Mixed-use developments are replacing big-box retailers

Mixed-use developments are replacing big-box retailers

By: Beatrice Silva

2 min read September 2020  — Retail real estate is influenced by the state of the economy, occupancy levels and consumer trends. This past year, digital shoppers spent an estimated $601.75 billion online, which is up 14.9% from the previous year, according to the U.S. Department of Commerce. The popularity of e-commerce has led to hundreds of retail bankruptcies and an influx of vacant retail buildings. Developers like Walsh Properties and Terra Group have come up with clever ideas to use some of these obsolete establishments in South Florida.

The BrandsMart-anchored shopping center located in Davie is just one of the potential redevelopment projects in Broward County. Adache Group Architects are attached to the project, a 1.27-million-square-foot plot of land to be transformed into a mixed-use residential and commercial development, according to the Town of Davie’s planning report. Along with boasting 735 residential units, the blueprint calls for 23,00 square feet of commercial/retail space and 21,884 square feet of amenities, such as two outdoor pools, a clubhouse and a work area. On Sept. 8, the Town of Davie approved Walsh Properties’ rezoning application for the proposed project, which is anticipated to have a positive effect on surrounding property values. 

Although large chain retailers like JCPenny and Steinmart are faltering, having the perfect ratio of residential and commercial space could be the way forward. “I think you’ll see less retail development and more of a focus on entertainment and life experiences,” Dave Dickerson, president of Midwest business operations for Miller-Valentine Group, told Dayton Business Journal. “They will be a place where consumers go, not just to shop, but to have lunch and have more of an amusement experience.” 

For David Martin, real estate developer and CEO of Terra Group, his focus is on building strong fundamentals by diversifying South Florida’s economy away from its reliance on tourism. His firm currently has 8.9 million square feet of residential, commercial and retail development throughout Broward and Miami-Dade. 

Block 55 is just one of Terra Group’s ambitious projects. In partnership with Swerdlow Group, the two firms are proposing around 402 apartments, 54 affordable senior housing units and around 350,000 square feet of retail space anchored by a Target store, according to The Real Deal. 

Miami Beach and Coconut Grove will continue to attract an immense amount of investment. We believe in the political leadership and the zoning regulations that will promote sustainable development. We are finding that there is an increasing scarcity of land so this is creating more competition for properties and land. We are trying to focus and invest in the neighborhoods we believe in as well as creating assets that are really meeting the behavioral patterns related to people’s lifestyles. We are continuing to see mixed-use as a strong bet but we are sensitive to what is happening in retail today, as well as the implications of working from home. We are trying to design our residential buildings to adapt to the changes and differentiate ours from the other products available on the market,” Martin told Invest: Miami. 

Ghost kitchens very much alive in South Florida

Ghost kitchens very much alive in South Florida

By: Beatrice Silva

2 min read August 2020  — The digital age means consumers can enjoy a restaurant experience without leaving the comfort of their own home. Even before COVID-19, people appreciated the convenience of having their food delivered. An estimated 44 million Americans use food carrier apps like UberEats and GrubHub every year, according to EMarketer. To feed the demand for more food delivery options, ghost kitchens, also known as virtual restaurants, have started to emerge. 

Ghost kitchens are similar to traditional restaurants except for the fact that they don’t technically have an official location. Cloud kitchens can be established almost anywhere that has running water and electricity. Warehouses, food trucks or other large commercial spaces are typically the most popular locations for virtual restaurants to set up shop.

Establishing a virtual eatery has become a lucrative business for not only inspiring restaurant owners but for real estate investors as well. Early this year, Simon Property Group partnered with SBE Entertainment Group to develop around 200 ghost kitchens in vacant retail spaces, according to The Wall Street Journal. Once furnished with proper kitchen equipment, spaces can be leased out to chefs and small-business owners to make their culinary dreams a reality. 

“We expect in the current pandemic we’ll see more of this repurposing; real estate operators doing anything they can to drive revenue from their existing properties. Likewise, we’re going to see a lot of new operators looking to fill the void with cheaper concepts … more delivery-friendly concepts that require less capital up front,” Michael Schaefer, global lead for food and beverage at Euromonitor International, told Restaurant Dive.

