2020 | Page 7 of 16 | FIP Commercial

Aug 08 No Comments

South Florida Medical Office Buildings Trade For $313 Per Square Foot

Author: Admin

Berger Commercial Realty/Corfac International Senior Vice President Stephen Hyatt represented the seller, TDH 2866, LLC and TDH 2870, LLC, in the sale of two freestanding medical office buildings located at 2866-2870 East Oakland Park Blvd. in Fort Lauderdale.

Sun Medical Center consists of two newly renovated buildings located adjacent to one another. The 2866 building comprises approximately 12,113 square feet on 3 floors. Broward Health, one of the 10 largest health systems in the U.S., is the main tenant in the building. The 2870 building comprises 1,940 square feet. Extensive renovations featuring Class A medical finishes were completed in 2018. The subject also features ample surface parking to accommodate medical use.

Sun Medical 2866 LLC, a New York-based investor, purchased the 1967-built, building for $4.4 million. The deal closed July 24. The buyer intends to occupy a portion of the building for its own medical practice.

The property is located on well-traveled East Oakland Park Boulevard, just east of Bayview Drive and west of the Intracoastal Waterway.

“There is tremendous demand for medical office buildings due to the stability of the sector and historically long-term tenants,” commented Hyatt. “The medical office building sector continues to be at the forefront of leading real estate sectors, even in this challenging market, and continues to show encouraging signs for acquisition as well as development.”

The buyer was represented by Lyman Phillips with Karlington Commercial.

Aug 06 No Comments

Miami Worldcenter Developer Sells Site For $24M

Author: Admin

Categories: Commercial News,Development

Miami Worldcenter’s development group sold off another part of the mega-project.

Abbhi Capital bought a 1.15-acre parcel of land at the Miami Worldcenter development site at 1016 Northeast Second Avenue for $24 million, according to a spokesperson for Miami Worldcenter. MWC Block A, LLC, led by Nitin Motwani, sold the property.

The site is zoned T6-60a-O, which allows the developer to build up to 60 stories with a wide variety of uses, according to property records.

Abbhi Capital’s plans for the site remain unclear. Attorneys for both Abbhi Capital and Miami Worldcenter and a spokesperson for Miami Worldcenter declined comment.

The property is next to Akara Partners’ planned mixed-use apartment project that will feature 450 apartments, 10,000 square feet of retail and 20,000 square feet of co-working space. Akara closed on the property in July for $18.85 million.

Abbhi Capital’s lawyer, Elena Ortero of Holland and Knight, said Abbhi Capita, through its affiliates, partnered with Akara on that recent acquisition.

Abbhi Capital is a privately-held investment firm based in Miami. The company, led by Sankesh Abbhi, focuses on investing in healthcare, technology, real estate and hospitality, according to its website. Abbhi is also the CEO of ArisGlobal, a cloud solutions provider for life sciences companies.

Miami Worldcenter, which spans 27 acres near downtown Miami, is being developed by Art Falcone, Nitin Motwani and Dan Kodsi. It is one of the largest commercial real estate projects on the East Coast.

The phased Miami Worldcenter project will include 300,000 square feet of retail, restaurant and entertainment space; the completed Paramount Miami Worldcenter condominium tower; Caoba, a 444-unit apartment tower that is completed; and a 348-room CitizenM hotel that is now under construction. It will also include a 434-unit rental tower by ZOM Living and 500,000 square feet of Class A office space.

Source: The Real Deal

Aug 03 No Comments

Credit Unions Making Bigger Play For CRE Loans

Author: Admin

Categories: Commercial News

Credit unions are an attractive option for borrowers who are seeing fewer lender bids, particularly from banks and debt funds.

Credit unions that have been working to grow market share in the commercial real estate lending space in recent years are taking advantage of open runway as other capital sources have pulled back in recent months. In fact, these institutions are willing to offer competitive terms and creative solutions.

“What we have seen from credit unions is that they are willing to finance property types that others aren’t doing,” says Pat Minea, executive vice president, debt and equity at NorthMarq.

NorthMarq estimates that its financing activity with credit unions is about 50 percent higher this year compared to last year. Since March, the firm has closed more than two dozen financing transactions with credit unions as the lender for borrowers across the board involving multifamily, industrial, retail and office projects.

