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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

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The owners of the Boca Raton Innovation Campus, the largest office complex in South Florida, are working on plans for a mixed-use project, but the goal is to enhance the office space, not replace it.

Located on 123 acres at 5000 T-Rex Ave., BRIC spans 1.7 million square feet of offices that previously housed IBM.

Boca Raton-based CP Group acquired BRIC in 2018 with several partners, and in 2021 CP Group brought in several new partners. The ownership group also includes Rialto, DRA Advisors and Las Olas Capital Advisors.

Angelo Bianco, managing partner of CP Group, said he has a pending application with Boca Raton to rezone the property to allow a mixed-use development to rise in the parking lots surrounding the offices. Plans call for 1,250 residential units, 125,000 square feet of retail, restaurants, grocery and entertainment, a 150- to 175-room hotel, and several parking garages. That would include a 4,000-seat performing arts center.

 

Source: SFBJ

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The industrial sector experienced a moment of worry several weeks ago amid the mounting economic and financial sector turmoil. That moment appears to have passed, based on Prologis’ Industrial Business Indicator, which moved back into expansionary territory in April with a score of 56.2, after falling to its lowest level in 30 months for March.

Prologis, too, apparently is feeling sanguine about the sector, tweaking its forecast to a 10% increase in rents for the year, given that there has been 275 million square feet of net absorption and deliveries of 445 million square feet to date.

Prologis’ research also reported that the utilization rate stabilized in the 85% to 86% range, which is considered good for logistics users. The rate averaged 85.6% in the first quarter of this year and was close but a slightly lower 84.9% for April, which translates to an absence of shadow space.

It also found that the true months of supply (TMS) number—the time it would take to absorb available supply at the current demand run rate–increased to 30 months, up five months from the fourth quarter. The markets and submarkets with the biggest construction pipelines should have the largest TMS increases and lead to variations in availability, as well as rent growth, depending on locations.

“Macroeconomic crosscurrents may lead to some delayed decision-making, which could push demand from 2023 into 2024,” Prologis concluded. “The U.S. vacancy rate should drift up to the low-/mid-4% range by year-end, well below the historic average.”

If supply drops off sharply in 2024, it may raise the potential for demand to outpace supply and pull the vacancy rate down to the mid-3% range by year-end 2024. Also affecting the longer-term prospects next year is a 40% drop in construction starts due to increased costs and a lack of financing. Prologis suggests customers may face a narrow window to act as projects get done this year but decrease next year, particularly in highly desired locations.

Some markets are also expected to experience more interim vacancies due to an abundance of speculative space under construction. Such possibilities include Dallas, Phoenix, Savannah and Austin. Beside such markets, vacancy rates may remain below 2019 levels, in part due to the existence of few unleased buildings available.

 

Source:  GlobeSt.

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With the trifecta of idling engines, diesel exhaust and the constant presence of 18-wheelers, industrial outdoor storage operators fight an uphill battle getting their projects approved by municipalities.

But rising demand — and the rising prices that come with it — has motivated developers to find ways forward despite community backlash.

Entitlement challenges, zoning difficulties and pushback from NIMBY-esque neighbors slow the production of IOS properties, causing developers to create strategies targeted at avoiding these pitfalls to get their deals done and meet a ballooning market need.

“The lack of available supply for truck terminals has historically been driven by local zoning ordinances,” said Cresa broker Eric Rose, who is based in Omaha, Nebraska. “Most communities aren’t friendly and won’t really add any more of these locations unless it’s via a case-by-case, special-use approval process, which is time-consuming and costly.”

As the continued growth of e-commerce and a renewed domestic manufacturing sector add pressure to expand trucking to handle increased logistics demand, some developers are striking out and figuring out how to add new capacity. With IOS vacancy rates slipping to 3% in 2022, according to Marcus & Millichap research, the need is clear. And with the high rents and sales prices being fetched by existing IOS properties, ground-up development can offer a significant payday, especially from interested institutional investors or truck carriers.

Earlier this month, Industrial Outdoor Ventures announced plans to turn the Twin Lakes Travel Park in Davie, Florida, 24 miles north of Miami, into a 38-acre industrial service facility. Situated south of Interstate 595, between State Road 7 and Florida’s Turnpike, the ground-up development will include two buildings totaling 227K SF and outdoor storage yards that can hold 280 truck trailers.

