Coming soon: The Real Deal Miami’s fall issue!

The Real Deal South Florida is pleased to announce the publication of our fall issue, which is set to hit newsstands this September!

The fall issue is packed with the most important industry news and insider information, including a ranking of the top brokerages in the tri-county region. We survey the top architecture firms this cycle, and look at the trends taking over environmentally-conscious building. Rental brokers give us their take on the evolving multifamily market, while we check in with what’s happening with the area’s retail brokers. We also look into how developers secure financing for projects in today’s lending environment.

Subscribe to receive your copy of The Real Deal South Florida, which will be sent out this September. Click here to read the summer issue.

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Source: The Real Deal South Florida

Deutsche, Ocwen accused of discrimination in maintaining bank-owned homes

John Cryan, CEO of Deutsche Bank (Credit: Getty Images)

Deutsche Bank, Ocwen Financial and real estate management firm Altisource are being accused of failing to maintain bank-owned homes in African-American and Hispanic neighborhoods across the country, including in Miami and Fort Lauderdale.

The National Fair Housing Alliance amended a complaint filed in 2014 with the Department of Housing and Urban Development, alleging racial discrimination in 30 U.S. metros. NFHA is claiming that Deutsche, Ocwen and Altisource were lacking in the routine maintenance provided to properties in predominantly minority neighborhoods compared to the upkeep in mostly white neighborhoods.

Garbage, debris, overgrown landscaping, broken windows and doors, graffiti and other damage was prevalent in homes the German bank foreclosed on following the housing crash in 2008, NFHA is alleging, according to the Miami Herald. Failing to maintain the houses led to other issues that bought in police, fire and other city resources.

The housing advocate collected evidence of such discrimination in the 30 metros. In the Miami and Fort Lauderdale area, the Housing Opportunities Project for Excellence nonprofit found that nearly 75 percent of the 63 Deutsche-owned homes in neighborhoods of color had “substantial amounts of trash on the premises” and 55 percent had broken or boarded windows, according to the Miami Herald. More than 40 percent of the bank’s homes had a damaged fence.

Shanna Smith, president of NFHA, said the investor-owned homes change a neighborhood’s demographic, raising interest and insurance rates as a result. [Miami Herald] – Katherine Kallergis



Source: The Real Deal South Florida

Cushman teams up with MetaProp to find new real estate technologies

From left: MetaProp’s Aaron Block and Cushman’s Adam Stanley

From TRD New York: Cushman & Wakefield is teaming up with the tech accelerator MetaProp to find new real estate technology companies that could boost its business.

During the past few months, MetaProp has evaluated 100 opportunities as an adviser to Cushman including parking technologies as well as services using artificial intelligence and robotics, the Wall Street Journal reported. The new deal with Cushman formalizes the relationship.

“We believe that the top practitioners across all of our service lines will increasingly need to get exposed to new technologies to meet demand from increasingly tech-savvy clients,” Adam Stanley, Cushman’s global chief information officer, wrote in an email. “Our industry is changing at an incredible ‘catch up’ speed and we want to lead that transformation.”

Cushman is looking for new technologies that could become pilot programs, partnerships and opportunities for investments and acquisitions, the Journal reported. Cushman expects MetaProp to connect the firm with entrepreneurs and real estate-focused startups beyond the reach it already has through relationships with large tech companies like Microsoft and Salesforce.com.

“We want to be able to have a view into potentially disruptive plays coming down the road,” Stanley said.

MetaProp in June disclosed it was looking to raise $25 million for a new real estate tech fund. [WSJ]Rich Bockmann



Source: The Real Deal South Florida

California REIT pays $175M for Oceans Edge Hotel and Marina in Stock Island

Oceans Edge Key West Hotel & Marina (Credit: Sunstone)

A California-based real estate investment trust just paid $175 million for the recently completed Oceans Edge Hotel and Marina in the Florida Keys.

Sunstone Hotel Investors paid $1 million per room for the 175-room Stock Island resort, according to a press release. Developer Pritam Singh of Singh Co. opened the $25 million Ocean’s Edge in January.

Property records show Singh purchased the 20-acre property at 5950 Peninsular Avenue for $5 million in 2013 from BB&T Bank, which foreclosed on the Oceanside Marina.

Amenities include six pools, a marina, the Yellowfin Bar and Grill and a dog park. Each hotel room has a balcony and views of the water, according to the resort’s website.

Singh is active in the Keys, where his other projects include The Marker Resort in Key West, Parrot Key Resort in Key West, Tranquility Bay Beach House Resort in Marathon and the luxury Truman Annex residential development in Key West.

