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As industrial took off in 2020, so did new construction in Florida markets. In many of those areas, completions have reached historic levels.

In the second half of 2020, large-scale speculative construction projects or expansions at existing industrial parks were announced in multiple Florida markets, according to Cushman and Wakefield’s “Florida Industrial Construction” report.

There was 15.4 million square feet (MSF) under construction at the end of 2020. In addition, another 29.7 MSF is poised to come online in the next three years.

Out of this new construction, speculative building dominated. At the end of 2020, 5.8 MSF of speculative building had been completed. C&W says Build-to-Suits accounted for 43% of all completions. Many of those speculative projects under construction have yet to attract tenants. By the end of 2020, only 56% achieved any pre-leasing.

“In several cases, developers moved ahead with entitlements hoping to land a sizeable build-to-suit for a new-to-market or expanding tenant,” according to C&W.

Drilling down into individual markets, Miami leads the way with 8.7 million square feet of industrial space proposed. Tampa Bay (6.0 million), Lakeland (5.8 million), Jacksonville (3.7 million), Broward (2.4 million), Orlando (2.0 million) and Palm Beach (1.2 million) are next.

Tampa Bay leads with 3.4 million square feet of industrial space under construction. It is followed by Miami (2.7 million), Broward (2.2 million), Orlando (2.2 million), Jacksonville (1.9 million), Lakeland (1.7 million) and Palm Beach (1.4 million). The highest preleasing was found in Lakeland (91%), Jacksonville (84%), Orlando (60%) and Miami (50%).

In a recent report focusing on Jacksonville, Colliers International found that construction, which represents about 1.9% of the current industrial stock, created a “trickle-up” effect where industrial users are shedding dated space for quality new construction product. The trend has produced a combination of rising industrial vacancy—which hit 5.4% in the fourth quarter—and rising rents—which increased to $5.21 per square foot.

While other asset classes are closely monitoring the vacancy rate—typically because a rising rate leads to tempered if not negative rent growth—Colliers says that increased vacancy is actually a welcome relief in the Jacksonville industrial market. In 2018, the local vacancy rate reached lows of 2%, giving users limited options. Today, the increased rate of 5.4% still points to healthy market conditions, and new construction activity is well matched to demand.

Nationally, industrial space is getting absorbed. In a recent report, Moody’s Analytics said the warehouse/distribution space absorbed 35.4 million square feet in Q4, its highest mark since Q1 2019 when 70.7 million square feet were absorbed.

Construction for the new warehouse/distribution space fell to 25.8 million square feet in Q4 after hitting 38.2 million square feet added in Q3, according to Moody’s Analytics. The space has posted an average of 36.8 million square feet of new inventory added per quarter in the prior six quarters.

 

Source: GlobeSt.

fort lauderdale

Fort Lauderdale is booming with development.

It’s become a city of choice for savvy investors, both commercial and residential. Once known as the mecca for spring break and teenage beach movies — think Where The Boys Are with Connie Frances and Girl Happystarring Elvis Presley — Fort Lauderdale has grown up.

Historically, Fort Lauderdale had always been a secondary market to Miami. Then when prices kept rising in Miami, developers started looking for cheaper dirt and came here. We have a relaxed coastal environment, beautiful beachfront and a strong commerce center with 7.5 million of class A office space in our downtown, notes Jenni Morejon, Executive director, Fort Lauderdale Downtown Development Authority (DDA)

We have significant luxury development both in residential and hospitality underway. The residential component has a high-level of amenities, service and finishes in beautiful ocean front locations. On the hospitality side, the Four Seasons is building a beautiful property and there was a $150 million renovation at the W Fort Lauderdale, Morejon adds.

To satisfy the increasing residential base, Morejon points to over 1,000 restaurant seats coming on line over the next several months on Las Olas, Fort Lauderdale’s dining, shopping and entertainment destination for tourists and residents alike.  Las Olos (Spanish for waves) Boulevard is our crown jewel connecting the beach and downtown core.

The privately-owned Brightline, an electric high-speed train, inaugurated service between Fort Lauderdale and West Palm Beach in January. Morjon sees this as another game changer for Fort Lauderdale when the Brightline extends from Miami to West Palm Beach with a stop in Ft. Lauderdale.

Finding cheaper dirt in Fort Lauderdale is The Related Group, a major South Florida developer. The Related Group has developed luxury condominiums since 1979. Today the company is betting on Fort Lauderdale’s rapidly growing luxury branded residential condominium market.

The Related Group is developing  the two-tower Auberge Beach Residences & Spa, a luxury branded beachfront condominium part of the Auberge Resort Collection. Fronting the Atlantic, amenities include signature Auberge dining, World-Class Spa by Auberge, private elevators, wine room, cigar lounge and Fitness Center with views of the Atlantic. Currently Auberge’s North Tower is 90% sold and 75% of the South Tower sold. According to The Related Group, Auberge Beach Residences & Spa set a Fort Lauderdale’s sales record in 2017 for the highest condo sale at $9.5 million. Prices range from $1.5 million to $9.9 million.

