Monday, May 29, 2006

Lincoln Tech Buys 2 Campuses in Palm Beach Co.

Lincoln Educational Services entered Palm Beach County. It acquired New England Institute of Technology at Palm Beach Inc., two post-secondary campuses at 2400-2410 Metrocentre Blvd. in West Palm Beach and 1126 53rd Court North in Mangonia Park, for $43 million.
The price paid for 115,000 square feet of building space on a total of 14.5 acres between the two campuses was $374 per square foot. This price included the value of the business as well as that of the real estate. The breakdown between business and real estate considerations was not disclosed.
Both "career college" campuses will be re-branded as Lincoln College of Technology. Lincoln's CEO, David Carney, remarked in a press release that his company was pleased to extend its "geographic footprint into Palm Beach County, one of the nation's fastest growing regions."

New Miami Condos Break Ground

Ultra-Modern Construction has begun on Capital at Brickell, a 1 million-square-foot mixed-use project in Miami's high-end Brickell submarket that is scheduled to deliver in 2009.

Designed by Fullerton Diaz Architects and developed by Cabi Developers, Capital at Brickell is comprised of two primarily residential towers of 53 and 57 stories on S. Miami Ave. The project will offer about 100,000 square feet of office space, more than 47,800 square feet of retail space and about 830 luxury residential condominiums, on a 2.6-acre site.
Grant Killingsworth and Clarissa Willis of Holly Real Estate are handling the sale of pre-construction office condominiums as well as leasing of retail space.

Broward Flex Park Commands $25.7M

RREEF acquired the 280,512-square-foot, 17.7-acre Prospect Park I, II and III in Fort Lauderdale, FL. The Chicago-based REIT purchased the 16-building portfolio for $25.7 million, or approximately $92 per square foot.

The seller, Boston-based Great Point Investors, acquired the complex in 1999 and figures to net about $10 million on the sale.

The park was built in 1982 and is comprised of three sections on NW 33rd and 35th avenues and NW 55th St. The six-building Prospect Park I totals 63,774 square feet, comprised exclusively of office space. The eight-building Prospect Park II totals 81,997 square feet, 75% of which is office space. The two-building Prospect Park III totals 134,395 square feet, 20% of which is office space. In total, the park is about 55% office space and has an average clear height of 25 feet.

Developer Sold Million-Dollar Units at 2222 N. Atlantic

Naples-based M.K. Developers sold its new construction of 16 residential condominium units at 2222 N. Atlantic Blvd. in Fort Lauderdale.

Miami-based Fortune International Management paid $16.25 million, or more than $1.01 million per unit.

The development is on 33,977 square feet of oceanfront property. It was once the site of a restaurant. M.K. Developers paid $1.25 million for the site in 2002 and redeveloped it.

Both sides were self-represented.

$61M Funds Office Condo Conversion

COCONUT GROVE, FL-Key Realty Advisors plans to acquire and convert the 22-story SBS Tower at 2601 South Bayshore D. into office condominiums. The deal has been fueled by a $61.5-million financing from Wachovia Securities Real Estate Capital Markets.

The Fort Lauderdale office of Wachovia Securities Real Estate Capital Markets managing director Steven Russo and vice president David Auerbach handled the transaction. Auerbach tells that the financing will pay for a portion of the acquisition and conversion costs. “It’s one of the nicest properties in the area and should do well as an office condo project,” Auerbach says.

The SBS Tower was owned by Irradio Holdings Ltd. The class A office tower is a multi-tenanted property, and the sale included the attached parking garage and 16 townhouse units on the property. Leasing and management was handled by CB Richard Ellis. Among current building tenants are Barmello, AJamill and Partners, Inc.; Bloom, Gettis, Habib, Silver & Terrone, P.A.; Oppenheimer & Co. Inc.; Ocean Bank; SeaDream Yacht Club, Terremark Worldwide and Spanish Broadcasting Systems Inc.
Key Realty Advisors, under the ownership of Eduardo Avila handles development, conversion, sales and marketing for commercial and residential property in Florida. Current projects include 107 Office Park in Kendall, Pine Island Office Centre in Fort Lauderdale and Villagio at Deerwood, a 440-unit condominium project in Jacksonville.

Thursday, May 25, 2006

Office Condo Project Hits 70% Mark

WEST PALM BEACH, FL-As it nears completion, the 125,630-sf West Palm Commerce Park office/warehouse condo development has reached 70% sold. The project is on Haverhill Road just south of 45th Street.

