Two massive towers are rising in West Palm Beach, reaching 426 feet high to clutch the tile for the cityâs tallest high-rises.
Theyâre just the latest sign of the expansive growth as the downtown lures more businesses and residents.
The 30-story mixed-use complex, titled One West Palm, will contain 326 luxury residential units, 200,000 square feet of Class A office space, a hotel and a long list of amenities, including a fitness club, spa, movie theater and indoor tennis courts.
âThese arenât just the tallest,â One West Palm developer Jeff Greene said. âTheyâre certainly going to be the iconic landmark buildings in the skyline of West Palm Beach.â
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One West Palm sits at 550 N. Quadrille Blvd. in West Palm Beach on Sept. 15. Developer Jeff Greene said the project will be completed some time next year. (PHOTO CREDIT: Carline Jean/South Florida Sun Sentinel)
Residing at 550 N. Quadrille Boulevard, the 426-foot behemoths could fit the length of nearly one-and-half American football fields. They may be the buildings closest to the sky in West Palm Beach, but the project is certainly not the only one in the works.
The âWall Street of the Southâ has become a magnet for developers, especially as people migrate from the cities south of it and move from states in the Northeastern United States.
âThe Most Exciting Thing â
Construction on One West Palm began more than four years ago, and delays pushed completion to 2024, Greene said. But his excitement for the project remains, especially as it will now join other newly developed current and future projects.
âWe started out with a kind of out-of-the-way location that really was across from a bunch of boarded-up buildings in Palm Beach,â Greene said. âAnd now weâre sitting kind of dead center in the middle of the most exciting thing happening in all of South Florida. So itâs really an exciting time for our project.â
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The AKA Hotel is at 695 S Olive Ave. in West Palm Beach, seen here on Sept. 15. This luxury hotel opened last year. (PHOTO CREDIT: Carline Jean/South Florida Sun Sentinel)
Greene said his vision was to create something the city did not yet have. While One West Palm will tout the title of highest buildings in the city, the surge of development in the area has produced several projects, some of which were recently completed, some of which are under construction and some of which were recently approved.
Among those projects are:
- 360 Rosemary, a nearly 300,000-square-foot office building at 360 S. Rosemary Ave., Suite 1100. This project was completed in 2021.
- AKA Hotel, a luxury hotel at 695 S. Olive Ave., recently opened last year.
- One Flagler, a 25-floor Class A-office building with luxury amenities at 154 Lakeview Ave., is under construction.
- Olara, a luxury waterfront residence at 1919 N. Flagler Drive, is under construction and expected to open in the next few years.
- NORA, a mixed-use district featuring casual to high-end dining, desserts, coffee shops, boutique fitness spots and retail, will open its first phase in 2024. Its first food and fitness tenants were recently announced.
- Transit Village, a mixed-use transit-oriented development with residential units planned for 150 Clearwater Drive and 203 S. Tamarind Ave.
- 515 Fern, a 25-floor mixed-use building expected to become the largest office building in downtown West Palm Beach at 515 Fern St.
Unlocking A Formula
âThose years of great planning and foresight and investment into the city are now bearing fruit by the private sector recognizing that this is a great place,â said Christopher Roog, the executive director for West Palm Beachâs Community Redevelopment Agency. âThe growth is occurring in a managed but high-quality way that is benefiting the residents.â
Roog said the city has unlocked a formula for creating places people want to work and live, leaning into the ever-popular âLive, Work, Playâ concept so many other cities, such as Boca Raton, are adopting.
âWeâre intentionally building our built environment, like our streets and our sidewalks, to make them so comfortable and so inviting that it makes it very easy for that âLive, Work, Playâ concept to happen,â Roog said.
âMore than 10,000 people now live in downtown West Palm Beach, and even four years ago, the population didnât hit anywhere close to that,â said Diane G. Papadakos, the cityâs director of communications.
âIt doesnât matter where you come from, you can live in the city of West Palm Beach and thrive here,â Roog said.
Growing As A Destination
The flocks of developers, Northeasterners and companies moving to the area is accelerating West Palmâs trajectory, said Jaime Sturgis, the CEO and founder of Native Realty, the real estate firm behind the AKA Hotel and other West Palm Beach projects.
âWhen a number of these really large funds or private equity groups or even development companies have moved down here, they want to build things that are in their backyard,â Sturgis said. âWith all of that wealth thatâs migrated down here, thereâs also been a tremendous demand to build projects to support the people that are coming. A company coming from Manhattan, for example, is accustomed to state-of-the-art facilities and rental properties to support the companyâs workforce.â
For the past 10 to 15 years, West Palm seemingly stalled behind cities such as Miami in âurban core development,â Sturgis said, meaning a lack of construction, new office buildings, retail and multifamily residences.