There are plenty of capital sources still willing to finance multifamily and industrial assets. Interest drops off, however, for office and retail properties with financing that has become tougher because of COVID-19.

“We are having to dig a little deeper to find the terms that borrowers want in the current climate, and credit unions are a great example of that alternative,” says Minea. “They are more receptive, for whatever reason, to doing these deals that, in today’s world, are a little more on the edge.”

For example, credit unions are still willing to finance single-tenant retail and unanchored retail properties. That may be because credit unions don’t have as large of a loan portfolio and potential concentration risk to that sector as other lenders might have, notes Minea.

Creative financing solutions

Credit unions are an attractive option for borrowers who are seeing fewer lender bids, particularly from banks and debt funds. Although most credit unions focus on loans below $5 million in a tight local footprint, some of the larger credit unions will go up to $50 million or higher.

“I’ve seen credit unions inserting themselves into the lending market on a much more active basis over the past couple years,” agrees Ari Schwartzbard, a senior managing director on the Multifamily Capital Markets team at Newmark Knight Frank (NKF) in Atlanta. “We have seen them try to come up with different creative ways to get a bigger share of the market,” he adds.

In June, NKF’s multifamily capital markets team helped to arrange the financing for American Landmark Apartments’ acquisition of The Bentley at Marietta through Alliant Credit Union. The credit union provided a $22.8 million, five-year loan with a two-year interest-only period followed by a 30-year amortization. The loan includes structure components, including a future built-in rate reduction and an earn-out provision to partially reimburse capital improvement costs.

The financing execution occurred in the midst of COVID-19 when a lot of other lenders had pulled back. Pre-COVID-19, there were 10 to 15 debt funds that were extremely aggressive on the multifamily side. However, those debt funds were hit hard in COVID-19 when repo lines were pulled or terms changed, notes Schwartzbard. In addition, there were certain underwriting quirks of the deal that made it not a good fit for Fannie Mae or Freddie Mac, he says. “That created a great opportunity for a credit union, Alliant in this case, to come in and step up to the plate to provide an acquisition loan,” he adds.

In a recent episode of NREI’s Common Area podcast, Alliant Credit Union, Vice President and Head of Commercial Lending Charles Krawitz said that Alliant has been active nationally both before and during COVID-19. About 85 percent of its commercial loans are made to stabilized assets.

Stepping into the gap

Credit unions are active in providing both construction and term loans, although they tend to prefer stable, cash-flowing assets. Because credit unions are structured as non-profits, they are able to maneuver a little differently than banks, such as offering different pricing structures and no pre-payment penalties, although they do typically require at least some recourse from borrowers. The bigger credit unions are willing to do loans up to $50 million, or larger in some cases. Credit unions also differ in the property types they are interested in pursuing.

“I do not think they are more active or less active now than they were pre-COVID-19. However, they are gaining more attention because other lenders have pulled back, and therefore they are a good option for borrowers that need to transact,” says Shawn Hill, a principal at The BSC Group, a financial brokerage and advisory firm based in Chicago.

The BSC Group recently closed a $12.1-million loan with a credit union for a portfolio of three self-storage assets. The five-year loan featured a 30-year amortization and one year of interest-only payments. Because the properties had recently been expanded, the loan was structured with an initial funding at 61 percent loan-to-value (LTV) ratio and a “future funding” component for the balance at 70 percent LTV based on performance as certain leasing hurdles were met. In addition, there was a 50 percent limited recourse to the sponsors with a burn off as cash flow increased. Hill has seen credit unions focusing on permanent loans with between five-year and 10-year terms at moderate leverage of 60 percent to 65 percent with competitive pricing between 3.25 percent to 4.25 percent.

Credit unions may have a bigger appetite for CRE loans these days as compared to their bank competitors, because they have less concentration risk. Additionally, banks are highly focused on granting forbearance and preserving capital because they are not sure how deeply they will be impacted by distressed loans.

“I think credit unions have a better handle on their balance sheet exposure and are therefore able to take advantage of the lending opportunities in the market,” says Hill.

Source: NREI

Jul 31 No Comments

The Hidden Dangers In Medical Lease Concessions

Author: Admin

Categories: Healthcare,Leasing

As medical offices struggle to keep their doors open during COVID-19, they’re often going to their landlords to request relief.