West Palm Commerce Park, being developed by Coral Gables-based Integrated Property Services, consists of three buildings with 46 units ranging in size from 2,000 sf to 3,000 sf. The project was designed by Coral Gables-based architects Wolfberg Alvarez & Partners and the general contractor is Fort Lauderdale-based Miller Construction Co.

CB Richard Ellis senior associate Kerry Jackson, who handled sales and marketing at the park, tells that a typical 2,000-sf unit contains 500 sf of build-out office space and another 500 sf of mezzanine space which may be built out as office space and 1,000 sf of warehouse space. Unlike similar developments, which only contain parking spaces to accommodate 10% build-out for office space, West Palm Commerce Park contains enough spaces to accommodate 40% build-out for office space. Another feature of the building is the inclusion of impact resistant windows, instead of hurricane shutters. “We provide the build-outs so when buyers purchase units, they can move right in. In some projects it can take up to 120 days to move in,” Jackson says.
Jackson says certificates of occupancy will be obtained by the end of the week, with closings anticipated within the next two weeks. Among companies that have purchased units are promotion and marketing firm Mediazine. “As a small business owner, networking is very important. The advantages of being in the West Palm Commerce Park is that we get an opportunity to network with other small business owners that offer products and services that compliment our business,” says Mediazine president Curtis Azama in a prepared statement.

Arbors Office Park Racks Up Leases

DELRAY BEACH, FL-Three tenants have signed deals to take 38,347 sf of space at Arbors Office Park. The leases total more than $4.6 million.

Miami Beach-based Terranova Corp. senior commercial associate Gordon Messinger represented the landlord in the transactions. Terranova assumed management and leasing of the three-building, 240,000-sf office park located at 1615, 1625 and 1690 Congress Ave. in 2003.

The leases include a $2.4-million renewal with bridal apparel maker Alfred Angelo, Inc., which will maintain its 21,391-sf office. Charlie Barton and Ted Garrity, of Cresa Partners, represented the tenant. A $1.7-million deal was struck with American Home Mortgage Construction, which will expand its space within the building to 13,258 sf. A third lease worth $500,000 was secured with World Savings Bank, which will open a new 3,700-sf office to serve customers in the Delray Beach and Boynton Beach markets.
Messinger tells that rents in the building average $16 to $17 per sf. With the signing of the leases, the building is 84% occupied with approximately 65,000 sf of vacant space.

Tuesday, May 23, 2006

Condo Park to Launch in Florida

Florida-based REMS Group Inc. is preparing to begin sales for its latest project, the 595 Corporate Park of Commerce in Davie, Fla., on May 9. The $60 million, all-condominium business park will feature office, flex and warehouse space. The developer paid $22 million, or $516,000 per acre, for the 42-acre park site in January. Site work for the 523,000-square-foot park will begin in August.
Prices for condominiums at the 595 Corporate Park of Commerce will start at $160 per square foot for flex space and go as high as $280 per square foot for office space. The market for the units will be small and medium-size businesses, according to Robert Lechter, director of REMS Group.
In addition to the 595 Corporate Park of Commerce, REMS has developed the 215,000-square-foot Dolphin Park of Commerce in West Miami-Dade County and the 140,000-square-foot Deerwood Commerce Center in South Miami-Dade.
REMS has site plan approval for the 595 Corporate Park of Commerce, but is going through the permitting process for Phase I of the project. “We don’t get any special favors, but (the city) has not put any roadblocks in our way, either,” said Lechter, referring to the Davie citizenry’s well-known objections to commercial development. Davie is known for its semi-rural, equestrian lifestyle.
The 595 Corporate Park of Commerce will be financed by a $30 million revolving loan from Miami-based City National Bank, which will cover acquisition and construction costs, according to Lechter.
Land prices have skyrocketed in Broward County--where 595 Corporate Park of Commerce is located--in recent years, but Lechter said the per-acre price REMS paid for the park land was similar to that for land for other commercial projects “with inferior locations and less entitlements.” (The land for the park was purchased with site plan approval already in place.) Since January, Lechter said, he has heard of land sales in the area for as high as $600,000 per acre.

County Takes Mixed-Use Building for $23M

MIAMI-A 196,000-sf building within the Dolphin Commerce Center at 11500 NW 25th St. has been sold for $23.1 million.

