Posts

Compass needle pointing to the text 2021 - 3d render

It’s a good for a city to be called a “magnet,” so long as it’s attracting the right things.

In the case of Fort Lauderdale, business leaders just took heart after PwC, the national auditing and accounting firm, released an annual commercial real estate survey of 80 metro areas that for the first time ranks the city as a top “18-hour city.”

It’s a loosely defined term that refers to smaller cities with amenities, public services, and job opportunities that are comparable to those in larger places such as New York, Chicago and Los Angeles. But Fort Lauderdale is a place where it’s cheaper to live and do business, and where many entrepreneurs and investors find it easier to set up shop. Years ago, the city would button up and workers would go home at 5 p.m.

“Now you have more of an 18-hour city,” said Steve Hudson, president and CEO of Hudson Capital Group, a Fort Lauderdale-based real estate investment firm. “Young people are being attracted here — there are more jobs. People are catching on that this is very laid-back place to live that has a lot of benefits.”

Others cities the category include Charlotte, Denver, Minneapolis/St. Paul, Portland, Oregon, Salt Lake City and San Diego.

The PwC report also said Fort Lauderdale’s downtown is at the leading edge of the nation’s top 10 metropolitan areas that have workers returning to their offices from COVID -19. In addition, retail vacancy rates this year were 4.8%, the lowest in a decade and down from 8% in 2020.

All of it bodes well, according to real estate analysts and leaders of the Downtown Development Authority, for a local economy that is likely to continue a run to the upside in 2022.

The Migration Behind The Magnetism

Much of that optimism is based on a continued surge of population growth as thousands of people moved into South Florida from northern urban areas during the COVID-19 pandemic.

“You’re seeing a pretty strong migration of talent into this area, and the companies are paying attention,” said Ken Krasnow, vice chairman of Colliers Florida, the commercial real estate service firm.

Jenni Morejon, president and CEO of the DDA, said net migration into the city this year was 4,900 people, many of whom took up residence in new apartment towers that are sprouting in Flagler Village. Business leaders expect those numbers to grow in 2022 and 2023, and base their expectations in part on continued inquiries from out-of-town companies looking to expand.

“A rise in the number of downtown retail and restaurant operations is largely attributable to owners noticing a boost in the local population, and taking advantage of rents that are lower than elsewhere in South Florida,” Morejon said. “The downtown population has eclipsed 21,000. Many of the new restaurateurs that came to Fort Lauderdale have seen success in Miami and other places around the country and recognize rent is not as expensive as it is in Miami and West Palm beach. It’s really encouraging. New retailers are coming to downtown Fort Lauderdale. The movement has driven retail vacancy rates in the city’s core downward to 4.8% this year, which is lower than pre pandemic levels.”

Many of the newly arrived residents, Krasnow said, have the ability to work remotely from new homes in Fort Lauderdale while keeping their jobs in their original cities.

“People are free to effectively work or live wherever they want and increasingly they are choosing to live down there,” Krasnow said.

Aside from the well-documented flight from northern cities to the Sun Belt for tax and weather-related reasons, professionals in the legal, financial, technology and engineering fields are looking for more walkable neighborhood spaces and diversified cultural activities.

“The talent is choosing to live in places that have all of those dynamics,” Krasnow said. “We rate very well on all of those scales.”

Tim Petrillo, co-founder and CEO of The Restaurant People, operators of a dozen restaurants in the area, said the pandemic “put gas on the fire” of migration into the city, with many of the new residents being remote workers.

“I know we see all the time these people in the restaurants,” Petrillo said of the demographic. “Before, talent used to follow companies. Now we’re seeing companies following talent. Now companies are looking to establish a presence in our market. One challenge facing the city is that there has not been a lot of office space built in Fort Lauderdale. The 25-story The Main Las Olas which contains 1.4 million square feet of office, retail and residential space at 201 Las Olas, is the only new building with major office space to rise since the Bank of American tower a decade ago.”

Petrillo and Alan Hooper, through their Urban Street Development firm, are in a joint venture with Hines, the Houston-based office development giant, to add to the commercial mix with an expansive mixed-use project in the Flagler Village area, scene of multiple high-end apartment rentals towers.

A key proposed component is a Hines concept called Timber, Transit and Technology [T3], a seven-story structure aimed at attracting technology and financial service firms. The developers expect to complete the project in 2024.

