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Aventura Brightline Station Attracts Another Big Apartment Proposal

Ram Realty and Pinnacle Housing's Ojus Apartment Project Rendering

A new multifamily proposal in the Ojus neighborhood of Aventura is the latest in a string of signals that developers are leveraging the recently opened Brightline station in the area to add density to their projects.

Developers Ram Realty and Pinnacle Housing are proposing a 16-story apartment building at 19640 W. Dixie Highway, directly across from the Aventura Mall and Brightline station. The joint venture submitted a pre-application with Miami-Dade County for the project, which would include 334 units, 10% of which would be designated as workforce housing, set atop a four-level parking garage.

Site plans submitted to the county include a 2,900 SF ground-floor retail space marked for coworking and a dog-washing station. A fifth-floor pool deck would have amenities including a fitness center, golf simulator and 2,700 SF club room. The building, designed by Orlando-based architect Baker Barrios, would have units ranging from studios to three-bedroom apartments.

Apartments would rise on three sides of the pool deck starting on the fifth floor before shifting to cover only two sides of the property beginning on the ninth level.

The proposal is an update to plans originally presented in January 2022, leveraging zoning changes passed last year to increase the project’s density by 49 units, according to a letter of intent submitted by Edward Martos, a partner at Weiss Serota Helfman Cole + Bierman who is representing the developers.

The workforce housing units would be available for residents making up to 110% of the area median income, or $82,170 for a single person, Martos said in the letter of intent, which asks the county to provide feedback on the project at the next available pre-application meeting.

The joint venture paid $15.4M in January 2022 to acquire the vacant 2.25-acre parcel via an entity called 19640 WDH LLC, property records indicate.

The seller was an entity controlled by Miami Beach-based Privé Group, a development and land banking firm that has also proposed a new project near the Aventura Brightline station.

Privé Group filed a pre-application in January, disclosing plans for an 11-story office building with a 12-unit residential component connected by a parking garage at 18820 W. Dixie Highway, half a mile from the Ram and Pinnacle site.

That proposal also took advantage of changes to the zoning rules that increased the maximum allowable density in the county’s Ojus District. The neighborhood has attracted interest from developers since the Brightline added a station adjacent to the Aventura Mall in December 2022.

Aventura-based BH Group also filed a pre-application last January to replace eight small apartments and a vacant lot with a 132-unit apartment building spanning 232K SF, the South Florida Business Journal reported at the time.

Raphael Ammar, a preschool developer and operator, filed plans in August for an 18-story mixed-use project with 210 apartments called The Gateway in OjusThe Real Deal reported, and Lumer Real Estate and Goldberg Cos. filed plans in November for a 700-unit apartment complex in the neighborhood, according to TRD.

Mark Gilbert, a vice chair at Cushman & Wakefield who recently brokered the $48M sale of a 90K SF shopping center near Ojus in Aventura, told Bisnow earlier this month that the opening of the Brightline station was transformative for the area.

“The amount of residential growth and commercial activity in the region is probably unprecedented,” Gilbert said. 

 

Source:  Bisnow

 

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Developers Envision Pedestrian Paradise From Wynwood To The Design District

Developers are working to build up Midtown as a natural connection between Wynwood and the Design District_Photo Credit Bisnow 1170x435

As the warehouses of Wynwood give way to high-end apartments, developers are spreading their tendrils beyond the dense retail core and into neighborhoods that were all but ignored less than a decade ago.

“It’s almost like there was a memo that went out to all developers across the country: Spend a lot of money in Wynwood and Midtown,” said Ryan Shear, managing partner at Property Markets Group.  “And it’s happening, you’re watching it happen before your eyes.” 

The rapid growth of Wynwood in the last five years is spilling northward into Midtown as developers look to connect the city’s creative core with its luxury retail center of the Design District, tying together distinct neighborhoods into a unified hub of activity.

Developers from outside of Florida are especially interested in starting projects in Wynwood, Amanda Hertzler, executive managing director at the architecture firm MKDA, said at a Bisnow event Tuesday held at the Hyatt Regency Miami on the future of Wynwood, Midtown and the Design District.

The out-of-state firms are “looking at Wynwood specifically, not just South Florida but Wynwood specifically, as where they want to put shovels in the ground not just for one, not just for two but for multiple projects,” she said.

The interest extends beyond the confines of Wynwood, where developers in recent years have worked to transform what had been a neighborhood of low-rise industrial buildings into a creative hub and hospitality destination.

