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A little chest thumping never hurt anybody — especially when business is sizzling during inflationary times.

The economic development agency for Palm Beach County made a splash in Times Square in New York City with some targeted advertising. (PHOTO CREDIT: Business Development Board of Palm Beach CountY)

In a case of “strike while the iron is hot,” or perhaps before it turns cold, the Business Development Board of Palm Beach County just took its decade-old “Wall Street South” campaign to midtown Manhattan with the purchase of one-day ads on giant electronic billboards in Times Square and nearby neighborhoods.

“Wall Street South. Head for Palm Beach, Florida,” said one. “Wall Street South. Your Future Is Bright in Palm Beach, FL.” said another.

Fort Lauderdale’s Downtown Development Authority, meanwhile, is circulating a report declaring that its central business district and Flagler Village are generating as much economic activity as Port Everglades and Fort Lauderdale-Hollywood International Airport. For this, think about amounts for each entity that are north of $30 billion a year.

The heads of both agencies are advocates of maintaining hard-earned momentum in a highly competitive economic development game made more difficult by stubborn rising costs for businesses and households.

Kelly Smallridge, president and CEO of the development board, said in an interview that her nonprofit agency caught a deal that was hard to resist: Color ads in three locations for $20,000 — not only for this past Wednesday, but for the forthcoming New Year’s Eve celebration as well.

“This is probably the boldest strategy from an advertising perspective  we’ve engaged in anywhere in Manhattan,” Smallridge said. “I can’t image the hype that’s going to take place when it airs on New Year’s Eve.”

Development board representatives have been visiting New York for years touting the county’s “Wall Street South” campaign, which is designed to persuade executives from financial firms to locate or relocate offices, including headquarters, in Palm Beach County.

Smallridge said her agency was approached by a billboard ad firm and offered a discount rate designed for nonprofit agencies.

“We got very lucky and took advantage of it,” Smallridge said. “We could no way afford the real cost. They approached us to see if we wanted to buy it. They never would have had us on their radar had not been such a big story already. Every time you go to Manhattan, people say, ‘it’s not if we will move, but when.’”

She said the ads appeared at the Times Square Tower, the 43rd Rotunda, and on the “I Love NY” Board at 1530 Broadway,

In a statement, the Business Development Board says that since 2019, it has helped 100 firms open offices in Palm Beach County, which is home to 57 billionaires and 70,000 millionaires. Over the years, the board has even connected headmasters of local schools with company executives to assure them that their children will receive top-notch educations in the county’s schools.

“The 10-year campaign has yielded great results and has certainly boosted our economy in Palm Beach County from Boca Raton to Jupiter,” Smallridge said. “Among those gains: higher salaried jobs, more philanthropic donations to local nonprofits, and companies “run by very smart people. They want to be ingrained in the community,” she said of the newcomers. “None of them has received any financial incentives to move here. We are definitely becoming a finance hub in the Southeastern United States. It’s going to be a continuous effort and we’re not going away any time soon.”

A Surge In Fort Lauderdale

Jenni Morejon, the DDA president and CEO, said the downtown’s growth has its “building blocks” in the wake of the recession triggered by the housing collapse 15 years ago.

But that growth has been gradual with a spike triggered by COVID-19 and a growing desire of out-of-state residents to relocate to places such as Fort Lauderdale,said Morejon.

A report commissioned by the DDA and authored by Walter Duke + Partners, a commercial real estate appraisal firm,  concludes that the downtown area, which is defined as a 2.2-square-mile area that runs north of 17th Street to the central business district, Flagler Village and Sunrise Boulevard, “has an annual economic impact of $35.7 billion, a $6 billion increase from 2019.”

“Clearly, the silver lining to COVID was the 250 residents moving in a month into the downtown core,” Morejon said. “The vibrancy of downtown stayed and people were coming into the office. Businesses saw that and continued to locate here.”

The impact figure rivals Port Everglades and Fort Lauderdale-Hollywood International Airport, the authority says. They combine for more than $105 billion in economic activity such as jobs, generation of tax revenue and business transactions.

“There are 40 new developments “somewhere in the review pipeline, with some approved by a city review committee,” said Morejon. “I think the sustainable growth in downtown Fort Lauderdale is certainly something unique. Not a lot of cities get that. We’ve grown in population about 35% since 2020, a little over 60% since 2018 and almost a complete doubling of population since 2010.”

The downtown area is now roughly 26,000, according to the report.

The DDA, though, has no plans to broadcast highlights of its uplifting report on Times Square billboards. In the past, Visit Lauderdale, the tourism promotion agency for Broward County, has advertised its latest campaigns there.

“I emailed it to all of my peers in public and private leadership roles,” Morejon said. “The message to the private sector is to continue to show how economically successful downtown is and how it’s great place to relocate to. From a political standpoint it can be a real center that can benefit the entire county and region.”

 

Source: SunSentinel

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The U.S. commercial real estate industry’s ability to get credit and, therefore, fortunes have strong ties to the 4,648 insured banks (according to the FDIC) in the country that provide about 38.6% of CRE loans.

