Month: March 2020

In this COVID-19 social distancing policy compliant remote interview done by TRD’s Amir Korangy, Michael Shvo, CEO of SHVO, a real estate development company based in New York City with additional offices in London and Dubai, and highly active in Miami, discusses the implications of COVID-19 on commercial real estate and lifestyles overall. The core of his message is that this will pass. He notes there was a similar panic after 9-11, but that panic passed, and opportunity was found on the other side. He expects that owners that to this point were hesitant to accept good offers for properties out of a nagging concern that they might get more now or soon might, of a sudden, be more willing to do a deal. This is an excellent and timely interview with a pragmatist already thinking about the opportunity on the other side of all this.

About 2/3 of the way through there is considerable discussion of SHVO’s plans for the Raleigh Hotel and the effects of his Miami hotels having been shut down due to the coronavirus. He notes that, in their case, it means they have to close 4 months earlier than they would have had to otherwise. They go on to discuss hotels as an asset looking forward. Interestingly, for a set of reasons that make sense (listen) he thinks more moderate priced hotels will rebound faster.

Mac Papers inks deal, sells warehouse near MIA for $15M

A major paper supplier sold its warehouse near Miami International Airport for $14.6 million. Jacksonville-based Mac Papers sold the 137,872-square-foot warehouse at 5900 Northwest 176th Street in Miami for $105 per square foot, records show. Spirit Master Funding X LLC, tied to Dallas-based Spirit Realty Capital, purchased the property. The warehouse is on…

Sam Zell’s Equity Residential halts evictions, rent hikes on 80K-unit portfolio

Sam Zell’s Equity Residential said it will halt evictions and rent increases for 90 days on its thousands of apartments across the country in response to the coronavirus emergency. The move, first reported by Crain’s, comes after several states like California, New York, and Illinois have called for or have suspended eviction proceedings and rent hikes. The real estate…

South Florida commercial real estate closings face delays and cancellations due to coronavirus economic meltdown

Jay Sakalo and Jaime Sturgis A month before the closing date, commercial broker Jaime Sturgis just had to kiss goodbye a nearly $1 million multifamily deal. Sturgis, founder and CEO of Fort Lauderdale-based Native Realty, said he represented the seller of an eight-unit apartment building in Miramar who canceled the sale after the buyer requested “unreasonable…”

Seagis Property Group Inks Full-Building Lease in Miami-Dade

Del Valle Brands, a Miami-based brand development and distribution company specializing in Caribbean markets, has leased an entire 125,976-square-foot building owned by Seagis Property Group in Medley, Fla., a Miami-Dade submarket. The building has Palmetto Expressway frontage and is located at the southeast quadrant of… at 8150 NW 76th Avenue…

“It is catastrophic:” Sam Nazarian, Kobi Karp talk coronavirus toll

Last week, The Real Deal publisher Amir Korangy sat down for another episode of Coffee Talk with luxury hospitality group SBE’s Sam Nazarian and leading architect Kobi Karp. This time, though, coffees were kept at home, with Karp and Nazarian joining TRD for a virtual conversation. Nazarian detailed the difficulty in maintaining his large workforce…

Hotels get pummeled as demand nosedives for a second week

The hotel industry suffered another devastating week, as cities like New York and San Francisco saw more than eight out of every 10 hotel rooms sit empty. Occupancy levels in those two cities plunged more than 80 percent last week as the Covid-19 pandemic obliterated demand for hotel stays, new figures released Wednesday by the…

TRD Talks: How developers are contending with coronavirus

One called for a total shutdown of business. Another advised startups to plan for zero revenue for six months. And a third had harsh words for impatient lenders. All three New York developers, Miki Naftali, Ryan Freedman and Steve Witkoff, made their views known about how they would deal with the deepening coronavirus pandemic. The trio spoke…