Midtown, north of Wynwood, is also drawing significant attention from developers who are looking to create a natural connection between the nightlife and hospitality that dominates Wynwood and the high-end shopping that defines the Design District.

“Wynwood has really pushed a walkable area,” Hertzler said. “What’s challenging is the walkable area does kind of stop at some point. The idea is to really connect the Design District to Midtown to Wynwood in a really pedestrian-friendly way and get cars off the street.” 

The push into the 18 blocks that make up Midtown has been decades in the making and is being shepherded along by a master plan that encourages the development of walkable streets, speakers at the event said.

Two decades ago, the neighborhood was a largely undeveloped industrial expanse known as the Buena Vista railyards. Florida East Coast Railway sold the property to Miami developer Michael Samuel and Joe Cayre, the chairman of New York-based Midtown Equities, who in turn sold half the land to Cleveland-based Developers Diversified Realty, The New York Times reported in 2009.

The real estate investment trust built the 470K SF Shops at Midtown, creating a nominal link between Wynwood and the Design District that is now being supercharged by a wave of recent development.

“In 2005, I was with a different group and we financed the Cayre family to buy the land in Midtown Miami,” said Greg Newman, senior managing director at Bank OZK, one of the most active lenders on developments in Miami. “Everybody in Miami, most of my developer clients, thought we were nuts. But sometimes it takes somebody outside the town to see the vision.” 

Miami-based Rosso Development is building The Standard Residences, Midtown Miami in the neighborhood. The 120-story condo building had 80% of its 228 units pre-sold as of October, when Bank OZK provided a $45M construction loan for the project.

Carlos Rosso, the firm’s founder and a former minority partner at Related  Group, said the neighborhood was beginning to realize its full potential under its master plan.

Midtown has a “design intent in the whole neighborhood that I don’t think we have anywhere else in Miami,” he said.

Generous sidewalk requirements that extend up to 20 feet wide, a focus on substantial tree cover to shade pedestrians from the South Florida sun and requirements that the ground floors of new developments must be at least 80% glass all help to promote foot traffic and street-level activations, he said.

“Northeast First Avenue, where The Standard is, has been designed from day one as a natural connection between the Design District and Wynwood,” Rosso said. “The whole street doesn’t have one loading dock, one garage entrance, you don’t smell trash, you’re always walking on a sidewalk that is always the same material.” 

He pointed to the June purchase by Terra Group, led by David Martin, and Lion Development Group of a 1.7-acre site at 3501 NE First Ave. for a planned condo project as further proof that the neighborhood was rising to meet the moment.

“When the Cayres bought Midtown, I think they paid something like $30M for the whole neighborhood,” he said. “David Martin just paid $40M for 1 acre.”

The neighborhood is being boosted by the success of the Design District, which itself is reaching the culmination of a decade-long redevelopment.

Dacra, led by billionaire Craig Robins, had been repositioning the district since 1998 before partnering with L Catterton, the private equity arm of LVMH and its CEO, Bernard Arnault, in 2010 to bring the firm’s luxury brands to the district.

The pandemic boosted Florida’s profile among the wealthy elite, propelling the Design District into Miami’s premiere luxury retail destination.

“We are getting tenants from the Design District inquiring about our retail spaces at The Standard,” Rosso said. “They say the people that are in the Design District, guess where they live? They live in Midtown.”

The master planning that developers credit with Midtown’s success is also playing out in Wynwood, which passed its own regulations in 2020 to promote pedestrian traffic.

“The common thread between Midtown and the Design District is that they both have streetscape master plans that were very intentional,” said Raymond Fort, vice president at Arquitectonica. “Wynwood also has a streetscape master plan, but it’s not controlled by a single entity. It’s up to the responsibility of each individual developer to build out their frontage.” 

Developers have been diligent in the implementation of the new design standards, Fort said, adding that the neighborhood has plans to create pedestrian-only streets as more projects get built.

“It’s not just the building that’s going to create the neighborhood, but the streetscape and the landscape as well,” he said.  

Hertzler said the regulations went into effect just as developers began amassing larger assemblages to build denser projects in the neighborhood, helping to promote designs that will make the neighborhood more navigable to pedestrians.

Her firm designed PMG’s Society Wynwood, a 318-unit apartment building at 176 NW 25th St. that is expected to open next month. A primary feature of the development is its paseo, a pedestrian walkway that cuts through the property and helps connect the neighborhood’s long blocks.

PMG’s project was one of the first large assemblages to begin construction when it broke ground in 2021, she said, but other developers have followed suit to design projects that will add paths crisscrossing the neighborhood.