Anything that negatively affects the stability and credit ratings of the banks is an issue for the CRE industry. Despite multiple federal officials and regulators repeatedly saying that the entire banking system is sound, Moody’s recently cut ratings on a number of smaller and regional banks and put some larger ones on notice that they might face potential actions.

Now Fitch Ratings analyst Chris Wolfe warned in a CNBC interview that the current financial state of banks couldn’t be taken for granted. It is possibly that a slight change in conditions for the industry, with an overall rating drop like the one Fitch instituted in June, could force a reconsideration and credit downgrade of some major banks, including JPMorgan and Bank of America, because an individual bank can’t have a credit rating higher than the industry as a whole.

In June, Fitch downgraded banks’ “operating industry” score from AA to AA- “because of pressure on the country’s credit rating, regulatory gaps exposed by the March regional bank failures and uncertainty around interest rates,” as CNBC wrote.

A second downgrade would leave the industry at A+. Currently, JPMorgan and Bank of America, among some other of the largest banks, have an AA- rating from Fitch.

JPMorgan said that it did not have a comment in reply to a GlobeSt.com request. Bank of America also said it wouldn’t comment, but did send a copy of Moody’s May 3, 2023, upgrade of the “long-term debt and deposit ratings, counterparty risk ratings and counterparty risk assessments of Bank of America Corporation” and its rated subsidiaries and the baseline assessment of its principal bank subsidiary, Bank of America, N.A.

However, in today’s quickly changing economic environment, the date of that upgrade is close to four months old. Downgrades would have serious implications for banks and for CRE lending. With a lower rating, banks have higher credit costs and more concerned investors and depositors. That could drive banks to polish up their balance sheets even more, which in turn could mean reductions in CRE lending and selling off of existing loans, which would drive down their value and that of existing loans, undermining valuations going forward.

 

Source: GlobeSt

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Looking for an industrial site with lots of truck parking? You could be in luck if real estate assets owned by the trucking company Yellow come on the market.

The company filed for Chapter 11 bankruptcy on Aug. 6, and the shutdown is expected to put hundreds of industrial properties up for sale or lease, according to CoStar Group’s August 2023 real estate data update.

“Even though most of Yellow’s properties were built before 1985, one key advantage is that they offer abundant truck parking, which is in short supply in major U.S. markets,” CoStar noted.

With truck terminals in most major U.S. cities, Yellow or its subsidiaries have “at least seven facilities” in each of New York, Chicago, and Los Angeles.

In total, CoStar tracks more than nine million SF of industrial space that is either owned or leased by Yellow or its subsidiaries in more than 240 U.S. cities. Yellow’s 2022 annual report refers to more than 300 properties across North America.

While Yellow’s bankruptcy may increase the supply of industrial space, Amazon may be ready to do the opposite. Each month from May through July, Amazon put 600,000 SF of warehouse space up for lease, CoStar noted. However, CoStar believes Amazon’s strong second quarter earnings report suggests that strategy could change.

“The company may be returning to a more offensive strategy when it comes to growing its distribution space,” CoStar commented. It cited the second quarter’s 9% boost to Amazon’s net sales from online stores and third-party seller services compared to 2Q 2022, as well as Amazon’s plans to double the number of same-day delivery facilities it operates.

 

Source: GlobeSt

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If there’s one thing the pandemic shed a spotlight on, it is how the global supply chain was not ready for an influx of consumerism.

Ships were backed up at some of the world’s largest ports, meaning that hardware, car parts and furniture were absent from retailers’ usual inventory.

Richard Thompson, international supply chain director at JLL,  summed it up earlier this year when he said, “The pandemic exposed how fragile our global supply chain was when reliant on one region. A more regionalized model allows companies to be nimbler when problems arise.”

Industrial real estate investors have benefitted from the pivot to a regional supply chain focus. The asset class has outperformed almost all other commercial sectors. During the past two years, JLL found that industrial investment activity picked up across the entire spectrum as automotive companies continued diversifying their footprint. And as supply chain logistics move to nearshoring and reshoring, investors are snatching up regional industrial space opportunities, especially near busy ports.

For example, Miami-based real estate and investment firm Black Salmon, in partnership with InLight Real Estate Partners, this week announced the $103 million disposition of Hicks Transload Facility, a Class A truck terminal and trans-loading warehouse in the Port of Savannah, the country’s third busiest port, as well as the disposition of Rex Distribution Center in Atlanta, Georgia.

“There was a tremendous amount of volume in Savannah and the state has invested billions into the port, so we found there was a lot of opportunity for us and it was just a matter of finding the right property,” Black Salmon Managing Director Stephen Evans told Benzinga. “The site in Savannah was perfect for a truck terminal. This wasn’t about warehousing. The trucks come in on one side, empty their containers and then transfer the materials to the next destination.”