While medical office landlords might be inclined to provide this relief rather than seeing their tenants go out of business, Allison Nelson, co-deputy chair of Akerman’s real estate group, says laws specific to the healthcare sector could open landlords up to compliance issues. The main threat is violating The Stark Law and the Anti-Kickback Statute, which is a set of federal laws that prohibit physician self-referral.

These laws may be applicable when a physician or healthcare practitioner or an immediate family member of a physician is leasing or subleasing from another healthcare provider or hospital. Making things even thornier is that there could also be state corollaries to these laws.

“The [medical office] lease has to be at fair market value, and the parties can’t give concessions to each other or remuneration outside the contract,” Nelson says. “So that’s where you could get into issues with giving rent relief, which could inadvertently be considered a kickback in exchange for referrals of patients between the parties.”

In these situations, Nelson advises landlords to get their attorney involved to determine if Sark law or the Anti-Kickback Statute governs a leasing arrangement. They should also determine if the lease or sublease provides a provision that allows for a concession.

But there are situations where Nelson thinks rent relief may be acceptable. “If the healthcare system just closes down its entire medical office building and bars a tenant from use of the space, that’s probably a pretty easy example of an instance in which a rent concession is allowed,” Nelson says. “The tenant was denied access, and the whole building was shut down.”

The Anti-Kickback Statute is generally an intent-based law, according to Nelson. So if the landlord creates a policy for all tenants, that could help establish that there was no intent.

“Under The Anti-Kickback Statute, there has to be an intent to induce referrals,” Nelson says. “So if they are creating consistent policy across the board, it’s going to help mitigate that intent to induce referrals.”

Government agencies have moved to provide relief. The Centers for Medicare & Medicaid Services offered blank waivers for arrangements governed by the Stark law if related to a COVID-19 purpose. The Office of Inspector General also issued guidance that it wouldn’t prosecute or enforce agreements subject The Anti-Kickback Statute. “Hospitals and healthcare systems are looking to those blanket waivers now to give them some means for providing written concessions or other types of relief to their tenants,” Nelson says.

Nelson advises her medical office clients to create a protocol for dealing with rent relief requests.

“Maybe the tenant has to prove that they sought loans under the Paycheck Protection Program or that not getting this relief will cause an economic hardship for them that could put them out of business,” Nelson says. “That’s important with these blanket waivers. They have to be related to a COVID-19 purpose.”

Nelson says that purpose could include a lease at a below fair market value rate so a physician could treat COVID-19 patients at a hospital. “Some argue it could include rent relief to ensure medical practices stay open to serve the community,” she says.

Source: GlobeSt.

Jul 29 No Comments

Webinar: South Florida Retail Outlook: What is the Impact of COVID-19 on South Florida’s Retail Sector?

Author: Admin

Categories: Commercial News,Retail,Shopping Centers,Trends

Last week, Shopping Center Business and Southeast Real Estate Business hosted “South Florida Retail Outlook: What is the Impact of COVID-19 on South Florida’s Retail Sector?”

Listen as a panel of retail experts discusses their gameplans: how they are working with tenants and their employees as the industry seeks to adapt. Hear about attitudes towards loans, rent reductions, property value, next steps and more.

See a list of some topics covered and their timestamps below:

(07:00): How are restaurants and experiential tenants faring?

(09:29) Adapting for the challenges of COVID-19

(17:28) Retail rent trends over the next 180 days?

(24:32) What can owners do today to position themselves to succeed?

(36:00) When might we start to see real loan defaults and real distressed assets?

(42:55) Lessons learned from 2007-2008 financial crisis

(53:56) Decisions made in the pre-COVID-19 world that have carried over well into our current environment

Click here to access the complimentary webinar recording. Hear how South Florida retail professionals are approaching industry challenges and evolving to meet the needs of retailers.

Source: Shopping Center Business

Jul 27 No Comments

Swire Sells Brickell City Centre Office Buildings

Author: Admin

Categories: Commercial News,Offices

Swire Properties sold two office buildings at Brickell City Centre for $163 million, marking the largest sale to close in South Florida during the pandemic.

