Miami Commercial Real Estate News, Trends, Observations • Page 8 of 114

Video: BGO Economist Ryan Severino’s Shares View on Commercial and Multifamily Real Estate

The Conversation: Navigating the Future; Insights from BGO Chief Economist on the Economy and Commercial Real Estate Market

In this video, BGO Chief Economist Ryan Severino joins America’s Commercial Real Estate Show to discuss the economy and the U.S. commercial real estate market. Discussions include Severino’s views on the various property sectors moving forward as well as forecasts for interest rates, property values, and opportunities in 2024. This discussion is about commercial real estate across the United States. Given this, it should be noted that some observations may apply less or not at all to Miami commercial real estate.

Fed Policy and Market Sentiment:
The dialogue delves into the Federal Reserve’s role in shaping economic trends, particularly regarding interest rates. Ryan provides insights into how the market reacts to Fed tightening and suggests that a clear signal from the Fed about halting rate hikes could boost market confidence.

2023 Market Recap and 2024 Predictions:
The hosts review transaction volumes from the previous year, noting a decline attributed to uncertainty around Fed policies. Ryan predicts a modest rebound in transaction volume for 2024 as market confidence grows.

Banking and Lending Outlook:
The conversation shifts to the banking sector’s cautious approach, with banks being selective due to full balance sheets and potential risks associated with loan performance. Non-traditional lenders may find opportunities in the market dislocation.

Distressed Asset Market and Capital Raises:
There’s anticipation of distressed asset opportunities as more capital is raised, but the actual market activity hasn’t matched the raised capital yet. Ryan expects more distress in certain property types, creating opportunities for investors.

Office Market Dynamics:
The office market receives detailed attention, with acknowledgment of its diverse performance across different regions and property types. While some segments, like Class A and trophy buildings, thrive, others face challenges, especially in large cities like New York. There’s anticipation of a prolonged recovery period for the office sector.

Opportunities in Other Real Estate Sectors:
The conversation highlights opportunities beyond the office sector, emphasizing the resilience of industrial, residential, and even retail properties. Self-storage properties are particularly praised for their stable income potential once stabilized.

Investment Strategy and Risk Assessment:
There’s a recurring theme of recalibrating investment expectations and risk assessments in light of changing market dynamics. The dialogue emphasizes the importance of understanding market nuances and picking investment spots carefully.

The Transformative Power of AI in Commercial Real Estate:
The conversation took an intriguing turn as the host delved into the topic of artificial intelligence (AI) and its impact on the world, particularly within the realm of commercial real estate (CRE). Ryan Severino shared interesting insights derived from firsthand experience with integrating AI into commercial real estate practices.

Acknowledging Skepticism and Embracing Potential for CRE:
Ryan began by acknowledging his initial skepticism toward AI but quickly transitioned into a fervent endorsement of its potential. As someone deeply immersed in data analysis and market strategies, Ryan’s journey from skeptic to believer speaks volumes about the transformative power of AI. “It’s not just about crunching numbers,” Ryan emphasized. “AI liberates us to engage in higher-order thinking, enabling us to focus on strategic decision-making rather than getting bogged down in mundane tasks.”

Revolutionizing Commercial Real Estate Market Analysis:
He highlighted AI’s capacity for market ranking, targeting, and forecasting rents, emphasizing its ability to process vast amounts of data at speeds unimaginable to humans. This sentiment echoed throughout the conversation as Ryan elaborated on how AI is revolutionizing portfolio strategy and market analysis within the commercial real estate landscape. “What’s truly mind-boggling,” Ryan noted, “is the sheer volume of data and complex mathematical calculations AI can handle effortlessly. It’s like having a supercharged compass guiding us toward optimal decisions.”

Augmenting Human Capabilities for Informed CRE Decisions:
The conversation also touched upon the evolving role of AI in CRE’s human-centric environment. While AI enhances efficiency and provides invaluable insights, Ryan stressed the importance of maintaining human judgment and intuition in decision-making processes. “It’s not about replacing humans,” he clarified. “AI serves as a powerful tool augmenting our capabilities, guiding us toward informed choices while mitigating biases and oversights.”

Addressing Challenges for AI:
The dialogue didn’t shy away from acknowledging the challenges accompanying AI’s proliferation. Ryan and the host explored concerns regarding AI’s energy consumption, particularly in light of the increasing demand for electricity in an era marked by electric vehicles and data centers. “The rise of AI and electric vehicles poses significant challenges for our energy infrastructure,” Ryan admitted. “We need to confront these issues head-on, ensuring sustainable solutions to meet growing energy demands.”

Cautiously Optimistic Outlook for AI in CRE:
Despite these challenges, Ryan Severino remained cautiously optimistic about the future of commercial real estate. He anticipated a shift in market dynamics, driven by improving fundamentals and a more favorable capital markets environment. “As we navigate the uncertainties of today,” Ryan concluded, “I’m confident in the resilience of the CRE industry. While challenges persist, the cyclical nature of our business promises brighter days ahead.”

About BGO:
Based here in South Florida in the city of Miami Beach, Ryan Severino’s firm BentallGreenOak, known and referred to herein by the trade name BGO, stands as a formidable player in the realm of real estate investment. Serving as the real estate investment arm of Sun Life Financial, BGO has solidified its position as one of the premier firms in North America’s commercial real estate landscape. Their offices are in the 555 Washington Avenue building on Miami Beach, which made it to our Miami commercial real estate weekly headlines posts when it was sold to The Davis Companies by East End Capital and BGO for $52M in 2022 after previously making it for trading for $38M in 2018. With a track record of success and innovation, BGO has garnered recognition as one of the largest real estate investment firms in the region. Its strategic approach and commitment to excellence have earned it accolades and respect within the industry. In a testament to its prominence, BGO secured the seventh spot in PERE’s prestigious ranking of Private Equity Real Estate firms in 2022. This recognition, based on total fundraising efforts over the preceding five years, underscores BGO’s ability to navigate and thrive in the competitive world of commercial property investment.

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Observations, Trends

The Potential Implications of Survey Listing Price Questions Following Property Tours According to Behavioral Economics Theory

Daniel Kahneman, Author of Bestselling Books on Behavioral Economics Theory

Daniel Kahneman, Author of Bestselling Book on Behavioral Economics Theory, “Thinking, Fast and Slow;” nrkbeta, CC BY-SA 2.0, via Wikimedia Commons

I was recently exposed to a survey for a buyer following a property tour wherein the buyer and buyer’s broker were asked a few questions, one addressing how they felt about the listing price. This immediately struck me as something that might work against the interests of the seller.

I’ve long been a student of behavioral economics theory. I notice situations all the time in my personal and business life. This provides me a familiarity such that I instantly sense the implications of asking a prospective buyer about the price, that for the seller this could have undesirable anchoring and framing effects.

The impact of this is perhaps more obvious if one imagines a hypothetical. Imagine if instead of this question being posed in an email, the listing broker pulled the buyer aside during a property tour and whispered the question; “Hey, what do you think of the listing price?” If you think this is different if posed in an survey, stop and think how you’ve looked for every opportunity to talk down a price, regardless of how you felt about it (pricing). This question, even if only in a survey question, would seem to be at the cost to the seller of some number of percentage points in price.

I posed this question to the generative artificial intelligence chatbot ChatGPT. This is just the type of topic it can answer well.

Asking buyers and their agents for their opinion on the price after touring a property can have several implications according to behavioral economics theories.

Question Posed to ChatGPT:

A property was listed at a price believed to be at market value given comparable sales in the area. After buyers tour the property, the listing agent sends the buyer’s agent and the buyer a survey. One question is; “what is your (and your client’s) opinion of the price.” What might the implications be of asking this question after a buyer tours a property, according to behavioral economics theories?

ChatGPT’s Answer:

Asking buyers and their agents for their opinion on the price after touring a property can have several implications according to behavioral economics theories:

1. Anchoring Effect: By asking for the buyer’s opinion on the price after they have toured the property, the listing agent may inadvertently anchor the buyer’s perception of the price to the figure they have in mind. If the buyer perceives the property as being overpriced, their response may reinforce this perception, potentially making negotiations more challenging.

2. Reciprocity: According to the principle of reciprocity, when someone is asked for their opinion, they may feel obliged to reciprocate by providing a response. In this case, the buyer may feel obliged to offer their opinion on the price, even if they haven’t fully formed one yet, which could influence their subsequent negotiations.

3. Confirmation Bias: The question about the price may trigger confirmation bias, where individuals are more likely to notice and remember information that confirms their pre-existing beliefs. If the buyer already believes the property is overpriced, they may be more likely to respond with a negative opinion, reinforcing their initial bias.

4. Social Proof: People often look to others’ opinions and behaviors as a guide for their own. By asking for both the buyer’s and their agent’s opinion on the price, the listing agent may be seeking to leverage social proof to reinforce the perceived value of the property. However, if the responses are negative, it could have the opposite effect and undermine the perceived value.

5. Framing Effect: The wording of the question itself can influence the response. If the question is framed in a way that suggests the price is open to negotiation or that the seller is open to feedback, it may encourage the buyer to be more candid in their response. Conversely, if the question is framed in a way that suggests the price is fixed and non-negotiable, the buyer may be less likely to express any concerns they have about the price.

In summary, asking for the buyer’s opinion on the price after they have toured the property can potentially influence their perception of the price and impact negotiations, depending on various psychological factors such as anchoring, reciprocity, confirmation bias, social proof, and framing.

Richard Thaler, Author of Bestselling Books on Behavioral Economics Theory, “Misbehaving” and “Nudge;” Chatham House, CC BY 2.0, via Wikimedia Commons

I thought ChatGPT answered this very well. But of course, this might just be confirmation bias. Chuckle.

In my two decades on Wall Street, I noticed how people tended to sometimes irrationally make financial decisions that I later came to know as falling under behavioral economics theory. As a commercial real estate broker, I also see it all the time, and frequently an amped up version of it. As I did for publicly traded markets investors in my Wall Street days, I have developed methods to help clients make better decisions with their commercial real estate negotiations, principally by making them aware of human tendencies that can put them at a disadvantage.

I communicate on an ongoing basis with prospective buyers and their brokers that have inquired about commercial properties. I do this more than any other commercial broker I know, with quantified positive effects in the form of sales that happened from one of these follow-ups weeks after an initial inquiry. Thus, I believe in communicating with buyers. What I definitely do not do is ask them how they feel about the price.

Follow Up Question Posed to ChatGPT

What would you estimate the effect, in percentage points of the asking price, of such a question to be on an offering price by the buyer?

ChatGPT’s Answer to the Follow Up Question

It’s challenging to provide a precise estimation of the effect of asking for the buyer’s opinion on the price in percentage points of the asking price, as it depends on numerous factors including the specific market conditions, the buyer’s mindset, the property’s perceived value, and the negotiation strategies of both parties. However, I can offer a broad range of potential effects based on behavioral economics theories and empirical observations:

1. Minimal Effect (0-5%): In some cases, the question may have a minimal effect on the offering price by the buyer. If the buyer’s opinion aligns closely with the asking price and they perceive the property to be fairly priced based on their assessment, they may not adjust their offer significantly.

2. Moderate Effect (5-15%): The question could lead to a moderate adjustment in the offering price by the buyer. If the buyer perceives the property as slightly overpriced or if the question triggers doubts about the value, they may adjust their offer downwards within a moderate range.

3. Substantial Effect (15-30%): In certain situations, the question might result in a more substantial adjustment in the offering price. If the buyer’s opinion is strongly negative regarding the price, or if the question prompts them to reassess the value significantly, they may substantially decrease their offer.

4. Negligible Effect (>30%): In rare cases, the question may have a negligible effect on the offering price if other factors, such as the property’s desirability, location, or unique features, outweigh the buyer’s concerns about the price. Additionally, if the buyer is highly motivated or if there are multiple competing offers, the effect of the question on the offering price may be minimal.

These estimations are speculative and highly variable depending on the specific circumstances of the transaction. The actual effect of asking for the buyer’s opinion on the price will likely vary case by case and may not fit neatly into these categories. Additionally, other factors such as the negotiation skills of both parties and any external market influences will also play a significant role in determining the final offering price.

What I gather from this is that ChatGPT, based on behavioral economics theories and empirical observations, estimates that 45-60% of buyers’ offering prices would be moderately to substantially affected by this question. I’d guess – and I’m pulling this out of the air from my own experiences, a gut feel as much as anything – that the effect on a buyer’s offer would be in the 2-10% range, with a median effect of 4%. That’s not being persnickety; that’s real money. I’ll also guess that the question would have an affect on most buyers, probably 80-90%.

Also consider that 475.278 of the Florida Statutes requires that transaction brokers, among other things, provide limited confidentiality that “will prevent disclosure that the seller will accept a price less than the asking or listed price.” In my opinion, walking up to a buyer to ask how he feels about the price is consistent with the spirit of this, and certainly is not in line with what sellers expect. Doing this via a standard email survey is nearly the same. It is a bad idea, in my opinion.

Hawkins Commercial Realty brokers commercial properties only. Given this, we only consider things in terms of their impact on commercial transactions. The discussion herein could apply equally to commercial or residential real estate. In fact, the survey mentioned herein that I was exposed to and which led to this post was regarding a listed residential property owned by someone close to me. I’ve not seen such a post-tour survey question in the commercial world.

If you are at all intrigued about the topic of behavioral economics, there are several books I’ve read on the topic by Richard Thaler, Daniel Kahneman, and others, each of which I would strongly recommend. Some of my favorites are:

Misbehaving by Richard Thaler
Nudge by Richard Thaler
Thinking, Fast and Slow by Daniel Kahneman

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Negotiating

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A mixed-use, transit-oriented project has just been announced in Allapattah. Developer The Calta Group said it paid $17.2m for an assemblage where it plans the new development. It closed on the final parcel this week. The property is a block from River Landing, and across from the site where another 28-story tower called MidRiverVu is planned with 475 apartments.

Aby Rosen’s Lincoln Road retail building hit with foreclosure lawsuit

Aby Rosen could lose a Lincoln Road retail building to foreclosure — if he doesn’t sell it first. On Jan. 30, Wilmington Trust sued an entity managed by Rosen, principal of New York-based RFR Realty, for allegeding defaulting on a $15.1 million mortgage debt collateralized by the single-story building at 318-334 Lincoln Road. The complaint was filed in Miami-Dade Circuit Court.

