Yearly Archives : 2017

Why Malls Should Add Residential To Their Repurposing Plans


The retail apocalypse has not been kind to malls. Credit Suisse recently studied the state of mall-based retail and predicted that that about one-fourth of the nation’s 1,100 shopping malls — or roughly 220 to 275 shopping centers — will close by 2022. This is largely credited to the shift toward online shopping, which the bank predicts to capture upwards of 35% of consumers’ spend by 2030 and the resulting raft of brick-and-mortar store closures, that will reach 8,600 this year and more are expected to follow next year.

The traditional concept of a mall as a grand hall for shopping is becoming “a historical anachronism” desperately in need of reinvention, says Rick Caruso, CEO of retail developer Caruso Affiliated, which is responsible for the trend- setting LA-based The Grove at Farmers Market that offers outdoor retail, food, and entertainment centers.

Mall owners aren’t sitting idly by though, as they push the traditional mall’s boundaries beyond retail to create community centers that become destinations where guests can meet, eat, be entertained, and shop, if they feel so inclined. The new buzz word in the mall industry is “reuse” or “remix” where old retail spaces are made over for new, more relevant uses for today’s consumer culture.

Shopping alone or shopping primarily can’t be the reason why people will come to the mall anymore. With big increasingly empty spaces, ample parking, and access to major thoroughfares, malls are now asking “what else can these locations be used for?” says Peter Muoio, chief economist at Ten-X.

Among the answers to that question are dining experiences, beyond the ubiquitous mall food court; hotels and other services, such as dry cleaners, salons and barber shops; fitness, with gyms, yoga, Pilates and other workouts centers; recreational activities for families, such as rock climbing, children’s activities, even indoor water parks and amusement parks; and medical care uses. But one of the more revolutionary and promising concepts is adding live/work alternatives.

“Residential housing is one of the several options that developers are considering in order to revitalize failing mall properties,” Rick Rizzuto, vice president at Transwestern reports. “In today’s landscape, some are redeveloping mall properties to include residential units, while others are considering condos and apartments.”

The need is great and growing for accessible, affordable housing.

Market success hinges on finding a consumer need and meeting it. And that is what malls can do by adding residential into their mix.

Housing collocated in mall properties can capture growing demand from two of the key demographics looking for such accessible, convenient places to live: aging baby boomers and young millennials. The Harvard Joint Center for Housing reports that by 2035 more than one in five people in the U.S. will be aged 65 and older, and one in three households will be headed by someone in that age group.

“The housing implications of this surge in the older adult population are many,” says Chris Herbert, managing director at the center, “and call for innovative approaches to respond to growing need for housing that is affordable, accessible and linked to supportive services that will grow.” Mall properties could be well suited to meet these needs. Further it may offer opportunities for mall owners to bring in new retail, like grocery and pharmacy, and new services including medical and senior care tenants.

Affordable and accessible housing is also in great demand among millennials which forward-looking malls could be repurposed to address as well. In its new State of the Nation’s Housing report, the Harvard Joint Center for Housing Studies says, “Looking at the decade ahead, as the members of the millennial generation move into their late 20s and early 30s, the demand for both rental housing and entry-level homeownership is set to soar. The most racially and ethnically diverse generation in the nation’s history, these young households will propel demand for a broad range of housing in cities, suburbs, and beyond.”

By adding residential into the mall mix, the commercial tenants will find a new captive audience for their goods and services. “One of the main benefits is that residents will have restaurants, services and retail at their front door step. The close proximity to these uses will allow the consumer to utilize these almost as amenities,” says Steven Henenfeld, senior vice president and director of retail leasing at CREC.

How malls are redefining “living over the shop”.

By looking beyond conventional retail space, malls can untap tremendous value in those properties and become more relevant to their local communities. “While we’ve seen store closures increase in 2017, for the most part, malls are attracting new tenants through strategic marketing and property enhancements,” says Nick Hernandez, managing director of retail for Transwestern. “And in cases where a retail mall no longer makes sense, we have seen many owners successfully adapt to the changes in their trade areas by repurposing the mall for another use.”

Mall locations can be prime for residential uses. “Malls are typically located on or near an intersection of a high or a main street and are well served by public transportation,” Henenfeld notes. “That puts the residential properties at the center of town, allowing residents easy access to main roads and highway systems.”

