Yearly Archives : 2017

Get ready. Amazon-Whole Foods deal will change how you buy food forever

Get ready. Amazon-Whole Foods deal will change how you buy food forever

, USA TODAY Published 12:05 a.m. ET June 18, 2017 | Updated 6:25 a.m. ET June 19, 2017

The Amazon-Whole Foods deal is expected to lead to lower prices and other changes across the industry. (Photo: Eric Gay, AP)

 

For anyone in the business of selling, supplying or hauling groceries: Things just got real.

Amazon.com’s $13.7 billion purchase of Whole Foods instantly makes it a major player in the U.S. grocery industry and that leaves a lot for shoppers, retailers and other companies involved in the industry to chew on.

The online seller is bringing its firepower to a grocery industry plagued by razor-thin profit margins. The move could slice into profits for food manufacturers, other supermarket chains such as the nation’s largest by market share, Kroger, and behemoths like Walmart, which is currently the biggest seller of groceries in the U.S. with more than one-quarter of the market, according to Euromonitor. It also potentially creates a challenge for companies that deliver groceries such as Fresh Direct and Peapod, and ready-to-cook ingredients and recipes to customers’ doors, like Blue Apron and Sun Basket.

“Once Amazon is a player in the industry, anything can go,” said Joe Agnese, senior food retailing analyst at CFRA. “The big threat is what else they can do. Now that they have a retail presence with (more than) 400 stores, long-term they can expand on that threat. They can (bring) pricing pressure. They could bring down prices and everyone would have to match them or lose share.”

The broader retail industry’s tailspin has only deepened with Amazon taking a big share of the blame. Once stalwarts of the industry, Sears, J.C. Penney and Macy’s are closing hundreds of stores. Mall favorites like The Limited and Gymboree have filed for bankruptcy protection. Now, traditional grocers could face a similar fate.

►A wave of merger and acquisition activity may on the way as companies seek scale. Amazon may, itself, be the acquirer. “I don’t think that this will be the last of Amazon’s purchases,” said Rafael Romero, vice president of Florida-based real estate firm CREC’s retail division.  “They fully recognize that brick and mortar and online retailing is all retailing and you need both.”

Other companies could look to buy expertise in crunching customer data — an area at which Amazon excels — and one that more shoppers, especially the Millennial generation, embraces. r

“I think it’s a great idea,” Trish Wichmann of New York said about Amazon’s reputation for speedy service while out shopping on Friday. “(Consumers are) used to texting. We’re used to instant gratification. That’s what we want. I think industries are trying to do that.”

Big food stores that haven’t been getting information on customers and crunching it are immediately behind. One of Amazon’s strengths is the way it captures purchase history and makes suggestions for new ones.

“Amazon is smart about mining data. They own data like Saudi Arabia has crude oil. Data is going to become only more (important) for those in grocery store business,” said Mark Hamrick, senior economic analyst at Bankrate.com.

►The challenges will extend beyond grocery aisles. Food manufacturers and producers need to gear up for two key possibilities: Amazon nudging itself into shoppers’ carts with food of its own making. It already has its own brand of many items such as batteries and pet food and Whole Foods sells its 365 Everyday Value brand.

The other major threat: Amazon engaging in margin-busting negotiations.

“If Amazon is able to gain the kind of scale they want in this space, they’ll be very tough in commanding a price,” Hamrick said.

Mass retailers now selling groceries, like Walmart and Target, and traditional supermarkets will need to be more competitive to retain customers, especially if Amazon cuts Whole Foods’ high prices.

Walmart had long been the biggest threat to the supermarket industry. In the 1990’s the chain began adding full-line grocery sections to its stores in a bid to increase sales and push foot traffic to the more profitable clothing and general merchandise it sells and Target followed with its own grocery sections. Today, new entrants such as Germany’s Lidl are coming into the market and chains like Aldi (also from Germany) are adding and revamping stores by adding more organic and specialty merchandise such as gluten-free foods, at low prices, to attract shoppers, creating an hyper-competitive environment.

►Mainstream grocers will need to take a hard look at themselves. Kroger’s stock dropped Thursday after the company lowered its outlook for annual profit and tanked again after the Amazon-Whole Foods deal was announced. Kroger’s shares lost 28% for the week. Stocks of other food sellers tanked, too.

“We’re going to see polarization here. Some players, like Wegmans and Publix, are strongly differentiated. I don’t think they’ll lose because of that. The ones that are not so strong and differentiated are more likely to fall victim to the price squeeze and you’ll see the shake-out. Other chains will look to buy these chains to consolidate,” said Neil Saunders, managing director of GlobalData Retail, pointing to Buy Low Market in California and Ingles in the South as chains that might struggle to survive.

In the near-term, at least, the big winner will probably be shoppers. Consumers can look forward to more than just extra cash in their wallets when they leave their local grocery stores. They might see completely overhauled stores — smaller footprints and larger assortments of exclusive brands, which is the successful German approach already invading the United States. Lidl opened its first U.S. stores on Thursday and Aldi is planning to add another 900 American stores and remodel the majority of its 1,300 existing ones. And Amazon’s tech heritage could completely refashion grocery stores from how they are laid out to what products are offered to how shoppers gather their purchases.

Longer-term it’s hard to say, but some people and consumer groups have already expressed concern about one company potentially having so much power.

“If you look at mergers in other industries, you already see what are the end results,” said Robert Ambrozy of New York.  “This will impact the end users and the price overall. They’re monopolizing the markets, so the rates will definitely go up.”

