Tag Archive for: virgin trains

the road to 2020

So 2019 is drawing to a close, having given the world of commercial real estate things we expected — like a booming industrial market — and things we didn’t (WeWork and opportunity zones were among the greatest flops of the decade).

Bisnow asked some South Florida real estate pros what 2020 may bring. Here are their thoughts:

Jeff Gordon, Vice President, JLL

“We have a number of interesting new office developments delivering or in the pipeline across Miami’s office market over the next few years. This will create variety and optionality not previously seen in Miami as it pertains to emerging submarkets, deepening options in changing submarkets and the way in which the office use is amenitized with other product types across the market as a whole. This variability will provide opportunities for tenants that approach their future leasing with a proactive strategy. In line with this, it will also be interesting to see the impact that the continued expansion of the Virgin Trains stations will have on the connectivity of Aventura and Boca with our Central Business Districts and the continued goal of connecting Florida’s growing talent and workforce.”

Tere Blanca, Founder and CEO, Blanca Commercial Real Estate

“Miami’s vibrant and diverse economy, its business-friendly environment (and tax advantages) and its convenient lifestyle and connectivity to the world via Miami International Airport will continue to spur the relocation to Miami of talented professionals and companies across various industries both domestically and internationally. Key factors driving this movement include this increase in people relocating here due to tax incentives including the lack of a state income tax. The strong population growth in the past five years, with continued projected growth, will continue to motivate companies to establish a presence in Miami. Also, the uncertain political climate in key Latin American countries may attract investment into Miami from these markets that include Mexico and other nations. With limited new office supply delivering in 2020 and robust demand from companies touring the market, we expect the market to remain stable and steady with positive absorption and modest increase in rents. Also, new office deliveries in 2020 will be well-received given Miami’s persistent flight-to-quality trend and this in turn will drive owners of older, existing buildings to undertake strategic renovations to remain competitive. With flight-to-quality prominent among tenants today, we expect new supply to attract tenants across various submarkets, while also attracting new-to-market entrants.”

Cory Yeffet, Director of Acquisitions, Integra Investments

“We expect multifamily development and sales to remain active in 2020. Although rent growth has slowed due in part to significant new supply, demand remaining strong and multifamily cap rates remaining at record lows will continue to support a healthy development and sales environment. This is why Integra continues to be active in the sector, with four multifamily projects under development in South Florida, including the 315-unit Bella Vista project in Lauderdale Lakes, which we intend to deliver and stabilize in 2020. The biggest commercial real estate concern we see for 2020 is the uncertain impacts of the election year, and how global economic and sociopolitical dynamics may slow down private sector expansions.”

Doug Jones, Co-founder and Managing Partner, JAG Insurance Group

“For about the last 10 years, rates have consistently gone down. But with the influx of natural disasters, reinsurance went up in 2019 and that will continue in 2020. That trickles down to the consumer. Also, while risk of sea level rise continues to be a concern, thanks to the recent expansion of the private flood market, consumers will actually have more options in 2020 than ever before to make sure their assets have the proper coverage.”

David Druey, Florida Regional President, Centennial Bank

“I predict minimal, if any, slowing down in deal flow of construction financing in any of the major sectors. Smart developers are seizing the opportunities of low interest rates through use of bank financing for construction financing and securing forward commitments with institution investors for stabilized projects. The ongoing major risk is if the developer can actually complete the project on time and budget. Most of the more substantial projects, outside of apartments, typically have the stabilization piece solved prior to construction commencement.”

Ronald Fieldstone, Partner, Saul Ewing Arnstein & Lehr

“The new EB-5 regulations went into effect at the end of 2019 and we are still seeing increasing interest from investors, especially from Latin America, in the EB-5 program despite the higher threshold. Over the past 10 years, developers have grown dependent on raising EB-5 capital to finance their projects due to the low cost of EB-5 borrowing. We expect it to continue to remain a viable source of financing for development projects in downtown Miami west of Biscayne Boulevard, Little River, areas around Miami International Airport and certain sections of Coconut Grove.”

