NEWS PICK-UP: Northbridge Centre Trades Hands for $98 Million

Please enjoy excerpts below from the original article by Alexandra Clough, Business Writer at the Palm Beach Post, featuring insights from Neil Merin. View PDF | View Article Link

The Northbridge Centre office tower last week traded hands for $98 million, as investors continue to pour money into West Palm Beach property. The 21-story office tower at 515 N. Flagler Drive sold to 515 N. Flagler Drive Owner LLC, a partnership of C-III Capital Partners and Vanderbilt Office Properties, according to sources. The tower’s prior sale was in 2016, when it sold for $68 million.

Photo credit: ThePublishedReporter.com

The Northbridge sale took place after its recent owners, Connecticut-based Greenfield Partners and Crocker Partners of Boca Raton, spent three years and an estimated $15 million upgrading the office complex.

The black-glass office tower, nicknamed the Darth Vader building, underwent a renovation that included upgrades to its lobby and common areas and the construction of a conference facility. Some space was built out for prospective tenants, too.

The 294,000-square-foot Northbridge leased up with law firms and hedge funds but reportedly lost out on a big tenant, WeWork, the trendy co-working space. Word is WeWork took a hard look at Northbridge but decided not to lease space in West Palm Beach. Instead, the co-working space leased four floors in a new office tower in Miami.

As it stands, Northbridge still has plenty of vacant space, at a time when two new office complexes, Rosemary 360 and One West Palm, are being built.

Peter Reed, Managing Partner of Commercial Florida Realty Services, which handled Northbridge’s leasing, said new tenants such as Evercore Wealth Management and Atlantic Street Capital bolstered the county’s efforts to brand downtown West Palm Beach the “Flagler Financial District.” Law firms such as Fisher Potter Hodas also took space in the tower, which Reed, a golf aficionado, said was a “chip shot” away from the courthouse.

Nevertheless, Neil Merin, chairman of NAI/Merin Hunter Codman in West Palm Beach, said the office tower still has about 54,000 square feet of vacant space. Merin said two full floors remain vacant, meaning that tenants wanting to be on the water still have good choices for space.

Brokers say there’s already plenty of office space available in downtown West Palm Beach right now. In fact, Merin recently made a presentation before an Urban Land Institute conference in West Palm Beach on the topic. In his speech, he noted downtown’s 17 percent vacancy rate, featuring about 285,000 square feet of available space.

360 Rosemary Square, a 297,000 SF Class-A office development coming to West Palm Beach. Photo Credit: www.rosemarysquarewpb.com

Brokers characterized the West Palm Beach office market as a “move around market,” with new office buildings usually poaching tenants from existing buildings. Few large new office users come to the market. The Comvest deal is a perfect example of this trend, they said.

This fact contradicts statements by developers, business and government leaders who maintain there is an immediate and desperate need for more Class A space downtown.

Merin said in the short term, the supply of office space might swell to more than 786,000 square feet with the addition of two more office complexes, keeping office rents in check.

In the long run, however, Merin expects downtown West Palm Beach’s office space will fill up as more financial and business firms move to Florida from high-tax states in the Northeast.

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NEWS PICK-UP: West Palm Beach development aims higher

Please enjoy the following article Real Estate Journal: West Palm Beach development aims higher by Brian Bandell, Senior Reporter, South Florida Business Journal, featuring insights from Neil Merin. Click here to view the PDF article.

JOCK FISTICK/SOUTH FLORIDA BUSINESS JOURNAL

There’s a building boom in West Palm Beach, as more multifamily, hotel and office projects are built across the water from the billionaire playground of Palm Beach.

It’s easy to see why.

As many Florida municipalities aim to lure residents looking to relocate from higher-tax states, recent U.S. Census Bureau data shows that, compared with Miami-Dade and Broward counties, Palm Beach County has excelled at drawing residents from elsewhere in the U.S.

Experts credit its attractive housing values, lifestyle and growing accessibility to Fort Lauderdale and Miami for that uptick. It’s a combination that’s made West Palm Beach one of its fastest-growing cities.

West Palm Beach has better housing values compared to most of South Florida – without a lot of congestion, said Raphael Clemente, executive director of the West Palm Beach Downtown Development Authority. Expansion projects at its cultural venues, including the Norton Museum of Art and the Kravis Center for the Performing Arts, have made the city more of a leisure destination.

