Industrial investors eager to pounce on faltering retail properties

Industrial investors eager to pounce on faltering retail properties

By: Beatrice Silva 

2 min read August 2020 — Before April, e-commerce was already a booming business but COVID-19 has skyrocketed digital commercial transactions to a whole new level. Despite the current flash recession, the demand for industrial real estate has grown in almost every market. As a result, industrial real estate investors are eager to pounce on faltering hospitality and retail properties. Vacant or unprofitable large-acre facilities are being eyed up as potential warehouses and distribution centers. 

Businesses like hotels, theme parks, restaurants and others in the hospitality industry have taken the greatest hit financially among all major sectors. In Orlando, tourism disparities are now trickling down to those industrial companies that succor these industries. “Orlando’s weakness is that we’re a community built on tourism and convention services. When those industries suffer, typically our market suffers too,” Bo Bradford, industrial expert and co-president of Lee & Associates Central Florida, told Orlando Business Journal

However, with every crisis comes opportunity. If building vacancies do start to emerge as a result of the current economic slowdown it will give new operations a chance to plant roots in Orlando’s limited industrial market. One example is the area around the Orlando airport. In July, two flex industrial warehouses were proposed on 61.8 vacant acres at 6249 S. Goldenrod Road, according to the Orlando Business Journal. Orlando Office Center LLC are the property owners and Kelly Collins & Gentry Inc. are reported to be the project engineers. 

The increase in demand for industrial properties is making real estate investment companies get creative. Simon Property Group Inc. is considering converting vacant Sears and JCPenney stores into distribution centers, according to the Orlando Business Journal. However, in early June, the group decided not to proceed with an agreement with Taubman Centers that could have added various retail properties to its portfolio. “The COVID-19 pandemic has had a uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry,” Simon Property Group said in a press release. The real estate investment company has four properties in Orlando and if it does decide to transform even one of its properties into an industrial building, it could be a win-win for both parties involved in the transaction. 

Since the pandemic began, retail stores have suffered as more and more people shift to online shopping. Within a few years, traditional malls and outlet stores could become a thing of the past. For companies like Amazon, large vacant retail properties provide vital space in a limited market. 

Spotlight On: Jenna Kelly, Northern Georgia Region President, Truist

Spotlight On: Jenna Kelly, Northern Georgia Region President, Truist

By: Felipe Rivas

2 min read May 2020SunTrust and BB&T have combined in a historic merger of equals to create Truist, the sixth-largest U.S. bank holding company. With 275 years of combined history serving clients and communities in high-growth markets, the new company will deliver the best of both companies’ talent, technology and processes, Northern Georgia Region President Jenna Kelly told Focus: Atlanta.

 

Q: What has stood out for Truist in Atlanta in the last year?

A: We announced our merger in February last year and closed it in December. We spent the bulk of the year operating independently as SunTrust and BB&T. This meant we really only had three months as a joint entity before the COVID-19 pandemic struck. All along, we have been talking about how this merger was an opportunity to build a better bank and we looked at how we were better together, including our complementary business lines and strategies. One of the exciting developments this year was our announcement of the new branding and our purpose. The Truist purpose is to Inspire and Build Better Lives and Communities. That purpose is at the center of everything we do, and something that differentiates us, especially given the current circumstances, to our clients.

Q: What has been the real impact of the COVID-19 outbreak on the operations of Truist?

A: We said from the outset of the merger that all our client-facing teammates would retain roles. Within the Northern Georgia region, our team remains in place and our efforts have really been more about how we integrate culture. With the pandemic, most of our team is working remotely. We paid a $1,200 special bonus to all our teammates who make less than $100,000, we have implemented additional time off and we have introduced more flexibility given family dynamics can be difficult to juggle when childcare or education are not available. 

We also turned our attention to how we can provide our clients with relief. We are participating in the Paycheck Protection Program (PPP) and we are working on how we can get our clients the funding they need. Through the first round of funding, we have helped around 32,000 clients with $10 billion in PPP loans. In Atlanta, we made around $4 million in grants to the agencies that are on the frontlines of the crisis response. 

Q: As you have seen the landscape change, how have you seen the banking industry set up for the future?