Real estate developers using large abandoned buildings offer all parties involved a chance to make money. Not having a traditional brick and mortar location saves restaurant owners thousands of dollars in rent each month. “It could literally be a third or less of what you might otherwise be paying with a traditional lease. These kitchens are not just for you; there are other people using them, so the costs are spread for the owner,” Herman R. Lipkis, a Fort Lauderdale-based attorney for Holland & Knight LLP, told RestaurantOwner.

For one ghost kitchen, having the option to save money on rent gave its owner the leg up he needed to launch a physical version of his virtual brand off of N. Federal Highway in Fort Lauderdale.

Brian Peter, a virtual restaurateur, originally owned and operated a traditional restaurant. However, low sales and even lower profit margins left him no other option but to close his doors. Fortunately for Peter he was able to pivot and shift his focus to delivery. Doing so, he was able to become profitable enough to launch his virtual brand, Wicked Cheesesteaks, Pizza and Wings, into a physical sit-down restaurant. “After trying and trying, we finally arrived … All the food is still on food-delivery apps but now we have a true brick-and-mortar,” Peter told the Sun Sentinel

Even though the pandemic is taking a heavy toll on the hospitality industry, physical restaurants don’t seem to be going anywhere anytime soon. Nevertheless, ghost kitchens and food delivery apps are the hottests trends in the food industry. As the world continues to evolve digitally so does the typical restaurant experience. “In the future, a more robust ghost kitchen market could also usher in advanced restaurant automation,” Schaefer told Restaurant Dive. “In five to 10 years, this shift could translate to full automation for the production of certain menu items, like pizza, ramen or high-end coffee, to drive speed of service and lower food production costs.” 

Brightline and Virgin sever rail ties

Brightline and Virgin sever rail ties

By: Beatrice Silva

2 min read August 2020 — Brightline is passing on Virgin Trains. On Aug. 7, the high-speed passenger train operator announced that it would not be rebranded as Virgin Trains USA and would continue its operations under Brightline LLC. The withdrawal represents a sudden and apparently astringent end to the link between Brightline and Virgin Group. 

Brightline originally announced its strategic partnership with billionaire Richard Branson, founder of the Virgin Group, two years ago. Brightline quickly welcomed this new partnership and underwent a complete makeover. Virgin Trains USA was officially supposed to debut its rebranding transformation this summer. However, COVID-19 related issues looks to have stopped the deal dead in its tracks. 

Originally, the relationship seemed like a match made in transit heaven. Branson and his team have carved out a successful enterprise in the transportation and hospitality industry with a fleet of carriers ranging from airplanes to cruise ships. “It’s already a very good experience,” Branson told the South Florida Business Journal in 2019. “We just need to sprinkle a bit of magic dust over it. We need to make sure the two hours, 45 minutes to Orlando is magical, and we are used to doing that in the UK, where we have longer train journeys.” 

Unfortunately, that seamless experience of having guests fly in on Virgin Atlantic then transported on a Virgin Train to their Virgin Voyage will have to be postponed. Branson’s lucrative business, like many others in the hospitality industry, came to a halt as a result of the pandemic. To make matters worse, Brighline’s 2019 passenger count was less than half what it projected and its revenue was less than a fifth of its expectations, according to The Palm Beach Post. The future of Virgin Atlantic Airways remains uncertain after the airline filed Chapter 15 bankruptcy earlier this week. 

Brightline, however, seems to be moving along. Its current routes consist of Miami, Fort Lauderdale and West Palm Beach. Progress also continues to be made on its fourth station in Florida at the Orlando International Airport. Operations are scheduled to begin sometime in 2022. There has also been talk of building additional stations in Aventura and Boca Raton. 

The Miami-Dade County Commission was negotiating terms regarding proposed stations with Virgin Trains USA but it’s unclear whether the county will agree to a new county commuter service. “We really need to think about what is the future of transit and how people will get around this town…” Mayor Carlos Gimenez told The Real Deal in June. “We may have as many of 20 to 30 percent of people working out of their homes.” How Brightline’s withdrawal from its Virgin deal will impact the commission’s decision remains unknown.