The property was sold to Miami-Dade County to house a variety of county services, such as the Office of Emergency Management and other emergency-related services. The seller was Dallas-based Olympus Real Estate Partners. CB Richard Ellis first vice president Wayne Schuchts and senior vice president Chris Coots and Victor Suvall, of the Swerdlow Co., represented the seller. General Services Administration represented the buyer.

Schuchts tells that the building was constructed as a special-use facility for Exodus Communications, a company that was later acquired by another company which went out of business. “The company vacated the building and we were hired to sell it,” Schuchts explains.
Among reasons Miami-Dade County purchased the property was its Category 5 hurricane resistance rating, which means it can withstand wind speeds experienced during a Category 5 hurricane. The building that was sold contains 40,000 sf of office space, 70,000 sf of raised flooring space, 70,000 sf of warehouse space and 16,000 sf of UPS space. “To my knowledge, there are only a few buildings in Miami-Dade County with this type of specification,” Schuchts says. “Because Miami-Dade County is using this space to house several operations, this setup makes Dolphin Commerce Center the perfect fit and a great purchase for the county.”

Thursday, May 18, 2006

$7M Buy To Spur Office Condo Plan

CORAL GABLES, FL-A 26,865-sf office building at 8585 Sunset Dr. has been sold to PBD Realty LLC for $6.95 million. The new owners are planning to convert the building into office condos and rename it Sunset at Galloway. The project will be completed in December.

Colliers Abood Wood-Fay investments specialists John Crotty and Mia Stierman handled the sale. The seller was 8585 Sunset Ltd. Stierman tells that the building looked tired and required a lot of improvements. So, instead of spending money to improve the building, the seller decided to take advantage of the strong real estate market and sell the property.

Crotty tells that the buyer purchased the property for near its asking price of $7.25 million. Sunset at Galloway will offer spaces that range from 1,200 to 10,000 sf. Among improvements to the building will be a new exterior facade, landscaping, roof, electrical, plumbing and mechanical. The spaces will be delivered to buyers as shell space that can be retrofitted. An on-site sales office has been established for potential buyers to view site plans.
Office condos are becoming more attractive for tenants as investments shift from the stock market to real estate. Among other office condo projects in the area are the former Burger King headquarters on 80 acres in Palmetto Bay, a project in which Stierman is currently involved. “There are so many people who are tired of paying rent and want the pride of ownership,” Crotty says.

Wednesday, May 17, 2006

Hot Office Market Continues in S. Florida

MIAMI-The South Florida office market is experiencing continued tightening with decreased vacancy and rising rental rates, according to recently issued market reports.

According to a Studley first quarter 2006 South Florida office market report, decreasing availability and increasing rents is a trend that has been occurring for 11 quarters. During the first quarter, the vacancy rate was 11.2%, down by 1.2 percentage points for the quarter and by 3.5 percentage points for the year. South Florida’s class A availability rate was 13.2%, which reflects a decrease for the both the quarter and the year, the report notes.

According to the CB Richard Ellis Florida market perspective for year-end 2005, all six Florida markets tracked posted suburban vacancy rates well below the US rate of 14.6% for fourth quarter 2005. Much of the development and leasing activity is in the suburbs where lower rents and more expansion room can be found. Central business districts are also strong, with Miami experiencing a 12.7% vacancy rate, which is below the US average.
Brokers note that the real estate fundamentals are strong in South Florida, with continued demand for space and little product on the market. They add that many available development sites are being acquired for residential, rather than commercial use. “Broward County is going like gangbusters,” says Jeff Holding, managing director of the Broward County office for CB Richard Ellis. “Over the next few months it’s going to be a tough road for tenants.”

One of the biggest events of the quarter was Palm Beach County Commission’s approval of the City of Jupiter’s proposal to house the Scripps Research Institute at Florida Atlantic University’s Abacoa campus. The first phase of the project will include construction of 364,000 sf of laboratories on 30 acres. Several developers reacted quickly to the decision. One developer, Bruce Rendina, said he has received approval to proceed with development of 177,000 sf of office space. Catalfumo Development is marketing two parcels in Palm Beach Gardens for creation of more than one million sf of research and development space.