Back-of-the-Envelope Estimates of Next Quarter’s Unemployment Rate

As state and local governments implement social-distancing measures to suppress and contain the spread of COVID-19, many businesses are faced with a large decrease in sales and revenue. This slowdown of economic activity could inevitably lead to solvency and liquidity problems that result in workers being laid off. This negative shock does not equally affect all…

Target store signs for planned Overtown block

Retail giant Target has signed a letter of intent to open a store inside a planned mixed-use retail and residential development in Overtown called Block 55, according to the developer of the expansive project. The developer, in concert with the board of directors of the Southeast Overtown/Park West Community Redevelopment Agency (CRA), plans…

Transit hub to feature University of Miami student housing

New student housing is a key component of a major mixed-use project in South Miami destined to become a transportation hub for the region, according to the developers. The TREO group, in collaboration with Miami-Dade County, is building the mixed-use, transit-oriented student housing development to be called VOX Miami. Officials from The TREO Group…

New blueprints are coming for hospitality industry’s future

Miami-Dade’s hospitality sector is under economic siege from the coronavirus. How it recovers is crucial to the future for us all. Of course, whatever industry we look at is struggling while society battles a peril with no track record to indicate when the siege might ease up.  Hospitality is in the same boat – but hospitality has been what Miami was built on…

Edgewater condo tower’s retail space sells for $15M

The commercial space in an Edgewater condo tower sold for $15.45 million. Biscayne Plaza II LLC, led by Javier Cevera, sold the 11 commercial condos at 1800 Biscayne Plaza to Delorean Holdings LLC, led by Daniel Serber, a lawyer in Aventura, records show. The commercial… The space at 295 18th Street is occupied by a Chase bank branch and restaurants 3 Chefs…

CenterPoint buys an industrial property near MIA for $30M

CenterPoint Properties CEO Bob Chapman and South Florida Logistics Center CenterPoint Properties Trust bought an industrial property near Miami International Airport for $29.5 million. Oak Brook, Illinois-based CenterPoint Properties purchased the 42.5-acre property at 3200 Northwest 67th Avenue for $694,117 per acre, records show. FDG Hialeah, tied to…

Expected U.S. Macroeconomic Performance during the Pandemic Adjustment Period

The coronavirus has the potential to create catastrophic health outcomes in the U.S.2 In order to mitigate this, public health officials have recommended a variety of social-distancing policies to slow the spread of the virus. In addition, social interaction has declined dramatically due to voluntary withdrawal by individuals, corporate work-from-home policies and…

Miami condo tower shuts down amenities due to confirmed coronavirus case

A downtown Miami condo tower has shut down its amenities deck, pools and barbecue, and asked visitors to stay away after a resident was confirmed to have tested positive for Covid-19, The Real Deal has learned. The condo association of Marinablue, the 57-story, 516-unit tower at 888 Biscayne Boulevard, sent an email blast alerting residents of the…

Tom Barrack predicts commercial mortgage market crisis

Colony Capital chairman and CEO Tom Barrack thinks the commercial mortgage market in the United States is on the verge of collapsing. Barrack wrote in a white paper, posted to Medium late Sunday, that the coronavirus pandemic and subsequent shutdown of sectors of the U.S. economy could lead to margin calls, foreclosures, evictions and potential bank failures.

Fannie, Freddie offer multifamily landlords a break — strings attached

Some relief from the federal government is on the way for multifamily landlords, but it comes with strings attached. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, announced that the two mortgage insurers will give multifamily landlords a break on their loans on the condition that they do not evict any renters impacted by…

CFH Group picks up Allapattah bank branch

Even in the midst of the coronavirus pandemic some deals are closing. Truist sold a bank branch in Miami’s Allapattah neighborhood for $6.9 million to a company tied to CFH Group, records show. The branch, at 1400 Northwest 20th Street, is on a 19,604-square-foot lot, equating to a price of $349 per square foot, according to records. Truist is the bank holding…

