, the game itself has been evolving and companies are adapting to the next generation of fans and players. Topgolf, a Texas-based entertainment and technology-themed firm, has been establishing a presence in major commercial centers around the world, including Miami. At least five Topgolf facilities have either opened or are being planned in Florida. The first opened in Miami Gardens in 2016.

Investors are also considering other uses for all that golf course land. Soccer superstar and entrepreneur David Beckham is considering transforming the Melreese Country Club in Miami into a 25,000-seat Major League Soccer stadium. Beckham and his partners, Marcelo Claure, Jorge and Jose Mas, and Simon Fuller have put the price tag at $200 million.

For Topgolf, facilities are typically three-story entertainment complexes that feature a driving range, restaurant and bar. The golf balls are microchipped so statistics like distance and accuracy can be tracked and translated into points for games.

In some cases, they’re being built on existing courses, as in West Palm Beach. There, a Topgolf facility will rise on the 196-acre West Palm Beach municipal golf course. And while it could be seen as a competitor to 18-hole courses, Topgolf says it works closely with institutions like the Professional Golfers’ Association to help some courses stay open.

Topgolf spokesperson Morgan Schaaf said Florida is a natural place for Topgolf to expand, which the company is doing at a rapid rate. Topgolf is aiming to open seven to 10 locations a year, she said. It’s also going international, with facilities planned for Australia, Canada and Mexico within the next five years. Schaaf added that half its customers are golf novices because the company makes it more accessible than a traditional course.

Despite Topgolf’s popularity, a love for the course is still strong in Florida. Developer Lennar had been under contract to build homes on the 212-acre Ocean Breeze Golf Club in Boca Raton, which shut down in 2016 after having lost money and members for years. But plans skidded into the rough amid opposition from Boca Teeca duffers who were left with no options.

Sunrise-based GL Homes had already acquired the nearby Boca Raton Municipal Golf Course for $65 million. It plans to replace the 27-hole, 194-acre course with a community of 500 homes.

Earlier this month, the city of Boca Raton and its Greater Boca Raton Beach and Park District bought the 27-hole Ocean Breeze course for $24 million. The seller, Wells Fargo, seized the property through foreclosure. The renovated golf course, to be called the Boca Raton National Golf Club, is set to open in late 2019 or early 2020. It is expected to be a costly endeavor, up to $18 million to renovate and about $2.2 million per year to maintain.

“That kind of community effort appears to be an outlier,” said Brent Baker, Pulte’s Southeast Florida division president. “Only two kinds of golf courses will stay open in the future. The first is the one that requires membership fees, and the second is a public golf course that is subsidized by taxpayers, though even those — as seen with the Boca Raton municipal course — have great difficulty staying afloat. The math usually doesn’t add up. To keep a golf courses operating you’re talking hundreds of thousands of dollars, sometimes millions of dollars a year.”

 

Source: The Real Deal

Medical-Marijuana Ruling Put On Hold By Florida Appeals Court

In a closely watched case, an appeals court just agreed to put on hold a circuit judge’s ruling that said Florida lawmakers and the state Department of Health have violated a 2016 constitutional amendment that broadly legalized medical marijuana.

The 1st District Court of Appeal approved a stay of the ruling but also said consideration of the underlying issues in the case would be “expedited.” The Florida Department of Health went to the appeals court in October after Leon County Circuit Judge Charles Dodson sided with the Tampa-based firm Florigrown in a battle about how the state is carrying out the constitutional amendment.

Dodson found that a 2017 law was unconstitutional and issued a temporary injunction requiring state health officials to begin registering Florigrown and other medical-marijuana firms to do business. Dodson’s ruling targeted parts of the law that placed caps on the number of medical-marijuana licenses and dealt with issues such as the creation of a “vertical integration” system that requires marijuana operators to grow, process and sell medical marijuana — as opposed to businesses being licensed to play different roles in the industry.

The case could open the door to more firms doing business in that broadly legalized medical marijuana.Florida’s fast-growing medical marijuana market. Florigrown, for example, filed the lawsuit after being denied approval by the Department of Health.

In arguing for the stay, Department of Health attorneys this month wrote that allowing Dodson’s order to “take effect injects confusion and uncertainty into the implementation of the medical marijuana amendment and the registration of MMTCs (medical marijuana treatment centers, as the firms are known) throughout Florida,” the filing said. “Under the existing status quo, the department may only grant an MMTC license to an entity after vetting its qualifications. In contrast, under the injunction order, it is unclear how the department would determine which entities are qualified to operate as an MMTC, or if any registration process would exist at all. This is because the department’s authority for establishing such rules … would be gone, nullifying the implementing rules already established by the department.”