“It creates this shaded, really interesting, meandering path through Wynwood,” she said. 

As Wynwood sees a burst of residential development, neighborhood officials also moved in 2020 to tackle Miami’s housing affordability issue. The Wynwood Business Improvement District created the Wynwood Public Benefit Trust Fund, which is financed by developers who pay into it in exchange for additional square footage at their sites.

Those funds can then be disbursed to developers who include workforce housing inside their projects, a scheme that Miami-based developers Black Salmon and LD&D embraced at their Wynwood Haus project at 23 NE 17th Terrace.

The 224-unit luxury apartment building, also financed with a construction loan from Bank OZK, has units set aside for tenants making between 100% and 140% of the area median income. Part of the lost income from what the units could be leased for at market rates are rebated back to the developer by Miami’s Omni Community Redevelopment Agency, said Diego Bonet, managing partner at LD&D.

Wynwood Haus opened its doors less than a month ago and is now 17% leased by around 45 tenants, most of whom are occupying the workforce-priced apartments, he said.

“Those units have been flying off the shelves, as you’d expect them to,” Bonet said. “Just knowing that we’ll have a base of the building that’s always rented de-risks the project to a certain extent. To us, it was really a win-win solution.” 

As more large-scale projects fill into Wynwood, the quiet Wynwood Norte neighborhood just north of the core and west of Midtown is also attracting developers eyeing smaller-scale projects.

PMG and Lndmrk Development spent $20M on a 1.1-acre assemblage in the neighborhood in October. Plans haven’t been announced for the site, but Shear said Tuesday that PMG was preparing to launch a condo project in the neighborhood during the second quarter.

Wynwood Norte has separate zoning from the rest of Wynwood that encourages the development of lower-density projects. These will become attractive relocation options for the boutique retailers that are being pushed out of Wynwood’s core or tenants looking for a smaller scale than Midtown.

“Wynwood Norte is smack in the middle of both these neighborhoods,” Shear said. “It’s already becoming one of the anchor neighborhoods that will connect both of these places.” 

 

Source:  Bisnow

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Why Food Halls Whet Developers’ Appetites

Aventura Food Hall Planned For 2777 N.E. 185th St_Image Credit Architectonica 1170x435

For years, food halls have been a tempting option for commercial real estate developers and investors who hunger for more flexible lease structures and for a delectable option for repurposing often obsolete properties. But this appetite has not been sated. If anything, it has only grown with feeding.

In a five-year span, the number of food halls has doubled from 150 in 2018 to 352 in 2023, according to Cushman & Wakefield data. The number will soon grow even higher with another 147 food halls currently at some stage of development, according to Richard Latella, executive managing director and retail practice group leader for Cushman & Wakefield’s valuation & advisory group. He noted that food halls are also spreading into more tertiary markets compared with around a decade ago when 20 percent of the assets were in New York City.

And while an increasing number of mall developers have sought to transform their properties with food halls, they’re hardly the only ones who are taking unused space and filling it with local (read: non-chain), pop-up and artisanal dining options. Even former warehouses or industrial assets are shaping up as options for food hall owners to park.

The concept is gaining favor with lenders, too, who are more likely to invest with mall properties that feature creative amenities to draw visitors, according to Latella.

“The money will go with those owners that show that they can adapt and continue to change their mix to make it relevant, and I think that they’re the malls that are beginning to differentiate themselves from others,” Latella said. “With such a trend going towards food and entertainment, food halls keep people at the malls longer if you have the right mix and the right profitability. It’s very important for the operator, and I think many of the operators have recognized that.” 

Latella said food halls are attractive from an underwriting perspective largely because consumers seek “an experience” when dining but also are eager to support local restaurants. He noted that food halls with the right mix of retailers attracting local diners, coupled with a central bar area where adults can congregate, can yield higher occupancy and rents along with improved revenue. 

The food hall at Zero Irving illustrates the trend’s recipe for success. Zero Irving is a new office building and technology training center in Manhattan’s Union Square, developed by Ral Development and the New York City Economic Development Corporation in space that once housed a P.C. Richard & Son electronics store. Urbanspace opened a 10,000-square-foot food hall there a year ago with 13 vendors. 

In an effort to produce unique offerings, 25 percent of the food hall booths at Zero Irving were reserved for first-time restaurant entrepreneurs or those operating for less than four years. The food hall utilizes licensing agreements with the vendors, which in addition to benefiting the property owner can also enable more creativity from the individual businesses, according to Josh Wein, finance director at RAL. 