Metromover Could Be Expanded West To FIU Under New Proposal

An expansion of Metromover westward to FIU has become a possibility, according to Miami Today. A vote by Miami-Dade’s Transportation Planning Organization last week could eventually lead to the new people mover route. The potential east-west Metromover extension would run along Flagler Street. It would take about 35-40 minutes to get to FIU, compared…

Terra, New Valley Obtain $127M Refinancing for Natura Gardens Multifamily Community in West Hialeah

Terra and New Valley have obtained a $127 million loan for the refinancing of Natura Gardens, a newly built multifamily community located in Miami’s West Hialeah neighborhood. The co-developers are using the loan, which was provided by an affiliate of MF1 Capital, to pay off and refinance a $65 million construction loan that Bank OZK provided in 2021. Keith Kurland…

Developer Who Amassed $10B Condo Portfolio Arrested In Multimillion-Dollar Fraud Scheme

New York developer Nir Meir, who fled to Miami after his company collapsed, was arrested in South Beach Monday on an out-of-state warrant. Meir, a former executive at HFZ Capital Group, was arrested at the 1 Hotel South Beach and faces extradition to New York, where he is expected to be charged in connection to a multimillion-dollar fraud scheme, sources told…

Lease roundup: Padel courts on tap in Wellington, RFB + Fisher Potter Hodas opens Citigroup Center office in Miami’s CBD

Law firm Rottenstreich Farley Bronstein Fisher Potter Hodas opened a downtown Miami office. The firm, founded and led by Richard I. Segal and Zachary Potter, leased 6,900 square feet at Citigroup Center at 201 South Biscayne Boulevard, according to the tenant’s news release. Ryan Rosalsky of Newmark represented the tenant. Steven Hurwitz and Madeline Fine of…

Three Towers Approved in North Miami Beach

The North Miami Beach city commission voted 5-2 last month to approve a large-scale housing development that just weeks prior seemed to have little support. Developer May NMB LLC – a collaboration between New Jersey-based Accurate Builders and Kastel Development – brought forth a series of compromises in response to outcries from both commissioners and residents in December…

1986 Cold Case Murder of North Miami Beach Real Estate Developer Shirley Brant Reopened with Hopeful Advances in DNA Technology

In a chilling unsolved mystery that has haunted North Miami Beach for 37 years, the murder of Shirley Brant, a successful commercial real estate developer, remains a painful chapter in the community’s history. However, there’s newfound hope as police reopen the case, counting on advancements in DNA technology to potentially bring justice to a grieving family and a perplexed…

Apollo, Liberty Base score $56M construction loan for Dania Beach multifamily project

Apollo Companies and Liberty Base Investments secured $55.6 million in construction financing for the first phase of their 101 Dania Beach mixed-use project. Israel Discount Bank provided the loan to the joint venture, records show. 101 Dania Beach’s first phase is a planned 12-story building with 278 apartments, a cafe and 449 parking spaces. In May of last year, Apollo…

High-Rise Olakino House to Offer 83 Condos at 551 Bayshore Drive in Fort Lauderdale

In March 2023, Florida YIMBY reported on the EDITION Residences in Fort Lauderdale, a residential venture that aimed to offer 65 condos between two 11-story towers. Yet, amid various legal battles, the project never came to fruition. Now, 551 Bayshore SPE LLC owns the 1.58-acre site, and it aims to move forward with a project even larger in scope. Meet Olakino House.

Newgard Development Group Unveils Plans For 40-Story, 384-Unit Natiivo Fort Lauderdale

Miami-based Newgard Development Group has unveiled plans for Natiivo Fort Lauderdale, a 40-story resort condominium at 200 West Broward Boulevard. Occupying a prime 1.08-acre site in downtown Fort Lauderdale, the project is designed by the renowned Arquitectonica, with interiors by ID & Design International. It will feature 384 fully finished and furnished residences…

Developer Unveils Plans To Build 40-Story Natiivo Fort Lauderdale

Newgard Development Group has unveiled plans to build a 40-story tower called Natiivo Fort Lauderdale. The developer says it is the first turnkey resort condominium property in Fort Lauderdale purposely designed, built, and licensed for short-term rentals. Natiivo Fort Lauderdale is planned to include 384 condo units which will be delivered fully finished and furnished. Unit sizes…

10-Story Condominium ‘Glass House Boca Raton’ Slated To Break Ground In Q1 Of 2025

Slated to break ground in the first quarter of 2025, Glass House Boca Raton marks a significant addition to downtown Boca Raton’s architectural landscape. This venture, led by 280 E Palmetto Park Road, LLC, with Brandon Chasen and Paul Davis of the Baltimore-based Chasen Companies and Adam Gottbetter of Boca Raton-based ASG Development, will introduce the first…

Glass House Slated for 2025 Groundbreaking at 280 East Palmetto Park Road in Boca Raton

Sales have launched for Glass House, a boutique luxury condo development in Boca Raton. The 10-story building will offer 28 units, measuring 2,550 square feet to 3,900 square feet each. Per the South Florida Business Journal, buyers can have units that span an entire floor or half a floor. In-unit offerings include private terraces with built-in grills, along with various high-end…

Christ Fellowship Church pays $24M for Boca Raton Macy’s store

Christ Fellowship Church acquired a Macy’s Furniture and Mattress Gallery in Boca Raton for $23.5 million. An affiliate of the Palm Beach Gardens-based church acquired the 50,000-square-foot retail store at 9339 Glades Road, records and Vizzda show. The deal expands Christ Fellowship’s real estate portfolio in Palm Beach County, where the church purchased a Jupiter…

Developer Proposes 323-Unit Oasis Tower at 1415 Centrepark Boulevard in West Palm Beach

Index Investment has plans for a 2.2-acre parcel in West Palm Beach. Oasis Tower would measure 12 stories above grade and comprise 323 apartments, with 64 homes designated as workforce housing. Layout plans would span from studios to three-bedroom units. Communal amenities would include a swimming pool, fitness center, work-from-home space, and rooftop terrace…

NYU pays $33M for Langone medical office dev site in downtown West Palm Beach

New York University dropped $33 million for a medical office development site in downtown West Palm Beach, with plans to move its Langone Health to the new building. NYU bought the 0.6-acre property at 324 Datura Street from an affiliate of Boca Raton-based Morning Calm Management, according to records and real estate database Vizzda. The site now houses a four-story…

Video: Buligo Capital CEO Itay Goren Shares Institutional Foreign Investor Views on U.S. Commercial Real Estate Market

The Discussion: Navigating the Landscape of Commercial Real Estate. In a recent episode of “America’s Commercial Real Estate Show,” the show welcomed Itay Goren, founder and CEO of Beluga Capital, a public company based in Israel with investments in various property types across the United States. The conversation delved into the current market conditions, investor…

Video: CoStar Director of Office Analytics Phil Mobley Discusses Office Sector Outlook

The Conversation: Deciphering the Complexities of the 2024 Office Real Estate Market In a comprehensive conversation with Phil Mobley, Director of Office Analytics at CoStar, the world leader in commercial real estate information, invaluable insights into the intricate dynamics shaping the 2024 office real estate market were gained. As we delve into the multifaceted…

Adam Neumann is trying to buy WeWork, but Third Point says financing not committed

Billionaire Adam Neumann is trying to buy back bankrupt real estate company WeWork, which he founded in 2010 and was ousted from in 2019. Neumann’s counsel said it had the support of Dan Loeb’s Third Point, but the hedge fund told CNBC that it had not committed financing and discussions were only “preliminary.” Neumann’s letter, first obtained by DealBook, suggests months…

Adam Neumann Seeks To Buy WeWork, Partners With Hedge Fund Manager Daniel Loeb

WeWork co-founder Adam Neumann is reportedly trying to take back control of the coworking giant. Neumann’s real estate company, Flow Global, and hedge fund manager Daniel Loeb have been pushing for months to buy WeWork out of bankruptcy, The New York Times reports, citing a letter Neumann’s lawyers sent to WeWork on Monday. “We write to express our dismay with…”

JP Morgan on the role of cap rates in real estate

It’s critical to analyze like-kind comparables, such as property type, location, income/expense, quality/condition, durability, when looking at cap rates. Factors such as actual or projected income and expenses can also make a big difference. While they aren’t considered a primary driver of cap rates, interest rate changes can influence cap rates as the cost of borrowing will impact…

Investors Seek To Shut Down CrowdStreet After Nightingale Fiasco

A group of investors who lost their money in Nightingale Properties’ now-infamous offerings on CrowdStreet are looking for payback and focusing their attention on the real estate crowdfunding platform they say let it happen. Attorneys acting on behalf of a dozen investors who collectively had more than $1.5M misappropriated from Nightingale’s failed bid to acquire the Atlanta…

Federal Court Partially Blocks Florida’s Ban On Chinese Landownership

A controversial Florida law that bans Chinese nationals from buying certain land in the state was dealt a significant blow last week, with a federal court signaling it is unlikely to survive legal challenges. The 11th U.S. Circuit Court of Appeals in Atlanta on Thursday blocked the law from being enforced against two Chinese nationals who were in the process of purchasing property, ruling…

Federal appeals court halts enforcement of Florida law targeting Chinese real estate buyers

A federal appeals court has halted the enforcement of a controversial Florida law that restricts Chinese citizens from buying land, siding with two Chinese immigrant plaintiffs represented by the American Civil Liberties Union. The 11th Circuit Court of Appeals in Atlanta ruled that the plaintiffs demonstrated a “substantial likelihood of success” in proving that the law, championed…

International Monetary Fund Sounds Warning Over US Commercial Real Estate Market

If you want a barometer for how dark the storm clouds gathering over America’s commercial real estate market are, look no further than a recent warning by the International Monetary Fund (IMF). In late January, the IMF posted an article on monetary policy expressing deep concern over the impact of two specific threats to commercial real estate: rapidly rising and maturing debt paired…

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Video: CoStar Director of Office Analytics Phil Mobley Discusses Office Sector Outlook

The Conversation: Deciphering the Complexities of the 2024 Office Real Estate Market

In a comprehensive conversation with Phil Mobley, Director of Office Analytics at CoStar, the world leader in commercial real estate information, invaluable insights into the intricate dynamics shaping the 2024 office real estate market were gained. As the conversation delves into the multifaceted landscape of office properties nationally, it’s crucial to recognize the nuances and regional variations that define market trends and investment opportunities. Miami office property dynamics in particular can be and are indeed unique. Discussions include office property values, leasing trends, occupancy quality, lender behavior, cap rates for office property, conversions, and opportunities to look for in 2024.

1. Understanding Office Tenant Behavior and Market Dynamics

The conversation illuminated how tenant behavior continues to evolve in response to enduring effects of the COVID-19 pandemic and shifting workplace preferences. Mobley highlighted the resilient demand for office space, particularly in Class A buildings constructed within the last three to five years. These modern, amenity-rich spaces remain in high demand, reflecting companies’ preferences for contemporary work environments.

However, Mobley also noted disparities within the Class A category, distinguishing between newer constructions and “commodity Class A” buildings. While the former enjoys sustained demand, the latter faces challenges, with sublease concentrations impacting absorption rates. This nuanced understanding underscores the importance of assessing asset quality beyond conventional classifications.

Furthermore, Mobley emphasized the significance of regional variations, noting that while nationally, the office market exhibits certain trends, local dynamics may diverge. For instance, the Miami office market showcases resilience, fueled by in-migration and limited supply, contrasting with broader national patterns.

2. Geographic Variations and Market Resilience

Geographic markets play a pivotal role in shaping office real estate trends, each exhibiting unique responses to economic shifts and industry dynamics. Mobley highlighted the contrasting experiences of cities like San Francisco and Miami, illustrating the divergent trajectories influenced by local factors.

San Francisco, heavily dependent on the tech sector, has grappled with employment slowdowns, leading to increased office vacancies. In contrast, the Miami market has demonstrated resilience, driven by population influx and constrained office supply. These regional nuances underscore the importance of localized analysis in understanding market dynamics and investment prospects.

Moreover, Mobley discussed the nuanced differences between suburban and central business district (CBD) markets, highlighting how suburban offices have exhibited greater resilience amidst changing commuting patterns and health concerns. The commercial diversity and accessibility of suburban locations contribute to their attractiveness, presenting opportunities for investors attuned to local market dynamics.

3. Investment Trends in Office Real Estate and Capital Markets

Investment trends in office real estate reflect a complex interplay of factors, influenced by market sentiment, economic conditions, and risk perceptions. Mobley emphasized the divergent trends observed across property sizes and asset classes, noting distinctions between institutional-grade properties and smaller buildings targeted by owner-occupiers.

While larger properties have experienced declines in value, smaller buildings present opportunities at attractive price points, reflecting a nuanced investment landscape. Additionally, Mobley discussed the impact of rising interest rates on cap rates, highlighting the importance of granular analysis in assessing investment opportunities and navigating market uncertainties.

4. Adaptive Strategies and Silver Linings

Amidst challenges, opportunities emerge for investors and landlords willing to embrace adaptive strategies and innovative approaches. Mobley discussed the potential for office space conversions facilitated by government incentives, offering transformative possibilities at the neighborhood level. Additionally, he highlighted the quality of occupancy as a silver lining, characterized by committed tenants and stable lease terms amidst market uncertainties.

5. Looking Ahead: Strategies for Office Property Success

As stakeholders navigate the complexities of the 2024 office real estate market, strategic foresight and flexibility are paramount. By understanding regional nuances, embracing adaptive strategies, and leveraging market insights, investors can position themselves for success amidst evolving market dynamics. The conversation with Phil Mobley underscores the importance of nuanced analysis and localized understanding in navigating the intricacies of the office real estate landscape in 2024 and beyond.

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Miami Commercial Real Estate News January 31, 2024: $82M Miami Beach Office Sale Collapses; 806 Unit MF Planned Near Douglas Metrorail; LA Fitness Building Trades for $15M; More…

Nightingale’s $82M Miami Beach Office Sale Collapses In Flurry Of Lawsuits

The planned $82M sale of a Miami Beach office building owned by Nightingale Properties has failed to close, sparking a court battle between the embattled developer and the planned buyers. The dispute rose to the surface just as CEO Elie Schwartz began repaying $53M in funds he misappropriated from two crowdfunding campaigns, including… 1601 Washington Ave…

Robert Rivani, Mathieu Massa cancel $82M purchase of Starwood’s former Miami Beach HQ

Robert Rivani’s Black Lion and Mathieu Massa pulled out of their $82 million purchase agreement for Starwood Capital’s former headquarters in Miami Beach. And now the partners are in a legal fight with the seller, New York-based Nightingale Properties, over a $2 million deposit.The cratered deal is the latest setback for Nightingale, which was counting on proceeds from the sale…

806 Apartments Proposed Within Walking Distance Of Douglas Road Metrorail Station

A pre-application has been filed with Miami-Dade planners for a transit-oriented mixed-use development at the Douglas Road Metrorail station. Two 31-story towers are in planning, according to the pre-application filing, with: 806 multifamily units (of which 105 will be workforce) 16,750 +/- square feet of ground floor commercial space approximately 865 parking spaces Merrick Parc…

Developer Proposes 120K SF Office With Studio Apartments In Aventura

Privé Group is planning to build 120K SF of office space in the Ojus neighborhood near the Aventura Mall.The Aventura-based investment and development firm filed a pre-application on Wednesday seeking approval from the county to build an 11-story office building and a small residential building connected by a seven-story parking garage at 18802 and 18820 W. Dixie Highway.