âThe urbanization of formerly industrial neighborhoods, which weâve seen take off on a massive scale in both Miami and Fort Lauderdale, right through Wynwood and through Flagler Village, has been very successful,â Sturgis said. âAnd now West Palm is doing that with Nora, which I think is phenomenal. ⌠It really starts to become like a true urban core.â
While not entirely new, the Brightline station in West Palm affords more flexibility for people who live in the city but work elsewhere, Sturgis said. And with more than $70 million in Tri-Rail funds for updated coaches, accessible transportation continues to play an integral role in not only taking people to West Palm Beach to enjoy a night on Clematis Street or a day walking in The Square, but keeping them there and turning them into new residents, too.
Rapid growth, especially when coupled with the arrival of large, successful businesses to an area still coming into its own, could create an environment where standalone spots are swallowed whole by chains. But Sturgis does not feel this threat looms over West Palm Beach or anywhere in South Florida for that matter as he watches communities rally around small businesses.
âWeâre still seeing a desire for local and regional tenants,â Sturgis said. âA local coffee shop, or the owner of the local bakery where the husband and wife are working there each day, that sort of thing.â
âUnique Environmentâ
Clusters of new buildings popping up in a city are not enough to support peopleâs desire to visit or stay, no matter how nice they may be. Take it from Jordan Rathlev, a senior vice president of Related Southeast, the real estate company behind West Palmâs 360 Rosemary, One Flagler and 515 Fern.
The ability to cultivate a desired lifestyle, whether that revolves around golfing, beach access, walkable downtowns, outdoor restaurants or all of the above, is an important factor in the decision to move, Rathlev said, which is why Related considers those aspects when deciding where and how they want to move forward with particular developments.
âWe start to recognize if people want to come and be successful in South Florida, thereâs a lot of critical infrastructure pieces that weâre looking to address because they come to these cities, they expect some of the same amenity base and offering that you would have in some of the other world class cities around the country,â Rathlev said.
West Palmâs planning department, which Rathlev said is âvery progressiveâ in encouraging a variety of architectural types, helps achieve that goal. But the city also remains sensible. Developers arenât constructing buildings 100 stories in the air, he said.
âI donât think you will ever see West Palm evolve to the scale and density of a Miami and New York, and frankly, I donât think we personally want it to,â Rathlev said.
Source: SunSentinel
A Boomtown Emerges Right Under Our Noses
The next boomtown in South Florida has been right under our noses all this time, and we didnât see it.
The little city that could turns out to be, of all places, Oakland Park, smack in the middle of Broward County. Youâve driven by it, or through it, a thousand times and you never gave it a second thought.
As Sun Sentinel reporter Phillip Valys lays out in great detail in a must-read story, Oakland Park is hitting its stride and is building itself an impressive skyline.
A signature destination is Oaklyn, an 11-story mixed-use tower at 3333 N. Federal Highway, where the website apartments.com says the rent for a one-bedroom studio apartment is $1,934 a month and ranges upward to $3,770.
Itâs a sure sign of progress for a town that not so long ago was little more than some warehouses, a strip club or two, the circular KenAnn building and the Peter Pan Diner.
Oakland Park Boulevard? Sure, thatâs a major east-west corridor. But Oakland Park, the place? Forget it.
If youâre like most people, you probably thought it was part of Fort Lauderdale. It isnât. Tucked in alongside U.S. 1, itâs one of Browardâs oldest cities, chartered in 1929 from the remains of the boom-and-bust town of Floranada. In this prime location, with its huge traffic counts, the Sun Sentinel article describes an emerging nightlife in Oakland Park.
After many years of working in, living in and writing about Broward, Steve Bousque, the Opinion Editor of the Sun Sentinel and a columnist in Tallahassee and Fort Lauderdale, decided a long time ago that a place so small and densely populated didnât need so many bland cities. The county has 31 cities and towns packed into a populated area of about 400 square miles, barely one-fourth the size of Rhode Island, which is completely nuts.
To appreciate how far Oakland Park has come, take a brief trip along Old Dixie Highway back to the earlier, 1980âs version. You wonât be disappointed. If you think the political extremism of today is out of control, youâd be right. But for the sake of sanity, if nothing else, itâs worth remembering that weâve had to endure these antics before. During the 1980s, Oakland Park became a political laughingstock after a far-right cabal of three commissioners took control of City Hall.
They drove away a competent city manager, John Stunson. They gave a key to the city to Phyllis Schlafly, an anti-ERA crusader. The ceremonial mayor at the time, Mary Laveratt, an anti-abortion activist, sued her city, claiming her colleagues illegally restricted her power. Commissioners refused to let Laveratt order the city clerk to issue a âSanctity of Life Dayâ resolution.