CREC Sells Sunrise Shopping Center For Three Times Original Acquisition Price

CRE-Sources | South Florida Commercial Real Estate News

CREC announced that CPAC, a joint venture between CREC and members of the Lindemann Family, has completed the sale of University Shoppes of Sunrise in Sunrise, for $12.6 million, to Luxcom, founded by Oscar Barbara.

With this sale, which closed on November 20, the partnership achieved three times its original acquisition price.

CPAC acquired University Shoppes of Sunrise through foreclosure after purchasing the distressed note in 2012 at a significant discount. At the time of purchase, the property was comprised of a 135,011-square-foot retail center located on 13.2 acres, which included a vacant 103,480-square-foot former BJ’s Wholesale Club.

The partnership identified this purchase as a redevelopment opportunity and began to reposition the property to execute a ground lease with Aldi for a portion of the property. Upon completion of the new grocer, 9.2 acres of prime developable land remained, which CREC recognized as a prime suburban 222-unit multifamily development site and positioned the property for sale as such.

“This transaction adds yet another layer to the depth of CREC’s acquisition activity this year, further highlighting our ability to recognize opportunities that yield a robust return,” said CREC Chairman and Co-Founder Warren Weiser. “We saw tremendous value in purchasing the note for this property, at a low basis point that allowed us to evaluate the best use for its future, which we ultimately concluded to be multifamily. The execution of the sale was a strong land play, where we maximized value.”

“We continue to engage in high-level acquisition and sales activity with the benefit of providing our partnerships with full-service capabilities across our diverse product types and services, which includes the ability to seamlessly underwrite and execute deals across the state of Florida,” added CREC Co-Founder and President Carol Greenberg Brooks.
CREC Vice President Andrew Remick and Aztec Group Managing Director Peter Mekras represented the seller, CPAC.

The shoppers are coming

The shoppers are coming

Brokers say the shifting demographics of a growing population help make the case for prospective retail tenants to sign on the dotted line

By The Real Deal

In pitching new retailers on why they need to open a location at Downtown Dadeland, Continental Real Estate Companies’ (CREC) Vice President Rafael Romero presents a flyer featuring photos of the well-known local chefs behind four restaurants that have opened in the past 18 months at the retail and residential development in Kendall.

Romero tells prospective tenants about how restaurants like Barley, an American Brasserie; Harry’s Pizzeria; Pubbelly Sushi; and Ghee Indian Kitchen are reshaping the 7.5-acre Downtown Dadeland into a destination that will draw in affluent consumers from throughout South Florida as well as those living in the immediate area, where the estimated median household income is $137,237.

“Those establishments are part of a concentrated effort to create a restaurant row that has completely revitalized Downtown Dadeland,” Romero said. “To get them, we went to every chef event we could find in South Florida. If there was a croquet contest and they were there, we were there, too.” 

At a time when many brick-and-mortar brands continue downsizing or disappearing altogether from the American retail landscape, South Florida commercial brokers are courting tenants with sales pitches that focus on the region’s growing population and changing demographics.

The tri-county region added about 482,000 residents between 2010 and 2016, according to a March 2017 report by Florida International University analyzing recent U.S. Census figures. That growth has largely been fueled by immigrants —  the university’s report found that net international migration to the region increased 397 percent in that period. It remains to be seen how President Trump’s immigration policies could affect this trend.

To land some tenants, the brokers are working with landlords to revamp existing properties and configure new developments into experiential destinations. They’re also giving start-up businesses and established brands short-term leases to test out empty storefronts. And some good old-fashioned networking helps to land deals, too.

“Cold-calling and being a voice on the phone is not enough,” Romero said. “You need to get in front of them, show them pictures and explain the vision to get them to buy in. It is more than just promoting a building. You have to create a scene for them.”

To be sure, retail real estate is performing better in South Florid than in other parts of the country. Colliers International’s second-quarter retail report showed Miami-Dade’s vacancy rate was just 3.8 percent, Broward’s was 3.7 percent, and Palm Beach’s was 4.5 percent.  In comparison, the national retail vacancy rate rose to 10 percent in the same period, according to real estate research firm Reis Inc. And a recent report from online real estate marketplace Ten-X placed Miami and Fort Lauderdale in the first two slots of its top “Buy” markets for retail investors, forecasting  that the metropolitan areas will experience a combined 14 percent growth in net operating income by year’s end.

