Florida Market Overview – Webinar & Summary

Click here to view the original article posted by Juniper Square.

Juniper Square’s Strategic Account Directors, Carrie Frugé and Jennifer Sutherland, recently spoke to three leading commercial real estate investors in Florida: Matt Adler, Founder and Managing Principal at Adler Partners; Daryl Shevin, CFO and Principal at 13th Floor Investments; and Neil Merin, Chairman at NAI/Merin Hunter Codman.

Proceeding with caution in uncertain times

Although the panel agreed that the Florida market has a bright future despite unknowns, they were also aware of the current realities. 

Merin stated, “The buyers and 90% of the capital that’s out there are looking to see how cheap they can buy things. And that’s freaking sellers out. So sellers aren’t putting properties on the market.” 

Buyers feel this is a huge bargain moment. “The way I see it, sellers think it’s January and buyers think it’s July,” said Shevin. 

Getting through the current market environment

Merin said the “new normal” requires viewing tenant evaluations through a different lens. “Unless your tenant’s in the PPE supply business, they may not be your tenant next week. Underwriting is going to be a little different now, during this pandemic period. As we consider properties, we’re not just going to look at their financial statement. We want to understand—is this a business that holds up? In retail, six months ago, we used to look for Amazon-proof properties. Now we have to look for COVID-proof tenants.”

Another important tactic mentioned for getting through the downturn is frequent, detailed communication with investors to keep them informed and gauge their needs.

For Merin and his team, technology enables this. “Our primary tool of communication with our investors is Juniper Square. We bring everything into the portal. This allows us to pay monthly to our investors, and report monthly along with the return.”

Being proactive is the key, according to Adler. “You don’t want to be an event communicator. Regularly reporting makes you focused on being very transparent on what the facts are, and not just on waiting for something to happen. That’s a very dangerous game, if you’re waiting for that lease to be signed or that deal to close.” 

Looking forward to what lies ahead 

As America continues adjusting to life and business during the pandemic, Merin, Adler, and Shevin are rethinking how they approach building management. In addition to protocols such as social distancing, masks, and having ample supplies of hand sanitizer available, Merin cautioned to keep things in perspective. 

“At some point, the pandemic will become a distant memory and we won’t have the same fears we do now. In the meantime, you have to observe the fear of the people who work for you, and the people you’re serving as your tenants. You need to be responsive.”

Shevin offered examples of how his business is shifting its residential staging model. “We converted one of our model homes so that the den had a home office. It’s very easy to tell someone, ‘You can make that area a home office.’ But when they walk in and they see the home office, and they see it all set up, it tells a different story.”

Many people love working from home, which is driving relocation from cities like New York to Florida. Merin expects this to continue as workers escape long and crowded commutes, high costs of living, and cold weather

Merin also predicted that interest rates will continue to stay low, it’ll be easier to borrow money, and the trillions of dollars the government has pumped into the industry will ensure liquidity for the foreseeable future.

As Adler stated, “In 2008 real estate and banks were the catalyst of the financial crisis. This time, banks are part of the solution.”

Click here to watch the full conversation

Brokerage Events Market Reports

Experts: West Palm Beach has Class-A Office Space Glut as New Towers Start to Rise

The following article was originally published in The Palm Beach Post by Alexandra Clough. View Article | View PDF

Photo by Lannis Waters / The Palm Beach Post

Real estate brokers are growing concerned that top tier office buildings have too much shadow sublease space.

Even as another project is up for consideration, West Palm Beach’s downtown office market is loaded with empty space, and there is little demand from tenants outside the area wanting to lease large offices, real estate professionals say.

Interviews with real estate developers and brokers indicate that the city’s Class A office buildings, which typically attract the top tenants, have plentiful space available directly from the buildings, or from office tenants that are trying to sublease their space.

General Market Reports News Articles

PRESS RELEASE: ULI West Palm Beach Development and Investment Forum Showcases Extraordinary Citywide Growth

WEST PALM BEACH, Fla. (May 10, 2019) –   A collection of some of Florida’s leading commercial and residential real estate developers, architects, and urban planning experts gathered today to speak to a crowd of almost 300 about real estate trends, opportunities and related issues at the Urban Land Institute (ULI) West Palm Beach Development and Investment Forum at the Hilton West Palm Beach.

Chairman Neil Merin, of NAI/Merin Hunter Codman, kicked off the three-hour program by itemizing the highlights of more than $3 billion worth of new investment in West Palm Beach either underway or planned.  This includes 2,336 hotel rooms, 3,520 residential units, 1,310,000 sq. ft. of new Class A office space and Hospital for Special Surgery’s first expansion outside its home base in New York. These investments are “game-changers for the city,” according to Raphael Clemente, executive director of the West Palm Beach Downtown Development Authority, a co-sponsor of the event with ULI. “The entire city is flourishing, and downtown development is the most intense it’s been since the days of Henry Flagler. The big difference is that today, our planners are steering the kind of growth that advances the quality of life for all.”

“All of the new Class A office space will help stabilize rates and allow us to fulfill the demand from out-of-market companies looking to locate here,” Merin said. The new residential units and major commercial projects have contributed to a recent increase in the city’s tax base of 13.5 percent, he added, a number that is expected to keep rising.  He also cited the extensive recent upgrades to some of the city’s cultural institutions bringing them to world-class levels, especially the Norton Museum of Art and the Kravis Center for the Performing Arts. “Investment in arts and culture adds real value to the continued viability of the real estate market. There is a direct correlation.” (Click here to view a slideshow of his presentation.)

Events Market Reports News Articles Press Releases