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There were many frightening months in the South Florida real estate sector in 2020 amid the Covid-19 pandemic, but experts expect the market to bounce back.
Just how quickly that recovery occurs depends on the type of real estate.
Single-family homes and industrial properties are already thriving. Office and retail space have a cloudy outlook, depending on how much the trends of remote work and e-commerce, respectively, impact business. The fate of hotels depends on the type of visitor they serve, and how quickly they’re likely to resume traveling.
Those were some of the takeaways from the Business Journal’s seventh annual Market Review panel, held virtually and broadcast online Dec. 15
Berkowitz Pollack Brant Advisors + CPAs and First Horizon Bank sponsored the discussion, which was moderated by Senior Reporter Brian Bandell.
Some of South Florida’s top players in the areas of retail, industrial, office and residential real estate recently gathered for the Business Journal’s seventh annual Market Review panel, a virtual affair where the experts reviewed some of the current – and future – trends impacting the tri-county region.
The spirited conversation highlighted how the Covid-19 pandemic is fueling certain real estate sectors while hurting others, and what the region’s top industry could experience in 2021.
MEET THE PANEL:
Art Lieberman, Director of tax services, Berkowitz Pollack Brant Advisors + CPAs
Neil E. Merin, SIOR, CCIM, Chairman, NAI/Merin Hunter Codman
Dev Motwani, President and CEO, Merrimac Ventures
Peggy Olin, CEO, OneWorld Properties
Stephanie Rodriguez, Senior VP, Florida region, Duke Realty
Andrew Zidar, VP of development and acquisition, RK Centers
Neil Merin, NAI/Merin Hunter Codman: “The brightest outlook is single-family housing. Housing sales right now are running 125% ahead of the same time last year.”
Peggy Olin, OneWorld Properties: “Single-family homes. Everyone had the dream of being in South Florida and this [Covid-19] has really accelerated that decision. The level of prices we are seeing trading on the single-family home side and some of the high-end condos, as well, are amazing to see, and I think we will continue to see it.”
Stephanie Rodriguez, Duke Realty: “On the industrial side, institutional developers put a pause on spec development [in the first quarter]. But there was a shift in our business and an acceleration in demand, and we are pulling off that band-aid and going full throttle.”
Dev Motwani, Merrimac Ventures: “With Elliot [Management], and Blackstone and Goldman [Sachs] announcing moves here, the rest will follow because they realize this is a great place to do business. That will benefit the residential market. That will benefit the office market. That’s going to benefit retail, and certainly industrial.”
Art Lieberman, Berkowitz Pollack Brant Advisors + CPAs: “You are seeing a lot of opportunity zone projects starting to come online. Leasing to businesses looking for opportunity zone tax benefits will start to trend.”
Neil Merin, NAI/Merin Hunter Codman: “Hospitality and retail. There will be a permanent impairment to hospitality in the business travel sector. Retail is a reimagining.”
Andrew Zidar, RK Centers: “It’s survival of the fittest on the retail side. There will continue to be fallout over the next year or two. There will be names in retail we have known for a long time that cease to exist.”
Dev Motwani, Merrimac Ventures: “We’ve always been a great hospitality and cruise market, and those markets are going to take a little longer to rebound in 2021 as people get comfortable traveling again.”
— Two of NAI/Merin Hunter Codman’s commercial real estate experts discuss what it takes to close transactions during the COVID-19 pandemic. —
West Palm Beach, Fla. – NAI/Merin Hunter Codman, Palm Beach County’s leading commercial real estate firm, acknowledges that commercial real estate transaction activity has slowed throughout the first six months of the COVID-19 pandemic but the firm notes that it has not been locked down entirely. Two of the firm’s seasoned veteran brokers, retail expert Bruce Corn and office market specialist Adam Starr, have successfully completed nearly $10,000,000 in lease and sale transactions while most of South Florida’s shelter-in-place mandates remain in place. The secret to their success has been what they have always done… servicing their long-time clients with updated market intelligence and creative deal making options.
Long-time office veteran Adam Starr and retail expert Bruce Corn represent two different commercial real estate market sectors, but they have two things in common – expertise in navigating positive and negative market cycles, as well as long-term, trusted client relationships.
Local office market expert, Adam Starr, who joined NAI/Merin Hunter Codman in January 2020, just six weeks prior to the pandemic shutdown, has facilitated transactions in excess of $5.4 million on behalf of his clients, completing lease transactions in excess of $4.5 million and one building sale in Jacksonville, on behalf of a long-time local client, for $910,000, completed just last week.
