New construction is fueling Broward County’s growing property values, which reached an all-time high this year, according to new preliminary 2017 values released Friday by the Property Appraiser’s Office.

The new figures will be used by local governments to set their tax rates and budgets for the coming year. (Click here to see the latest property value figures for the county and local cities.)

Leading Broward cities in new construction this year were Hollywood and Dania Beach, reaping the windfall of FPL’s new $1.2 billion “clean energy” plant in their portion of Port Everglades that was added to the tax rolls this year.

But right behind those cities were two that have been consistently near the top of the county’s new construction list in recent years: Fort Lauderdale and Parkland. They’re the only two Broward cities to be in the top five when it comes to new construction in each of the past six years. And they couldn’t be more different.

Fort Lauderdale is the county seat with a booming downtown and an upscale beach that are attracting substantial high-rise and redevelopment projects. Parkland, with its 30,000 population that’s a sixth of the size of Fort Lauderdale on the county’s northwestern fringe, doesn’t have a beach or a downtown.

What Parkland does have is vacant land to build on, something that’s a rarity in the rest of the county. In recent years, the suburban community has been annexing for development portions of the Wedge, a nearly 2,000-acre triangle of vacant land that was transferred from Palm Beach County to Broward in 2009.

“Developers are purchasing large agricultural parcels in Parkland and developing them into single-family home communities,” Property Appraiser Marty Kiar said.

Major builders there include Lennar, Toll Brothers and CalAtlantic Homes. The projects include the Parkland Golf and Country Club, Watercress, Mira Lago, Heron Bay and Parkland Bay. Construction in the city was largely responsible for a 52 percent increase in the number of Broward homes started during the first three months of this year.

“That land that came in is highly desirable as so many people want to be in Northwest Broward and Parkland,” said Broward Commissioner Michael Udine, a former mayor of the city. “They love our open space, great schools and family-friendly environment. People are moving from within Broward and many from out of state.”

The new figures released Friday put Broward’s new construction this year at $2.4 billion, which was $111 million more than the amount listed in the initial report that came out in May. The county’s overall taxable value came in at $177.3 billion, up $17 million from the May report.

Existing property values in the county are up 7.8 percent from a year ago, while the increase is 9.3 percent when new construction is included. For property owners, higher values signal a growing return on the investment they made, but they can also mean higher taxes to be paid.

Miami-Dade County is reporting an overall taxable value of $272.4 billion, an increase of 8.4 percent, with $8.2 billion in new construction. In Palm Beach County, property values reached $176.8 billion, a 7.3 percent increase, with new construction totaling 2.7 billion.

Among Broward cities, overall totals show Dania Beach leading the county with a 20.7 percent increase in property values and Hollywood second with a 15.6 percent increase. Fort Lauderdale values are up 9.3 percent, Pompano Beach 9.2 percent, Pembroke Pines 8.6 percent, Miramar 7.7 percent and Coral Springs 7.4 percent.

 

Source: SunSentinel

In disruption there is opportunity as well, and the Counselors of Real Estate’s annual list of the Top Ten Issues Affecting Real Estate certainly goes heavy on disruption.

It’s also not a list of items that can be ticked off and dealt with one by one: in announcing the 2017-2018 CRE Top Ten list earlier this month, Scott Muldavin, chair of the invitation-only Counselors, noted that many of the issues are interconnected and reflect both global uncertainty and seemingly relentless disruption in the economy and multiple real estate sectors.

Heading the list is a hydra-headed issue that has an impact on all of the others because, as FTI Consulting’s Michael Hedden points out, it makes reaching decisions on anything more difficult. The issue is global uncertainty and political polarization, as exemplified by recent elections in the US, the UK, France, Austria and other countries.

The Counselors see “resurging nationalism, testing existing diplomatic and trade relationships around the globe as exemplified by Brexit and NATO.  Potentially devastating military conflicts seem more likely in Asia and existing conflicts in the Middle East are more volatile.” Within the US, its scope isn’t limited to Washington, DC by any means, but carries through to the local level as well.

