Property Markets Group acquired the site of a downtown Miami church along Biscayne Boulevard for $55 million, with plans to build a major mixed-use tower.

The First United Methodist Church of Miami sold its 1.15-acre property at 400 Biscayne Blvd. to New York-based PMG. The deal was partially funded by Toronto-based Greybrook Realty Partners, which previously announced plans to invest $32.2 million into the project. The site is near American Airlines Arena, Miami Dade College, and the College/Bayside Metromover Station.

PMG’s Ryan ShearEvan SchapiroMatt Ellish, and Yechiel Ciment negotiated the deal. They were represented by Saul Ewing Arnstein & Lehr attorneys Luis Flores, Rebecca Sarelson and David Yontz, plus Josh Kaplan at Bilzin.

“This is our third investment in the Biscayne corridor, increasing our ability to create innovative living experiences for residents,” Shear said. “We feel that this market is one of the most important areas of Miami from a future growth perspective, general location and view standpoint.”

The developer said it plans to build over 690 units and about 20,000 square feet of commercial space. The property is zoned for about 50 stories. The apartments would be branded by PMG’s new X Social Communities division, which appeals to young professionals seeking more attainable pricing. Its nearby X Miami apartment building, which is under construction, is part of the same brand.

The 400 Biscayne project would have co-working spaces, an oversized fitness center, communal kitchens, smart package lockers, smart home technology controlled by an app, and many pre-furnished units. As part of the project, PMG will build a new church on the site with a separate entrance for FUMC Miami.

“FUMC wanted to rebuild the church in the same location, so the relationship with the potential buyer was very important,” Flores said. “They liked the young and thriving energy that PMG brings to its developments and could see themselves doing business with the developer in the short and long term. The transaction is unique because we had to wear different hats at different times since we are the buyer and builder of the future church.”

“It was the right time for the church to take advantage of the revitalization of its neighborhood,” Pastor Dr. Audrey Warren said. “The project will ultimately allow the church to grow and meet its future operating needs.”

PMG said the architect of the building is Sieger Suarez, and Carlos Ott is consulting on the church that will be included in the structure.


Source: SFBJ

Whether it’s Wynwood, downtown Miami or Miami Beach, commercial developers and brokers are starting to look toward one demographic above all others for how they market and sell their projects: millennials.

So said a panel of industry heavyweights during “Commerical Outlook: Examining the flurry of activity across South Florida’s retail, hospitality and office markets,” at recent The Real Deal’s South Florida Showcase & Forum.

From left: Stuart Elliott, Steven Kamali, Lyle Stern, Keith Menin, Donna Abood and Tony Cho

From left: Stuart Elliott, Steven Kamali, Lyle Stern, Keith Menin, Donna Abood and Tony Cho

Panelists included Donna Abood, principal of Avison Young’s Miami branch; Keith Menin, principal of Menin Hospitality; Tony Cho, president of Metro 1; Lyle Stern, president of the Koniver Stern Group; and Steven Kamali, founder of Hospitality House. TRD‘s Editor-in-Chief Stuart Elliott was the moderator.

“The millennial way of thinking has already started filtering into Miami’s evolving office market,” Abood said. “All Aboard Florida is building more than 800 market-rate rentals right next to its Class A offices as part of the MiamiCentral development in the downtown area. The project also has a built-in transit hub — a detail that helped convince global media company Cisneros to lease 30,000 square feet of office space before the project even opened. They’re speaking millennial languages. These guys don’t want to own cars, they don’t want to own homes.”

Abood added that the overall office market in Miami has been starved of supply, leaving brokers frustrated as potential tenants leave Miami-Dade County for greener pastures.

“We are tight on office space to the extreme,” Abood said. “Condo developers took prime sites that were really meant for offices. Since there’s been a dearth of new construction, the trend has been for investors to scoop up Class C or Class B office buildings and renovate them. Co-working operators like WeWork have also proliferated as smaller businesses and startups seek affordable office space.”

That’s been the case in Wynwood more-so than anywhere else in Miami, where companies have transformed a swath of the neighborhood’s aging warehouses into hip workspaces and shops.

“There’s still a big gap to fill for development in Wynwood. Top-shelf retail space in the neighborhood is pushing $100 per square foot and land prices are rising as a result,” Cho said.