According to a June report from Motley Fool, industrial commercial real estate has grown 10.3% in the past 12 months, led by demand for logistics space and limited available real estate. The vacancy rate for industrial is also the lowest in commercial real estate (CRE) at 4.3%. That performance, which is outshining the multifamily and office sectors, is fueling the present and future investment strategies of companies like Black Salmon and InLight.

“Our firm focuses primarily on industrial real estate, although it’s a type of CRE which has a different set of fundamentals that we’ve been working with since the beginning of the company,” InLight Principal Matt DiLeo said.

DiLeo also noted that industrial investors for specific property uses aren’t necessarily looking for new, high-end properties.

“We are building a value add and bridging the gap with the older facilities who need a tenant that doesn’t necessarily need all the bells and whistles,” DiLeo said.

As for the future of industrial investment, Evans is bullish and says he has already raised funding for the next year of targets.

“If I were to pick one single product type today to invest in, it would be industrial,” Evans said. “E-commerce has been the huge disruption in the industrial supply chain, and capitalizing on that disruption and how it impacts the space, has allowed us to reap the benefits.”

 

Source: yahoo!finance

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Trammel Crow Residential (TCR) acquired an industrial site in Delray Beach that already has approval for an apartment complex.

Eckols ‘70 Ltd and Admiral ‘80 Ltd., both managed by Richard Eckhouse and Norman D. Olson in Boca Raton, sold the 6.74-acre site at 1155 S. Congress Ave. to the Dallas-based developer for $12.67 million.

The property last sold for $616,000 in 1980, so the sellers generated a huge return after a long-term investment. It currently has a 29,250-square-foot warehouse, but it will be demolished to build apartments.

 

Source: SFBJ

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Lenders and special servicers are looking beyond refinancing options when it comes to working with borrowers on commercial real estate loans that are set to mature in the coming months and years, even as those loans increasingly are backing properties facing distress.

According to an analysis by Moody’s Investors Service, the percentage of real estate properties that use commercial mortgage-backed securities debt that are being refinanced is on the decline. Conduit refinance rates were 78.1% and 71.8% in the first and second quarter of this year, respectively, compared to 85.5% in 2019, the year before the Covid-19 pandemic and broader economy upended the commercial real estate market.

“Given the low interest-rate environment that existed before the pandemic, it wasn’t surprising to see so many loans refinanced then, especially if a borrower had a strong debt-service coverage ratio, which measures available cash flow versus debt obligations,” said Matthew Halpern, vice president and senior credit officer at Moody’s Investors Service.

Interest-rate hikes imposed by the Federal Reserve over the past year in the wake of rising inflation have compressed real estate values. Add to that rising vacancy rates and a weaker leasing environment in especially the office sector, and the pressure has increased on building owners with loans coming due in the near term.

“Some loans are performing well from in-place cash flow but are unable to refinance,” Halpern said.

Lenders also have tightened standards in the wake of a more challenging economy and commercial real estate market, with some banks outright saying they’ve stopped new lending to office properties. While fewer loans are getting refinanced overall, there’s been an uptick in the number of performing loans that are past maturity but haven’t been formally extended. That amount, negligible before the pandemic, reached 5.2% in Q1 of this year and 6.9% in Q2.

“That means the borrower is still making interest and principal payments as if the loan hadn’t matured — which typically suggests the borrower is committed to the property,” Halpern said. “Because the overall refinance rate has declined in recent quarters, the number of performing loans past maturity has naturally risen.”

The Moody’s analysis, which only examined CMBS loans, found 16.7% of maturing loans tracked by the firm were delinquent as of the second quarter. That share was much higher in the office sector, with 27.6% of office loans scheduled to mature in Q2 2023 considered delinquent.

 

Source: SFBJ

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The owner of Bedner’s Farm Fresh Market, a popular agricultural attraction, has proposed rezoning part of its land west of Boynton Beach for industrial development.

Bedner’s Farm Fresh Market has proposed industrial rezoning on the two parcels outlined in red in Palm Beach County.
(IMAGE CREDIT: JMORTON PLANNING AND LANDSCAPE ARCHITECTURE)

Bedner Brothers Farms, managed by Stephen Bedner, filed a land use amendment with Palm Beach County officials concerning 14 acres of the 19-acre site at 10066 Lee Road, on the west side of U.S. 441.

The Bedner family proposed changing the zoning of the strawberry and pumpkin fields from agricultural to commerce/light industrial, which would allow up to 274,428 square feet of industrial uses. That could include warehouses, flex office/warehouse or self-storage facilities. However, the five-acre site including the farmer’s market would be preserved through a conservation easement.

The land use amendment will require County Commission approval. A hearing before the board is tentatively scheduled for Nov. 1.

 

Source: SFBJ

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According to Coconut Creek officials, plans to build a warehouse complex in the city’s south part are in the “best interest of the city.”

City commissioners are expected next week to take the first set of votes on whether to permit developers to build a 385,000-square-foot light industry complex on vacant land on the northwest corner where Atlantic Boulevard and Lyons Road connect.

Those plans have already been approved by two city panels and will now advance to the commission for final decision.