“Everyone’s game just needs to get tighter and that battle for the customer becomes all the more apparent,” said Jeff Roster, vice president of the research firm IHL.

“This is brand spanking new territory we’re smashing through here.”

How schools, trains and concerts are building up Miami’s neighborhoods
On Thursday, May 25, 2017, parents pick up their children after school at Downtown Doral Charter Elementary. CARL JUSTE cjuste@miamiherald.com

How schools, trains and concerts are building up Miami’s neighborhoods

By Rene Rodriguez
rrodriguez@miamiherald.com
June 4th, 2017 7:00 AM

On Thursday, school’s out for summer at the Downtown Doral Charter Elementary, and its report card is packed with A’s. In only its second year of operation, the school is already topping county-wide honor rolls — and helping to fuel Doral’s thriving real estate market.

In the post-recession building boom, developers promoted sweeping waterfront views and luxury bonuses like car elevators, bowling alleys, plunge pools and private chefs to wealthy buyers. But in recent months, while sales in the luxury condo market have stalled amid a slowdown in Latin America, developers are starting to reap the benefits from master plans that incorporate long-term, community-building amenities.

The Downtown Doral Charter Elementary School is one gamble that has paid off. The Florida Department of Education ranked the school tops among Miami-Dade elementaries for total achievement in English and math in 2015-2016. In November, principal Jeanette Acevedo-Isenberg won the Council for Educational Change’s annual Leonard Miller Principal Leadership Award — the first time a charter school won the honor.

The school is also proving to be a formidable draw for homebuyers. While any child who lives in Miami can apply to attend, residents of the new Downtown Doral development are given preference. According to a report by Gridics.com, Doral had 167 sale closings in the first quarter of 2017 — the fifth-highest of any neighborhood in Miami-Dade County.

Codina Partners CEO Ana Codina Barlick, who has overseen the metamorphosis of Downtown Doral from drab offices into a thriving work/live/play community, said an elementary school offering top-notch education was always a critical part of the master plan. A high school is scheduled to break ground in 2018.

“Our business is real estate, not education,” Codina said. “We don’t make a penny off the school. We just wanted it to be great, because the better it is, the more people would want to live in this community.”

In addition to that massive, 120-acre development, which cost more than $1 billion, Codina Partners also gave Doral a new city hall and the three-acre Downtown Doral park. But the elementary school takes developer-led community facilities to a new level.

“GENTRIFICATION IS THE GENESIS OF PEOPLE TRYING TO MAKE MONEY. NO ONE THINKS DEVELOPERS ARE DOING THESE THINGS OUT OF THE GOODNESS OF THEIR HEARTS.”
Doug Jones, managing partner of JAG Insurance Group

The Downtown Doral Charter Elementary School is the first charter school built in a public-private partnership between the Miami-Dade School Board and a developer. Codina Partners donated the $3.5 million plot of land where the school sits. The school is a 501 (c)(3) nonprofit corporation with its own board. That board leased the land back from the county school board and issued $20 million in bonds to construct the building.

The nonprofit board pays the Miami-Dade School Board a fee to manage the Doral operation. But the nonprofit board hires the principal and sets the direction of the school. Reflecting Doral’s high percentage of Hispanic residents, 60 percent of all classes are taught in English; the other 40 percent are in either Spanish or Portuguese. Teachers at the school work under one-year contracts.

“It wasn’t just about providing a school,” Codina said. “That’s really easy. You can call a charter school company and they will put a school here and you don’t have to think about it. We wanted to go beyond that.”

The investment is working. An analysis of U.S. census data by Florida International University’s Metropolitan Center reveals Doral is the fastest-growing big city in Florida and the 11th fastest in the U.S., with 58,000 residents in 2016 — a 26.1 percent increase since 2016. The median price of homes currently listed in Doral is $398,000; the median rent is $2,300. The median income of Doral households was $72,933 in 2015 — almost 60 percent higher than the Miami-Dade County median of $43,129.

“One of the big things that drives property values up is having good education nearby,” Codina said. “We wanted to sell something more than walls, a roof, a floor and some nice appliances. We offer a much bigger value to people by telling them if you move here, you have a school for your kids through high school.”

Quality-of-Life Perks

Doral isn’t alone in focusing on education: The Related Urban Development Group is currently negotiating with the Miami-Dade School Board to include a secondary school at its Gallery at West Brickell affordable and workforce housing project at 201 SW 10th St. Other developers are pinpointing facilities most important to their own potential buyers, including transit stations, places of worship, cultural events and infrastructure designed to serve full-time Miami residents and improve their quality of life.

“Real estate has started to transition away from just brick-and-mortar investment and more into creating a sense of place and being part of the fabric of their community,” said Steven Hurwitz, a partner at the Florida real estate firm CREC.

“It’s not a purely altruistic move, but developers who have done it successfully are seeing it equates to a more successful investment overall,” Hurwitz said. “Miami neighborhoods are starting to develop individual identities. The projects being presented in them are often playing a role in servicing that demographic and delivering more of an experience.”

Some of those projects are relatively small in scale and cater to a niche demographic. But their impact on their respective communities can be significant.

Developer Verzasca Group will donate a Mikvah — a bath used by Jewish men and women for ritual immersion — to the Chabad Lubavitch of Sunny Isles Beach as part of their 61-residence luxury condo tower Aurora at 17550 Collins Ave. Groundbreaking is scheduled for July.
Chabad Lubavitch of Sunny Isles Beach

As part of its 17-floor, 61-unit luxury condo project Aurora, at 17550 Collins Ave., developer Verzasca Group is donating a 2,000 square-foot mikvah — a bath used by Jewish men and women for ritual immersion — to the Chabad Lubavitch of Sunny Isles Beach. The mikvah, to be delivered upon completion of the building, will have a separate entrance and will be available for use by anyone in the community, not just residents of the tower.

