Oakland Park Tranforms Into A Low-Key, Hipster Enclave

Oakland Park, the suburban city just north of Fort Lauderdale, began as a bustling farm town called Floranda in the early 1900s.

Among the first settlers were Mr. and Mrs. Joe Johns, who arrived to their swampy patch in South Florida in their Model T Ford in 1914. The Johns’ farm was the site of the community’s first grocery store. The boom ended in 1926, when the great hurricane smashed Florida peninsula.

Three years later, residents replaced Floranda with Oakland Park, a name that pays homage to the massive oaks in the city that withstood the storm’s monster winds. By the 1950s, the city became a satellite vacation spot for snowbirds unable to find hotel accommodations in Fort Lauderdale. In 1956, brothers Jack and Bob Thornton opened Mai Kai Restaurant, a Polynesian restaurant that cost $400,000 to build and was famous for its tiki decor, dance shows and potent rum cocktails. At the time, it was the most expensive price tag for a restaurant construction project in the U.S.

Today, Mai Kai is one of Broward County’s top tourist destinations and is one of two locations in Oakland Park listed on the U.S. Register of Historic Places. The other is the Oakland Park Elementary School, which was built in 1925.

As far as real estate development, Oakland Park mirrors other suburban municipalities in Broward with post World War II, low-rise multifamily and office buildings and outdoor shopping centers.

Signs Of Change

In the spring of 2013, Funky Buddha Brewery opened its full-scale production beer-making facility and tap room in a converted warehouse in the heart of Oakland Park’s downtown. By securing the craft beer company to anchor the city’s culinary arts district, Oakland Park’s leaders made it clear they were ready to transform a drab downtown into a lively destination.

In the last five years, other hip restaurants and retailers targeting a younger, sophisticated demographic have followed Funky Buddha into the culinary arts district, said Jaime Sturgis, CEO and founder of Native Realty Co. For instance, remodeling services company Allied Kitchen, Bath and Home opened its second showroom at 616 West Oakland Park Boulevard in 2016. Luxury lifestyle fitness company G21 opened a gym, meditation room and smoothie bar at 3400 Northeast 11th Avenue in November 2017. And Antique to Chic, an antique furniture retailer is relocating from its current Wynwood location to the Match Point building at 1510 East Oakland Park Boulevard.

Sturgis handled the sale of the Match Point building to Antique to Chic.

“Oakland Park was a sleepy city for a very long time,” Sturgis said. “It was a place for working class families. In the last five to 10 years, the demographics have started to shift. People have more disposable income and Oakland Park has become more progressive and youthful.”

Residential Take

“The demand for residential is strong because you have many employment drivers so close in proximity. Broward led the state with job growth and there are great economic elements. If you can find urban infill, east of I-95 sites around employment drivers, and develop a product that is in demand, I believe you can do very well,” said Adam Bedzow, Ceiba Groupe managing principal.

Commercial Take

“The value in the office market is pretty considerable when you compare the rental rates in downtown Fort Lauderdale. There is definitely opportunity for tenants who are willing to go a little north. You are starting to see things you haven’t seen a lot of, such as industrial buildings getting converted to retail uses. All that helps drive growth in the market,” said Brady Titcomb, JLL vice president.

Demographics

Population: 43,660
Median Age: 39
Median Income: $46,447
Average Household Net Worth: $227,890

Price Trends

– Median residential sales price per square foot: $177, roughly 2% less than the Broward County average
– Decrease in average rent over the last year: 13% to $1,800

Most Expensive Residential Sale: A three-bedroom, two-bathroom waterfront house at 1732 Northeast 35th Street sold for $680,000 on May 10

Least Expensive Residential Sale: A two-bedroom, one-bathroom house at 371 Northeast 51st Street sold for $75,000 on April 24

Most Expensive Home On The Market: A four-bedroom, four-bathroom house at 1777 Northeast 39th Street is listed at $692,000

New Developments

Ever since a moratorium on small-scale residential projects was lifted in October, development in Oakland Park has picked up its pace. In January, Bedzow’s Ceiba Groupe unveiled plans for a rental townhouse project on a 6.6-acre site at 1000 Northeast 58th Street. Plans show 114 townhomes totaling 181,000 square feet, plus a clubhouse, a pool and 252 parking spaces.