Two Brickell City Centre and Three Brickell City Centre LLC, led by Swire Properties President Kieran Bowers sold the office portion of 78 Southwest Seventh Street and 98 Southeast Seventh Street in Miami to US VI 2 Brickell LLC and US VI 3 Brickell LLC, affiliates of Northwood Investors. Tenants include Akerman LLP and WeWork.

The combined $163 million purchase breaks down to $80.3 million for Two Brickell City Centre and $82.7 million for Three Brickell City Centre. Each building has about 130,000 square feet, which means they sold for roughly $630 per square foot.

In a statement, a spokesperson for Brickell City Centre said the buildings are nearly 100 percent occupied and that Swire plans to use the cash for future developments.

Northwood, a Denver, Colorado-based investment adviser, had about $8 billion of assets under management as of December. That includes Cheeca Lodge & Spa in the Florida Keys and the mixed-use project under construction at 1177 Kane Concourse in Bay Harbor Islands.

Swire’s more than $1 billion Brickell City Centre development also includes the East Miami hotel, condo towers Reach and Rise, and the open-air shopping center anchored by Saks Fifth Avenue and the luxury movie theater CMX. Two and Three Brickell City Centre were completed in 2016. Arquitectonica was the lead architect.

Swire Properties is headquartered at Brickell City Centre, but the company is a subsidiary of Hong Kong-based Swire Properties Limited.

The developer has plans for a second phase of Brickell City Centre. In early 2019, Swire and businessman Carlos Mattos scored final approval for a 100,000-square-foot-plus expansion that would have a 54-story, 588-unit residential tower, another 62-story, 384-unit residential tower, commercial space and parking.

Source: The Real Deal

Jul 24 No Comments

The CARES Act Is Positioning Healthcare Real Estate For A Bright Future

Author: Admin

Categories: Commercial News,Development,Healthcare,Trends

The Coronavirus Aid, Relief, and Economic Security Act, known as The CARES Act, was passed with great fanfare and a lot of promise.

In a lot of ways, it hasn’t lived up to that hype as small businesses struggled to get the help that they needed. But Kyle O’Connor, President and Founder of MLL Capital, which owns medical and life sciences facilities, thinks one sector was well-positioned to benefit from The CARES Act.

“One of the things that has been a big help for the medical industry has been The CARES Act, whether it be the payroll protection program [PPP] or the other funding that went to the health systems,” O’Connor says. “That has, I believe, helped quite a bit.”

O’Connor thinks the medical sector has received many benefits from the act that haven’t been there for other sectors.

“If you look throughout the economy, not every type of business was as well suited as the health care industry was to take advantage of the payroll protection program,” O’Connor says.

The employee size limitation for PPP grants is 500 employees. Since most medical offices won’t clear that threshold, they are great candidates for that funding.

“Most medical practices plan to rehire all of their laid off or furloughed employees given they expect demand to resume,” O’Connor says. “It’s also important to note that the health systems received/will receive funding from other elements of The CARES Act. In the medical field, The CARES Act has allowed doctor’s offices to keep critical medical workers employed. The doctors can only see so many people. So the nurse practitioners, the administrative staff, all the nurses that support each individual practice are a pretty important part of the system.”

Doctors are also adopting things like telehealth to offset a decline in office visits.

“The occupiers in our buildings were organizing themselves for dealing with the issues that have been caused by the stay-at-home orders,” O’Connor says.

Once the COVID crisis eases up or clears, O’Connor does not doubt that patients will return to medical offices. And demand could be even more significant as there is pent-up demand for medical services.

“They’re going to be much more comfortable going back to the doctor, and there will be a flood of requests for appointments,” O’Connor says. “There will likely be greater levels of health care that is being provided as the impact of the stay-at-home orders dissipates.”

The support from The CARES Act, in addition to the resilience of the sector, has made O’Connor optimistic about its future.

“Medical offices and life science property types have a defensive element to them,” O’Connor says. “We are going to hold their value better than some of the other property types.”

Source: GlobeSt.

Jul 24 No Comments

Pair Of Mixed-Use Towers Planned For Wynwood

Author: Admin

Categories: Commercial News,Development,Multifamily,Offices,Retail,Wynwood

On the eastern side of growing Wynwood a developer plans a large mixed-use residential project that will also bring in new commercial tenants.

