Rauch Robertson & Co. Senior Vice President Dan Casey, CCIM represented the seller in the sale of a 12,184-square-foot office/warehouse facility located at 1358 E. Newport Center Drive in Deerfield Beach.

The building traded at $2,314,960 or $190 per square foot, marking the highest negotiated price per square foot for an industrial property in Newport Center and the firm’s second record breaking sale in the park in the past five months.

1358 W Newport Center Dr-front

In November 2019, Managing Partners Michael Rauch and Tom Robertson represented the seller in the sale of a 15,268-square-foot office/showroom/warehouse facility within the park. The building traded at $2,800,000, or $183 per square foot.

Newport Center is a large, master-planned professional business park located 5 minutes from Interstate I-95, just south of SW 10th Street, with easy access to the Sawgrass Expressway.  The park features two hotels, a daycare center, and is home to many notable businesses including JPMorgan Chase, Hoerbiger Compressor Technology, Quest Diagnostics, Sandvik Corporation, HYLA USA, and the Mapei Corporation.

“Businesses recognize the convenience and prestige that a Newport Center address provides, and this is why we’re seeing property values continue to rise,” explained Casey.

Rauch, Robertson & Co. is seeking leasing and investment sales professionals for its growing commercial real estate expansion in Miami-Dade, 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 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 College wants to work with developers to build a commercial project on 15.5 acres of its Davie campus.

The college issued an Invitation to Negotiate (ITN) with private parties on April 17. The deadline to respond is May 29.

The available property is at the southeast corner of its campus along Davie Road, including Seahawk Lake and several parking lots. A deal would require approval of the college’s Board of Trustees. Development could take place as early as 2021.

“Real estate partnerships are certainly not new to us,” said Broward College President Gregory A. Haile. “In recent years, we have looked to partner with the private sector to leverage college assets, and thus reduce our reliance on tax payer funding. Resources derived by this enterprising model will serve to enhance the lives of our students and our contributions to the Broward County community.”

The ITN doesn’t include a requirement that the development on the BC campus include an educational component. It states the responses will be evaluated based on the experience of the developers and the project’s ability to “maximize the college’s financial return.” It also says enhancing the “student/faculty experience” on campus will be a factor.

BC has over 27,000 students on that 150-acre campus, which is near campuses for Nova Southeastern University and Florida Atlantic University.

Seahawk Lake could be relocated as part of a new stormwater master plan BC could work on with the developer, according to the ITN.

In addition to the 15.5-acre development site, proposals in the ITN could include the redevelopment of BC Buildings 1 and 2 and a test track used by law enforcement, according to BC. There is a significant amount of deferred maintenance on those buildings and the college would not need to replace them. However, it would probably need to relocate the test track.

“We look forward to the development opportunities this endeavor can offer,” said Broward College Board Chair Gloria Fernandez. “In addition to improved infrastructure, it will help us generate revenue to offset costs, keep tuition affordable, and prioritize student success initiatives.”

Zaida Riollano is BC’s point of contact for ITN submissions.

Several years ago, BC approved a similar deal with Stiles Corp. to build a mixed-use tower on its downtown Fort Lauderdale campus.

 

Source: SFBJ

questions

COVID-19 deepens its hold on cities around the country, the question is increasingly becoming when it will peak in each city and for how long?

By now, U.S. cases have risen to top 600,000 despite a recent plateauing of cases in some areas. Even once the worst of it is officially behind us, we may continue to see the virus pop up here and there, menacing populations that may have thought they were safe.

One commercial real estate professional we spoke to, an asset manager at a major real estate investment firm, is conservative and practical in her recovery expectations. She said in a conference call that “if we shed 10 million jobs in March, we have never created more than 200 thousand jobs in a month. Even if we double that, it will take a lot of time to recover.”

Even after that recovery eventually, inexorably occurs, though, what will the world look like? We keep talking about a return to the way things were, but is that even within the realm of possibility? Or will this period of disruption be so destabilizing to our systems that it will completely change our social, economic and political norms?

