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Will the potential economic slowdown have a significant effect on the commercial real estate market in South Florida? Not really, says Nathan Perlmutter, vice president in commercial lending at TD Bank, in this podcast.

Listen to the podcast for more insights on:

  • Projections for the multifamily sector.
  • Miami office sector trends that CRE experts are watching in 2020.
  • The impact of the global trade war on the industrial sector’s growth.
  • How landlords are adjusting to major changes in the retail landscape.
  • The effect millennial preferences are having on the multifamily market.
  • The biggest CRE trend in South Florida in 2020.

 

 

Source:  SFBJ

Could IBM’s former office complex in Boca Raton become more than just a hub of technology — and become a hub for housing, too?

Sources say the Boca Raton Innovation Campus , as it is now called, is being marketed for sale by its current owners. This time, potential buyers are taking a look at doing something more with the Boca Raton site than using it only for leased office space. The site could become a mixed-use complex featuring apartments, shops and a hotel, too.

Plans are afoot to seek the city’s OK to build 720 apartments, 20 townhomes, a 120-room hotel and 81,000 square feet of retail space. The property’s owners are San Francisco-based Farallon Capital Management and New York-based Next Tier HD, which bought the property for an undisclosed sum in January 2015. They are said to be working closely with Boca Raton to allow new zoned uses for the 130 acres on which the property sits.

The move is in line with changes made to the nearby Park at Broken Sound, formerly the Arvida Park of Commerce, where the city has allowed homes and shops to built on land that formerly was limited to light industrial research buildings. The city is placing a greater emphasis on housing that sits near public transportation, and the Boca Raton Innovation Campus has a Tri-Rail station directly to its east.

The iconic 1.7 million-square-foot building that once housed IBM’s software and hardware developers could remain intact, or parts of it could make way for other uses. But it’s unlikely large portions of the old IBM building will be felled.

In addition to its historic value, the complex houses a range of corporate tenants with varying lease lengths. Tenants include Bluegreen Corp., Tyco Integrated Security, TransUnion, Modernizing Medicine and MDVIP.

Since the purchase, Next Tier and its on-site broker, CBRE, have brought occupancy to 71 percent from 55 percent. More deals are in the works, too. A broker for Eastdil Secured, which is marketing the property, could not be reached for comment.

“Although the property has historic value, it does not have a historic designation from either the city of Boca Raton which could limit any change to the buildings or the National Register of Historic Places, according to Susan Gillis, Boca Raton Historical Society curator. “But we would like it to.

The former IBM building is special to fans of both technology and architecture. In December 1966, IBM announced its purchase of 550 acres west of what is now Interstate 95, south of Yamato Road and east of Military Trail. IBM was the first company to build an industrial site in the scrubland of the west, according to the Boca Raton Historical Society.

The building was designed by Marcel Breuer and Thomas Gatje and featured buildings for administration and product testing, development labs, manufacturing and distribution. The buildings feature a unique Y-shaped design, considered an engineering marvel for its day.

“The building is considered an oustanding example of the Brutalist style of architecture,” Gillis said.

The building isn’t just important for its aesthetic elements. The architects also designed the structure to withstand a Category 5 hurricane.

“They put a lot of thought into those buildings, way back when,” said Michael Masanoff, who was part of the Blue Lake Ltd. group that bought the building from IBM in 1996.

On March 31, 1970, 3,500 people, led by IBM chairman Thomas J. Watson Jr., attended the ceremonial dedication of the new facility, according to IBM’s website.

Over time IBM dominated the city, and “wild ducks” flew high in Boca Raton. That was the nickname of a small group of engineers, marketing experts and communications specialists led by Philip “Don” Estridge. They designed the first personal computer, which was introduced in 1981. (On Aug. 2, 1985, Estridge died in the crash of Delta Flight 191 in Dallas. A former IBM building became the Don Estridge High Tech Middle School, named in his honor.)

By the mid-1980s, IBM employed nearly 10,000 people at this site and in office buildings clustered in the area. But by the end of that decade, IBM had stopped manufacturing at the site, moving this function to North Carolina. Then the software development team moved to Texas.

With employment dwindling, IBM sold the property for $46 million in 1996. The property became the Blue Lake Corporate Center, then the T-Rex Corporate Center, when an ownership group bought it from the Blue Lake group for $138.65 million in 2000.

Private equity fund Blackstone Group bought the site for $192.7 million in 2005 and renamed it the Boca Corporate Center & Campus, until Farallon and Next Tier renamed it the Boca Raton Innovation Campus, or BRIC.

In the years since IBM left the building, the area around the complex has matured. A lively strip of retail shops now fronts the building along Yamato Road, and a new interstate interchange is nearly complete on the south side of the property, at Spanish River Boulevard.

More importantly, demand for in-town housing is huge, especially since the city is virtually out of space for new homes, leading many developers to snap up golf course to transform into houses.

Owners of the Boca Raton Innovation Campus have worked to brighten up the old office interiors with renovations and amenities, including adding a fitness center and daycare and renovating the conference room and lobbies. And since no one is building new office space in Boca Raton, existing office space is becoming scarce, too.

Also helping boost the property’s allure, particularly on the heels of this hurricane season: The building has its own backup generator, installed by the Blue Lake group years ago.

 

Source: Palm Beach Post

Boynton Beach officials will consider plans for the mixed-use Ocean One project along Federal Highway/U.S. 1.