Equity One Adds Three Centers to Portfolio

NORTH MIAMI BEACH-Locally based REIT Equity One Inc. has acquired three shopping plazas for $23.4 million. The properties acquired were Alfaya Village in Orlando, Sunpoint Shopping Center in Ruskin and Chapel Trail Plaza in Pembroke Pines.

Doron Valero, president of Equity One, tells that the new properties are consistent with the company’s acquisition strategy. “In general we are trying to acquire properties that are adjacent to our existing properties or ones that are good redevelopment opportunities. When you acquire a property next to one you already own, it’s like an extension of your property.”

Alfaya Village is a 39,477-sf shopping center on Colonial Boulevard. It is shadow anchored by a 49,000-sf Super Saver grocery center and sits diagonally across the street from the Publix-anchored Alfaya Commons shopping center. In addition to the $6.8-million purchase of the property, Equity assumed the $4.1-million balance on a 5.99% mortgage loan maturing August 2013. The property was 87% leased at the closing.
Sunpoint Shopping Center is a 132,374-sf shopping center on State Road 674/College Avenue. It is anchored by a 30,625-sf Bealls, a 10,356-sf Goodwill and a 9,500-sf Dove Carpets. The property sold for $7.7 million and was 72% leased at the time of closing.

Chapel Trail Plaza is a 56,378-sf shopping center on Pines Boulevard. At the time the plaza was put under contract for sale, it contained a vacant 51,703-sf anchor store. Before the sale closed, Equity signed a lease with L.A. Fitness to occupy the space. The shopping center is located just east of the Publix-anchored Shoppes of Silverlakes, which Equity owns.

Landmark Renovation Spurs Leasing Activity

With the $1.5-million renovation of the ground floor of the landmark Bank of America Tower completed, five leases totaling 14,758 sf have been signed. With the new leases, the ground floor of the office building at International Place went from being 10% to 76% leased, bringing the building’s total occupancy to 94%.

Danet Linares, vice president of leasing and marketing for the Bank of America Tower, tells that building owners Blue Capital USA began renovating the ground floor in January 2005. The 47-story, 600,959-sf building was constructed in 1987 and sits on top of a 10-story parking garage owned by the City of Miami. On top of the parking garage is an 11th floor Sky Lobby and Terrace.

The ground floor contains 21,000 sf of retail space, its own Metro Rail Station and connections to the Miami Convention and Hyatt Regency Miami. Prior to renovations, the ground only had a single tenant--bakery Au Bon Pain--and was only 10% occupied. “When you walked into the building from the ground floor, it was totally disconnected. In the middle of the lobby was a glass wall that separated the retail space from the entrance of the building,” Linares explains. “Our whole intent was to brighten it up and open it up.”
Leases signed after renovations to the landmark office building at International Place include U.S. Century Bank, 7,000 sf ; H&R Block, 1,600 sf; law firm Marder Gonzalez & Goetz, 2,950 sf; hair salon the Salone 1,350 sf; Au Bon Pain, 1,858 sf

Starbucks is also expected to sign a lease in the coming months. There is currently 5,139 sf of ground-floor space available. Linares says the renovations are the first phase in the project. The second phase, which will start next year, will include improvements to the building’s exterior, such as a new monument and landscaping.

Wednesday, May 10, 2006

Developer Readies Condo-Hotel Start

The newest condominium hotel project, the 200-unit St. George Residences and Condo-Hotel, will begin to rise in the late summer. It will be the first new hotel built in Coral Gables in 25 years.

Construction is scheduled to begin in late summer on the St. George Residences and Condo-Hotel, a 200-unit condominium project at 2020 Salzedo St. located four blocks away from the Miracle Mile. The project is being developed by Gables Centre LLC.

Gary Prosterman, principal of Gables Centre LLC, tells that the project is a joint venture between Memphis-based Development Services Group, which specializes in hotel development, and Atlanta-based City Centre Properties, which specializes in mid- and high-rise residential development.