Although the future of the Brightline expansion may be up in the air, if more stations do pop up it could leave a positive impact on the local economy. Brightline’s expansion could bring over 5,000 jobs on average per year after rail-line construction is complete through 2021 and have a $6.4 billion direct economic impact to Florida’s economy over the next eight years, according to Washington Economics Group, Inc. 

How the hospitality industry is staying afloat during the flash recession

How the hospitality industry is staying afloat during the flash recession

By: Beatrice Silva 

2 min read FORT LAUDERDALE — The hospitality sector is a vital factor in South Florida’s economy. Around 1.3 million Floridians have jobs related to the tourism industry, which contributes $85.9 billion of the state’s GDP, according to A Banner Year for Florida Tourism Performance. On April 1, Gov. Ron DeSantis issued a statewide stay at home order that forced nonessential businesses like restaurants, hotels and shopping centers to close their doors. Within days of the shut down, an estimated 1.2 million people lost their jobs and more than 1.5 million unemployment claims were filed, according to the Florida Department of Economic Opportunity.

 Although Broward County is a few weeks into phase one of reopening, uncertainty still looms. However, it has become apparent that the hospitality industry is doing everything in its power to stay afloat during the flash recession. The hospitality industry has endured a difficult four months and although it is making strides, no one knows how long it’s going to take for it to make a full recovery. 

Many industry leaders speculate that normal life won’t resume until a vaccine for the virus is discovered and easily accessible to the masses. The pharmaceutical industry indicates that a cure for COVID-19 could take years. In the meantime, businesses are having to come up with innovative ways to stay profitable. Unlike other sectors of the economy like technology and banking, the hospitality industry relies heavily on face-to-face interaction and physical guest services. “The hospitality industry will have to learn to function in a way not seen before. As the relationship between each brand and consumer starts by building trust, regaining customer confidence will be the first step in overcoming the crisis. Strict sanitary and hygiene measures will need to be applied, with new practices put in place to monitor and control the environment in which the business takes place,” Hassan Djeebet, food and beverage manager for Les Roches Marbella told hospitalitynet. 

Being transparent with guests will become even more important during the transition into a post-pandemic world. Managers will have to make their workers feel just as safe as their customers to ensure an overall positive guest experience. Although Broward County is just a few weeks into its phase one reopening plan, restaurant owners have noticed more and more people venturing out to indulge in their favorite food and drinks. “Eating outside is less risky than eating inside, if everybody is six feet apart and the wait staff are all wearing masks. That keeps the risk as low as it can be,” Dr. William Schaffner, a professor of preventive medicine and infectious diseases at Vanderbilt University School of Medicine in Nashville, told CNN Travel. 

Some argue one brightside to the pandemic is the emergence of new innovations in the hospitality industry. Many restaurants have adopted new technologies to ensure the customer experience is as hands free as possible. For example, instead of having a physical menu, restaurants are offering digital menus that can be accessed by scanning a QR code. Other innovations include artificial intelligence systems like FAQ bots to answer customer questions, virtual tours, and smart amenities like voice-controlled rooms and facial recognition. It’s safe to say that the pandemic has pushed businesses out of their comfort zones. However, as a result, easier and more efficient ways of doing things have surfaced. Some industry leaders even go so far as to say that the pandemic has propelled them at least five years into the future. 

 

 

Fort Lauderdale company develops another layer of COVID-19 protection

Fort Lauderdale company develops another layer of COVID-19 protection

By: Beatrice Silva 

2 min read FORT LAUDERDALE — It has been nearly five months since COVID-19 became a pandemic and initiated its assault on the world. On March 13, the United States declared a national state of emergency. Within weeks, local economies were in decline. Millions of people quarantined themselves in the safety of their homes. As the months went on, county officials began to loosen restrictions on non-essential businesses and people slowly started to emerge from the lockdown. What materialized on the other side was a completely new way of living. Wearing a mask inside establishments, waving hello instead of greeting people with a handshake and keeping a safe distance have become the new normal. With that being said, more and more people are looking for additional ways to protect themselves from the novel coronavirus. Veloce BioPharma LLC, a Fort Lauderdale-based company, has raised $2.3 million in equity financing to help scale up manufacturing of its COVID-19 nasal antiseptic and mouth rinse, according to the Philadelphia Business Journal. 