The commission will need to rezone the land and approve the building plans before the 36-acre property — owned by Coolidge Inc. – can be developed into three buildings. The property was approved in 2008 for a 340,000-square-foot Lowes Home Improvement and Kohl’s plaza, but was never constructed.

Some nearby residents have spoken out and sent letters to city officials urging them not to move forward with the building plans out of concern for traffic, noise and other issues. Developers — and some real estate brokers — have said the complex would meet demand for new industrial buildings to support “service-oriented uses and distribution of goods” in Broward County.

The Cocomar Business Logistics Park, as the complex would be called, would be designed for local and national businesses looking for “Class A logistics space,” according to plans.

The project is expected to create more than 3,200 jobs and generate more than $1.3 million in impact fees for Coconut Creek and Broward County, according to plans.

The buildings would range in space from 61,055-square-feet to 167,350-square-feet. The site would include 314 parking spaces, a preserve, and relocation of more than 80 trees and two palms, as well as landscaping buffering with nearby homes, according to plans.

According to city documents, the city finds the complex’s site plans are “in the best interest of the city” and consistent with land regulations.

City commissioners are schedule to vote on the property’s rezoning and site plans on Thursday, July 13, at 7 p.m. at Coconut Creek Government Center, 4800 West Copans Road.

 

Source: TAPintoCoconutCreek

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Industrial outdoor storage (IOS) is emerging as an increasingly popular property sector among institutional and other types of investors.

Interest in the sector ramped up during the pandemic as space was needed for container storage to relieve backlogged ports. Estimates from the experts WMRE interviewed suggest that the U.S. IOS market, which represents a niche within the larger industrial asset class, ranges somewhere between $130 billion and $200 billion in value.

Zoned for industrial use, IOS sites typically house vehicles, construction equipment, building materials and even shipping containers on an interim basis and range in size from two to 10 acres, often including a small building. The sector has been referred to as a “beautiful ugly duckling” by Green Street’s Vince Tibone since the properties are just lots with storage containers and construction equipment that have delivered “exceptional” returns over the last three years and brought in more institutional investors for funds raising hundreds of millions of dollars to target IOS.

While the sector is not immune to the same forces that are affecting other property types in the current environment, Tibone said he remains bullish on IOS over the next five to 10 years. Investor demand for IOS has been buoyed by strong recent operating results, favorable long-term supply/demand dynamics and a minimal cap-ex burden with an option to use the land for a higher and better use at some future time.

IOS sites located in infill submarkets in particular can deliver risk-adjusted returns “that are superior to those available on most other commercial real estate investments, including traditional industrial,” Tibone said. However, the fragmented, non-institutional ownership structure of the sector today makes it difficult to invest at scale, he noted.

“IOS portfolios do not come on the market often and the best returns are likely available through one-off deals, where there could be operational upside left on the table from the prior owner,” Tibone said. “Those with the patience and wherewithal to aggregate infill IOS sites over time should be rewarded with robust total returns relative to other property types.”

Among investors that are currently raising funds and targeting acquisitions in the IOS marketplace is EverWest Real Estate Investors, a Denver-headquartered real estate investment advisor with $5.2 billion in assets under management, including in the industrial, multifamily, office and retail sectors.

EverWest operates open-end funds and three single–client accounts with industrial strategies focused on IOS. The average size of the deals it has completed ranges between $10 million and $25 million.

So far in 2023, EverWest acquired two IOS sites—39.6 acres south of Atlanta for $12 million and 4.12 acres in Miami for $12.5 million, according to John Maurer, EverWest’s senior managing director and head of portfolio management. In May, the firm also invested in an industrial asset in Carlson, Calif. that includes acreage that can be used for IOS.

Part of the appeal of the sector is that when U.S. industrial inventory tightens and rents rise, IOS sites rise in value as they become reliever locations for a wide range of logistics activity, Maurer noted. In addition, in a market where industrial assets are still often priced at a premium, with cap rates as low as 4.5%, an IOS site adjacent to such a traditional industrial asset will often sell at a cap rate that’s 50 basis points higher. Rental rates in the sector have also been rising by 3.5% to 4.0% a year, according to Maurer.

EverWest’s open-end fund, the Open End Diversified Core Equity Fund in the NFI-ODCE Index, has a target return of 10%. Like Tibone, Maurer noted that the IOS marketplace is less institutionalized than regular industrial and has more fragmented ownership.

“We think because it’s difficult to acquire these sites that are smaller, if you aggregate portfolios in a target market that there’s going to be a cap rate compression,” Maurer said.

As a result, EverWest aims to aggregate a number of acquisitions from different sellers to build up its IOS holdings. Over the past 12 to 18 months, the firm has invested about $200 million in the IOS sector and it hopes to double that volume in the next 12 to 18 months. EverWest is also planning to launch an enhanced fund with a higher return strategy in the near future that will have a significant IOS component, according to Maurer. The firm is hoping to build off its current investor base of public and private pension plans, foundations and endowments, insurance companies and financial advisors for the fund, Maurer said.