“This is another great opportunity for IOV to meet market demand by developing the type of modern facilities that today’s end users require and in a location that has a scarcity of land available for this type of asset,” Industrial Outdoor Ventures Senior Vice President of Development and Acquisitions Eric Johnson said in a statement.

Turnbridge Equities also just picked up a 3.6-acre site in Rancho Dominguez, California, near Los Angeles, in a $25.5M buy.

“The deal, another 2.49-acre pickup in the South Bay, aligns perfectly with our strategic vision of expanding our Industrial Outdoor Storage strategy in port-adjacent, infill and high barrier-to-entry markets,” a Turnbridge executive said in a statement.

In nearby Perris, California, Alterra IOS spent $8.5M on a 7-acre towing yard in early May, with plans to renovate it and reintroduce it as an IOS property with easy access to the busy Inland Empire.

Chicago-based Dayton Street Partners has been busy with redevelopments and plans to create new trucking facilities, one of just a handful of ground-up IOS developments taking place. The firm just finished a 95-acre terminal with 500K SF of industrial space at 5800 Mesa Road in Houston, which is being leased to the carrier Maersk.

The firm also has a 47-acre, 1,000-trailer terminal set to open in Baytown, Texas, near Houston and less than 20 miles from two Gulf ports, set to open in June. The terminal includes a 24-foot-tall, 1,382-foot-long building meant for unloading and reloading truck cargo. In addition, Dayton Street acquired two truck maintenance facilities in Atlanta with plans to renovate and reopen.

“The difficulties of finding appropriate space and building new facilities — often renovating existing industrial or vehicle-focused real estate, such as mobile home parks or underutilized warehouse sites with vacant buildings and minimal need for rehabilitation — means it often isn’t worth it to seek out real estate on the fringes of a market,” Dayton Street principal Howard Wedren said. “Financing has been rocky lately so it is difficult to get access to capital compared to those with longstanding client relationships.”

It is key to find locations near big travel hubs and ports, spots already in high demand for industrial developers seeking storage space.

“We don’t go to the outskirts,” Wedren said. “We’re very much into the high-barrier-to-entry sites. That’s our model, and we don’t deviate.”

High barriers are common for IOS projects. In Long Beach, California, the firm Cargomatic received city council approval for an IOS storage site last month near the busy Pacific port, just overcoming significant backlash by business groups and local leaders concerned about additional pollution from heavy trucks.

“There are no guarantees at the end of the day,” Cresa’s Rose said. “So do you go through a multiyear development process, not 100% certain that you’re going to get those rezoning and entitlements you need? Or do you just bite the bullet and buy the existing facility, and you can activate your service immediately upon opening the facility?”

In the case of Industrial Outdoor Ventures’ project in Davie, Director of Construction and Properties Rob Chase said the firm had good relationships with local leaders. It helped that the older travel park was showing signs of age and wear, and many in town were happy to replace the site with something newer.

Even with the support, it is a long process. Properly and fairly relocating existing residents is time-consuming, and even with the relatively simple construction requirements of these kinds of projects, it will still take 14 months of site work and construction once the site is cleared.

On the flip side, an empty site in Jurupa Valley, California, near the Inland Empire, that Industrial Outdoor Ventures acquired on the precipice of gaining approvals for construction in a portfolio purchase, now has to restart the entitlement process.

Chase said he sees the value of existing and new IOS facilities continuing to rise, spurring more developers to attempt more conversions, but he acknowledged that the process is often difficult.

“Having the right zoning is absolutely critical,” Chase said. “An entitlement process I describe as being long and drawn out is nothing in comparison to trying to change the zoning. That’s even more of a hill to climb. You could easily flip these properties, but pushing, sticking with it through to the finish line, is worth it.”

 

Source: Bisnow

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Bed Bath & Beyond’s recent bankruptcy filing is not expected to impact retail landlords very much, as many have lined up tenants long before Bed Bath & Beyond actually filed its paperwork.

But it will have ripple effects elsewhere, including in some industrial markets, according to CoStar Group’s May 2023 real estate report.