1.5M Square Foot Sawyer’s Walk in Overtown Now 100% Leased, Completion In Summer

The retail and office space at Sawyer’s Walk is now 100% leased, with completion expected this summer. It is the largest mixed-use project in Overtown in decades, with 1.5 million square feet. The development will include 175,000 square feet of retail, including a 50,000-square-foot Target store, a 25,000-square-foot Aldi supermarket, and new locations for Ross Dress for Less…

Plans For New Midtown Miami Building Submitted To FAA

A filing has just been made with the Federal Aviation Administration requesting height approval for a new tower in Midtown Miami. The filing was submitted in January 29, and is for the property where the Midtown 7 building is planned. According to the filing, the new tower is proposed to rise 348 feet above ground, or 363 feet above sea level. That roughly matches a previous filing…

Rock Soffer adds to Wynwood development site

Developer Rock Soffer acquired additional land for a planned project in Wynwood. An entity led by Soffer paid $7.8 million for a third of an acre at 119 Northwest 24th Street in Miami last week, according to Metro 1 broker Juan Andres Nava. Nava and Bernardita Banfi of the same firm brokered the off-market Wynwood deal. A company managed by Elias and Aida Mitrani sold the property.

Related Urban Development Group and Miami-Dade County held a groundbreaking ceremony this morning for Gallery at Marti Park. The 12-story development is being built a block away from Brickell. Around half of the units will be normal market-rate apartments. The remainder of apartments will be targeted towards low-income seniors under the Rental Assistance Demonstration…

Ram Realty sells LA Fitness building in south Miami-Dade for $15M

Ram Realty Advisors sold a recently completed standalone retail building leased to LA Fitness in south Miami-Dade County for $15.4 million.An affiliate of West Aventura Developers, a Sunny Isles Beach-based firm led by Marina Kessler and Gustavo Lumer, acquired the 5.3-acre retail site at 15400 Southwest 127th Avenue, records show. The buyer obtained a $3.5 million mortgage…

Historic boutique hotel in Miami Beach sold for $8.9M, set to become teacher housing

A historic boutique hotel in Miami Beach has been sold, and it will likely be converted into residences. Collinaire Luxury Suites, located at 221 Collins Ave., was sold for $8.9 million on Jan. 16. The sale was handled by Susan Gale of Miami Beach-based Gale Group International, an affiliate of Coconut Grove-based One Sotheby’s International Realty. The 9,160-square-foot property,,,

Modera Riverside Tops Off In Downtown Miami At 36 Stories

Modera Riverside has officially topped off at 36 stories, according to Nichols Architects. The apartment tower is located in Downtown Miami, just across the bridge from Brickell and the under-construction River District. The $185M Riverside Wharf complex is being built down the block. Modera will include 428 apartments, ranging from studios to three-bedroom units. Nichols is…

Belmont Village, Turnberry Break Ground on 11-Story Seniors Housing Community in Aventura

Belmont Village Senior Living has broken ground on Belmont Village Aventura in Aventura, a coastal city in Miami-Dade County. The 11-story project is being built in partnership with Turnberry and will be Belmont Village’s third location in South Florida. Located at 3510 Yacht Club Way, the property is scheduled to open in early 2026. This venture is Turnberry’s first collaboration…

Jackie Soffer’s Turnberry, Belmont plan Aventura apartments for seniors

Turnberry and Belmont Village Senior Living are planning an 11-story senior living project with 153 apartments in Aventura. Belmont Village Aventura at 3510 Yacht Club Way will mark the third project in South Florida and the first partnership with Turnberry for the Houston-based senior living developer, a press release states. Last month, A Belmont Village affiliate paid $8 million…

Codina turning former Doral offices, part of former Koger Center, into a retail site

Codina Partners is set to redevelop the final remaining older generation office buildings that were part of the former Koger Center along 87th Avenue. The new phase will introduce nearly 25,000 square feet of retail offerings and 929 parking spaces in the garages serving the retail space. The expansion will include 13 customizable units, with a rooftop deck featuring pickleball courts…

Codina Partners to Add 25,000 SF of Retail Space to Downtown Doral

Codina Partners will add 25,000 square feet of retail space to Downtown Doral, the developer’s 250-acre mixed-use community in Miami-Dade County. The new plans for Downtown Doral include the addition of 13 customizable retail units with a rooftop deck featuring amenities including pickleball courts. Plans also include 929 additional parking spaces. Established in 2005…

Codina reveals plans for final phase at Downtown Doral complex

Codina Partners is nearing the finish line at Downtown Doral. The Coral Gables-based firm will develop 25,000 square feet of retail with 13 tenant units and rooftop amenities such as pickleball courts, as well as garages with 929 spaces along Northwest 87th Avenue, according to a Codina news release. Construction of the retail is expected to start this summer and completion…

Developers Increase Size of 5050 Residences at 5050 NW 22nd Avenue in Miami

The 5050 Residences, a proposed housing development in Miami-Dade County, is now larger. Initial plans in 2020 presented a four-story building, offering 40 one-bedroom apartments, measuring about 800 square feet each. Now, revised plans have doubled the available apartments, now offering 82 residences in an eight-story building. Per the South Florida Business Journal…

Miami-Dade East-West rapid transit pivots to two new routes

A long-standing plan for bus rapid transit from downtown Miami to West Dade has been shelved as planners have decided to try two other paths to reach Florida International University. One is rail, the other an elevated Metromover along Flagler Street. The plan agreed upon last week is to try both paths and forget the aim of bus rapid transit down the center of SR 836.

Closure plan coming for Doral solid waste plant

The next major step forward with Miami-Dade County’s waste disposal project, after a fire last February destroyed most of the Doral facility, is to, by March 15, submit a closure plan to the Florida Department of Environmental Protection (FDEP), Mayor Daniella Levine Cava told Miami Today last week. While the resource recovery facility 13 miles west of downtown Miami…

Miami Beach community center a burning issue

Miami Beach’s City Commission this week is to touch on a flaming issue: the future of the South Shore Community Center, where the city’s Fire Station No. 1 now is to be placed. At the commission’s December meeting, discussion arose of an alternate location for the fire station. Many are hoping to save the South Shore Community Center at 833 Sixth St. as an online petition…

1,000-square-foot pedestrian bridge to link Morningside buildings

A pedestrian bridge totaling 1,000 square feet has been approved to rise over Northeast 55th Street off Biscayne Boulevard in Miami’s Morningside neighborhood to facilitate a two-building, mixed-use development. The Miami City Commission passed two resolutions related to Morningside Place, a planned retail and residential project comprised of two three-story buildings…

Doral industrial real estate at top of the Southeast market

Doral’s commercial real estate market continues to expand as the city welcomes new tenants and office spaces are repurposed. On the industrial side, which in Doral is referred to as Miami Airport West, asking rates on market rents are up when comparing December 2023 to December 2022, said Carlos Villanueva, a managing broker with The Keyes Company. “The average asking rent…”

Steven Meiner: Miami Beach mayor targets open government, public safety

In a historic runoff election in November, Steven Meiner was elected the 39th mayor of Miami Beach. His four-year tenure as commissioner was the catalyst for his path to the office of mayor, marked by his passion for promoting the safety and quality of life for residents in Miami Beach. In his new role, Mr. Meiner wants to continue serving his community as an active…

Michael Lewis: Give government a refresher course on why tourism is vital

A government attitude problem could harm taxpayers. The ugly attitude is that tourists are a nuisance and cost us money. Elected officials sometimes say almost that. What if we complained that a mushrooming financial industry that pours money into our economy is filling offices that should be left to other businesses, and that the newcomers are driving up prices of homes and…

Midtown Miami’s 228-Unit The Standard Residences Gets Master Permit, Construction Underway

The Standard Residences in Midtown Miami has been issued its master permit and construction is underway. The project is now 90% pre-sold. A groundbreaking ceremony for the project took place in April 2023, and a $45M construction loan was issued by Bank OZK in October. The Standard Residences in Midtown Miami is planned to include: 228 residential condo units 11,000 sf…

343-Unit Downtown Miami Tower Without Parking Garage Close To Topping Off

A 39-story downtown Miami that is being built without a parking garage is now nearly topped off, according to photos by Phillip Pessar. The photos taken yesterday appear to show the shell of the tower now at about level 34. That is around 13 floors higher than photos showed in mid-October. A total of 343 condos are being built, which will be permitted for rental on a short term…

Prologis Signs Seaboard Marine to 308K SF Lease Renewal at Industrial Park in Medley, Florida

Prologis has signed Seaboard Marine Ltd. to two lease renewals at Prologis Palmetto Tradeport, an 880,000-square-foot industrial park in Medley, a city in Miami-Dade County. The two leases, for facilities located at 7800-7890 NW 80th Street and 8001 NW 79th Avenue, total 308,000 square feet. Brian Smith of JLL represented Prologis in the lease transactions. Jonathan Kingsley…

Five Times The Size Of Titanic, New World’s Largest Cruise Ship Now Based In Miami

Royal Caribbean’s Icon of the Seas set sail on its maiden voyage from PortMiami over the weekend. It is now officialy in service as the world’s largest cruise ship. Inter Miami’s Lionel Messi presided over a naming ceremony for the ship at PortMiami before it set sail. The ship is about five times the size of the Titanic, and cost $2b to build. It can hold nearly 10,000 people…

‘Longest Pile Driver Ever In Florida’ Working At 750-Foot St. Regis Sunny Isles Beach

Contractors working on the foundation for first tower at The St. Regis Residences, Sunny Isles Beach are using the “longest pile driver ever in the state of Florida,” according to a newly released construction update from Fortune International Group, which is overseeing sales. The first tower is planned to rise 62 stories and 750 feet, the tallest ever in Sunny Isles. A second tower…

Abinger Capital files to foreclose on ex-Best Buy store in Pinecrest

After Best Buy said “bye-bye” as a tenant, a retail landlord could lose his big box store in Pinecrest to foreclosure. An affiliate of Abinger Capital, a New York-based real estate investment management firm, is suing an entity managed by Azhar Said in Miami for allegedly defaulting on a $11.5 million mortgage. In the complaint filed this week, Abinger alleges Said’s Maria Investments…

Cranes Coming Back To Royal Caribbean PortMiami HQ Office Complex For 4,000 Employees

It appears that construction cranes will soon return to the Royal Caribbean headquarters office complex at PortMiami. According to a filing with the FAA earlier this month, five cranes are planned to be installed at the site, including four tower cranes and one mobile crane. The cranes will range in height from 212 to 305 feet above ground. The work schedule for the cranes is listed…

Terra And Grass River Secure $245 Million Permanent Loan For 23-Story ‘Grove Central’ Mixed-Use Development in Miami

Miami-based developers Terra and Grass River have secured $245 million in permanent financing for Grove Central, a newly completed mixed-use development at 2800 Southwest 27th Terrace in Miami’s Coconut Grove neighborhood. The loan, issued by JP Morgan Chase & Co., will be used to pay off the development’s existing construction loan, provided in 2021 by Apollo…

Terra, Grass River score $245M refi for Grove Central

Terra and Grass River secured a $245 million refinancing for Grove Central, a mixed-use retail and apartment project they recently completed in Miami’s Coconut Grove. J.P. Morgan provided the permanent debt for Grove Central, replacing a $204.5 million construction loan Apollo Global Management provided in 2021, according to a spokesperson for the developers.

Turnberry Breaks Ground On 33-Story ‘ONE Park Tower by Turnberry’ At SoLé Mia In North Miami

Turnberry, an Aventura-based real estate developer, has broken ground on ONE Park Tower by Turnberry. The 33-story tower, located at 2411 Laguna Circle in North Miami – within the multi-billion dollar, 184-acre master-planned community of SoLé Mia, is slated to offer 299 residences. Over 50% of the units were sold within the first 18 months of sales. The condominium complex…

Groundbreaking Ceremony Held For 33-Story One Park Tower at SoLé Mia

Developer Turnberry held a groundbreaking ceremony for the 33-story One Park Tower At SoLé Mia. A total of 299 residential condo units are planned. Demand has exceeded expectations, with over 50% of residences now sold, the developer said. The tower is being built in front of the Laguna Solé, a crystal clear swimmable lagoon the size of 21 Olympic-sized pools. Residents will have…

Miami-Dade mayor’s $2.5B bond proposal targets affordable housing

Miami-Dade Mayor Daniella Levine Cava proposes a $2.5 billion bond program for county projects, including affordable housing. The “305 Future Ready” borrowing plan would be financed through an existing property tax that already repays county debt, and would require voters’ approval through a referendum, the Miami Herald reported. Levine Cava, who is up for reelection…

Celebrity hotspot Vous Church opens Miami Gardens sanctuary

Vous Church, a celebrity hotspot led by the pastor who officiated Kanye West and Kim Kardashian’s 2014 wedding, expanded to Miami Gardens. Vous bought the 100,000-square-foot sanctuary at 17801 Northwest Second Avenue for $12 million from Trinity Church, according to records. The buyer assumed a mortgage from the seller with a $9.6 million balance maturing in 2041.

