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Sellers Will Take Cryptocurrency For Miami Beach Properties

Developer Scott Robins and his partner, former Miami Beach Mayor Philip Levine, are accepting cryptocurrency for two properties they’re selling on South Beach’s Alton Road corridor.

Robins’ son Jared, founder of Miami Beach-based brokerage InHouse Commercial, said he’s partnering with FTX, a cryptocurrency exchange based in the Bahamas that purchased the naming rights of the former AmericanAirlines Arena in March and has an office in Brickell.

One of the properties for sale is the two-story Royal Media building and the adjacent one-story Reebok CrossFit Miami Beach studio.

The partners are seeking $25 million for the 23,810-square-foot Royal Media building, which was constructed at 960 Alton Road in 1975, and the 7,500-square-foot Reebok CrossFit studio, built at 930 Alton Road in 1948. Media Holdings Ltd. paid $1.6 million for 960 Alton Road in April 1996, and Media Holdings 930 LLC paid $1.42 million for 930 Alton Road in June 2010.

Since the Miami Beach City Commission increased the height limit to 75 feet, the property has development rights for a new 46,965-square-foot building, according to a brochure produced by InHouse Commercial.

The partners are asking $19 million for a three-story, Arquitectonica-designed retail complex built in 2014 at 1000 17th St. 17th St. Partners LLC bought the 8,000-square-foot lot the building stands on for $1.47 million in June 2007.

Jared Robins said the building is 81% leased, and the asking rent is $80 a square foot.

Cryptocurrencies, including Bitcoin, tend to swing widely in value. But Jared Robins said FTX’s ability to instantly exchange crypto into cash “really de-risks that whole aspect of it.”

 

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THesis Miami Raises $33M From Retail Investors With Plan to Tokenize

Nolan Reynolds International (NRI) has recapitalized THesis Miami, a mixed-use property in Coral Gables, that opened last fall, with $32.7 million from retail investors, in a bid to become the first property in Miami to be tokenized.

Pending approval, retail investors will be able to trade shares in the property, backed by a cryptocurrency issued by NRI after a six-month lockup period.

The equity, raised through the CrowdStreet platform, is part of a broader recapitalization for the property, which includes a total of $150 million in debt from Starwood Property Trust and around $95 million in equity.

THesis, located at 1340 S Dixie Hwy, includes residential, hotel and retail components across its 777,000 square feet. The Residences at THesis, the 204-unit residential portion, is 99 percent leased, while the 295-key THesis Miami Hotel and retail portions are on the path to stabilization, according to the CrowdStreet offering.

NRI plans to tokenize the property, allowing retail investors to trade shares backed by digital coins throughout the investment’s lifetime, thus introducing liquidity into real estate, a traditionally illiquid vehicle. If everything goes according to plan, NRI will register its operating partnership as a real estate investment trust, and, after a six-month lockup, existing investors can exchange their traditional shares for digital shares — represented by a digital coin — in the real estate investment trust.

Approximately 700 investors participated in the offering, which started at a minimum of $25,000, offering a greater shot at liquidity should the secondary market become possible. For those who choose the traditional setup, the investment period is expected to be five years.

While NRI has structured the investment to allow for tokenization through the REIT, it has yet to be approved by the Securities and Exchange Commission

Starwood Property Trust provided the $150 million in debt, while NRI contributed $17 million in equity. The remaining equity in the capital stack will be raised from private placement, according to the offering.

 

Source:  Commercial Observer

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Miami Board Denies Wynwood Station Mixed-Use Project

A mixed-use residential project planned for the east side of the Wynwood Arts District, near Midtown and Edgewater, was denied by the City of Miami’s Urban Development Review Board.

Developer-owner Newcomb Properties #2 LLC plans to build Wynwood Station at 45 NE 27th St.

But the board voted unanimously Nov. 17 to deny the project, after voicing numerous concerns including the massing of the building, location of a trash chute, location of elevators, design of the parking levels and ramps, the width of a covered walkway, the size of a courtyard and more.
Board member Ignacio Permuy said of the project, “It’s a good start but it’s just not there yet.”

Total size of the floor area for Wynwood Station is 331,846 square feet.