“As a fairly new developer in town, we started to do community outreach and meet with the neighbors to understand who lives in the area,” said Verzasca managing director Tim Lobanov. “We knew we would need to get approval from the city commissioners for this project. We met with Rabbi Yisrael Baron of the community center across the street and he told us about the need. Among the Jewish people in the area, we are already known as the building that’s going to have a mikvah in it.”

On Miami’s Upper East Side, Global City Development and the Midtown Group are teaming up on a mixed-use development named Legions West that would initially bring 237 rental apartments and a new 15,000 square-foot American Legion facility overlooking Biscayne Bay at 6445 NE Seventh Ave. in Miami.

Architectural rendering of the new $4 million Harvey W. Seeds American Legion Post 29 headquarters and campus planned by Global City Development and Midtown Group as part of its five-story, 237-unit Legions West mixed-use apartment complex at 6445 NE Seventh Ave. in Miami.
Stantec

“We’re trying to update what the American Legion has been in the past — a place for older veterans to come have a drink and talk — and attract younger veterans from Afghanistan and Iraq who have young families and want to participate in activities that are more relevant for them,” said Brian Pearl, principal and co-founder of Global City Development. “We’ve organized our whole business around socially impactful real estate development. There’s a benefit to having more integrated communities that will pay off in the long run.”

Pearl said that even though his company won’t make any money from the American Legion facility, doing something positive for the community helps people feel more comfortable with new development.

Global’s desire to incorporate a swath of Legion Memorial Park into its eventual 1.2 million square-foot complex has already met with resistance. That kind of controversy is bound to arise when locals don’t entirely agree with the developer’s vision.

“Businessmen will always be businessmen,” said Doug Jones, managing partner of JAG Insurance Group. “Gentrification is the genesis of people trying to make money. No one thinks developers are doing these things out of the goodness of their hearts. But at the end of the day, you can’t stop a lot of this from happening, so it becomes about what you can get out of it. A lot of developers end up making positive changes in communities by doing what they have to do in order to get their deals done.”

Changing the city

Other developers are taking a big-picture approach with amenities needed to help Miami fulfill its destiny as a major metropolis — with all the accompanying infrastructure that implies.

In traffic-challenged Miami-Dade, nearly a dozen mixed-use residential projects are planned along U.S. 1 and in Hialeah, close to Metrorail. The trend was spurred by Brickell City Centre, Swire Properties’ mammoth 5.4 million square-foot mixed-use complex that opened in 2016.

When Swire announced its ambitious plan in 2011, Miami was still in the grip of the Great Recession. Brickell was a ghost town of unlit condos. Metrorail and Metromover’s grungy stations reflected county funding shortages. The idea of an upscale city-within-a-city that would lure shoppers, diners, residents and office workers arriving by public transit seemed like a pipe dream.

But long before the designer shops, condos, offices and eateries opened, developer Swire Properties spent $10 million refurbishing the Eighth Street Metromover Station, with a design by Arquitectonica, that would fit functionally and aesthetically into the project’s finished structure. As part of the station’s redesign, Swire is under contract to maintain the facility until 2025, with an option to renew the agreement every 10 years after that, up to 99 years.


“All our mixed-use developments in Hong Kong and China sit on top of major transport nodes,” said Kieran Bowers, president of Swire Properties. “In Miami, there’s only the Metrorail and Metromover to choose from. But we’ll always integrate public transport into the project.”

Swire and Arquitectonica paid special heed to the station’s design and its role in the overall plan. “It would have been easy for us to have made changes but left a municipal style of architecture design. But we wanted you to feel a difference when you arrive at Brickell Centre,” Bowers said.

Florida East Coast Industries (FECI) is putting the transit concept on steroids.The $3 billion, 235-mile Brightline inter-city express train service will be the first to connect South Florida in early fall via a rail system. Passengers will be able to travel from Miami to Fort Lauderdale in less that 30 minutes at a speed of up to 79 miles per hour. The train will reach up to 125 miles per hour on the eventual extension connecting West Palm Beach to Orlando.

All aboard

The project, a privately owned venture by FECI subsidiary Brightline, is expected to alleviate South Florida traffic woes, removing an estimated three million cars from clogged highways such as I-95 and U.S. 1.

One key element: a vertical neighborhood created around the rail’s Miami hub.

In downtown, FECI is developing the 11-acre MiamiCentral on Northwest First Avenue between Northwest Third and Eighth streets. The station will connect to Metrorail, Metromover and the Tri-rail and feature three buildings offering 800 rental apartments, nearly 200,000 square feet of retail space, and 300,000 square feet of Class-A office space.

Tere Blanca, founder and CEO of Blanca Real Estate, which is handling commercial leasing, says MiamiCentral will offer grocery stores, food and beverage options at all price ranges, a fitness center, an elevated jogging track, and loads of shopping. Service between Fort Lauderdale and West Palm Beach is to begin in July, with Miami service launching this fall.

“The Brightline group is moving their offices there this summer,” Blanca said. “Several leases are already underway, and the office building is delivering at the end of June and should be leased out before the end of the year. It’s an exciting project that is driving tremendous investment around it.”