While recovery may still be a long way off, it is not too early to estimate the impacts of the crisis on the activity within the commercial real estate industry. That’s why propmoda recently conducted an in-depth survey, in which we collected responses from industry professionals across the country and the world, working in fields from development to architecture to brokerage across a diverse range of property types. The resulting deep-dive report, The Commercial Real Estate Industry’s Reaction to the COVID-19 Threat, uncovered responses and sentiment about the affects of the pandemic on the industry.

Many respondents chimed in commenting on a need for a moratorium on commercial mortgages, and others just pointed to the dire need for an effective treatment or vaccine. One respondent, a leader at an office landlord in Turkey, said that “I don’t think the commercial real estate industry will recover to pre-crisis levels since both employers and employees will be accustomed to new business processes which make use of less office time. People will not change their habits.” So what kind of habits will change?

Will remote work become more commonplace now that we have all started growing accustomed to it? By the time this pandemic ends, all of us will have had a crash course in Zoom video conferencing. What about the way we cluster on city streets, take public transit, or shop at the grocery store? In many ways, COVID-19 seems to be shining a light on trends that were already bubbling under the surface. Online shopping for groceries, for instance, was already growing, by as much as 35 million U.S. consumers between 2018 and 2019.

Twenty three percent of our survey respondents said that they would be using remote working arrangements more, after the COVID-19 outbreak. We are not alone in picking out this trend. In another recent study of 317 CFO-type professionals, Gartner found that almost three quarters of finance leaders will be increasing the number of remote workers within their organizations by at least 5%. Not only that, but their survey also found that 4% of respondents would be transitioning fully half their company’s staff members to a permanently remote plan. 17% of respondents said they’d be sending 20% of their workers home. These numbers could be disastrous to the office market.

Beyond just office space use, COVID-19 is opening up entirely new questions that point to the very heart of the real estate industry. How will retail landlords survive when their tenants cannot welcome shoppers into their stores? How will industrial owners keep their warehouses humming with activity when huge numbers of non-essential goods aren’t being sold? How will apartment landlords respond when their residents can’t pay rent, but regulations prevent them from evicting non-paying tenants? According to the NMHC, April rent payments are down only 7% from March, before the worst of the outbreak came to the country, but that’s just one month. What happens next?

Social distancing is something that will likely come to an end, whether it is in two months or a year and a half. Hopefully, we can end it sooner than later, but the memories of the danger present in close human contact will likely stay fresh for a long time. The economy may get its engine running and wheels turning late this year or some time next year. But will it even be the same kind of car?

 

Source: propmoda

silver lining

The COVID-19 outbreak and widespread response to slow its spread has thrown cold water on what had been a healthy U.S. economy. Nearly all sectors, including real estate, has seen immediate impacts.

Even so, those in the Milwaukee-area commercial real estate industry see a number of opportunities coming as a result of the pandemic. Opportunities will come in the form of buying opportunities, a healthy industrial sector through growth in e-commerce and repatriation of supply chains, remote-work related investments and more lease and expansion opportunities due to newly vacated space.

These musings from local real-estate professionals were compiled in a recent survey conducted by six area industry groups: Marquette University Center for Real Estate, NAIOP Wisconsin, the Commercial Association of Realtors Wisconsin, Wisconsin CREW, Building Owners & Managers Association of Wisconsin and IREM Milwaukee. The survey asked respondents what impacts they were seeing from the outbreak and what strategies they were using to address them. It generated nearly 350 responses. The full results were released last week.

One of the most commonly mentioned things is the rise of buying opportunities, due to variables including low interest rates, distressed assets, foreclosures, increasing supply and lower property values.

As one respondent noted, opportunity could lie in “potential distressed sellers looking to recapitalize or sell at a discount to replacement cost and prior value.”

Respondents also noted two opportunities in the realm of industrial real estate. Some predicted accelerated growth in the e-commerce sector as more people become comfortable with using home-delivery services. Others noted that supply chains could be re-focused domestically, as the outbreak caused global disruptions. The thought is that the industry would be better equipped to handle a similar pandemic in the future if more operations were located in the U.S.