However, local asking rents are growing at a slower pace than the 3 percent national rate, per JLL’s 2017 spring retail report for South Florida. In the second quarter of 2017, asking rents only ticked up 1 percent in Miami-Dade, 2 percent in Broward and 2.7 percent in Palm Beach. The brokerage also placed Miami, Fort Lauderdale and Palm Beach among 15 cities that have reached the peak of the market cycle.

A more anecdotal sign that South Florida is not immune to the shrinking base of department, apparel and accessory stores is the fact that brokers are concentrating more on fitness tenants like indoor cycling studios and fighting gyms as well as entertainment providers such as bowling alleys and luxury movie theaters .

“There is not much deal flow for traditional apparel and trinket sellers,” Romero said. “These other categories have stepped in and given rise to the lifestyle center.”

Robert Granda, commercial brokerage Franklin Street’s South Florida retail director, said he is advising landlords he works with to target start-up business owners doing old school concepts like luxury barbershops and cigar bars.

“It could be a barber from Los Angeles or New York who is looking to open his first location,” Granda said. “Typically, landlords would like to see a track record. I will tell them men’s grooming and barbershops are hot tenants because they provide services that are driven by the experience of being there.”

To attract a retailer, some landlords are willing to offer short-term leases for pop-up stores, says Rod Castan, president of leasing and management for Courtelis Company. The property owner gets to temporarily fill an empty space while the tenant gets to test out a storefront, he explained.

“You will see landlords willing to take chances on incubating a retail concept,” Castan said. “That is a method we have used in Florida’s softer markets.”

For instance, House 2 Home Goods — a tenant at the Shops of Surfside in Cape Coral — opened under a three-month lease in February but in May converted to a longer term agreement, Castan said. In Miami, French macaron maker Ladurée opened a permanent spot in the Design District in June 2016 after testing out a two-month pop-up inside the Chrome Hearts boutique at 4025 Northeast Second Avenue during 2015’s Art Basel.

In other instances, the national retail slowdown means Castan’s team has to make more cold calls and do more face-to-face meetings with potential tenants. “We are rolling up our sleeves and doing old-school leasing … Our agents are on the road almost every day visiting other shopping center and trade areas looking for potential tenants.”

The promise of a development that has a social center is what gets many retailers to sign on the dotted line.

In Pembroke Pines, Courtelis has been successful in preleasing 75 percent of the 300,000-square-foot retail, entertainment and restaurant space at Pines City Center. Developed by Terra Group, the 47-acre mixed-use development is being built in two phases, with the first scheduled for completion by 2018. Major tenant signings include Publix, Carl’s Patio, Cooper’s Hawk, BurgerFi and Outback Steakhouse.

“These types of projects tend to have more attractive common areas and are better gathering places from a development standpoint compared to traditional shopping centers,” Castan said. “Bringing in ethnic, fast casual and healthy dining concepts is another way to make the projects more successful.”

Castan said he and his team show potential tenants renderings of Pines City Center to point out the features that will draw people in. “The center has transitional plazas between buildings and attractive rotundas, and the parking areas are planned to be more pedestrian-friendly,” he says. “These areas create gathering spaces where we can have pop-ups, art exhibits, music and other features that will make the shopping center more interesting to visit.”

Another large-scale mixed-use development that is following a similar retail recruitment strategy is Metropica, which has leased about half of its 485,000 square feet of retail. In all, the 4 million-square-foot development in Sunrise will have more than 2,200 residential units in addition to retail, dining and entertainment space, a wellness and fitness facility, a park and other recreational amenities.

“In the past, landlords would need a department store or a big box retailer as an anchor tenant,” says Sandie Witmer, in-house director of retail leasing for Metropica. “Today, the environment you create is the anchor.”

Witmer’s leasing team has been working on a curated restaurant collection as one of Metropica’s “environment anchor” concepts. “Retailers now look at the restaurant mix to see if it attracts different types of clientele,” Witmer says. “If they think someone eating there could be a customer, they want to be there, too.”