The planned eight-story building would be home to 210 dwellings, 11,152 square feet of commercial-retail uses, and parking for up to 283 vehicles in an adjacent screened garage.

The development site is on Northeast 27th Street, south of Northeast 28th Street and east of North Miami Avenue. The contiguous mid-block site is in the northeast quadrant of Wynwood, near the Florida East Coast Railway line.

The applicant is FRC Realty Inc., represented by attorney Steve Wernick.

In a letter to the city, he said the plan is “to redevelop this former industrial yard into a mixed-use multi-family residential project that will activate NE 27th Street and contribute to the ongoing transformation of Wynwood into a 24/7 mixed use walkable neighborhood.”

The project was designed by MSA Architects Inc.

Zoning allows up to five stories by right and eight stories with bonus height. A future land use designation permits a wide range of residential and non-residential uses up to 150 units per acre across the properties, Mr. Wernick said.

“The property is a sprawling industrial yard and currently used as a Sunbelt construction equipment rental and storage facility. The existing conditions impose a hard-edge intent on bufferingthe site from the public realm and pedestrians on the sidewalk. It is a site that is quite reminiscent of Wynwood’s former self as an industrial warehouse district, with few trees or shade from the elements,” he said.

Mr. Wernick wrote, “NE 27th Street is a unique street as the link between Wynwood & Edgewater and thus acts as an eastern gateway into the arts district planned for greater pedestrian orientation in the Wynwood Streetscape Master Plan.

“NE 28th Street in its current condition functions as an oversized industrial alley, with little to no right of way improvements and much narrower than a standard right of way in Wynwood,” he said.

Mr. Wernick said the project gives considerable attention to the public realm in the area, including introducing a cross-block paseo connection that will provide much greater mobility and accessibility.

“With the required right of way dedication contemplated with the project, the project will greatly improve and activate NE 28th Street,” he said.

The property is also steps from the intersection of Northeast 27th Street and the FEC Northeast Corridor, the anticipated location for a future commuter rail station that has not yet been approved.

Mr. Wernick said FRC Realty Inc. is an affiliate of Fifield Holdings. Founded in 1977 by Steven Fifield and headquartered in Chicago, Fifield is a national real estate developer with expertise in land acquisition, structured finance, construction management, architecture and design, and asset management.

Over the past four decades, Fifield has developed more than 13,000 residential units and 8.7 million square feet of commercial projects – in markets from Chicago to Los Angeles.

Mr. Wernick noted that the developer had already presented the plan to the Wynwood Design Review Committee and the plan they were showing the city’s review board “has changed significantly” based on comments from the Wynwood committee.

Review board members questioned why the developer’s team would go before the city board before making a planned return before the Wynwood committee.

And some board members said they preferred the look of the planned building seen in earlier renderings, before the changes.

Board Chair Willy Bermello said, “I don’t think you’ve improved this at all … It’s a big building with no statement as to its entrance.

“I’d also like to see what you did the first time. I’m not impressed with what you currently have,” he said.

Board member Anthony Tzamtzis said, “I have many issues with the building, so many I don’t know where to start from.”

Board member Neil Hall said, “I would have loved to see the first design that you did, and which caused you to rework the entire scheme. The scheme presented here today, I’m not in tune with it. I’m getting no positive vibe. I would have liked for us to have the opportunity to react to the first one.”

Mr. Wernick responded, “We feel a little like a ping-pong ball,” and that scheduling issues complicated matters.

After the board voted to recommend denial, Mr. Bermello said hopefully the board would see the developer back with a refined plan, after again meeting with the Wynwood Design Review Committee and continuing to work with city staff.

 

Source:  Miami Today

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Five Class A Office Projects In The Development Pipeline For Miami Beach

Intent on diversifying its economy beyond tourism and nightlife, officials have heavily incentivized the construction of Class A office buildings in Miami Beach. The hope is that the new projects will lure tenants from the many technology, financial and venture capital businesses flocking to the area.

Those incentives include height increases in certain corridors, an office-friendly overlay district in Sunset Harbour, and a request for proposals for developers interested in building new offices on three city-owned parking lots by Lincoln Road. (The deadline for that RFP is Dec. 17).