Bed Bath & Beyond leased 6.1 million square feet of distribution centers throughout the country, most of which in large, modern centers built after 2005. About half already are marketed for lease on CoStar.

CoStar believes that some of those distribution locations will fare better than others and attract new tenants. The reason is that there are only three other existing or under construction distribution centers with space measuring 500,000 square feet or greater, also built after 2000 and within a one-hour drive of Bed Bath & Beyond’s largest Las Vegas distribution center. In contrast, its center within the Dallas-Fort Worth metro market has almost 50 such available distribution spaces within a one-hour drive.

At the same time, several other big chains such as T.J. Maxx, HomeGoods and Ross Stores have grabbed up some of Bed Bath & Beyond’s stores, which could necessitate their demand for more distribution centers down the road.

Meanwhile, while Bed Bath & Beyond’s store closures won’t have that much of an impact on landlords, that is not to say that retail itself hasn’t experienced some setbacks in the first quarter, according to CoStar.

In the first quarter, leasing volume for the retail sector slowed by 2% when comparing quarters and 26% in comparing year to year activity, due to the uncertain economy and absence of available spaces. Altogether, retail tenants occupied 13.2 million square feet on a net basis, which accounted for move outs. This represented the slowest level since 2020 but the ninth consecutive quarters of net demand growth.

Retail property sales also fell—by 40% quarter to quarter and almost 50% year over year due to higher interest rates affecting deal flow adversely. Falling prices have not declined enough to encourage investors to step in.

 

Source: GlobeSt.

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The Live Local Act will significantly change how real estate is developed in Florida, Miami land use attorneys said at a recent webinar.

Held May 4, the webinar was hosted by Bilzin Sumberg partners Anthony De Yurre, Sara Barli Herald, and Carter McDowell. During the hour-long event, the attorneys urged developers to gather with their teams, consult with municipal planning staff, and take another look at their planned projects.

“This opens up a whole area of potential development that was not there before,” said Herald, who specializes in affordable housing and tax credits. “There are a lot of changes. This is probably the most significant land use change in decades.”

De Yurre, who specializes in zoning and complex land use, added “This is the Magna Carta.”

Also known as Senate Bill 102, the legislation was signed into law in late March, effective July 1. Among other things, the bill grants developers the ability to build the maximum amount of units a local jurisdiction allows – and at the maximum allowed height within a mile of a project’s site – on almost any property zoned commercial, industrial, or mixed-use. And that developer can obtain those rights without a public hearing.

The catch is that 40% of those units must be reserved for households earning up to 120% of a county’s area medium income (AMI) for the next 30 years. (A developer can seek the same rights with just 10% of the units reserved for affordable housing, but that will require approval from the jurisdiction’s elected body.)

In addition, SB 102 does not destroy other zoning rights reserved by states such as setbacks and parking requirements. However, the law states that cities and counties must consider reducing parking requirements for affordable projects built within a half-mile of a transit stop.

Besides zoning variances, the code grants developers property tax breaks if they constructed or substantially rehabbed a building in the past five years in which at least 71 units are affordable housing. If those units are reserved for people who earn between 80% to 120% AMI, the landowner is entitled to a tax reduction of 75% for those apartments. If the units are for households earning below 80%, a landlord can secure a 100% reduction on a property tax bill. The catch is rents must conform to HUD rent income restrictions or 90% of an area’s market rate, which ever is less, for the next three years.

 

Source: SFBJ

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As with so many areas of real estate, there was an operational and profit high during the last few years that was like an industry getting drunk and then waking up with a headache.

Looking back can create regret, but here are some things that MSCI in its Q1 2023 U.S. Industrial Capital Trends Report suggests are easy to underestimate.

1. Immediate Comparisons Are Unrealistic

Would you compare a little kid running around with a blanket tied around the shoulders like a cape to an actual superhero? Of course not. Nor would you reasonably undergo a once-in-a-blue-moon experience and then expect that should become an everyday event. That is the difficulty in looking at typical year-over-year business comparisons in industrial.