Worst of all, Oakland Park passed a resolution urging everybody in town to go out and buy a gun. The media had a field day. It was Oakland Parkâs overreaction to an ordinance by a liberal Broward County Commission that required gun buyers to get permits.
In the news mediaâs annual spoof of Broward politics that year, the Yellow Feather Awards (for âyellow journalismâ), we could not resist skewering Oakland Parkâs pro-gun resolution in song, with a takeoff on the folk classic âThis Land is Your Land.â It went like this:
This gun is my gun, this gun ainât your gun. I got a handgun, and you ainât got one The NRA says itâs okay To whip it out and blow you away.
The political craziness in Oakland Park did not last very long. After a couple of election cycles, voters restored some sanity to Dixie Highway.
The Oakland Park of today, high-rises and all, is a far better place than it was in 1983. Itâs even getting a motorcycle-themed coffeehouse.
Back then, the town had a seediness that you just donât see today. A strip club called the Backstage Lounge served fruit juice to customers after the city banned sales of alcohol at nude dancing clubs. It took three decades for Oakland Park to put two strip clubs out of business.
Every community should know, honor and remember its history as it really was, and Oakland Park does well at that too. On the cityâs website are priceless black and white photos from its early years and asks residents to share their personal stories for the cityâs upcoming centennial six years from now, in 2029. The little city is on the move.
Source: SunSentinel
Here Come The Next Waves Of Industrial Demand
When a company wants to build a new building for industrial use, it would typically start with the real estate manager and the supply chain manager meeting with the C suite to fund the project.
During the pandemic they might well have gotten what they wanted. But now these executives are likely leaving that meeting empty-handed. The C suite mantra to these and many other requests is to avoid committing capital as much as possible. âCome back with a plan B,â they are told.
Jake Fraker, Global Head of Industrial & Logistics Capital Markets for Newmark, relayed this hypothetical example during a webinar held by GlobeSt.com last week and sponsored by JLL Technologies. It was a telling illustration of the state of demand for industrial product at the moment. The demand is there, clearly, but current financial conditions have made decision makers cautious about investing in both assets and additional space.
Newmark stats on third quarter activity also demonstrate this trend. Nationally, absorption measured 47 million square feet for the quarter, a solid if muted demand, Newmark said, with the volume approximately 15 million square feet less than 2019âs quarterly average net absorption.
That said, this current state of demand is not even remotely reflective of the wave of activity that experts expect in the future for the industrial class.
E-commerce-generated demand continues, according to participant Alex Motiuk, director of acquisitions for Greek Real Estate Partners. Couple that with other trends emerging in the marketplace, such as the growth of onshoring and nearshoring, the increasingly globalized nature of supply chains and the rise of secondary markets in these strategies and experts are quite confident that industrial will continue to be a top asset class for commercial real estate.
During the pandemic, the sensitivity of global supply chains became painfully apparent to all parties in this sector and the memories of empty store shelves that often resulted from a sudden change in consumer behavior â think back to the run on toilet paper when it became apparent how serious COVID-19 was â have not been forgotten.
Even despite the current focus on costs, many companies continue to lease additional distribution space than they typically need to ensure their supply chains continue to flow smoothly â a trend that is expected to continue into the future.
Hence the rise of onshoring and nearshoring. To be sure, these trends have been long standing ones driven by complex factors. But they have lately achieved a heightened status thanks to certain U.S. legislation such as the CHIPS Act and the Inflation Reduction Act, which have encouraged manufacturing on U.S. soil. Other companies, recognizing that China has become an increasingly unstable partner due to political concerns, are migrating operations to Mexico. Nearby industrial facilities in the U.S. are subsequently benefiting from a huge boom in demand. Indeed, in the third quarter, secondary markets absorbed an increasingly larger share of demand, Newmark reported.
Source: GlobeSt
Rockpoint To Develop Trophy Infill Industrial Site In Pompano Beach Along With The Cordish Companies And Caesars Entertainment
Rockpoint, a Boston-based real estate private equity firm, today announced it will develop a trophy industrial site in the Pompano Beach.
Rockpoint will develop the property with The Cordish Companies and Caesars Entertainment as part of a larger master plan. Today’s announcement gives Rockpoint a significant presence in the supply-constrained South Florida industrial market and builds on the firm’s strategy of acquiring industrial facilities in high-barrier-to-entry locations across the U.S.