As demand rises for workspaces on the multibillion-dollar sandbar, these are five Class A office projects in the pipeline to know about, according to a capital market list compiled by the Miami Beach-based commercial brokerage Koniver Stern:

Starwood Global Headquarters, 2340 Collins Ave.: A limited liability company connected to Starwood Capital Group took out a $76.2 million construction loan to build a six-story, 144,430-square-foot building that will serve as the headquarters for a real estate firm led by Barry Sternlicht. The firm has $100 billion worth of assets under management, employs 4,000 people in 16 offices worldwide, and controls the publicly traded mortgage investment company Starwood Property Trust (NYSE: STWD). Around 55% of the Starwood Global Headquarters office space will be used as the base of operations for 300 Starwood employees. The rest of the office building, which was co-developed by Miami-based Integra Investments, will be leased to third parties. The building will also have 8,000 square feet of retail, a 277-space parking garage, and “an array of outdoor wood-clad ‘cabanas’ on each floor,” according to a press statement issued by Starwood. Topped off in December 2020, the Starwood Global Headquarters is due to be completed by the end of the year.

The Bancroft, 1501 Collins Ave.: This hotel circa 1939 is being converted into Class A office space by Boca Raton-based Pebb Capital, Maxwelle Real Estate Group in downtown Miami, and Crescent Heights headquartered in Miami’s Edgewater. When the project is completed, The Bancroft will have 50,000 square feet of offices, four restaurants, and a 210-space underground parking garage.

One Island Park, 120 MacArthur Causeway: The Related Group scrapped its previous plans to construct a 90-unit condo at Terminal Island. Instead, the Coconut Grove real estate development company, headed by Jorge Pérez, will build an office complex totaling around 162,000 square feet in size with a rooftop restaurant, a four-level parking garage, a guard gate, and infrastructure to fuel up and service megayachts docked at the facility.

Eighteen Sunset, 1733 Purdy Ave.: This past November, developer Bradley Colmer of Deco Capital Group broke ground on the first brand new office building to be constructed within the Sunset Harbour Overlay District. The five-story project will include 40,000 square feet of offices, 17,000 square feet of retail, and a private penthouse residence with amenities that include an outdoor pool and hot tub.

944 Fifth St.: Two New York development firms, Sumaida + Khurana and Bizzi & Partners, are teaming up to build a 56,177-square-foot, Class A office building with high interior ceilings and a white façade. As previously reported by the South Florida Business Journal, this office building will also be the first to be designed by famed Spanish architect Alberto Campo Baeza. This project has yet to be named. It also has yet to obtain the 75-foot height limit it needs to move forward. Nevertheless, the development team aims to have the project completed by the summer of 2022.

 

Source:  SFBJ

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Commercial Real Estate Trends And The Call For Creativity

The ripple effect of the pandemic’s impact on the commercial real estate (CRE) market is going to have a lasting effect on several market sectors. The remote workforce genie isn’t going back in the bottle, and the reliance on e-commerce and advances in technology for home delivery will continue to disrupt retail. However, there is reason for optimism, but not across all sectors, and there’s still a lot of emperors without clothes out there talking about how everything is going to be just fine. There are thriving CRE sectors, some that need only pivot to adjust to the new normal, and others that will have to completely reinvent themselves.

Multifamily Real Estate: On The Rebound

As a leader in providing property management technology to the apartment industry, my company has seen firsthand how the multifamily real estate market has made a faster recovery than expected compared with other real estate sectors. It’s arguable that some markets felt almost no impact at all, and some sectors are actually stronger coming out of the lockdown. Yes, government aid has helped, but the overall market has gotten back on its feet quickly and will continue to do so in 2022. The multifamily market is seeing strong growth with low vacancies, steady rental rates and robust development for next year.

Investors agree: Recent data puts sales volume of market-rate apartments at $46.6 billion in the first half of 2021, which was up by 35% from a year ago. This is on pace with the average growth rate for the past five years. Apartments in secondary markets or further from major cities may benefit from this remote work trend since employees no longer need to be near their physical office location.

