BOMA Forecasts Sunny Outlook For Miami-Dade’s CRE Industry

, , , ,

The commercial real estate market outlook for Miami-Dade: Sunny, as long as more mass transit is on the horizon, said industry experts at the Building Owners and Managers Association of Miami-Dade’s 2017 Commercial Real Estate Outlook event.

In the office market, rents are at an all-time high in certain sub-markets, said Brian Gale, Cushman & Wakefield’s vice chairman of Brokerage Services who represents nearly 5 million square feet of office space in South Florida.

On Brickell, office space is hitting around $60 a square foot for Class A space; back in 2008 the high was in the upper $40s, said Gale, during the panel discussion at the East Miami in Brickell. Downtown Miami is just behind it, and Aventura and Airport West have also hit all-time highs, too, he said. Coral Gables presents a different story, he said. In 2007-08, rent in the trophy buildings was $46-$48 a square foot; today it’s the low $40s.

“For many years, Coral Gables was the darling of the office market. I would say it has a temporary black eye with less demand and blocks of spaces still existing. But Coral Gables also has the most to gain,” Gale said.

Gale sees the South Miami market as vaulting too, once new mass transit options fully kick in for the area.

“The traffic on Useless 1 is not getting any better. … Miami Beach needs to figure out a way to get light rail over there.” Gale said. “Rental rates will continue to increase in 2017. Looking further out, being a gateway city … there is no reason to believe we couldn’t be a $70 rental market in 2022.”

Growth in shared office spaces has exploded — for instance, WeWork recently leased 65,000 feet at Brickell City Centre and there are now more than 20 shared workspace centers in downtown Miami alone. Sometimes these shared office centers can act as an incubator for a building; when the companies grow out of the co-working space they take space on other floors, Gale said. In the broader office market, expect more smaller offices, with more open spaces and cubicle areas on the outside of the floor with the glass-walled offices in the center, he added.

In the industrial sector, with job growth projected to slow in 2017 and 2018, is that a concern with 1.8 million square feet coming online in 2017 and 1.4 million in 2018?

“That’s actually less than half of what we have seen in 2015 and 2016.” said JLL Managing Director Brian Smith, who led the team representing NBC Universal/Telemundo Enterprises in the record breaking lease of over 550,000 square feet for a world headquarters broadcast center in western Miami-Dade.

He said he looks more closely at population growth. In both the office and industrial markets, new-to-market tenants are pushing the records. The last three years have brought more than 700,000 square feet of new-to-market office tenants. But that’s more than the previous 15 years combined, Gale said.

The last two years saw 300,00 square feet of new-to-market industrial tenants, but this year it will be 2 million and perhaps 3 million square feet.

“John Deere, new names. We have quickly become one of the most important industrial markets on the globe,” said Smith. “Three large deals in the works may be the biggest ever, in addition to the NBCUniversal deal.”

To be sure, urbanization has transformed the retail landscape, with Miami’s downtown population now approaching 90,0000 people, a 30 percent increase since 2010, with an incredibly affluent demographic, said David Moret, president of Highline Real Estate Capital, which acquires and redevelops office and retail properties with capital partners.

Retail rents are in the stratosphere on Lincoln Road, surpassing $300 a square foot. They are hitting $200 in the Design District and Coconut Grove and Wynwood are flirting with $100 a foot, Moret said. How far will they go?

“I think we have gotten ahead of ourselves,” Moret said. “ I think there will be a reset. … We are already seeing resistance. We are seeing leasing volume way down on Lincoln Road.”

He sees the biggest impact coming from millennials, a group that will have the most spending power by 2017. This means tenant mix is more important than ever.

“Successful centers are going to be about creating experiences, to give people a reason to go there instead of click on their phone,” said Moret.

 

Source: Miami Herald

/by

Is Downtown Miami About To See Retail Overload?

, ,

About 2.3 million square feet of retail space is set to deliver in Miami by 2018. What will a massive influx of retail supply mean for the overall market?

Jason Shapiro, managing director at Aztec Group, has some opinions. First, he tells GlobeSt.com, it’s noteworthy that the vast majority of that space—approximately 1.4 million square feet—is located within Brickell and Downtown Miami with major mixed-use projects such as Brickell City Centre, Miami Worldcenter and Met Square fueling this new development. That’s according to a Miami Downtown Development Authority.

“While the delivery of over 2 million square feet of retail space by 2018 may sound like a huge number, it is not necessarily an oversupply,” Shapiro says. “Historically speaking, the Miami’s Central Business District has been underserved in terms of access to high quality, international retail brands.”

As Shapiro sees it, substantial residential growth in the Downtown Miami area, along with organic employment growth and increased visitation, have all contributed to improved retail fundamentals. The DDA report found that over 30% of tourists to Miami in 2014 visited the downtown area. That’s a record-breaking number.

