South Florida Commercial Real Estate Boom Continues with Major Acquisition

South Florida Commercial Real Estate Boom Continues with Major Acquisition

In a continuation of their aggressive acquisition strategy, a partnership between three prominent South Florida real estate firms has purchased a significant waterfront mixed-use property in Fort Lauderdale. This strategic acquisition, valued at $48.5 million, signals ongoing growth and redevelopment in the region.

Key Points of the Acquisition:

  1. The Property and Acquisition Details:
    • Location: The Quay at 17th Street, 1515 Southeast 17th Street, Fort Lauderdale.
    • Property Size: 7 acres.
    • Components: Shopping center, two-story office building, six-yacht marina.
    • Acquisition Price: $48.5 million.
    • Buyers: Coconut Grove-based Related Group, Aventura-based BH Group, and Boca Raton-based Pebb Enterprises.
    • Seller: Affiliate of Miami-based Mast Capital and Boston-based AEW Capital Management.
    • Brokerage: JLL, led by Danny Finkle and Maurice Habif.
  2. Future Development Plans:
    • The partnership plans to redevelop the site with a new mixed-use project.
    • Project Approvals: The city of Fort Lauderdale has approved 361 residential units and 12,000 square feet of retail and restaurants.
    • Details Unveiling: Specific project details to be announced in the coming months.
  3. Financing:
    • Amerant Bank provided financing for the acquisition.
    • The partnership has chosen not to disclose the loan amount.
  4. Historical Context:
    • The Quay at 17th Street was completed in 1988 and acquired by Mast and AEW in 2019 for $43 million.
    • At the time of the recent sale, the property was 93% leased with tenants like Boatyard, Chipotle, the U.S. Postal Service, Azimut Benetti Yachts, and Sanlorenzo Yachts.
  5. Recent Collaborative Ventures:
    • In September, the same firms acquired Ocean Walk in Riviera Beach’s Singer Island for $19.2 million.
    • They also own the Office Depot campus in Boca Raton, purchased for $104 million in April of last year, with plans to redevelop it into a mixed-use project.

The recent acquisition by Related Group, BH Group, and Pebb Enterprises highlights the continued momentum in South Florida’s commercial real estate market. The redevelopment plans for The Quay at 17th Street reflect the region’s dynamic growth and the strategic vision of these firms in shaping the future landscape of Fort Lauderdale.

Source: Francisco Alvarado, The Real Deal

Live Local Act Amendments Set to Boost Workforce Housing in South Florida

Live Local Act Amendments Set to Boost Workforce Housing in South Florida

Governor Ron DeSantis has signed amendments to the Live Local Act into law, aiming to address South Florida’s affordable housing crisis. This legislation, particularly significant in light of the pandemic-induced surge in rents and housing prices, introduces new incentives for developers to create more workforce housing units.

  • Pinnacle 441 Demand Highlights Housing Crisis
    • A “coming soon” sign for Pinnacle 441, an affordable housing project in Hollywood, drew over 21,000 applications for just 113 units, illustrating the severe shortage of affordable housing in the region.
  • Live Local Act Overview
    • The Live Local Act, enacted last year, allocated over $700 million in funding and provided tax and zoning incentives for developers who allocate units for residents earning up to 120 percent of the area median income (AMI).
  • Amendments to the Act
    • The recent amendments include property tax exemptions of up to 75 percent for mixed-income projects and up to 100 percent for fully workforce housing projects. Additionally, developers can increase floor area ratios and reduce parking requirements for projects near major transportation hubs.
  • Developer Reactions and Plans
    • Developers are analyzing the new amendments to determine their feasibility. Some, like Pinnacle, plan to use the tax incentives and increased density allowances to make market-rate deals work for the “missing middle” income bracket.
  • Impact on the Market
    • The amendments could potentially lead to the construction of hundreds or thousands of new workforce housing units, alleviating some of the housing pressures in South Florida. However, the higher cost of land in urban and waterfront areas might limit the effectiveness of these incentives.
  • Live Local in Action
    • Developers such as Asi Cymbal are already leveraging the property tax benefits for projects like Laguna Gardens in Miami Gardens, ensuring lower rents for residents. Similar strategies are being considered by developers in other areas like Fort Lauderdale and Wynwood.

The Live Local Act amendments are poised to significantly impact the availability of workforce housing in South Florida. By offering substantial tax incentives and zoning flexibility, the legislation encourages developers to create more affordable units, addressing the acute housing shortage in the region. As these changes take effect, they are expected to provide much-needed relief for many residents struggling to find affordable housing.