Bankruptcy, restructuring lawyer outlines strategies

By Adam Marshall The impact of the coronavirus will result in a lot of tough financial and legal decisions for many business. These are topics  I know intimately as a veteran bankruptcy and restructuring lawyer. For some stressed businesses, negotiating with creditors and lenders could be imminent while restructurings, bankruptcy filings and liquidations are…

Feds looking to lease warehouses for coronavirus triage, testing centers

The federal government is reaching out to commercial property owners and brokers to lease empty warehouse space for temporary triage centers, as the number of confirmed coronavirus cases nationwide continues to grow. As of Friday afternoon, more than 15,000 people had tested positive for the virus in the U.S., with more cases expected as the number of…

All hotels, short-term rentals in Miami-Dade ordered to shut down due to coronavirus

Miami-Dade County and the city of Miami Beach ordered all hotels, motels and short-term rentals shut down effective Monday, March 23, in an effort to curb the spread of Covid-19. Guests and renters must be out of all commercial lodging establishments by midnight on Monday night, according to the city of Miami Beach’s or…

Diplomat, Acqualina, Biltmore hotels closing amid coronavirus

Major hotels across South Florida are closing voluntarily amid the coronavirus pandemic. Acqualina Resort in Sunny Isles Beach, the Diplomat Beach Resort in Hollywood, and the Biltmore in Coral Gables are all closing by this weekend, as Covid-19 sends shock waves through South Florida’s economy. Miami-Dade Mayor Carlos Gimenez issued an executive order…

Coronavirus And The Future Of SoFlo CRE

There’s no easy way to begin. As you all are very much aware, coronavirus is taking an incredible toll on lives and livelihoods. Anxiety is high, nerves are frayed, and because the situation is rapidly changing, there is no way to predict the short- and long-term outcomes accurately. It wasn’t so long ago, in fact, that investors were excited because the Federal Reserve had…

Treo Group scores loan for mixed-use student housing project in South Miami

Rendering of Vox Miami The Treo Group closed on a $33.25 million construction loan for Vox Miami, a mixed-use project under construction next to the South Miami Metrorail station. Centennial Bank is providing the senior construction loan to Treo. It closed on Wednesday, amid the crisis caused by the coronavirus pandemic. J.C. de Onda, division president…

Miami-Dade orders all non-essential businesses closed due to coronavirus

Miami-Dade Mayor Carlos Gimenez has expanded his order of businesses that must close — and those that can remain open — during the coronavirus pandemic. All malls and casinos will have to shut down. Construction sites, hotels and banks can remain open. Medical facilities, grocery stores, gas stations and restaurant kitchens can…

Coronavirus COVID-19 Real Estate Task Force | Jordan + Lawyers Provides Tactical Step by Step Guide

As mentioned in our previous post, the number of COVID-19 coronavirus (“Coronavirus”) cases continues to increase, and with the World Health Organization raising its threat assessment of Coronavirus to its highest level, businesses in Miami-Dade and Broward Counties are becoming increasingly aware of the many challenges that are ahead. At Jordan…

Video 1 of 2:

Video 2 of 2:

In this two part video series, Michael Roessle, Director of United States Office Analytics with CoStar, a leading provider of information, analytics and marketing services to the commercial property industry, appears on America’s Commercial Real Estate Show to talk about office property market performance. Among the topics discussed are absorption, growth rates for office property rent, and investment trends. This is a national recap, but with relevance to office property investors in any city, including Miami.

In my practice I’ve noticed a dearth of moderate sized, 7,000 to 10,000 square feet, light industrial properties. There are numbers of older properties, many of which predate the widespread use of the container ship and the consequent dominance of the modern semi-trailer truck. Older buildings frequently have lower ceilings, lack dock height loading, and have inadequate room for trucks. Given this, users that require these features and are willing to pay for them tend to isolate their searches to properties built in the last few decades.