Using this strategy, the $1.5 billion megadevelopment has signed popular eateries like Harry’s Pizzeria, Bulla Gastrobar, Shake Shack and Fogo de Chao to go alongside entertainment tenants iPic Theaters and Kings Bowl and retailers such as Anthropologie and Kendra Scott Jewelry.

So far, retail leasing in South Florida remains strong enough and vacancy rates are low enough that brokers and landlords don’t need to offer “crazy concessions,” said CREC’s Romero.

“We’ve been in the single digits for a very long time,” he said. “Retail is very much alive.” 

The Heat Is On For Retail Developers In Miami

AUGUST 25, 2017

FATcity’s retail component will breathe new life into Andrews Avenue.

MIAMI—Yes, the heat is on—but maybe not for the reasons you think. While retailers in many parts of the country are struggling, Miami has a different challenge. caught up with Sabrina Stimming, senior vice president and director of leasing at CREC, to discuss this issue in light of the 2017 ICSC conference in Orlando. You can still read part one: Why South Florida Is Bucking E-Commerce Erosion Trends. What sources or forces are driving South Florida retail traffic?

Stimming: Now more than ever, retailers need a reason to drive consumers to brick and mortar stores. The Internet’s growing effect on retail and e-commerce has given consumers the ability to purchase almost anything online.

In addition, Millennial tastes are strongly influencing retail traffic in South Florida. While Millennials generally lack brand loyalty and happily engage in e-commerce, they appreciate great dining and entertainment. And, they are very mindful of health and wellness.

As a result, restaurants and fitness tenants are high on the list for landlords seeking to drive foot traffic. Hybrid entertainment and retail concepts, such as CMX Cinemas that recently opened in Brickell City Centre, Bowlero at Dolphin Mall, and Top Golf slated to open in Miami Gardens are also gaining popularity. What “hot” South Florida developments gain interest from retailers?

Stimming: New developments continue to emerge in South Florida. Recent and proposed projects that are catching the eye of retailers include: Cityplace Doral (a 300,000-square-foot lifestyle project that recently opened anchored by Fresh Market and Cinebisto); Shops at Beacon Lakes in Doral (a 430,00-square-foot power center development that CREC is joint leasing, which will be anchored by a 65,000-square-foot Top Golf); and Aventura Mall (both Turnberry’s 315,000-square-foot expansion of the mall, which will have Florida’s first Topshop and Topman, and Seritage’s 315,000-square-foot redevelopment of Sears).

The “heat” is on in prime development spots. These include Wynwood, particularly for restaurants, and Downtown Dadeland, across from the Dadeland Mall, spurred by the addition of several, award-winning and chef-driven restaurants such as Barley, Ghee’s Indian Kitchen, Pubbelly Sushi and Harry’s Pizzeria.

Florida Shines Through

Florida Shines Through

The state’s retail growth corridors answer national wave of store closures with absorption, new developments.

By John Nelson, Katie Sloan and Camren Skelton

Master developer Miami Worldcenter Associates, led by Art Falcone and Nitin Motwani, will deliver Miami Worldcenter in phases over the coming years. The $2 billion Miami Worldcenter development is now under construction and will feature residential, retail, office and hospitality components.

Metro areas around the state of Florida are flexing their retail muscles with several high-profile projects that are popular landing spots for national and regional retailers and restaurants. Whether its Miami Worldcenter, Water Street Tampa, Butler Town Center or ONE DAYTONA, retailers and restaurants are flocking to these locations in droves because they’re attracted to the state’s employment growth, tourism and population growth, the latter of which is up by 9.6 percent from 2010 to 2016, according to the U.S. Census Bureau.

“We’re seeing net migration up across the board in Florida’s top metros,” says Brian Finnegan, executive vice president of leasing for Brixmor, a shopping center landlord with 55 properties in its Florida portfolio. “We saw a tremendous hit during the downturn, but now that’s up in all sectors — housing, tourism, employment. That’s been a huge plus for retail leasing, and we’ve seen it in our results. Our small shop occupancy in the state of Florida is up 350 basis points over the past two years, which is significantly outpacing the company average.”