“We are focused on identifying areas where people want to live and are underserved with a certain type of products,” Bedzow said. “The rental pool is still growing and there is unmet rental demand. We see Oakland Park as a great location that hasn’t seen new rental construction for a long time.”

Ceiba Group will face a lot of competition from other multifamily developers. Local developer Amos Chess and Don Deitchman are planning to redevelop two former strip clubs into a mid-rise apartment building with ground-floor commercial space. The development, known as O2, is located at 3339-3347 North Federal Highway. It will have 165 units totaling 119,000 square feet and another 31,795 square feet of retail.

Chess and Deitchman also want to develop Round Corner, a mixed-use project that would wrap around the historic Kennan Building at 3101 and 3201 North Federal Highway. The developers would build a new 274-unit apartment building that would include some micro units, 20,100 square feet of commercial space and parking garages. The Kennan building would be renovated.

 

Source: The Real Deal

, ,

CRE Industry Veteran Dan Casey, CCIM Joins CRE Florida Partners To Expand Commercial Investment Brokerage

Michael Rauch and Thomas Robertson, co-founders of Rauch, Robertson & Co. and CRE Florida Partners, welcome Dan Casey, CCIM to its team of professional commercial real estate specialists.

Dan Casey, CCIM is a senior real estate advisor with over twenty-five years of commercial real estate brokerage, development and management experience. His extensive market knowledge and broad-based expertise enables him to identify sound investment opportunities and develop value-enhancing strategies that maximize investment returns and minimize risk.

Dan has brokered commercial property acquisitions, dispositions and provided underwriting and due diligence advisory services on property and portfolio transactions of more than $500 million. He has represented commercial property owners and tenants in office, industrial and retail lease transactions totaling 510,000 square feet. His extensive background includes complex property transactions and successfully implemented distressed real estate workout and repositioning plans.

His management experience includes asset management of institutional property portfolios of 3.7 million square feet of Class A office.  As a Development Project Manager, he oversaw the design and construction of over $68 million of new construction and capital improvements projects, as well as tenant improvement projects of more than 350,000 square feet of Class A office and retail space.

“Dan will be critical to expanding our firm’s Commercial Investment team throughout the tri-county areas in South Florida,” commented Rauch. “We are excited to have him as a member of our real estate family.”

Dan earned the prestigious CCIM designation in 2010 and has been an active member of the CCIM Florida Chapter since moving to the state from Southern California in 2009.  In 2017, he sat on the CCIM Florida Chapter’s Executive Committee, served on the East Coast District’s Board of Directors since 2015, and is currently serving his second consecutive term as District President.  Dan is a graduate of Trinity University where he majored in History and minored in Business.

CRE Rauch, Robertson & Co. is seeking leasing and investment sales professionals for its growing commercial real estate expansion in Broward and Palm Beach counties. Multiple positions are available within these and other Florida markets that offer a unique ground floor career opportunity to work closely with the firm’s Founders Tom Robertson and Michael Rauch to move their vision for the CRE Florida Partners brand forward. Commission and benefits are commensurate with experience. A Florida Real Estate License and Commercial Real Estate experience are required. Only qualified candidates should apply by forwarding resumes to mail@crefloridapartners.com.

 

Broward Leads South Florida Job Growth In April

While unemployment continued to decline in April, job creation was a mixed bag in South Florida, according to data released by the state on Friday.

“Florida’s economy is in an expansion mode that is in its late phases,” said Sean Snaith, economist for the University of Central Florida in Orlando. “It’s hard to sustain high rates of job growth. Florida is still adding jobs more rapidly than the U.S. economy, but our lead is narrowing.”

Broward County’s jobless rate fell to 3.2 percent compared with 3.7 percent in April 2017, according to the Florida Department of Economic Opportunity. Meanwhile, the county added 12,800 jobs, an increase of 1.5 percent over the year. That was the most jobs added in the tricounty region.