Oceans Edge Hotel and Marina is the first of two waterfront redevelopments delivered in Stock Island this year. It is joined by the $38 million, 100-room Hotel Key West at Stock Island. Stock Island, which is immediately east of Key West, houses a majority of Key West workers, boatyards and fish houses.

Sunstone CEO John Arabia said the REIT has sold nearly $735 million of real estate over the past 19 months. Sunstone owns 27 hotels with more than 13,000 rooms. – Amanda Rabines 



Source: The Real Deal South Florida

Google has reportedly spent $820 million on properties in Silicon Valley

Google's main campus is located in Mountain View, California.Roman Boed/Flickr

Google’s main campus is located in Mountain View, California.Roman Boed/Flickr

Google has reportedly bought 52 properties in Sunnyvale, California for a total of $820 million in an effort to expand its operations, according to a report from the Silicon Valley Business Journal.

The purchase is reportedly meant to “fill in gaps between multiple smaller campuses in Sunnyvale that Google has purchased or leased in recent years,” as the small city is located right next to Mountain View, where the search giant has its main headquarters.

A month ago, Google won exclusive rights to negotiate with the city of San Jose, which granted it the chance to buy 16 tracts of land, CNBC reported, and together with its real estate development partner Trammell Crow they have already spent $100 million (£76.4 million) buying parcels in the city.

The idea is to ultimately branch out there and have employees spread out from Mountain View — where Google is building a new main campus — to San Jose through Sunnyvale, as the 72,000 strong staff is reportedly going to get even bigger as the firm seeks to sustain its growth.



Source: The Real Deal South Florida

Job growth propels South Florida’s multifamily market

Milagro Coral Gables

South Florida’s employment expansion helped to drive strong demand for rental housing and big-ticket sales of apartment properties in the second quarter.

Eleven South Florida multifamily housing properties sold from April through June at prices above $49 million the Daily Business Review reported. Their combined value was $940 million, the newspaper reported.

South Florida employers created about 117,000 new jobs in the 12 months ended in May, lowering the area’s unemployment rate to 4.2 percent from 4.7 percent in May 2016, according to the federal Bureau of Labor Statistics.

This year, the biggest deal for South Florida rental apartments has been Harbor Group International’s $159 million acquisition of the Montage at City Center in Pembroke Pines.

Other big-ticket multifamily deals this year have included Berkshire Group’s $100 million purchase of Aviva Coral Gables, a 276-unit rental apartment complex.

Shortly before that transaction closed, another apartment property in Coral Gables, called Milagro, sold to New York-based Wafra Investment Advisory Group Inc. for $78 million.

In South Florida market forecasts for 2017, real estate brokerage firm Marcus & Millichap reported heightened investor interest in rental apartments.

In Miami-Dade, for example, “Class B and Class C assets are poised to perform well this year,” the firm reported. In Palm Beach County, “healthy market operations going into 2017 will draw greater investment to Palm Beach County’s multifamily stock, supporting asset appreciation.”

Older multifamily housing properties in South Florida will face new competition this year. Marcus & Millichap estimated that developers will finish construction of 15,200 new apartments in South Florida this year, up from 11,400 last year.

Yet the brokerage firm also forecasts 2017 increases in monthly apartment rents in all three counties: 4.7 percent in Broward, 4.4 percent in Miami-Dade, and 3 percent in Palm Beach.

The brokerage firm expects the super-tight, Miami-Dade apartment vacancy rate to dip even further to 2 percent this year from 2.1 percent last year.

The firm also estimates vacancy rates will rise this year to 4.2 percent from 4.1 percent last year in Broward, and will rise to 6.3 percent from 5.2 percent in Palm Beach. [Daily Business Review] Mike Seemuth



Source: The Real Deal South Florida

Firm acquires its 3rd Sarasota office building for $23.5M

101 Paramount Drive in Sarasota

Capstone Management LLC acquired its third office building in Sarasota in a $23.5 million deal.

An affiliate of Capstone bought a three-story office building with 157,500 square feet of space. The 18-year-old building at 101 Paramount Drive, called Sarasota Commerce Center II, has tenants that include Universal North America Insurance Co. and Shared Services Center.

The Paramount Drive property had been occupied by accounting firm Arthur Andersen prior to its 2002 collapse.

Sarasota Commerce Center II is Capstone’s third office-building acquisition in Sarasota since 2015.

Capstone paid $15.9 million in February 2016 for the PNC Bank building, a 71,000-square-foot office property in downtown Sarasota, together with two adjacent lots.