Stephen Rutchik, Executive Managing Director, Colliers International

“Although one of the original iterations of coworking, WeWork has collapsed on a corporate level, I expect that the concept and most of the existing locations will continue to perform well over the next year. On a larger scale, office landlords in South Florida are increasingly incorporating the coworking concept into existing office buildings. This is attracting new tenants who previously would have either been priced out of traditional office space or who require flexibility that a traditional lease cannot provide. The coworking concept is much larger than WeWork. It has quickly become a part of the American office culture and I expect this trend to grow in the coming years.”

Adam Lustig, Partner and Incoming Real Estate Practice Group Leader, Bilzin Sumberg

“With continued low interest rates, increased employment and significant population growth, I expect the South Florida real estate market to remain strong in 2020. In particular, I see health-related real estate and senior housing as areas of opportunity with the aging of the population and the need for urgent care centers, hospitals, medical office space and senior housing facilities. As shopping center owners try to adapt to dramatic changes in the retail market, medical, health and wellness uses will continue to expand. The major threats to continued growth in South Florida remain traffic, lack of public transportation and affordable housing. One other threat that is not being talked about enough, but that we are very focused on, is the phase-out of Libor at the end of 2021 which affects trillions of dollars of commercial real estate loans.”

Chris Chakford, Managing Director of Origination, Kawa

“Kawa sees ground leases as an ongoing trend in 2020 as banks pull back on commercial fee simple financing in non-core markets, most notably in hospitality and office sectors. With sponsors needing creative solutions to fill out capital stacks and lessen their equity requirement, Kawa has created a ground lease program that offers a complete financing solution to meet these needs. This type of financing vehicle offers a highly adaptable bifurcation structure that accommodates owners’ needs while typically enhancing returns, providing tax benefits, being nonrecourse, and mitigating interest rate risk by offering perpetual financing. In the last three years, Kawa has executed 12 ground lease transactions with a total value in excess of $652M and anticipates ground leases to be a prominent alternative for providing creative financing solutions with flexible capital that can be deployed quickly as we look ahead into 2020.”

Peter Mekras, President of Aztec Group

“2020 is likely to be a year filled with volatility. Interest rates and the political environment both locally and nationally will be the main drivers of market volatility in 2020. Irrespective of the trend of volatility in 2020, we expect capital markets to remain liquid. Equity capital will continue to flow into Florida real estate in 2020. Florida will maintain its label as one of the few states positioned for strong long-term fundamentals and a uniquely favorable business environment for real estate investors. Florida is projected to experience better than national trend employment growth and will continue to benefit from strong population growth. Rental apartments, senior housing and well-located office and shopping centers will be the beneficiaries.”

Lissette Calderon, President and CEO of Neology Life Development Group

“Allapattah is seeing significant residential and commercial real estate investment underway that will enhance the neighborhood’s appeal and quality-of-life offerings. With Miami’s growing population seeking lifestyle living alternatives within the urban core at attainable price points, our mission is to provide a solution to this need by developing attainable luxury rental units that are modern, functional and offer upscale amenities.”

Michael C. Brown, Executive Vice President and General Manager, Skanska USA Florida

“Come the new year, I anticipate the two sectors poised to fuel Miami’s economic growth will be healthcare and higher education, which continue to be the largest sectors for us across the state and in South Florida. I believe we will also continue to see a more pronounced shift into environmentally friendly building, specifically with companies looking to minimize their carbon footprints.”

Martin Melo, Principal, The Melo Group

“2020 will prove to be a year full of challenges, mostly driven by the political landscape throughout Latin America, the upcoming elections and the increasingly low interest rates and low income tax in Florida. We can expect to see an influx of new residents who come to South Florida searching for a more attractive and stable socioeconomic climate as opposed to the current situation in their own countries. The demand for multifamily and market-rate apartments will continue to rise and interest rates will remain low, which will ultimately spark a bigger interest from developers and investors in the area.”

