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The COVID-19 pandemic has forced the South Florida real estate industry to rethink the answers to a range of questions, including how buildings are designed, how goods are delivered, and where and how tenants want to live.

Here are the top 3 emerging trends local industry leaders are watching.

1. Outdoor Space Is Desirable

Retail stores and restaurants took a big hit as shutdowns, restrictions and health concerns changed consumer’s spending habits. Instead of going out to eat, people stocked up on food and avoided in-person shopping, causing a surge in online sales.

Jonathan Carter, executive managing director at Colliers International, says there are a number of deals being done to adapt current spaces to modern environments. And while outdoor environments and open-air concepts in retail stores and restaurants were trending before the pandemic, now there’s a bigger emphasis on it.

“If you had told me in August where we would be today, I wouldn’t have believed you,” Carter said. “The market has gone from having almost no tenants, to what he would now consider a landlord’s market. Landlords who previously had space with a lot of outdoor areas that weren’t perfect, suddenly those spaces are in demand.”

2. Drive-Thru Operators Are Thriving

Last year, the rise in demand for food deliveries, curbside pickup and drive-thrus at quick-service restaurants has been especially prevalent in South Florida, according to Zach Winkler, executive vice president of JLL’s South Florida retail brokerage.

“The demand for more drive-thrus is probably more intense here than any part of the country,” Winkler said. “I think it’s part of the way the restaurant world has shifted a little bit.”

Winkler said sales have remained strong for fast-food restaurants like Louisiana-based Raising Cane’s, and he expects to see an expansion of the chain in South Florida.

“Their sales remained very strong during COVID, and the fact that they’re one of the most efficient drive-thru operators out there,” Winkler said.

3. Offices Are Morphing

As large amounts of people continue to migrate to South Florida and many others prepare to return to the office after a year of working from home, companies are looking at different models for remote and in-office workers. With social distancing changing the way people interact with one another, employers want to give their employees more space and a healthy environment.

Jonathan Kingsley specializes in office and industrial representation of landlords at Colliers International, and he said returning workers are typically getting more square feet per person, while offices are being redesigned.

Remote work is here to stay, but Kingsley feels it won’t be on the scale everyone thought it would.

“Certain employees are absolutely required to work in the office 100% of the time,” said Kingsley, “There’s a second-tier in which there is a three-day at the office, two-day at-home model, three-day at home, and two at the office, and then there is another model where you work from home 100% of the time.”

Click here to for the remaining emerging trends.

 

Stockbridge Capital Group has acquired Powerline Business Park, an industrial park in Pompano Beach, for $62.3 million.

Cushman & Wakefield negotiated the deal on behalf of the seller, Industrial Development Co., as well as arranged $31.1 million in acquisition financing through State Farm Insurance Co., for the buyer.

Located at 4100 Powerline Road, the property comprises 443,720 square feet spread across 24 small-bay buildings. The assets were constructed on a 26.4-acre site between 1983 and 1994.

Powerline Business Park offers features including dock-high truck loading and grade-level, air-conditioned office space, electric roof ventilators in shop areas, city-served water and sewer, skylights, overhead 12- by 14-foot doors, 16- to 20-foot clear heights, illuminated parking, heavy duty three-phase electrical service to each bay and professional landscaping and exterior maintenance. Major tenants at the 96.8 percent-occupied park include First World Imports, Bernoti Corp. and CMC Bakery.

The buildings provide convenient access to Interstate 95, Florida’s Turnpike, Fort Lauderdale-Hollywood International Airport, Palm Beach International Airport, Miami International Airport, Port Everglades, PortMiami and Port of Palm Beach.

The Cushman & Wakefield Capital Markets team of Vice Chairman Mike Davis, Executive Directors Scott O’Donnell, Rick Brugge and Michael Lerner, Managing Director Dominic Montazemiand Senior Associate Greg Miller represented the seller. Senior Director Jason Hochman of Cushman and Wakefield’s Equity, Debt and Structured Finance Group secured the low fixed-rate loan. Earlier this month, members of the same team negotiated the $12 million sale of a five-building industrial portfolio in West Palm Beach and Riviera Beach on behalf of The Silverman Group.

“The South Florida industrial market remains a target for investors with demand driven by the exceptional performance of existing assets, the scarcity of for-sale product and limited development opportunities,” Scott O’Donnell said in a prepared statement.

 

Source: Commercial Property Executive

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