The development, which sits on an 87.8-acre site and will include approximately 1.5 million square feet of rentable space, is located just 20 minutes from downtown Fort Lauderdale and 40 minutes from downtown Miami and downtown Palm Beach. It represents one of the last remaining infill trophy development sites of its size in South Florida, a region that continues to experience significant industrial rent growth due to ongoing supply constraints and consistently high demand for space.
The site is part of a much larger 223-acre development called The Pomp which The Cordish Companies and Caesars Entertainment are developing as a transformative mixed-use destination. The Pomp is one of the largest and most dynamic mixed-use developments in South Florida featuring more than 10 million square feet of best-in-class entertainment, hospitality, retail and residential uses. Anchors such as TopGolf will be opening shortly and development of Live! at The Pomp is underway.
Site work for the project is expected to start in May 2024, as phase one of a three-phase development timeline. Rockhill Management, Rockpoint’s dedicated property services affiliate, working with The Cordish Companies and Caesars Entertainment, will lead the development and management of the project.
Source: PR Newswire
South Florida Industrial Asking Rents Climb In The Third Quarter
South Florida industrial landlords are still in feast mode.
In the third quarter, Miami-Dade, Broward and Palm Beach countiesâ median asking rents rose 14 percent, 16 percent and 18 percent, respectively, compared to the same period of last year, according to a recent JLL report.
Rising rents in South Floridaâs industrial market are a continuing trend. Available warehouse space was at a premium in the third quarter, because vacancy rates in the three counties hovered below 4 percent, JLL found. New projects will add roughly 12 million square feet of industrial space by the end of the year, according to the report, but construction is slowing as a result of economic volatility.
Miami-Dade County
In the third quarter, the median asking rent in Miami-Dade County jumped to $16.80 a square foot compared to $14.35 a square foot during the same period of last year, the report shows. Landlords have the advantage, as the vacancy rate hit 1.6 percent during the third quarter, sustaining a year-long trend. During the same period in 2022, Miami-Dadeâs vacancy rate was 1.8 percent.
The countyâs industrial market had a net absorption of 4.1 million square feet in the third quarter, compared to 3.4 million square feet absorbed during the same period of last year. New projects representing 8 million square feet of industrial space were under construction in the third quarter, the report shows.
Among new projects is the proposed Sycamore Logistics Center in Medley. In August, Blackstone, and its subsidiary Link Logistics, broke ground on the two-warehouse complex after landing a $51 million construction loan from Boston-based AEW Capital Management.
Frito Lay signed the biggest lease in the third quarter for 130,320 square feet at Bridge Point Doral, a 175-acre warehouse campus developed by Chicago-based Bridge Industrial, according to JLL.
Broward County
The asking median rent increased to $15.43 per square foot in the third quarter, compared to $12.89 per square foot during the same period of last year, the report shows. Broward landlords also benefited from a low vacancy rate that has remained steady, year-over-year. The vacancy rate was 3.4 percent in the third quarter, compared to 3.3 percent during the same period of last year, the report states.
In the third quarter, net absorption dipped to 172,000 square feet, compared to 2 million square feet absorbed during the same period of last year. Developers are currently building 1.5 million square feet of new industrial space in Broward, the report shows.
Link Logistics was also active in Broward during the third quarter, paying $162 million for a seven-building campus in Deerfield Beach in July. The purchase represented a ânotable saleâ during the third quarter for Browardâs industrial market, the report states. New York-based Sterling Investors also targeted Broward, acquiring a fully leased warehouse in Pompano Beach for $24.3 million.
Palm Beach County
During the third quarter, the median asking rent increased to $14.48 a square foot, compared to $11.84 a square foot during the same period of last year, the report shows. The 18 percent price jump was the biggest of all three counties. The vacancy rate slightly rose to 3.8 percent in the third quarter, compared to 3.1 percent during the same period of last year.
Net absorption was 412,000 square feet in the third quarter, compared to 580,000 square feet absorbed during the same period of last year. Yet, the development pipeline will add 2 million square feet of new industrial space by the end of the year, the report states.
New buildings to land tenants include 7th Avenue Logistics, a 76,000-square-foot warehouse at 1939 Seventh Avenue in Lake Worth developed by Coconut Creek-based Butters Group. Foundation Building Materials signed a lease for 50,000 square feet at 7th Avenue Logistics, the report states.
Source: The Real Deal
Building Materials Firm Buys West Palm Beach Industrial Building For $31M
The former home of a beer distributor has sold for $31 million, commercial real estate firm CBRE said.
Boise Cascade, a maker of building materials, bought the 120,000-square-foot industrial and office property located at 1300 Allendale Road in West Palm Beach, Fla. The seller was JRB West Palm LLC, according to property records.