“It attracts the food vendors to be more willing to either start something new or expand on a concept and try different things when it’s a license agreement rather than making that long-term commitment on a lease with a restaurant,” Wein said. 

RAL had never included a food hall in a project before, but Wein said the developer liked the idea of using it as an amenity to draw office tenants to Zero Irving. The 21-story building, which was completed earlier this year, is 96 percent leased with rents ranging between $100 and $150 a square foot, according to Wein. This is despite increased hybrid working trends spurred by the COVID-19 pandemic. 

Bank OZK provided a $120 million construction loan for the overall Zero Irving project in 2019. Wein noted that financing food halls creates some challenges for lenders in terms of underwriting future rents.

“A lot of these food hall agreements are basically management agreements with a base rent that’s relatively low, and then there’s a revenue-share agreement with the landlord,” Wein said. “That is a little bit more difficult to get financed from a lender because, even if you as a landlord and an entrepreneur believe in the food hall plan, getting a lender to underwrite anything more than a base rent is going to be difficult.” 

On the other side of the country, the Westfield Topanga mall in Southern California’s San Fernando Valley added a 50,000-square-foot food hall with 27 Los Angeles area eateries and bars. The $250 million project from Unibail-Rodamco-Westfield and joint venture partner Earl Enterprises includes a 55,000-square-foot space at a former Sears site. It replaces a former food court housed in another area of the mall. 

Development firm Casazza Company also invested heavily in the food hall concept with Reno Public Market in Reno, Nev., which opened last year in the former Shoppers Square Shopping Mall. Casazza selected a food hall operator via a venue management contract that provides a detailed set of owner-operator deliverables, where vendors obtain license agreements. There is also a large central bar space leased and operated by Fireten Hospitality, an affiliate entity of Casazza. 

Mall owners like these with food halls will often utilize percentage rent leases with vendors due to financial and reporting structures required of most mall ownership entities, according to Phil Colicchio, a food hall consultant and executive director at C&W. Colicchio added, though, that “more enlightened mall owners” opt instead for a master lease concept for food hall operators, rather than leases, to obtain license agreements from vendors. He said this structure creates more transparency with mall owners, who are better able to report income to enable easier valuations of the properties. 

Colicchio noted that the pandemic spurred many property owners to deploy percentage rents with food halls. 

“Percentage rent is the common denominator between a license agreement and a traditional lease, and the pandemic helped it to become more acceptable since there was a recognized need by the landlord community for the restaurants to continue to operate,” Colicchio said. “For periods of time, the only way to accomplish that was through a percentage rent agreement.” 

Fran Faulknor, managing partner at Alpine View Investments, is in the process of developing a $6.8 million food hall project in South Lake Tahoe, Calif. Called Cascade Kitchens, the food hall will be developed on a 12,000-square-foot space that Kmart previously utilized as a warehouse. Kmart owned the property for about 30 years before Alpine acquired it in 2021 with a vision of creating the first food hall in the Lake Tahoe region.

Faulknor said she had previously explored tackling food hall developments and was particularly drawn to this opportunity given the property’s location in a touristy area with high rents for restaurants due to a lack of supply. The project will include a commercial kitchen that users can rent on a membership basis, which will be the first dedicated facility like this on Lake Tahoe’s south shore, according to Faulknor.

“Food halls are an excellent business model, especially in select markets and select situations,” Faulknor said. “Food halls, especially when they are well sited, can also be a huge benefit to the community both in terms of the way that they can provide really great options to local residents as well as tourists, but then also give an opportunity to young restaurant businesses to get their start without having a huge amount of overhead.”

The Cascade Kitchens project will utilize licensing agreements, which Faulknor said is beneficial for the property owner since it provides flexibility in working with vendors and sharing revenue. 

Alpine View closed a321`1 $4.7 million construction loan with Greater Commercial Lending (GCL) in November to help jump-start the project’s development, which is slated for completion in fall 2024. 

 

Source:  Commercial Observer

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Workforce Housing Outperforms But Experts Disagree Why

98867795_s workforce housing 1170x435

Workforce housing has a reputation for being a steady asset class for investors that appreciate its reliable cash flows.

Most residents that live in such housing are the backbone of cities and towns, serving indispensable roles such as teachers, policemen, and firefighters. Therefore, their jobs tend to be resilient during any economic headwinds, “offering a degree of recession resistance compared to more cyclical sectors,” according to a report by Cushman & Wakefield.