“Industrial deal volume hit a record high of $40.6b for any first quarter in 2022,” MSCI wrote. “The next-highest first quarter period was in 2020 when $34.4b traded. Any comparisons of the current quarter to these record high points for the market are going to look harsh. In truth, the market simply slipped back closer to a normal level at the start of 2023.”

According to MSCI’s analysis, average first quarter deal volume from 2005 to 2019 is $11.2 billion. This year’s Q1 transaction volume fits in with the past.

2. The Industry Was Already Gearing Up For Higher Rates

“It can be difficult to think in terms of anything aside from Covid given the collective trauma experienced, but back in the fall of 2019, investors began to adapt to a rising rate environment,” the analysis said, remembering that concerns about rates existed before the pandemic.

CRE professionals attending industry conferences at the time were concerned about the Federal Reserve tightening its balance sheet. But it had been more than a decade since the Global Financial Crisis. Realistically, how long would the Fed put off cleaning its inflated balance sheet?

“Investors wanted to focus more on asset types that had low capex relative to the NOI for a rising interest rate environment, and the industrial sector matched this need.”

3. Investors Were Under-Allocated

The MSCI report suggests that investors hadn’t allocated enough of their capital to the industrial sector. This was true for multifamily, as they reported in a separate publication.

“It is not yet clear that investors have the allocations that they desire as there are many moving parts in place. But with the RCA CPPI for industrial slowing to only a 3.3% gain from a year earlier and volume back to average levels, one might make that case.”

4. Cap Rates Are Up, But Not That Much

One of the stories floating around is the return of cap rates. They are up some, but that’s in comparison to the depths they visited in 2022. Cap rates are nowhere nearly as high as pre-pandemic levels.

“The RCA Hedonic Series cap rate reached5.5% in Q1 2023, up from a low of 5.2% seen in Q1 2022 before interest rates surged. Cap rates have increased only 30 bps in a time when the 10yr UST has increased 170 bps.”

 

Source: GlobeSt

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Developer Daniel Catalfumo wants to demolish two office buildings at the PGA Station business park in Palm Beach Gardens in order to build more apartments.

This would be the second phase of the apartment development at PGA Station. Greenwich, Connecticut-based Richman Group of Cos. broke ground on 396 apartments there in 2022 after buying land from Catalfumo.

PGA Building 9 & 10 LLC, managed by Catalfumo, recently filed plans with the city to amend the development plan for the 37.6-acre business park at 11025 RCA Center Drive. It would remove a 48,000-square-foot office and a 9,000-square-foot office, replacing them with 620 apartments in two buildings plus two parking garages with a combined 975 spaces. The developer would make 10% of those units workforce housing.

Each of the two apartment buildings would be 13 stories tall, one with 328 units and the other with 301 units. Each building would have a rooftop pool deck, a fitness room, a game room, a club room and coworking space. One building would have a half basketball court and the other would have two pickleball courts.

 

Source: SFBJ

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Industrial properties have long been a favored investment for those seeking stable cash flow with minimal effort. Often featuring “triple net” leases, tenants cover expenses such as taxes, insurance, and maintenance.

Due to low vacancy rates, most industrial landlords primarily focus on collecting checks. However, the rise of e-commerce has transformed the industrial landscape. Online purchases require an intricate network of warehouses and distribution facilities, which has led logistics companies to demand more from their landlords in terms of building improvements and additional services, and they are willing to pay for these enhancements.

The sustainability movement has further intensified the need for industrial landlords to expand their offerings, as logistics giants like Amazon and UPS have committed to aggressive decarbonization goals. Consequently, industrial property owners must adapt to the evolving market demands and expectations driven by the growing influence of e-commerce and an increasing emphasis on environmental responsibility.

All this adds up to industrial real estate going from the property type with the least amount of tenant collaboration to one with the most in just a few decades. To meet this challenge, large industrial owners have transformed their businesses into much more of a partnership model. The largest of these industrial and logistics landlords is Prologis. They own over 1.2 billion square feet of space across the globe. Rather than just lease out space to their tenants, they work with them hand in hand to try to tailor properties and services to help them advance their business goals.