Click on the photo for a SFBJ slideshow of the Ocean One project

Ocean One Boynton LLC, an affiliate of Washington, D.C.-based Washington Real Estate Partners, wants to rezone the 3.63-acre site at 114 N. Federal Highway to allow 358 apartments, 12,075 square feet of commercial/retail, a 120-room hotel and 439 parking spaces. The property runs along the highway from Boynton Beach Boulevard to Ocean Avenue. It is not along the water, but it’s a quick drive across the bridge to the beach.

The City Commission will hold the first vote on Ocean One on March 21 and, should it pass, then a final vote on April 4. Attorney Bonnie Miskel, who represents the developer in the application, couldn’t immediately be reached for comment.

The vote would cover the rezoning and the site plan for the first phase, which would be developed on 1.93 acres of the site. The first phase calls for an 8-story building with 231 apartments in 218,935 square feet and 6,175 square feet of retail, including a health club, and a 7-story parking garage with 359 spaces.

The building would feature a public plaza, an interior courtyard with a pool, summer kitchen, grilling stations and a fountain wall. It would also have a clubhouse. The apartments in the first phase would break down to 152 with one bedroom, and 79 with two bedrooms. Units would range from 560 to 1,600 square feet.

Cohen, Freedman, Encinosa & Associates is the architect of Ocean One. The developer hopes to acquire 0.47 acre of the development site from the Boynton Beach Community Redevelopment Agency. Ocean One Boynton acquired the rest of the site for $9 million in 2005.

According to the Palm Beach Post, Washington Real Estate Partners Chairman F. Davis Camalier is seeking an incentive deal with the CRA to provide millions in property tax rebates for the project.

 

Source: SFBJ

But for the hockey arena on it, the 143 acres of public land on the edge of the Everglades in Sunrise is a clean slate.

In the coming 20 years, the county intends to fill in the grassy blanks with Downtown West, a mix that could include condos, stores, restaurants, offices, maybe even a casino.

This week, Broward County embraced a development vision for the land, a potential playbook created by the Urban Land Institute. The nonprofit real estate consultancy visited the site, studied it and issued the report this month. To carry it out, the County Commission agreed Tuesday to hire two real estate employees, including a director of real estate.

The institute’s land-use experts said the county-owned BB&T Center, a giant venue surrounded by parking spaces, represents “an opportunity lost.’’ The consultants said visitors leave the arena after shows or games because there’s nothing there to capture them. They suggest the land be developed thoughtfully, and slowly, with a potential mix of housing, a hotel, office space, retail, a casino and the hockey arena.

“The undertaking is huge and could be controversial,” said Broward Commissioner Nan Rich, who represents most of Sunrise. “There’s a lot of potential. But we have to get it right, and that’s the challenge.’’

The mix of development — including whether casino rights are obtained and whether the Florida Panthers hockey team remains in the arena — will be determined in the coming years. The development is expected to complement what’s around it: America’s largest single-story retail mall, Sawgrass Mills, condo towers and  Metropica, a $1.5 billion development on Northwest 136th Avenue and Sunrise Boulevard that’s in the planning stages.

Sunrise Mayor Mike Ryan said he’s “thrilled’’ the county is taking the opportunity so seriously. He said the arena never was expected to stand alone, as it has since its 1998 construction. Sunrise supports development of the land, he said, and the market will determine the right mixture of uses.

“We’re a partner in trying to help find something that works in the context of what’s already there,’’ Mayor Ryan said.

The land for years was in the hands of the hockey team owners, who never used it. The Panthers, a National Hockey League team, plays in the county arena, and an affiliated company operates it. In a reworked agreement in December 2015, the county won back development rights to the land surrounding the arena. The deal increased the public subsidy of the team by $86 million, to $342 million. The new agreement aims to keep the team in the BB&T Center until 2028.

The county brought Urban Land Institute to town last summer to brainstorm possibilities for the land around the arena, and to look at possibilities if the Panthers ultimately depart. After visiting in June, the institute’s participating experts interviewed those involved in the arena and the site and conducted research, producing the report released this month.

The consultants explored three alternatives: the Panthers extend their lease, and a casino is added; the Panthers extend their lease, and office and housing are added; and the Panthers leave, the arena is demolished, and housing, a casino and offices are added. The third option would bring in the most tax revenue and income to the county, at an estimated $391.3 million over 11 years, the report said.

“Limited initial demand exists for new development on the site,’’ the report says, “However, over time, more opportunities will arise.’’

The development report lays out a timeline from now to 2040 for remaking the acreage.

“Redevelopment of the arena site will require a long-term, patient approach that will take more than 20 years,’’ the report says.

It also acknowledges that market forces, including potential downturns, remain unknown. The path to development started Tuesday with the agreement to hire real estate overseers. The expense of a real estate director and project coordinator is expected to be $275,000 a year, a county memo says.

The consultants suggest the county start by assembling a Downtown West Broward Leadership Council, a hub for public input and problem solving. Ryan said one thorny issue will be management of traffic. He’s advocating construction of Sawgrass Expressway ramps to and from the north, to help drivers reach and depart from the site. He also said it’s important that the county not build anything that would compete with or detract from nearby development.

“It’s critical to get participation from everyone from the beginning,’’ Broward Commissioner Nan Rich said.  “One thing is clear, there has got to be a lot of involvement from the community. When you’re developing something this size, I don’t want to superimpose things on people that live in an area.’’

Click here to view the SunSentinel video ‘Broward Embraces Development Vision of Downtown West’

Click here to view the SunSentinel video ‘Broward Explores Developing Land Around BB&T Center’

 

Source: SunSentinel