Developers Jockey For Position

The influx of new residents and ensuing demand for places to live hasn’t been lost on developers, who seem to be working overtime at their drawing boards.

“We see that a lot,” said Stephen Chang, chief operating officer of Suffolk Construction of West Palm Beach, which is involved in a variety of commercial projects regionwide. “There is a definite boom going on right now for South Florida,” he said. “You have a lot of out-of-town developers very interested in South Florida because of the climate and its business acumen and how the government has kept the doors open. Financially it’s relatively cheap, when you compare to older cities like New York or Chicago.”

Areas Poised For Prominence

Fort Lauderdale has some areas that developers seem particularly keen on, based on their existing amenities, Brightline among them. For example, the Kushner Companies of New York and Aimco of Denver have proposed a joint venture to build a 540-foot mixed use project at 300 West Broward Boulevard, slightly to the west of Brightllne’s downtown train station. It would be comprised of two 38-floor towers atop a 10-floor podium, with 956 residential units and 23,752 square feet of ground level commercial space, according to the companies’ development application with the city.

The effort would result in the tallest structure in the city, reaching higher than the 499-foot 100 Las Olas building tower and serve, the developers say, as “an urban gateway to the heart of downtown Fort Lauderdale.”

The proposed building follows an earlier proposal Kushner submitted this year for four other high rises called “Broward Crossing,” also near the Brightline station.

Both companies declined to comment. But their application echoed what local analysts say about why developers want to build here: to leverage nearby existing civic and cultural amenities and build momentum toward more growth — and profits.

“The site is located at an important junction between major transportation hubs, civic and cultural institutions, and commercial attractions,” the application says.

It goes on to note the nearby Brightline and the Broward Central Bus Terminal, the civic and cultural landmarks including the future Joint Governmental Campus, the Museum of Discovery and Science, the Broward Center for the Performing Arts, and Esplanade Park.

“The proposed building is an opportunity to create not only an icon for the city, but also a new community space that contributes to the life of the neighborhood and enhances the pedestrian connections from around the city,” the application adds.

The companies also think the project would inspire further development westward along Broward Boulevard.

“The hope is to add new energy to the neighborhood, supporting the local economy and the lives of those throughout the local community,” the application says.

 

Source: SunSentinel

New approaches from technology companies and co-working providers across North America and Europe are challenging occupiers’ and landlords’ office-space accommodation strategies, forcing players in more established sectors to adjust how they think about the size, physical form and operational function of their premises.

This transformation continues to encourage new development, which is racing to keep up with demand in some markets and being bolstered by a young, educated workforce gravitating to urban centres.

These are some of the key trends noted in Avison Young’s Mid-Year 2018 North America and Europe Office Market Report, that was just released.

The report covers the office markets in 67 metropolitan regions in Canada , the U.S., Mexico, the United Kingdom, Germany and Romania: Calgary, Edmonton, Halifax, Lethbridge, Montreal, Ottawa, Regina, Toronto, Vancouver, Waterloo Region, Winnipeg, Atlanta, Austin, Boston, Charleston, Charlotte, Chicago, Cleveland, Columbus, OH; Dallas, Denver, Detroit, Fairfield County, Fort Lauderdale, Greenville, Hartford, Houston, Indianapolis, Jacksonville, Las Vegas, Long Island, Los Angeles, Memphis, Miami, Minneapolis, Nashville, New Jersey, New York, Oakland, Orange County, Orlando, Philadelphia, Phoenix, Pittsburgh, Raleigh-Durham, Reno, Sacramento, San Antonio, San Diego County, San Francisco, San Jose, Silicon Valley, San Mateo, St. Louis, Tampa, Washington, DC; West Palm Beach, Westchester County, Mexico City, Coventry, London, U.K.; Manchester, Berlin, Duesseldorf, Frankfurt, Hamburg, Munich, and Bucharest.

“Against a backdrop of economic, geopolitical and financial volatility, the commercial property markets – for the most part – are functioning under relatively sound fundamentals,” comments Mark E. Rose, Chair and CEO of Avison Young. “Nowhere are we seeing more profound changes than in the office sector – especially in urban areas of major metropolitan markets across the six countries covered in our annual review. The impact can be seen on city skylines, which are changing rapidly as new construction picks up pace, driven by insatiable tenant demand from organizations adjusting their workplace strategies to a growing millennial workforce and their adaptability to innovative technologies.”