PRH CHO Dragon Wynwood LLC plans to build the pair of neighboring buildings at 2804, 2810, 2819, 2828, 2838 and 2804 NW First Ave.

The city’s Urban Development Review Board considered the project at a virtual meeting and recommended it for approval with a couple of thoughts.

With a current working title of Wynwood 29, the vast development tops out at 375,383 square feet.

The project includes a 12-story building that connects to an 8-story portion, and a separate 8-story building across the street, with 248 multifamily residential units, 28,071 square feet of ground floor commercial uses, a garage for 372 vehicles and room to park 22 bicycles.

Wynwood 29 will include a pool and amenity deck. The garage is intended for both residential and commercial tenants, as well as patrons.

The project is to have 6,360 square feet of open space.

The collection of parcels is between Northwest 28th and 29th streets, split by Northwest First Avenue.

The 12-story portion is planned for the southwest corner of Northwest 29th Street and First Avenue. The southern end of that block has the connected 8 stories. The ground floor is set for retail uses.

What’s referred to in the plans as Parcel 2 is on the northeast corner of Northwest 28th Street and First Avenue. Planned there is the 8-story building, which has eight levels of parking, seven levels of residential and ground floor retail.

The property is currently vacant and is within both the T5-O and T6-8-O Zoning Transects and the Wynwood Neighborhood Revitalization District (NRD-1) Overlay.

Multifamily structures sit to the east and west of the property.

Attorney Brian Dombrowski, representing the developer, told the review board the project was previously approved in September 2016 and this is a slightly modified design, updated after the company gained an additional parcel.

In a letter to the city, Mr. Dombrowski detailed requests for one warrant and several waivers in order to construct Wynwood 29.

The developer is requesting a warrant to allow on-street maneuverability to access two loading berths. Turning movements associated with more than one loading berth per development may be permitted on-street by warrant, except along Wynwood Corridors, under Miami 21 zoning.

The project proposes on-street maneuverability to access two loading berths from Northwest 28th Street, on the western portion of the project, according to the letter.

The waivers being sought include:

Up to a 30% reduction in required parking within the quarter-mile radius of a Transit Corridor. The property is within a quarter mile of multiple bus and trolley stops.
Up to a 10% increase in lot size from 40,000 square feet to 44,000.
Up to 90% lot coverage through the Flexible Lot Coverage Program, of the NRD-1 Regulations. This additional lot coverage allows both the activation of the roof terrace as well enhancing the pedestrian realm.
Up to a 10% increase in lot coverage for the T6-8-O portion of the property, allowing 84.3% of coverage when 80% is allowed.
To allow vehicular entry, loading docks, and service entries from the primary frontage, Northwest 28th Street.
Up to a 10% reduction in the minimum square footage for a one-bedroom residential unit. Miami 21 typically requires a minimum square footage for a one-bedroom residential unit of 550 square feet. The project proposes one-bedroom units at 531 square feet, 3.5% below the minimum.

“By reducing the minimum one-bedroom unit size, the Project can provide more affordable units. The Project’s proximity to mass transit makes it a great candidate for smaller, more affordable units,” wrote Mr. Dombrowski.

“Urban Land Institute studies indicate that smaller units have stronger occupancy rates than typical apartments and individuals choosing to live in smaller units are attracted to them because of a desire to sacrifice space for lower per unit cost and proximity to transit, employment, and vibrant mixed-use neighborhoods,” he said.

The project is designed by the architectural firm of Arquitectonica. Ray Fort, of the firm, described details of the Wynwood 29 project during the virtual meeting.

Mr. Fort told the board: “This quadrant of Wynwood is becoming the residential sector of Wynwood … it is a little bit quieter – there aren’t as many bars – and surrounding projects are planned to be residential,”

Board Chair Willy Bermello said, “I think the project is beautifully designed.”

And while he complimented the bright colors proposed for the project, Mr. Bermello mentioned a concern with the longevity of painted stucco.

“The issue of our Florida sun is that it’s not forgiving when it comes to bright colored paints. [How do you] maintain the crispness of those colors over time?” he asked.

Mr. Bermello asked if they had considered brick for the project.

Mr. Fort said they did not and referred to the size of the development.

Board member Anthony Tzamtzis also voiced concern about the painted surfaces.