Sterling Bay, Key International to Develop Miami Office Tower

Rendering of an 848 Brickell balcony. Image courtesy of Sterling Bay Rendering of an 848 Brickell balcony. Image courtesy of Sterling Bay Rendering of an 848 Brickell balcony. Image courtesy of Sterling Bay Sterling Bay, a national real estate development firm known for building creative office and mixed-use projects, is teaming up with Key International…

Sterling Bay Joins Key International As Co-Developer Of 51-Story 848 Brickell In Miami’s Financial District

Key International, led by Diego and Inigo Ardid, has announced Sterling Bay, a national real estate development firm known for its pioneering approach to developing award-winning creative offices, as the co-development partner of 848 Brickell, a 761-foot-tall Class A creative office and retail tower proposed in Miami’s Brickell neighborhood. Sterling Bay joins Key International…

Sterling Bay, Key International Propose 51-Story Office Tower in Miami’s Brickell District

Sterling Bay has joined Key International as a co-developer for 848 Brickell, a proposed 51-story mixed-use tower in downtown Miami’s Brickell district. Plans for the Class A tower include 750,000 square feet of creative offices, structured parking for 1,000 vehicles and 7,500 square feet of ground-level retail space. The project is pursuant to zooming approval by Miami-Dade County.

Brightline Carries 2M Passengers In 2023, Up 67%

Brightline says it passed 2 million passengers in 2023. A total of 2,053,893 passengers rode Brightline in 2023 (up 67% over 2022), generating revenue of $87.7 million (up 174% over 2022). The company launched service to Orlando in late September, and continues to see strong demand for the new long-haul trains. A total of 115,683 passengers rode Brightline’s long-distance service…

Notable Retail Leases Signed in South Florida Q4 2023

South Florida Retail Real Estate Leases 2023 We’ve compiled a comprehensive list of the top retail leases signed by square footage in South Florida during 2023. This past quarter was busy overall, and there were a few big box leases signed and sealed. Despite the sentiment that the traditional retail market is taking a hit due to several factors, particularly e-commerce and…

The 93 Ocean High-Rise Residential Slated for 9317 Collins Avenue in Surfside

In 2022, Florida YIMBY reported on the 93 Ocean, a high-rise residential tower planned for Surfside, Florida. Now, our sources indicate that the project is one step closer to fruition. Per the South Florida Business Journal, the 12-story tower will replace Regent Palace Condominium, a 34-unit complex erected in 1951. Multiplan Real Estate Asset Management purchased the 37,456 sf…

Trump could claim over $320M in tax deductions thanks to Doral golf course deal

Donald Trump may claim more than $320 million in federal income tax deductions, thanks to an easement that restricts development of the Blue Monster golf course at Trump National Doral Miami. The Trump Organization struck a deal in late 2022 to donate the development rights for the 184-acre course to the city of Doral. The Blue Monster is one of four golf courses at the…

Lease roundup: Morgan Law relocating within Coral Gables, Bondi Sushi opening in Oakland Park

Two law firms and a spa leased at Amerant Bank’s headquarters building in Coral Gables. In the biggest deal, The Morgan Law Group took the entire 20,000-square-foot fifth floor, where it will move in the second quarter from 55 Merrick Way in Coral Gables, according to a news release from the landlord’s broker. Law firm Kelley Kronenberg took 9,000 square feet on the fourth floor…

The Dixiana Apartments Planned for 182 Dixiana Street in Hollywood

Our sources point to an exciting residential venture slated for Hollywood, FL. Neal Development and Guardian Properties have joined forces and founded affiliate GN Dixiana LLC. The pair hope to move forward with a 10-story complex that will replace a smaller, one-story housing development built in 1945. Per the South Florida Business Journal, the mid-rise project…

Lennar Corp. Moves Ahead with Tuscan Springs at 18452 Pines Boulevard in Pembroke Pines

Miami-based Lennar Corp. has purchased a 6.47-acre parcel in west Pembroke Pines. The end goal? A townhouse community named “Tuscan Springs.” Per the South Florida Business Journal, the developer initially proposed the development in 2023, where it wanted a rezoning change for the parcel. Upon full buildout, the residential complex will offer 50 three-bedroom townhomes…

The Era Apartments Could Offer Workforce Housing at 2125 S. Andrews Avenue in Fort Lauderdale

Affiliated Development is moving forward with a residential venture in Broward County. At full buildout, the Era Apartments would offer 400 homes, 3,650 square feet of retail, and 549 parking spots. Presently, the Fort Lauderdale-based developer is requesting $5.5 million from the county to include workforce housing as part of the project…

Kaplan Residential wins approval for 190-unit multifamily development in Wilton Manors

Kaplan Residential won approval for a six-story mixed-use development with 190 apartments in Wilton Manors, marking its first major project in South Florida. The mixed-use multifamily development, to be called Generation at Wilton Manors, will be built on 3.6 acres at 1209 Northeast 24th Street, 1225 Northeast 24th Street, 1401 Northeast 24th Street, 2449 Northeast 13th Avenue…

Grass River plans 252-unit mixed-use redevelopment of Wilton Manors shopping center

Grass River Property won approval to raze part of a shopping center in Wilton Manors to make way for a six-story, mixed-use building with 252 apartments. The Wilton Manors City Commission on Tuesday voted unanimously to approve a development agreement between the city and Miami-based Grass River, along with a public access easement agreement and a plat amendment…

Portopiccolo buys Regents Park assisted living facility in Sunrise

A family office bought the Regents Park of Sunrise for $26.7 million, marking continued investment appetite for assisted living facilities. The Portopiccolo Group purchased the one-story, 120-bed property at 9701-9711 West Oakland Park Boulevard from an affiliate of Healthcare Realty Trust, according to records and real estate database Vizzda. The buyer secured loans for $67.4 million…

Fairstead buys affordable housing complex in Lauderhill, starts renovations

Fairstead bought an affordable housing complex in Lauderhill for $26.5 million, marking continued investment in South Florida’s low-income rental market. The New York-based firm, led by Jeffrey Goldberg, purchased Lauderhill Point at 3144-3146 Northwest 19th Street and started renovating the 177-unit property, according to records and real estate database Vizzda. An affiliate…

GL Homes drops $29M on 120 acres in Westlake

GL Homes dropped $29.4 million on a 120-acre swath of farmland in Westlake, Palm Beach County’s newest municipality. Records show an affiliate of the Sunrise-based homebuilder bought the land between 140th Avenue North and Seminole Pratt Whitney Road from Silver Lake Enterprises, a Florida entity managed by Philomena Liu, Kin Man Tse and Ryan Liang. Liang is a former…

JP Morgan 2024 commercial real estate outlook

Key takeaways: Multifamily and neighborhood retail stay strong, while industrial may be starting to soften. The future of office buildings remains unclear. The future of interest rates is uncertain as the economy begins to slow down. It’s critical that owners, operators and investors across commercial real estate optimize their cash so they can capitalize on opportunities as they…

IBM Tells Employees To Relocate Near a Corporate Hub or ‘Separate’ From Company

IBM employees who don’t live close enough to commute to an office have been asked to relocate or leave the tech giant in a sign of an increasing crackdown on remote work in favor of in-person attendance. The Armonk, New York-based computer hardware maker is immediately requiring most U.S.-based staff to report to an office or corporate hub at least three days weekly…

CRE Transaction Volumes Nationally Plummeted In 2023, But Prices Were More Resilient

Commercial property sales volume sank like a stone in 2023, tallying just $374.1B, a 51% drop from the year before, according to MSCI Real Capital Analytics 2023 Capital Trends report. The conditions were “reminiscent of the worst parts of the Global Financial Crisis,” the report’s authors wrote. Apartments saw the largest decline in sales volume year-over-year, totaling $119B in 2023…

Apartment Defaults Nationally To Double This Year, Fitch Predicts

A major ratings agency is predicting that the U.S. multifamily market is on the verge of a surge in loan defaults. Apartment delinquencies for CMBS loans could hit $1.3B this year, exceeding the losses seen during the height of the pandemic, Multifamily Dive reported, citing a Fitch Ratings report. Apartment landlords are experiencing headwinds due to a record onslaught of new supply…

U.S. Apartment Occupancy Hits Decade Low Nationally

U.S. apartment occupancy hit a 10-year low at the end of 2023, as sizable new supply volumes weighed on market fundamentals. But some markets bucked that trend. After the worst of the COVID-19 pandemic, as the country started to open back up at the end of 2021 and the first few months of 2022, apartment occupancy – and prices – saw a drastic hike. Feeling renewed, developers…

With Capital And Patience Dwindling, Short Sales Begin To Hit The Office Market Around the USA

Investors raised billions of dollars last year as they awaited distressed real estate assets to come to market at steep discounts. However, they found few opportunities as office owners largely found ways to hold on to their properties. That’s now starting to change. Office buildings across the country are starting to trade at significant markdowns, in many cases selling for less than…

The office meltdown will result in $1 trillion of losses, real estate billionaire Barry Sternlicht says

Billionaire Starwood CEO Barry Sternlicht sees losses on office properties hitting $1 trillion, per Bloomberg. The billionaire slammed the Fed for leaving a “serious mess” in the real estate market. Office values have plummeted as remote work proves to be a lasting legacy of the pandemic. The ailing office market is headed for $1 trillion of losses, billionaire and Starwood Capital…

What are the opportunities for commercial real estate in 2024

In 2024, the commercial real estate outlook is optimistic, thanks to lower interest rates, Florida’s robust economy, and a significant capital influx into South Florida. I recently participated in the CCIM Commercial Real Estate Outlook Conference, an event where industry leaders converge on the latest trends and insights within the capital market. The panelists portrayed..

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Chart: The Remarkable Post-COVID Run of Industrial Property Prices in Miami-Dade

The chart illustrates the dynamic changes in the average selling price of industrial property in Miami-Dade since 2019 Q4, a date just prior to the onset of COVID, with each data point scaled relative to the baseline value of 1.00 at the end of 2019. Several notable trends and patterns emerge from the dataset.

In the early stages of the dataset, from 2019 Q4 to 2020 Q3, there seems to be a gradual decline in the average selling price, reaching its lowest point of 0.91 in 2020 Q3. This period likely reflects the initial impacts of the COVID-19 pandemic on the real estate market, with economic uncertainties influencing property prices. At that time, it seemed everyone was anxious about what the shutdown would mean for the economy overall and thus commercial real estate. I had a few calls from buyers asking for any distressed deals that arose, convinced that severe issues were just around the corner, and recall multiple buyers being agitated because my sellers would not respond to their well below asking price offers. The consensus was almost completely “uh-oh;” there was really nobody thinking “here we go” in an optimistic sense. For brokers, the phones stopped ringing.

However, starting from 2020 Q4, there is a noticeable rebound, and the average selling price experiences an upward trajectory. The rebound continues through 2021, with substantial increases in 2021 Q1, reaching 1.37, and 2021 Q4, reaching 1.52. This suggests a recovery and potential resilience in the industrial property market as economic conditions stabilize / heat up.

The year 2022 shows further fluctuations but generally maintains an upward trend. Notably, 2022 Q2 sees a significant spike with a scaled price of 1.75, indicating a notable surge in the average selling price during that quarter. Never underestimate the power of The Fed.

As we move into 2023, the dataset continues to depict volatility, with peaks and troughs in subsequent quarters. The scaled price reaches its highest point of 2.09 in 2023 Q1, underlining a potential period of robust growth. However, by 2023 Q4, there is a slight dip, emphasizing the dynamic nature of the real estate market and perhaps a bit of data noise. Prices appear to be moving around a range approaching double what they were pre-COVID. Higher financing costs have no doubt have slowed the price increases.

In the most recent data point, 2024 Q1 QTD, the scaled price stands at 1.94, perhaps showcasing a continuation of positive momentum in the early days of the year, though more likely only a reflection of limited data that happens to be on the high side. Overall, the full dataset suggests a resilient industrial property market in Miami-Dade, characterized by fluctuations influenced by external factors such as the COVID-19 pandemic and broader economic conditions.

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Video: Buligo Capital CEO Itay Goren Shares Institutional Foreign Investor Views on U.S. Commercial Real Estate Market

The Discussion: Navigating the Landscape of Commercial Real Estate

In a recent episode of “America’s Commercial Real Estate Show,” the show welcomed Itay Goren, founder and CEO of Beluga Capital, a public company based in Israel with investments in various property types across the United States. The conversation delved into the current market conditions, investor sentiments, and emerging trends in commercial real estate (CRE) throughout the United States. Goren’s views on debt, equity, and performance of retail, industrial, senior housing, and multifamily properties moving forward were shared in this wide ranging discussion.

Commercial Real Estate Market Dynamics Amidst Global Challenges

The dialogue commenced with a reflection on the challenging times facing Israel, where Beluga Capital is based, with both hosts expressing solidarity with those affected by ongoing crises. Despite the backdrop of global uncertainties, the focus shifted swiftly to the CRE landscape, with Goren highlighting the evolving dynamics of raising capital in the current market.

Shifting Investor Appetites and Market Opportunities

Goren pointed out the noticeable shift in investor appetite compared to previous years, attributing this change to increased interest rates and a broader range of investment alternatives. However, despite the subdued appetite, Beluga Capital managed to secure investments and close deals, indicating pockets of opportunity amidst the market flux.

Impact of Federal Reserve Policies and Financing Landscape

Discussion then turned to the recent Federal Reserve announcements regarding interest rates, with Goren noting a subsequent easing in treasury rates and increased lender flexibility. This shift in financial dynamics hinted at a potentially more active market in the coming year, driven by renewed investor interest and improved liquidity in the debt market.

Projections for Property Performance and Investment Strategies

Looking ahead, Goren outlined a cautiously optimistic outlook for property performance, citing factors such as upcoming property deliveries and the impact of interest rate adjustments. Despite short-term challenges, Beluga Capital remained bullish on sectors such as multifamily, senior housing, and industrial, buoyed by favorable supply-demand dynamics and anticipated rent increases.

Not part of the discussion but notable for this site given that Hawkins Commercial Realty is Miami based is that the performance of Miami industrial and multifamily properties have been very strong. The run up in prices in Miami industrial property were recently highlighted in a post, Charting the Remarkable Post-COVID Run of Industrial Property Prices in Miami-Dade.

Navigating Sectoral Opportunities and Risks

The conversation delved into specific sectors, with insights shared on senior housing, multifamily, industrial, and retail properties. Goren emphasized the resilience of grocery-anchored retail centers and highlighted opportunities in smaller industrial properties, driven by last-mile logistics demand and favorable occupancy trends.

Construction Cost Dynamics and Investment Goals

Addressing construction cost dynamics, Goren acknowledged recent cost escalations but expressed optimism for a potential moderation in the near future. Looking ahead to 2024, the overarching goal for Beluga Capital was to capitalize on market opportunities across diverse property types while maintaining a balanced approach to risk and return.

Global Investment Trends and Foreign Capital Inflows

In response to queries about foreign investment trends, Goren noted an increasing allocation of capital from foreign investors into the U.S. CRE market. He highlighted the U.S. market’s attractiveness due to its transparency, liquidity, and stability, indicating a reservoir of capital poised for deployment in the coming months.