 

Veloce paid homage to its roots by naming its two over-the-counter products after the company it originated from, Halodine. “This is the first iodine-based antiseptic that has ever been shown to have activity against the virus that causes Covid-19,” Dr. Jesse Pelletie, CEO of Veloce and Halodine, said in a news release. The antiseptic contains a polymer-enriched povidone-iodine, which is non-toxic to sensitive areas of the body like the eyes, mouth and skin. 

The spread of COVID-19 most commonly occurs through respiratory droplets produced when an infected person coughs, sneezes or talks. Those viral aerosols and droplets can remain infectious for up to three hours. Although face coverings are suggested by the CDC to help prevent the spread of the virus, all masks are not created equal. The N95 has been proven to effectively prevent viral spread. However, even the most prestigious hospitals are having trouble obtaining them. A  cloth mask, most commonly worn by the average person, allows air in around the sides. “Masks aren’t enough,” said Samuel Barone, Chief Medical Officer of Veloce BioPharma to the Philadelphia Business Journal. “The world is going to be a different place. We are seeing a changing recognition and a new normal with infection control. There’s never been anything before that could bring economies to a screeching halt like COVID-19 has.”

Even though thousands of companies have adjusted their business to allow their employees to work from home there are still obstacles to overcome. For workers who have to be physically present at their jobs, undergoing a bi-weekly COVID-19 test could become a normal activity but companies should be mindful of the type of test they ask their employees to take. A molecular test is done with a simple nasal or throat swab and it can identify if a person has been infected within three to five days. Antibody tests, on the other hand, can help identify who has already been exposed to COVID-19 to reduce the need for any future testing. 

“The good news is that we’ve been synthesizing a lot of information to come up with simpler, more digestible rules, approaches and strategies that we can use to take the important steps to help people get back to their workplaces… We’re continuing to learn more about these tests and how to interpret them. We’re also gaining more experience with how to use these tests in work environments,” Dr. William Shrank, chief medical officer for Humana, told the South Florida Business Journal.  

 

 

Real estate development is booming in Fort Lauderdale

Real estate development is booming in Fort Lauderdale

By: Beatrice Silva 

2 min read –  Real estate development in Fort Lauderdale is getting a jolt of confidence despite the lingering impact of COVID-19. On March 24, a majority of businesses were forced to shut down after Gov. Ron DeSantis announced a statewide shelter-in-place order. However, construction companies, hospitals, grocery stores, gas stations and other essential businesses were allowed to carry on with work as usual.

 

Florida is just one of several states that allowed construction to continue despite nationwide shutdowns. Similar to many other regions in the area, development is a vital part of Fort Lauderdale’s economy. The construction industry is projected to have the largest industry increase in employment from 2014 to 2024, according to the U.S. Bureau of Labor Statistics. 

A strong signal of the confidence in the market is a recent move by Oko Group, an international real estate development firm founded by Vladislav Doronin. It is the first company to close a large deal since the beginning of COVID-19. The firm recently purchased 6.68 acres of land east of the county courthouse in Downtown Fort Lauderdale for $62.59 million. “Oko Group is excited to expand its portfolio of South Florida real estate with the acquisition of a mixed-use development site in the heart of Fort Lauderdale’s urban core,” the developer said in a statement reported by South Florida Business Journal. “The Oko Group team, led by Doronin, now looks forward to working with the city of Fort Lauderdale to finalize plans for an exceptional development that will help to further transform the Downtown district while adding significant amenities for nearby residents and businesses.”