Rose continues: “At the same time, sectors that have historically accounted for a significant amount of demand for office space are now being both augmented and squeezed by ever-expanding technology and co-working industries. This phenomenon is being seen across national boundaries, particularly in markets with dense and growing urban populations.”

According to the report, of the 67 office markets tracked by Avison Young in North America and Europe, which comprise more than 6 billion square feet (bsf), market-wide vacancy rates declined in 38 markets, remained unchanged in seven, and increased in 22 markets as almost 74 million square feet (msf) was absorbed on an annualized basis.

The report goes on to say that construction cranes remained prominent fixtures across many skylines as nearly 74 msf of office space was completed during the 12-month period, while another 138 msf was under construction at mid-year 2018 – with 50% of the space preleased.

“It’s great to see so much confidence on the part of developers as they respond to the supply-demand imbalance in many markets,” says Rose. “As always in this industry, the inherent risk is that circumstances could change, resulting in an oversupply of product at the time of delivery. In many cases, this scenario is the result of external economic and geopolitical factors. This time around, however, the new influences of disruptive technologies and increasing co-working space availability are also affecting how and where people work, potentially impacting the office sector from within – and challenging conventional wisdom.”

Rose adds: “Generally sound office market fundamentals are being threatened on the North American front by ongoing NAFTA talks. In Europe, the looming Brexit deadline continues to dominate the headlines in the U.K., while in Germany, strong leasing activity continues to drive vacancy rates downward in all Avison Young markets. In Bucharest, Romania, development continues in response to demand.”

THE UNITED STATES

The U.S. office market has benefited from another strong 12-month period of positive economic indicators: Further business expansion and job growth, decades-low unemployment, and rising consumer and business spending. Business spending kept its momentum in the first half of 2018, boosted by corporate tax breaks even while the federal government moved toward greater isolationism and global trade uncertainty. As of June, U.S. unemployment averaged 4% and employment over the last 12 months grew by 2.4 million, supported by the office-occupying professional and business sector gaining 521,000 jobs.

The 5.2-bsf U.S. office market reported net absorption of 43 msf on the strength of gains in five markets each achieving more than 3 msf.

“In spite of this strong take-up, I’m not surprised that the overall vacancy rate remains elevated given the volume of construction underway and the continuing trend of more efficient space design,” says Earl Webb, Avison Young‘s President, U.S. Operations.

U.S. office market trends mirror those in Canada, registering an increasing impact from co-working firms. Occasionally, co-working companies have occupied large blocks of space in oversupplied markets, helping to keep vacancy in check, and the concept’s popularity with tenants has forced landlords to compete by adding conference rooms, tenant centers and social spaces.

Webb continues: “Flexible occupancy is key. We also see some national corporate tenants utilizing co-working space in order to control costs and create that flexibility. One co-working operator’s recent announcement that it is moving into brokerage operations could further disrupt the office market, and we’ll be watching that situation and other co-working developments as we head into 2019.”

The report goes on to discuss other recent and continuing trends, including the redevelopment of aging inventory and developers’ emphasis on offering transit-oriented mixed-use projects. Tenants continue to display a preference for amenity-laden buildings and geographies – an important recruiting strategy designed to appeal to the millennial workforce in the tight U.S. labor environment.

Notable Mid-Year 2018 U.S. Office Market Highlights:

  • Five U.S. markets each achieved more than 3 msf of net absorption. San Jose/Silicon Valley and San Francisco together represented 29% of the U.S. total with net absorption of 7.5 msf and 5 msf, respectively. As well, a handful of U.S. markets recorded negative net absorption. Of those, Houston lost the most ground with negative 2 msf during the last 12-month period.
  • Total vacancy in the U.S. was 12.1% as of June 30, 2018, a drop of 10 bps year-over-year. In spite of strong absorption, vacancy rates remained stubbornly high overall with the highest levels in Memphis(20.9%), Westchester County (19.5%) and Houston (18.3%). All but 13 of the 46 U.S. markets reported vacancy averaging more than 10%.
  • Improvement was centered in the downtown inventory (1.7 bsf) with average vacancy falling to 11.2% at mid-year 2018 compared with 11.4% one year earlier, while the bigger suburban market (3.5 bsf) recorded no change in vacancy year-over-year (12.6%).
  • Construction volume fell year-over-year although 96 msf remained under development across the U.S. In new projects overall, 53% of the space was preleased at mid-year 2018 compared with 49% one year earlier. The 379-msf Washington, DC region led the country with 11 msf underway. Demand for new product is high in Washington and preleasing in buildings under construction reached 69% by mid-year. This level was almost matched by New York, where 10.6 msf was under construction (47% preleased) at mid-year 2018.
  • Completions in the 12-month period ending at mid-year 2018 totaled 57.8 msf, increasing slightly from the prior year’s total (55.2 msf). Dallas and Northern California’sSan Jose/Silicon Valley led the country by delivering 7.5 msf each, followed by Washington’s 5.1 msf of completions.
  • Eleven U.S. markets reported asking rents that exceeded the downtown class A average of $48.04 psf full-service gross. Not surprisingly, tight leasing market conditions in Northern Californiaresulted in San Mateo ($84.96 psf), San Jose/Silicon Valley ($74.74psf), San Francisco ($76.54 psf) and Oakland ($57.56 psf) having some of the highest rents in the country. In the Northeast, Boston($66.91 psf), New York ($64.08 psf) and Fairfield County ($54.72psf) were the leaders.
  • Suburban class A rents tell a similar story with Northern Californiamarkets leading the country by far, while most U.S. markets hovered near the national average of $31.32 psf.

“As we forecasted at mid-year 2017, the flight to quality and tenant demand for efficient, amenity-rich options carried into 2018 – and showed no signs of abatement, while class A rents, downtown and suburban, edged higher,” concludes Webb. “High-quality development will continue to boost tenant occupancy and garner higher rents and institutional interest while outperforming the market at large through year-end.”

CANADA

Canada’s office property markets remained sound through the first half of 2018, supported by stable macroeconomic indicators, including healthy employment numbers, GDP growth and a rebounding Alberta economy. However, U.S. protectionist policies and escalating tariffs pose a risk to the Canadian economy and global trade flows, and may lead to moderating growth ahead.

“Intense competition for office space continues to bolster office market fundamentals across Canada – especially in downtown markets,” states Bill Argeropoulos, Principal and Practice Leader, Research (Canada) for Avison Young. “Demand from traditional sectors is being augmented by the proliferation of domestic and global technology and co-working firms, ongoing urbanization and a burgeoning millennial workforce – all part of Canada’s emerging innovation economy.”

The report shows declining vacancy rates in more than half of the Canadian office markets with suburban markets outpacing downtown markets in terms of absorption (led by Montreal and Vancouver) and new deliveries (led by TorontoVancouver and Montreal) during the past 12 months. However, the amount of downtown space under construction at mid-year (led by Toronto) outstripped the suburbs by a significant margin.

Argeropoulos concludes: “Urbanization – partly attributable to growth in the technology sector – has created a noticeable gulf between downtown and suburban vacancy rates in emerging tech hubs such as Vancouver, Toronto, Waterloo Region, Ottawa and Montreal. Given tight conditions and upward pressure on rents in some of the nation’s downtown markets, and with little or no near-term supply relief, suburban markets – particularly those offering transit connectivity and other urban amenities – may be the beneficiaries of overflowing tenant demand during the next couple of years.”

Notable Mid-Year 2018 Canadian Office Market Highlights:

  • Canada’s 530-msf office market recorded positive absorption of almost 6 msf in the 12 months ending at June 30, 2018, led by strong gains in TorontoVancouver and Montreal – offsetting losses in the struggling, but stabilizing, Calgary market.
  • Canada’s overall office vacancy retreated 60 basis points (bps) year-over-year to finish the first half of 2018 at 11.5%. Vacancy declined in six of 11 markets. Unchanged from one year ago, Calgary (23.5%) maintained the highest vacancy rate, Toronto (6.2%) now has the lowest, while Waterloo Region (up 360 bps to 17.1%), Edmonton(down 320 bps to 14.1%) and Ottawa (down 320 bps to 9.5%) recorded the biggest swings.
  • Most downtown markets posted positive results, combining for more than 2.2 msf of absorption in the 12 months ending at mid-year 2018 – led by TorontoVancouver and Edmonton. Consequently, Canada’sdowntown vacancy rate declined 80 bps year-over-year to reach 10.5% at mid-year 2018. Vacancy was lower in seven of 11 downtown markets; four remained in single digits and below the national downtown average, while Toronto (2.2%) registered the lowest downtown vacancy – not just in Canada, but North America.
  • Aside from Edmonton and Calgary, the nation’s suburban markets expanded by varying degrees with strong results in Montreal and Vancouver. Outpacing downtowns, suburban markets combined for positive 12-month absorption of nearly 3.4 msf – slightly behind the previous 12 months’ pace. Suburban vacancy fell 50 bps during the year to close first-half 2018 at 13.1%. Though double-digit vacancy prevailed in all but two suburban markets, six of 11 suburban markets recorded lower vacancy levels year-over-year – with Winnipeg being the tightest (5.5%).
  • New office completions slowed to 3.6 msf delivered in the 12 months ending at mid-year 2018, down from nearly 10 msf in the previous 12-month period – aggravating the shortage of available space, especially in Vancouver’s and Toronto’s downtown markets. In a change from the prior period, suburban completions (led by TorontoVancouverand Montreal) overtook downtown completions, while Torontorecorded the most deliveries overall.
  • Trying to keep pace with demand, developers had more than 15 msf under construction (52% preleased, 3% of existing inventory) at mid-year 2018 as downtown construction outstripped the suburbs by a four-to-one margin. Toronto had the most overall (8.5 msf) and downtown (7.2 msf) office space under construction in Canada and was in good company globally with cities such as LondonMexico CityWashington, DC and New York.
  • Weighed down primarily by Calgary and, to a lesser degree, Ottawa, average class A gross rents softened collectively year-over-year. The downtown average was down $1.97 per square foot (psf) to $38.83psf, and the suburban dipped $0.43 psf to $31.86 psf. Similar to one year prior, Vancouver boasted the highest downtown class A gross rent at $59 psf and Regina edged out Vancouver for the highest suburban class A gross rent at $40 psf.

 

Source: MarketsInsider

The City of Hollywood is working to develop and expand targeted industries to become more successful, resulting in higher paying jobs and ultimately more money for the City.

Health Care

Memorial Healthcare System, one of the largest in the nation and it is continuing to grow.  Memorial Regional Hospital is the flagship facility of this system. It offers extensive and diverse health care services that include Memorial Cardiac and Vascular Institute featuring renowned surgeons, Memorial Cancer Institute and Memorial Neuroscience Institute providing innovative technology.

There is Joe DiMaggio Children’s Hospital at Memorial, one of the region’s leading pediatric hospitals. It offers a comprehensive scope of healthcare services and programs in a child-friendly atmosphere. It is a full-service hospital and offers treatment for minor illnesses, trauma-related accidents, and complex medical conditions. It combines advanced technology and the expertise of a large group of board-certified pediatric specialists. The hospital has 226 beds.

Tourism

Tourism and hospitality is another major objective. The Diplomat Beach Resort has completed major renovations and offers many high-end restaurants and amenities. The Margaritaville Hollywood Beach Resort offers fine dining a high-quality hotel, a beautiful pool, and other amenities. And there are other hotels located at Hollywood Beach and throughout the city.

Aerospace and Aviation

Hollywood is home to HEICO Corporation, is a top manufacturer of aerospace, industrial, defense and electronics products. They make products that are found on commercial airplanes, military aircraft, industrial turbines, targeting systems, and missiles. HEICO operates in two segments, the Flight Support, and Electronic Technologies Group.

And there is Quiet Technology Aerospace which recently moved into a 30,000 square foot facility. This company performs repair work for aviation. It is a market leader in the application of advanced composites for noise attenuation and structures.

The Fort Lauderdale Hollywood International Airport is one of the fastest growing airports in the nation. Major developments are underway and new destinations are being added.

Marine Technology

Marine technology is another major industry for Hollywood. Most of Port Everglades is in Hollywood. Each cruise ship that comes to the port brings thousands of passengers. And there is more development taking place with cruise terminals.

A major expansion project at the port will allow larger freight ships to come to the port and all this means more people and money coming into HollywoodQuantum Marine Engineering of Florida is a leader in producing stabilization technology for yachts. The company is operating in Hollywood. There are many other businesses that are prospering in the marine industry. Nova Southeastern University is operating an Oceanographic Center in Hollywood for various research programs.

Education and Technology

In the area of education and technology, Barry University recently opened a health sciences building in Hollywood, adding to a number of high-quality private schools, charter schools and public schools in the city.

And there are many other thriving businesses in the City. Chewy.com has a location in the City. In addition to developing these key industries, small businesses throughout the city are thriving and offering career opportunities for residents.

 

Source: Hollywood Gazette