A: The message is that there is a place for everyone, whether it be a small bank, a large regional or a multinational. The impetus behind our merger was the growth of technology in banking. We looked at the demands our clients have in the way they want to be serviced, and it is not necessarily walking into a branch anymore. We needed some additional scale, and we came together so we could be more innovative and make new investments. This does not mean there is no longer a role for community banks. We believe we have a unique opportunity however to leverage our high touch community bank model with investments in technology to create better client experiences and build more trust – something we call T3.

Q: What role does Atlanta continue to play for Truist in its portfolio?

A: Atlanta is our largest market, given it was the headquarters of SunTrust. When we merged, we enhanced our market position. Atlanta is a diversified economy both in industries and population and from a banking perspective, we like where we are in the market. We continue to invest to strengthen our position.  

We have a very long history of supporting Atlanta as well as communities across the state. We announced last year that we would double our commitment to the Atlanta community to $300 million in investments over a three-year period. The investments include a combination of community development investments from the bank and philanthropic grants from our foundation. 

More broadly, the Southeast has been one of the most attractive areas of the country. Those growth dynamics play well for Atlanta, which will continue to attract jobs, companies and population. As we come out of the COVID-19 pandemic, we hope to recover faster than other parts of the country, given our position going into the crisis. 

Q: How are banks going to be able to help small businesses through this crisis?

A: Unfortunately, small businesses will be the hardest hit through this pandemic. The government stimulus is certainly a starting point and that will give them some temporary relief. We want to be able to leverage the tools and capabilities we have as a larger bank and deliver them on a local, personalized level. We, as a bank, can perhaps help fund CDFIs that can in turn fund small businesses. There is no one solution, but that is an area we were considering well before the pandemic.

I think it will be interesting to see how this pandemic changes the world for all of us. We have all adapted in ways we probably thought we never would or could. There is a lot of digital activity going on now that makes our merger make even more sense. We set up a portal for the PPP program within 36 hours so our small-business clients could apply for this funding quickly. Now we have this online business portal we can use when it is over to help small businesses apply for loans in ways that were not possible before. It remains to be seen what the scale of the impact will be. For our teammates, the priority will continue to be about their safety and when we will go back to working in a more traditional environment. But we have all proven that we can be productive in a nontraditional environment.

Q: What is the outlook for Truist Atlanta in the next 12-18 months?

A: We will continue our integration of the two banks because we are still operating fairly independently in terms of systems and brands in the market. The full rebranding will not happen until the third quarter of next year, so we have a lot of integration work to do in the next 18 months. We will focus on doing this in the least disruptive way for our clients. One significant and positive development is that we will not need to change our clients’ existing account and routing numbers so they will not have to order new checks. Creating a seamless transition to Truist will help solidify and grow our brand awareness in Atlanta, especially given the loyalty our previous brands generated. 

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

 

 

Pennsylvania ready for a partial reopening; Philly, New Jersey not there yet

Pennsylvania ready for a partial reopening; Philly, New Jersey not there yet

By: Felipe Rivas

2 min read May 2020 — Along the East Coast, states are phasing in the reopening of their respective economies after weeks of economic inactivity as a result of the coronavirus. In the Northeast, Pennsylvania is the latest state to begin the battle of balancing public health and economic recovery by partially opening 24 counties along the northwest and north-central regions of the state beginning Friday. Most notable during this process, Philadelphia County, a major economic driver for the state and its most populous county, will remain shut down. Across the Delaware Valley, New Jersey remains in a health battle as Gov. Phil Murphy extended his shelter in place order for another 30 days.

“Over the past two months, Pennsylvanians in every corner of our commonwealth have acted collectively to stop the spread of COVID-19,” Gov. Tom Wolf said in a press release. “We have seen our new case numbers stabilize statewide and while we still have areas where outbreaks are occurring, we also have many areas that have few or no new cases.” The 24 counties reopening on Friday are Bradford, Cameron, Centre, Clarion, Clearfield, Clinton, Crawford, Elk, Erie, Forest, Jefferson, Lawrence, Lycoming, McKean, Mercer, Montour, Northumberland, Potter, Snyder, Sullivan, Tioga, Union, Venango and Warren. These counties were deemed ready to move to a reopening because of low per-capita case counts, the ability to conduct contact tracing and testing, and appropriate population density to contain community spread, according to the governor’s office.