Shawn Gracey, Executive Vice President of Hospitality, Key International

“As the hospitality industry becomes increasingly diverse, there will be even more emphasis on presenting a unique value proposition to today’s travelers. We’ve found that our customer profile is seeking experience-based and design-driven accommodations in key coastline cities, which led us to develop the AC Hotel by Marriott in Fort Lauderdale Beach, which will be one of the newest, upscale select-service properties in the area when it’s delivered next year.”

Rishi Kapoor, CEO, Location Ventures

“Pointing to various indicators, the fortress submarkets of Miami’s luxury condo inventory are the prominent choice in 2020, compared to areas of oversupply. Foreign buyers will remain a challenge, despite promising pockets from target countries in Latin America; the true stability is in the end user, who traditionally purchases a primary residence rather than investment product, and is more likely to focus on lifestyle moves in the market. This is why more protected submarkets, such as Coral Gables, will be a strategic play, as we’re seeing a wave of retirees or empty nesters, coupled with growing families, seeking to place roots in a neighborhood with a thriving business environment, limited top-tier condo product and a historic record for stability.”

Miguel Díaz de la Portilla, Attorney, Saul Ewing Arnstein & Lehr

“2020 will be an exciting year of American Dream Miami. We have our land use and zoning approvals in place and will be finalizing the design of the project, applying for administrative site plan approval, and moving forward with continuing to work on infrastructure. This will all be happening at a time when people from all over the world are beginning to experience the magnificence of American Dream Meadowlands in New Jersey. Triple Five just opened the entertainment center that serves as a sneak peek to how American Dream Miami will look and the tremendous benefit that it will have on our local economy.”


Source: Bisnow

brightline train

Virgin Trains is on track for its expansion into Orlando as the scale of work continues to grow across Central Florida.

The $4 billion West Palm Beach-to-Orlando expansion, which includes 170 miles of new and existing track, is set to be completed in 2022 after starting work this past May. Since that point, crews along the corridor have been clearing space for new tracks among other work.

As construction has expanded, one of the challenges is coordinating with area stakeholders on the project, Michael Cegelis, Virgin Trains executive vice president of infrastructure, said during a Nov. 21 media preview of the track. Those stakeholders include the Greater Orlando Aviation AuthorityCentral Florida Expressway Authority and the Florida Department of Transportation.

“We have lots of stakeholders — that’s where the challenges come,” Cegelis said. “Typically, we are a private sector company looking to make decisions and move fast, and the challenge is sometimes these entities are not used to moving at the same speed we are. But, we have a good relationship that helps prevent some issues.”

Work on the route will include:

  • Zone 1 vehicle maintenance facility and station at Orlando International Airport: The Vehicle Maintenance Facility will be a $70 million, 138,000-square-foot facility that will employ 160 people in high-skill jobs, including train engineers, conductors, technicians and inspectors. Construction of the building structure is set to begin in February.
  • Zones 2 and 3 include 40 miles of new rail from Cocoa to Orlando International Airport: Work on this corridor includes 30 bridges for the rail line, along with three underpasses going toward Cocoa. Currently clearing work is continuing across the zones to make way for track work.
  • Zone 4 reconstruction of 129 miles of track and infrastructure from West Palm Beach to Cocoa: The existing track in the area will be reinforced to allow for higher speeds of rail travel. Clearing work is underway in the area and materials are being stationed on the corridor.

The project is expected to create more than 10,000 temporary construction jobs over the life of the project and generate $653 million in federal, state and local tax revenue. The project will create more than 2,000 permanent jobs post-construction.

Progress on the Orlando route comes as a Jan. 1 deadline was set for right-of-way negotiations for the proposed Tampa route between Virgin Trains, the Central Florida Expressway Authority and the Florida Department of Transportation. This gives the parties another 90 days to reach an agreement that would allow for construction to begin on a $1.7 billion expansion of the intercity passenger rail system.