Construction led job growth in Broward, with the addition of 3,400 jobs, followed by 3,100 jobs in professional and business services; 2,100 in other services; 1,000 in trade, transportation and utilities; 800 in manufacturing; 800 in leisure and hospitality; 400 in government; 100 in information; and 100 in education and health services. Broward didn’t lose any jobs in April 2017.

Palm Beach County’s unemployment in April declined to 3.3 percent from 3.8 percent a year ago. The county added 500 jobs, an increase of only 0.1 percent. There were 2,800 new jobs in construction; 1,800 in financial activities; 1,700 in leisure and hospitality; 700 in manufacturing and 600 in government. However, Palm Beach County also lost jobs over the year: 3,600 in education and health services; 1,800 in trade, transportation and utilities; 900 in professional and business services; 500 in information; and 300 in other services.

Miami-Dade County’s jobless rate was 4.2 percent compared with 4.6 percent in April 2017. The county added 12,300 jobs, an increase of 1 percent over the year. The county added 6,200 jobs in manufacturing; 5,800 in construction and mining; 3,800 in education and health services; 1,000 in professional and business services; and 700 in trade, transportation and utilities. Miami-Dade also lost jobs over the year: 2,000 in financial activities; 1,500 in government; 1,000 in other services; 500 in information; and 300 in leisure and hospitality.

Florida’s unemployment rate was 3.9 percent seasonally adjusted, unchanged from March but a decline from 4.3 percent a year ago. The state added 178,400 jobs, an increase of 2.1 percent over April 2017.

 

Source: SunSentinel

Location Of Possible New Dolphins Headquarters In Miramar Revealed

The Dolphins are looking for a new home. Miramar has the land and a pretty sweet deal.

That is why the Southwest Broward bedroom town is on a very short list to land the team’s headquarters, should the Dolphins move from Davie.

Miramar Mayor Wayne Messam recently told residents about a very preliminary plan to lease a 21-acre plot of land between Everglades High School and Glades Middle School to the Dolphins for a self-funding new practice facility.

While the terms of the nascent financial deal were not made public, the Dolphins would be headquartered there for at least the next two decades, leasing the land for a negligible amount. This is only possible because the Dolphins are considering (but certainly not set on) a move from their Nova Southeastern home for the last quarter-century.

“Our benefits would come from a community benefit package, direct and indirect economic benefits of having the Dolphins here in our community,” Messam said after the 90-minute open forum. “It would be more of a comprehensive deal. The Dolphins will be fully funding and financing their own construction of their site. There will be no public dollars that will go into the construction of the facility.”

The team is considering three sites in Miami-Dade and Broward, but were not prepared to name the others. The Dolphins want additional training facility space for their locker room, cafeteria, weight room and physical therapy room, among other upgrades. But a source said they have by no means ruled out making those upgrades at Nova Southeastern.

The Dolphins are still evaluating whether there’s enough space on the Nova campus to achieve everything they would like to do and how much those upgrades would cost if they remain at Nova. The Dolphins’ contract with Nova includes a series of three-year options than run through 2033, according to Nova president George Hanbury.

Asked if he would be receptive to the Dolphins leaving in the middle of one of those three-year options, Hanbury said: “That’s something we would have to discuss. We’ve never looked at it as a tenant/landlord. We’ve looked as partner in community.”

Hanbury declined to say if there was any financial penalty for the Dolphins leaving during their contract. But Hanbury made clear the Dolphins can stay as long as they would like.

“I am sure other cities would love to have the Dolphins,” Hanbury said. “Any business is always looking for opportunities. That’s a business decision on their part. We are very happy to have the Dolphins on our campus. They have got opportunities to stay there as long as they want. The Dolphins have options for further expansion on our campus if they decide to remain long-term. As part of the Dolphins’ agreement with the university, Nova students receive free tickets to games,and the Dolphins agreed to have their trainers and coaches speak to our students occasionally.”

Miramar would look for a more robust partnership, based on Messam‘s presentation, and Dolphins officials insist they will be great neighbors, regardless of where they end up. The proposed Miramar site would be a few miles west of Interstate 75, between Dykes Road and Southwest 172 Avenue, bordered by Bass Creek Road to the north.