It’s been an interesting summer for national retail real estate markets as landlords have had to adjust to the wave of store closures announced during the first quarter. For the most part, Florida’s retail industry specialists say that tight market conditions and favorable demographics have increased demand for the retail space that is becoming available.

“Florida is handling the wave of store closures relatively well. There’s still a significant amount of demand for retail space,” says Finnegan. “These vacant boxes are getting filled with better uses for the shopping centers. We had a Kmart deal in Naples that we replaced with Burlington, Party City and a Saks OFF Fifth. We look at what the community needs and we try to address that in our redevelopment efforts. When you do it right, it’s a win-win for everyone.”

Savvy retailers and restaurants are leading the charge in backfilling those stores and executing leases in new centers to take advantage of what the state has to offer, while also being mindful of the snares that can come with market saturation.

“Great retailers are taking action because they recognize the landscape is changing,” says Whitney Knoll, senior managing director of Crossman & Co., a retail leasing, brokerage and property management firm based in Orlando. “Publix is constantly thinking about what to do next, even though it’s the king down here.”


The retail sector is thriving in South Florida — developments are breaking ground, vacancy rates are low and rental rates are rising. From 2010 to 2015, retail sales grew by 34 percent in Miami-Dade County and are projected to grow by an additional 23 percent by the end of 2020, according to CBRE’s 2017 Southeast U.S. Real Estate Market Outlook.

The Miami market boasts one of the lowest availability rates in the country for retail space, according to CBRE, as well as one of the fastest rates of rent growth during the past five years. Retail property sales have slowed recently due to limited supply, and developers are filling the void with nearly 2.3 million square feet of retail properties currently under construction (and millions more in planning stages) around the Miami metro.

The upgraded Bal Harbour Shops will feature the first Barneys New York flagship store in the Southeast.
Rendering courtesy of Zyscovich Architects

Several large-scale mixed-use developments are underway in Miami, including Swire Properties, Whitman Family Development and Simon Property Group’s $1.05 billion Brickell City Centre and the $2 billion Miami Worldcenter by Miami Worldcenter Associates.

The first group of over 100 retailers and eateries opened last November at Brickell City Centre in the project’s 500,000-square-foot, open-air shopping center component. At completion, the development will include two condominium towers, two Class A office buildings and a hotel connected by Climate Ribbon, a $30 million elevated trellis of steel, glass and fabric that is designed to harness Miami’s bay breezes while deflecting direct sunlight.

Tenants at Brickell include a flagship Saks Fifth Avenue, Victoria’s Secret, Suit Supply, lululemon athletica, Cinemex, Coach, LIVE! and Porsche Design. A three-story Italian food hall that will feature a market, wine shop, gelato, cheese bar and restaurant is also set to open this year at the center.

Construction is underway on Miami Worldcenter, led by developers Art Falcone and Nitin Motwani. At completion, the project will deliver 450,000 square feet of retail, a 500,000-square-foot convention space, 600,000 square feet of Class A office space, a 1,700-room Marriott Marquis and 4.5 acres of open space. Both billion-dollar projects are set to deliver over the course of the coming years, and are transforming the retail landscape in Miami.

Roughly 20 miles outside Miami in Dania Beach, Kimco Realty is developing Dania Pointe, a 102-acre mixed-use project. The development is set to include almost 1 million square feet of retail and restaurants, Class A office space, hotels, luxury apartments and public event space.

Regency also has multiple developments and redevelopments underway around the Miami metro.

“Our redevelopment pipeline in South Florida is very strong and should keep us busy for a while,” says Tom Meredith, vice president, market officer at Regency Centers Corp. “We’re currently redeveloping Aventura Shopping Center, which is anchored by Publix roughly 15 miles outside Miami, and Countryside Plaza in Cooper City, roughly 23 miles outside Miami. We’re also redeveloping Pine Crest Plaza and adding a Whole Foods Market, as well as Point Royal shopping center in Cutler Bay.”

Redevelopment efforts are also underway at Bal Harbour Shops in Bal Harbour, about 12 miles north of Miami. Whitman Family Development recently gained final approval for a $400 million enhancement plan at the upscale 450,000-square-foot, open-air shopping center. The redevelopment will add 340,387 square feet of retail space, nearly doubling the center’s footprint.