However, Maurer admitted that EverWest’s transaction volume is currently about 15% off what it was a year ago because the increase in interest rates has made the firm more selective in making new purchases.

“There are some compelling opportunities in the marketplace in terms of attractive return potential, given where rates are today versus they were 12 months ago,” Maurer said. “We always want to look at where pricing is going and take advantage of correctly priced opportunities. What we see is sellers ultimately capitulate and need liquidity, so they will sell at market-clearing prices based on our new model for interest rates in the current environment.”

Assuming a leverage level of 40% to 40%, EverWest’s investments can deliver gross returns of 12% to 14% over a seven- to 10-year period, Maurer noted. That would require a barbell approach of doing straight up five-year lease IOS deals, he said. There would also need to be some value-add component for redevelopment in its strategy. About 20% of the IOS marketplace is about adding a warehouse over time, Maurer noted.

Change Is Coming

In the meantime, the number of institutional players involved in the sector is growing. For example, Brooklyn-based Zenith IOS, a builder and owner of outdoor storage properties, has partnered with institutional investors advised by J.P. Morgan Global Alternatives, to buy hundreds of millions of dollars of IOS properties last year. In February, J.P. Morgan and Zenith IOS announced a $700 million joint venture to buy more IOS assets.

Another active participant in the marketplace is Alterra IOS, which is part of Philadelphia-based Alterra Property Group, a real estate investment and development company that, according to reports, made more than $850 million in acquisitions over the past year.

In its most recent announcement, dated June 22nd, the firm expanded its presence in Las Vegas by acquiring a six-acre site for $7 million—its third in the marketplace.

Alterra declined to comment on its current fundraising effort, instead referring to a public filing from the Ventura County Employees’ Retirement Association (VCERA). The filing contained a recommendation to commit $35 million from the pension fund to Alterra’s IOS Venture III fund. Alterra’s goal has been to raise $750 million for the fund targeting IOS properties, according to IPE Real Assets. A previous Alterra fund raised $524 million in 2022, exceeding the firm’s goal of $400 million.

IOS Venture III will target smaller, infill IOS assets operating on triple net leases. Part of the value proposition of these assets, according to VCERA’s filing, is that they are typically owned by single owner-operators and have escaped the attention of most institutional investors. Alterra also plans to leverage its in-house management and leasing expertise to pursue value-add strategies for the assets. The firm estimates that it will generate from 30% to 40% of its total returns through the assets’ current cash flow, creating annual cash flow yields of 6% to 8%.

The fund has an eight-year horizon, with two one-year extension options, and will offer a preferred return to investors of 9%, with a carried interest of 20%. The fund’s net IRR target is between 14% and 16%, with a leverage ratio of 65%.

In addition to VCERA, Alterra’s equity investors include other public pension funds, foundations, endowments, insurance companies and family offices, both domestic and foreign, according to Managing Director Matthew Pfeiffer.

“Investors are finding IOS an attractive proposition right now because, unlike with a number of other real estate assets, supply is structurally muted, with municipalities not being incentivized to add new zoned land for outdoor storage,” Pfeiffer said.

He also mentioned the attraction of low cap-ex.

“Beyond the favorable supply and demand dynamics, IOS also benefits from being a very low capital expenditure business translating into low frictional leasing costs to put new tenants in the space,” Pfeiffer noted. “Lastly, the tenant profile is largely credit and national, under a triple-net lease structure that further entices institutional capital’s interest in the space,”

According to BJ Feller, managing director and senior vice president at Northmarq, cap rates on traditional industrial properties have gotten so aggressive in recent years that institutional capital was looking for opportunities with a similar profile, but more attractive cap rates.

“Once they’ve been able to establish their credibility and track record in the segment, we’ve seen operators have great access to the capital sources who want to play in this asset class,” Feller said.

He added that while equity inflows to the sector have “cooled to a certain degree” on a year-over-year basis, they remain robust relative to other property types.

“Most of the decline has been a reaction to caution that cap rates may be going mildly higher and offer better acquisition opportunities in the months ahead,” Fuller said.

 

Source: Wealth Management

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Many families and business executives relocate to Palm Beach County for a number of reasons.

Low taxes and no personal state income tax, the balmy winter days, and often an escape from the harried lives they led “back North” have lured them South.

What they’ve also found is both a burgeoning and existing business community representing many of the core sectors leading the charge into the new economy. These include information technology and telecommunications; healthcare and health tech; manufacturing, warehousing and logistics; business services; aviation, aerospace and engineering; even equestrian and agribusiness across thousands of open acres to the west.

The growth of financial services, private equity and investment banking has been so concentrated and profound, with names like Citadel, BlackRock and Goldman Sachs coming to town, the Palm Beaches have been coined “Wall Street South.”

What each finds is a pro-business, relocation-friendly infrastructure keen to launch, lure or retain new businesses. That’s atop the county’s enduring allure as a vacationer’s and business traveler’s destination. Travel and tourism in 2022 welcomed a record 9.1 million visitors with a total estimated economic impact of $9.7 billion.