Messam said that Bass Creek would likely be expanded from two to four lanes, should the Dolphins move there. The facility would include a field house with an indoor field, two regulation-sized outdoor practice field, offices, training and weight rooms and lockers.

“The deal would likely need to include some sort of property tax incentive for the Dolphins,” Messam said. “Construction would be completed in approximately two years from the time an agreement is reached.”

“We haven’t ranked these sites, but Miramar has location, location, location,” said Marcus Bach-Armas, the team’s senior director of legal and government affairs. “It’s a great place to work, it’s a great place to play.”

 

Source: Miami Herald

West Palm Beach Might Revive Rezoning Plan To Encourage Downtown Office Development

West Palm Beach might reconsider a business district that would encourage downtown office development through rezoning.

Mayor Jeri Muoio directed city staff to revive planning for the Okeechobee Business District downtown, which the city commission rejected last year.

The proposed district would have rezoned an area that now limits the height of buildings to five stories. But opponents saw the proposal as an attempt to promote one development within the district: One Flagler, a 25-story office building proposed by The Related Companies, led by Miami Dolphins owner Stephen Ross.

Mayor Muoio told the city’s development services director, Rick Greene, to revive planning for the Okeechobee Business District to encourage downtown office development.

The city’s Planning Board is scheduled to consider the district on May 15. The five-member city commission may have enough votes to approve the Okeechobee Business District this year. Two of the three votes against the district last year were cast by city commissioners who are no longer in office.

It is unclear whether the district would again include the land where Related wanted to build a 25-story office building, which opponents had denounced as “spot zoning.”

Gopal Rajegowda, senior vice president of Related, said the company’s focus in West Palm Beach is developing an office building at another downtown site at Rosemary Avenue and Evernia Street.

 

Source: The Real Deal

Fort Lauderdale Is Booming: Here’s Why

fort lauderdale

Fort Lauderdale is booming with development.

It’s become a city of choice for savvy investors, both commercial and residential. Once known as the mecca for spring break and teenage beach movies — think Where The Boys Are with Connie Frances and Girl Happystarring Elvis Presley — Fort Lauderdale has grown up.

Historically, Fort Lauderdale had always been a secondary market to Miami. Then when prices kept rising in Miami, developers started looking for cheaper dirt and came here. We have a relaxed coastal environment, beautiful beachfront and a strong commerce center with 7.5 million of class A office space in our downtown, notes Jenni Morejon, Executive director, Fort Lauderdale Downtown Development Authority (DDA)

We have significant luxury development both in residential and hospitality underway. The residential component has a high-level of amenities, service and finishes in beautiful ocean front locations. On the hospitality side, the Four Seasons is building a beautiful property and there was a $150 million renovation at the W Fort Lauderdale, Morejon adds.

To satisfy the increasing residential base, Morejon points to over 1,000 restaurant seats coming on line over the next several months on Las Olas, Fort Lauderdale’s dining, shopping and entertainment destination for tourists and residents alike.  Las Olos (Spanish for waves) Boulevard is our crown jewel connecting the beach and downtown core.

The privately-owned Brightline, an electric high-speed train, inaugurated service between Fort Lauderdale and West Palm Beach in January. Morjon sees this as another game changer for Fort Lauderdale when the Brightline extends from Miami to West Palm Beach with a stop in Ft. Lauderdale.

Finding cheaper dirt in Fort Lauderdale is The Related Group, a major South Florida developer. The Related Group has developed luxury condominiums since 1979. Today the company is betting on Fort Lauderdale’s rapidly growing luxury branded residential condominium market.

The Related Group is developing  the two-tower Auberge Beach Residences & Spa, a luxury branded beachfront condominium part of the Auberge Resort Collection. Fronting the Atlantic, amenities include signature Auberge dining, World-Class Spa by Auberge, private elevators, wine room, cigar lounge and Fitness Center with views of the Atlantic. Currently Auberge’s North Tower is 90% sold and 75% of the South Tower sold. According to The Related Group, Auberge Beach Residences & Spa set a Fort Lauderdale’s sales record in 2017 for the highest condo sale at $9.5 million. Prices range from $1.5 million to $9.9 million.