The majority of developments in the pipeline for Fort Lauderdale will most likely be residential. Retail and office real estate have proven themselves to be the weakest sectors in the market during the pandemic. “Prior to COVID-19, South Florida’s real estate sector was very strong, propelled by the demand and low interest rates. I think the commercial office market may see a bit of a correction. So many people are working from home and I imagine that most of them are going to continue to do that the rest of the year. I think business owners are getting more comfortable allowing their employees to work remotely. So far, the industrial and residential markets have proven themselves to be the strongest sectors in the real estate industry during the pandemic. I don’t think we’ll see any correction there. Currently, at Touchstone Webb Realty Company, we are watching retail and commercial as we move forward. We think it is going to take a good year before we see this sector begin to correct. We are still purchasing industrial and flex spaces for our clients,” Susan Thomas, president of Touchstone Webb Realty Company, told Invest: Palm Beach.

As Thomas mentioned, CDC regulations like social distancing have compelled more people to want to work from home. As a result, business owners could require less office space. Fairfield Cypress Creek is just one example of this trend. The new mixed-use project is currently underway between 6500 and 6520 N. Andrews Ave. The land which was originally occupied by office buildings will now hold 295 residential units, shops and restaurants. A new downtown could be another exciting project on the horizon for Broward County. Broward is recruiting a large company to relocate to the 140 acres next to the Everglades in Sunrise. “It’s one of the last few pieces you could make a statement. We really want to market this site internationally, not just nationally,” County Manager Bertha told the Sun Sentinel. 

 

 

The Post-Pandemic City

The Post-Pandemic City

By: Abby Melone, President & CEO, Capital Analytics

It’s a truism in today’s hyper-connected world that people go where the jobs are, more so now than ever before. But what happens when your job suddenly can be done from anywhere?

 

The 19th century ushered in the first and second Industrial Revolutions that saw more and more people move to urban environments, precisely because that’s where the jobs were. In the United States, the rise of manufacturing opened a new world of employment possibilities, pushing people from the farm to the factory. It’s a push that in one way or another continued into the 20th and 21st centuries. The result is seen today in the population densities that cram big cities from coast to coast, border to border.

According to the United Nations’ World Urbanization Prospects report and the website Our World in Data, the world crossed over in 2007. That’s the fist year the number of people living in urban areas rose above the number living in rural areas (3.35 billion versus 3.33 billion). In the United States, around 82.3% of the population lives in urban areas, according to the World Bank. Growth trajectories project a steady increase in urbanization as far out as 2050. 

Today, the millennial generation is changing the character of urbanization by spearheading the live-work-play ethos. This generation prefers to skirt the traffic jams and live and play near where they work. The goal to have it all close by has given rise to the mixed-use building concept that puts everything – your living options, your entertainment choices and your shopping – all in one convenient location, which preferably, is near your workplace. 

It also means we are all living closer to each other in smaller and smaller spaces. That seemed to suit a lot of people just fine. Then the COVID-19 pandemic happened, and all of sudden, none of that seemed fine at all.

The pandemic resulted in shelter-in-place orders that forced people to live 24 hours a day in their homes while also working from their home offices, if they had one, or their kitchen tables if they didn’t. The very idea of needing to go somewhere else to do your job turned out to be not so much of a necessity after all. In just a few months, priorities appear to have shifted. Now, many of us seem to crave space, the great outdoors, and we seem to be split 50-50 on whether we want to continue working from home, wherever we choose that to be, or prefer an official office setting, mostly for the socializing.

There is little doubt that the world has changed as a result of the pandemic. Most experts are puzzling on whether that change will last and just what our cities will look like as a result. The fact is, though, that change was already in play before COVID-19 hit.

My company focuses on nine major U.S. markets like Orlando, Miami, Atlanta and Philadelphia. We talk to industry and political leaders to understand the issues their communities face to gauge the direction in which they are moving. Today, everyone is talking about the pandemic’s impact on the retail sector, for example. Yet, e-commerce was already a thing before COVID-19. In 2019, a record 9,800 stores were shuttered, according to a Bloomberg report, with 25,000 closures expected in 2020 due to the coronavirus impact, the report said, citing Coresight Research. Yes, that’s a devastating impact, but the pandemic really has only accelerated the pace of implementation. It pushed more people online immediately, but those people were likely headed there anyway.