It all continues to grow, adding to a county with over 1.5 million residents. Some 70% of business recruitment projects handled by the Business Development Board of Palm Beach County are from out of state, atop the 460 corporate headquarters already here. Topping the list: Carrier, TBC Corp., Office Depot, SBA Communications and ADT.

“We’re officially ‘Wall Street South,’ with many financial firms relocating from New York to the Countycounty, and we only see that trend accelerating as new Class A office buildings open within the next few years,” said BDB President and CEO Kelly Smallridge, whose organization in the last fiscal year landed 33 corporate relocations and expansions, secured some 2,500 jobs, and drove $362.5 million in capital investment. In fact, over half of those deals were from out of state. “With an A-rated public school district, 115 private and faith-based schools and world-class higher-ed, executives are learning Palm Beach County has the best opportunities for business and family.”

Today, the county is part of a tricounty region of over 6 million that’s the largest economic engine in a state that is the nation’s fourth largest, with $1.4 trillion in gross state product in 2022 and would be the 16th-largest economy if it were a sovereign nation, notes the International Monetary Fund.

Think of the county as a collection of 39 interconnected municipalities each adding to the greater whole. Eastside destinations, such as Boca Raton, Lake Worth and Delray Beach, bring culture, dining and entertainment that attracts visitors from across the region and world. To the west, Wellington is the global epicenter of winter equestrian sports.

The names of those calling the county home have changed its very reputation. Once known only as a vibrant vacation destination, today it’s a hub of business and industry. Ken Griffin’s Citadel and other investment and private equity firms are only the most recent arrivals to “Wall Street South,” the banking, financial services and insurance (BFSI) sector centered in West Palm Beach.

As a medical device manufacturing hub, Johnson & Johnson subsidiary DePuy Synthes, Precision Esthetics, SurGenTec and Boca Raton’s own Modernizing Medicine are among the hundreds here that make life sciences among the county’s hottest sectors.

The county’s diversity makes it a prime market for health care providers. Regional names, such as Cleveland Clinic Florida, Nicklaus Children’s Health System and Baptist Health each have made inroads in the county. Baptist, for example, acquired several hospitals – —Boca Raton Regional Hospital and two Bethesda hospitals in Boynton Beach – — and continues to add new services. These include institutes for cancer, vascular care, women’s health, neuroscience and orthopedics. In all, the county has 23 hospitals, from county-run facilities and leading national health care providers.

The county is a hotbed for higher education. Beyond the UF / Scripps deal, Palm Beach State College recently announced TGL, a new tech-infused virtual golf program and prime-time league co-founded by Tiger Woods and Rory McIlroy, that will attract world-class golfers from around the world on its Palm Beach Gardens campus.

Palm Beach Atlantic University, which recently received Association to Advance Collegiate Schools of Business accreditation, unveiled a new state-of-the-art, six-story business complex planned for downtown West Palm Beach.

Florida Atlantic University (FAU), a top public university as ranked by U.S. News & World Report, is a significant contributor to the region’s economic growth and development. It awards more than 8,000 degrees annually, making it first in the nation for degree completion, as noted by the Association of Public & Land-grant Universities, and top 20 and top 40, respectively, for graduating African American students and Hispanic students with bachelor’s degrees.

FAU’s undergraduate entrepreneurship program is ranked 27th and the graduate program is ranked 42nd in the nation by The Princeton Review. FAU has received the Carnegie Community Engagement Classification, an elective designation that indicates institutional commitment to community engagement.

Another literally high-profile ranking: the school’s men’s basketball team last season had the best season in program history. It notched a school-record 35 wins, the nation’s best record (35-4), a perfect 17-0 record at home and a spot in the NCAA Tournament’s Final Four.

FAU’s various colleges – — of business, engineering, technology, life science and others – provide next-generation talent for the region’s growing workforce needs, often alongside career training organization, CareerSource Palm Beach County. As the region expands, employers are turning to such providers to prepare skilled workers.

Suffolk Construction, for example, partners with universities to build its pipeline, said Chris Kennedy, VP of preconstruction with the firm, whose list of work in the county includes The Bristol, Plumosa School of the Arts Expansion, The Strand, One City Plaza, and ongoing projects such as Palm Beach International Airport Concourse B Expansion, Royal Palm Residences in Boca Raton and the Ritz-Carlton Residences Palm Beach Gardens.

Among the talent it seeks are those skilled in construction management services, including such lines as its real estate capital investment, design, self-perform construction services, technology start-up investment and innovation research/development.

“We are seeing more seasoned construction professionals start to retire, so the need for younger talent is even more dire,” added Jay Fayette, Florida East Coast president for Suffolk.