Prologis collaborates with logistics firms, such as Amazon, to support their expansion and enhance their distribution networks. They specialize in creating and managing custom logistics centers and leasing space in their properties worldwide. Beyond this, they offer a comprehensive range of services, called Prologis Essentials, including warehouse racking, renewable energy production, electric vehicle charging infrastructure, and workforce solutions, making them a sought-after partner for both large and small logistics operators.

By outsourcing these supplementary tasks, logistics companies can efficiently scale their networks and transform capital-intensive investments into manageable operating expenses. While Prologis is already a critical component of the global logistics infrastructure, the company aims to further expand its role and impact.

To continue to grow what services they offer, Prologis has also created a venture investment arm that makes strategic bets on companies that they think will be able to add value to their tenants.

“We spend a lot of time talking to our clients to understand what their pain points are and how we can help them either by providing a service or introducing them to new tech solutions,” said Will O’Donnell, Managing Director at Prologis Ventures.

So far Prologis has invested in 42 companies in every stage of growth from seed to Series A rounds. Recent investments include Solarcycle, a company that repairs, refurbishes, and reuses solar panels, and Strivr, a virtual reality training platform.

“We spend the time doing our homework on technologies and piloting with companies so when we introduce them to our clients, they know they’ve been vetted,” O’Donnell said.

Right now Prologis is seeing a lot of demand for carbon reduction solutions from their clients.

“The supply chain only represents about 5 percent of the costs for retailers but has a strong carbon footprint, so it is something that retailers are very willing to pay for,” O’Donnell explained.

Prologis has hired a Chief Sustainability and Energy Officer who is solely focused on how to provide energy solutions to clients.

 

Source: propmodo

 

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Business opportunities at Port Everglades are expanding with the construction of two warehouses that will offer distribution and logistical services.

Seagis Property Group just reported that it’s 75% complete with its 199,624-square-foot speculative development at 1700 Eller Drive in Hollywood. It expects construction to be complete in September. The building sits just outside Port Everglades’ security entrance allowing for prompt entry to the seaport’s cargo terminals, Port Everglades International Logistics Center (PEILC) and Florida East Coast Railway‘s near-dock facility.

The other new build is by Bridge Industrial, which anticipates completing its 170,892-square-foot logistics facility in the second quarter of 2024. The building is less than a mile from Port Everglades at 2200 NE 7th Ave. in Dania Beach. It’s the former site of Park ‘N Fly.

“The creation of warehouses immediately adjacent to Port Everglades is an indication of our seaport’s strength and standing in the marketplace,” said CEO and Port Director Jonathan Daniels. “The private sector understands the advantages of partnering with our Port. In addition to being conveniently located near major modes of transportation, we are responsible for more than $28.6 billion worth of trade in 2022. That is attractive to businesses.”

These new privately owned warehouses will complement the PEILC, a public-private partnership with CenterPoint Properties that was built in 2020 on 16.657 acres of Port-owned property. The entire PEILC is activated as Foreign Trade-Zone No. 25 allowing for the efficient distribution of goods at lower duty and tariff costs.

By The Numbers

According to Bridge Industrial, the new Bridge Point Port Everglades warehouse will have:

  • 32-foot clear ceiling height
  • 34 dock-high doors
  • 2 drive-in doors
  • A 120-foot truck court
  • 156 car parking spaces
  • Seagis Property Group reported that its warehouse will have:
  • 36-foot clear ceiling height
  • 32 dock doors
  • 2 oversized drive-in ramps
  • 172 automobile parking spaces
  • 49 trailer parking spaces

 

Source: AJOT

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Bargain hunters who head to the Swap Shop — the unusual decades-old shopping destination in South Florida — may start seeing its surrounding neighborhood spruced up with a string of redevelopment projects.

Lauderhill is eyeing properties around town, preparing to buy real estate, bring in food markets for lower-income areas and clean up a deteriorating part of the city.

A proposal calls for creating a newly expanded redevelopment area of 186 acres that includes the landmark Swap Shop at 3291 W. Sunrise Blvd. The venue opened in 1963 as the Thunderbird Drive-In Theater, with just one movie screen. The main building opened in 1979.

Today the Swap Shop’s drive-in theater is closed, but it has scores of retail vendors hawking shoes, clothing, electronics, jewelry, knives, among other items, and services such as a barbershop and produce stands. The region, which also includes gas stations, rests along a prominent corridor just west of Fort Lauderdale, by West Sunrise Boulevard, west of Northwest 31st Avenue.