His firm recently brokered the $53.5 million sale of nearly an acre to the Gindi family, which is planning to build a new two-story retail project.

“It won’t be long before Wynwood starts seeing hotel projects,” Cho said. “Wynwood is underserved in terms of hospitality leaving room for one or even several new hotels. Metro 1 is already in talks with several operators.

Outside of Wynwood, Cho said he’s also working on a dual-branded hotel in Brickell that’s geared toward the middle market instead of luxury.

“The first developer is a little bit scared,” Cho said. “But once the first person does it, everybody’s going to follow.”

One major point of fear: Zika, the mosquito-borne virus linked to birth defects, which made landfall in Wynwood earlier this year and wreaked havoc on local businesses as tourists avoided the neighborhood. Cho said the situation was overblown in the media, and that Wynwood’s retail market quickly bounced back once Gov. Rick Scott declared the neighborhood a Zika-free zone in September.

Menin conceded his hospitality firm hunkered down for the Zika fallout amid an already slow summer season, cutting costs as much as possible, paying staff quarterly and offering incentives to guests and events ahead of any drops in occupancy. “For us, we really just watch every dollar and every cent,” he said.

Stern was also keeping his fingers crossed, hoping a cold winter in the Northeast would keep business flowing to South Florida. “Usually around Yom Kippur, we start praying for icebergs in the Hudson,” he said. “That’s not always going to be the case.” He added that though business may be slowing in Miami’s already well-established neighborhoods, Miami River and especially Allapattah are seeing a boom in property sales — and development will likely follow soon.

Stern said two major investors have scooped up almost 20 acres of industrial properties in Allapattah over the past several years, totaling some $40 million in transactions. And with a swath of new national retailers coming to Brickell City Centre and Miami Worldcenter, the surrounding neighborhoods are poised to see a wave of hip street retail and restaurant concepts fill in the gaps.

“If you drew an arc from New York to Chicago to Las Vegas, there’s not another city in that entire arc that has the number of restaurants doing over $8, $10, $12 and $15 million dollars in business that we do in the Miami market,” said Stern.


Source: The Real Deal

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

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

One of the largest leasing deals in Miami-Dade last year was for 37,700 square feet in a building on Miami Beach’s Lincoln Road.

The lessee: WeWork. Founded in 2010, this New York-based company specializes in creating shared workspaces for startups, private contractors, artists, small firms and international corporations — basically, everyone. WeWork, which was valued at $5 billion in December, has opened locations in nine cities across the U.S., plus two in Israel. The firm’s four floors at 350 Lincoln Road, a 1940s-era building that will be its first Miami location, will be among WeWork’s newest locations once renovations are complete.

“As we build out our global network with locations in major global cities, Miami of course is on our map,” Mark Lapidus, head of real estate for WeWork, told The Real Deal. He cited the city’s growing “entrepreneurial market” and its status as a “gateway to Latin America” as reasons for opening the new location.

WeWork is far from first to market in Miami with the shared office space concept. Local players have been operating here since at least 2010, and many are in the process of expanding.

Pipeline Brickell founders, Philippe Houdard and Todd Oretsky.

Pipeline Brickell founders,
Philippe Houdard and Todd Oretsky.

“The demand for what we offer is very high,” said Philippe Houdard, co-founder of Pipeline, which has operated in a 23,000-square-foot office space in Brickell since 2012. So high, Houdard added, that occupancy for Pipeline’s private suites and reserved desks is near 100 percent, with tenants ranging from established corporations such as Italian car design company Pininfarina to relatively unknown companies including Ironhack, a computer programming school, and Crea7ive, a local web design company.

Monthly rates for shared offices can range from $99 for a mailbox and a phone number to more than $3,000 for a private suite. Services, much like the rates, vary from operation to operation, but typically a shared-office space in Miami offers access to refreshments, high-speed Internet, meeting rooms, and — perhaps most significantly — networking opportunities and camaraderie.

“There is a sense a community,” said Ana Maria Yumiseva, owner of Frecuencia Latinoamerica, a mobile technology company that operates in Pipeline’s Brickell office.