But how does the asset class fare during times of both high inflation and a job market that appears to be tightening? C&W has been monitoring this situation – particularly the inventory under its purview  – and it reports that so far the effects of these dual forces has been minimal, if that.

“The pinch of inflation tends to affect Class B renters more, which is why we consistently analyze our dataset for weaknesses that would signal an underlying frailty in the economy,” it said in its report. “Thus far, we haven’t found one.”

Demand has increased for these properties as more renters seek out affordable housing and as Class A renters seek out cheaper housing in the face of increasing rents.

“Those living in Class A residences stand to save an average of about $540 per month by trading to a Class B apartment, a 30% savings,” according to Cushman & Wakefield, which is wider than the $340 historical average.

But other feet on the ground disagree with some of these conclusions.

Jay Lybik, national director of multifamily analytics at CoStar Group, for example, tells GlobeSt.com that it is Class A multifamily residents that have the lowest rent-to-income ratio in the sector.

“For most Class A properties, it hovers near 20% compared to Class B and Class C which tend to be 30% or even higher,” Lybik said.

“Thus, these Class A residents are in the best position to absorb rent increases.” Lybik says he has no evidence of Class A renters “trading” down to Class B properties to save money. “As a matter of fact, Class A absorption has increased in each quarter so far this year.”

Masoud Shojaee, CEO and Chairman of the Board at Shoma Group, agrees, telling GlobeSt.com that he’s seeing renters at his Class A projects staying longer than ever.

“In the post-pandemic rental market, many renters now prioritize safety, cleanliness, and outdoor space and amenities, which has prompted some B renters to reassess their living situations.”

Lybik also argued that Class B renters have, in fact, been impacted by inflation.

“We saw that very clearly in the 2022 absorption,” Lybik said. “Class B absorption ended the year in the negative. One sign that these households struggled to afford the increases from 2021 and the beginning of 2022. In some cases, Class B residents moved in with a roommate, moved back home with parents, or in some cases moved to the cheapest unit available in the property that they already lived in.”

The crux of the matter is that Class B rents outperform because  its residents have a highly inelastic demand, according to Lybik.

 

Source:  GlobeSt.

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‘Bullish on Allapattah’: Miami’s Next Frontier Of Development

No. 17 Residences in Miami's Allapattah neighborhood 1170x435

At 4.6 square miles, Allapattah is an eclectic landscape of warehouses, single-family homes, apartment buildings, hospitals, justice facilities, restaurants, shops, and art museums.

In recent years, the predominantly working-class Miami neighborhood has become something else: the next frontier of real estate development.

Real estate insiders said Allapattah won’t have the same fate as Wynwood, with office and retail rents are among the highest in South Florida. For one thing, it is more than three times the size of Wynwood. For another, real estate investment there has been at a moderate tempo, at least so far, said Francisco “Paco” De La Torre, an artist who transformed two Allapattah industrial buildings into arts studios and offices.

“It’s been a slow and steady growth,” he said. However, since the onset of the Covid-19 pandemic, that growth has manifested at a “stronger, steadier pace.”

Among Allapattah’s agents of change are Don and Mera Rubell and their son Jason. The family of prominent art collectors moved their collection’s exhibition site from Wynwood to a 100,000-square-foot warehouse building at 110 N.W. 23rd St. in Allapattah in 2019. Since then, the Rubells have converted two other neighboring warehouses to display their art. Their most recent acquisition is the 45,711-square-foot former Rex Discount Wholesale warehouse at 1090 N.W. 23rd St., purchased for $10.7 million in 2022.

In 2019, Jorge Pérez, founder of Miami-based Related Group, turned a 28,000-square-foot warehouse at 2270 N.W. 23rd St. into an art exhibition space called El Espacio Twenty Three.

On the multifamily apartment front, Neology Life Development Group, led by Lissette Calderon, completed No. 17 Residences, a 13-story, 192-unit market-rate apartment building at 1569 N.W. 17th Ave., in 2021. Two more 14-story apartment complexes – the 237-unit Fourteen Allapattah Residences and the 323-unit The Julia – will be finished in six months, she said.

Alfredo Riascos, principal of Miami-based Gridline Properties, said most of Allapattah’s warehouses will either remain industrial uses or be converted into office or art-related uses. But along its major vehicular corridors, developers will have an incentive through the Live Local Act to replace warehouses with workforce housing projects.

“Allapattah is a [desirable] market, given its location in the Miami urban core and the vicinity to downtown Miami, Wynwood and the Medical District,” he said.