Closing Remarks: The Ever-Evolving Real Estate Landscape

As the conversation drew to a close, Goren underscored the enduring appeal of real estate as an asset class and the resilience of the U.S. market amidst global uncertainties. The dialogue concluded with a nod to the importance of continuous learning, adaptation, and a spirit of optimism as stakeholders navigate the ever-evolving landscape of commercial real estate.

In summary, the discussion between the show host and Itay Goren provided valuable insights into the current state of the commercial real estate market, investor sentiments, and emerging trends. Despite challenges, opportunities abound for astute investors willing to navigate the dynamic terrain of the CRE landscape.

A Bit About Itay Goren & Buligo Capital

Itay Goren stands as a pivotal figure within Buligo, holding the position of Chief Executive Officer. His role encompasses a wide array of responsibilities, ranging from strategic planning and investment analysis to business development and fundraising initiatives. With a wealth of expertise in the realm of private equity real estate, Mr. Goren boasts a distinguished track record in sourcing, negotiating, structuring, financing, and successfully closing high-value transactions, investment programs, and funds.

Before co-founding Buligo, Mr. Goren held a prominent position overseeing a multi-division operation within a prominent Israeli investment firm for over 11 years. During this tenure, he steered substantial equity investments exceeding hundreds of millions of dollars on behalf of major institutional investors and high-net-worth individuals. His academic background is equally impressive, having graduated magna cum laude from Tel Aviv University with a BA in Economics and a Bachelor of Laws. Additionally, he holds a Master of Business Administration from Northwestern University’s esteemed Kellogg School of Management.

Beyond his professional accomplishments, Mr. Goren has also served with distinction as a Major in the Israeli Defense Forces, further exemplifying his leadership capabilities and commitment to service.

Itay Goren’s firm, Buligo Capital, stands out as a prominent player in the global real estate investment sphere, offering investors opportunities to participate in diverse ventures alongside seasoned operators. Boasting a strategic presence with offices in Israel and the United States, coupled with strategic alliances spanning the globe, Buligo Capital provides its clientele with a comprehensive array of investment avenues tailored to varying risk profiles.

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Miami Commercial Real Estate News January 24, 2024: MSC Announces Downtown Miami HQ; Evacuated Surfside Condo Bought as Dev Site; Major Live Local Act Reach Testing Lawsuit Filed;

Bal Harbour Shops Owner Files First Major Lawsuit Testing Reach Of Live Local Act

The owner of the Bal Harbour Shops is stepping up its fight with local politicians to add four residential towers to the luxury shopping center. Whitman Family Development, which owns the shops, filed a lawsuit Tuesday asking a judge to compel the village to approve its plan to develop more than 500 apartments on the property under the Live Local Act. The filing marks one…

Bal Harbour Shops sues village over response to its planned expansion

The owner of Bal Harbour Shops is counterattacking the village’s plan to fight a mixed-use expansion of the high-end shopping center under Florida’s new affordable housing law. Bal Harbour Shops, owned by Whitman Family Development, filed a lawsuit against Bal Harbour on Tuesday, two weeks after submitting an application under Florida’s Live Local Act to build up to 275…

Craig Zinn Automotive pays $24M for Kendall dealership dev site

Craig Zinn Automotive Group paid $23.5 million for a development site in Kendall. The Hollywood-based car dealer acquired an 8.3-acre property at 15200 Southwest 136th Street, records and Vizzda show. The site is approved for a two-story auto retail building spanning nearly 76,000 square feet and 580 parking spaces, records and Vizzda show. The seller, an entity managed…

Whole Foods Applies For Permit To Build Store Next To Midtown Miami

Whole Foods is getting ready to begin building a large new supermarket near Midtown Miami. Miami Building Department records show that a construction permit application for the new store was filed on January 22. According to the filing, a total of 50,812 square feet will be built out at an estimated cost of $7 million. C.E. Gleeson Constructors of Troy, Michigan is listed as the contractor.

Chart: The Remarkable Post-COVID Run of Industrial Property Prices in Miami-Dade

South Florida industrial asking rents rise in the fourth quarter

South Florida’s industrial market ended the fourth quarter of last year with a seismic shift in ownership of 1.4 million square feet in Miami-Dade and Broward counties. Boston-based Longpoint Partners acquired 25 industrial buildings in eight cities from Conshohocken, Pennsylvania-based Seagis. Longpoint’s $262 million portfolio purchase clocked in as the priciest industrial…

MG Developer completes assemblage for Metro Parc South apartments in Hialeah

MG Developer completed the assemblage for its planned Metro Parc South multifamily project in Hialeah. The firm paid $16.3 million in three deals for 1.8 acres along East 24th and 25th streets, near Ninth Avenue. In the biggest purchase, MG paid $10.5 million for the sites at 975 East 24th Street, as well as at 934 and 954 East 25th Street, according to records. An entity led by Michael…

Chicago Developer Sterling Bay to Partner On New Brickell Office Tower: ‘Best Office Market In The Country’

Chicago developer Sterling Bay has announced plans to partner on a new Brickell Avenue office tower. The company will team with Miami’s Key International on what is being called Miami’s “most iconic class-A office tower” at 848 Brickell Avenue. Sterling Bay’s Chief Investment Officer Chang Lee told Bloomberg that Brickell has become “the best office market in the country.”

Phased Vertical Construction Permit Issued For 100-Story Waldorf Astoria Miami

Miami’s Building Department has issued a phased vertical construction permit for the Waldorf Astoria Hotel and Residences supertall tower in downtown Miami. The phased vertical permit was approved and issued on January 10. John Moriarty is listed as the contractor. A phased foundation permit for the Waldorf Astoria tower was issued to John Moriarty in July, and construction…

224-Unit Wynwood Haus Gets TCO, Move-Ins Underway

Wynwood Haus is now officially open, with move-ins underway. The 20-story apartment tower, which broke ground in June 2021, received its Temporary Certificate of Occupancy from the City of Miami on January 12. The building includes studios, one- and two-bedroom floor plans, ranging from 394 to 945 square feet, as well as about 5,500 square feet of ground-floor retail and 222…

Demolition Of I-395 Ramps To Make Way For Signature Downtown Miami Bridge Now Underway

Demolition of downtown Miami’s old I-395 bridges are now underway as part of Miami’s Signature Bridge project. Demolition is expected to be complete by summer. Completion date for the overall project remains late 2027, with a budget of $840 million. The completion date has not been changed since last year. The original completion date for the entire project was Fall 2023.

Miami-Dade County Votes To Authorize More Funding For Northeast Corridor Commuter Rail Design Work

Miami-Dade commissioners voted last week to approve additional funding needed for design work for the Northeast Corridor commuter rail line. It is the final design work needed before a possible grant approval, according to Brightline. The new service will include up to five new stations between downtown Miami and Aventura, where it could then continue into Broward County…

Sale Arranged of Nine Big Lots Retail Locations in California & Florida – Including 1 in Miami – for $50.7M

CBRE has brokered the sales of nine individual Big Lots-occupied retail properties, including 2100 SW 27th Avenue in Miami, to two buyers. Alex Kozakov and Patrick Wade of CBRE represented the seller, a large institutional investor, in the transactions. Robhana Group acquired four properties, totaling 117,494 square feet, for $23.6 million. The assets are: Reliable Properties…

Global MSC Group plants its US base in Miami’s Overtown

On Overtown land where the City of Miami once planned 1,050 units of affordable and mid-income housing, a global cargo firm and cruise line will invest $100 million to develop a new US headquarters, uniting its 250 South Florida employees under one roof. Switzerland-based MSC Group announced the new headquarters last week after county commissioners earlier…

Why Retail Rents Have Tripled In Miami’s Glitziest Shopping District

No prime shopping district in the country has seen its star rise faster than Miami’s Design District. Asking rents for Design District retail have risen 200% since 2019, according to a JLL report. The run-up is by far the steepest increase of any North American prime retail corridor over that time period — second place was M Street in Washington, D.C.’s Georgetown neighborhood…

Hotels Rejoice; Miami Area Spring Visitor Numbers Taking Off

Miami-Dade’s domestic and international travel is ramping up. Conventions, sporting events, hotel demand, plus airline and cruise travel are key cogs in this year’s expected growth. The county enjoyed soaring visitor numbers to kick off the year, said Rolando Aedo, chief operating officer at the Greater Miami Convention & Visitors Bureau. “That first week of January, which runs…”

Hotel coming? Harry Gross’ G Holdings buys Edgewater dev site for $29M

New York hotel developer Harry Gross’ G Holdings bought a development site in Miami’s Edgewater neighborhood, The Real Deal has learned. Infinity Real Estate sold the 1.1-acre property at 2501 Biscayne Boulevard for $28.5 million, according to the seller’s news release. The firm had planned to develop the site with a 308-unit apartment project, and was on the cusp of submitting…

Miami may scale back its downtown billboards aims

A year after Miami expanded its outdoor advertising sites, the city commission may reverse the decision and return to just the three places allowed under a 2015 law. Today (1/25), the commission is to hear a resolution to repeal a policy that allows outdoor ad signs at ten government-owned sites. If approved, the measure would reinstate the 2015 law that allows for billboards up…

Evacuated Surfside Condos Slated To Be Replaced With 10-Story Luxury Project

A Miami developer is moving ahead on a luxury beachfront condo project in Surfside that was first proposed more than a year ago. Multiplan, led by Brazilian developer Joe Issac Peres, acquired the property at 9309 and 9317 Collins Ave. from an entity controlled by Vivian Dimond, founder of Bayshore Grove Capital and a broker at Brown Harris Stevens Miami.

Multiplan pays $64M for oceanfront Surfside dev site

Brazilian developer Jose Isaac Peres’ firm bought an oceanfront site in Surfside for $64 million, following a complicated condo buyout and termination. Multiplan Real Estate Asset Management acquired the site at 9309 and 9317 Collins Avenue from R Palace, an entity led by Vivian Dimond. Dimond, principal at Bayshore Grove Capital and broker at Brown Harris Stevens Miami, has…

Omni Building Gets New Tenant Key Point Academy For 62k Square Feet

The Omni building has a new tenant. Key Point Academy signed a lease for 62,349 square feet in the 1501 Omni Building. It was formerly a Jordan Marsh department store. Resorts World Omni is the landlord. “Resorts World Omni is delighted to champion Key Point Academy’s relocation, nurturing educational growth in South Florida,” said Robert DeSalvio, President of Genting Americas East.

Report: Miami Airport Could Be At Risk Of State Takeover

Miami International Airport’s highly publicized maintenance issues could mean Florida legislators may try to take control of the facility, according to the Herald. Commissioner Juan Carlos Bermudez warned at a meeting earlier this month that the county was in a “situation” with the state, and both MIA and PortMiami could be takeover targets, the report said. The county has been…

Updated Plans Filed For ‘Calle 8’ In Brickell, Gets Height Boost To 856 Feet Above Ground Across 65 Stories

Miami-Dade County planners have been presented with updated plans for Calle 8, a mixed-use development proposed for 190 Southwest 8th Street in Brickell, innovatively designed by BMA Architects and developed by Millennium Developments of Brickell LLC, an affiliate of Aston Martin Residences developer G&G Business Developments. The January 17th filing represents a significant…

Sterling Bay partnering with Key International on Brickell office tower

Key International scored Sterling Bay as a partner on its planned 51-story 848 Brickell office tower. The Ardid family’s Brickell-based Key International and Chicago-based Sterling Bay plan to co-develop the building with more than 750,000 square feet of offices, 7,500 square feet of ground-floor retail and a 1,000-plus-space garage at 848 Brickell Avenue in Miami, according to a Key…

Construction Commences on The Addison in Palmetto Bay at 18185 SW 98th Avenue in Palmetto Bay

Coastland Construction, an affiliate of Coastland Residential, has broken ground on The Addison in Palmetto Bay, a residential development in Miami-Dade County. Per the South Florida Business Journal, the rental community will offer 83 units spread across 13 two- and three-story buildings. Floorplans include three-bedroom and four-bedroom options.

Foreclosure Averted For Downtown Miami Building With $27M Sale

The 225K SF retail and office building at 1 NE First St., which Levy rebranded as the Time Century Jewelry Center and poured millions of dollars into as part of a major renovation, sold for $27.5M on Jan. 9, less than a week before it was slated for a foreclosure auction, the South Florida Business Journal reported. The buyer is a joint venture of Miami-based Elysee Investments…

Uncut gem: Avi Dishi, Elysee and Pan Am buy Yair Levy’s downtown Miami building

Yair Levy’s involvement in an attempted takeover of downtown Miami’s jewelry district is kaput. Now, Avi Dishi, Elysee Investments and Pan Am Equities are betting that Levy’s gamble of converting a 1920s, nine-story building into a bedazzling crown will pay off. An affiliate of Levy’s New York-based Time Century Holdings sold the mixed-use property at 1 Northeast 1st Street…

Pérez family’s Related lands $100M construction loan for apartment project in North Miami

Related Group, led by the Pérez family, landed a $100.4 million construction loan for a multifamily project on a portion of a closed university campus in North Miami. The debt comes amid a swell of construction financing in South Florida, as the tri-county region is bucking the national trend of a slowdown due to elevated interest rates. Coconut Grove-based Related plans…

HTG, Elite Equity Break Ground on $44M Affordable Seniors Housing Community in Leisure City

Housing Trust Group (HTG) has begun construction of Naranja Grand, an affordable housing community for seniors in Leisure City, approximately 25 miles southwest of Miami. The $44 million project is a collaborative effort between HTG and Miami Lakes, Fla.-based Elite Equity Development. The eight-story property will feature 120 units (91 one-bedroom, 29 two-bedroom)…

Constellation Group Breaks Ground On Class A+ Office And Retail Development At 4225 Ponce de Leon Blvd In Coral Gables

Constellation Group, a Miami-based commercial real estate investment and development firm, in partnership with The Boschetti Group, recently celebrated the groundbreaking of their Class A+ boutique office and retail project located at 4225 Ponce de Leon Boulevard in Coral Gables, often referred to as South Florida’s “City Beautiful.” This development is set to enhance the Merrick Park…

13th Floor’s Arnaud Karsenti Is Betting Big on Miami

The delicate art of dealmaking is one that several in the commercial real estate industry have mastered over the years. Some grew up in real estate families, absorbing knowledge and hunger for the craft through osmosis at dinner tables. Others came from far-flung lands with no familial connection to real estate, but with the art of the deal firmly embedded in their DNA nevertheless.