“Did you consider glazed tiles? I think the painted stucco is degrading the concept you are trying to promote, which is the industrial [look],” said Mr. Tzamtzis. But he went on to congratulate Mr. Fort for “an extremely elegant presentation and thoughtful design.”

Board member Dean Lewis said the project is “well thought out, well detailed.”

He suggested a pedestrian bridge over Northwest First Avenue to connect the buildings.

Attorney Iris Escarra, also representing the developer, said they have discussed a pedestrian bridge but said it would require a separate approval from the city commission. She said such a bridge may be an option.

Board member Ignacio Permuy said: “I commend you on an exceptional job, starting from the massing to the architecture of the buildings … I truly appreciate the screening on the parking garage.”

Mr. Permuy said he understood the others’ comments about the bright painted stucco but added, “I don’t mind the color scheme that much. I understand comments … but this shows levels of playfulness, it shows you enjoyed designing this project.”

Board member Robert Behar said: “I like the whole project. You’ve done a great job.”

A motion to recommend approval of the project passed unanimously, with recommendations including the developer considering connecting the buildings, perhaps with a bridge, and to consider materials other than stucco.

Jul 20 No Comments

How Retail Leases Will Change In A Post-COVID World

Author: Admin

Categories: Commercial News,Leasing,Retail,Shopping Centers,Trends

In the post-COVID world, retail leases will need to change and adapt. Several provisions will need to be changed and added to account for the possibility of a pandemic and the mandated shuttering of businesses. This includes adjustments to force majeure and insurance provisions as well as use of common areas, common area caps, alterations, and rules and regulations, all of which should be adjusted to reflect the new market.

“These modifications will likely put landlords in a better position to respond and react to the new normal that will exist until a vaccine is developed and widely distributed,” Dan Villalpando, a partner at Cox, Castle & Nicholson, tells GlobeSt.com.

In regards to the common areas, most leases are currently too broad to account for usage and social distancing. This is one of the first areas that will need to be addressed in leases.

“Landlords should make sure that the language in the Control of Common Area provision found in most leases is broad enough for landlords to respond and adapt to pandemics and similar emergencies, such as by installing items to improve health and safety conditions and making other, perhaps currently unforeseeable, changes to the common area to comply with recommendations or requirements of the Center for Disease Control and Prevention, World Health Organization, or state or local authorities,” says Villalpando.

In some instances, common areas may need to be converted into dining and retail spaces to accommodate social distancing guidelines, and landlords will need to comply.

“As a result of physical distancing and store-capacity requirements, tenants may need the right to use portions of the common area (like sidewalks) for customers to form lines outside the stores,” says Villalpando. “A landlord should not decline a request by a tenant to use the common area for queuing. Nevertheless, a landlord can condition such use upon tenant fulfilling certain prerequisites, such as giving the landlord prior written notice of such intent and the expected duration, peak times, and specific area the tenant wants to use. Additionally, landlords may want to specifically require that the tenant cleans up the area used for queuing on a daily basis.”

In addition, these changes to common areas do not apply to increase caps, according to Villalpando.

“In leases where a landlord provides a tenant with a cap on increases in common area costs, such cap does not typically apply to uncontrollable costs,” he says. “Following COVID-19, landlords should consider expanding the list of “uncontrollable” costs. For example, costs associated with a pandemic and the related health or safety measures the landlord takes, for example the installation of hand sanitizing stations, upgrades to automatic doors, use of more personnel to administer cleaning and to make sure guests comply with social distancing requirements, should be deemed uncontrollable and not be subject to any cap.”

In addition, landlords should also take the into account the cost structure, particularly during a pandemic.

“If it turns out that the “base year” for setting the “floor” for common area costs occurs during a year when the common areas are used less because of a pandemic or related outbreak, the landlord should consider including a “gross up” concept to bring the “floor” up to a number that is more reflective of what common area costs would have been but for the pandemic,” says Villalpando.

Villalpando also suggests that landlords can modify the cap during the lowest period.

“Another alternative would be to modify the cumulative versus non-cumulative nature of the cap for any period during which common area costs are artificially low,” he says. “Basically, with a cumulative cap, when the common area costs for a particular year exceed the cap, the landlord can apply any unused portions of the cap from previous years to make up the difference.”

Source: GlobeSt.