The project will contain 83 one-, two- and three-bedroom condominium units ranging in size from 792 sf to 1,418 sf and 117 studio and one-bedroom hotel condominium units ranging in size from 428 sf to 928 sf. Preconstruction prices for the condominium units will start at the mid-$400,000s and for the hotel condominium units start from the mid-$200,000s. “It’s a true mixed-used development. Residents of the condominium will have access to the hotel services on an a la carte basis,” Posterman says.
Posterman says Gables Centre acquired the site about a year ago from another developer, which had assembled the lots over a four-year period and obtained approvals for the project. The hotel condominium units will be managed by Hilton Hotels when not occupied by owners. Under deed restrictions in Coral Gables, owners can only occupy units 30 days during the year. “What we like about this project is there hasn’t been a hotel built in Coral Gables in 25 years because of high barriers to entry,” Posterman says.
Amenities in the project include private entrances for residences, a landscaped pool deck with swimming pool, restaurant, owners’ lounge, spa and fitness center. Owners of the condominiums will have access to services on an a la carte basis, Posterman says. Fortune International Realty is the exclusive sales and marketing agency for the project. A temporary sales center is located at 2401 Douglas Rd. with an on-site sales center estimated to open in July.

Tuesday, May 09, 2006

$155M Project To Bring Condos to Landmark

The landmark hotel Royal Palm Resort will be transformed into a condo-hotel project under a $155-million refurbishment project by a partnership between developers the Falor Cos., of Miami and Chicago, and the Mitchell Cos of Miami.

The project will feature the first Maxim Lounge, an 8,000-sf lounge that will feature an outside pool area, terrace and upstairs VIP pool. The lounge is the creation of a partnership of nightlife entrepreneur Rande Gerber, founder of New York-based After Midnight Co., and Maxim Magazine. Gerber and production designer Charles Infante will complete the lounge. Both the hotel and lounge will open in November.

Robert Falor, president of the Falor Cos., tells that the property was selected because of its prime South Beach location, which is directly on the water. “Between the location and the fact that Maxim will be located there makes this a great project.”
After completing the refurbishment project, the 417-unit Royal Palm Resort located in South Beach will contain 130 hotel-condominium suites ranging in size from 273 to 1,151 sf, 35 poolside bungalows ranging in size from 451 to 466 sf and 252 refurbished hotel rooms. Sales of the units, which will be priced from the $400,000s, will begin next month. West Paces Hotel Group, which was founded by former president and COO of the Ritz Carlton company Horst Schulze, was hired to consultant on the project.
The landmark property was constructed in the late 1930s by Russian immigrants Joe Rose and Nat Hankoff. The property was sold to the City of Miami Beach in 1995 to create a Convention Center Hotel Village but, after learning of the redevelopment plans, hotel developer R. Donahue Peebles outbid the city and turned the property into the Royal Palm Crowne Plaza Resort. The Falor Cos. bought the property from Peebles in 2004.

Monday, May 08, 2006

Business is Different for Investment Properties Than Primary Residences

The best-selling book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner argues that REALTOR®-owned homes sell at a higher price than others because they stay on the market longer, and the authors suggest that somehow REALTORS® do a better job of selling their own properties than they do for their customers.

The fact is that a large percentage of the REALTOR®-owned properties the Freakonomics authors studied were investment properties, not primary residences. With investor properties, the seller can wait out a bad market and wait for the prices, not worrying about the timing of a job transfer or the start of school year. In the Freakonomics study, the data sample consisted of 3,300 REALTOR®-owned sales out of 98,000 total sales. That is, REALTORS® engaged in 3.4% of all home sales. Yet REALTORS® represent only 0.8% of the general population. That percentage is much larger than would be expected out of the general working population. Clearly, the high percentage of REALTOR®-owned homes can only be attributed to investment properties.

Freakonomics assumes that the longer a property is on the market, the higher the price at which it will sell. In fact, the opposite usually occurs; price concessions become deeper the longer a home stays on the market. For sellers needing to move, they have to concede lower price with each passing week. Investors, on the other hand, have less incentive to concede. So the fact that REALTORS® are selling a client's home with fewer days on the market is a value-added contribution.

30-Year Mortgage Rates Near 4-Year High

Mortgage rates rose for the sixth consecutive week, with interest on 30-year fixed mortgages averaging 6.59 percent for the week ended May 4, according to Freddie Mac.

Mortgage rates were significantly lower a year ago at 5.75 percent. More increases could be on the way, says Freddie Mac chief economist Frank Nothaft, who expects the upward movement in borrowing costs to slow housing sales by 5 percent this year as increases in the federal-funds rate push bank prime rates higher — which would result in higher payments for consumers who hold variable-rate mortgages or home equity loans.

Chris Thornberg, senior economist for the UCLA Anderson Forecast, downplays the impact of interest rates, noting that rates eventually had to rise as a result of tightening by the Federal Reserve.