Donna Abood, managing director of the Miami office for Avison Young, said Miami-Dade is fertile ground for shared office space. “When you have entrepreneurs, you have a lot of startup businesses, and their need to collaborate is great,” said Abood, a 30-year veteran of South Florida commercial real estate.

An added bonus: co-working spaces typically offer short-term leases or require no leases at all.  Short-term and month-to-month leases are traits shared by an ancestor of the co-working space: the serviced “executive suite” office model. In the 1980s, companies such as Regus started opening executive suite offices in Miami-Dade that provided separate businesses a shared secretary and a conference room. Unlike the new generation of co-working spaces, tenants in executive suites (which continue to operate in Miami) tend to keep to themselves. “They aren’t looking for collaboration,” Abood said.

Büro Miami features open areas as well as private suites.

Büro Miami features open areas as well as private suites.

Michael Feinstein, CEO of the Büro Group, said his company was the first to bring the collaborative co-working space model to Miami (Abood said that if Büro wasn’t the first, they were certainly one of the first). Feinstein said he had spent a lot of time in coffee shops when he worked as a resort development consultant back in 2009. Then inspiration struck.

“We had not seen anyone actually [create] a shared work environment, so we went about doing it ourselves,” said Feinstein, who started Büro in Midtown Miami in 2010 with the help of friends, family and  later on, an investment from G3 Capital.

Büro now provides space for more than 100 companies (The Real Deal South Florida is a temporary tenant). The company operates in a second, 10,000-square-foot location in Sunset Harbour in Miami Beach, and Feinstein doubled his office space in Midtown Miami from 10,000 to 20,000 square feet last year. They are also opening additional spaces in the Coppertone building in the Miami Modern Historic District and the Engle Building in Coconut Grove.

Pipeline is growing, too. This summer they will open a Coral Gables office, which will include specialized services for lawyers, Houdard said. Pipeline is also planning to build an 80,000-square-foot space in Miami’s Little Haiti area. They also operate in Philadelphia.

Pipeline and Büro are seeing increased competition in the market, and not just from behemoths like WeWork. In Little Haiti, Urbana Atlantic Group and Conway Commercial Real Estate just finished converting a 26,000-square-foot office building, once used as a BellSouth headquarters, into MADE at the Citadel, a co-working space that offers shared work space in addition to a shared workshop area for artists.

“We are just opening our doors now and about 40 percent of our office space is already accounted for,” said Timothy Conway, managing director of Conway Commercial Real Estate. “And we have not done much marketing, if any.”

Another shared office space entity, The Lab Miami in Wynwood, just celebrated its two-year anniversary. Its managing director Tamara Wendt said co-working spaces are proliferating because they’re attractive to young professionals.  “Millennials and tech startups are drawn to co-working spaces because it’s a low barrier to entry and low cost for office space,” explained Wendt.

Wendt and other sources estimate that there are 15 to 20 shared offices ventures operating in Miami-Dade. Companies providing shared office spaces are still a relatively new concept in the area and are not yet specifically tracked. Wendt noted that the growth of shared offices is not just local or national — it’s a global phenomenon. “Co-working spaces are doing well around the world,” she said. “It’s a very fast-growing segment.”


Source: The Real Deal

WeWork signed a lease for 40,000 square feet to open a co-working space in Miami Beach.

CBRE’s Maggie Guajardo Kurtz and Nancy Cibrano, of N Cibrano Realty, were the brokers for the landlord at 350 Lincoln Road. The 50,000-square-foot building, owned by The Wings Group, is now fully leased.

“This property’s location on the doorstep of the world-renowned Lincoln Road, along with its unique, historic features, makes it ideal for WeWork’s first Miami location,” Kurtz said in a news release.

WeWork offers flexible leases, from individual desks to small office spaces. Tenants are supported with high-speed internet and conference rooms, and also get discounts on services such as Shopify, Uber, Zipcar and legal services. It has more than 20 locations.

“The vibrancy of Miami’s small business and start up communities is the perfect match for WeWork’s unique offerings and energy,” said Mark Lapidus, director of real estate at WeWork. “We look forward to opening our doors and fueling the growth of the city’s many small businesses.”

WeWork should open in Miami Beach in the first quarter.


Source: SFBJ