$74 million

Amount being spent on improving city infrastructure at Miami Worldcenter in downtown Miami


One of the biggest neighboring investments: The massive Miami Worldcenter, the 27-acre mixed-use project spanning 10 city blocks adjacent to the MiamiCentral station. The second-largest in development in the U.S. after Manhattan’s Hudson Yards, Miami Worldcenter spans 10 city blocks and will offer a combination of retail, residential, hotel, office and expo spaces. The first phase of the project is due in 2019.

Developers of the 27-acre Miami Worldcenter mixed-use project, shown here on March 3, 2016, will spend $74 million in new infrastructure upgrades in the neighborhood, including increased water and sewer capacity, electrical connectivity, street lights, sidewalks and landscaping.
MATIAS J. OCNER mocner@miamiherald.com

As part of the $2 billion Miami Worldcenter project, developers issued $74 million worth of private bonds to fund installation and improvement of sewage and water lines, drainage, cable and Internet fibers and new sidewalks in the formerly blighted area.

“People look at Miami Worldcenter as a project, but it’s really not: It’s a truly mixed-use city-within-a-city,” said Nitin Motwani, managing principal of Miami Worldcenter Associates, a joint venture between the Falcone Group and Centurion Partners. “We’re hoping this will have the kind of impact on downtown Miami that Rockefeller Center had on Manhattan: change the way that area operates. All the infrastructure work that the public will enjoy is not the sexy stuff that everyone likes to talk about. But it’s the stuff that makes possible all the buildings you see on Brickell.”

Building community

Other developers are investing in less tangible, but still crucial, amenities. Nir Shoshani, who runs NR Investments with his partner Ron Gottesmann, has been spearheading the cultural scene over the past three years in the self-branded Arts + Entertainment district near the Omni in downtown Miami.

The developers have drawn a young demographic to the formerly desolate neighborhood via pumped-up programming: free rooftop concerts featuring folk and acoustic acts from around the U.S.; outdoor movie screenings hosted by the Miami Film Festival, street markets and art shows.

The New York-based musical duo Sofi Tukker performed a free concert on Nov. 30, 2016 on the rooftop of Filling Station Lofts, 1657 N. Miami Ave. in downtown Miami’s Arts & Entertainment district.
Andrea Lorena

Shoshani estimates he has invested more than $1.5 million on all the area’s events thus far, and his gamble may be about to pay off. The 37-story Canvas Condo tower, at 1630 NE First Ave., is scheduled to be completed in early 2018, with its bohemian-styled units ranging in size from 620-1,110 square feet and selling for $300,000-$580,000.

“Risk is always a factor in business, especially in real estate,” Shoshani said. “Our idea was to really push forward with an urban village concept. If people had thought what we’ve been doing was a promotional stunt by a developer, it would have never gotten off the ground. This wasn’t a renaissance: It’s not like there was something going on in this neighborhood 50 years ago.”

Other developments feature amenities that dig even deeper into their communities, providing job opportunities, healthcare, museums and youth centers.

A $307 million redevelopment of Liberty Square, Miami-Dade County’s biggest and oldest housing project, broke ground in May. When completed by 2020, developer Related Urban Development will deliver 1,400 condos, townhouses and apartments — all integrated with free wifi — as well as a youth center provided by the Mourning Family Foundation, a YMCA-run family center and daycare, a museum celebrating the area’s history, a medical center and 65,000 square feet of retail anchored by a national grocery chain and supplanted by locally owned businesses.

To the north, slow but steady progress continues on SoLe Mia, a 183-acre development at 15045 Biscayne Blvd. in North Miami. The project — a joint venture between Richard LeFrak and Turnberry Associates co-chairs Jeffrey Soffer and Jackie Soffer — will occupy the largest piece of underutilized land east of Biscayne Boulevard in the county. SoLe Mia will be comprised of 4,390 residences, 1.4 million square feet of retail space, dining and entertainment and two swimmable 10-acre lagoons.

According to the developer, 29 percent of the 14,000 short- and long-term jobs created by the project have been filled by North Miami residents — nearly three times the 10 percent mandated by the county.

Old-school amenities still popular

The growth of practical, neighborhood-building amenities doesn’t mean traditional standbys such as clubhouses and swimming pools are going away. Carlos Gonzalez, division president of Lennar Homes, Florida’s largest housing developer, said variations on tried-and-true amenities are still an effective way to sell new houses.

“The No. 1 competitor for all new home developers is the resale market,” he said. “There are more resale transactions than new home transactions. So how do you set yourself apart other than having new product built to the latest codes? We do home automation and energy saving. But that isn’t enough. You have to provide things such as attractive clubhouses with a kids’ water park, or a gym for grown-ups with an adjacent playroom for your kids while you work out. In South Florida, we’re tailored toward outdoor living, so we have exterior kitchens and fire pits.”

But as Miami’s population density increases and familiar neighborhoods develop more nooks and crannies, developers will continue to gamble on long-term community-building endeavors — a sign of faith in the city’s continued growth.

“When we first started this, people thought we were crazy,” Miami Worldcenter’s Motwani said. “During the recession, they thought we were stupid. Today they say we’re lucky. We are, because a lot of what we counted on has come to fruition. But this kind of transformative project just takes a little longer. It’s a great opportunity to do something long-lasting and more meaningful than just coming in, putting up another building and leaving.”