The property is located between Interstate 95 and Palm Beach International Airport. It last sold in 2012, for $5.5 million.
Built in 1987, the West Palm Beach warehouse was the longtime home of Brown Distributing Company, a beer distributor that had operated in the county for a century. Brown Distributing closed the facility in 2021 after the sale of its distribution territory to two companies, the Palm Beach Post reported last year.
Robert Smith, Kirk Nelson and Jeff Kelly of CBRE Industrial & Logistics represented the seller. Boise Cascade was represented by Gabriel Garcia-Menocal, Lucia Custer and David Oxios of NAI Miami | Fort Lauderdale and Peter Oliver of TOK Commercial.
The property sits on 9.77 acres. It features a 91,120-square-foot climate-controlled warehouse with 20 dock-high doors and two cooler rooms. The property also includes 20,000 square feet of office space.
Source: Commercial Observer
Coconut Creek City Commissioners Scheduled To Review Plans For Building New Light Industrial Complex
A developerâs request to build a new light industrial complex in Coconut Creekâs south-end is back before city commissioners.
The builder, Greystar, of the proposed 385,000-square-foot complex on the northwest corner of Atlantic Boulevard and Lyons Road is seeking from the city permission to rezone vacant land and allow the construction of the project known as Cocomar.
Commissioners had tabled their requests in July, and Greystar pushed to delay those decisions until Oct. 26.
Many commissioners have said they were concerned about an influx of trucks coming into the city as well as the traffic flow in the area of the planned development.
As part of that, commissioners wanted Greystar to address those issues with city staff, along with nearby residentsâ concerns about noise and safety, before they made final decisions on the project.
Commissioners also discussed the consideration of adding a new traffic light at the complex to help control cars and trucks coming in and out of the 36-acre property, where three new buildings are proposed just south of residential areas.
The project is scheduled to be reviewed Thursday, October 26, at the commission meeting which starts at 7 p.m. in the Coconut Creek Government Center at 4800 West Copans Road.
Source: TAPintoCoconutCreek
Multistory Warehouses Usher In New Era Of Urban Logistics
Tentative steps to revolutionize the way warehouses are conceived and designed are being made in the United States.
No longer do they need to be gigantic spaces on a single floor. Instead, they could be multistory structures with docks on more than one level.
A handful of such facilities already exist in the U.S. or are in the process of construction. Indeed, according to a new report by Leslie Lanne, senior managing director with JLL, 2023 marks the five-year anniversary of multistory warehouse development in the nation. This new category of buildings even has its own name: âurban logistics.â Amazonâs need for distribution centers is helping drive some of the growth.
The first and perhaps best-known example in the U.S. is Georgetown Crossroads in Seattle. Developed by Prologis in partnership with Craft Architects, it consists of a three-level, 590,000-square-foot warehouse. There are 62 dock doors on the first level and 38 on the second. The third level contains a makersâ space. The building features truck ramps leading to the second and third floors, served by forklift-accessible freight elevators for lighter-scale warehouse operations, according to Prologis.
Prologis is now in the process of building a far larger project, the San Francisco Gateway, consisting of two 97-foot-tall structures totaling 2.16 million square feet across three floors and a rooftop deck. Each level will be reached by a one-way ramp that can carry tractor-trailers. It will also offer retail and maker space. Prologis says the development will provide much-needed space for production, distribution and repair (PDR) businesses to evolve.
In New York, 2505 Bruckner, a 1-million square foot multi-story warehouse opened in 2022, claims to be the largest, most efficient urban industrial facility in the city. There are now five existing multistory buildings in the New York City boroughs and another five under construction, according to Lanne.
A 1.2 million-square-foot, two-story warehouse located at 1237 W. Division, in Chicago, is the most recent project to break ground. It is scheduled for completion in 2024.
Established markets include Boston, New York, Philadelphia, Mid-Atlantic, Chicago, San Francisco and Los Angeles. Atlanta, Miami, Dallas, Houston and Seattle are among emerging markets.
For success, proximity to major air and seaport hubs is paramount, as industrial real estate relies on the efficient movement of goods, Lanne noted. Population density is another factor. Efficient site planning and careful layout of the loading docks and parking are vital.
Developers also face other challenges. They include outdated zoning laws, scarcity of available land and financing, and significantly higher construction costs.
Source: GlobeSt
What A Manufacturing ‘Supercycle’ Means For Real Estate Leaders
The U.S. is at the cusp of a manufacturing supercycle that could reshape the global investment landscape and greatly impact the real estate industry.