This is a signature property and there is nothing like it right on the ocean sitting on five contiguous acres. Our sales show demand is there for the project and product. We didn’t know what to expect and went with a smaller tower first,  explains Patrick Campbell, Vice president at The Related Group.

The oceanfront W Residences Fort Lauderdale are also selling briskly. The 171 residences with prices starting in the $900,000’s is proving to be the right product for the market. With over 100 units sold to date, buyers are excited. Residents at the W will have access to all W Fort Lauderdale hotel amenities with resident signing privileges for convenience. In addition, they receive dining, room and spa discounts at W Fort Lauderdale. Owners also have the option to place their home in the W’s rental pool.

Who is buying in Fort Lauderdale? The Fort Lauderdale buyer is very different than Miami. About 75% of our buyers either have a tie to the area versus Miami where many buyers are investors or from South America, Campbell observes.  Eric Johnston of New Jersey chose the W Residences Fort Lauderdale for his fourth home, buying a two-bedroom two-bath unit in December. Miami did not have what I wanted. The location to the airport, the weather and the W product is what attracted me. I actually would have bought a larger unit if they had one.

Craig Studnicky, principal of International Sales Group, (ISG) has over 25 years of experience in the South Florida residential market. Fort Lauderdale has always been compared to Miami Beach, but now its value in terms of price per square foot is at an all-time high. From 1990 to 2010, the annual difference in price per square footage between these two destinations was roughly 25 percent. In May 2016, this difference jumped to 261 percent due to the slew of new inventory. This means that a buyer can get the same ocean views, amenities, finishes and services in Fort Lauderdale but at almost half the price.

Fort Lauderdale’s retail market is thriving with over 2.6 million square feet of commercial real estate either completed, under construction or approved since 2012.

According to Colliers International Fort Lauderdale Market Pulse Q1 2018|Overview,  Fort Lauderdale jumped to 6th place in the Top Ten U.S. Markets To Watch. This is the first time Fort Lauderdale even made into the Top Ten. Retail rents in downtown Fort Lauderdale have a 5-year growth prediction of 48% compared to 42% in Miami-Dade. Since 2013, Fort Lauderdale’s downtown retail rents have increased 51% to $35.75 per square foot compared to a 14% increase throughout Broward County (Fort Lauderdale is in Broward County.)

As a vacation destination and national cruise hub, total visitors through Fort Lauderdale-Hollywood International Airport rose from 11.3% in 2016 to 32.5 million in 2017. In addition, JetBlue, Southwest and Emirates have launched new routes within the past year to and from Fort Lauderdale expanding the potential visitor market and as an added boost to area residents for business and leisure travel.

William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami explains market dynamics.  Fort Lauderdale offers relative value compared to Miami. There is good luxury product there now that appeals to the buyer wanting a different pace than Miami.

 

Source: Forbes

VIDEO: Cypress Creek Could Undergo Bold Revitalization

One of South Florida’s busiest business districts could soon become the latest South Florida area to undergo major redevelopment.

A group of companies in a public-private partnership, is hoping to make some major changes to Fort Lauderdale’s Cypress Creek neighborhood.

Under the banner Envision Uptown, the group is awaiting final approval to re-zone and revitalize the area and turn it into a hub for business, entertainment, dining and housing.

Investors hope the changes will attract more companies to the area.

CBS4’s Eliott Rodriguez recently spoke to South Florida Business Journal real estate reporter Brian Bandell about the bold plans for Cypress Creek.

Source: CBS4 Miami News

,

CRE Investors React To Federal Rate Increases

As many expected, the Federal Reserve recently decided to raise interest rates to the range of 1.5 percent to 1.75 percent, and the increases are likely to continue in 2018.

In March, the Federal Open Market Committee meeting announced its expectation for “further gradual increases” this year. Interest rates are extremely important in the evaluation and performance of any commercial real estate investment due to their impact on the present value of future cash flows. Higher rates make borrowing more expensive for owners, and tend to raise cap rates and reduce property values. However, higher rates also mean a stronger economy, which tends to be associated with a stronger real estate market.