The upgraded center is set to feature the first Barneys New York flagship store in the Southeast, upgrades to longtime anchor tenant Neiman Marcus and new dining options, including Freds at Barneys. The plan also calls for a new plaza at the shopping center’s main entrance.

Despite all of this new development, retail space is still very slim for tenants seeking to expand in South Florida.

“The climate for retailers in South Florida today is pretty challenged, simply because there’s not a lot of space,” says Sabrina Stimming, senior vice president and director of retail leasing at CREC. “Vacancy rates in the market today are just under 4 percent — around 3.7 percent. Landlords that have space available are definitely in the driver’s seat right now.”

Several markets across the metro are considered prime targets for expanding retailers.

Brickell City Centre’s 500,000-square-foot, open-air shopping center houses
more than 100 retailers and eateries, including a flagship Saks Fifth Avenue store.

“Wynwood is hot right now, mostly for restaurants,” says Stimming. “The most in demand markets are Brickell, Aventura and Doral. Solid, core markets with a history of retail performance like Kendall and Boca Raton are also seeing interest from retailers.”

Service tenants continue to expand at the highest levels around South Florida. “Boutique fitness and specialty medical tenants continue to expand throughout the market,” says Meredith. “The pizza craze is out of control and healthy eats concepts and breakfast chains like First Watch continue to expand. Even the wireless chains are back.”
The outlook for the foreseeable future is positive around the Miami metro.

“The market in South Florida is very strong, but deals are taking longer to get done,” says Meredith. “Demand for small shop space remains very strong here in South Florida. We are finding even the local mom-and-pops are becoming much more deal savvy, which is adding time to lease negotiations.”

“I’m positive about the market in South Florida,” adds Stimming. “We’re reading a lot lately about doom and gloom in retail, but we seem to be bucking the trend down here in South Florida due to strong fundamentals like population density, tourism, immigration, lack of land for development and just generally limited supply. Despite what we’re hearing nationally, retail is alive and prospering down here.”


Tourism is alive and well in Central Florida, with a record number 68 million travelers coming to O-Town last year to take in Universal Studios, Walt Disney World and Sea World, among other destinations. That increased traffic has boosted retail and restaurant growth in the region.

“If the number of people moving here and vacationing here go up, retail follows,” says John Crossman, president of Crossman & Co. “We had a record year for tourism; more people came to Central Florida than New York City in 2016, and it’s not even close. And Disney and Universal keep adding attractions to their parks.”

At the same time, Orlando is hiring at an impressive clip. Total nonfarm employment in the Orlando-KissimmeeSanford region posted a 4 percent yearover-year growth rate in June, outpacing the state of Florida’s employment growth by 110 basis points and the U.S. rate by 240 basis points in that same time frame, according to the U.S. Bureau of Labor Statistics.

A lot of the employment growth is centralized in the Lake Nona and Hamlin districts, which are on every retailer’s radar.

“Existing retailers and new entrants alike have both Lake Nona and Hamlin at the top of their hit lists — all my clients want to be there,” says James Mitchell, senior vice president of CBRE’s Orlando office. “They’re both in the top 15 nationally in terms of new housing permits as well.”

In Lake Nona, a 17-square-mile development on the east side of Orlando — titled Lake Nona Town Center — has attracted high-tech employers like Amazon, Lowe’s Home Improvement is under construction on Narcoossee Road, and Super Walmart and Sam’s Club just opened. A Super Walmart also opened in the Hamlin community on the west side of town in the Winter Garden submarket. Publix and Cinépolis USA are opening new locations in Hamlin as well.

In addition to the rise in tourism and job growth, improving market conditions are driving Orlando’s new retail development. The metro experienced more than 500,000 square feet of net positive absorption in the first quarter and improved its vacancy rate from 5.3 percent to 5.1 percent, according to CoStar.

On the northeast side of Central Florida in Oviedo, Hill Gray Seven is underway on Stonehill Plaza. Mitchell is leasing the development and is seeing a lot of interest from national retailers.

“We’re already 80 percent pre-leased,” says Mitchell. “We’ve signed First Watch, Floyd’s Barber Shop, Burger Fi, Pacific Dental and Tazikis Mediterranean Café.”