 

Source:  SFBJ

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Fewer CRE Loans Being Refinanced, But Lenders Find Other Ways To Work With Borrowers

stacks of money_cash_dollars canstockphoto628836 1170x435

Lenders and special servicers are looking beyond refinancing options when it comes to working with borrowers on commercial real estate loans that are set to mature in the coming months and years, even as those loans increasingly are backing properties facing distress.

According to an analysis by Moody’s Investors Service, the percentage of real estate properties that use commercial mortgage-backed securities debt that are being refinanced is on the decline. Conduit refinance rates were 78.1% and 71.8% in the first and second quarter of this year, respectively, compared to 85.5% in 2019, the year before the Covid-19 pandemic and broader economy upended the commercial real estate market.

“Given the low interest-rate environment that existed before the pandemic, it wasn’t surprising to see so many loans refinanced then, especially if a borrower had a strong debt-service coverage ratio, which measures available cash flow versus debt obligations,” said Matthew Halpern, vice president and senior credit officer at Moody’s Investors Service.

Interest-rate hikes imposed by the Federal Reserve over the past year in the wake of rising inflation have compressed real estate values. Add to that rising vacancy rates and a weaker leasing environment in especially the office sector, and the pressure has increased on building owners with loans coming due in the near term.

“Some loans are performing well from in-place cash flow but are unable to refinance,” Halpern said.

Lenders also have tightened standards in the wake of a more challenging economy and commercial real estate market, with some banks outright saying they’ve stopped new lending to office properties. While fewer loans are getting refinanced overall, there’s been an uptick in the number of performing loans that are past maturity but haven’t been formally extended. That amount, negligible before the pandemic, reached 5.2% in Q1 of this year and 6.9% in Q2.

“That means the borrower is still making interest and principal payments as if the loan hadn’t matured — which typically suggests the borrower is committed to the property,” Halpern said. “Because the overall refinance rate has declined in recent quarters, the number of performing loans past maturity has naturally risen.”

The Moody’s analysis, which only examined CMBS loans, found 16.7% of maturing loans tracked by the firm were delinquent as of the second quarter. That share was much higher in the office sector, with 27.6% of office loans scheduled to mature in Q2 2023 considered delinquent.

 

Source: SFBJ

 

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Miami Retail Leads Nation In Rent Growth As Brands, Chefs Follow The Money

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Michelin-starred chefs and high-end retailers continue to expand into Miami as they follow their customers from places like New York, California and Chicago.

The flow of new tenants is pushing up rents to prices second only to New York City, according to a Lee & Associates report, and driving vacancy down to among the lowest levels in the country.

Miami retail vacancy is at 3.7%, 50 basis points below the national average of 4.2%, and the city leads all major U.S. markets in rent growth, rising 11.6% year-over-year to $42.40 per SF, according to a second-quarter report from Marcus & Millichap.

The market “is exponentially better in terms of occupancy and rental rates than pre-pandemic. I think it’s just a different world that we live in now,” said Lisa Ferrazza, the senior director of retail leasing at the Miami-based investment firm Tricera Capital. 

The city’s trendiest neighborhoods have seen the greatest growth, driven by a rise in demand from restaurants and luxury retailers. Asking rents in Brickell and Miami Beach were above $70 per SF at the start of April, according to Marcus & Millichap, and highly coveted space can fetch considerably more.

Ferrazza said her firm has done deals above $115 per SF in Wynwood with retailers looking to capitalize on Miami’s rising profile. She said retailers are bringing flagship stores to the city in growing numbers.

In the second quarter, Ralph Lauren and Amsterdam-based furniture company Eicholtz opened flagship locations in the Miami Design District, a high-end shopping destination that spans 18 blocks.

Lincoln Road, the iconic shopping destination in Miami Beach, landed eight new tenants this quarter, including Cheesecake Factory and a range of retailers selling everything from footwear to candy. The Museum of Ice Cream revealed plans for a 14K SF experience-focused shop at Miami Worldcenter, a 27-acre mixed-use development in Downtown Miami that will host the company’s first permanent location.

“If they have determined that Wynwood or the Design District or Lincoln Road is their market and where they want to have a flagship, they’re usually willing to pay the freight regardless,” Ferrazza said.

Much of the demand for space is coming from the food and beverage sector. Miami now has 12 restaurants with Michelin stars after the acclaimed guidebook announced in 2021 that it would begin rating restaurants in the city. The growth of the city’s food scene and influx of new residents is drawing more star chefs and creating expansion opportunities.