This manufacturing resurgence gained momentum with the “America first” emphasis and 2018 tariffs on Chinese goods. The Biden administration continued restricting capital inflows to China, which further encouraged bringing supply chains to the U.S. This drive is bolstered by legislative acts that provide nearly $2 trillion in domestic investment and incentives: the U.S. Inflation Reduction Act for clean energy, the $280 billion CHIPS and Science Act for semiconductor production and the $1 trillion Infrastructure Investment and Jobs Act for sustainable infrastructure.
Consequently, U.S. manufacturing construction outlays have surged to $196.1 billion as of July. The governmentâs initiatives to bolster domestic manufacturing have unleashed a wave of investment that could reshape supply chains during the next decade and create a significant tailwind for the real estate sector.
Manufacturing Supercycle And Regional Beneficiaries
From my perspective, the American South could be a primary beneficiary of manufacturing investments. Texas, in particular, has received a disproportionate share of investment, with firms such as Samsung, Texas Instruments (paywall) and Tesla already commencing expansion plans that are expected to create thousands of new jobs during the coming years.
The Laredo, Texas, border gateway is a primary point for goods shipments coming to the U.S., with a reported 37% of truck container crossings and 46% of rail containers entering in 2021 through that corridor. Additionally, Laredo registered a 12% year-over-year increase in commerce in 2023. From my view, this heavy traffic has helped increase the demand for industrial space in the central Texas corridor, including San Antonio and Austin.
Xebec, a developer focused on industrial properties, revealed plans for a “3,300-acre logistics and manufacturing center” on a 32,000-acre site northeast of Austin, according to the Dallas Morning News. This development is one example of many seeking to fill the demand for industrial and residential space near multi-billion-dollar projects like Samsungâs chip factory in Taylor and Teslaâs Gigafactory. The impact of these developments will be felt across the Austin-San Antonio corridor and could generate significant economic output and position the region as a hub for advanced manufacturing and technology.
Florida is also poised to benefit from a surge in advanced manufacturing investment. With the NeoCity district positioning Orlando as one of the top cities for STEM talent in the U.S., the stateâs prospects are promising.
Moreover, it is expected the region will see a substantial economic boost from several major infrastructure and technology projects currently underway. Among these is Brightline‘s high-speed rail initiative, which links cities like Miami and West Palm Beach to Orlando. This connectivity will enhance commuter access to the Orlando market, catalyzing growth in central Florida. A press release by the company said the rail project generated 10,000 new jobs during its construction phase. Given the current growth trajectory, Floridaâs population is estimated to rise by 3.2 million by 2030, according to the Florida Apartment Association. To accommodate this surge, the state will require over 570,000 new housing units, the FAA also said.
Elsewhere in the south, companies like Toyota, Hyundai, BMW and Albemarle are investing billions of dollars in whatâs been called the new âBattery Belt.â The auto manufacturing industry has expanded from the traditional markets in the Midwest, which could lead to the creation of tens of thousands of jobs in states like Georgia, Tennessee and North and South Carolina.
Beyond the U.S., Mexico stands to benefit from the regionalization of supply chains, given the existing United States-Mexico-Canada Agreement, proximity to U.S. population hubs, affordable labor and ample land.
What This Means For The Real Estate Sector
The manufacturing sector has one of the highest job multipliers, as a manufacturing plant typically fosters demand for suppliers, transportation services and maintenance providers. From my perspective, one of the ripple effects of the revival in domestic manufacturing will be an increased demand for residential real estate throughout the southern states with proximity to ports. Investments in clean energy, infrastructure and semiconductor production will stimulate large-scale job creation throughout these states, particularly in higher-wage sectors.
Based on data from the U.S. Bureau of Labor Statistics, the Dallas-Fort Worth metro is on a trajectory to add 150,000 to 200,000 jobs annually during the coming years, which would be an increase of roughly 4% per year and almost twice the pace of job creation before the pandemic. The conventional theory assumes that one new housing unit is needed for every 1.5 new jobs created. Permits authorized in 2022 for the DFW metro only amounted to about 76,000, creating an annual deficit of roughly 23,000 to 56,000 housing units. This comes at a time when the U.S. already faces a nationwide housing shortage and underscores the need to develop new housing units to meet excess demand.
As the nation intensifies its commitment to domestic manufacturing and the states in the Southeast attract vast industrial and residential investments, there will be significant demand for new housing and industrial space that will not be met by current construction projections and permitted developments. It is important for policymakers, real estate developers and investors to focus on these areas of growth and plan ahead in order to avoid rapidly rising rents and housing costs.
Additionally, real estate developers and investors should consider how they can capitalize on the upcoming capital investment wave. Housing developments generally take two to four years to materialize from inception. Investors and developers should pay attention to the mentioned growth corridors. Additionally, it is critical that developers engage with local municipalities to stay informed on upcoming manufacturing and infrastructure investments to ensure there is sufficient housing available when these investments come to fruition.