“As our city’s demographics evolve and neighborhoods such as Downtown Miami and Wynwood continue to build up and grow more sophisticated, the stronger market fundamentals support the fact that the additional supply will meet demand,” Shapiro says. “Most of the new product coming down the pipeline is luxury, high-street retail that will serve new demographics that live and work in those key urban areas.”

 

Source: GlobeSt.

/by

Miami Named Top 10 Most Expensive City In The World For Rents

,

A new study by commercial real estate firm CBRE says that rents in Miami are among the most expensive in the world.

Miami’s average monthly rent of $1,868 places it tenth out of 35 global cities studied. Rents in Miami are also increasing quickly, with the seventh fastest rate of growth worldwide last year.

Overall, investors in Miami are said to be earning an overall yield of 2.6$ – second highest in the world.

toptencities-highestrent

 

CLICK HERE TO DOWNLOAD THE CBRE GLOBAL LIVING 2016 REPORT

 

Source: The Next Miami

/by

Competition Could Drive PACE Program Prices Down, Boosters Say

, ,

Costs could start to fall for Florida consumers who want to finance energy efficiency improvements with no money down and no credit check.

That’s the optimistic view from Paul Handerhan, a principal of the new Fort Lauderdale-based company, Clean PACE Inc., created to promote and certify program providers in the Property Assessed Clean Energy program.

Over the summer, four providers reached agreements with Broward County to offer property owners countywide the opportunity to finance a wide variety of energy efficiency and storm hardening improvements. Palm Beach County is working out details and expects to finalize agreements by early 2017, Handerhan said.

“Having them compete against each other, ultimately we’re going to see better consumer protections, interest rates and contractor controls,” Handerhan said. “We’re seeing that now. PACE providers are starting to get somewhat competitive in their offerings in order to gain market share.”

Unlike traditional loans, repayment is set up as an assessment on the owner’s property tax bill, and the loan can be transferred to a new owner when the property is sold. Homeowners with mortgage loans can have the repayments rolled into their monthly mortgage bills.

Eligible projects include solar energy systems, new roofs, new hot water heaters, new air conditioning units, upgraded insulation and impact-resistant windows and doors. Customers see cost savings right away as utility bills and homeowner insurance bills fall, supporters say.

Renew Financial, approved on June 14 to offer PACE financing programs countywide in Broward, officially launched its program in Florida.

Cisco DeVries, the company’s CEO, said his business recently certified 150 Florida contractors for PACE programs and is ready to market the program to homeowners throughout Broward and many cities in Palm Beach and other counties.

“Already, the company has hundreds of thousands of dollars in approved contracts with Florida homeowners, many of whom can’t afford upfront costs for expensive improvements,” DeVries said, adding, “We help them knock down those barriers. Formed in 2008 in California, the company completed more than $300 million in residential PACE projects in the state over the past two years. It’s growing very quickly. We signed contracts for more than $49 million in projects in August.”

Interest rates for financing through Renew Financial range from mid-6 percent to low 8 percent, depending on the size and term of the financing, among other factors.

“Assuming interest rates remain low overall in the financial world, consumers could see competition driving rates lower,” DeVries said. Competition is good for consumers and good for cities and counties they serve. Our approach is to encourage multiple PACE providers in cities so everyone benefits. But it’s critical for the programs to have strong rules — clear disclosures to consumers and protections for everyone involved so this continues to evolve.”

The other PACE providers approved to compete countywide are Ygrene Energy Fund, which pioneered the concept in the South Florida market over the past year; Renovate America; and Florida PACE Funding Agency.

Handerhan predicted the PACE market could see some companies offering interest rates as low as 5.9 percent regardless of the loan term. Also, some might seek an edge by lowering origination fees, which tend to be slightly higher than traditional financing.

“Those higher fees come with benefits borrowers don’t get from traditional financing,” Handerhan said. “If I go to a bank and borrow $10,000, I’m kind of on my own at that point. If the contractor walks away, I owe that $10,000 regardless. With PACE, the provider manages every step of the process, including pulling permits and certifying the contractor. The customer only signs off at the end of the process.”

 

Source: SunSentinel

/by

Florida Primary Voters Give Green Light To Solar Tax Break

, , , , ,

Primary-election voters approved the expansion of a renewable-energy tax break that backers say will help businesses and spark the expanded use of solar energy in Florida.

But while the measure had support from an array of groups, they are divided on an unrelated solar amendment on the November general-election ballot that could lead to a major political fight.

The proposed constitutional amendment approved Tuesday was known as Amendment 4 and was placed on the ballot by the Legislature. It is designed to extend a residential renewable-energy tax break to commercial and industrial properties.

Shortly after the polls closed, the measure was more than 10 percentage points above the required 60 percent threshold needed for approval of constitutional amendments. The preliminary results indicated that the measure, which backers say will spur growth in solar and renewable energy, was supported in almost every county.