Industrial Real Estate: Thriving During Distress

The industrial market saw a huge boost during the pandemic due to the growth in e-commerce, and it looks like this will keep rolling through 2022. Year-over-year e-commerce growth surged to 44.5% in Q2 from 14.8% in Q1, which put pressure on retailers, wholesalers and third-party logistics companies (3PLs) to lower transportation costs. There is still healthy demand for industrial real estate, with 367.8 million square feet of industrial property under construction. Completions for 2021 are forecasted to top 250 million square feet, slightly above 2019’s total.

Rent increases were most significant in or adjacent to port areas where there was increased demand due to shipping problems exacerbating supply chain challenges. Vacancies remained steady at 6.1% compared to March 2020. Strong vacancy and rent growth figures show new space has easily been absorbed.

Office Real Estate: In Dire Trouble

Since approximately 50% of U.S. workers worked remotely during the pandemic, flexible work location is no longer a nice-to-have but often a requirement. Businesses have shifted from “always in-person” to a remote workforce, and a vast majority of that workforce likes it. In my opinion, this trend isn’t going anywhere; about 74% of the workforce is planning to permanently be working remotely. This spells a significant reduction in demand for office space. Companies are not re-upping leases and are significantly reducing their square footage, all signals of troubling trends for the CRE market. Not surprisingly, I’ve noticed that CRE owners aren’t talking about this exodus and are telling all who will listen that everyone’s coming back. They may even talk about the need for flex space but not about how flex space will require less space overall.

An overwhelming 72% of companies anticipate modest office space reductions, and 9% of large companies plan to make their office space “significantly smaller” in the next three years. Perhaps some CRE owners are working behind the curtain to stem the tide of companies leaving their buildings or designing new uses, but they have a cash crunch ahead to meet loan payments. Loans to keep CRE businesses afloat can be difficult or impossible to service because a reduction in 20% of topline revenue due to loss of tenants severely impacts a commercial loan, which is typically levered at 75-80%. Cash is only going to get tighter.

Adaptive Re-Use Will Be Key

One of the saving graces for the struggling office and retail real estate markets is the shift to a mixed-use property because apartments in a mixed-use environment command 13.9% higher rents than apartments that are not. I believe that this is the most significant opportunity in CRE and where one strong sector can bolster the struggling one.

There are a number of creative ways that CRE real estate executives can reuse a vacant structure to give a neighborhood a boost. Converting unused office space or retail buildings into apartments or nursing care facilities, for example, can make the best use of space and tap into needs in the market. You can add apartments on top of malls or earmark warehouse storage on the back of office spaces. Key factors that determine optimal reuse in a property include location, building structure, cultural significance, sustainability and ROI.

Cities and counties have also put into place adaptive re-use ordinances making permitting easier and construction easier and cheaper. In Los Angeles, for example, where my company is headquartered, CIM Group took advantage of the new adaptive re-use ordinance to renovate a downtown high-rise building.

One component to assist with the success of adaptive repurposing commercial real estate property is technology, which has grown by leaps and bounds over the course of the pandemic. Once considered a “tech-hesitant” industry, it is now embracing everything from automation software for remote property operations to AI that scans for changes in state and local code and compliance regulations. A recent survey showed that 80% of real estate owners and operators claimed new technology was already having a positive impact on their operations.

While some office building owners are awaiting a mass re-entry of people back into offices, others are thinking creatively to re-envision a future that combines the best of both worlds, solving a housing shortage and enlivening office and retail space.

 

Source:  Forbes

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A Skatepark Is The Centerpiece To This Miami Developer’s New Mixed-Use Concept

Miami is slated to get a new mixed-use hangout, with a skate park serving as the centerpiece.

The concept, dubbed SkateBird, will serve as a skating arena, shopping hub, event center and food hall.

The 32K SF facility — located at 533 Northeast 83rd St. in the mostly residential village of El Portal, just north of Little Haiti — is said to be a first for the state.

The open-air venue, set to have a soft opening this month, has a concrete plaza for street skateboarding and a pump track with a roof to protect from sun and rain.

The facility will also have a full-service kitchen and bar, its own skate shop, and pop-up micro-retail spaces — made from shipping containers — where artists, fashion designers or other vendors can sell their wares. It will also serve as a community hub, hosting events and musicians.