To the west, the aviation, aerospace and engineering sector is home to over 1,600 companies, led by Pratt & Whitney, Lockheed Martin, Sikorsky, Aerojet Rocketdyne and Northrop Grumman. Interspersed where large-parcel land permits, is the burgeoning distribution and logistics sector for companies seeking proximity to a metro area of over six million stretching from the Palm Beaches through greater Fort Lauderdale to Miami-Dade County. Players epitomize household names, including Amazon, Aldi, FedEx, Tropical Shipping, Walgreens, Woodfield Distribution and Cheney Brothers.

Connections make the county and region desirable to logistics firms, as well as those millions of leisure and business travelers and local commuters. The downtown West Palm Beach and new Boca Raton stations for regional rail provider Brightline simplify travel between the three counties – — and soon, Orlando.

For longer travel, Palm Beach International Airport is part of a three- airport offering (along with Fort Lauderdale-Hollywood International Airport and Miami International Airport) offering thousands of flights throughout the region, nation, hemisphere and world.

With growth among its residents, businesses and trade, a high quality of life and that escape from harried lives back north make the county a thriving business and lifestyle destination.

 

Source: SFBJ

green yes signs_canstockphoto9735183 770x320

Joe Mulvehill and his siblings have been working to get their 40-acre wholesale plant nursery west of Delray Beach rezoned for about a decade so it could be sold to a commercial developer.

Now that dream is on its way to fruition.

The Palm Beach County Commission has proposed warehouse development at the site at the northeast corner of State Road 7 and Happy Hollow Road in the county’s Agricultural Reserve. BBX Logistics Properties, based in Fort Lauderdale, plans to build three warehouse buildings and offices totaling 672,533 square feet and 687 parking spaces.

“The entrance and exit to the project known as State Road 7 Business Plaza will be on S.R. 7, instead of Happy Hollow, where the nursery entrance is now,” said Mark Levy, BBX president. “The property was put under contract in August 2021 and the company will close on it after site plan approval. Obtaining final approvals to build is expected to take several months.”

Construction will likely begin in the first quarter of 2024 with a total project cost of more than $100 million, Levy said. The average tenant, such as plumbers, electricians, companies which supply hospitals and schools and others, will rent from 25,000 to 60,000 square feet. Offices will be in the front, with storage areas in the rear.

Nursery Operation In Southern Palm Beach County Dates To 1980s

Mulvehill, 60, owns the property with his siblings Diane, Suzanne and James. He began working for his nurseryman father, the late Joe Mulvehill Sr., at age 17 when he was still a student at Coral Springs High School in Broward County.

The 40-acres of the Mulvehill Nursery (Photo Credit: Andres Leiva, Palm Beach Post)

Mulvehill, who is the nursery operations’ sole owner, has been in business for 42 years and has run the nursery from the current location since 1995. He said he was grateful the county commission understood that the nursery was “left out of the Ag Reserve Master Plan. We are one of the few remaining property owners who bought our property before the Ag Reserve land use restrictions went into effect in the late 1990s.”

“That heavily restricted our property rights. We have worked with the prior commissions for nearly a decade bringing this issue to their attention and finding equitable solutions,” Mulvehill said.

Mulvehill and other small landowners in the 22,000-acre Agricultural Reserve west of Boynton Beach, Delray Beach and Boca Raton, have said for years that the county’s development rules for the area have depressed the value of their land by limiting what a potential purchaser could do with it. The Ag Reserve was formally created in 1980.

Despite hurricane damage and losses, insects, diseases, labor shortages and other issues Mulvehill has faced over the years, he wants to stay in the business. He ships foliage and interior plants throughout the continental U.S. and Canada and sells locally to landscapers.

“My father started with a 5-acre nursery in 1976 and expanded it to 20 acres when I started working there during high school. This parcel was sold to develop what is now called Four Seasons, a residential community off Atlantic Avenue and S.R. 7. In fact, you will see Mulvehill Road off of Atlantic Avenue that still shows up on Google Maps. That was the original road to our first nursery,” Mulvehill said.

Mulvehill said this year has been especially difficult as he lost all his entire crop of mandevillas, a flowering vine, to a pest called pepper thrips.

He said he will continue to operate Mulvehill’s Nursery on 15 acres off Smith Sundy Road, an arrangement that “will be less stressful and give me more time to enjoy life,” Mulvehill said.

Some Concerns Warehouses Won’t Fit With Agricultural Area

At the May 25 hearing before the county commission, nearby residents who support the project and those who oppose it spoke and submitted comment cards. Those opposed expressed concerns about noise, lights and increased traffic that could impact residential developments and horse farms.

The commission took two votes, the first was a 6-1 approval, changing the property’s future land use designation from Agricultural Reserve to Commerce with an underlying Agricultural Reserve.

Vice Mayor Maria Sachs opposed the land use change, as did the county’s staff, which said it will be an isolated industrial use inconsistent with the other development along that portion of S.R. 7.

Sachs said she wants to work with the legacy farmers to find ways for them to get out of the business, and for the highest and best use of their land. However, she said Clint Moore Road and Congress Avenue, about 12 miles to the southeast in Boca Raton, is a more appropriate location for warehouses.

Sachs also said that the Florida Department of Transportation said that the project may generate more traffic than allowed under the Commerce designation.

