Face Off:
The challenges of 2020 and the outlook for Fort Lauderdale’s real estate market

Face Off:
The challenges of 2020 and the outlook for Fort Lauderdale’s real estate market

2020-12-01T16:52:29+00:00December 1st, 2020|Economy, Fort Lauderdale, Real Estate & Construction|

By: Beatrice Silva

3 min read December 2020 — Despite challenges caused by the pandemic, new developments continue to emerge in Fort Lauderdale. The ever-growing population and the need for more affordable housing options has created demand for a new type of mixed-income workforce housing. Invest: Greater Fort Lauderdale spoke with Jeff Burns, founder and CEO of Affiliated Development, and Jaime Sturgis, founder and CEO of Native Realty, about their unique perspective on bringing purposeful developments to meet the needs of the local community while having a positive social and economic impact on the region. 

How has your company fared in this new landscape?

Jeff Burns: We delivered one of our projects in July 2020, during the height of the pandemic. We have another 230-unit project called the MID, located in Lake Worth Beach. It’s scheduled for completion by January 2021, several months ahead of schedule. We have done really well, both from a leasing and construction standpoint, on these two projects during the pandemic. We also have several other projects in the pipeline, such as the 309-unit The Grand, which includes mixed-income workforce housing in Downtown West Palm Beach. We assembled 18 different parcels, nearly an entire city block near the county courthouse. All of our gap funding approvals are in place and we are looking to get shovels in the ground in 2021. The Bohemian, a 200-unit mixed-income workforce project, is also in our pipeline, also located in Lake Worth Beach. That product is going to be more geared toward an urban lifestyle: more walkable, smaller units with more amenities. We are expecting to break ground in 1Q21 on that project. 

Jaime Sturgis: We have had exponential growth in the last few years. 2020 certainly threw a curveball at us but we have been able to achieve the same transaction volumes this year as we have in previous years. The only difference is we have to work much harder to achieve the same level of results. We have closed several transactions recently in the sectors hardest hit by COVID-

19, including restaurants, bars, nightclubs, retail and office. COVID-19 created the Super Bowl for brokers, and has proven to be the defining moment that separated those who live, sleep, eat and breathe real estate from those who believed they could do this job part-time.

What emerging Fort Lauderdale neighborhoods are you keeping an eye on for 2021?

JB: Our company’s overall investment strategy involves a longer-term perspective. We locate within the natural growth progression in areas such as Progresso Village in Fort Lauderdale, the Historic Northwest community in West Palm Beach and Downtown Lake Worth Beach. Historically, these areas have not experienced significant investment activity. Our SIX13 project in Fort Lauderdale happens to be a Qualified Opportunity Zone investment project, so we are holding it for a minimum of 10 years in order to be in compliance with the program. 

JS: We are very active on 13th Street and have been instrumental in curating the area through our close relationships with all of the owners. On this project, we had a unity of vision, and we were all working toward a common goal of improving the street and making the required capital investments. What took us seven years in Flagler Village has taken us two years on 13th Street. We recently brokered a large adaptive re-use site on the corner of 13th Street and 4th Avenue to a developer from Wynwood. The site was a former church and will be repurposed into a restaurant, retail and creative office space. While 13th Street is very exciting, 4th Avenue also has a lot of potential and we have already begun working on curating that street. With the evolution of this next project, we look forward to fusing these two neighborhoods together and creating more of a continuously walkable neighborhood. 

What real estate trends are you focusing on? 

JB: We focus heavily on the experience of living in a community, providing high-quality finishes in our units and products that are going to withstand the test of time. We also focus on amenity spaces and what we can offer to add to an enjoyable experience. One thing we are replicating in all of our buildings is providing co-work space at the first-floor level, which has proven to be popular given the current landscape. All of our assets are poised to have access to each other’s co-work space, so if you live in our building in Fort Lauderdale and find yourself in West Palm Beach for a meeting, you have access to space to get work done or host a meeting. We are also big on fitness. Our tenants lead healthy, highly active lifestyles. How people workout is continually evolving, going beyond just treadmills and weights. We spend a lot of time staying ahead of the fitness trends. We are also tending the need for social spaces, albeit it is proving difficult these days, from the fun party atmosphere to a more calm, private-conversation setting. 

JS: With cloud kitchens, investors can go into these second-generation restaurants and adapt and repurpose them for delivery. There is a lot of demand for delivery services and often a seasoned chef can create a number of different cloud restaurants to service the demand in one central location. That is an interesting opportunity because kitchens are expensive to build out, creating a high barrier to entry. I think as some of these restaurants inevitably fail due to COVID-19, there will be an opportunity to create cloud restaurants. 

What is your outlook for your company for the remainder of the year and beyond? 

JB: As a company, we try not to let the noise distract us from the goals we have established within our organization and to remain disciplined. We plan to continue to operate as usual, always minding our nimbleness and flexibility with the changing environment. Our outlook is to stay the course.

JS: We will continue to grow the residential and property management divisions. They are complementary to our clients and they help us be more vertically integrated. We will continue to grow the commercial division, with a focus on quality over quantity. We are starting to see activity pick back up and it seems like we have rounded a corner. We are cautiously optimistic that things will continue to get better.

To learn more about our interviewees, visit:

http://affiliateddevelopment.com/

https://nativerealty.com/