So how will these increases affect commercial real estate investors? Alex Zylberglait, Marcus & Millichap’s senior managing director of investment, delves into how the increase in interest rates is impacting both foreign and domestic investment in U.S. real estate.

How will the rise in interest rates influence the commercial real estate market?

Zylberglait: The Federal Reserve recently raised interest rates by a quarter of a percentage point and is expected to raise rates twice more this year. As a broker who handles investment sales targeting properties in the range of $1 million to $20 million, which is the most active segment of the CRE market in South Florida, I can say that I haven’t seen much of an impact in the commercial real estate market yet. But having said that, I do anticipate a delayed effect, with rates influencing the market in the next three to six months. What I am beginning to see are prospective buyers locking in rates for long-term financing.

On the other hand, I am seeing more properties hitting the market, as property owners seek to cash out before cap rates go up as a result of rising interest rates. For example, one of my clients who owns an office building in Miami has a mortgage that’s maturing and debt coming due. Due to rising interest rates coupled with a maturing mortgage, my client wants to unload the property now instead of selling in a higher interest rate environment. But rising interest rates is one of many factors positioned to impact the CRE market this year.

How will higher interest rates impact foreign vs. domestic investment?

Zylberglait: The impact of rising interest rates will most likely be less on foreign investment than on domestic investment. The foreigners who use financing pay a much lower interest rate in the U.S. than in their home country.

However, what we’re seeing is foreigners unloading their CRE assets. For the past seven years, foreign investors have steadily moved away from buying pre-construction condos and turned their attention to CRE properties in Miami. As the Fed raises interest rates coupled with the real estate cycle nearing an end, foreigners are now cashing out for different reasons. Based on where we are in the real estate cycle, foreign investors are selling to capitalize on the rapid appreciation that the South Florida market experienced in the last five years. They no longer expect a significant appreciation so many of them have no reason to hold on to their properties.

Can you give an example?

Zylberglait: One of my clients from Argentina, who has been buying commercial properties in South Florida for nearly a decade, is now selling a single-tenant building occupied by Starbucks in one of Miami’s hottest markets, Doral. He recently renegotiated a nice lease deal with Starbucks to maximize sales proceeds in order to invest in value-add opportunities in the region.

Another one of my clients, Metro Capital Partners, which invests capital from Colombia in Miami, is another example of this trend. Metro recently sold an office building in Miami-Dade County’s West Kendall submarket for $7.9 million, after acquiring it in a 2014 distress sale for $3.2 million. For the most part, these investors are selling to either buy more assets in South Florida or pay down debt on other properties. Foreign investors continue to see our region as a safe place to grow and protect their capital even as interest rates continue rise.

What impact will the rate increase have on the South Florida market?

Zylberglait: In this real estate cycle, a significant amount of assets in South Florida were priced aggressively, with 2015 being the peak. As the market stabilizes or levels off, a rise in interest rates will contribute to faster stabilization of prices, resulting in investors preparing for slower growth and appreciation.

However, some of my clients who are more yield driven are looking outside of South Florida to places like Orlando and Tampa. We are starting to see a migration of investors and developers northward. For example, Dezer, a well-known developer in South Florida, recently purchased a shopping mall in Orlando with plans to redevelop it into an entertainment complex.

Another example is Riviera Point Development Group, a South Florida developer that purchased 3.3 acres on 11551 International Drive, a few miles from Seaworld, where he plans to build a dual-branded hotel, La Quinta Inns and Suites, and Tryp by Wyndham. Riviera Point developed five office buildings in South Florida and a Radisson Red Hotel near Miami International Airport in this real estate cycle. When it came time to purchase more land, Riviera Point’s CEO Rodrigo Azpurua chose Orlando because of land values and appreciation, which can mitigate the impact of rising interest rates. But having said that, I may add that land values in Orlando today are not as advantageous as they were a year ago.

How will the CRE market respond as interest rates continue to rise?

Zylberglait: Everyone knew rising interest rates were coming and as a result, we haven’t seen much of a reaction in the market. There’s no panic. However, the value for Class B and C assets is softening and I expect to see a divergence between Class A, B and C assets.