Next, the commission voted 7-0 to rezone the property from the Agricultural Reserve Zoning District to the Multiple Use Planned Development Zoning District.

Commissioner Marci Woodward said she met with neighbors in the immediate area of quiet roads next to a canal and said they are happy with the entrance being moved to S.R. 7 because there will be less traffic on Happy Hollow and Smith Sundy.

Joseph Starkey owns a 60-acre horse boarding farm, Irish Acres of Florida, near Lyons Road and Atlantic Avenue, also in the Ag Reserve west of Delray Beach. He said that the warehouses do not belong in the Ag Reserve.

“I believe in landowner’s rights and in developer’s rights. I truly believe in the rights of the existing land owners. They are in the Ag Reserve for protection,” Starkey said.

Mike Atchison, owner of Atchison Exotics at 9625 Happy Hollow Road, and president-elect of the Palm Beach County chapter of the Florida Nursery, Growers and Landscape Association, said he supports the rights of the Mulvehills and other farmers to have their property rezoned and to sell their property.

“The industry is tough between bugs, labor and government overreach. I am here before you to express support for the code change. The Mulvehills’ property is not designated as a preserve or a reserve,” Atchison said.

Suzanne Mulvehill, Joe Mulvehill’s sister and a former Lake Worth Beach city commissioner, also spoke before the commission.

“We are the legacy farmers. We have been here before every GL Homes development. We have been here before Lyons Road went through. We were here before the county bought the 1,000-acre dairy at the end of Smith Sundy Road. We were here before the Ag Reserve rules were put into place,” Suzanne Mulvehill said. “We been coming here for 10 years, you have heard farmers get up and share about being here since the 1970s. Our rights were restricted when those rules went into place.”

Commissioner Mack Bernard noted that the Mulvehills had worked with the county on the site’s future for several years.

“Joe and Suzanne, I have been here for 7 years, and you have been coming here in front of us for 10 years,” said Bernard. “I said we would try to be fair to you if you came with the right project. I believe this is a good project for Palm Beach County.”

Entrance To Warehouse Complex Will Be Off State Road 7

The approval includes a requirement for an 8.9-acre preserve and a 4.26-acre water management tract with a 2.86-acre wetland designed to provide enhanced environmental features.

BBX’s Levy said the extraordinary population growth in southwestern Palm Beach County proves the need for more warehouses, and right now no space is available. He said the Mulvehill location is ideal because it is on the U.S. 441-S.R. 7 corridor and close to Florida’s Turnpike. Some companies could not find space in Palm Beach County, and had to locate as far away as Miami and Orlando.

The loading docks will be in the project’s interior, with the buildings serving as a noise buffer, and Levy said he expects most of the trucks coming in will be vans and box trucks, not semi-trucks.

Levy said that he will reach out to homeowners in the nearby Four Seasons residential development after a homeowner stated at the meeting that the group had not heard from the developer. The buildings might be built in phases, and once they are occupied, Levy estimates that 250 to 300 people will be working there.

“So many companies have expressed interest. We can’t build this fast enough,” Levy said. “It will be such a great thing for the community. We worked so hard to integrate it into the community. We feel really good that we did this the right way.”

 

Source: Palm Beach Post

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The city of Plantation could award incentives to a developer to demolish a hotel and replace it with a mixed-use project.

The board of the city’s Community Redevelopment Agency (CRA) will consider the $2.235 million forgivable loan for Wells Real Estate Investment on June 7. The West Palm Beach-based developer would utilize the funds to purchase and demolish the Plantation Inn at 375 N. State Road 7.

According to the application, Wells Real Estate Investment has the 75-room hotel under contract from Plantation-based Plantation Hospitality Group for $12.2 million. It was built on the 31,744-square-foot site in 1970.

According to the city staff report, the site of the Plantation Inn hosted 32 arrests and 121 incident reports to police so far this year – far more than any other hotel in the city.

The proposed loan agreement states that the $2.235 million loan would be forgiven in full, without interest, after the developer purchases the property and completes demolition of the hotel.

The Plantation Inn site would be combined with two neighboring parcels Wells Real Estate Investment already owns to create a mixed-use project. It owns the 31,935-square-foot medical office building at 4100 S. Hospital Drive and the 5,102-square-foot office building at 4050 N.W. Third Court.

According to the application, the $70 million project would consist of 118 residential units inclusive of 15% workforce housing, 36,000 square feet of medical office space, a 124-room Marriott-branded hotel and 350 covered parking spaces.

Janalie Bingham Joseph at Wells Real Estate Investment couldn’t be reached for comment.

The city also has interest in redeveloping the property because it wants to spur more economic activity next to the former Plantation General Hospital, which HCA Healthcare (NYSE: HCA) closed and relocated to Davie. HCA still operates an emergency room in the former hospital building, but it doesn’t use most of the campus. According to the city staff report, HCA is considering plans to build a new free-standing emergency department facility of about 11,000 square feet closer to State Road 7.

 

Source: SFBJ