Source: Forbes
The Federal Reserve’s Impact On Commercial Real Estate Explained
Amid its tinkering with the interest rate to tamp inflation down, the Fed has identified commercial real estate as one of the biggest risks to financial stability.
So where does that leave private lenders?
Mortgage Professional America reached out to Jeff Holzmann, COO of RREAF Holdings, to learn more. RREAF Holdings is a private real estate investment firm with more than $5 billion in assets.
But first some context: Large banks have pulled back from commercial real estate financing, causing smaller, regional banks to become more exposed to the travails of the industry. Given the freefall nature of the market, this creates a perfect storm for a âdoom loop.â
And yet Holzmann seemed rather confident in his companyâs approach to choppier waters.
But things are changed now.
Living In An Age Of The Inverted Curve Yield
Itâs a matter of economics.
So how does this movie end?
If itâs just a few properties succumbing in that way, some investor will swoop in and take it.
Too Big To Want To Fail
Given todayâs economic scenarios, there are strategies companies can adopt to mitigate risks and/or capitalize on opportunities. Holzmann outlined the way RREAF approaches things.
So what is RREAFâs approach?
Formed in 2010, Dallas-based RREAF Holdings is a privately held commercial real estate firm that deals in the acquisition, development, asset management, ownership repositioning and financing of complex real estate projects throughout the US.
Source: MPA Magazine
Downtown West Palm Beach Booms With New Development
Two massive towers are rising in West Palm Beach, reaching 426 feet high to clutch the tile for the cityâs tallest high-rises.
Theyâre just the latest sign of the expansive growth as the downtown lures more businesses and residents.
The 30-story mixed-use complex, titled One West Palm, will contain 326 luxury residential units, 200,000 square feet of Class A office space, a hotel and a long list of amenities, including a fitness club, spa, movie theater and indoor tennis courts.
One West Palm sits at 550 N. Quadrille Blvd. in West Palm Beach on Sept. 15. Developer Jeff Greene said the project will be completed some time next year. (PHOTO CREDIT: Carline Jean/South Florida Sun Sentinel)
Residing at 550 N. Quadrille Boulevard, the 426-foot behemoths could fit the length of nearly one-and-half American football fields. They may be the buildings closest to the sky in West Palm Beach, but the project is certainly not the only one in the works.
The âWall Street of the Southâ has become a magnet for developers, especially as people migrate from the cities south of it and move from states in the Northeastern United States.
âThe Most Exciting Thing â
Construction on One West Palm began more than four years ago, and delays pushed completion to 2024, Greene said. But his excitement for the project remains, especially as it will now join other newly developed current and future projects.
The AKA Hotel is at 695 S Olive Ave. in West Palm Beach, seen here on Sept. 15. This luxury hotel opened last year. (PHOTO CREDIT: Carline Jean/South Florida Sun Sentinel)
Greene said his vision was to create something the city did not yet have. While One West Palm will tout the title of highest buildings in the city, the surge of development in the area has produced several projects, some of which were recently completed, some of which are under construction and some of which were recently approved.
Among those projects are:
Unlocking A Formula
Roog said the city has unlocked a formula for creating places people want to work and live, leaning into the ever-popular âLive, Work, Playâ concept so many other cities, such as Boca Raton, are adopting.
Growing As A Destination
The flocks of developers, Northeasterners and companies moving to the area is accelerating West Palmâs trajectory, said Jaime Sturgis, the CEO and founder of Native Realty, the real estate firm behind the AKA Hotel and other West Palm Beach projects.
For the past 10 to 15 years, West Palm seemingly stalled behind cities such as Miami in âurban core development,â Sturgis said, meaning a lack of construction, new office buildings, retail and multifamily residences.
While not entirely new, the Brightline station in West Palm affords more flexibility for people who live in the city but work elsewhere, Sturgis said. And with more than $70 million in Tri-Rail funds for updated coaches, accessible transportation continues to play an integral role in not only taking people to West Palm Beach to enjoy a night on Clematis Street or a day walking in The Square, but keeping them there and turning them into new residents, too.
Rapid growth, especially when coupled with the arrival of large, successful businesses to an area still coming into its own, could create an environment where standalone spots are swallowed whole by chains. But Sturgis does not feel this threat looms over West Palm Beach or anywhere in South Florida for that matter as he watches communities rally around small businesses.
âUnique Environmentâ
Clusters of new buildings popping up in a city are not enough to support peopleâs desire to visit or stay, no matter how nice they may be. Take it from Jordan Rathlev, a senior vice president of Related Southeast, the real estate company behind West Palmâs 360 Rosemary, One Flagler and 515 Fern.