Philadelphia Mayor Jim Kenney says he’s “not going to sacrifice people’s lives” in reopening the city too soon during the COVID-19 pandemic, according to local news sources. Kenney said there is no timetable as to when the city will open. “You can’t set a timeline. The timeline is what the virus dictates. We certainly have targeted things we’d like to see happen, but unless the data indicates that it’s safe, then it’s not safe,” Kenney said, according to CBS 3 Philly. 

Gov. Wolf urged citizens to adhere to all social distancing and health guidelines. “Every human-to-human contact is a chance for the virus to spread, so more contacts mean a higher likelihood of an outbreak,” Wolf said. “If we see an outbreak occur in one of the communities that has been moved to yellow, we will need to take swift action, and revert to the red category until the new case count falls again. So, Pennsylvanians living in a county that has been moved to the yellow category should continue to strongly consider the impact of their actions.”

In New Jersey, Gov. Murphy erred on the side of caution, as the state continues to deal with the COVID-19 pandemic. “I want to make it absolutely clear that this action does not mean that we are seeing anything in the data which would pause our path forward, and it should not be interpreted by anyone to mean we are going to be tightening any of the restrictions currently in place. These declarations, unless extended, expire after 30 days,” Murphy said. 

No formal timeline was given as to when the economy will reopen. In the meantime, Murphy urged residents to continue to observe all social distancing and health guidelines. “If this extension of the public health emergency signals one thing, it is this: we can’t give up one bit on the one thing that we know that is working in this fight, social distancing,” Murphy said. “Remember, in the absence of either a vaccine, or proven therapeutics for COVID-19 specifically, our only cure is social distancing, covering our faces, washing our hands with soap etc. And we know, by the way, that the effort of millions in this state is working. We have made enormous strides, folks, unlike any American state. Let’s keep it that way.”

 

To learn more, visit: https://www.governor.pa.gov/newsroom/gov-wolf-announces-reopening-of-24-counties-beginning-may-8/

https://www.nj.gov/governor/news/news/562020/approved/20200506c.shtml

GFL Businesses Adapt as Coronavirus Threat Looms for US

GFL Businesses Adapt as Coronavirus Threat Looms for US

By: Sara Warden

2 min read March 2020 — Businesses across South Florida have been hit by the impact of the Coronavirus pandemic, as the government issued new advice urging people to stay home if possible. Drastic measures have been taken to prevent the further spread of the virus, but some Fort Lauderdale companies are taking the crisis in stride.

 

 

Fort Lauderdale made the decision to close all public beaches, bars, nightclubs and restaurants. All meetings of city boards and committees have been postponed until the end of March at the earliest. Only essential businesses such as pharmacies and grocery stores are excluded from the measures. The TSA reported that one of its agents at the Fort Lauderdale-Hollywood Airport tested positive for the virus, bringing the tally to two officers across the state.

“We have to do everything possible to minimize crowds and unfortunately, our beautiful beaches must be part of that plan,” said Fort Lauderdale Mayor Dean Trantalis to South Florida Business Journal. “I want to be clear that this is not an overreaction, but a way for us to help stop further cases of COVID-19 in our community.”

With the measures set to last until April 12, one of the biggest concerns for Fort Lauderdale residents – and for people all over the world – is of a potential shortage in supplies of essentials such as canned goods, medicine and toilet paper. 

As the virus response ramped up, Postmates and Walgreens announced an expansion of their partnership to allow customers to order Walgreens pharmacy goods through Postmates and have them delivered to their doors. The service was piloted in New York six months ago but its ramp up to cover a handful of cities including Fort Lauderdale comes at an opportune time to allow citizens to comfortably practice social distancing. 

Businesses are urging employees to work from home, but are threatened by a drop in productivity. Some forward-thinking businesses had already made preparations, having monitored the unfolding situation from its roots in China’s Wuhan region in December. Davie-based Bankers Healthcare Group implemented home office last Friday after extensive testing of its digital systems. 