Also, West Palm Beach is the northernmost stop – so far – of the Virgin Trains USA passenger rail that connects with Fort Lauderdale and Miami. So people can live in West Palm Beach at a lower cost, but still have easy access to the entertainment destinations of Miami and Fort Lauderdale – and, eventually, Orlando.

The city is also revamping Clematis Street, its dining and entertainment district right near the train station, which could draw more Miami and Fort Lauderdale residents north.

“West Palm Beach has lagged Miami in terms of development and is starting to catch up a bit,” said Gopal Rajegowda, senior VP at the Related Cos., owner of Rosemary Square in the city. “While Miami might be overbuilt in some categories, West Palm Beach has a huge runway for more buildings to happen downtown.”

It’s been over a decade since a major Class A office building was delivered in downtown West Palm Beach, but two are now under construction, with a combined 502,000 square feet coming to market, according to NAI Merin Hunter Codman.

The Related Cos., led by billionaire Miami Dolphins owner Stephen M. Ross, is building an office complex at Rosemary Square, its mixed-use project formerly known as CityPlace. Billionaire Jeff Greene will include offices in his mixed-use One West Palm, slated to be the tallest building in Palm Beach County.

Many companies are looking to relocate to West Palm Beach, and the 360 Rosemary building will provide a modern building a short walk from the Virgin Trains station, Rajegowda said. Related Cos. is also completing common area improvements to Rosemary Square, and will soon break ground on an apartment tower.

Comvest Partners is the first tenant to sign a lease at 360 Rosemary.

Greene said the heavy preleasing activity for One West Palm probably won’t start until the building is about a year from completion.

“This is not a big preleasing town,” Greene said. “It’s smaller firms looking for 3,000 to 7,000 square feet.”

When you consider the new buildings and 285,000 square feet of vacant Class A space downtown, there’s a huge amount of office space to absorb over the next few years, said Neil Merin, chairman of NAI/Merin Hunter Codman. The two new buildings may attract tenants, but it will be at the expense of the older office buildings, he added.

“I wouldn’t want to buy an office building in downtown West Palm Beach now, thinking I can raise rents,” Merin said. “Because they are building on cash, they can undercut the market on rent.”

The Bristol Palm Beach has raised the bar for West Palm Beach condo prices, and inspired more developers to target the city.

The 69-unit Bristol smashed the city’s price record in March by selling a full-floor penthouse for $42.56 million. The prices per square foot there are comparable to Miami Beach.

For years, Palm Beach owned the luxury home market, and wealthy buyers wouldn’t consider West Palm Beach – but that has changed, said Taylor Collins, managing partner of West Palm Beach-based condo builder Two Roads Development. The Bristol proved wealthy buyers will pay premium prices for high-end projects downtown, he said.

The island of Palm Beach has virtually no land left for condo development, so most of the existing condo buildings are decades old, Collins said.

“If you want a new high-rise condo, the only place to get it is West Palm Beach,” Collins said.

Two Roads Development plans to launch sales this fall for the Forte, a 48-unit condominium along the Intracoastal Waterway. Collins said units at Forte will range from the high $3 millions to $8 million. The buyers are mostly Palm Beach homeowners seeking to downsize from their mansions and wealthy people relocating from the Northeast, he said.

Great Gulf has already started construction on the 84-unit La Clara, also along the water.

In addition to the condos, there are 1,069 apartments completed or under construction downtown, according to NAI/Merin Hunter Codman.

West Palm Beach has three hotels with a combined 602 rooms under construction downtown – the Canopy Hotel, the Ben, and a hotel in One West Palm.

“West Palm Beach is offering people an alternative for a staycation,” Merin said. “It’s seen as a cool coastal downtown area with activities on the water.”

Greene, who owns a Ramada Inn in the city, is concerned hotels are overbuilt there so new hotels will take business from older hotels. However, Greene’s confident the hotel he’s building at One West Palm will do well as the only Five Star hotel in the city, he said.

Business at the Related Cos.-owned Hilton Hotel connected to the Palm Beach County Convention Center has exceeded expectations, Rajegowda said. With demand for conventions exceeding capacity for rooms, they are considering a 250-room addition to the hotel, he said.

“When the Brightline [Virgin Trains] connects to Orlando, we will tap into a significant tourist base,” Rajegowda said. “The tourist who goes to Disney will have an easy way to stop in West Palm Beach for a few days.”