But attorneys for Florigrown disputed such arguments.

“Contrary to the department’s assertions, Florigrown produced an abundance of evidence establishing the public harm that is occurring because of the Legislature’s unconstitutional limits on the registration of medical marijuana treatment centers,” the firm’s attorneys said in a brief last week. “It also established that sufficient guidelines already exist to protect the public. The department produced no evidence or testimony to the contrary. All the trial court has done is direct the department to allow the ‘registration’ of MMTCs. Once an MMTC is registered, it must still meet other requirements before it can actually commence operations.”

The Department of Health’s appeal of Dodson’s ruling in October triggered an automatic stay. But Florigrown then returned to Dodson and requested that he vacate the stay — which he did in a Dec. 4 order.

Attorneys for the department then went to the appeals court, essentially asking that the stay be reinstated while the appeal of Dodson’s October ruling moves forward.

The Tallahassee-based appeals court granted that request, saying in a one-page order that “The stay shall remain in effect pending final disposition of the merits of this appeal.”

As is common in such orders, the appeals court did not explain its reasoning. But it also said the appeal will be expedited.

With Florida potentially one of the most-lucrative markets in the country for medical marijuana, disputes about licenses have led to numerous court and administrative fights. More than 71 percent of voters approved the medical-marijuana constitutional amendment in 2016.

In the appeals-court filing this month, the Department of Health said “14 medical-marijuana treatment centers had been registered and licensed and that they operated 72 dispensing locations across the state.”

 

Source: SunSentinel

The Real Estate Trends Expected To Shape Cities In 2019

As industry experts cast predictions of how various smart city sectors will evolve in the new year, one sector is offering a blurry outlook for 2019: real estate.

While commercial activity has been on the rise, particularly from expanding technology firms, shifts in e-commerce, affordable housing and residential demographics have also spurred many questions for how the urban real estate landscape will transform.

The Urban Land Institute and PricewaterhouseCoopers (PwC) has analyzed this real estate forecast and compiled insights in its 40th annual Emerging Trends in Real Estate report. While 2018 promised to be a year of tech adoption and activity among Generation Z buyers, 2019’s biggest trends will likely include cybersecurity risk management and prioritizing resilience.

“Think of this year’s trends as circles in a Venn diagram,” the report reads. “Trends will overlap, indicating that they interact, and over time those interactions (sometimes involving more than just two circles) foster new conditions that can alter either the features of the trend, its relative strength, and even its duration. We aren’t in coloring-book world anymore.”

Hot Markets To Watch

Each year, the Emerging Trends survey — which reflects the views of more than 2,300 individuals, including property owners, real estate investors, homebuilders and developers — highlights areas that rank high for investor interest.

The report authors wrote, “Growth appears to be in vogue for 2019,” noting that survey respondents favored markets with growth potential over traditional “gateway” markets.

Dallas/Fort Worth took the crown as the top market for overall real estate prospects, up from the No. 5 spot in 2018.

The top 20 list includes:

  • Dallas/Fort Worth
  • New York/Brooklyn
  • Raleigh/Durham, NC
  • Orlando, FL
  • Nashville, TN
  • Austin, TX
  • Boston
  • Denver
  • Charlotte, NC
  • Tampa/St. Petersburg, FL
  • Atlanta
  • Miami
  • Salt Lake City
  • Los Angeles
  • Orange County, CA
  • Seattle
  • Fort Lauderdale, FL
  • Washington, DC
  • Indianapolis
  • San Antonio

Seattle — which ranked No. 1 in the 2018 report — came in at No. 16 for 2019, which the authors suggested may be to the blame of the media for its coverage of the city’s real estate market. The authors also noted the list is so vastly different from last year’s list due to the impacts of 2018 tax laws. Overall, however, it is noted there is not a market in the survey that is ranked poorly based on respondent answers.

“The bottom line is that opportunities are available in all markets,” the report reads.

Experiential Retail

The surge of the e-commerce industry has turned retail on its head in recent years, transforming brick-and-mortar stores and shopping plazas into vacant canvases for new development possibilities. The rise of experiential retail will likely shake-up real estate opportunities in 2019, as developers look to “creative solutions” to take advantage of the evolving retail industry — such as combining retail and non-retail offerings into mixed-use properties.

“Over time, cities and suburbs may have the new opportunity to support — through zoning or master-plan amendments — needed development on sites previously dedicated only to retail,” the report reads. “In any given community, new uses may include housing, schools, or any activity for which land availability had been limited. These new uses will, in turn, create new demand for retail goods and services.”