For real estate, the negative implications are immediate, according to the Counselors: “Uncertainty about changes to trade, travel and immigration policy threaten cross-border investing, hospitality properties, retail, and manufacturing supply chains, among other effects. Rising interest rates and retail inflation will make middle-class homeownership that much more difficult.”

Longer-term implications, the Counselors warn, “could be much more severe, as polarization prevents long-term fixes to issues such as infrastructure, affordable housing, local and state pension liabilities, and education. And so, one or both of these trends affects virtually every issue on this year’s list and a host of others that didn’t make the cut.”

On a brighter although no less disruptive note is the second item in CRE’s list, the technology boom. This boom encompasses everything from the tech start-ups that are revolutionizing commercial real estate operations to ecommerce and the trend toward autonomous cars that may eventually render parking garages obsolete.

In retail, according to the Counselors, “the question has shifted from ‘Do you shop online?’ to ‘How many deliveries did you have today?’ Online retail continues to drive warehouse demand—but each foot of new warehouse space leased by online retailers translates into eight feet of vacant retail. Smart lenders and investors are already insisting that new construction reflect future demand patterns, not those with which we are currently familiar.”

Third on the list is generational disruption. A few years ago, Baby Boomers (formerly the largest generation by population) and Millennials (who now outnumber them) were perceived as by and large going their own ways.

 “The generations are crossing paths everywhere: in the workplace, in housing and at the local bar and grill, intersecting and sharing spaces, despite their often disparate priorities when it comes to the built environment.” the Counselors say. “Studies project that Millennials will ultimately behave in a fashion similar to Boomers—but do so 10 years later.”

Other issues on the latest CRE Top Ten list include retail disruptions, infrastructure investment, housing: the big mismatch, lost decades of the middle class, real estate’s emerging role in health care, immigration and climate change. Issues to watch include tax reform and monetary policy, various other policy matters and cannabis.

Under the direction of research executive and author Peter C. Burley and Victor Calanog, chief economist and SVP with Reis, the Counselors’ 1,100 members globally undertook an extensive collaborative dialogue on current issues and trends to compile the final list.

 

Source: GlobeSt.

McCraney Property Company sold one of three industrial facilities at the Vista Business Park in West Palm Beach for $8.9 million.

The Vista Business Park in West Palm Beach

Berger Commercial Realty/CORFAC International represented the buyer, who paid $127 per square foot, for the fully occupied industrial building at 2361 and 2365 Vista Parkway.

Berger also retained its position as exclusive leasing agent and property manager for the 70,000-square-foot building.

The property’s new owner is McNab Commerce, a long-established partnership between commercial real estate developers Austin Forman and Jack Loos.

The multi-tenant building is a small bay facility with front-load, grade-level doors and ceilings 18 feet high.

Vista Business Park is a 500-acre, master-planned business park near Interstate 95, Palm Beach International Airport and downtown West Palm Beach.

 

Source: The Real Deal

34309962 - silhouettes of construction and power lines at sunset

Chicago-based investment firm is about to complete the $35 million re-positioning of the former Motorola office park into an office/retail campus in Plantation.

The renovation of this iconic property has injected new life to the city. Specifically, the renovation is attracting innovative tech and healthcare companies as tenants and adding restaurants, landscaping, lighting, a fitness center, a jogging trail around a manmade lake and other amenities for tenants to enjoy. The campus is now home to Motorola, Magic Leap, a company developing virtual reality technology, and health care company Amsurg Corp., among others.

GlobeSt.com sat down with Arnstein & Lehr Attorney Josh M. Atlas to discuss the behind-the-scenes of transforming the former Motorola campus into Plantation Pointe. Atlas is a partner in the law firm’s West Palm Beach office and a member of the Construction Law and Commercial Litigation Practice Groups.