This is a signature property and there is nothing like it right on the ocean sitting on five contiguous acres. Our sales show demand is there for the project and product. We didn’t know what to expect and went with a smaller tower first,  explains Patrick Campbell, Vice president at The Related Group.

The oceanfront W Residences Fort Lauderdale are also selling briskly. The 171 residences with prices starting in the $900,000’s is proving to be the right product for the market. With over 100 units sold to date, buyers are excited. Residents at the W will have access to all W Fort Lauderdale hotel amenities with resident signing privileges for convenience. In addition, they receive dining, room and spa discounts at W Fort Lauderdale. Owners also have the option to place their home in the W’s rental pool.

Who is buying in Fort Lauderdale? The Fort Lauderdale buyer is very different than Miami. About 75% of our buyers either have a tie to the area versus Miami where many buyers are investors or from South America, Campbell observes.  Eric Johnston of New Jersey chose the W Residences Fort Lauderdale for his fourth home, buying a two-bedroom two-bath unit in December. Miami did not have what I wanted. The location to the airport, the weather and the W product is what attracted me. I actually would have bought a larger unit if they had one.

Craig Studnicky, principal of International Sales Group, (ISG) has over 25 years of experience in the South Florida residential market. Fort Lauderdale has always been compared to Miami Beach, but now its value in terms of price per square foot is at an all-time high. From 1990 to 2010, the annual difference in price per square footage between these two destinations was roughly 25 percent. In May 2016, this difference jumped to 261 percent due to the slew of new inventory. This means that a buyer can get the same ocean views, amenities, finishes and services in Fort Lauderdale but at almost half the price.

Fort Lauderdale’s retail market is thriving with over 2.6 million square feet of commercial real estate either completed, under construction or approved since 2012.

According to Colliers International Fort Lauderdale Market Pulse Q1 2018|OverviewFort Lauderdale jumped to 6th place in the Top Ten U.S. Markets To Watch. This is the first time Fort Lauderdale even made into the Top Ten. Retail rents in downtown Fort Lauderdale have a 5-year growth prediction of 48% compared to 42% in Miami-Dade. Since 2013, Fort Lauderdale’s downtown retail rents have increased 51% to $35.75 per square foot compared to a 14% increase throughout Broward County (Fort Lauderdale is in Broward County.)

As a vacation destination and national cruise hub, total visitors through Fort Lauderdale-Hollywood International Airport rose from 11.3% in 2016 to 32.5 million in 2017. In addition, JetBlue, Southwest and Emirates have launched new routes within the past year to and from Fort Lauderdale expanding the potential visitor market and as an added boost to area residents for business and leisure travel.

William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami explains market dynamics.  Fort Lauderdale offers relative value compared to Miami. There is good luxury product there now that appeals to the buyer wanting a different pace than Miami.

 

Source: Forbes

The city of Fort Lauderdale is soliciting bids, starting at just over $13 million, for a 24-acre industrial property in Dania Beach that could be developed into offices or warehouses.


4050-South-State-Road-7, Dania Beach site

Colliers International is overseeing the planned sale of the city-owned industrial property at 4030 State Road 7, just south of I-595. It’s one of Colliers’ first assignments from the city of Fort Lauderdale under its new contract to help manage the city’s real estate and dispose of surplus properties.

Fort Lauderdale requires potential buyers to submit sealed bids for the property in Dania Beach to the procurement division of the city’s finance department by Nov. 3. Sealed bids should include a cashier’s check or certified check to the city in an amount equal to 10 percent of the offered purchase price. Colliers would collect a commission at closing equal to 4 percent of the sale price.

Potential buyers must submit a minimum bid of $13.226 million, the appraised value of the property. The appraisal was completed Aug. 14 by Adrian Gonzalez, Jr., of Adrian Gonzalez & Associates P.A. in Hollywood. Terms of the sale would include payment of all closing costs by the buyer. No purchase money mortgage would be held by the city.

In a memo this week to city commissioners, City Manager Lee Feldman said Fort Lauderdale acquired the property in Dania Beach through eminent domain in February 1984. The property currently is used for motor vehicle training by the Fort Lauderdale Police Department, among other uses.

The 24-acre property, zoned I-G (industrial general) by the city of Dania Beach, has sewer and water service from Broward County. An active landfill along the north side of the property accepts only ash residue from the Wheelabrator South Broward trash-incineration facility located south of the property.

“There is, to the best of our knowledge, no contamination of the site,” said Steve Wasserman of Colliers International in South Florida. “The likely future uses of the property are office and warehouse development.”

Fort Lauderdale city commissioners declared the 24-acre site a surplus property and approved the city’s contract with Colliers at their meeting Tuesday, Chaz Adams, spokesperson for the city of Fort Lauderdale, said in an email.

“We expect Colliers to offer recommendations regarding the highest and best use for the properties that comprise our real estate portfolio,” Adams wrote in an email Thursday. “These recommendations may include the sale and disposition of city-owned surplus property. By returning property to the tax roll, the city can reduce operating costs, maximize resources, and generate additional revenue.”

 

Source: The Real Deal

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