Customers can buy memberships for $75 per person, or a VIP membership that covers five people for a year for $3K. Those include access to skateboarding sessions, happy hours and events, plus discounts on food and merchandise.

The project is led by Miami-based Jonathan “Joner” Strauss, also the founder of Skateboard Supercross, or SBSX, a company that helped design 5,000 parks worldwide. With that concept, he aimed to build facilities all around the world, described on the company’s website as “mini stadiums that provide a strong sense of community” based on “one of the most marketable and memorable sports in the action sports industry.” He’s also envisioned skatepark resorts, according to his LinkedIn profile.

Strauss considers SkateBird to be “the newest concept in sports and entertainment,” according to the Miami New Times.

“We’re giving the answer as to what is lacking in public skateparks, which is there’s never amenities for families to take advantage of, like shade structures, water fountains, or bathrooms,” Strauss said to the outlet. 

The facility aims to be inclusive with lessons for all ages. It will also sell its own brand of beer.

A grand opening is scheduled for Dec. 3-5, during Miami Art Week.

 

Source:  Bisnow

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Renter Churn: Which Cities Are Seeing The Most?

Over the last 20 months, unprecedented shifts have led to new migration patterns. And while some aspects of the COVID-19 pandemic that led to it are waning, many other societal shifts — remote work chief among them — are still at play.

Of renters looking to move, an average of 40 percent were looking to move out of the metro where they resided in the third quarter of 2021, according to a report from Apartment List, based on searches on their platform.

While San Francisco far exceeds that level, with over 50 percent of renters on the move looking to exit, both Los Angeles and New York fell below the national average. Miami was far below it, with only 22 percent of searchers looking to leave.

But none of those cities experienced the greatest amount of potential renter turnover. The three cities with the most people looking to move both in and out of the metro area were Austin, San Jose and Raleigh, N.C. Not coincidentally, those three cities also have a very high share of remote-friendly jobs. In fact, all three are in the top 10 metros for remote-friendly occupations, according to a separate analysis by Apartment List.

Another migration pattern that doesn’t appear to have changed is the New York-to-Florida pipeline. This time last year, as the first COVID winter was settling in, Florida beckoned many New Yorkers and other northeasterners to its sunnier shores. And they’re still at it.

Of renters looking to move out of New York, 6.1 percent were interested in Miami in the third quarter of 2021, very much in line with the 5.9 percent doing the same last year, per the report.

Philadelphia tied with Miami for top outbound searches from New York, with Boston coming in third at 5.2 percent. In addition to Miami, another 7 percent of New York searchers were looking to move somewhere in Florida.

Miami has wide appeal, particularly to others in the state. While New Yorkers made up 16.9 percent of inbound searches to Miami in the third quarter of 2020, they made up 9.6 percent this past quarter. Instead, Orlando took the top spot for inbound searches to Miami, with a full 30 percent coming from the central Florida city, with Tampa taking third place, after New York.

It is important to note that this report is based on searches, not on actual moves, so while it does reflect renter interest, it may not reflect the patterns that eventually play out in reality.

 

Source: Commercial Observer

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‘Lowest Vacancies In Years’ Drive Up Prices For Multifamily Investors

For “the first time ever” the average price for a Class C apartment building averaged $150,000 a unit, according to a recent report on the South Florida multifamily market from Franklin Street, a Tampa-headquartered commercial and insurance brokerage.

But it isn’t just Class C apartment buildings — classified as multifamily structures more than 30 years old and in fair-to-poor condition — that are rising in value. Prices, rents, and vacancies for Class A apartments and Class B apartments are also becoming more expensive for investors in Miami-Dade, Broward, and Palm Beach counties.

According to the Franklin Street report, rents per square foot increased 23% year-over-year in the third quarter in Palm Beach County, 16.7% in Broward County, and 11.6% in Miami-Dade County. Miami-Dade still had the highest rents for Class A and Class C buildings, however, with Class As running an average of $2.42 a square foot and Class Cs at $1.57 a square foot. Palm Beach County had the highest rents for Class B buildings, which averaged $1.85 a square foot.

As for vacancies, the rates were 4% in Palm Beach County, 3.3% in Broward County, and 3.3% in Miami-Dade in the third quarter, “marking the lowest vacancies in years.”