Retail properties, specifically in cities, will also likely see more technology implementation in 2019 to collect consumer data and optimize the shopping experience. The report notes that this trend will become lucrative for the real estate market, suggesting that monetizing data collection of a retail building “might someday generate more income than traditional leases.”

Cybersecurity Risk Management

Cybersecurity scored 3.14 out of 5 on an “importance of issues” scale in the 2018 report. For 2019, cybersecurity is now described as an “industry disruptor” by the report authors, scoring 3.44 out of 5 on the importance scale.

“The increased flow of data and growing use of mobile devices to control facilities are raising awareness about the need for more sophisticated cybersecurity,” the report reads.

The authors list cybersecurity risk management as an issue to watch in 2019, noting that the popularity of internet of things (IoT) technology infiltrating building components has made the overall real estate industry more vulnerable to attacks. An interviewee of the survey noted the need for real estate leaders to establish “industry norms and best practices” to defend against cyberattacks and evaluate the efficiencies and vulnerabilities of such technologies.

Building Resilience

As is the trend for any smart city-related sector, building resilience into the framework of the real estate industry is crucial for long-term sustainability — especially as changes in climate have brought unprecedented destruction to a number of U.S. markets.

The report estimates natural disasters in 2017 — including Hurricanes Harvey, Maria and Irma — cost an estimated $306 billion in the U.S. These and impending natural disasters have put a heightened focus on resilience in real estate.

Two particular factors — an increase in risk and the potential for decreased property values — are driving much of the focus on resilience. Nearly 25% of the National Council of Real Estate Investment Fiduciaries (NCREIF)’s Property Index value is in cities among the 10% most exposed to sea-level rise, according to the report. Such flood risk has caused property values to decrease in some areas, particularly in flood-vulnerable regions on the East Coast; properties in such regions of New York, Connecticut, New Jersey, Florida, South Carolina, North Carolina, Virginia and Georgia had lost $14.1 billion in value between 2005 and 2017, according to the report.

The report authors suggest embracing resilient design (both of real estate properties and surrounding infrastructure) to enhance protection of at-risk markets. Such investments in resilience are said to not only benefit properties in the long run, but make them far more attractive to investors.

“Investing in resilience may also become an effective part of a community engagement strategy and help limit local opposition to a project,” the report reads.

 

Source: SmartCitiesDIVE

Report: After Strong Growth, Industrial Development Slowing Slightly Nationwide

The number of industrial buildings coming online nationally slowed slightly in the first nine months of 2018, after several years of strong growth.

A total of 237 million square feet of new industrial space was delivered across the country from January through September, down slightly from 243 million square feet year over year, according to a new report by Avison Young.

The slowdown follows a major growth period for industrial development across the country, with 1.5 billion square feet of new space coming online since 2012, the report said.

“The surge in deliveries in previous years left many markets struggling to absorb the new space, and developers unwilling to start new projects,” Avison Young principal Erik Foster said. “As the existing space is filled, new projects will start getting launched.”

Markets like Los Angeles and Chicago have been leading the way in industrial market growth, and developers have benefited from record low vacancy rates and strong rent growths. But after years of growth, even those markets slowed this year.

Chicago saw 10 million square feet of new industrial space in the first three quarters of 2018 — a steep drop from the 22.6 million year over year, according to Avison Young. Los Angeles saw 5.4 million square feet of new industrial space through three quarters, which is about 77 percent of the way to its 2017 total of 7 million square feet.

In Chicago, the drop in deliveries caused vacancy rates to continue falling, with the 5.7 percent vacancy in the third quarter a 20 basis point drop year-over-year. That’s not the case in Los Angeles, where vacancy in the Inland Empire area increased to 4.9 percent but is still near record lows.

While deliveries are down so far in 2018, they won’t be for long: More than 337 million square feet of new industrial space is under construction across the country, the report said.

New Jersey has already eclipsed its 2017 industrial delivery total, with 10.3 million square feet of new space coming online through three quarters of this year, compared with 9.7 million square feet delivered all last year.

In Miami, demand for warehouse space has pushed vacancy rates to a record low 2.7 percent in the third quarter, falling 33 basis points year-over-year. But more than 4 million square feet of industrial space under construction will increase the supply.

“Secondary markets across the country are now benefiting from the same economic factors that caused a surge of industrial development in larger markets,” Foster said.

Growth in e-commerce is leading companies to increase the amount of industrial space needed for productive storage and delivery. Columbus, Ohio, for example, has seen 4.3 million square feet of industrial deliveries so far this year, eclipsing 2017’s year-end total of 3 million new square feet. In Greenville, South Carolina, 2.8 million square feet has been delivered through the end of the third quarter, eclipsing 2017’s total of 2.3 million square feet of new development.

 

Source: The Real Deal