The chart above shows the total number of light industrial buildings in the entire county by maximum number of years old. As can be seen, there are a mere 66 properties that are less than 30 years old (i.e. built since 1990). Based on average data for commercial properties in the county, that likely means 4 or 5 such properties trade in a given year. Sometimes these don’t even make it to the market but instead quietly trade off market. Given that, and further that most buyers are looking in a given area, it is likely that a suitable property comes available that matches a buyer’s needs once a year.

What is the lesson of this? When you are looking for a property like this and find one, don’t mess around; don’t expect that another will just come along just like it. Get it.

SoFla landlords, retailers brace for coronavirus impacts

FroCommercial landlord Scott Sherman is trying to get ahead of potential losses and hardship South Florida retail tenants are facing. His Miami-based Tricera Capital is giving them the ability to defer rent payments for the near future, as bars and restaurants are forced to close and the fallout from the coronavirus pandemic unfolds. Across South Florida, from…

Barry Sternlicht calls coronavirus “World War III for 90 days”

Barry Sternlicht has voiced worries of the next “calamitous recession,” but now he is optimistic that the epic disruption of the global coronavirus pandemic will be over in three months. “I don’t think in the history of the world have you ever had this many labs, this many people focused on a cure or a vaccine with technology that didn’t…

Insight into the coronavirus impact on commercial real estate

There’s a lot of economic comparisons between the Great Recession and the coronavirus, but there are a couple of key differences this time when it comes to commercial real estate, says Marc Shuster, a partner at the Berger Singerman law firm. Shuster brings a lot of insight from representing family offices, high net worth individuals and private equity funds. Those…

Social distancing? Coronavirus not stopping South Florida construction projects — for now

The concrete will continue pouring at South Florida construction sites. As other aspects of everyday life are shut down due to the coronavirus pandemic, the building industry is still forging ahead — for now, according to general contractors, trade association representatives and government officials. Peter Dyga, president and CEO of Associated Builders and…

Starbucks transitioning to temporary “To-Go” model

In light of recent public health concerns, all company-owned Starbucks stores in the U.S. will be open for to-go and delivery orders only. This decision was made public on March 15th and, according to Starbucks representatives, will remain in effect for at least two weeks. Though the high-traffic chain has shut down all indoor and outdoor seating…

International Council of Shopping Centers requests federal help amid massive shutdowns

The International Council of Shopping Centers is requesting aid from the Trump administration amid a host of restaurants, retailers and entertainment operators shutting down. ICSC wants the federal government to directly pay for or guarantee business interruption coverage for retailers, restaurants and other impacted businesses, according to the Wall Street…

Trump suspends HUD evictions, foreclosures amid coronavirus pandemic

President Donald Trump announced Tuesday that the Department of Housing and Urban Development will suspend all foreclosures and evictions through April in response to the coronavirus pandemic. The moratorium would apply to mortgages insured by the department’s Federal Housing Administration, or around 8.1 million households, according to…

“We are not close to the bottom in the US”: Hotels suffer declining revenues, mass layoffs

By every conventional measure, the hotel industry took a beating last week as the country went further into lockdown to contain the spread of the coronavirus. Occupancies, average daily room rates and revenues per available room fell drastically last week, according to new figures from the hospitality research firm STR. “Through comparative analysis of the…”

Miami Self Storage Portfolio Commands $44M Refi

Two of the properties are situated in Miami, at 490 NW 36th Street and 1100 NE 76th Street, while the third one is located at 812 NW First St., in Fort Lauderdale, Fla. CubeSmart manages the Miami facilities, while Public Storage operates the one in Fort Lauderdale. The portfolio encompasses 1,836 units spread across three multi-story buildings, which came online…

Airbnb calls for federal aid as hosts voice anger over policy changes

Airbnb’s business model relies on making both hosts and guests happy, but the startup is facing pushback from both sides as it flip-flops over who should cover the cost of cancellations. With demand for short-term rentals falling amid a global coronavirus pandemic, the company is now seeking government support for its hosts. But many of them have voiced anger…