“Manufacturing growth in U.S. as more companies repatriate their supply chains,” wrote one respondent.

They also noted several opportunities in the retail sector. More space will be made available due to businesses closing, which will create opportunities for tenants to relocate or expand. Landlords will also settle for lower rental rates as they look to make deals with replacement tenants.

This all could be viewed as a silver lining, since retail has been hit particularly hard due to state and local shutdown orders.

” … I believe some businesses will not be able to reopen or will fail, that more retail space will become available, and that asking rents will come down as landlords look to do deals with good replacement tenants,” said a respondent.

Builders noted opportunities to do more renovation work on buildings that are now vacant or have limited occupancy. They also predicted more demand coming from the health care sector, with users looking to upgrade facilities. On the other hand, a number of respondents suggested the rise in virtual health care could also harm their business due to less need for services at brick-and-mortar locations.

Many respondents pointed out that many companies have had to quickly adapt to remote work. This would have long-term impacts on the way people work, they said.

Things traditionally done in-person that are now being done virtually include team meetings, property showings and remote notarization.

Several even suggested this would lead to changes in the office market, such as the reduction of needed office space.

This particular point caught the attention of Andrew Hunt, director of the Marquette University Center for Real Estate, one of the groups involved in the survey.

He said respondents were surprised how easily and quickly their firms adjusted to remote-work tools such as Zoom and Microsoft Teams. Many of them wondered how this would change the way people work, both inside and away from the office, even after the outbreak subsides.

“I think what they’re trying to say is, ‘We know that there’s a way people work, we think it is probably likely to change from this,’” Hunt said in a recent interview.

He later added, “How that impacts office space in the future, how that impacts just the way people do work and maybe even how efficient they are in doing work, is something that we all need to continue to watch. But a lot of people think that is going to have an impact.”

Other takeaways from the survey include:

 

Source:  BizTimes

uncharted waters

It is reasonable to presume that no South Florida business will emerge entirely unaffected by the pandemic and subsequent economic downturn.

As companies figure out how to get back on their feet, commercial real estate brokers and property managers are helping them adapt to the possibility of staff reductions and structural changes to their businesses. The big picture will be a mixed bag of positives and negatives for owners, investors and tenants.

On the positive side for owners, low-interest rates will mean an attractive environment for refinancing quality loans. For domestic and international investors who still consider America the world’s safest place to invest, the time will be right to return to the market in search of new buying opportunities. Tenants who are hit hard by months of interruption and serious revenue shortfalls will scrap plans to expand.

The commercial real estate sector as a whole is navigating this evolving crisis through uncharted waters. Tenants have reached out to us to report the early impact of the coronavirus, or COVID-19, on their businesses. We are sympathetic to the economic uncertainty they are facing and are pointing them toward the various federal, state and local programs being deployed to help businesses recover.

Facing immediate fiscal challenges, landlords are not in a position to extend financial relief. Some are offering hope that when the crisis ends a comprehensive review of tenants’ circumstances can be performed and a response provided in due course.

We also are urging tenants to examine their own resources, including the terms of their insurance policies. For example, if coronavirus losses are sufficient to trigger business interruption coverage according to the terms of their policy, some tenants may be covered for income losses resulting from disruption of their operations.

No one knows the timeline for recovery, so until the pandemic is under control and the economy recalibrates, my staff and I are focusing on the things we can control. We moved rapidly to transition our firm to remote mode and are proactively taking the following steps to keep our team engaged and our customers reassured:

  • As the pandemic became imminent, we fast-tracked the companywide installation, training and roll-out of stay-at-home technologies. It was a substantial investment, but well worth the long-term benefits it will deliver to our business. We also made sure everyone had a laptop and video conferencing capabilities, and adapted our phone system for the seamless offsite handling of calls.
  • We hold mandatory virtual staff meetings every day to talk shop, share news, observations and suggestions. We challenge everyone to present fresh ideas to benefit our company, our clients and our community. In addition, for as long as the health authorities permit, two people per day go to the office to support the stay-at-home team by forwarding mail and other documents, as needed.
  • Each of us stays in touch with clients to share updates and assure them that we are taking care of everything in our power on their behalf. We visit their properties to make sure they are being properly maintained, and although we no longer can go inside tenant spaces, we make sure everything is being maintained as planned on the outside.
  • Working from home can offer quiet periods during the day to sit and think about what we can be doing differently. We are encouraging our brokers, property managers and administrative staff to carve out time every day to think about challenges and opportunities for moving our business forward and ultimately making it more successful than ever before.
  • Several members of our staff are using this time to hone their skills with online training
  • Most of us have that folder full of miscellaneous notes that might be useful someday but never make it out of the pile. With some extra time temporarily on our hands, most of us are getting more organized, filing all those business cards we’ve collected or reading those industry articles we’ve meant to read for months. It’s time well spent.

Instead of wasting precious time worrying about how and when the commercial real estate market is going to recover from the impact of COVID-19, we are preparing to hit the ground running when it does.

 

Source: SunSentinel

big box retail

Across FloridaSeritage Growth Properties, the publicly traded Sears REIT, has been working quickly to repurpose old Sears and Kmart stores since the department store retailer went bankrupt in 2018 and closed more than 100 stores in the U.S.

A year ago, the firm transformed an 88,400-square-foot Hialeah Kmart into a shopping plaza featuring Bed, Bath & Beyond, Ross Dress for Less and dd’s Discount. Nearby, the company plans to convert a recently shuttered Sears store and auto center at the Westfield Mall into a movie theater and retail spaces that will house Ulta Beauty, Five Below and Panera Bread. In Gainesville, Seritage redeveloped another Kmart store, totaling 139,100 square feet, into an office building for the Florida Clinical Practice Association and the University of Florida College of Medicine.

The strategy is paying off. According to Seritage’s Q4 2019 quarterly report, the firm is collecting new national retail rents averaging $20.35 a square foot compared to $7.51 a square foot that was being paid by Sears and Kmart. In Miami-Dade County, average asking retail rents were $38.18 per square foot in Q4 2019, up from $34.81 during the same period in 2018, according to Colliers International. Seritage also increased the share of non-Sears tenants from 54.3 percent in 2018 to 83.3 percent last year.

The demise of Sears, Kmart, Sports Authority, Toys ‘R’ Us and other major department store retailers in recent years jolted big box landlords in South Florida and across the country. To fill their empty massive stores, some property owners have followed Seritage’s formula of splitting up a big box to attract discount apparel companies such as Ross and Burlington, which do not need as much space as a traditional department store. Others have been lucky enough to fill entire stores by luring grocery chains like Sprout and furniture retailers like At Home.

Seritage and all other landlords are taking advantage of what were low rents from Sears and Kmarts and creating a value-add opportunity by leasing to higher paying tenants,” Alan Esquenazi of Colliers International said.

Infill ideas

A few landlords, such as shopping center developer Raanan Katz, are planning ambitious mixed-use projects on former big box sites. Katz’s company RK Centers wants to transform the site of a Sears building in Fort Lauderdale into a massive development that would have four towers with 854 residential units, a 192-room hotel, 11,065 square feet for restaurants, cafes and a food hall and 86,990 square feet for retail, office and art gallery spaces. In the city’s burgeoning Flagler Village neighborhood, the proposed project was first presented at a Fort Lauderdale design review committee meeting in January.

In Lantana, a small town in Palm Beach County, Miami-based builder Saglo Development Corp. wants to redevelop a Kmart on an 18.6-acre site on Hypoluxo Road and South Dixie Highway into an apartment complex. A preliminary plan shows five four-story residential buildings with 209 units, a clubhouse, pool and 508 parking spaces. In January, the Lantana Town Council voted to approve a land use map change for the property from commercial to mixed-use.

Shopping centers formerly anchored by big box stores are usually well located in the heart of mostly residential areas with strong traffic counts, good access and ample parking,” said Nick Banks, a principal and managing director with Avison YoungThis makes malls excellent candidates for redevelopment for other uses. Multifamily options in these projects help bring residents to the doorstep of remaining retailers. Furthermore, cities are in favor of infill development like this as the pathway to achieving increased density.”