“The strong showing of support for Amendment 4 sends a clear message to elected officials at all levels of government that Florida voters want more diversity in our energy market,” said Sen. Jeff Brandes, a St. Petersburg Republican who sponsored the proposal during the 2016 legislative session.

Though approved by voters, the measure still needs the Legislature to enact the changes. The measure, sponsored in the House by Rep. Ray Rodrigues, R-Estero, and Rep. Lori Berman, D-Lantana, will exempt for 20 years the assessed value of solar and renewable-energy devices installed on businesses and industrial properties.

“Eliminating high tax barriers will unleash the potential of the ‘Sunshine State’ to become a leader in solar energy production,” Rodrigues said in a statement.

“The election results allow Florida to enter a new era where renewable energy can be accessible for all, and clean energy jobs can be at the forefront of Florida’s economy,” Berman said.

Voters approved a similar exemption for residential property owners in 2008, with the measure taking effect in 2014.

The new proposal also has an element to help residential property owners, as it would exempt all renewable-energy equipment from state tangible personal property taxes.

Support for the measure came from a wide range of organizations such as the Florida Retail Federation, the Florida Restaurant & Lodging Association, the Florida Petroleum Marketers and Convenience Store Association, the Florida AFL-CIO, the Nature Conservancy, the Sierra Club of Florida and Surfrider Foundation.

A poll released last week by the Florida Chamber of Commerce showed 70 percent of Floridians supported the proposal, with 14 percent opposed. Yet on Friday Mason-Dixon Polling & Research released findings that indicated the measure was having serious trouble with Republicans and independent voters.

Some late opposition to the measure came from groups such as the Orlando-based political action committees Stop Playing Favorites and the Advocacy, Action & Accountability Alliance, which claimed the amendment would provide “millions in tax breaks to big corporations” at the expense of money that would otherwise flow into minority communities.

Backers of the measure also had to overcome some confusion that the proposal was linked to a separate utility-backed solar proposal on the November ballot.

With Tuesday’s victory, supporters of Amendment 4 are now expected to divide up on what is known as Amendment 1 in November.

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said his group is ready to immediately “pivot” from having supported Amendment 4 to vocally opposing Amendment 1.

“What Amendment 1 does not have is the support of a broad, very diverse, grassroots coalition,” Smith said. “It is exactly what it is, a utility-backed, utility-funded, self-promoting approach to try to keep a monopoly control on their terms.”

The November “Consumers for Smart Solar” initiative would generally maintain the status quo in allowing Floridians with solar equipment on their property to sell energy to power companies.

More than $15 million has already been spent promoting the November amendment.

 

Source: Daily Business Review

/by

WeWork To Lease Roughly 65,000 Square Feet At Brickell City Centre

, ,

Coworking giant WeWork has signed a deal to lease nearly 65,000 square feet of uncompleted office space at Swire Properties’ Brickell City Centre project, sources told The Real Deal.

A source with knowledge of the lease told The Real Deal that WeWork will occupy space at Two Brickell City Centre, the second of two Class A mid-rise office buildings at the project.

A rendering of Two Brickell City Centre and WeWork’s Miguel McKelvey and Adam Neumann

A rendering of Two Brickell City Centre and WeWork’s Miguel McKelvey and Adam Neumann

The lease includes “nearly half” of the 132,280-square-foot building’s total space, though an exact size was not given. According to data from the CoStar Group, asking rents at the building average $53 per square foot, annually. That means the lease is likely worth millions of dollars.

Swire Properties has yet to complete the building, though its twin Three Brickell City Centre received its certificate of occupancy earlier this year.

This deal marks one of the largest expansions for WeWork in Miami, mirroring the shared office space provider’s explosive — and at times controversial — growth both in New York and throughout the country.

WeWork landed in South Florida in summer 2015 with its launch of an outpost on Lincoln Road, and the workspace provider jumped to a second 850-desk location at 429 Lenox Avenue in Miami Beach earlier this year.

In its biggest move so far, the company signed a lease for the entirety of downtown Miami’s 16-story Security Building, totaling about 96,000 square feet. WeWork has yet to open that space.

The company has battled both data leaks and challenges to its $16 billion valuation, all while working to aggressively expand in the hot co-working industry.

 

Source: The Real Deal

/by

Related Group And Allen Morris Propose Coral Gables City Center

, , ,

Related Group and The Allen Morris Company are proposing a $250 million project to replace city-owned parking garages at 245 and 345 Andalusia Avenue in Coral Gables.

The project, called Coral Gables City Center, would have two 16-story towers and could be built in phases.