Many of the leaders we have spoken with during the pandemic agree that retail and commercial real estate was already undergoing a slowdown as industrial space to accommodate last-mile delivery for the Amazons of the world was booming. Many expect this trend will continue.

More importantly, what the pandemic has done has caused a rethink of priorities among individuals and it is this impact that will likely shape the post-pandemic city. Living in lockdown awakened people to the “smallness” of their space, forced on them by a combination of convenience and higher and higher housing prices in big cities. The median listing price for a home in Miami-Dade, for example, was $465,050 in May compared to the average U.S. listing price of $329,950, according to the Federal Reserve Bank of St. Louis. Interestingly, population growth in Miami-Dade was already slowing as more people moved out, with escalating living costs among the factors. With the pandemic highlighting the risks of living so close together, will more people decide that farther away is not only cheaper, but safer?

Big city living will change in the post-pandemic world as social distancing forces “people places” like gyms and restaurants to accommodate lingering fears from the virus. Tens of thousands of small businesses have already closed down for good, clearly altering the very unique characteristics of cities that attracted people in the first place.

The biggest impact, however, will be on how – and where – jobs are done. Remote working is hear to stay in some form or another. Like the industrial revolutions of the 18th and 19th centuries, people will always go where the jobs are. For many, those jobs will now be done from home, which means that home can be virtually anywhere. It creates choice like never before, and this will dramatically alter the character, although not likely the course, of urbanization. That’s an important difference. 

Big cities have seen the ebbs and flows of population growth before and will likely see them again. Through it all, they have more often thrived than not. The post-pandemic city may look and feel a bit different – the way condo units are built, for example, may change to accommodate working from home, while adding elements like air filters to battle any future virus outbreak – and there may even be a greater push to the suburbs in the short term. Overall, however, continued urbanization likely will remain on the cards. If we’re lucky, there may just be a little more distance between all of us.

 

Florida’s phase 2 reopening and what it means for South Florida

Florida’s phase 2 reopening and what it means for South Florida

By: Beatrice Silva 

2 min read June 2020 On June 3, Gov. Ron DeSantis announced his plans to transition the majority of the state into the second phase of its recovery plan. However, the three southeast counties hit hardest by COVID-19 — Miami-Dade, Broward, and Palm Beach — will not be included in the reopening. 

 

 “We’ll work with the three southeast Florida counties to see how they’re developing and whether they want to move into phase 2,” DeSantis said during a news conference in Orlando on June 3. “They’re on a little bit of a different schedule.”

 

Gov. DeSantis will allow the three southeast counties to enter phase 2 under certain circumstances. The county mayors or county administrators will have to seek approval to enter phase 2 with a written request. Palm Beach County Mayor Dave Kerner and County Administrator Verdenia Baker wasted no time sending their request letter to DeSantis. 

 

“Palm Beach County is ready to go into ‘phase 2,” said Kerner at a news conference on Friday afternoon. “But we want to do it with some particular carve-outs that are necessary for the unique nature of Palm Beach County.” The county’s public officials are waiting for approval from Gov. DeSantis. 

 

As for Miami-Dade, their previous reopening date was pushed back by protests against police brutality. Miami-Dade Mayor Carlos Gimenez lifted the countywide curfew on June 8, and approved the reopening of gyms and fitness centers under Amendment 2 to Miami-Dade County Emergency Order 23-20. Although the city isn’t officially included in the initial phase 2 reopening date, Gimenez says he is working with the state on reopening locations very soon. 

 

Upon approval, restaurants may allow bar-top seating with appropriate social distancing. Bars will be able to operate at a 50 percent capacity inside and full capacity outside. Retail stores are going to be allowed to operate at full capacity and entertainment venues like movie theaters and bowling alleys will be able to welcome back guests at a 50 percent capacity. Residents who do decide to venture out will still have to follow CDC guidelines like wearing a mask, social distancing, and frequently washing their hands.