Miami lacks appetite for new food truck regulations

Legislation that would add additional food trucks regulations in the City of Miami has stalled, as the discussion among commissioners centered on the ways food trucks operate in the city among brick-and-mortar businesses. Last week, city commissioners deferred an item sponsored by Commissioner Ken Russell that would address food trucks operating…

Property insurance costs likely to soar

There may be bright spots on the commercial insurance horizon – workers’ compensation among them – but property insurance won’t be one of them, said Mark Schwartz, CEO of Corporate Insurance Advisors. “In general, we are a cat-exposed state,” he said, meaning frequent hurricanes dampen the profitability of insurers and re-insurers in Florida, causing many to leave…

Allapattah midrise plans 47 micro-unit apartments

A developer plans to build a midrise building in Allapattah that will include smaller micro unit apartments. 2323 Pointe Group LLC is asking the City of Miami to approve its plan to construct an 8-story mixed-use residential building at 2323 NW 36th Street. The city’s Urban Development Review Board recommended approval. The project’s working name is 2323…

State to order bars shut for 30 days

The normally festive St. Patrick’s Day took on a very somber note Tuesday as Florida Gov. Ron DeSantis planned a 5 p.m. press conference to issue an order for bars to close for 30 days, multiple media outlets were reporting. Bars are being defined as establishments where more than 50 percent of sales are from alcoholic beverages. Restaurants will be told to reduce…

Real estate pros weigh in Fed and Trump’s moves to bolster economy from COVID-19 pains

The Trump administration’s effort to work with Congress on an $850 billion stimulus package to bolster the economy may be getting a positive response from investors, but it may not be enough to ultimately calm markets and those same investors. As the U.S. fights to contain the coronavirus epidemic, the Federal Reserve on Tuesday resurrected a program…

SoftBank may bail on WeWork bailout: report

SoftBank no longer plans to proceed with all of its bailout of WeWork, justifying its decision to back out of its $3 billion pledge to buy shares back from investors by citing several regulatory investigations of the troubled shared office–space giant. According to the Wall Street Journal, WeWork’s shareholders were sent a notice Tuesday stating that SoftBank believes…

Eric the Jeweler blames Mondrian South Beach owners for $2M heist: lawsuit

Eric the Jeweler suing Mondrian South Beach owners Eric Mavachev, a New York City jeweler who counts Sean “Diddy” Combs and Drake among his A-list clientele, is blaming the owners and two employees of the Mondrian South Beach Hotel for the theft of nearly $2 million in baubles from his hotel room last month, according to a recently filed lawsuit. Mavachev…

Restaurants, bars, gyms and theaters ordered to close in Miami-Dade

Miami-Dade County ordered all restaurant dining rooms, bars, gyms, movie theaters, bowling alleys and other businesses closed due to coronavirus, or COVID-19. Deputy Mayor Jennifer Moon made the announcement along with Miami Beach Mayor Dan Gelber on Tuesday morning at a press conference at Joe’s Stone Crab in South Beach. The order will go into…

CenterPoint Properties Acquires Airport-Adjacent Land Site In Miami-Dade County

CenterPoint Properties has announced the acquisition of a 17.14-acre land site in the Miami-Dade County submarket. Located at 3200 NW 67th Avenue in Miami, this site is currently 100% leased to a leading e-commerce retailer. Located in the highly coveted “Airport West” submarket of Miami-Dade County, the property is directly adjacent to Miami International…

With curfews and public assembly restrictions, what will happen to malls?