Despite vacancies caused by national chains faltering, big box retail is stable overall in South Florida,” Colliers’ Esquenazi said. In certain markets, I have a lot of new vacancies and rental rates are going down. That is not the case in Florida. We had a solid year. Rental rates are better than we’ve had in three years.”

According to a Colliers International Q4 2019 report, the vacancy rate for big box retail stores in South Florida is below 5 percent with properties in Miami-Dade faring slightly better than those in Broward (see chart on page 30).

“There’s a perception that landlords are not finding new tenants because big box stores will remain vacant for long periods of time even when there are signed leases,” Esquenazi said. It takes about a year to fill the space. But it’s not due to a lack of demand. The negotiations, getting letters of intent, signing the lease, obtaining permits and starting construction takes a number of months to complete.”

Esquenazi said his practice specializes in big box stores and represents chains, such as Target, Kohl’s and 24-Hour Fitness, among many others that are adding new locations in South Florida. Dick’s Sporting Goods, for instance, took over shuttered Sports Authority stores in at least five South Florida locations, including Sawgrass Mills Mall, Midtown Miami, Dadeland Station and Aventura.

Obviously, Dick’s knew where Sports Authority’s best stores were and jumped on them,” Esquenazi said. “Dick’s is one example of expanding retailers. Then you have your off-price retailers like TJ Maxx, Burlington, Ross and Marshalls that remain strong.”

Supermarket Rescue

Grocers are another hot category that helps boost big box-anchored shopping centers,” said Ian Weiner, president and CEO of Pebb Enterprises, a Boca Raton-based commercial real estate investment firm. It took nearly two years to land the right tenant to fill a large chunk of a 42,000-square-foot store that housed a Sports Authority at the Shoppes at Isla Verde in Wellington. Rather than replacing it with any big box, we were looking for a tenant that could change the dynamics of the shopping center. In today’s environment retailers are also being extra cautious in making decisions. Quick deals are not easy to come by.”

In July 2018, Pebb announced Sprouts, a fast-growing grocery chain offering fresh, natural and organic products, was opening its first South Florida location, taking 30,000 square feet in the former Sports Authority space. A month later, Pebb sold the Shoppes at Isla Verde — which has a Best Buy, Ulta Beauty, and Petco — to MetLife Investment Management for $73.75 million. Pebb still handles leasing and property management for the 207,030-square-foot outdoor shopping center.

Adding Sprouts increased the value of the shopping center,” Weiner said. “It adds a lot more foot traffic having a grocer versus a Sports Authority, and the investor pool is a lot better for grocery store-anchored shopping centers.”

Last year, Pebb was also able to find a large tenant to fill an 126,000-square-foot big box store that was once occupied by Gander Mountain, an outdoor apparel company that filed for bankruptcy in 2018, after liquidating merchandise, laying off employees and closing 30 to 40 stores. The home décor superstore At Home signed a 10-year lease and opened its doors last May. Pebb bought the 13-acre Gander Mountain site in April 2018 for $2.6 million.

We bought it knowing we had potential options like splitting it up or doing an alternative use like industrial,” Weiner said. “But splitting up a big box space is very costly to do. So the best solution is to get a tenant that can absorb the entire space. Each project varies, but it can cost $50 to $100 a square foot to reconfigure a big box for smaller tenants.

The benefit of splitting a big box store is that a landlord can charge a higher rate per square foot for smaller spaces, said Claudio Mekler, CEO of Miami Manager, a commercial real estate firm based in Sunrise. A Sears Home vacated a nearly 5,000 square foot space at the Miami Manager-owned Village Shoppes of Coconut Creek in June 2017. Belfort Gym, a tenant at another Miami Manager property totalling 5,963 square feet, was looking to downsize its space by half.

Mekler said he convinced the gym owners to take half of the space in the former Sears Home store. He then leased Belfort’s old space to another existing tenant, Salon 360, that wanted to expand its square footage.