In April 2015, Capstone paid $11.5 million for another office property in downtown Sarasota, a five-story, 38,420-square-foot building at 1626 Ringling Boulevard. [Business Observer]Mike Seemuth

 



Source: The Real Deal South Florida

Downtown Hollywood traffic circle may get a major redesign

Young Circle (Source: Sun-Sentinel)

A major redesign may be coming to iconic Young Circle in downtown Hollywood, a traffic circle with seven traffic lights that can confuse motorists and endanger pedestrians.

Hollywood Mayor Josh Levy described Young Circle as a “choke point” that discourages drivers from visiting the city’s downtown area.

Under discussion is a removal of all the traffic lights and a conversion of Young Circle to a two-way traffic circle, with counter-clockwise traffic in the outer lanes, as now, and clockwise traffic in the inner lanes.

Landscaped roundabouts would replace traffic lights at Federal Highway and Hollywood Boulevard.

Ian Lockwood of Toole Design Group conceived of these and other details of a Young Circle redesign. The city hired Toole Design to determine ways to smooth traffic flow through the downtown circle.

Lockwood’s redesign would divide a Publix-occupied parcel on the east side of Young Circle, making space for a roundabout that directly links Hollywood Boulevard to the circle.

City Commissioner Peter Hernandez said a change is needed because commuters and Hollywood residents have complained for years about traffic at Young Circle.

A spokesman for the Florida Department of Transportation (FDOT), Chuck McGinness, said FDOT was prepared to work with the city of Hollywood on a redesign of Young Circle.

City Commissioner Dick Blattner said “we just have an idea,” and the municipal government needs a detailed plan to slow traffic and reduce the number of accidents at the circle.  [Sun-Sentinel] Mike Seemuth



Source: The Real Deal South Florida

Fort Pierce seeks hotel development partner

The former site of a power plant in Fort Pierce is now a vacant downtown parcel.

The city of Fort Pierce is seeking a partnership with a developer to build a hotel on a former power-plant site in the city’s downtown area.

The city would retain ownership of the eight-acre site of the former H.D. King Power Plant, and the developer would lease the land for hotel construction.

All proposed-project bids are due Sept. 5, according to a draft copy of the city’s request for proposals and qualifications to recruit a hotel developer.

The Fort Pierce Redevelopment Agency has approved the Sept. 5 bidding deadline as part of a bid-solicitation timetable proposed by Fort Pierce City Manager Nick Mimms.

Mimms said the city will advertise its request for proposals in publications and on websites devoted to real estate development.

The city has tried twice before to get a new use for the old power-plant site.

In 2014, a St. Petersburg-based group canceled its plan to build not only a hotel on the eight acres downtown but also 300 apartments, 50 townhouses and a four-story parking garage.

In 2010, a South Florida developer terminated its own plan to build a hotel and more on the site, including restaurants, shops and homes. [TCPalm.com] Mike Seemuth



Source: The Real Deal South Florida

St. Petersburg mall project illustrates how Sears is downsizing

The Tyrone Square shopping mall in St. Petersburg

The redevelopment of a former Sears department store in St. Petersburg illustrates how billionaire Eddie Lampert is dealing with the decline of the Chicago-based retailer.

Lampert is chairman and chief executive officer of Sears Holding Corp., the corporate parent of Sears and Kmart. He also serves as chairman of Seritage Growth Properties, which owns about 200 Sears and Kmart stores and leases them to Sears Holding under a master lease agreement.

Under that agreement, Seritage can “recapture” certain store space from Sears Holding and redevelop it or replace Sears and Kmart with new tenants.

In St. Petersburg, Seritage plans to demolish the 188,515-square-foot store Sears formerly occupied at the Tyrone Square Mall and to develop 151,952 square feet of new retail space for a Dick’s Sporting Goods location, a Petsmart outlet and the first Lucky’s Market grocery store in the Tampa Bay area.

Jeff Green, a Phoenix-based retail analyst, told the Tampa Bay Times that Lampert has set up unique arrangement between Sears Holding and Seritage, a real estate investment trust formed in 2015 and listed on the New York Stock Exchange under ticker symbol SRG.

Green told the Times that their real estate represents most of the value of Sears department stores, and the formation of Seritage allows Sears Holding to monetize the value of some Sears stores by putting them in a separate public company.

Indeed, the $2.4 billion market value of Seritage is about three times greater than the $800 million market value of Sears Holding.

Sears Holding is closing part of some Sears department stores, and Seritage is leasing the vacated space to other retailers. In Clearwater, for example, Seritage converted half of a Sears store at the Westfield Countryside Mall to a Whole Foods Market. [Tampa Bay Times]Mike Seemuth

 



Source: The Real Deal South Florida