Jul 16 No Comments

Miami-Dade Property Appraiser Getting Sued Over Tax Bills

Author: Admin

Categories: Commercial News,Healthcare,Multifamily,Offices,Retail,Shopping Centers

Affiliates of megamall developer Triple Five, along with Terra and Starwood Capital Group are crying foul over property tax bills from Miami-Dade County.

A number of developers and investment groups have recently filed lawsuits against Miami-Dade Property Appraiser Pedro J. Garcia for their tax appraisals for the 2019 tax year. Others include the owners of Aventura ParkSquare, the SunTrust office building on Brickell and the Delano South Beach.

The latest suits come as Miami-Dade issued preliminary taxable values for 2020 earlier this month, based on assessments and market conditions on Jan. 1. More such suits could arise, as businesses continue to lose money and commercial real estate values fall due to impacts of the coronavirus pandemic.

“A litigation showdown is looming between property owners and the government over property taxes,” said attorney Josh Migdal, a partner at the Miami law firm Mark Migdal & Hayden, who handles real estate cases.

“Property owners are faced with budget shortfalls due to decreased revenue,” Migdal added. “However, a decrease in tax revenue collection due to the virus will require the government to maximize its property tax collection to prevent its own budget shortfall.”

Florida is heavily reliant on property taxes since the state does not have a state income tax.

Overall, preliminary property tax values across Miami-Dade County rose in 2020 compared to the previous year. The estimated taxable value for Miami-Dade County properties totaled $324.36 million, up 5.1 percent from 2019, according to the property appraiser’s office.

The biggest increases were in West Miami (14.6 percent); Florida City (13.8 percent); Homestead (10.8 percent); Hialeah and North Miami (each up 10.4 percent). Much of the boost in appraised value is due to new construction, the property appraiser’s report shows.

Yet, the property appraiser’s office said falling prices for condos properties in Bal Harbour, North Bay Village, Key Biscayne and Aventura will have a negative impact on property taxes in 2020. It also says that coronavirus is starting to impact commercial real estate values.

“I will do everything within my authority to assist property owners who are struggling during these unprecedented times,” Garcia said in a statement. “As the real estate market changes during 2020, my office will consider these factors and make the necessary corrections permitted by law.”

The property appraiser’s office declined to comment on the recently filed suits. Among them, Triple Five, the Canadian developer, sued over the assessed value of its property in west Miami-Dade, where the group plans to build American Dream Miami mall.

The developer alleges the property appraiser gave an agricultural designation for 46.5 acres of its property, but denied the agriculture designation for two parcels totaling 38.32 acres. The properties were valued at $5.13 million and at $1.5 million, respectively, which the Triple Five alleges are “amounts in excess of their agricultural values.” The developer alleges the entire property should be classified as agricultural for the 2019 tax year, according to the complaint.

Developer Terra is also suing over a 11,865-square-foot parcel it owns at 2765 South Bayshore Drive in Coconut Grove. The company alleges the property is based on appraisal practices that are not “professionally accepted appraisal practices nor acceptable mass appraisal standards” in Miami-Dade County.

A company tied to Starwood Capital Group sued the property appraiser over a hotel it owns at 6700 Northwest 7th Street near Miami International Airport. The complaint alleges the $20 million assessment does not represent the value of Springhill Suites Miami Downtown/Medical Center because it exceeds the market value.

An affiliate of Integra Investments is suing the appraiser over Aventura ParkSquare, its mixed-use project in Aventura. The development group claims the property appraiser misappraised its property and it should not owe $106,629 in property taxes. The 1.2-million-square-foot project, at 2920 Northeast 207th Street, was completed in 2018. It includes a 131-unit luxury condo building, a 100,000-square-foot Class A office component, 55,000 square feet of ground-floor retail and restaurant space, and a hotel.

Alliance Re Holdings, the investment group that owns the SunTrust building at 777 Brickell Avenue is suing the property appraiser over its appraised value at the office tower. The group, led by Adolfo Geo Filho, who is tied to Brazilian construction company Construtora ARG, alleges it should not owe $2.2 million in property taxes. Alliance Re Holdings alleges the “Property Appraiser’s assessment of the property is arbitrarily based on appraisal practices.” The Filho-led group purchased the SunTrust building for $140 million in February 2015. Tenants include SunTrust, Truluck’s and Quest Workspaces.