Atlas represented Illinois-based Blue Water Builders, the general contractor for the developer Illinois-based Torburn Partners. In part one of this interview, GlobeSt.com asked him what is the main takeaway from the transformation of the iconic Motorola Corporate Park into a sprawling retail/office campus designed with Millennials lifestyle-preferences in mind?

“The main takeaway is that a forward-thinking developer can restore and revitalize an entire community by taking the right approach to a project like the re-positioning of the former Motorola Corporate Park,” Atlas says. “Growing up in South Florida, everyone recognized that the Motorola Corporate Park was an important part of the local community because it was so noteworthy that such a high-profile company would have a large presence in a suburb like Plantation. “

By transforming the project into a multi-tenant corporate campus and adding both retail and lifestyle amenities, he says, the developer created a platform to bring in a much more diverse group of tenants. And that is benefiting everyone.

“The transformation of this campus gives tenants the ability to satisfy the demands of a workforce that is increasingly populated with Millennials who want more out of their professional experience than just having an office to go to work,” Atlas says. “The transformation should also serve as a boost to the local economy by increasing the tax base, creating opportunity for local business and giving more people a reason to move into the community to be near work.”

 

Source: GlobeSt.

Wellington-based B/E Aerospace, an aircraft cabin interior products and services manufacturer, has sold to Rockwell Colllins of Cedar Rapids, Iowa for $8.6 billion.

B/E said it will close its South Florida headquarters at the close of the acquisition. The number of employees affected was not immediately available.

B/E Aerospace was among South Florida‘s top public companies with $2.7 billion in revenue in 2015.

Effective immediately, B/E Aerospace is rebranded as Rockwell Collins. Werner Lieberherr, former B/E Aerospace president and chief executive officer, is now executive VP and COO of Rockwell Collins’ newly created interior systems business. He will report to Kelly Ortberg, chairman, president and chief executive officer of Rockwell Collins.

With the acquisition, Rockwell Collins now has about 30,000 employees and annual revenue of more than $8 billion based on calendar year 2016 results.

The acquisition also expands the Iowa-based company’s portfolio with a wide range of cabin interior products for commercial aircraft and business jets including seating, food and beverage preparation and storage equipment, lighting and oxygen systems, and modular galley and lavatory systems.

“Today marks a major step in advancing our vision of being the most trusted source of aviation and high-integrity solutions in the world,” Ortberg said. “The industry-leading products and solutions being brought together by this acquisition give us a much broader offering, increasing value for our customers and ultimately driving long-term, profitable growth and shareowner value.”

 

Source: SFBJ

Canada-based generic pharmaceutical company Apotex Corp. bought a warehouse in Miramar for $50 million.

An affiliate of Apotex, called Sherm Realty Corp., bought the 302,864-square-foot warehouse Jan. 31 for $165 per square foot.

The seller was Atlanta-based industrial property developer IDI Gazeley, which built the warehouse in 2014.

5501 SW 29 Street in Miramar

The warehouse is located on a 20-acre lot in a corporate park that IDI Gazeley developed at 15501 Southwest 29 Street in Miramar, northwest of Miramar Parkway and Interstate 75. The park’s tenants include Kellstrom Defense Industries Inc.

Colliers International reported that the pace of industrial-space absorption in Broward during last year’s fourth quarter was the fastest in a decade and supported “skyrocketing” lease rates. Colliers reported that 37 percent of all Broward industrial space leased last year was leased in the fourth quarter, about 936,000 square feet.

 

Source: The Real Deal

cash

Michael Rauch, Senior Managing Partner with CRE Florida Partners and Rauch | Robertson & Co., recently negotiated the sale of an industrial property located at 741 NE 42ndStreet in Oakland Park.

The property, which sold for $1,440,000, or $96 per square foot, is a free-standing industrial building with a 1-acre adjacent outside storage yard. The building features 22’ clear ceiling height and several grade level overhead doors.