“The corridor is a bit neglected,” acknowledges Sean Henderson, Lauderhill’s Community Redevelopment Agency director and deputy finance director.

In addition to the Swap Shop, there are various other types of businesses in the area: Northwest 31st Avenue “contains numerous junkyards, automotive repair facilities, and the Wingate landfill and incinerator,” according to a city memo.

As Lauderhill aims to redefine the eastern part of the city to take advantage of tax benefits allowed under state law, it has a challenge that could take years to overcome. To pull it off, the Lauderhill CRA is asking Broward’s county commissioners Tuesday to sign off on an expansion of its territory.

How The Improvements Would Happen

The plan would allow the Lauderhill CRA to benefit from tax increment financing, which is the money the agency gets in addition to property taxes from increases in the redevelopment area’s assessed value. The more the value of property goes up, the more money the CRA gets for additional projects.

Among the city’s goals:

  • Food Services: Attract grocery stores and “sit-down” restaurants. “We want a diversity of food options, not just Kentucky Fried Chicken,” Henderson said. He said the area is defined as a food desert, a federal government designation of places where people have trouble getting affordable, fresh, nutritious food.
  • Redevelopment: Buy properties “and do something with it,” Henderson said. The land will be scouted clandestinely (”we have third parties go for us,” Henderson said) to avoid property owners trying to jack up prices to benefit from government’s deep pockets. New land could mean pairing with developers for much-wanted projects.
  • Beautification: Clean up areas by picking up litter and adding landscaping.

In the mid-2000s, the city annexed the Swap Shop along with three communities — St. George, West Ken Lark and Broward Estates.

“With the new CRA expansion, it would also mean focusing on the Swap Shop property although not immediately,” Henderson said. “But there’s always possibilities. The city’s vision could include a mid-town on the Swap Shop land — which is on both sides of Sunrise Boulevard — with new housing and shops.”

‘The Best Swap Shop It Can Be’

But there are contingencies, he said, of the land’s requirement for it to stay a Swap Shop, at least for now. Preston Henn, the former owner who died in 2017, became a multimillionaire from the shopping venue. The Swap Shop is bequeathed to his family with one condition, Henn told the Sun Sentinel in 2013.

“They have to keep it for 20 years — it’s in the will,” Henn said.

Henderson called the Swap Shop an “incubator of small business” and there was a “possibility” some of those businesses could be coaxed to set up “retail spots within the community.”

He said he’ll meet with the Henn family at some point to “share a vision” of the “wishes and dreams of the city” and work to determine “their intent with the property.” If the Henn family wants to continue to maintain it status quo, the CRA will work with them to make it “the best Swap Shop it can be.” Henn’s family, which is now running the business, could not be reached for comment.

Planning Redevelopment

The current land already in the Lauderhill CRA’s redevelopment area is 446 acres, generally confined by State Road 7, Sunrise Boulevard and Northwest 19th Street. The expansion would bring the corridor to Plantation’s border at Broward Boulevard and include the Swap Shop on Sunrise Boulevard.

The proposed boundaries of the expansion are an extension of the existing State Road 7 CRA along West Sunrise Boulevard to Northwest 31st Avenue encompassing the Swap Shop. The boundaries are further expanded to include the commercial properties along 31st Avenue from 19th Street to Broward Boulevard, from the corner of Broward and 31st Avenue to the Lauderhill and Plantation Boundary to the west.

While any improvements to the overall neighborhood are embraced, the Swap Shop customers’ reaction to any kind of flea market adjustments was mixed. Orse Joseph, a shopper from Fort Lauderdale, arrived one cloudy morning to buy lemons and rice. She found the idea of redevelopment of the site intriguing, especially because she sees vendors struggling.

“Change is better,” Joseph said. “So many shops are closing.”

But another shopper, Elizabeth Paulin, was taken aback by the idea. She’s a regular at the Swap Shop to buy “exotic” fruits and vegetables including mangoes and avocadoes that come from the sellers’ backyards. She also has tried mabi, a drink that comes from the bark of the Mauby tree, which reminds her of root beer. She said it’s an international experience as she chats with new immigrants, and has made out Russian, Canadian and Haitian music on the speakers.