The 115th Street Apartments on the Horizon for 1231 NE 115th Street in Miami

New York-based El Special Situations LLC wants to rezone a .98-acre site from two-family district to mixed-use corridor district. The end goal? A mixed-use complex dubbed the 115th Street Apartments. The venture, measuring four stories above grade, would offer 60 apartments, measuring 891 to 1,182 square feet each. Floorplans vary from one-bedroom to two-bedroom…

The Manor Biscayne Slated for 1650 N.E. 124th in North Miami

Miami-based Related Group has secured a $100 million loan for the construction of the Manor Biscayne, a new housing development. Per the City of North Miami, the building will measure eight stories above grade and offer 382 residences, ranging from studios to three-bedroom units. Of the 173 two-bedroom units, 16 will be set aside as townhouses. In March 2022…

Developers Secure $21 Million In Financing For ‘Merrick Parc’, Slated For 3898 Shipping Avenue In Coral Gables

HKS Real Estate Advisors has successfully closed on a substantial $21 million loan for Merrick Parc, a groundbreaking multifamily development in Coral Gables. This significant financial achievement underscores HKS’s expertise in navigating complex real estate transactions and marks a major milestone in the progress of this ambitious project. Designed by the Coral Gables…

MSC Announces Large New Downtown Miami Headquarters Office

A large new headquarters office has just been announced for downtown Miami. MSC Group said it is planning a $100m investment, with a new headquarters in the Block 55 complex under construction in Overtown. The new office will have 130,000 square feet, with around 250 people working from there. Three company divisions, MSC Cargo, MSC Cruises, and newly launched Explora Journeys…

The Related Group is nearing a deal to acquire the majority of units at an older oceanfront condo building in Sunny Isles Beach where it has a litigious history, The Real Deal has learned. Miami-based Related, led by condo king Jorge Pérez and his sons, Jon Paul and Nick Pérez, is in contract to purchase a majority of the units at Miami Beach Club at 19051 Collins Avenue, sources told…

Brickell Tower Submitted To Zoning Review, Height Increases To 856 Feet

Plans were filed yesterday with Miami-Dade for a Brickell tower with a unique appearance. The newly filed plans showed the tower is now planned to rise 52 stories, or 856 feet above ground and 870 feet above sea level. Plans filed prior to an October pre-application meeting showed a height of 57 stories, or 685 feet above ground and 699 feet above sea level, so the tower is now planned…

Receiver taking over Rishi Kapoor’s firms

A court-appointed receiver, Bernice Lee, is taking control of Rishi Kapoor’s former development firms. Her primary tasks will include investigating the disgraced developer’s alleged misappropriation of $93 million in investor funds, and determining from whom to claw back monies. Last week, Chief U.S. District Judge Cecilia Altonaga appointed Lee to manage Location Ventures…

Office rents up in Miami-Dade, down in Broward and Palm Beach counties in fourth quarter

Elevated interest rates and an overall economic slowdown caught up to South Florida’s office market. Landlords in Broward and Palm Beach counties pushed down average asking rents in the fourth quarter, albeit slightly. Miami-Dade County, however, remained on a high note. Its average asking rents ticked up, according to a recently released report from Colliers. Still, the drop in Broward…

“Office is a dirty word right now”: Buildings outside Brickell, downtown West Palm in trouble, economist says

In downtown West Palm Beach, “they are getting the highest rents in Florida. Some of the highest rents in the country are in Brickell. But that’s the best of [buildings] in the best of submarkets,” said Spencer Levy, a CBRE economist. “Everything that’s one ring outside of that, that’s where the trouble begins.” Even Class A buildings with maturing loans will have a hard time refinancing…

Coral Gables-based KDM launches $350M commercial real estate fund

KDM Financial is launching a $350 million fund to provide bridge loans for recently completed multifamily projects and to purchase distressed properties, The Real Deal has learned. It’s the Coral Gables-based lending firm’s first fund, KDM CEO Holly MacDonald-Korth told TRD. And it joins a swell of real estate funds launched or completed in recent months. “Previously, you would have…”

Lease roundup: Shoma, Related, Turnberry nab tenants

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Video: AFIRE CEO Gunnar Branson Discusses International Real Estate Investor Survey; Fall 2023 Pulse Report

The Discussion

Introduction:
In a recent conversation with Gunner Branson, CEO of AFIRE, the Association for International Real Estate Investors, key insights into the dynamics of the US commercial property market were unveiled. Aires conducts an annual survey of investors worldwide, providing a comprehensive view of their sentiments and strategies. The third-quarter 2023 survey results were discussed, shedding light on the current challenges and opportunities in the ever-evolving landscape of US real estate.

Changing Trends and Market Sentiments:
The conversation opened with a reflection on the evolving sentiment among international investors. Branson highlighted a shift in tone compared to a year ago, emphasizing a more cautious and subdued atmosphere. Investors are actively reassessing existing portfolios, particularly in the office property sector, as the capital markets experience a pause, and debt becomes scarcer and more expensive.

Global Perception of US Real Estate:
Despite challenges, the US continues to be perceived as a safe haven for real estate investment. Branson pointed out a 34% net increase in intended allocations for real estate in the US among international investors. The depth of the US market, with numerous institutional cities and the continued strength of the US dollar, contributes to the confidence placed in the country’s real estate.

Debt Market Challenges and Opportunities:
The discussion delved into the debt market, highlighting concerns about the rising cost and reduced availability of debt. Regional banks’ departure and the impact on refinancing were discussed, with Branson acknowledging the challenges but also pointing to opportunities for debt investors. As the debt landscape undergoes restructuring, investors are exploring alternative debt providers and debt funds to navigate the changing dynamics.

Foreign Investors’ Allocation Strategies:
Foreign investors are adjusting their allocation strategies, with a notable interest in alternative assets. Sectors such as data centers, movie studios, and niche plays like cold storage are gaining traction. The survey also revealed a focus on single-family rental properties, especially in markets like Atlanta, addressing the growing demand for rental housing amid a housing shortage.

Assessment of Office Market:
The conversation addressed the challenges facing the office market, particularly in the context of the COVID-19 pandemic. Branson acknowledged the overbuilding of office spaces in the last decade, leading to distress, especially in older buildings. The survey indicated a potential shift towards conversions, including multifamily, hospitality, storage, and surprisingly, urban farming. The adaptability of existing office spaces to meet evolving needs was highlighted.

Central Business District vs. Suburban Office Properties:
The discussion touched upon the evolving preferences regarding central business district (CBD) versus suburban offices. While there was a previous trend favoring suburban offices, the survey results indicated a shift, with confidence in CBD offices holding value more effectively. However, concerns about the decline in office values were noted, emphasizing the need for a mixed-use environment and the impact on perceived value.

Insurance Challenges and Climate Risk:
Branson addressed the rising concerns about insurance costs, particularly in coastal regions facing climate-related risks. The survey highlighted a significant increase in insurance premiums, impacting the economics of real estate deals. The recognition of climate risk and the need to account for it in pricing were discussed as ongoing challenges for investors, with potential implications for investment decisions in vulnerable areas.

Conclusion:
The conversation with Gunner Branson provided valuable insights into the complex landscape of international real estate investment in the US. As investors navigate challenges in the debt market, changing office dynamics, and rising insurance costs, opportunities emerge in alternative assets and strategically chosen sectors. The survey results reflect a nuanced outlook, emphasizing the importance of adaptability and a keen understanding of evolving market trends in making informed investment decisions.

AFIRE, the association for international real estate investors focused on commercial property in the United States, is a forum for real estate investment thought leadership. AFIRE members gather throughout the year to help each other become Better Investors, Better Leaders, and Better Global Citizens through conversations, research, and analysis of real estate capital markets, cross-border issues, policy, economics, technology, and management. Known as representing the “who’s who” in the global real estate investment industry, AFIRE membership is exclusive to principals and senior executives. Click here for previous AFIRE videos.

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Video: Janney Montgomery Scott Director or Research Chris Marinac Discusses if Banks Handle Upcoming Loan Maturities

1. Data and Information Sources: The conversation mentions the use of Tre data, a service that provides information about lending. It emphasizes the importance of having accurate and detailed data to understand the real estate market and banking system.

2. Challenges in the Banking System: There’s a discussion about the challenges faced by banks, especially related to loans outside the banking system. The speaker suggests that there might be a significant number of loans outside traditional banking that need to be addressed separately.

3. Context of Real Estate Loans: The speaker highlights that not all real estate loans are problematic, and there are borrowers trying to adapt to changing circumstances. The context of each loan, such as demand, needs, and changes in usage, should be considered.

4. Buying Power in the Marketplace: The conversation notes the presence of buying power from new players, such as family offices and private funds, taking advantage of opportunities when prices drop.

5. Example of Capital One: An example is provided where Capital One sold $900 million of office loans, and the actual losses were less than initially assumed. This illustrates the importance of having real data and not relying solely on assumptions.

6. Recognizing Losses and Restructuring: The speaker mentions the importance of recognizing losses and restructuring, drawing a parallel to strategies employed in the past, such as during the RTC days in the early ’90s.

7. Bank Assertiveness in Recognizing Issues: The speaker praises certain banks like Bank of America and Truist for being assertive in recognizing issues related to office loans. The assertion is made that banks have been more proactive in dealing with problems compared to investors.

8. Banking in 2023-2024 vs. 2008-2009: A comparison is made between the banking industry’s response to issues in 2023-2024 and the challenges faced in 2008-2009. The speaker suggests that banks have been more assertive and effective in addressing problems.

9. Bankruptcy Data: The conversation touches upon bankruptcy data, noting a reported increase in Chapter 11 bankruptcies. However, it emphasizes the need to consider a longer-term perspective and highlights that bankruptcy levels are still significantly below historical levels.

10. Banking Behavior and Liquidity: There’s a discussion about changes in banking behavior, increased liquidity, and how banks are better equipped to handle issues. The speaker notes that liquidity has been positively impacted by government stimulus checks and programs.

11. Deposit Behavior and Loan Contracts: Banks are mentioned to be requiring more deposits, with some introducing loan contracts tied to maintaining certain deposit levels. This behavior is seen as a positive change.

12. Behavior Change in Banking: The conversation underscores the shift in behavior within the banking industry, including better detection of issues and improved problem-solving approaches.

13. Short Sales and Loan Sales: The discussion acknowledges that short sales and loan sales are active, with banks willing to work through problems without resorting to foreclosures.

14. Expectations for Banks in 2024: The speaker expects banks to become more active in lending once regulatory uncertainties regarding capital rules are clarified. The importance of having a bank relationship for small businesses is emphasized.

15. Loan Growth Expectations: While overall loan growth is expected to be modest, the conversation notes that smaller and midsize banks might have more significant loan growth as they pick up the slack left by larger banks.

16. Opportunities for Banks: The speaker sees opportunities for banks to make safe loans, build relationships, and grow their businesses, especially by attracting new customers through lending.

Overall, the conversation provides insights into the current dynamics of the banking industry and real estate market, highlighting positive aspects and dispelling concerns raised by certain media narratives. Though Miami commercial real estate exists in a parallel universe without the stress other markets are perceiving, developments around the country can nonetheless affect financing, which is of concern to all investors, including those in Miami and the rest of South Florida.

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Lawmakers Mull Major Changes To Landmark Live Local Act

Proposed changes to Florida’s Live Local Act, which changed the landscape for housing development in the Sunshine State, are under consideration in the state legislature that would smooth out ambiguities in the law that have been used to push back on proposals. They would also tighten rules around project heights and the types of sites that qualify under its provisions. The amendments…

Grant Cardone sues John Legere for calling him ‘biggest bulls**t artist on the planet’ and other insults

Grant Cardone is 10X mad at his onetime pal, former T-Mobile CEO John Legere. In June of last year, Legere called Cardone “the biggest bullshit artist on the planet” and other alleged slanderous insults during an online group chat that was widely circulated on social media platforms, according to a recently filed lawsuit. Cardone, who leads Aventura-based Cardone Capital, sued Legere…

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Video: MSCI Real Asset Chief Economist Jim Costello Discusses U.S. Capital Trends

The conversation begins with a focus on the upcoming maturities in the commercial real estate market, amounting to around $1.5 trillion between the present and 2026. The discussion emphasizes the potential challenges arising from these maturities, especially considering recent interest rate increases.

The conversation then delves into the impact of interest rate hikes on property values, using examples to illustrate how even moderate increases can lead to significant value declines. They discuss the varying effects on different property types, with offices experiencing more significant declines compared to the warehouse sector.

Jim Costello highlights the issues surrounding small banks, a significant source of commercial real estate loans, and how they are becoming more cautious in their lending practices. He points out the lack of transparency in the commercial real estate sector, making it challenging to fully understand the situation.

The discussion touches on the softening deal volume in the current market, and the challenges faced by buyers and sellers due to differing expectations. The conversation also addresses the potential impact of geopolitical events, like those in Israel, on the real estate market.

As the conversation shifts to the economic outlook, Jim Costello expresses cautious optimism, pointing out positive indicators such as job growth and consumer activity. However, he remains watchful for signs of weakness, particularly in hiring and job creation.

The discussion concludes with a reflection on the opportunities for lenders in the current market, emphasizing the potential benefits of building relationships and providing loans with safer underwriting. Jim Costello suggests that loans made after a downturn often outperform in the long term.

Throughout the episode, there is a recurring theme of uncertainty in the market, driven by factors like interest rates, maturities, and geopolitical events. Jim Costello’s insights provide a comprehensive overview of the challenges and opportunities in the US commercial real estate and debt markets.

He discusses the lending environment, the affects of the current lending environment on commercial real estate, and the various factors affecting the lending environment.

MSCI is an American finance company headquartered in New York City. The company, also know as Morgan Stanley Capital International, is a global provider of equity, fixed income, real estate indices, multi-asset portfolio analysis tools, ESG and climate products.

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Tax Credits, Grants, & Abatements for Converting Office to Multifamily

The Discussion: Navigating the Challenges of Office to Multifamily Conversions: A Closer Look at Incentives

Introduction:
In a recent episode of “America’s Commercial Real Estate Show,” Guest Ron Gart with Seyfarth delves into the complexities and challenges of converting office properties to residential spaces. The conversation explores the current state of the commercial real estate market, particularly the struggles faced by office properties in certain markets. The focus then shifts to the incentives provided by governments, both local and federal, to encourage and support this transformation.