Between Belfort and Salon 360, Miami Manager increased its income at these two properties by almost 32 percent compared to the income generated by the old Sears lease,” Mekler said. “Although the other half of the Sears space consisting of 2,338 square is still vacant, we know with the aggressive approach it will be leased shortly.”

 

Source: The Real Deal

oakland park

Oakland Park is on the brink of starting redevelopment efforts it hopes could be completed in time for the city’s 100th birthday celebrations in the year 2029.

A new fire station could be built within a self-storage business. The city’s first splash pad soon could jut water for scores of children. And a new library and City Hall could be part of the construction plans.

Fire Station

The fire station, at 4721 NW Ninth Ave., could be moved to a self-storage business that has planned a seven-story building on empty land south of Prospect Road, between Powerline Road and Interstate 95.

Hebert said the city was not enthused about approving another storage building, but changed course when the developer agreed to allow the first floor to become new bays for the engines, and the second floor to become sleeping quarters and a gym for firefighters.

“The idea is to get a new station and save us millions of dollars,” Herbert said. “All we’ll have to do is contribute to our space of the building.” And the neighbors won’t mind: “Who cares if sirens go off during the day? Nobody sleeps in storage buildings.”

The agreement could be finalized within three months.

A New Park

The “City Park” will be created along Park Lane, near the site of the current Public Works building and a fire station that is now along Northeast 38th Street. The public works site will be moved to a new location at the site of a former water plant, and the fire department will be reconstructed, larger, about three blocks away. The Collins Community Center also will be bulldozed.

In the space will be a new Collins Community Center, and the city’s first splash pad. The contract for the splash pad could be finalized by the end of the year. And the park will get a new pickleball court, basketball court, playground and restrooms.

The city’s library will move to City Park, about a mile west, bordering the Harlem-McBride neighborhood.

City Hall

The building off the railroad tracks, at 3650 NE 12th Ave., will no longer be City Hall.

A developer is proposing a five or six-story building of retail, restaurants and the commission’s chambers for public meetings on the ground floor, as well as a parking garage above that, and the top floor as the new City Hall.

“The size will actually grow from a 12,000-square-foot building now,” Hebert said. “We will double the size of the office space.”

The location will be along Dixie Highway, on the south side of Northeast 38th Street, and the city will rent the space from the owner as the main anchor.

No decision had been made about what would happen to the current City Hall site.

Caryl Stevens is the former mayor, and a former board member of the Oakland Park Historical Society, which is now inactive. She has some reservations. While she approves of the idea of a new park, she questions whether giving up City Hall is the right move.

“The whole plans are wild,” Stevens said. “We may be one of the few City Halls that are rented.”

 

Source: Sun-Sentinel

Looking for a safe place to put your money to wait out the coronavirus pandemic?

Healthcare stocks and real estate investment trusts in the sector aren’t a bad idea.

REITs and companies that own hospitals, medical offices, and medical science research facilities are expected to weather the pandemic and are considered safe bets even outside of health crises, according to CNN.

Kenneth Leon, an analyst with CFRA Research recommends three entities in particular: Alexandria Real Estate Equities, Healthcare Trust of America, and Medical Properties Trust.

They are each paying dividend yields of between 2.7 percent and 5 percent, making them attractive alternatives to bonds as the Federal Reserve slashes interest rates.

Companies that own senior living centers, however, probably aren’t the best bet. Leon said senior living centers will have trouble safely showing prospective new residents their facilities, pointing out that many underwent lockdowns during the flu seasons of 2018 and 2017.

The spread of Covid-19 is putting pressure on most other real estate sectors, particularly residential markets in areas with numerous cases of the virus. Home sales are down in Milan and Italy’s Lombardy region, for example. Daily deals in Seoul are down 90 percent.

Miami-Dade County has suspended all eviction activities as part of its declaration of a state of emergency.

New York landlords are stockpiling soaps and hand sanitizers and ramping up cleaning of their buildings. After an employee tested positive for the virus, Newmark Knight Frank stationed nurses at its Park Avenue office to screen clients and employees.