Bruce Corn, who has led NAI/Merin Hunter Codman’s retail services for nearly 30 years, has completed both sales and lease transactions totaling over $5.5 million on behalf of his clients.
It’s 2019 and experience is everything. The focus on experience has been steadily growing, and it’s become a full-blown obsession in nearly every major industry. CRE is no stranger to the concept of created experiences, and some sectors are totally dominating the game.
Let’s look at how these 4 rockstar CRE industries are utilizing created experiences to stay current and attract business.
By: Paul Owers, CoStar
After opening almost two decades ago near downtown West Palm Beach, Florida, the largest real estate development in the city’s history has a new name and focus, part of an evolution older centers nationwide are undertaking to appeal to millennials who prefer to shop online.
CityPlace, at 575 S. Rosemary Ave. , now is known as Rosemary Square, and The Related Cos. of New York says it is spending $550 million in the next five years to rebrand the aging outdoor center as an urban village to make it more of a destination that is different from other developments. West Palm Beach sits just across the Intracoastal Waterway from President Donald Trump’s Mar-a-Lago resort and other palatial properties in Palm Beach.
Similar retail transformations are happening at centers in and near Miami and across the United States as e-commerce gains more traction in the era of Amazon.
As Macy’s, Sears and other traditional retail heavyweights close stores, mall landlords are replacing them with innovative concepts and tenants that offer experiences to customers. Some owners are reconfiguring the spaces, adding apartments and even grocery stores , as a way to keep once-stale properties relevant.
“Not only do they have to be innovative and creative, but once the innovation becomes public, the shelf life is obviously shorter because everybody duplicates it,” said Michael Lagazo, an independent retail broker in San Diego.
“Shopping doesn’t hold our fascination as it did in the ‘70s, ‘80s and ‘90s,” added Neil Merin, a longtime South Florida broker and chairman of Merin Hunter Codman in West Palm Beach. “People want unique experiences.”
While the new name may be hard to get used to, CityPlace’s repositioning has merit, said Robert Granda, vice president of investments for the Marcus & Millichap brokerage in Fort Lauderdale, Florida.
“They had to do something,” Granda said. “CityPlace had a negative correlation. It was dying a very slow death.”
At first, the $375 million CityPlace was an image boost for West Palm Beach. The development helped the city attract locals who left Palm Beach County to drive south to bars and restaurants on trendy Las Olas Boulevard in Fort Lauderdale or to the swanky nightclubs on Miami Beach.
But CityPlace eventually grew stagnant, losing patrons to nearby downtown areas, including Atlantic Avenue 20 miles south in Delray Beach, Granda said.
Related Cos.’ investment in Rosemary Square includes adding a hotel and a 300,000-square-foot office tower while also turning a former Macy’s department store into a 21-story mixed-use building featuring residences and office space.
NAI/Merin Hunter Codman tapped to lease the retail development at Beeline Commons.
West Palm Beach, Fla. – NAI/Merin Hunter Codman, Palm Beach County’s leading commercial real estate firm, announces the retail leasing assignment of Palm Beach Park of Common’s Beeline Commons, 15519 Beeline Highway, 15279, 15319, and 15320 Commercial Circle in Jupiter. NAI/Merin Hunter Codman has partnered with Palm Beach Investment Property LLC to bring two 2,200-square foot quick service restaurants and a 5,600-square foot gas station/convenience store to the 9.54-acre Beeline Commons development.
All three sites will be located at the entrance of Palm Beach Park of Commerce to service the needs of the 70 existing businesses and 4,800 current employees. Additional area development plans include Kelly Slater’s Surf Ranch Florida surf park, TPA Group’s latest warehouse, a four-story medical office building and a 75,000-square foot, 120-room hotel. Pratt & Whitney and a major aviation complex also anchor the business park.
“The Beeline Highway area and Palm Beach Park of Commerce have become a destination for industrial users. With workforce growth
As the retail industry continues to evolve, it’s important for retailers to continue to offer more than just a product. Consumers are looking for true experiences when they go shopping and having this level of engagement can set your retail space apart from competitors.
Here are five steps to designing retail space with experiences in mind whether you are a seasoned retailer looking to revamp your space or a new retailer entering the market.
1. Associates Should Transition from Salesperson to Expert
Retailers who want to stay competitive need to ensure that they are training their employees to become more than a salesperson and transition into an expert guide to the service or product. You need to have a retail space that is designed to accommodate your employees and help them relate better to shoppers. They need to relate to consumers in a memorable way and blur the lines between employee and customer.