The owner of the Delano South Beach is suing the property appraiser’s office over the hotel’s $172,905 tax bill. A company tied to SBE Entertainment Group, led by Sam Nazarian, also alleges the property assessment is arbitrarily based on appraisal practices that are not professionally accepted nor acceptable in Miami-Dade County.

Source: The Real Deal

Blog

Year: <span>2020</span>

South Florida Medical Office Buildings Trade For $313 Per Square Foot

Miami Worldcenter Developer Sells Site For $24M

Credit Unions Making Bigger Play For CRE Loans

“What we have seen from credit unions is that they are willing to finance property types that others aren’t doing,” says Pat Minea, executive vice president, debt and equity at NorthMarq.

Creative financing solutions

Stepping into the gap

“I think credit unions have a better handle on their balance sheet exposure and are therefore able to take advantage of the lending opportunities in the market,” says Hill.

The Hidden Dangers In Medical Lease Concessions

“Under The Anti-Kickback Statute, there has to be an intent to induce referrals,” Nelson says. “So if they are creating consistent policy across the board, it’s going to help mitigate that intent to induce referrals.”

Webinar: South Florida Retail Outlook: What is the Impact of COVID-19 on South Florida’s Retail Sector?

Swire Sells Brickell City Centre Office Buildings

The CARES Act Is Positioning Healthcare Real Estate For A Bright Future

“One of the things that has been a big help for the medical industry has been The CARES Act, whether it be the payroll protection program [PPP] or the other funding that went to the health systems,” O’Connor says. “That has, I believe, helped quite a bit.”

“If you look throughout the economy, not every type of business was as well suited as the health care industry was to take advantage of the payroll protection program,” O’Connor says.

“The occupiers in our buildings were organizing themselves for dealing with the issues that have been caused by the stay-at-home orders,” O’Connor says.

“They’re going to be much more comfortable going back to the doctor, and there will be a flood of requests for appointments,” O’Connor says. “There will likely be greater levels of health care that is being provided as the impact of the stay-at-home orders dissipates.”

“Medical offices and life science property types have a defensive element to them,” O’Connor says. “We are going to hold their value better than some of the other property types.”

Pair Of Mixed-Use Towers Planned For Wynwood

“By reducing the minimum one-bedroom unit size, the Project can provide more affordable units. The Project’s proximity to mass transit makes it a great candidate for smaller, more affordable units,” wrote Mr. Dombrowski.

Board Chair Willy Bermello said, “I think the project is beautifully designed.”

“The issue of our Florida sun is that it’s not forgiving when it comes to bright colored paints. [How do you] maintain the crispness of those colors over time?” he asked.

“Did you consider glazed tiles? I think the painted stucco is degrading the concept you are trying to promote, which is the industrial [look],” said Mr. Tzamtzis. But he went on to congratulate Mr. Fort for “an extremely elegant presentation and thoughtful design.”

Board member Dean Lewis said the project is “well thought out, well detailed.”

Mr. Permuy said he understood the others’ comments about the bright painted stucco but added, “I don’t mind the color scheme that much. I understand comments … but this shows levels of playfulness, it shows you enjoyed designing this project.”

Board member Robert Behar said: “I like the whole project. You’ve done a great job.”

How Retail Leases Will Change In A Post-COVID World

“These modifications will likely put landlords in a better position to respond and react to the new normal that will exist until a vaccine is developed and widely distributed,” Dan Villalpando, a partner at Cox, Castle & Nicholson, tells GlobeSt.com.

Miami-Dade Property Appraiser Getting Sued Over Tax Bills

“A litigation showdown is looming between property owners and the government over property taxes,” said attorney Josh Migdal, a partner at the Miami law firm Mark Migdal & Hayden, who handles real estate cases.

“Property owners are faced with budget shortfalls due to decreased revenue,” Migdal added. “However, a decrease in tax revenue collection due to the virus will require the government to maximize its property tax collection to prevent its own budget shortfall.”

“I will do everything within my authority to assist property owners who are struggling during these unprecedented times,” Garcia said in a statement. “As the real estate market changes during 2020, my office will consider these factors and make the necessary corrections permitted by law.”

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