As a result of its popularity, South Florida is luring more multifamily building investors, too. Sales volume was highest for Class As in all three South Florida counties, which totaled $1.6 billion in the third quarter. However, the largest segment in Class A sales volume came from Palm Beach County, which amounted to about $675.2 million. Class C multifamily buildings had the second-highest volume, totaling $586.5 million in all three counties. The sales volume for Class Bs in South Florida was $508.8 million.

The report noted that Class A properties in Palm Beach and Miami-Dade counties exceeded the average sales price per unit of $300,000. But Dratch found it particularly interesting that average units for Class Cs are at $150,000 each.

“Close to five or six years ago, in this same market, Class C units were selling for less than $100,000. It speaks to what has been happening across the board,” he said.

 

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Wynwood Just Got A Little More Vibrant

the gateway at wynwood_mural 3As the The Gateway at Wynwood building nears completion, the long-awaited exterior garage cladding, which depicts a vibrant mural, has been fully installed just in time for Art Basel next month. Additionally, the rooftop deck has been completed and signage is going up around the building.

The Class A office building, developed by R&B Realty Group and designed by renowned Miami architect Kobi Karp, has helped turn Wynwood into a mini-city.

The office building, which found inspiration in Wynwood’s innovative spirit and modern vibe, will allow Wynwood’s new residents to walk to their offices and shops without having to get in their cars. Wynwood, which used to be home to neglected warehouses, is seeing a construction boom of condos and apartments and, now, office buildings as well.

The Gateway at Wynwood offers about 195,000 square feet of leasable Class A office space and nearly 25,900 square feet of prime street-level retail space at the intersection of Wynwood and Midtown. This summer, R&B Realty Group announced the building’s first office lease signed with biotech company Veru Inc. The eight-year, 12,155-square-foot lease will serve as the company’s global headquarters and triple Veru’s current office space.

 

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The Pandemic Has Made Healthcare Real Estate More Desirable

“The pandemic increased demand and made healthcare a more desirable asset class,” Rahul Chhajed, VP and senior director of healthcare at Matthews Real Estate Investment Services, tells GlobeSt.com about how the asset class fared during the pandemic.

For one, medical properties moved onto the list of darling asset classes, and it isn’t hard to understand why.

“It is no longer just a recession that investors are worried about. If there is another pandemic, healthcare services are something that people are always going to need. At the end of the day, everyone needs medical care,” says Chhajed.

With the exception of a temporary pause in the market at the beginning of the pandemic, when elective surgeries and other healthcare services were paused to allow healthcare providers to focus on COVID-19, healthcare properties outperformed other asset classes. Chhajed notes that many tenants didn’t need rent relief and continued to pay rent.

This year, investors have been trading out of more challenged asset classes, like retail and office, in favor of medial facilities.

“COVID really provided a proof of concept for the industry to show that this product type is here to stay. It is not only institutional, but it is an asset class that private capital should look at as well,” says Michael Moreno, VP and senior director of healthcare at Matthews Real Estate Investment Services.

Institutional capital has been the dominant player in the healthcare sector, and that is because it can be a more complicated asset class. Now, both institutional capital and private investors are competing for deals.

“More institutions have definitely entered the ring, but we are also seeing the private markets have started to buy these deals,” says Moreno.

And, there is a third player: owner-occupiers. Existing owners are looking at the demand—which has driven cap rates down significantly—and deciding to sell.

“The sale-leaseback market is really picking up, and a lot of that has to do with pricing,” says Moreno.

Over the last few years there has been significant cap rate compression, and owners would rather take the proceeds and put it back into the business and grow.

“Private buyers love those deals because they typically contain long-term leases and they are triple net,”  Moreno says.

On the lease side, retail owners are finding new users in healthcare. Many clinics and ambulatory centers are signing leases in retail facilities as part of the trend from in-patient care to out-patient care.

“Retail-centric healthcare is great for providers because the care is coming to the consumer,” says Chhajed. “A lot of these healthcare systems are looking for ways to provide ease of access, and retail centers meet those needs to make healthcare more accessible. The confluence of these trends is creating a heyday for medical assets after the pandemic. Now healthcare is looking stronger than ever.”

 

Source: GlobeSt.

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