“We’ve been preparing for this transition for more than a month, checking and testing our systems to ensure we could continue to do business as usual,” co-founder Eric Castro told South Florida business Journal. “We don’t anticipate any challenges or disruption to our business, and are confident we will not lose productivity.”

 

To learn more, visit:

https://www.broward.org/Airport/Pages/default.aspx

https://postmates.com/

https://www.walgreens.com/

https://bankershealthcaregroup.com/

 

For up-to-date advice on the Coronavirus response, you can check the CDC website here.  For Florida-specific information, click here 

Miami’s Events Calendar Rocked by Coronavirus Concerns

Miami’s Events Calendar Rocked by Coronavirus Concerns

By: Sara Warden

2 min read March 2020 — Sunshine, beaches, cruises, outdoor festivals … this is Florida’s bread and butter. But what happens when a global health crisis crosses international borders? Miami’s tourism industry is now finding out.

 

When the novel Coronavirus (Covid-19) outbreak began spreading in China at the end of January, there was very little overseas impact and China seemed to bear the brunt of the outbreak, shutting down logistics and imposing quarantines. But as cases began popping up globally, with Italy, Iran and Southeast Asian countries particularly affected, governments started to take action. The tourism industry, as a result, is suffering. The United States currently has 140 active cases of the virus, with 11 deaths, and officials confirmed two cases in Florida on Sunday. 

Florida very much intends to maintain open borders and air travel. Two of its economic strengths are international trade, with 40% of all U.S. exports to Latin America passing through Florida, and tourism, which added an estimated $111.7 billion to the state’s economy in 2016.

Already, Miami is feeling the impact of the outbreak. This week, the city was meant to host Zendesk Relate, a 2,300-attendee conference at Miami’s conference center held by San Francisco-based customer-service software company Zendesk. But the company announced the event’s cancellation on Monday, on the same day American Airlines suspended its Miami-Milan service as the number of active cases in Italy ballooned to 2,706, with 107 deaths registered.

Another event impacted by the virus is the annual Ultra Music Festival, which organizers have reportedly postponed – potentially for a year, according to the Miami Herald. The electronic dance event typically attracts 55,000 people per day and the 2020 edition is due to be held on Bayfront Park. With tickets starting at around $300 and going up to $1,500, the impact of cancellation would be significant. “I agreed with the decision to postpone it,” City Commissioner Manolo Reyes told the Miami Herald. “And now I’m worried about the Calle Ocho Festival,” referring to the Latin music festival scheduled for March 15 in Little Havana.

Some conference organizers and attendees are attempting to postpone events until May, when there is hope the virus will be contained. But Florida Gov. Ron DeSantis is less optimistic about the impact on Florida, predicting more cases will emerge shortly.

The Medical Affairs Professional Society is scheduled to host a conference on March 9-11 but has already experienced some cancellations, according to CEO Travis Hege. The conference is still going ahead as scheduled, he told the Miami Herald. “Any deaths in Florida or outbreak in Florida is the biggest thing we are monitoring,” he said. “We’re continuing to monitor the latest developments. Otherwise, we will be proceeding as planned.”

And while cancellations of events like Zendesk Relate are not ideal, this is far from the biggest event Miami is due to hold this year. Art Basel may or may not take place in June after the Hong Kong edition was canceled and Miami Pride events will take place at the end of March and beginning of April.

But Miami-Dade Mayor Carlos Gimenez said Tuesday there is no need to cancel major events, and instead there needs to be a specific focus on protecting the elderly and vulnerable populations. “We will step up and make sure that those elderly get those services,” he told Local 10. He added that arriving visitors will be more thoroughly screened and that residents should “live your normal life (and) take just common-sense precautions.”

 

To learn more, visit:

https://www.zendesk.com

https://www.artbasel.com/miami-beach

https://ultramusicfestival.com/

https://www.miamiandbeaches.com/event/miami-beach-pride/2188

https://carnavalmiami.com/events/calle-ocho/ 

https://www.miamidade.gov/global/government/mayor/home.page

https://www.medicalaffairs.org/