 

Source:  The Real Deal

rezoning

Florida’s Bert Harris Act, passed in 1995, allows property owners to seek compensation if a municipality changes its zoning or land use regulations and the land loses resale value.

A bill that would tweak that law, improving the process for property owners, is now making its way through the state legislature. Critics say it could be a disaster for local governments and taxpayers, exposing them to massive financial liability and hampering their ability to adjust how properties may be used.

An analysis prepared for the Senate’s rules committee described an instance of a Hollywood developer in 2002 buying land to build a 15-story condo after confirming zoning regulations with the planning and zoning director. However, when nearby residents opposed the project, the city reduced height limits to 65 feet. (The developer sued under the Bert Harris Act but lost on appeal in 2018 because it had never filed a formal application to develop the property.)

More recently, the city of Anna Maria put zoning limits on vacation rental units, then faced more than 100 Harris Act claims, with property owners demanding more than $37M, the Tampa Bay Times reported. The city ended up settling and reinstating the lost units.

In Venice, an effort to combine two parcels for the construction of some 1,300 homes failed to pass the city council, but last week, as a Bert Harris lawsuit loomed, the council rescinded and changed its vote.

Jay Daigneault, a lawyer who represents several beach communities, told the Tampa Bay Times an amendment to the Bert Harris Act now being proposed in the state legislature — as House Bill 519 and its companion Senate Bill 1766 — would be “a nuclear bomb to local regulation of land use.”

The bill would make it easier for property owners to make claims under the Bert Harris Act. Initially, the wording would have allowed for any compensation or settlement under the Harris Act to apply to other properties “similarly situated,” thus exposing governments to massive judgments. That provision has since been removed from the Senate version of the bill.

“Nonetheless, very damaging provisions remaining in both bills that reduce the time for governments to respond to Harris claims from 150 to 90 days, increase the likelihood of governments paying the property owners’ attorney fees, and make such challenges easier to bring,” activist group 1000 Friends of Florida stated. “The House version of the bill was worsened through an amendment to include making attorney fees recoverable for property owners but not local governments and negating the requirement that magistrates overseeing claims be certified mediators.”

“If passed, the bill would facilitate compensation for property owners, but local governments would likely exercise caution when imposing new rules and more claims will likely be submitted,” the analysis prepared for the Senate committee stated.

The bill has passed multiple legislative committees already. Florida‘s regular annual legislative session ends March 13.

 

Source: Bisnow

Developers completed construction of 289 million square feet of industrial and logistics real estate in the U.S. last year, but any concerns of oversupply are tempered, as only 39 percent of space in new construction was available.

That’s a major factor in vacancies staying near all-time lows in 2019, according to a new report from CBRE. The CBRE analysis finds that at 22.2 percent, Central and Northern New Jersey ranked among the top five markets nationally with the lowest vacancy rate for 2019 completions.

Deliveries outpaced the 255 million square feet of new absorption, but with robust leasing from occupiers, especially ecommerce and retail firms that often require modern building design and amenities, supply and demand dynamics remain healthy. A vacancy rate of less than 50 percent is considered healthy for newly delivered industrial properties.

“As New Jersey’s industrial market continues to break leasing and rental rate records, new developments are being snapped up by space users at a rapid pace,” said Thomas Monahan, Vice Chairman. CBRE. “While the development pipeline remained robust with 28 buildings and 10.3 million suqare feet currently under construction, the demand for high quality product is far outpacing supply.”

Another major factor contributing to the strong absorption of new construction is the increase in built-to-suit development — the construction of space for a specific space user. This segment made up 28.1 percent of new construction activity, as companies increasingly need unique requirements to meet their specific demands.

In markets with over four million square feet of new development, Kansas City finished 2019 with the lowest overall vacancy rate for 2019 construction completions at 7.3 percent, followed by Miami, Baltimore, and Greenville, SC, which all had vacancy rates for newly constructed product under 20 percent. Dallas-Fort Worth was the strongest core market, with nearly 75 percent of the 25 million square feet completed in 2019 taken.