 

Source: Commercial Property Executive

,

Palm Beach County Trying To Spur Development Of Affordable Housing As Rents, Prices Rise

Palm Beach County is searching for solutions to help teachers, restaurant managers and nurses find affordable housing when high rents and home prices are the norms in South Florida.

Suzanne Cabrera, president of Housing Leadership Council of Palm Beach County, said she hears far too often from moderate-income workers affected by the housing crunch.

“It’s hurting businesses needing to recruit entry-level employees,” Cabrera said. “It’s as bad as ever. I dread getting my phone calls. I dread reading my emails. People need things we just don’t have. I am really worried about the effect it’s going to have long term if we don’t address it.”

The county launched an initiative in 2006 to require developers to set aside a certain percentage of new homes and apartments as price-capped “workforce housing.” In exchange, developers could build more homes than allowed by county development rules. To qualify for workforce housing, a family of four would need to make between $40,740 and $95,060. But that program hasn’t produced the number of affordably priced units county leaders envisioned. One reason is builders have elected to pay an $81,500 per home buyout fee instead of constructing the workforce housing.

Not one price-capped single-family home has been built under the program. In its 12-year history, the program has produced 871 priced-capped apartments and 121 townhomes. Developers have contributed about $3 million into an affordable housing fund that commissioners are considering using to provide up to $38,500 in down-payment assistance for people looking to buy those below-market townhomes.

Now, county commissioners are looking at adjustments to the program that a consulting firm says could spur the development of affordable housing. One proposal would raise the developer’s buyout fee for a workforce home to $120,000. Developers would be granted even more density for building workforce housing, potentially doubling the density of their projects. An exchange would be created that would allow builders to partner with affordable housing developers to satisfy the requirement.

Housing prices throughout South Florida are rising. In Palm Beach County, an average apartment rents for $1,370, and the median price of a single-family home is $345,000. In Broward County, an average apartment rents for $1,858, while the median sales price for a home is $335,000. Miami-Dade tenants pay an average of $1,618, and the median price for a home is $332,500.

Other communities are crafting plans to help lower-income workers afford housing. Miami-Dade recently unveiled a proposal to build affordable housing for teachers next to schools in high-rent neighborhoods.

Home prices under Palm Beach County’s workforce housing program can range from about $142,000 to $264,000. That price range gets adjusted through the years, based on the county’s median family income.

Rental rates for homes built under the workforce housing program are also capped. For example, monthly rental prices allowed for a two-bedroom apartment under the program could range from $972 to $2,268.

The county’s consultant — BAE Urban Economics — wants to adjust the program to provide a minimum 10 percent profit margin for builders, an effort to ensure that it would be lucrative enough for developers to actually construct priced-capped housing.

Industry groups aren’t totally on board with the plan. Skeet Jernigan, president of the Community and Economic Development Council, said it shouldn’t fall solely on builders to pay for affordable housing efforts when restaurants and hotels don’t pay a wage that allows people to afford housing.

“You are never going to solve workforce housing by expecting to finance it solely on the back of the builders who build housing in the community,”Jernigan said. “It has to be a countywide effort, and other segments of the economy must be involved or this process will totally, totally fail. It’s also possible the county’s efforts could carry unintended consequences. Additional costs — such as higher fees — will be passed on to the buyers of homes not in the county’s workforce program.”

“Allowing developers greater density could create disputes, too, with neighbors,” Commissioner Hal Valeche said. “Commissioners are reviewing the proposals and will likely decide in coming months on how to alter the program. If we do this properly, the builders can be profitable with both market rate and affordable units.”

 

Source: SunSentinel

,

Developers Reimagine South Florida’s Money-Losing Golf Courses

golf course

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

, , ,

CRE Florida Partners Completes Boca Raton Office Building Sale

Michael Rauch and Tom Robertson, Senior Managing Partners with CRE Florida Partners, represented the owners, MDS Builders, in the sale of an office building located within Boca Raton Professional Plaza at 301 Crawford Blvd. in Boca Raton.

The office building sold for $2,700,000 ($180 per square foot) with a cap rate of 6.4%.