General News Articles

Commerce Pointe Gold Sells for $8.5 Million

Hats off to Neil E. Merin, SIOR, CCIM and Jason L. Sundook, SIOR who represented the buyer in the $8.5 million sale of Commerce Pointe Gold, a 99% occupied, 43,433 SF office building at 1800 S Australian Avenue in West Palm Beach. The property previously sold for $4.3 million in 2011.

Commerce Pointe Gold is adjacent to I-95 and minutes from everything that downtown West Palm Beach has to offer including Brightline, Rosemary Square and the Flagler Financial District, offering an ideal location for Palm Beach County professionals.

More details, courtesy of Commercial Property Executive: View Link | View PDF

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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.)

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Dated West Palm Beach Retail Development to Become Urban Village

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.

Click Here to view full original article | Click Here to view PDF

News Articles

NEWS PICK-UPS: The Workspace at The Press

A few media organizations have picked up our Press Release on the firm’s new property management and leasing assignment of The Press, the former ±300,000 SF Palm Beach Post campus located at 2751 S Dixie Highway in West Palm Beach.

CRE-Sources: View PDF | View Article

Business Development Board of Palm Beach County: View PDF | View Article

Boca Raton Chamber: View PDF | View Article

Chamber of Commerce of the Palm Beaches: View PDF | View Article

BOMA: View PDF | View Article

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Office Buildings in a “War for Talent”

Enjoy the below excerpt from the article “Office Park Near Miami Becomes the Latest to Add Perks to Compete” by Paul Owers of CoStar.

Call it the Facebook effect. New high-tech campuses in California built by social media giant Facebook and search engine Google have spurred workplace makeovers across the nation, and building owners have taken notice. In those campuses, the key is to make the workplace a fun place to hang out, with game tables and available food, with one benefit being that workers may hang around the workplace longer. As more offices adopt the practice, others feel the need to keep up.

Pexels.com/Marc Mueller

Savvy landlords are giving their office buildings a sense of place and making them sites for “playful entertainment,” said Neil Merin, chairman of the NAI / Merin Hunter Codman brokerage in West Palm Beach, Florida. “That’s the way people prefer to work today,” Merin said.

Merin is working with the new owner of The Palm Beach Post building in West Palm Beach to turn a sterile conference room on the first floor into an inviting meeting space that could feature a coffee bar and lounge areas.

“A really hip hotel lobby – that’s exactly what I’m shooting for,” he said.

View Article Link | View PDF

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EVENT: Heroes for Education 5K

NAI/Merin Hunter Codman is happy to be a sponsor of the fifth annual Heroes for Education 5k Run/Walk that took place on November 3rd at Bryant Park in Lake Worth.

The Education Foundation of Palm Beach County is a great non-profit organization that partners with the School District of Palm Beach County to fund over $1.5 million in programs that the schools could not otherwise afford. These include providing high-risk students with Graduation Coaches, training for Financial Literacy and the establishment of the Red Apple Supply Store.

Our REAL Leaders had a great morning at the beautiful course that bordered along the Intracoastal. Enjoy some photos below and click here to see how you can be a hero for education!

 

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NAI/Merin Hunter Codman Reaches New Heights

It’s with great excitement and pride that we share a recent milestone for our company – the NAI/Merin Hunter Codman name has been placed atop the Centurion Tower building! This is a grand accomplishment for a firm who humbly resided in a partial second floor space at the building for nearly 30 years. Our recent move to the seventh floor combined with building signage is a testament to the firms stability and dedication to West Palm Beach, Palm Beach County and South Florida.

Be sure to subscribe to our mailing list and follow us on Facebook and Instagram to get more exciting company news as it happens.

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NEWS ARTICLE: The race for space in West Palm Beach

Neil was quoted in the below article, written by Mike Seemuth of The Real Deal.

Real estate executive and Miami Dolphins owner Stephen Ross scored the most recent victory in the battle of billionaires looking to build high-rise office projects in downtown West Palm Beach. Ross was on an apparent collision course with Jeff Greene, real estate investor and former candidate for governor of Florida, but it appears that New York-based Related Companies, led by Ross, has won out — for now.

In reaction to the August news that part of the downtown would be upzoned, thereby allowing Related to proceed with a 25-story office project called One Flagler, Greene shelved his One West Palm project, citing an “uncertain zoning climate.” The city-approved project was a mix of office space, hotel rooms and apartments in two 30-story buildings, designed by Miami-based Arquitectonica.

The cancellation of Greene’s project seems to have exposed limits to commercial development in the central business district of West Palm Beach, despite local efforts to recruit out-of-town employers.

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