Supply fundamentals should remain stable this year, as already 33 percent of the 309 million square feet under construction nationwide is already accounted for. A preleasing rate of 25 percent for under-construction product typically are indicative of a solid leasing environment.

 

Source: Real Estate Weekly

Sometimes cities grow up. Sometimes, out. West Palm Beach is doing both.

Along with billions of dollars of development in the works, a new study identifies more than 100 acres on the city’s fringes ripe for annexation from unincorporated parts of the county. Officials say annexing strategic parcels along its jagged border, West Palm can square off its frontiers, make police and fire coverage less confused and build a healthier property tax base to support community needs.

“Annexing also helps the city because state money often is divvied out based on city population,” Development Services Director Rick Greene said at a mayor-commission work session.

In the past six months, Greene’s staff, in a team with representatives of the engineering, fire, police and other departments, studied 559 parcels in six key parts of the city for their annexation potential.

“City staff wants to pursue 38 of the parcels, with 125 acres in all, as priorities for annexation, Greene said. “Another 108 parcels are worth adding, if adding the initial 38 make the others contiguous to city borders. The remaining 413 are not worth pursuing for now, for various reasons. Some might require an arduous rezoning process, for example. For each parcel, they evaluated whether annexing would be politically, technically or economically feasible,”

They asked, would the city be able to deliver utility, police and services there, for example, and did the property have the potential to bring in more tax revenue than it would cost to serve it?

Starting in 1988, when a West Palm visioning report identified future areas for annexation, the city annexed 52 properties, totaling 6,463 acres. The big tracts are mostly gobbled up by now. In contrast to 1988-89, when the city added 2,692 acres in 14 annexations (the Ibis community land was the biggest, at 1,876 acres), in all of the 2010s the city processed half that many annexations, for a total of 22 acres.

The six priority areas the new report identifies for future annexations are:

  • On the south side of Okeechobee Boulevard west of the turnpike. This includes the 25-acre Grace Fellowship site at 8304 and 8350 Okeechobee, whose application is in the works. The site is opposite the Andros Isle community.
  • A multi-family property on the west side of North Haverhill Road, diagonally across from the MorseLife senior care residences
  • North Haverhill’s northeast corner with 45th Street, and a small daycare site on the west side of North Haverhill just south of the Riviera Beach city line.
  • North Military Trail near its intersection with Community Drive. This area includes Oxbridge Academy and several commercial sites on both sides of Military. An Oxbridge annexation would not contribute to the tax base because it’s a nonprofit school exempt from property tax. But since state law only allows annexations adjacent to existing city borders, so if West Palm were to annex Oxbridge, other parcels abutting the school would be within the city’s reach, Greene said.
  • Parcels scattered near the northeast corner of North Military and Okeechobee.
  • A triangular parcel, currently within the Town of Mangonia Park, an extension of the 45th Street Flea Market, which is already within West Palm’s borders.

Properties can be annexed voluntarily or involuntarily. The voluntary ones take place when a property owner applies for them. The sites must be contiguous to the city, “reasonably compact” and not create enclaves — islands of unincorporated parcels surrounded by city land. For involuntary annexations, a city has to schedule a referendum or get consent from more than half of the owners on land covering more than half the total.

“There are reasons why a property owner might want its land to be brought within West Palm’s boundaries but there are disincentives as well,” Greene said.

The big disincentive is that the city’s property tax rate is higher than the unincorporated county’s. The city charges nearly $22 per $1,000 of a property’s value annually; In the unincorporated county, it’s about $17.

“To overcome that disincentive, the city could charge annexed properties less, over three or four years, to make up the difference,” Greene said.

“The incentive for property owners, in addition to access to city services, is that city development rules and procedures can be easier to navigate than the county’s and allow projects of higher density,” said Alex Hansen, comprehensive planner for the city.

City Commissioner Richard Ryles asked whether, by annexing parcels and adding residents, the city risked diluting the votes of its existing African American community. Hansen responded that most of the priority parcels are commercial sites and several are vacant.

Each property to be considered for annexation would have to have the city commission’s approval.

Source: Palm Beach Post

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Source:  SFBJ