CREC, Lubert Adler sell Coral Springs shopping center for $48M to Zurich Insurance asset manager

CREC, Lubert Adler sell Coral Springs shopping center for $48M to Zurich Insurance asset manager

Sellers raised occupancy of Royal University Plaza from 45% to 98%

By Katherine Kallergis

June 2, 2017

Royal University Plaza, Warren Weiser, Andrew Remick and Alan Esquenazi

A joint venture between CREC and Lubert Adler Real Estate Funds just sold a shopping center in Coral Springs for $48 million, nearly double what the venture paid in 2015.

Property records show CPAC Royal University sold the Royal University Plaza at 2556 North University Drive to New York-based Zurich Alternative Asset Management, a subsidiary of Zurich Insurance Group.

The CREC-Lubert Adler joint venture bought the 10-acre property in February 2015 for $26 million with plans to renovate and lease the then 100,000-square-foot shopping center. It was 45 percent leased when it last sold, and is now 98 percent leased.

CREC and Lubert Adler also expanded Royal University Plaza for Orchard Supply, which has about 37,000 square feet, and brought in Total Wine & More to lease about 25,000 square feet.

The 115,000-square-foot center just sold for more than $415 per square foot. Other tenants include Pet Supermarket, Jimmy John’s and Brooklyn Water Bagel Co.

Asking rents are in the low $30s per square foot. “We pushed rents, but we really did was push occupancy and now we have a waiting list of tenants,” Warren Weiser, CREC chairman and partner, said. Weiser, CREC partner Alan Esquenazi and vice president Andrew Remick said the commercial real estate firm is looking to acquire more value-add properties like Royal University Plaza.

While the deal was off-market, Weiser said the firms were eventually planning on selling the shopping center.

Esquenazi and Sabrina Meerbott, director of retail leasing, handled leasing. Renovations included painting, landscaping, new lighting, adding an access turn lane and other facelift-type upgrades.

The $48 million sale is the second largest for a shopping center in Broward County so far this year, a spokesperson for CREC said. In February, InvenTrust Properties Corp. paid about $163 million for two shopping centers in Pembroke Pines, Paraiso Parc and Westfork Plaza, both on Pines Boulevard.

The asset manager arm of Zurich Insurance Group targets commercial real estate markets like Boston, New York, Los Angeles and Miami, according to its website. The asset manager’s real estate portfolio includes more than 20 million square feet of space in more than 200 properties.

Top Of Mind Topics From ICSC’s RECon 2017 Conference

Top Of Mind Topics From ICSC’s RECon 2017 Conference

May 30th, 2017
By Natalie Dolce

LAS VEGAS—CREC VP Rafael Romero tells GlobeSt.com about how chef-driven restaurants are driving heavy traffic to shopping centers and why regional malls will not go quietly into the night in this EXCLUSIVE article on the hottest retail topics from this year’s big event.


CREC Vice President Rafael Romero

LAS VEGAS—GlobeSt.com recently caught up with Rafael Romero, vice president of CREC, a leading independently-owned commercial real estate firm in Florida, to hear his top five takeaways from the 2017 ICSC RECon conference in Las Vegas.

Below are Romero’s notes the “hottest” retail topics that were top of mind this year for industry pros:

Chef-driven restaurants drive heavy traffic to shopping centers

“We are seeing a new wave of innovative restaurants driving critical mass and showing landlords/brokers that the chef really matters. The concept and value of chef-driven restaurants, often by notorious and prized culinary masters, are serving as a successful formula to significantly draw demand to lifestyle centers in need of a new retail ‘palate’ and steady foot traffic,” he says. “However, although your area’s hottest chef may be a culinary genius, that doesn’t always ensure financial success. It’s important to note that when digging into a restaurant deal, there are several economic and business fundamentals to consider.”

Regional malls will not go quietly into the night

Not all malls are created equal, says Romero. “Analysts continue to blame the internet as the driving factor contributing to the decline of malls but we are still seeing ‘Class-A’ assets thrive as a result of a premier selection of retail and restaurant tenants successfully targeting the affluent communities they serve. Conversely, ‘Class-B’ and ‘C’ malls are struggling to find customers and keep tenants, as anchor department stores such as Sears and Macy’s continue to shutter,” he says. At this year’s conference, GGP, Simon, Westfield and other major mall developers and operators showcased their tenacity to keep regional malls thriving, he explains. “The sentiment is that mall owners remain heavily active to generate exciting deals, while fostering new levels of creativity to backfill impending vacancies.”

The sky is not falling

Although the recent wave of big-box store troubles continues to make headlines and there has been a slew of recent retail closures, the fact that national vacancy is at approximately 5%, according to Romero, is a strong indication that we are still experiencing a healthy retail market. “While sector readjustments will naturally be made to combat big-box retail challenges and the age of online shopping, the sky is definitely not falling,” he says. “The future looks bright for the retail community.”

Discounters are growing and absorbing square footage

Within this changing retail landscape, fueled by the closure of iconic big-box retailers, the squeeze from the internet is not the only pressure felt in the industry, says Romero. “The off-price retail sector is actively thriving. Consumers are increasingly gravitating to discounters, such as T.J. Maxx, Marshalls and Nordstrom Rack, that can offer many benefits not seen at department stores—discount prices, changing product mix and that thrill of hunting to find the perfect item. We cannot ‘discount’ these retailers from the conversation.”

Grocery stores will take a larger piece of the neighborhood center pie

“We are definitely seeing more demand from grocery store giants, with their desire to continue rapid expansion in centers across the country. With new big-name grocers coming to the market and other giants, such as Whole Foods and Fresh Market, further developing prepared foods and unique offerings, margins are anticipated to widen and heighten the threat to other neighboring, local supermarkets and restaurants. We will definitely see the supermarket and grocery store industry remain a hot topic, one that is closely watched in the coming quarter.”