On this day she loaded a push cart with her purchases including a new-to-her pair of used pants with palm prints for 99 cents, and a picture frame. She frequents the Swap Shop as often as once a week for the last two decades and has gotten on a first-name basis with both shoppers and vendors. So Paulin, a retired nurse from Wilton Manors, doesn’t want to see anything changed.

“I never want it to close,” Paulin said. “That’s horrible to think that. It’s a hometown place. Everybody knows everybody.”

 

Source: SunSentinel

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Church property in South Florida often attracts developers who want to build something new on sacred ground, due to strong demand for precious land in the coastal corridor from Miami to West Palm Beach.

Nevertheless, church sales and redevelopments are rare in the tri-county area due to land-use and rezoning issues as well as resistance from church members and leaders. But that might be changing. Ascending property values in South Florida and the lingering impact of the COVID-19 pandemic may lead more church owners to put “For Sale” signs on their real estate.

Brokers try to nudge churches onto the market by “cold calling and saying: ‘Hey, do you know your property is worth $50 million today?’ ” said attorney Luis Flores, Miami-based partner of law firm Saul Ewing. “I think a lot of church leaders are going to dip a toe in the water and find out: What is the value of my property? Is it the value that’s advertised when people knock on my door?”

One of the latest listings is a 67-year-old church at 6501 North Avenue in Miami, an 18,800-square-foot brick building with a $4.9 million asking price – or $261 per square foot.

“We have multiple offers on it,” broker Matt Messier said in early March. “South Florida is extremely active.”

Messier is a principal of the brokerage with the listing, Foundry Commercial, an Orlando-based national specialist in sales of churches, schools, camps and other properties owned by religious denominations. He said Foundry brokers about 100 church sales a year nationwide.

“Lately, because the market’s so hot, a lot of churches are sitting on some really good real estate,” Messier said, “So you’re seeing churches being bought to be converted to another use. You’re seeing a lot more of that.”

One of South Florida’s biggest pending sales of a church property would lead to construction of a high-rise condominium in the bayfront backyard of First Miami Presbyterian Church, at 609 Brickell Avenue in Miami. Key International and 13th Floor Investments have offered $240 million for the church’s land on Biscayne Bay for a condo tower project that would preserve the 65-year-old church building that faces Brickell Avenue.

Attorney Cary Tolley, a member of the church, filed a complaint with the Presbyterian authorities to stop the sale of the church property. But the Kentucky-based Presbyterian Office of General Assembly rejected his complaint last September.

“If they build a high-rise condo on the property, that will be the end of it,” Tolley said. “The church will close, and the condo will be all that’s left.”

COVID-19 closed First Miami Presbyterian Church for about two years, reducing Sunday worship to an online-only experience. Tolley said the pandemic cut opposition to a sale of the church’s bayfront property, which had support from the church’s pastor, the Rev. Chris Benek, and by his supervisors at the Presbytery of Tropical Florida in Fort Lauderdale. Neither Benek nor officials at the regional presbytery responded to requests for comment.

“There’s no question that the pandemic played into their hands,” Tolley said. “Benek just wanted to sell the real estate. He’s not a big believer in the importance of in-person worship. He’s one of these guys who believes you can have worship online and have everything done over the internet.”

The pandemic had a simple effect at The Center for Spiritual Living, an aging church in Boca Raton that found a buyer after the pandemic killed cash flow from organizations that rented meeting space at the church.

“When COVID came and all the renters disbanded because no one was meeting anymore, it was a challenge for us because we still had the same expenses,” said the Rev. Jill Guerra, whose mother, Barbara Lunde, is also a minister and controls the company that owns the 3.7-acre church property just south of Palmetto Park Road on Southwest 12th Avenue. “We just realized it was too big of a property for us to maintain.”

In the fall of 2020, Boca Raton-based developer Jay Welchel approached the mother-daughter ministerial team and negotiated a contract to buy the Center for Spiritual Living, then got their consent to extend the closing date of the sale as social distancing and other COVID-era protocols persisted.