“This acquisition represents the ‘up-leg’ purchase of an IRC1031 tax free exchange,” explained Rauch. “We are very pleased to have successfully represented this buyer in both the ‘down-leg’ sale and ‘up-leg’ purchase phases of this tax free exchange.”

Rauch represented the buyer in the transaction.

 

 

 

 

Following a year marked by a contentious presidential election and likely changes to come in U.S. policy prescriptions, law firm leaders in Florida are largely optimistic about their firms going into 2017 and expect to see growth in Miami, according to a recent survey of firm leaders and administrators in the region.

“We’re more optimistic today in light of the election,” said Holland & Knight managing partner Steven Sonberg, discussing his personal outlook on the year to come. “The economy was in pretty good shape, and it seems clear with Donald Trump as president, he intends to add fuel to the economy.”

Sonberg isn’t the only firm leader in Florida looking forward to the coming year, according to ALM Intelligence’s Law Firm Leaders survey, which collected responses from administrators and leaders from 56 law firms in the Miami region. The survey was completed in September and October, before Trump’s victory.

In the survey, 29 percent of respondents said they were very optimistic about their firm’s prospects in 2017, while another 64 percent said they were somewhat optimistic. Seven percent said they were uncertain about the coming year, while no firm leaders said they were pessimistic about 2017. The survey also showed that 69 percent of firm leaders in Florida expect deal flow in 2017 to increase moderately over 2016, with another 8 percent expecting a significant increase. While no firm leaders expected deal flow to decrease, 23 percent said that they anticipated flat growth.

The greatest percentage of respondents, 46 percent, said they would expect to see corporate work provide the most revenue growth next year, with litigation as the second most popular response, at 23 percent. Fifteen percent said that they expect to see the most growth in real estate, while 8 percent selected bankruptcy and intellectual property.

Meanwhile, 62 percent of respondents said that they expected bankruptcy and restructuring to be the most financially challenging practice area in 2017. Litigation was named as the most potentially challenging by 31 percent of firm leaders, and another 8 percent pointed to real estate as an expected challenge. A large majority, 80 percent, of respondents said they expected their firms’ billing rates to increase by 5 percent or less in 2017, with the other 20 percent saying they plan to keep their rates at 2016 levels.

Firm leaders were also generally bullish on their firms’ financial outlook for 2017 in terms of the amount of profits taken home by partners. While 20 percent of respondents said they would expect profits-per-partner to decrease, the remainder said they anticipated increases—50 percent said they expect partner profits to grow by 5 percent or less, while 30 percent expected growth of more than 5 percent.

National Comparison

For the most part, the outlook among firm leaders in the Miami regional market closely tracks those of firm leaders in a nationwide survey also conducted by ALM Intelligence. But there were some differences in few key areas—including firm leaders’ optimism about their own firm’s prospects, the likelihood of an increase in deal flow and revenue growth from corporate work in 2017.

Compared to a nationwide survey, which included responses from 103 law firm leaders, a higher percentage of firm leaders in Florida were very optimistic about their own firm’s prospects in the coming year, and a greater percentage of those in the Miami region were more likely to expect increased deal flow and revenue growth from corporate work.

Discussing the results of the nationwide survey with DBR affiliate The American Lawyer, legal consultant Kent Zimmermann of the Zeughauser Group suggested that a change in presidential administration may have some impact on the mix of practice areas providing the most revenue growth for firms. Both the nationwide and regional surveys were conducted in September and October, before the election.

As specific examples, Zimmermann noted that, depending on the policy choices of President-elect Donald Trump, law firms could see more international trade, regulatory and tax work.

“Generally, change in Washington has historically been good for law firms,” Zimmermann told The American Lawyer, “but this particular change will be a mixed bag for law firms, and there will be ups and downs.”

Nationwide, 32 percent of firm leaders said they expected to see the most revenue growth from corporate work, while 27 percent pointed to litigation as the most likely revenue growth driver in 2017. In the Miami region, by contrast, 46 percent of firm leaders selected corporate work as the area that would see the most revenue growth, while only 23 percent said they expected litigation to see the most growth in 2017.