About Guest Ron Gart, Partner at Seyfarth:
The episode features Ron Gart, a partner at Seyfarth, a prominent law firm in the U.S., as the guest expert. Ron provides insights into the difficulties associated with office-to-residential conversions, addressing factors such as national vacancy rates, remote working trends, and distressed office loans. He emphasizes the broader impact on communities, including reduced tax income for municipalities and potential repercussions for surrounding businesses.

Government Initiatives and White House Guidelines:
Ron highlights the significant role governments play in addressing the challenges posed by distressed office properties. He specifically mentions the White House’s recent release of a “Commercial to Residential Conversion Guidebook” on October 27th. This guidebook outlines existing federal programs, totaling 21, aimed at supporting developers, owners, and lenders in converting office spaces into residential units.

Incentives and Programs:
The conversation covers various incentives provided by governments, including tax abatements, tax credits, tax increment financing, and reductions in transfer taxes. Ron emphasizes the importance of zoning changes, especially in urban areas, to permit residential use. The guidebook identifies programs such as rehabilitation tax credits, loan guarantees from the Department of Energy, and funds from the Department of Transportation for transit-oriented development projects.

Local Efforts and Grants:
Ron details the local efforts made by cities like Boston, New York, Chicago, Los Angeles, and Houston to incentivize office-to-residential conversions. These efforts involve grants, zoning changes, and pilot programs, all aimed at fostering affordable housing and revitalizing urban areas. The guidebook also outlines a range of grants, including a $10 billion grant from HUD, to support these conversions.

Closing Thoughts and Call to Action:
In closing, Ron stresses the urgency of addressing the conversion of distressed office properties to residential spaces. He emphasizes the need for a collaborative approach involving city planners, governmental bodies, and community members. Ron encourages stakeholders to explore and leverage the available incentives to mitigate the potential negative impacts on communities, tax revenues, and surrounding businesses.

Conclusion:
The episode sheds light on the evolving landscape of commercial real estate, with a particular focus on repurposing struggling office buildings around the country (not so much so in Miami). By examining government initiatives, incentives, and the White House’s guidelines, the conversation provides valuable insights for industry professionals, developers, and community members grappling with the challenges of transforming office spaces into vibrant residential hubs.

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Development, Multifamily Property, Office Property

Miami Commercial Real Estate News January 10, 2024: MXU, Affordable Housing Expansion Planned for Bal Harbour; Grove Central MXU Completed; More…

Whitman Family Development Unveils Plans for Mixed-Use Development Within Bal Harbour Shops Property

Whitman Family Development, the family-owned company behind the creation of Bal Harbour Shops, has submitted plans for a new mixed-use development in the Village of Bal Harbour, Florida. Aimed at enhancing the 18-acre property, this project proposes the addition of attainable and market-rate residences, alongside a boutique hotel, in the commercial district.

Bal Harbour Shops Files Plans To Build Multiple Residential Towers, Workforce Housing

The owners of Bal Harbour Shops have filed plans to build an expansion that includes 600 residential units. The proposal was filed under Florida’s new Live Local Act, which allows developers to bypass certain local zoning regulations in exchange for committing to build 40% of units as workforce housing. “By adding workforce and market-rate housing catering to service and hospitality…

Whitman Family Development Unveils Plans for Mixed-Use Expansion at Bal Harbour Shops

Whitman Family Development has submitted plans for a mixed-use project at its Bal Harbour Shops in Miami’s Bal Harbour village. Plans call for 600 apartment units, 40 percent of which are earmarked for workforce housing and 60 percent of which will be luxury housing. There will also be a 70-room, 20-story hotel and an additional 45,700 square feet of retail space. Bal Harbour Shops…

Whitman plans to add affordable housing to Bal Harbour Shops under new law

The owner of Bal Harbour Shops plans to move forward with a mixed-use expansion of the high-end mall, using the state’s new affordable housing legislation. Whitman Family Development filed plans with Bal Harbour to develop a 70-room hotel, 600 residential units and another 46,000 square feet of retail, according to a press release. Part of the project would be built where a Barneys…

Miami’s Unemployment Rate Remains At Record Low 1.4%

The Miami area’s unemployment rate remains at or near a record low, according to a new BLS report. Miami also had the fastest growing year-over-year increase in employment of any major metropolitan division nationwide. The report said that in November, unemployment in the Miami-Miami Beach-Kendall metropolitan division stood at 1.4 percent. Of the 38 metropolitan divisions…

Brickell’s Tallest-Ever Office Tower Nearing Completion (Photos)

830 Brickell continues to move closer to completion, new photos by Phillip Pessar show. The tower topped off in June 2022 at 55 stories and 724 feet, making it the tallest office building in Brickell. This property is located at 830 Brickell Plaza, Miami, FL 33131, which is at the southwest corner of Brickell Plaza, a street that runs just west of Brickell Avenue, and SW Eighth Street. Brickell City…

CREI Holdings Receives $41M Refinancing for Affordable Seniors Housing Community in Sweetwater

Development firm CREI Holdings has received a $41 million loan for the refinancing of Li’l Abner II apartments in Sweetwater, a South Florida city just west of Miami. Marc Suarez led the Lument team that provided the funds. The project was completed in April 2023. Designed by Burgos Lanza Architects and Planners, an architectural firm based in Coral Gables, Fla., the eight-story…

CREI Holdings Secures $41 Million Loan For Affordable/Workforce Housing In West Miami-Dade County

Miami-based development firm CREI Holdings has secured a $41 million loan from Lument for the refinancing of Li’l Abner II apartments, completed in April 2023 in the city of Sweetwater. The transaction closed on December 29, 2023, and was led by Marc Suarez, a managing director at Lument. Designed by Burgos Lanza Architects and Planners, an architectural firm based in Coral Gables…

Sale Arranged of 141,246 SF Office Building at Doral Square

CBRE has arranged the sale of The Offices at Doral Square, a 141,246-square-foot office building located at 8600 NW 36th Street in Doral, a suburb of Miami. The Class A property is the office component of Doral Square, a mixed-use development that also features 150,000 square feet of shops and restaurants. A partnership comprising “several Miami families” purchased the asset…

Terra And Grass River Property Complete ‘Grove Central’ Mixed-Use Development At 2800 SW 27th Terrace In Coconut Grove

Terra and Grass River Property, deeply established development firms in Miami’s Coconut Grove neighborhood, have completed a mixed-use multimodal complex at Grove Central. Now open to residents, the transit-oriented complex includes mixed-income apartments and neighborhood retail along the Metrorail corridor at the entrance to Coconut Grove. Located at 2800 Southwest 27th Terrace…

Transit Oriented Development At Coconut Grove Metrorail Station Reaches Completion

Grove Central, the giant transit-oriented development at the Coconut Grove Metrorail Station, is now officially complete. The development is meant to encourage Metrorail ridership, and allows residents and visitors to avoid traffic and parking by using transit. In addition to being connected with the Metrorail station, the development is also integrated with the adjacent Underline…

Ardid family’s Key International proposes 462-unit rental tower next to Trinity Episcopal Cathedral in Miami

Key International wants to build a 42-story multifamily tower next to the historic Trinity Episcopal Cathedral that’s at the foot of the Venetian Causeway in Miami. The proposal marks the latest planned redevelopment of a South Florida religious site. While some plans allow for the preservation of churches, others call for moving the congregation elsewhere. Key, led by the Ardid family…

27-Story Edgewater Tower Submitted To Urban Development Review Board

A proposal for a 27-story tower has just been revealed in a filing with Miami’s Urban Development Review Board. The tower will feature a contemporary design, a letter from the developer’s attorney said. It is planned to top off at 351 feet and include: 180 condo-hotel units (ranging from studios to 4 bedrooms) 4,768 square feet of ground floor retail 117 parking spaces on levels 1, 2…

Rentyl Resorts to Develop 44-Room Boutique Hotel in Miami Beach

Rentyl Resorts plans to develop a 44-unit boutique hotel at 2814 Collins Avenue in Miami Beach. Upon completion, the hotel will feature ground-level restaurants and entertainment venues, as well as direct beach access. The project is a partnership between Rentyl, DaVinci Hospitality Group and Ferrari Group. The construction timeline and name for the new hotel were not disclosed.

Terra, Grass River Property Complete Grove Central Mixed-Use Development in Miami

Terra and Grass River Property, two Miami-based development firms, have completed construction of Grove Central, a transit-oriented, mixed-use development in Miami’s Coconut Grove neighborhood. The property comprises a 23-story apartment tower, 1,250-space public parking garage and 170,000 square feet of retail space leased to tenants including Target and Sprouts…

Vestcor buys Naranja dev site planned for 576-unit multifamily complex

Less than a year after proposing a 576-unit apartment complex in south Miami-Dade County’s Naranja neighborhood, Vestcor scooped up the 7.7-acre site. Vestcor paid $12.5 million for the assemblage of seven lots between South Dixie Highway and the South Miami-Dade Busway, north of Southwest 280th Street in unincorporated Miami-Dade, according to records and real estate…

Tri-Rail ready to load in downtown Miami

“One more way to get people to avoid the Turnpike and I-95,” is how David Dech, director of the South Florida Regional Transportation Agency, describes this Saturday’s long-awaited arrival of Tri-Rail trains in downtown Miami. The achievement adds a fourth leaf, the one that symbolizes success and luck, to mass transit’s four-leaf downtown clover. “You’ve got Brightline, Metrorail…”

Naftali Group Chairman Miki Naftali Unveils Visionary Miami Project at The Real Deal Showcase

South Florida real estate is about to undergo a transformative shift with Naftali Group’s entry into the vibrant Miami market. In an exclusive interview with The Real Deal, Naftali Group’s Chairman and CEO Miki Naftali discussed the driving forces behind their expansion, showcased their upcoming project “Jem,” and highlighted the unique qualities that set Naftali Group apart in…

ComReal sells Doral industrial facility for $18M

ComReal sold a warehouse in Doral for $17.5 million to Aventura-based real estate investor Sebastian Guejman. An entity managed by Guejman acquired Lakes Edge Innovation Center, an 80,158-square-foot industrial facility at 9000 Northwest 15th Street, records and Vizzda show. The deal breaks down to $218 a square foot. Guejman’s entity took out a n $11 million mortgage…

Swiss developer Empira Group led by Rafael Aregger opens new North American headquarters in Miami

A real estate investment and development firm, based in Zug, Switzerland, recently relocated its North American headquarters to an office in downtown Miami. In December, Empira Group moved into a 10,000-square-foot office on the 46th floor of the Southeast Financial Center at 200 S Biscayne Boulevard. Led by Rafael Aregger, the Southeast Financial Center office will house up to 50…

Little River 12-story project seeks city waivers

A new 12-story mixed-use building is planned for the Little River area of Miami. Little River Cedar Property Owner LLC plans a 12-story building for a site at 7715-7737 NE Second Ave., between Northeast 78th and 77th streets. The site plan shows the new residential building for 191 residential units and 8,009 square feet of ground floor retail, and parking for 296 vehicles.

Ex-MLB player Mo Vaughn partners with Hyperion on 147-unit multifamily project in Little Haiti

Ex-Major League Baseball player Mo Vaughn wants to develop a multifamily building in Little Haiti, marking at least his second proposed Miami project in the past year. Vaughn, who founded affordable housing real estate firm Omni America, along with Hyperion Group and additional partners plan a 147-unit apartment building with ground-floor retail. The project would span nearly…

Cofe sells office and industrial complex near Medley for $39M

Cofe Properties sold a mixed-use complex near Medley for $38.5 million to a pair of out-of-state real estate investment firms. An affiliate of Baltimore, Maryland-based ABR Capital, and Darien, Connecticut-based East Capital Partners… The seller, an affiliate of Miami-based Cofe, paid $7.8 million for the 7.7-acre property at 6801 Northwest 77 Avenue and 7601 and 7661 Northwest 68th Street…

Whole Foods pays $21M for its commercial space at downtown Miami’s Met3

Whole Foods Market bought its commercial space at downtown Miami’s Met3 for $21 million. The national grocer, a subsidiary of billionaire Jeff Bezos’ Amazon, acquired the 97,674-square-foot ground-floor commercial unit and underground garage in the 32-story mixed-use tower at 299 Southeast Third Avenue, records and Vizzda show. The deal breaks down to about $215 psf…

UHealth on track to open in Doral

UHealth at Doral is on track to open its doors Sept. 16 as construction progresses and provider recruitment plans continue. “Construction is nearing 70% completion now,” said Vandana Pathak, assistant vice president of ambulatory service for the University of Miami Health System. “We’re well on our way for that first patient day [Sept. 16], and all major-medical equipment to support…

80,000 SF South Florida Industrial Property Sale Brokered

CBRE, in association with ComReal, has arranged the sale of an 80,158-square foot industrial property at 9000 NW 15th Street in Doral. Lakes Edge AIC, LLC purchased the property from Lakes Edge Commercial Properties, LLC for $17.5 million. David Wigoda, SIOR with CBRE Capital Markets represented the seller in the transaction. “Since purchasing the property in 2001…”

Luis de la Aguilera: Chairman links US Century Bank to small business loans

Since taking on the role as chairman of the board of directors for USCB Financial Holding and its banking subsidiary US Century Bank at the end of June 2023, Luis de la Aguilera continues to accelerate growth, drive profitability and deliver shareholder value. Under his leadership as president and CEO, US Century Bank launched an initial public share offering in July 2021, diversifying…

690-Unit Dolphin Square Planned for 1556 NW 110th Street in Miami

In August 2023, Coastal Residential purchased a 7.8-acre build site for $38 million from Procacci 1400 LLC––about $4.82 million an acre. Google Earth shows that the parcel is currently vacant. Now, the Miami-based developer has plans for multi-family housing development that some sources have called “Dolphin Square.” Measuring 10 stories above grade, the venture will offer 690 apartments.