“Retailers are one thing,” Ferrazza said. “The pool of expanding soft goods, fashion retailers is much more shallow than the food and beverage market. That’s really where we see most of the activity.” 

Just this week, celebrity chef Juan Manuel Berrientos opened Elcielo Miami at the SLS South Beach hotel, the second location in the city for the Michelin-starred restaurant. Michael Beltran, the chef at Michelin star-earning Ariete in Coconut Grove, announced in May that he would open a cigar and cocktail bar in Miami Worldcenter.

Some of the new upscale restaurants coming to Miami are aimed squarely at the wealthy new arrivals who moved to South Florida during the pandemic.

In March, chef Shaun Hergatt announced plans for a private restaurant and speakeasy concept exclusively for residents at the Perigon condo tower in Miami Beach, which is expected to open in 2026. Weeks earlier, Todd English signed on to open a private lobby restaurant at the Bentley Residences, a 62-story luxury condo tower in Sunny Isles that is also slated to deliver in 2026.

Tricera is working on deals with chefs from Las Vegas and Boston, Ferrazza said.

“We’re getting a lot more Michelin chefs, and everybody knows how competitive the F&B market is,” she said. “So everyone is trying to outdo each other in the Miami market to have a presence to be talked about and be seen.”

Developers are responding to the strong demand by building more space. Across South Florida, there is more than 3.5M SF of retail space under construction, including around 1.9M SF in Miami as of March.

Miami is slated to see 1.6M SF of new space come online in the second half of this year, following the completion of around 400K SF through the second quarter, according to Marcus & Millichap.

Deliveries in Miami will be four times higher than in 2022 and “may result in some upward pressure on vacancy in the near-term while new stock leases up,” the report’s authors wrote. But with vacancy rates at some of the lowest levels in the country, Ferrazza said the market is well-positioned to absorb the new inventory.

The inflow of new residents, growth of tourism and the business-friendly environment in the state has made Miami an ideal location for retail tenants looking to grow, she said.

“I don’t know where else you would look if you are looking to expand throughout the country,” she said.

 

Source:  Bisnow

 

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Residential Building Boom Hits Aventura

Photo Credit-ONE Park Tower by Turnberry 1170x435

Aventura and North Miami are in the midst of a multi-billion-dollar transformation, featuring new housing developments, schools, retail, transit and more.

Aventura, where the median single-family home price jumped 25% from $990,000 in 2022 to $1.237 million in the first quarter of 2023, according to a market report from ONE Sotheby’s International Realty.

Aventura’s population has steadily increased since 1990, when it was about 15,000. It grew to 25,000 by 2000, 35,000 in 2010, and today roughly 40,000 people call Aventura home. North Miami’s population jumped from about 50,000 to nearly 60,000 during the 1990s, and it has remained steady since then.

The same is true just south in North Miami, which has seen a more than 400% increase in residential units from 2019 to 2022, with more on the way, plus seven new schools and a boost to its local commerce. Nearly 20% of the area’s nearly 2,300 businesses opened since the start of 2022.

Now, developers are working to capitalize on the region’s growth with a series of housing developments new to the market, in construction or in the planning stages.

One of the largest is the 184-acre SoLé Mia community, led by Jackie Soffer’s Turnberry Development and Richard LeFrak’s LeFrak Organization. The developers have plans for thousands of residential units, 1.5 million square feet of retail and commercial space and a 10-acre University of Miami UHealth Medical Center, scheduled to open in 2025. The residential offerings will include the 33-story ONE Park Tower by Turnberry overlooking South Florida’s first seven-acre swimmable lagoon.

North Miami developments in the works include:

  • Aliro Luxury Apartments, 1820 NE 142nd St., approved to add 519 additional residential units and a parking garage.
  • Allure of North Miami, 1810 NE 146 St., approved to build a two-acre apartment complex with 360 units and a percentage of affordable housing options.
  • La Maison, 1850 NE 123rd St., approved to develop 297 residential rental units and 18,500 square feet of retail and restaurant space.
  • NoMi Square, 13855 NW 17 Ave., approved to build a seven-story development with 338 units and a public park.
  • North Miami Condos, 840 NE 130th St., approved to build a six-story, 67-unit luxury residential project with green building design and transit components.
  • Oleta, NE 151st St. & NE 20th Ave., approved for four residential towers with nearly 20,000 square feet of commercial and restaurant space.

Aventura is witnessing a wave of building and infrastructure improvements as well. The projects will upgrade Aventura Mall, add the new Brightline train station, bring on a new Hyatt House Hotel and introduce several new restaurants, retai shops and luxury residences.