Holland & Knight operations and finance partner Douglas Wright also described likely policy changes in a Trump administration as an opportunity for more legal work in certain areas—the president-elect has, for instance, promised to focus on infrastructure projects and has expressed an interest in overhauling the U.S. tax code.

“I think it’s likely that the tax code is overhauled,” said Wright. “And that really hasn’t happened since 1986, so I think those changes … will require businesses and individuals to reevaluate their structure and business planning.”

Firm Expansion

The nationwide and regional outlook on real estate practices also had some slight differences—10 percent of firm leaders in the national survey said they would expect to see the most growth in their real estate practices; in the Miami regional results, 15 percent of firm leaders said they expect real estate to be the practice with the most growth next year.

Sonberg expects his firm’s real estate work to continue at a high level. That’s especially true in Florida, he said, where real estate developers are remaking the landscape around Miami by eyeing potential projects in Broward and Palm Beach counties. He and his colleague, Wright, also noted an ambitious plan by Tampa Bay Lightning owner Jeff Vinik to develop an area in downtown Tampa.

GrayRobinson President Mayanne Downs had a similar take, saying that in light of increased real estate development, she’s seen a high demand for legal work in the realms of land use, permitting, planning and zoning. She also noted she’s starting to see an uptick in construction-related litigation that’s followed some of the real estate development in the state in the recent past.

“Real estate transactions are up,” Downs said, “and with that, all the stuff that goes with it.”

Law firms themselves have their own real estate and expansion plans. Downs noted GrayRobinson has a relatively new office location in Miami after relocating in 2015 to the downtown Wells Fargo Center. And Sonberg said Holland & Knight plans to add a sixth floor to its lease in the South Florida hub city.

Those developments appear to align with the survey results—83 percent of firm leaders in Florida said they expect to add lateral partners in Miami next year. The next most popular responses were New York, where 33 percent of firm leaders said they expect to hire laterals, and in Los Angeles and Chicago, where 17 percent said they expect to add to their partner ranks.

Overall, 72 percent of survey respondents said they would expect in 2017 to increase their firms’ total head count by 1 to 5 percent, while 14 percent anticipated more growth of 6 to10 percent. The remaining 14 percent of firm leaders said they expected to keep their lawyer head count the same in 2017 as it was in 2016.

Downs, for her part, said she’s focusing on hiring in Miami, but she also stressed that she’s engaged in a lot of recruiting throughout many of GrayRobinson‘s offices in Florida.

“Miami is buzzing. … It’s almost as if there’s an electric hum in the air,” she said. “So Miami for sure. But I really am seeing the excitement around the state.”

Source: DBR

Michael Rauch

Michael Rauch

Michael Rauch, President and Managing Partner of CRE Florida Partners recently completed the sale of two freestanding office properties in Dania Beach. Both office properties located at 3201 Griffin Road.

Rauch originally sold the property to the ownership of Gulfstream International Airlines in 2005, which was used by the airline until 2010 as the company’s corporate headquarters. Gulfstream was sold in 2010 to Silver Airways. The owner of Gulfstream retained the buildings. Rauch was retained in 2012 to lease and stabilize the property for sale.

3201 Griffin Road-Dania Beach 2The asset was purchased by Miami-Dade investment group Salomon Investment Inc. as part of an IRC1031 exchange. Salomon purchased the ±30,379 SF office property for $3,120,000 or ±$103 per square foot on a ±6.5% capitalization rate. At the time of sale, the property was approximately 93% occupied.

“The sale of the Gulfstream International Airlines property represents the conclusion of several years of asset-repositioning for an investment sale,” commented Rauch. “The sales price also reflects a slow trend in strengthening office values in South Florida, which is badly needed and long overdue,” he added.

The deal closed March 31.  The buyer represented itself in the transaction.