CREC Tapped by Thor Equities to Reposition & Draw High-Street Retail to Prime Fort Lauderdale Beach Shopping Destination

CREC Tapped by Thor Equities to Reposition & Draw High-Street Retail
to Prime Fort Lauderdale Beach Shopping Destination

Florida’s leading commercial real estate firm to transform The Gallery at Beach Place
into a live-work-play lifestyle center following major renovations.

CREC – Florida’s leading, independent, full-service commercial real estate firm – announced today that it has been selected by Thor Equities as the exclusive leasing agent for The Gallery at Beach Place in Fort Lauderdale Beach, Florida. Bringing extensive expertise in high-street retail, CREC together with Thor Equities will reposition the property’s tenant mix, revitalizing this Fort Lauderdale Beach landmark.

A major $1.9 million renovation by Thor Equities, including a fresh façade and modernization of finishes throughout, is currently underway to appeal to shifting demographics and increased demand for tailored, experiential retail in the Fort Lauderdale market.

“We are excited to collaborate with Thor Equities to reposition this trophy asset and bring it to full occupancy,” said CREC Vice President Rafael Romero. “The 360-degree renovation of The Gallery at Beach Place encompasses not only the aesthetics of the property, but our team’s commitment to re-imagine this property as a 21st century lifestyle center anchored by an inspired collection of eateries, offices, health and fitness centers, and entertainment retailers.”

With this appointment, CREC continues its track record of reshaping the retail blueprint of lifestyle shopping destinations in Florida. Most recently, the firm created and executed a vision for a revitalized tenant mix at Downtown Dadeland. Prior to CREC’s involvement in 2014, Downtown Dadeland struggled to attract retail occupants that boosted foot traffic. CREC has since positioned Downtown Dadeland as Miami’s premier location for chef-driven restaurants, situated in a pedestrian-friendly, open-air environment. The restaurant lineup includes four James Beard Award winners and nominees including Pubbelly Sushi, Harry’s Pizzeria, The Brick and Zuuk.

The Gallery at Beach Place is situated at 17 South Fort Lauderdale Boulevard, just steps from the sand, and directly on the main thoroughfare of Fort Lauderdale Beach’s State Road AIA. The property’s prime location affords breathtaking ocean views and heavy pedestrian and vehicle traffic from neighboring hotel brands, including Marriott, The Ritz-Carlton, W Hotels and Westin. Tourist attractions such as The Fort Lauderdale Air Show and Tortuga Music Festival add seasonal boosts of foot traffic. The area attracts over 13 million annual visitors, spending more than $10.6 billion each year.

Comprised of 95,769 square feet of mixed-use space amid three floors, The Gallery at Beach Place is currently 70 percent occupied, with 32,618 square feet of rentable space available. Thor Equities’ significant investment in infrastructure will transform the property to provide a platform for CREC to attract high-quality tenants to Fort Lauderdale Beach’s newest live-work-play lifestyle center.

CREC Vice President Rafael Romero and Senior Leasing Associate Ariel Bernstein will oversee leasing and marketing The Gallery at Beach Place. Current anchor tenants include CVS, Escapology, Hooters, Lulu’s Bait Shack, and Maui Nix.

 

Miami Beach office market in ‘very best of health right now’

May 18th, 2017

By Catherine Lackner

S.Hurwitz_CREC_2016Miami Beach, a small, boutique office market, is “phenomenal as an asset class and arguable in the very best of health right now,” said Stephen Rutchik, Colliers International executive Vice President.

With no new office product introduced since 2002 and exploding values that make residential and mixed-used projects the highest and best use for raw land, tenants are shopping around in existing spaces and landlords are re-investing in older buildings, he said.

“There’s been a very significant appreciation in rents,” he said. “We’re still at a discount to the central business district, but not as much as before.” Class A rents in downtown Miami are about $45-$50 per square foot gross, while that space can be had on Miami Beach in the mid-$40s, he said.

“Many employers are looking for a submarket that has all the amenities their employees want as well as places to entertain clients. Miami Beach provides that and it’s not horribly congested like the CBD. It also has that cool factor, like Wynwood,” which doesn’t have much in the way of pure office space, observers say.

On Miami Beach, a higher proportion of people get around on bikes, skateboard and scooters than on the mainland, which is appealing to the millennial who work for or own tech companies, Mr. Rutchik said. “Tech firms are the drivers of net absorption. Being on Miami Beach checks their boxes.”

“We are seeing that the Miami Beach office market is currently performing quite well, with several similarities to other South Florida boutique office markets, such as Aventura and South Miami,” said Steven Hurwitz, a partner at CREC who leads the firm’s office leasing practice, via email.

“They provide a wide range of high-end, close-to-home opportunities for professionals wanting to avoid the ever-growing traffic congestion in South Florida. In Miami Beach, calls A vacancy remains in the single digits, and rental rates continue to climb, with supply constraints and limited, to no new deliveries on the drawing board.

“Land values and the return on other asset classes – like residential, retail and hospitality – have made Miami Beach’s office supply flat for many years. It is highly unlikely you will see an institutional-quality office building being delivered in South Beach anytime in the near future,” he said.

Miami Beach tenants are typically middle- to high-net-worth decision-makers, the fund and investment managers, principals in music and talent agencies and others who don’t typically need to be downtown, he said.