 

Although the north and south regions of Florida are on different opening schedules. State universities will have to submit their blueprints by Friday. The State University System of  Board of Governors recommends things like social distancing, disinfecting, face masks and student’s desks being as far away from one another as possible. School districts on the other hand, will be given the final say on their own social distancing protocols. It is expected that students will have a much different learning experience upon returning to the classroom. 

 

“We have a great opportunity to get back on good footing,” DeSantis said. “I know our kids have been in difficult circumstances. … Getting back to the school year is going to be really, really important to the well-being of our kids.”

 

Broward County school districts are in the process of surveying parents to gauge what they would like their child’s school to look like this coming fall. “We will have schools open. We will have teachers in schools. We will have students in schools … including hybrid models that some parents are rightfully demanding,” said Alberto Carvalho, superintendent of Miami-Dade County Public School, at Wednesday’s school board committee meeting. 

 

Within the past four months, there have been 70,971 confirmed COVID-19 cases and 2,877 related deaths in Florida, according to the Florida Health. 

 

For more information visit: 

 

https://floridahealthcovid19.gov/#latest-stats/

 

https://www.miamiherald.com/news/local/education/article243464791.html

 

https://miami.cbslocal.com/2020/06/11/governor-ron-desantis-plans-reopening-schools-fall/

 

https://www.abcactionnews.com/news/state/florida-state-universities-must-submit-fall-reopening-plans-by-friday

 

 

South Florida real estate leaders analyze opportunities in current economic cycle

South Florida real estate leaders analyze opportunities in current economic cycle

By: Felipe Rivas

Virtually every sector of the economy has been pinched, crushed, or depleted by the initial impact of conducting business during the coronavirus landscape. Months into the “new normal,” industries and businesses have had to adapt operations to cope with COVID-19 related challenges. While many businesses remain embattled by the current economic cycle, innovation and opportunity are beginning to rise from the initial shocks of the novel coronavirus. 

 

In South Florida, a region hit particularly hard by coronavirus, real estate professionals are closely monitoring the impact of COVID-19 to the market while analyzing current and future opportunities. “Simply put, the South Florida industrial real estate market is healthy, even in the midst of a global pandemic,” Miami Cushman & Wakefield Managing Partner Gian Rodriguez told Invest: Miami. When you factor in the scarcity of developable industrially-zoned land, a growing population, single-digit vacancy rates, steady air and sea cargo volumes from our ports, as well as positive lease absorption of industrial product, it’s no wonder the major institutional owners and occupiers have a large stake in our market,” he said. These factors coupled with demand for e-commerce provide opportunities for distribution, logistics and warehousing subsectors in Miami-Dade County. “With the onset of COVID-19, we’ve only seen an increase in demand for well-located distribution space, further spurred-on by stay-at-home mandates which have only bolstered online orders.  Just take a look around, there are UPS, FedEx, DHL and Amazon trucks rolling down our streets almost on an hourly basis, and each one of those come from a warehouse within our market,” Rodriguez said. 

New construction will likely experience a growth in demand as population growth continues in South Florida and residents settle into the suburbs and other communities away from the downtown areas. “While we are only in the early innings of the COVID-19 impact on real estate, we are following several trends closely. New construction may have an advantage over existing, as residents will likely equate “new” with “clean and safe,” Lesley Deutch, principal with John Burns Real Estate Consulting in Palm Beach, told Invest: Palm Beach. “We are also anticipating a trend we call ‘the Great American Move.’  For safety reasons, financial prospects, life change improvements, personal comfort, or employment, we expect a surge in household and business relocations that will provide new strategic opportunities for the real estate market,” she said. This trend will likely create opportunities for real estate developers, investors and home builders. “New construction can incorporate technology such as air purification and touchless lighting which will appeal to future residents. A stronger focus on health and wellness will translate into new housing product with better home offices or private workspaces in apartments, flexibility for multigenerational living, private outdoor space, and a preference for functionality over design appeal in the home,” she said.   

 

 

To learn more about our interviewees, visit: https://www.realestateconsulting.com/

https://www.cushmanwakefield.com/en/united-states/people/gian-rodriguez