The ability to cultivate a desired lifestyle, whether that revolves around golfing, beach access, walkable downtowns, outdoor restaurants or all of the above, is an important factor in the decision to move, Rathlev said, which is why Related considers those aspects when deciding where and how they want to move forward with particular developments.
West Palmâs planning department, which Rathlev said is âvery progressiveâ in encouraging a variety of architectural types, helps achieve that goal. But the city also remains sensible. Developers arenât constructing buildings 100 stories in the air, he said.
Source: SunSentinel
BBX Logistics Properties Announces JV To Develop Over 600,000-SF Logistics Park
BBX Logistics Properties, a logistics development firm specializing in identifying high barrier-to-entry infill locations in Florida and other Eastern U.S. markets and a wholly-owned subsidiary of BBX Capital Real Estate and BBX Capital, Inc. (OTCQX: BBXIA)(PINK: BBXIB), announced the formation of a joint venture with PCCP, LLC, a real estate finance and investment management firm, and the successful acquisition of approximately 40 acres of land north of Atlantic Avenue on U.S. 441 in Delray Beach.
The joint venture intends to develop the site, which is entitled with rights to build up to 672,533 square feet of logistics space, into BBX Park at Delray, a logistics facility expected to be comprised of three buildings. The initial phase of the project is expected to be construction of an approximately 200,000-square-foot building with plans to construct two additional buildings in the future.
Focusing on attracting tenants who cater to the community, the development plans for BBX Park at Delray allow for the division of space into smaller units, with each of the planned three buildings expected to accommodates paces as small as 50,000 square feet. BBX Logistics Properties and PCCP also hope to incorporate sustainability initiatives in the development plans, including solar-ready roofing, electric vehicle charging stations, indoor air quality enhancements, and advanced exterior lighting control systems.
The joint venture currently expects to obtain debt financing and commence site development and construction of the initial phase of the project in the first quarter of 2024.
In connection with the formation of the joint venture with PCCP, BBX Capital Real Estate contributed $2.9 million to the venture with PCCP and currently expects to contribute an additional $2.5 million to the venture based on its expected share of the estimated total development costs.
Source: CRE-sources.com
Inside The Wild Swings Of Smaller Industrial Property Sales
Industrial properties were perhaps the best performing through the pandemic, to its heights, and through 2022, because of expansions of e-commerce and increased inventories for many companies that wanted to avoid the supply chain problems of the previous two years.
That was then, this is now, as the economy shifts, supply chains return to normal, and the needs for industrial real estate are finally changing, at least in this smaller size category.
Out of the 20 metros with the highest collective first half year sales, only seven were higher than the same period in 2022, according to a Green Street analysis.
The largest year-over-year percentage increase, 111.0%, was in Central New Jersey. But it was only number nine in dollar sales, with $241.9 million and 19 properties. That was a remarkably high increase, more than doubling.
In second place of growth year over year was the Atlanta metro area, 79.1% growth. But the dollar sales of $203.6 million and 20 properties were only high enough for twelfth place.
Third was Miami: 25.7% increase and fifth place in dollar volume with $288.2 million and 25 properties.
Fourth: Washington, D.C.âs 25.3% increase on $155.5 million and 19 properties, which was only enough for seventeenth place overall.
The numbers drop off even faster now, as New York had $345.5 on 38 properties, which was strong enough for a dollar third place, but the 17.0% year-over-year growth was fifth. Sixth and Seventh were Portland, Oregon (7.1%, $103.5 million, 12 properties, and twentieth place in dollars) and Northern New Jersey (6.0%, $194.2 million, 21 properties, and fourteenth place in dollars).
But some of these are signs of how the air has come out of the product category. Even a 17.0% increase seems small in New York. The biggest drop was 56.9% in Minneapolis, with $131.2 million and 15 buildings in sales that put it into nineteenth place. Just behind was Seattle â sixteenth place in dollars with $174.4 million and 16 properties but a drop of 56.8% over the first half of 2022.
Perhaps most surprising were San Diego (-42.9%, thirteenth place with $196.2 million and 18 properties) and the Inland Empire (-42.8%, $273.6 million and 27 properties for eight place). Both of those have been hot areas, but with supply chains improving, it might be a response to lessening pressure of ships backed up in the harbor.
Chicago, second at $357.4 million and 41 properties, was down 32.8%. Boston, -31.9%; Philadelphia, -31.5%; and Chicago, -32.8%.
Across all metros, it was -26.9%, and all but the top metros, -35.1%. There are significant shifts for investors and developers to watch in the near term.
Source: GlobeSt.