TOWER 1:

  • 140,000 square feet of office space
  • 11,871 square feet of ground-floor retail
  • 770 parking spaces

TOWER 2:

  • 270 residential units (either rental or condo)
  • 16,878 square feet of ground-floor retail
  • 799 parking spaces

Zyscovich is the architect. Related and Allen Morris are competing against another bid from ZOM and Terranova. Both were the finalists selected out of five bidders for the property, and the city commission will vote later this month.

 

Source: The Next Miami

/by

Miami Is Among The Hottest Markets For New Apartments In 2016

,
MiamiApartmentConstruction_5

Miami’s apartment scene is booming, with the market projected to deliver 13,245 new units in 2016, per Rent Cafe.

This ranks eighth nationally, closely behind Austin (13,568) and Seattle (13,384).

Texas paves the way, with Houston topping the list at nearly 26,000, followed by Dallas (23,159).

Midtown has been especially hot with rental projects, with several new developments announced within the past few months.

Top20MetrosApartmentDeliveries

 

Source: Curbed Miami

/by

Investors Want $20 Million For Miami Today HQ Building In Coconut Grove

,

The Coconut Grove office building that houses Miami Today’s headquarters is officially up for grabs at $20 million.

2000 South Dixie Highway Coconut GroveLocated at 2000 South Dixie Highway, the building is fully occupied, including a handful of notable tenants like Miami Today, one of the city’s longest-running business publications, and Tinsley Advertising, a storied ad agency that’s worked with brands like Airbus and Paramount Pictures.

The building is owned by a limited liability company named after its address. State corporate records show the entity’s registered agent is Jose Pita, head of a company called Sunrise Grove Management that manages properties for investors.

After purchasing the property, built in 1972, for $4.925 million in 2010, the current owners started a major renovation program. New impact-resistant windows were installed, the interiors were modernized, and the building’s two-story atrium was redone. At 53,074 square feet, the building’s asking price breaks down to just under $377 per square foot.

Listing agent Scott Sime of Sime Realty told The Real Deal that the owners sensed it was a good time to sell now that the office market has matured.

The current tenants are paying roughly $28 per square foot, triple-net, according to data from the CoStar Group. And Sime said as those leases expire, a new owner could potentially bring those rents higher. A second-quarter report from commercial brokerage CBRE shows asking rents in the neighborhood now hover at about $34 per square foot for Class A space, and $31.64 for Class B space.

2000-South-Dixie-HighwayAs for whether developers could be potential buyers because of the property’s 90,000 square feet of land, Sime said “That is certainly a possibility. But this property functions very well in its current state as an income producing property.”

 

Source: The Real Deal

/by

Miami Is Now A Buyers’ Market For Luxury Properties

, , , ,

Slower sales and a glut of inventory has led to a buyers’ market for South Florida luxury properties, according to Miami Beach real estate agent Jill Eber.

“For almost five years we were just on an upward spiral,” Eber, of Coldwell Banker’s the Jills, told a gathering of real estate professionals Wednesday evening. “But, right now, it has adjusted and it has become more of a buyers’ market. As a result, developers are adjusting their pricing and increasing broker commissions to move units. In no way is this like 2008, 2009, and 2010. The market has been steady.”

Eber participated on a panel hosted by the Miami chapter of the Asian Real Estate Association of America at Brickell City Centre’s East, Miami hotel. The discussion was moderated by Coldwell Banker luxury real estate Vice President Craig Hogan and featured Debora Overholt, Brickell City Centre’s vice-president for retail, Swire Properties Vice President Maile Aguila, Eber, Miami Association of Realtors President Teresa Kinney and Ramona Messore, vice-president of Saks Fifth Avenue at Brickell City Centre.

Overholt and Aguila offered their insights into Swire’s ability to finish massive developments like Brickell City Centre. Overholt noted that the $1 billion nine-acre mixed use project is modeled after Pacific Place, a complex of office towers, hotels and a shopping centre the company built in Hong Kong 27 years ago.

“If you are familiar with Pacific Place, what we are developing is very similar to that,” Overholt said. “We are very excited to bring something fairly new to U.S. retailers, but something we already do well.”

Since opening in 1989, the four-floor mall at Pacific Place has more than 711,000-square-feet of retail space that houses a Harvey Nichols department store and 140 luxury brand shops and boutiques. Similar to Brickell City Centre, the mall is integrated into three Class A office towers, four five-star hotels, and a condominium. Swire spent $2.1 billion in 2011 on a redesign project led by Thomas Heatherwick.

Aguila told the audience Swire’s success with Pacific Place proves the company has the strength and wherewithal to deliver every phase of Brickell City Centre.

“When we do things, we do things long-range and take a long time,” Aguila said. “I remember when we were developing Brickell Key, we were all looking forward to a retail component and food and beverage component that just never happened. We saw that need. We had the vision to come into the area at the right time and the right place.”

 

Source: The Real Deal

/by