Source: Katherine Kallergis, The Real Deal

Aimco Prepares to List Hamilton Apartment Tower in Edgewater

Aimco Prepares to List Hamilton Apartment Tower in Edgewater

Aimco, a prominent real estate investment trust (REIT), is gearing up to list its waterfront Hamilton apartment tower in Edgewater, Miami. This move marks the REIT’s second major property to hit the market in Miami this year. The 28-story, 276-unit Hamilton, located at 555 Northeast 34th Street, will be listed for sale this quarter, as revealed in Aimco’s filings to the Securities and Exchange Commission.

Following the listing of a 4.3-acre waterfront site in Miami’s Brickell area in March, Aimco’s plan to sell the Hamilton is part of its strategic initiatives. The Brickell assemblage includes the Brickell Bay Office Tower and the adjacent Yacht Club Apartments, with a combined asking price of $650 million. Aimco aims to close on the sale of both properties by year-end if pricing and terms are acceptable.

The Hamilton, completed in 1984 by Carnival Cruise Line founder Ted Arison, underwent a significant renovation after Aimco purchased it in 2020 for $89.6 million. Despite facing challenges from longtime tenants over lease terminations in 2021, Aimco successfully completed the redevelopment project last year and leased up the tower at rates exceeding underwritten rents.

In addition to the Hamilton and Brickell properties, Aimco may consider offloading other assets in South Florida and Aurora, Colorado, according to its first-quarter earnings release. Aimco’s strategic capital allocation strategy involves maximizing value-add and risk-adjusted returns by potentially monetizing planned projects before construction begins.

Aimco’s diverse portfolio includes plans for a waterfront rental tower in Edgewater and a mixed-use project in Fort Lauderdale’s Flagler Village. The REIT also holds a minority ownership stake in a megaproject development site at 3333 Biscayne Boulevard in Edgewater, which might also be on the market.

As Aimco moves forward with its sales strategy, it emphasizes prudent allocation of net proceeds with a preference for returning capital to stockholders, as stated in its SEC filings.

Source: Lidia Dinkova from therealdeal.com

Rise of Short-Term Rental-Friendly Condos in Miami Sparks Concerns Amidst Housing Market Dynamics

Rise of Short-Term Rental-Friendly Condos in Miami Sparks Concerns Amidst Housing Market Dynamics

The burgeoning trend of short-term rental-friendly condominiums in Miami is reshaping the city’s housing landscape, prompting discussions about its implications for both buyers and developers. Amidst a backdrop of rising home prices and evolving market dynamics, stakeholders are navigating the challenges posed by this shift in housing preferences.

Key Points:

Dominance of Short-Term Rental Projects: A recent report by ISG highlights that over half of Miami’s upcoming condo developments are tailored to accommodate short-term rentals, reflecting developer responsiveness to robust buyer demand in this segment. The allure of steady sales and favorable financing conditions incentivizes developers to embrace this trend.
Impact on Traditional Condos: The proliferation of short-term rental-friendly condos has implications for the availability and affordability of traditional condominiums. While these properties offer a diverse range of price points, the majority of existing resale inventory comprises older units, presenting financing and maintenance challenges.
Concerns Raised by Industry Experts: Craig Studnicky, CEO of ISG World, voices concerns about the sustainability and appreciation potential of short-term rental projects. He advocates for greater emphasis on traditional condominium development to address market needs effectively.
Price Disparities: The pricing dynamics between short-term rental condos and traditional units further complicate the housing landscape. Despite calls for more traditional developments, luxury projects like the Aston Martin Residences underscore the allure of high-end offerings, raising questions about housing affordability.
Market Response: The Miami housing market’s trajectory prompts reflections on the type of housing being built and its broader societal implications. While policymakers commend housing developments, there is growing awareness of the need for a diverse range of housing options to address affordability concerns.
Industry Events: Against the backdrop of housing market shifts, events like the Formula One Miami Grand Prix serve as platforms for industry stakeholders to capitalize on sales opportunities and engage with prospective buyers.

The evolving dynamics in Miami’s housing market underscore the need for a balanced approach to development that considers both short-term rental-friendly condos and traditional housing options. As stakeholders navigate these changes, attention to affordability and market sustainability remains paramount.

Source:
Katherine Kallergis from therealdeal.com