The 1979-built 2-story office building, which is located in the heart of Downtown Boca Raton’s business district, totals  ±15,004 square feet and is 100% occupied. It has recently been updated and renovated.

“The property has a solid mix of local, well established tenants, very low deferred maintenance and a class “A” location, making it an attractive purchase,” commented Rauch.

Tom Robertson & MIchael RauchCRE Rauch, Robertson & Co. is seeking leasing and investment sales professionals for its growing commercial real estate expansion in Broward and Palm Beach counties. Multiple positions are available within these and other Florida markets that offer a unique ground floor career opportunity to work closely with the firm’s Founders Tom Robertson and Michael Rauch to move their vision for the CRE Florida Partners brand forward. Commission and benefits are commensurate with experience. A Florida Real Estate License and Commercial Real Estate experience are required. Only qualified candidates should apply by forwarding resumes to mail@crefloridapartners.com.

 

Toys R Us’ Liquidation Will Send Ripples

The likely liquidation of Toys R Us, the nation’s largest independent toy seller, could add stress for the companies that make toys and games, and mean changes for the owners of the strip malls where most of its stores are. Not to mention its impact on more than Toys R Us‘s 30,000 U.S. workers.

Here’s a look.

What Happens To Toy Makers?

Toy companies, both big and small, will lose a place to test new toys. Toys R Us was a launchpad for emerging trends and toys, such as ZhuZhu Pets, which were the must-have holiday toy in 2008.

“Toys R Us was known as an incubator,” said Jim Silver, editor-in-chief of toy review site TTPM.com.

The toy makers will also have to find new places to sell their goods.

“The bigger toy makers — Hasbro and Mattel — will likely hurt at first, but then find their footing at Walmart, Target and Amazon,” says Richard Gottlieb, a consultant at Global Toy Experts.

Toys R Us accounts for about 11 percent of Mattel’s annual sales and about 9 percent of Hasbro‘s annual volume, analysts estimate. Both have posted lackluster financial results of late, and there was talk last year about the possibility of a merger between them.

But smaller toy companies will have a harder time. Silver believes they will be hurt more than Mattel Inc. and Hasbro Inc. since Toys R Us could account for up to 40 percent of their overall business. And big stores, such as Walmart and Target, are less likely to sell smaller brands because they have less space to sell toys. Stephanie Wissink, a toy analyst at Jefferies, wrote in a recent note that small companies will explore selling themselves to survive. She thinks that Hasbro and Mattel will be best positioned to add more small- to medium-sized toy makers to their portfolios.

What Happens To The Real Estate?

Real estate executives offer different opinions on whether landlords can easily fill the holes at the strip centers where most of the Toys R Us locations are.

“Given the chain’s issues, the closings aren’t a shock to landlords, and they’ve already been trying to line up possible tenants to replace Toys R Us over the past few months,” said Katy Welsh, a senior vice president at the southern Florida division of the commercial real estate brokerage firm Colliers International.

Welsh says she’s been working with a number of companies like Glowzone, an entertainment park, and Lucky Markets, which offers beer tastings in its stores, which would be interested in taking some of the spaces nationwide.

“You have to look at this as an opportunity to reposition that store,” Welsh said.

But Suzanne Mulvee, director of research for CoStar, a real estate research firm, says that 51 percent, or 450 Toys R Us’s stores are in shopping centers considered low-quality. So landlords could struggle to replace them with tenants at similar rates — or worse, they could remain vacant, she says. She says she also believes that matching the size of the box, which average about 30,000 square feet, could be difficult as well.

“The sweet spot seems to be boxes that are under 25,000 square feet, ” Mulvee says.

What Happens To The Brand?

Toys R Us, as a well-known and long-lasting brand, may yet have a future — the company even quoted its classic jingle in its bankruptcy filings. And other seemingly dead retailers have a way of coming back to life.

American Apparel, which closed all its stores last year after filing for bankruptcy, was revived by another company as an online-only clothing store. FAO Schwarz, which Toys R Us once owned, is opening shops inside department stores in the U.S. and China. And Sharper Image, which also shut its stores, now sells gadgets online and opened a New York pop-up shop during the holidays last year.

 

Source: Miami Herald