Some residents there have expressed concerns about proposed changes to the land development regulations in the city’s master plan. They cite the potential for increased traffic and an influx of high-rise buildings along the beach. Last month, a change.org petition launched seeking to “stop excessive development in Aventura,” and it has collected more than 1,400 signatures.

How that might affect the future of development in the area is still unclear, but there’s no denying Aventura and North Miami are booming.

 

Source:  South Florida Agent Magazine

 

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Miami-Dade County Most Competitive Rental Market In U.S.

Miami-Dade County is the most competitive market for renters in the U.S., according to a recent report.

The report from rental listing website RentCafe scored 137 areas across the U.S. based on the average number of days an apartment stayed vacant, the percentage of occupied apartments, the number of prospective renters per available unit, and the lease renewal rate between the months of January and March.

Under that criteria, Miami-Dade County was ranked at No. 1 with a competitive score of 120. According to the report, apartments stayed vacant for an average of only 33 days – the shortest span of any other area in the top 20.

“Given these circumstances, a sky-high 72% of renters in [Miami-Dade] choose to stay put and renew their leases, said Esther Urmosi, communications specialist for RentCafe. “On top of that, 97.1% of apartments are already occupied here, which is above the national benchmark of 94%.”

In RentCafe’s previous report, released in March, North Jersey was named as the most competitive market in the U.S.

Ranked at No. 4 is Broward County where apartments remained vacant an average of 41 days, 95.5% of its apartments are occupied, 67.2% of its leases are renewed and 14 renters compete for each available apartment.

Palm Beach County was the No. 20 most competitive rental market where apartments stayed vacant an average of 38 days, 95% of the apartments are occupied, 11 prospective renters competing for each available apartment and there’s a 59.5% renewal rate.

Another three Florida communities made RentCafe’s top 20 most competitive market list: Southwest Florida (No. 3), Orlando (No. 8), and Tampa (No. 19).

“Developers in Florida have been busy completing new apartments. However, this is still not enough to keep up with pent-up demand, which is why Florida markets are claiming the first spots on our list,” the RentCafe report stated.

 

Source:  SFBJ

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Is Retail The New Darling Of The CRE Industry?

A recent panel discussion at ICSC Las Vegas covered the state of the capital markets and during a morning session, where industry experts provided insights into the current situation, shedding light on the challenges and opportunities facing the market. Hessam Nadji, the president and CEO of Marcus & Millichap, kicked off the discussion by acknowledging the significant disruption caused by the movement of interest rates.

Nadji compared the situation to the financial crisis of 2008 and 2009, emphasizing that while the financial system was not on the brink of collapse this time, the impact on valuation and transaction velocity was similar. Sellers, Nadji noted, were hesitant to enter the market unless compelled by urgent circumstances. However, any products that did hit the market were attracting multiple offers, despite the tight financing conditions, with the intention of refinancing later, he said. Nadji also pointed out that retail, surprisingly, emerged as the new darling of the industry, outperforming other property types.

Glenn Rufrano, ICSC Chair and former CEO of VEREIT, moderator of the panel, expressed relief that the industry had moved away from the bottom of the economic downturn. This sentiment was echoed by other participants who acknowledged the progress made but also emphasized the need for more activity. Alex Nyhan, CEO of First Washington Realty and ICSC Trustee, for example, noted the changing composition of buyers for grocery-anchored shopping centers.

Nyhan explained that “caution had become prevalent in the market,” prompting a “wait for the debt market to stabilize approach” before putting more properties up for sale. However, he mentioned that demand from life companies remains strong.

Rufrano asked about the dynamics of buyers and sellers in the market where panelist Devin Murphy, president of Phillips, Edison & Co., responded that there was still considerable activity in the market. According to Murphy, while overall activity had declined, there were still opportunities to acquire assets. For example, Murphy’s company had successfully acquired four grocery-anchored centers in the first quarter, despite the challenging environment. The sellers encountered currently are primarily institutional investors motivated to sell due to the denominator effect, which aimed to rebalance their portfolios. Additionally, individual holders who were not willing to inject more equity into their assets are also ones who are seeking to sell. Despite the decline in overall activity, Murphy revealed that his company had managed to purchase nearly $100 million worth of assets in Q1.

Rufrano acknowledged the importance of understanding the motivations behind buyer and seller decisions. He expressed optimism, expecting to see more activity before the end of the year, indicating potential progress in the capital markets.

 

Source:  GlobeSt.

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