“Compass (a new tenant to Miami Beach) took the top two floors at the old Sony Building at 605 Lincoln Road in the past year and Warner extended its lease last year and is staying on Miami Beach, so that’s also good news for the market,” Mr. Hurwitz said. “Miami Beach tenants are those that want great quality in a location outside the more congested downtown and Brickell markets. Many of them live on Miami Beach, as do their employees.”

“Miami-Dade County’s pace of total office leasing activity bounced back from a tepid showing in 2016 with little adjustment to near-record high asking rate,” said JLL’s first quarter 2017 office report.

“Countywide total leasing activity registered 40% year-on-year growth (representing the largest single-quarter square-footage leased since the fourth quarter of 2015), led by the long-awaited return of suburban submarkets to long-term historical average activity.”

Miami Beach is a relatively small market with 1.9 million square feet of office space, the report continued. Throughout the Beach, rents average $41 per square foot, and the vacancy rate is 9%. Miami Beach class A space fetches $45 per square foot (with an 8% vacancy), while rates for class B are $39 per square foot with a 9% vacancy.

CREC Tapped To Exclusively Lease 43,000 SF Of Retail Space For Luxury Mixed-Use Development In Downtown Miami

May 16th, 2017

CREC has been appointed the exclusive leasing agent for 43,301 square feet of prime retail space of the luxury mixed-used development Vizcayne, located at 200 Biscayne Boulevard, in the heart of downtown Miami.

Vizcayne is situated within walking to distance to the American Airlines Arena, in a dense urban area with a strong population of businesses and growing residential base. Comprised of 849 condominium units in two residential towers, the development’s retail space provides everyday conveniences and services that appeal to the surrounding demographic.

Current ground-floor tenants include Orangetheory Fitness, CVS, Smoothie King, Zona Fresca, and The Learning Experience, with available retail space between 2,875 and 13,047 square feet. Additionally, Vizcayne offers a 126-space parking deck and abundant street parking along Biscayne Boulevard and adjacent side streets.

CREC Vice President Rafael Romero, CCIM and Senior Leasing Associate Ariel Bernstein will oversee leasing and marketing of the project.

“Vizcayne’s retail component provides a unique opportunity to attract lifestyle tenants that complement the neighborhood’s thriving residential base, as well as the bustling business community,” said Romero. “We are carefully selecting a retail mix that heightens the amenities of the luxury mixed-use development, while remaining conscious of drawing retailers that deliver a sense of ease to those who regularly frequent the area.”

Strategically located on Biscayne Boulevard, Vizcayne is across from Bayside Marketplace and Bayfront Park. Developed by Cabi Developers, the projected was designed by Fullerton-Diaz Architects, Inc. and completed in 2008.

“We are excited to add another luxury mixed-use project to our portfolio, and look forward to curating a lifestyle retail mix that brings great value to Vizcayne and Downtown Miami’s thriving pedestrian market,” added CREC President and Co-Founder Carol Greenberg Brooks.

Events company moves to top floor of South Beach office building

Events company moves to top floor of South Beach office building

INDUSTRIES & TAGS. Commercial Real Estate

By Emon Reiser – Digital Producer South Florida Business Journal 

GDS Publishing, an international events and technology services company, has relocated to the top floor of a 90,000-square-foot office building in Miami Beach.

The Bristol, United Kingdom-based company moved its South Florida branch to 10,000 square feet at 1688 Meridian Avenue. The firm will occupy the entire penthouse floor of the office space with more than 40 employees. Cushman & Wakefield Managing Director Gordon Messinger represented the property owner in lease negotiations and CREC’s Steven Hurwitz represented the tenant.

1688 Meridian Avenue is a 90,000-square-foot office building in Miami Beach.
PHOTO COURTESY CUSHMAN & WAKEFIELD

GDS relocated from 1691 Michigan Ave.

The company’s fellow tenants now include Regus, a major flexible workspace company; international modeling agency Next Model Management and international advertising agency J. Walter Thompson Worldwide.

Ivy Realty acquired 1688 Meridian Ave. and 1674 Meridian Ave. in July 2016. The office buildings total 120,000 square feet. The Connecticut-based company is planning improvements for both buildings including renovations to the lobbies, bathrooms and other common areas.

Long slog of Miracle Mile revamp alters business scene

WEEK OF THURSDAY, APRIL 13, 2017

A Singular Voice in an Evolving City.


COMMERCIAL & OFFICE SPACE


Long slog of Miracle Mile revamp alters business scene

By Catherine Lackner

The renovation of Miracle Mile and Gerald Avenue has been a long slog and, with completion set for January, it’s far from over. Stakeholders on the streets have experienced the construction differently.

“We’ve been very fortunate, but we are sensitive to the fact that others have had serious difficulties,” said Barbara Stein, executive producing director of the Actors’ Playhouse at the Miracle Theatre, 280 Miracle Mile.

“We’ve become somewhat of a destination, and people seem to be able to get to the theater on time,” she said. “People have a choice to see or not see the show, and we’ve had some good series.”

Parking is a challenge, she said, “but parking is always a challenge, and not just in Coral Gables, but everywhere. We’re hoping the return of valet service will help.”

On balance, Ms. Stein called the renovation “a little bit of pain for some gain.

“These are going to be amazing improvements, and we hope that the people we bring in will help generate opportunities for everyone,” she said. “We’re all working together for the prosperity of the community.”

An unintended consequence of the renovation forced Flowers & Services, formerly of 366 Miracle Mile, to leave the city.

“Due to the construction, the owner of our former location raised the rent from $4,000 to $11,000,” said Maria Budow, co-owner of the business. “We moved. Once the renovation is done, a restaurant can come in there and put tables on the sidewalks, which we couldn’t do.”