The company also still is evaluating train station sites in the area that may serve one or more local theme parks, something it is targeting for fourth-quarter this year.

“Virgin Trains is in discussions with Walt Disney World Resort and others on that potential,” said Patrick Goddard, president of Miami-based Virgin Trains USA.

Virgin Trains also is in discussions on a possible station at the Treasure Coast and Space Coast, and is evaluating the potential to connect with SunRail at its Meadow Woods station or another location.

“The train line is considering connections to boost area mobility,” Goddard said. “As we take care of that medium haul trip, we are looking at groups from the public and private sector to pick it up from there. There’s a phenomenal opportunity there and that’s part of the dialogue we are having with the various agencies involved.”

Check out the SFBJ photo slideshow on the progress of the Virgin Trains’ progress by clicking here.


Source: SFBJ

brightline train

Brightline station is coming to Boca Raton. It’s not official. But it’s obvious.

On Tuesday, September 24th, the city council members heard details from Virgin Trains USA executives about the company’s revised offer.

“Brightline has moved a lot,” said Jeremy Rodger.

And he’s correct. Gone is the company’s demand that the city donate two pieces of land in addition to the parcels for the station and a parking garage next to the downtown library. Virgin Trains now wants only first dibs on an option from the city for those properties. Gone is the demand that the city build a pedestrian walkover. Virgin Trains now will help the city seek federal or state money for the project. Gone is the demand that the city pay for a shuttle.

Most notably, gone is the demand that the city pay the entire cost of the parking garage. Company officials said that Virgin Trains USA would pay for the 58 spaces for library patrons that construction would displace.  The city would pay based on the 342 spaces for train passengers. There is no estimate for the cost of the 400-space garage, but current industry figures cite a price of about $20,000 per space.

Mayor Scott Singer noted that the council only was telling City Manager Leif Ahnell to proceed further with negotiations. But the council members’ comments revealed what the outcome will be.

— Andy Thomson: Virgin Trains has “heard us loud and clear on our concerns.” The company has acted in “good faith” and been “responsive and forthcoming.”

— Andrea O’Rourke: “We have to move forward.”

— Rodgers: “A lot of good can come from this.”

— Mayor Scott Singer: The new offer “feels more like a partnership.”

— Monica Mayotte: “This will be a very good addition to our city.”

Virgin Trains felt confident enough to prepare a statement before the meeting and hand it out afterward: “This marks another significant step in expanding Virgin Trains to Boca Raton.”

Not that everyone’s happy. Residents of Library Commons, which is north of the library, packed the chambers Tuesday to complain about the size of the garage and how near it will be to their community. Company officials say they will work Library Commons residents on lighting and setbacks.

Though the library still would have 181 overall parking spaces, members of the Friends of the Library expressed concern about patrons getting from the garage to the library. Virgin Trains said passengers and patrons would use separate entrances and that the company would provide security in the garage.

One major question, however, remains: What might Virgin Trains—or a developer partner—do with that city land if the company acquires it?

Boca Raton had designated land east of the library for a train station. That decision envisioned commuter service—station and parking only.

Optioning the land, however, could put added development next to the library and Library Commons. Jose Gonzalez is executive vice president for real estate development of Virgin Trains’ parent company. He told council members that the possibilities include residential, office or a hotel. Those possibilities worry the Friends of the Library, who already weren’t too keen on the garage.

 “The station isn’t the end of the story.” one speaker said,

Gonzalez said the idea of building on that city land “might go nowhere.” But officials in West Palm Beach and Fort Lauderdale tout the stations’ role in spurring development. Gonzalez wants Virgin to have an “exclusive conversation” about the properties and “preserve our optionality.” Delaying that decision delays the potentially more controversial aspect of the station.

Virgin Trains wants a vote from the council next month. The company would like to open the station by the end of next year. At this point, there’s no reason to think that won’t happen.


Source: Boca Magazine