“The $4.2 million sale was scheduled to close March 28,” Welchel said in a March 7 interview.

Welchel plans to develop a 128-bed assisted living facility for the elderly on the church site. But he is locked in a court battle with the city government that stems from city staff’s insistence that Welchel’s planned development would require a land-use change for the site.

“If unable to develop an assisted living facility there, I guess my backup would be to put a learning center type of day care at that location,” Welchel said.

“Church sales are different from other real estate deals because the seller often wants to stay on the property,” said attorney Flores. “The uniqueness of church sales is, the church usually wants to stay on the property somehow. It’s not like the typical sale. Those opportunities require the developer to rebuild the church, renovate the church or build around the church, and most developers are savvy enough to do that.”

For example, a church group in Pembroke Pines plans to share its 5-acre property on busy Pines Boulevard with a Wawa gas station and convenience store. The Wawa would replace the existing Trinity Lutheran Church building and its parking lot at 7150 Pines Boulevard. The church, which has operated in its current location since the mid-1960s, will move to a new building to be constructed on the south side of its property, behind the Wawa site, which is vacant. The local city commission voted last year to rezone the site of the planned Wawa and to change its land-use designation.

“A lot of the church groups we work with have a large property – too large for their use. A lot of groups are just trying to right-size their property,” Messier said. “Churches are, other than the federal government, the largest property owners in the country.”

Buying a church isn’t easy, though, even if the bid is rich.

“They are way more complicated than buying a piece of dirt,” said Ryan Shear, managing partner of Property Markets Group (PMG). “Churches are nonprofit, and we’re for-profit, so there’s a lot of education and getting-to-know-you.”

In partnership with Greybook, PMG has built Elser Hotel & Residences, a 49-story, 646-unit condo hotel in Downtown Miami where the First United Methodist Church of Miami occupies most of the first 10 floors.

“The developers have sold more than 50 percent of the building since unit sales began in June 2022,” Shear said in a March 8 interview.

PMG paid $55 million for the 1.1-acre development site at 400 Biscayne Boulevard after responding to a request for proposals from the leadership of First United Methodist to rebuild the church’s previous home, a dilapidated old structure that occupied the site.

Developer Jeff Burns made a bid to redevelop a Lutheran church in Fort Lauderdale that went awry after the church’s out-of-town hierarchy objected, even though he had negotiated a deal with the local leaders of the church to buy the property.

“We had a signed contract. And these guys [the church’s higher-ups] came in and hired an attorney to basically come up with a reason why they didn’t have to move forward with the contract,” Burns said. He decided against going to court to enforce the contract. “It meant suing the church,” he said. “But we’re a community developer, so we decided to move on.”

After that fiasco, Burns stumbled across a nearby church in Fort Lauderdale. He liked the address so much that, after redeveloping it, he moved his business there. He was looking at property across the street when he happened to notice the Gospel Arena of Faith on Northwest Third Avenue, a few blocks north of Downtown Fort Lauderdale and just west of the Flagler Village area. Burns walked into the church, met its owner, the Rev. T.G. Thompson, and asked him if he wanted to sell the church.

“It took a long courtship, if you will, for him to be comfortable and trusting of us,” said Burns, CEO of Fort Lauderdale-based Affiliated Development. “We met him on numerous occasions prior to even submitting an offer.”

Thompson died Nov. 24, 2022, after the sale was completed.

Affiliated Development ultimately paid $2.1 million for the 1.1-acre Gospel Arena of Faith property at 613 Northwest Third Avenue, where the company developed Six13, an apartment building with ground-floor commercial space, which is partially occupied by Affiliated. All 142 apartments at Six13 are so-called workforce housing units, available only to people who earn 80 percent to 140 percent of area median income.

Church redevelopment in South Florida probably will persist, because so many houses of worship occupy coveted locations.

“They have fantastic land,” Burns said. “And a lot of churches have property in areas that are prime for redevelopment. Money isn’t the only consideration because church redevelopments are unlikely to succeed if church sellers don’t like the plan. They would much rather try to figure out a deal with somebody who’s going to do something good on their properties and solve a social need, versus somebody who’s just looking for a profit.”

 

Source: Commercial Observer