2. Offer a Hands-On Experience
Make the retail space truly interactive by allowing your consumers and shoppers to use the product in the store. Try to determine how best to showcase your product in unique and different ways that offer a true experience. This goes along with having associates who are true experts on the product and can offer guidance when consumers are testing it out. If a consumer can truly experience the product before buying it, they are less likely to return it, which can help boost sales.
3. Bring Your Website In-Store
Enhance the brick-and-mortar experience by letting shoppers browse your online store while at your physical location. This can be a great value-add experience and can help drive traffic to your physical stores. This can be a great tool if you have multiple store locations or warehouses and don’t carry the same inventory in every store. Allowing customers to browse your e-commerce offerings in-store shows them products that you may not have on site. If they see something they’d like to purchase, one of your associates can place the order for them and ship it right to their doorstep.
4. Change the Checkout Experience
You would be surprised at how many people choose not to purchase an item based on how long the checkout line is. Research from Irisys shows that Americans will abandon a checkout line and leave a store after eight minutes of waiting. This means you need more than just traditional checkout lines. Apple has adopted the option to checkout via a mobile device where associates can go to the consumer when they are ready to check out.
5. Offer Immersive Experiences
If you want to really make a long-lasting impression on your customers, create a retail environment that grabs their full attention. Retailers are beginning to create an experience by using technology like Virtual Reality. IKEA even opened a concept called The Dining Club, which is a temporary pop-up store that allows guests an opportunity to run their own restaurant built with IKEA products. This offers an experience and brings brand and product awareness in a subtle way.
About NAI/Merin Hunter Codman
Through our corporate services group, NAI/Merin Hunter Codman provides value-added tenant representation and corporate services for corporations with local, national or worldwide real estate needs. The firm serves as a single point of contact, whether for one property or hundreds of properties or leases. We assist in evaluating opportunities, optimizing existing portfolios, planning new facilities, site selection, and managing and leasing corporate facilities, aided by award-winning technology that allows the firm to monitor and flag every step electronically, tailored specifically to client needs. Electronic monitoring is available for client review from anywhere in the world and can track everything from the real-time status of leases up for renewal and milestones in capital improvements to the progress of planned developments.
– Tenant/Buyer representation
– Demographic, market data & feasibility analysis
– Relocation studies
– Property, facilities and asset management
– Due diligence
– Investment acquisition/sales
– Development/redevelopment analysis
– Structured lease finance
NAI/Merin Hunter Codman’s history of prestigious clients includes BP Amoco, Wackenhut, Nextel, Walgreens, Spring, Amdahl, Oasis Outsourcing, GTECH Corp., Jennifer Convertibles, Daleen Technologies, Christofle, Christian Dior, Foster Wheeler Environmental Corp., Lydian Private Bank, and many others.
As a landlord, you’re always looking for ways to give a boost to the bottom line. With technology a huge part of that bottom line these days, it only makes sense that you’re going to look to it not only to increase revenue but to improve your tenants’ experience as well.
So what are the ways in which you can do this? Here are a few that we’ve collected:
● Use machine learning and artificial intelligence for optimal pricing strategies. With many new companies emerging with the exact intent of using data analytics and machine learning to predict rent-related factors, you won’t have to do all the heavy lifting yourself. These companies include Enodo as well as HouseCanary – but you’ll be able to find many competitors out there as well.
● Include high-speed internet in the rent, which in turn increases the rent you’ll be able to charge. Starry Internet is a great example of in-house internet that you can install, giving tenants quality internet connection and yourself a reason to increase your rent roll.
Article by Jeff Ostrowski – Palm Beach Post Staff Writer
Entrepreneur Hannah Wickins scoured Palm Beach County for space suitable for the indoor pet park that she calls “Disney World for dogs.” She settled on the long-empty Home Depot Expo at Woolbright Road and Interstate 95 in Boynton Beach. Wickins signed a bargain lease for 20,000 square feet for her Dog Activity World Group.
“It was a very desolated plaza,” Wickins said. “But the location had potential. I knew it was only a matter of time before that plaza turns around.”
Indeed. The former Home Depot Expo space has sat empty for nearly a decade. But in a recent flurry of activity, Wickins leased the 20,000 square feet at the south end of the property, and Illinois-based retailer Camping World this spring bought the other 88,000 square feet for $8.25 million.