Tri-Rail Starting Train Service To Downtown Miami This Week (Transfer Required)

Tri-Rail has announced that it is finally launching train service into MiamiCentral later this week – but a transfer will be required to use the service. The new Downtown Miami Link is being launched as a shuttle train, with all passengers to and from MiamiCentral required to transfer at the Metrorail Transfer Station in Hialeah. Initially, there will be just six trains per day in and out of out…

Grandview sells recently built Medley warehouse for $42M

Grandview Partners sold a recently completed warehouse in Medley for $42.3 million. An affiliate of Doral-based Parker Davis HVAC International acquired Palmetto Logistics Center at 7290 Northwest 77th Court, records and Vizzda show. The deal breaks down to roughly $295 a square foot. The seller, an affiliate of Greenwich, Connecticut-based Grandview, paid $13 million…

$17.7M Sale Arranged of Days Inn Airport Hotel, Brewery in Miami

Marcus & Millichap has arranged the $17.7 million sale of a Days Inn hotel located at 7250 N.W. 11th St. in Miami. The 103-room hotel, which includes an onsite Beat Culture Brewery & Restaurant, is situated on the campus of Miami International Airport. Leo Reilly and Robert Hunter of Marcus & Millichap’s Fort Lauderdale office represented the seller, a private investor, in the…

CMC Group Lands $239 Million Construction Loan For Vita at Grove Isle Condo At 5 Grove Isle Drive in Coconut Grove

Miami-based CMC Group, led by real estate developer Ugo Colombo, has obtained a $239 million construction loan from Bank OZK to develop Vita at Grove Isle. This luxury condominium project, currently under construction at 5 Grove Isle Drive on the private island of Grove Isle, near Miami’s Coconut Grove, will consist of a seven-story building with 65 waterfront residences, each boasting…

Bank OZK Lends $498M To 2 Condo Projects

Miami-based CMC Group secured a $239M construction loan for Vita at Grove Isle, a luxury 65-unit condo project on the exclusive island off Coconut Grove, according to a release. Bank OZK provided the financing for the seven-story project, boosting a $38.5M mortgage the Arkansas-based bank originally provided for the property in 2021. Vita at Grove Isle broke ground in April at 5…

Ugo Colombo scores $239M construction loan for Grove Isle condos

Ugo Colombo’s CMC Group scored a $239 million construction loan for Vita at Grove Isle, adding to more than $1 billion in construction financing that developers secured in the last days of 2023. Bank OZK provided the loan to CMC for the seven-story, 65-unit luxury waterfront condominium that is under construction on Grove Isle in Miami’s Coconut Grove. It’s more than 70 percent…

Treo scores $53M construction loan for 163-unit student housing project in South Miami

Treo Group landed a $53 million construction financing package for the second phase of its VOX student housing project near the South Miami Metrorail station. The Miami-based firm started construction of the 13-story, 163-unit building at 5949 Southwest 72nd Street last month, according to records. The financing consists of a $29 million loan from FirstBank Florida and a $24 million…

BH teams up with Kolter to redevelop White House Inn site in North Miami

BH Group landed a new partner to redevelop a waterfront North Miami site approved for a boutique condominium, The Real Deal has learned. Kolter Urban, a division of Delray Beach-based Kolter, and Aventura-based BH paid $20 million for the former White House Inn property at 2305 Northeast 123rd Street, representatives for both development firms confirmed to TRD.

South Florida’s Industrial Market Slows, But Wave Of Sales Signals Investor Confidence

South Florida’s industrial sector has retreated from roaring pandemic-era activity, but a burst of year-end transactions signal that investors continue to see opportunities in the region. Buyers spent $215M across three transactions in Miami during the last two weeks of 2023, capping off a fourth quarter that also saw the year’s largest portfolio deal. The flurry of sales came as rents continued…

Developers Secure FAA Approval For 390-Foot-Tall Structure At 401 NE 29th Street in Edgewater

The Federal Aviation Administration (FAA) has granted approval for 2900 Terrace, a 38-story mixed-use development planned at 401 Northeast 29th Street in the Edgewater neighborhood of Miami. These permits, approved on January 2 and set to expire on July 2, 2025, mark a significant step forward for the project. Designed by Arquitectonica and developed by LNDMRK…

“Leave our egos at the door”: Daniel Lebensohn on BH3’s approach, 2024 headwinds

Daniel Lebensohn is familiar with navigating complex projects and market challenges. BH3 Management, the company he leads with his partner, Greg Freedman, got its start in 2009 when it began buying non-performing loans from banks. One of their first deals was with Michael Dell’s MSD Capital in Miami Beach. Lebensohn was listening in remotely while Freedman and their…

“My predecessor was arrested on corruption charges because of that property”: Miami commissioner seeks to kill controversial deal with Centners

Miami Commissioner Miguel Gabela wants to put the kibosh on the no-bid city park deal with David and Leila Centner that led to criminal charges against his predecessor, Alex Diaz de la Portilla. Gabela placed a resolution on the agenda for Thursday’s city commission meeting that would terminate the city’s licensing agreement with Perpetual Love Trust, an entity managed by the Centners…

13th Floor Investments Proposes 30-Story Mixed-Use Tower At 500 NE 3rd Avenue In Fort Lauderdale

A 30-story mixed-use building named Flagler Village Residences at 500 Northeast 3rd Avenue in Fort Lauderdale has been proposed for development. Designed by Corwil Architects and WSP serving as the structural engineer, along with Within Hults + Partners as the landscape architect, this project is being developed by Miami-based 13th Floor Investments. The 320-foot-tall…

1000 Marina Mile Apartments Proposed for 1000 W State Road 84/Marina Mile in Fort Lauderdale

Karu, an 8,380-square-foot nightclub in Miami, could be replaced with a high-rise complex. The 1000 Marina Mile Apartments would rise 15 stories above grade, offering 283 units and requiring more than 515,000 square feet of new construction. Per the South Florida Business Journal, residences would include 165 one-bedroom units and 107 two-bedroom units. There would also…

Wurzak sues Fort Lauderdale over approval of site plan for Naftali’s 1,000-unit project

Hotel developer Jake Wurzak is suing the city of Fort Lauderdale over its approval of Naftali Group’s towers planned for the site next door to his Dalmar Hotel. Wurzak, via his 299 N. Federal Master LLC, is alleging the city commission’s Dev. 5 site plan approval of Naftali’s nearly 1,000-unit development at 201 North Federal Highway is invalid and not final. The vote allowed for two…

Fort Lauderdale Downtown Development Authority Secures $8.75 Million Construction Loan From Synovus Bank For Transformation Of Huizenga Park

The Fort Lauderdale Downtown Development Authority (DDA) has secured a $8.75 million construction loan to renovate Huizenga Park in downtown Fort Lauderdale. The DDA requested proposals seeking lenders to fund the Huizenga Park capital improvement project. After a thorough selection process, Synovus Bank was chosen as the best partner for financing the construction project…

Old Town Square II Planned for 2026 Completion at 217 NE 3rd Street in Pompano Beach

Our sources indicate that Pompano Beach-based Cavache Properties has secured approval for its second Old Town Square project in South Florida. Old Town Square II will comprise two buildings: one measuring 10 stories and offering 229 units, and another measuring six stories and offering 90 residences. The pair will be connected by a pedestrian bridge. Adache Group Architects is the architect…

Global Partners pays $28M for Dania Beach fuel depot

A national gas station owner and petroleum distributor made a high-octane real estate purchase in Dania Beach. An affiliate of Waltham, Massachusetts-based Global Partners paid $27.9 million for Motiva Enterprises South Terminal at 1200 Southeast 28th Street, records and Vizzda show. Near Port Everglades, the 51.5-acre property includes five industrial buildings and 12 fuel containers…

140-Condo Shorecrest Proposed for 1901 North Flagler Drive in West Palm Beach

The Related Companies, in partnership with Stephen M. Ross, has proposed plans for Shorecrest, a luxury high-rise venture in West Palm Beach. The community will rest on a 1.83-acre build site. Per the South Florida Business Journal, Shorecrest will measure 26 stories, offering 140 condos, ranging from one-bedroom to four-bedroom condos. They start at $1.5 million––although…

Witkoff, Access take over troubled Banyan Cay Resort, scores $75M loan

Witkoff and Len Blavatnik’s Access Real Estate have taken over ownership of the troubled Banyan Cay Resort & Golf Club project in West Palm Beach, and landed a $75 million loan from the seller. Three entities managed by New York and Miami-Beach-based Witkoff’s co-CEOs Steve and Alex Witkoff obtained the mortgage from an affiliate of Los Angeles-based Calmwater Capital…

Related Companies is moving forward with plans for a luxury condo tower on the site of a waterfront temple in West Palm Beach. Related is proposing a 26-story, 140-unit building on the site of Temple Israel of West Palm Beach, at 1901 North Flagler Drive. The New York-based firm, led by billionaire founder and Chairman Steve Ross, will go before the city’s plats and permits review…

Video: KPMG Partner Roger Yang Discusses Firm’s 2023 Global CEO Outlook Survey

Roger Yang, Audit partner in KPMG’s Building, Construction and Real Estate practice, joins Michael Bull, CCIM to discuss their (KPMG’s) 9th annual CEO Outlook, which surveys CEO’s from over a dozen industry sectors. Discussions include growth outlook, generative AI, ESG, and renewed optimism for return to office. He noted that business leaders overall are confident with regard…

CRE Experts Round-Up: Top Retail Trends to Expect in 2024

In another edition of our annual tradition, we reached out to several CRE experts from around the country specializing in retail real estate across the country to provide their predictions and insights regarding what they expect to see within the retail market and upcoming trends moving into 2024. The overall expertise provided by the selected retail professionals are upbeat.

Adaptive Reuse Extends to Higher Education Real Estate Amid Online Learning Shift

The term “adaptive reuse” in real estate circles typically conjures images of repurposing old, obsolete commercial buildings. Meanwhile, academic buildings, administrative offices and other properties on college campuses rarely come to mind. But NAI has noted a growing need among higher learning institutions with vacant or underused assets, particularly as a result of growing online…

Vacancy rate for industrial real estate nationally exceeds 5% mark for first time in 12 quarters

The industrial vacancy rate for commercial real estate in the fourth quarter of 2023 surpassed the 5% mark for the first time since the third quarter of 2020, thanks to muted demand and a healthy rate of speculative construction completions, according to a report from real estate firm Cushman & Wakefield. Specifically, the industrial vacancy rate ticked higher by 60 basis points (bps) to 5.2%…

Industrial Cooldown Continues: Warehouse Vacancy Nationally Rises To Highest Level Since 2020

Average warehouse vacancy rates in the U.S. rose to 5.2% in the fourth quarter of 2023 with 156M SF of new space becoming available, another sign the formerly red-hot sector has chilled from its pandemic heights. Q4 marked the second-highest quarterly construction completion on record, helping push the vacancy rate past 5% for the first time since the onset of the pandemic…

U.S. Office Vacancy Breaks All-Time Record

Office buildings across the U.S. have more empty space than ever before, breaking records set during the real estate crashes of the 1980s and ’90s. Roughly 19.6% of office space in major American metropolitan areas was vacant at the end of the year, according to new data from Moody’s Analytics. That is up from 18.8% at the end of 2022 and higher than the previous record of 19.3%…

Lawmakers propose changes to Florida’s new affordable housing law

Florida lawmakers are looking to make changes to the new affordable housing law that would clarify the state’s overriding of local zoning laws and restricting the height of new projects. Sen. Alexis Calatayud filed Senate Bill 328, and Rep. Vicki Lopez is sponsoring the sister legislation in the Florida House that would ban counties and local municipalities from restricting floor area ratio…

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Video: KPMG Partner Roger Yang Discusses Firm’s 2023 Global CEO Outlook Survey

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Video: Grandbridge’s Tom Walsh Discusses Financing Sources Today

Tom Walsh joins host Michael Bull to share the most active lenders for various property sectors today. Discussions include interest rates, underwriting, timing to close loans and strategies working today both for lenders and borrowers.

About the Discussion: Navigating the Dynamics of Real Estate Financing: A Comprehensive Discussion on Current Trends and Strategies with Tom Walsh of Grandbridge

Note that this conversation is generally about commercial real estate nationally, the performance of which can vary and has varied from that of Miami and other South Florida commercial property.

The real estate market is a dynamic landscape that responds to economic shifts, global events, and evolving consumer behaviors. In a recent conversation, industry experts engaged in a detailed exploration of the financing environment, shedding light on trends and strategies that define the real estate financing landscape. From navigating the challenges of 2020 to anticipating shifts in 2024, the discussion covered diverse sectors, including hotels, senior housing, and the intriguing realm of office spaces.

2020: A Challenging Year and the Rebound in 2021-2023:

The conversation commenced with a retrospective analysis of the hurdles faced in 2020. Termed a “throwaway” year, the real estate market, especially the hospitality sector, encountered substantial setbacks. However, the experts observed a rebound in 2021, with promising signs continuing into 2022 and 2023. Notably, hotels emerged as resilient performers in 2023, fostering an optimistic outlook.

Financing Challenges Across Sectors:

While overall trends showed positive momentum, the discussion turned to the challenges in securing financing across various real estate sectors. Senior housing, known for its inherent complexities, faced heightened difficulties in obtaining financing. The involvement of agencies like Fannie Mae, Freddie Mac, and HUD exhibited fluctuations in their appetite for senior housing projects.

In contrast, hotels were identified as a promising product within Commercial Mortgage-Backed Securities (CMBS). However, financing for hotels grappled with a “guilt by association” scenario, entangled with challenges stemming from the broader economic landscape.

The Office Dilemma:

The conversation delved into the intricacies of financing office spaces, acknowledging the uncertainties introduced by the rise of remote work. Lenders approached office projects cautiously, considering the potential long-term impact of evolving work dynamics, expiring leases, and decreased utilization.

Lenders’ Perspectives and Risk Mitigation:

Lenders found themselves in a delicate balancing act, navigating the fine line between recognizing opportunities and mitigating risks. Building relationships and trust with borrowers emerged as a crucial aspect, with a nuanced understanding of the human element in credit decisions.

2024: Investing in Office Properties:

As the conversation projected forward to 2024, a cautiously optimistic viewpoint emerged regarding office properties. Anticipated factors such as conversion to alternative uses, limited new supply, and a growing appreciation for the benefits of physical office spaces hinted at a potential turnaround.

Leveraging Safe Loans and Building Relationships:

Practical tips for both lenders and borrowers were highlighted. Lenders were encouraged to view the current market as an opportunity to engage in secure lending and cultivate valuable relationships. Openness to calculated risks and the evaluation of partner trustworthiness were emphasized.

Borrowers were advised to adopt a proactive approach in seeking financing, particularly with maturing loans. The trend of higher equity checks and the acceptance of seller seconds or mezzanine financing were recognized as strategic avenues to navigate the current financing landscape.

Conclusion:

The real estate financing conversation offered a comprehensive exploration of challenges and opportunities in the market. From the resilience of hotels to the cautious approach towards office spaces, industry experts provided insights into the intricacies of real estate financing. The key takeaway emphasized the significance of adaptability, relationship-building, and strategic decision-making in navigating the ever-evolving landscape of real estate financing.

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