As cities around the country curtail large public gatherings, institute curfews and shut down schools to prevent the spread of the coronavirus, questions hang over the fate of malls — which have already been on a knife’s edge thanks to retailer bankruptcies and store closures. Some industry watchers have said retail will be among the first industries to…

Coronavirus closures hit South Florida restaurants and stores

Popular Miami restaurants like Mandolin Aegean Bistro and Cafe La Trova are temporarily closing their doors amid the coronavirus crisis. National retailers are announcing closures by the hour. In Miami-Dade County, all bars and clubs must close by 10 p.m., and all restaurants by 11 p.m. The wave of closures is expected to continue locally and throughout the county…

Starwood snags Homestead apartment complex for $28M

An affiliate of Starwood Capital Group bought the Villa Biscayne Apartments in Homestead for $28.3 million, reflecting growing demand for multifamily properties in south Miami-Dade County. A company tied to Michael J. Hornbrook, president of Lakeside Capital, sold the 180-unit complex at 15350 Southwest 284th Street for $157,222 per unit to…

Building towers with stone could be the future, architects say

A group of architects wants to bring their practice back to the stone age. Groupwork and structural engineering firm Webb Yates collaboratively designed a 30-story office tower built of stone they say could be cheaper and more sustainable than a similar tower built with steel or concrete, according to Dezeen. The project was an investigation of how tall one…

Miami Beach orders all restaurants with occupancy over 250 to close or reduce capacity due to coronavirus

The city of Miami Beach late Friday ordered all restaurants and nightclubs with occupancy of over 250 people to cease operations due to the coronavirus pandemic. Restaurants and nightclubs can remain open if they maintain a capacity of fewer than 250 people, according to the city’s announcement. Miami Beach’s mayor and commission extended the…

Carl Icahn’s biggest short? Commercial real estate

The U.S. commercial real estate market is ripe for a meltdown, according to activist investor and notorious corporate raider Carl Icahn. And he’s putting a lot of money where his mouth is. “You’re going to have this blow up, too, and nobody’s even looking at it,” Icahn said on CNBC. The investor revealed that he’s shorting the commercial mortgage bond market, noting that it…

Miami-Dade suspends evictions due to coronavirus

Miami-Dade suspended all eviction activities amid the coronavirus pandemic. The county’s police department announced it would not assist with evictions now that Miami-Dade County is under a state of emergency. Mayor Carlos Gimenez, who self-isolated after a meeting with Brazilian President Jair Bolsonaro’s aide, declared the state of emergency on…

Coronavirus threat could help sink Anbang’s $5.8B hotels deal: report

CEO Andrew Miller and clockwise from top left: JW Marriott Essex House in New York, the Westin St. Francis in San Francisco and the Four Seasons in Jackson Hole Anbang Insurance Group’s pending deal to sell a $5.8 billion portfolio of 15 U.S. hotels to a South Korean money manager could be in doubt. A group of lenders led by Goldman Sachs failed to receive enough…

Edgewater condo building hits market as dev site

An older condo building on a 3.4-acre waterfront site in Miami’s Edgewater neighborhood is hitting the market and could be redeveloped into a 60-story tower. The older condo building, called Biscayne 21, at 2121 North Bayshore Drive, could be sold in a bulk deal. It represents one of the last remaining waterfront development opportunities in Miami’s Edgewater…

Developer breaks ground on mixed-income rentals in Little Havana

Rendering of Bonsai I with Ivanna Jimenez, Fernando Murzi and Jesus Luongo A Miami developer is taking advantage of the city’s mixed-income housing program to build a rental development in Little Havana. Forth Development, founded by Ivanna Jimenez, Fernando Murzi and Jesus Luongo, broke ground on Bonsai I, an eight-unit building at 519…

Wynwood BID proposes to allow outdoor music until 3 a.m.

If they agree to keep the volume down, Wynwood nightclub and bar owners could get a reprieve for playing outdoor music into the wee hours of the night. On Wednesday, a Wynwood Business Improvement District committee proposed legislation that would carve out an exemption for the trendy neighborhood from adhering to a Miami ordinance that prohibits…

How Quickly Does Fiscal Policy Get Implemented?

There are recent calls for fiscal policy intervention to mitigate the economic impact of the COVID-19 virus outbreak. It is worth recognizing that fiscal and other stabilization policies exhibit “long and variable lags,” as noted by Nobel-prize winning economist Milton Friedman.1 These lags involve moving from (i) the initial proposals to conduct a stimulus policy to (ii) the…