Flowers & Services moved to 6600 Coral Way. “It’s really nice and there’s plenty of parking,” Ms. Budow said. “We’re happy.”

Rent increases may be part of a trend, said Rafael Romero, Vice President of CREC, via email.

“While some retailers may not survive these challenging times, the long-term gains will deliver enhanced tenants and increased market vitality. With less than a 3% retail vacancy rate in Miami today, any vacancies will be absorbed quickly in this area.

“We expect landlords of existing retail buildings to upgrade infrastructure to meet the vision of the new streetscape, playing a significant role in the new retail aesthetic,” said Mr. Romero, whose office at 2121 Ponce de Leon Blvd. is two blocks from Giralda Avenue and four blocks from Miracle Mile. “Coral Gables will also need to work closely with the surrounding landlords to deliver a destination with a synergetic tenant mix.”

“This is a defining moment for downtown Coral Gables,” said Christopher Brown, co-developer of Giralda Place, a nine-story, 33-unit condominium project at 2222 Ponce de Leon Blvd., which will have 13,390 square feet of ground-floor retail and about 100,000 square feet of office space.

“We’re already seeing growing interest in Giralda Place due to the streetscape project taking shape across the street. While tenants have seen a dry sales period, there is real buzz surrounding the streetscape’s completion and resulting increase in foot traffic,” he said via email.

“The improvements will greatly benefit current retail tenants by helping to boost lost revenue from the heavy construction and providing them with a competitive advantage, as there are no other thoroughfares in the vicinity that share the same attributes.”

“We invite people to come experience the progress of the Miracle Mile streetscape as you stroll the south side of the 100 and 200 blocks of Miracle Mile [which house] the Miracle Theatre, Barnes & Noble and dozens of quality shops and eateries,” said Javier Betancourt, Coral Gables economic development director, via email.

“Hand-cut stone pavers – inspired by our beautiful South Florida skies – are being meticulously installed on ultra-wide sidewalks to create a captivating pedestrian experience for locals and visitors alike,” he said. “The first phase of this multimillion-dollar renaissance has successfully addressed long-standing drainage issues while installing high speed fiber, new shade trees, and specialty lighting. The drainage work is done and the magic is now taking shape.”

The first phase of the Giralda Plaza streetscape is taking shape, as well, he said. “To celebrate,

‘Parking is always a challenge, and not just in Coral Gables, but everywhere. We’re hoping the return of the valet service will help.’

Barbara Stein


‘While some retailers may not survive these challenging time, the long-term gains will deliver enhanced tenants and increased market vitality.’

Rafael Romero


many of the restaurants along ‘restaurant row,’ (the 100 block of Giralda Avenue) will operate impromptu outdoor cafes in the plaza each Saturday from breakfast to midnight.

“Entitled Giralda Alfresco, these Saturday experiences will allow us to get a taste of what’s to come, because it’s just too pretty now to wait until summer, when it’s officially complete,” Mr. Betancourt said.

The project – which was discussed for years before the first inch of pavement was broken – will create streets that are more walkable, vibrant and attractive, he said. Giralda Plaza is scheduled for completion by early summer, and seven of Miracle Mile’s eight blocks are scheduled for completion by November of this year (in time for the holiday season), with the last block slated for completion by January 2018.

“The city is sensitive to the hardships faced by merchants during this period of construction,” he said. Coral Gables has taken steps to support the merchants, including:

‘While tenants have seen a dry sales period, there is a real buzz surrounding the streetscape’s completion and resulting increase in foot traffic.’

Christopher Brown


‘The first phase of this multimillion-dollar renaissance has successfully addressed long-standing drainage issues while installing high speed fiber.’

Javier Betancourt


  • Working with the contractor to accelerate and expedite the work.
  • Attracting people to downtown through a variety of free events, such as Wellness Wednesdays, Jazz in the Gables, Movies on the Mile and Giralda Al Fresco.
  • Providing discounted or complementary parking for customers, including free parking vouchers and free valet vouchers for Giralda Avenue merchants.
  • Conducting a robust marketing and advertising campaign in publications and social media.
  • Installing more than 180 business continuity parking and wayfinding signs.
  • Waiving city permit fees and expediting permitting for facade improvements.
  • Providing flexibility with respect to certain code enforcement regulations.
  • Enhancing privately owned paseos at the city’s expense.
  • Providing rent abatement for retail tenants in city-owned properties.
CREC Tapped to Manage, Lease Miami Office Building

April 5th, 2017

CREC has been selected as the exclusive leasing agent and will be managing the office asset for Park Centre Boulevard in Miami Gardens.

The ‘Class A’ office building was acquired for $8.5 million in February by 1111 PCB Holdings, LLC.

Located at 1111 Park Centre Boulevard, the property offers 56,634 square feet of office space amidst four stories. The building is currently 92-percent occupied, with 5,162 square feet of rentable space available. CREC Senior Leasing Associates Katie Fernandez-Espinosa and Teri Jarp will oversee leasing.

“We are excited to be collaborating with the new ownership team for Park Centre Boulevard to bring this asset to full occupancy,” said CREC Co-founder and President Carol Brooks. “The property is currently home to a strong mix of professional tenants, including law offices, medical companies and government agencies, seeking convenient workspaces in proximity to major thoroughfares. The location, coupled with the building’s on-site amenities, will serve as a strong draw for our network.”

Park Centre is  situated west of the Golden Glades Interchange.