To the south in Kissimmee, Williams Co. Southeast is developing a 225,000-squarefoot project pre-leased to Hobby Lobby, Outback Steakhouse and Panera Bread. The project is expected to open in October. Also in Kissimmee, Crossman & Co. recently inked a lease with Toys “R” Us to join The LOOP, an open-air shopping destination that is home to national retail brands such as Regal, CVS, Petco, Old Navy, Famous Footwear and Ross Dress for Less.

On the north side of town in Winter Park, several national retailers have backfilled a former Kmart anchor space within Sterling Organization’s Center of Winter Park, a 245,000-square-foot power retail center. Marshalls/HomeGoods, Ross Dress for Less and Five Below are taking nearly 100,000 square feet left behind by Kmart. Crossman says that backfill opportunities in Orlando’s infill markets like Center of Winter Park are hot commodities.

“The closing stores in the first quarter have been gobbled up — if a retail space becomes vacant it has been quickly snapped up,” says Crossman. “Those are gobbled up because there’s so much pentup demand.”

The growth is not limited to Orlando’s surrounding submarkets, as downtown Orlando has several high-profile attractions underway, including the 68- acre Creative Village development that will bring student housing, office buildings, a 15-acre campus for University of Central Florida, Valencia State College’s culinary institute and supporting retail and restaurant space.

The $500 million Dr. Phillips Center for the Performing Arts is undergoing a multimillion-dollar expansion, and in February Orlando City Soccer Club, Orlando’s MLS franchise, opened a 25,500-capacity soccer stadium about two blocks from the Amway Center.

“The Orlando City MLS stadium was received better than anyone could have imagined — the team actually increased the seating in the facility during the planning stages because of the amount of demand it received,” says David Barilla, assistant director of the City of Orlando’s Downtown Development Board and Community Redevelopment Agency. “Vendors downtown tell us that game nights are the most profitable. There’s a culture around the team, fans march down Church Street before the game and then take in the match. The hotels are also seeing an uptick during the international friendly games that the stadium hosts.”

Walgreens recently opened a Main-andMain location downtown at the corner of Church and Orange streets, and Earth Fare has also signed a lease for a new downtown location.

On the experiential front, Ace Café opened a new 35,000-square-foot location in June in downtown Orlando, its first in North America. The London-based restaurant concept brings together car and motorcycle enthusiasts, rock-and-roll aficionados and typical restaurant-goers in a “motor-diner” setting. The restaurant expects to host 400,000 people annually.

“Ace Café focuses on the motorist market by hosting events around cars and motorcycles,” says Barilla. “The restaurant will host a Mustang night, Corvette night, etc. People from a 500-mile radius will come down for those events to participate in those special evenings. The café also has a BMW store and Triumph store. It’s targeting its retail based on its target demographic.”

The first phase of construction for Water Street Tampa will begin this year, with over 4 million square feet scheduled for completion in 2020. Subsequent phases of the project are slated for completion by 2027.


The most significant retail project in Daytona Beach remains ONE DAYTONA, International Speedway Corp.’s (ISC) massive mixed-use development located near Daytona International Speedway, home of the DAYTONA 500 NASCAR race. ISC recently invested $400 million to redevelop the racetrack and has since teamed up with Legacy Development to help bring ONE DAYTONA to fruition.

According to Chelsea Phelps, Legacy’s director of marketing, ISC is targeting both best-in-class and first-to-market retailers and restaurants within the project’s 300,000-square-foot retail and entertainment district. Rock Bottom Brewery will open its first location in Florida at the project, which will also house Guitar Center, P.F. Chang’s, Oklahoma Joe’s BBQ, Venetian Nail Spa, IT’SUGAR, Built Custom Burgers and Tervis, among others. ISC recently added Ben & Jerry’s, Sprint and Pink Narcissus, a Lily Pulitzer signature store to the tenant roster, which is becoming more dynamic daily.

“We’ve seen a lot of momentum not just on the leasing side but also overall opportunities present in the marketplace,” says Jeff Boerger, ISC’s vice president of corporate development. “We are planning to open in the fourth quarter of this year, and we’re confident we’ll open at near-to-full capacity. It’s nice to be in this position.”

In 2011, ISC purchased the nearby Volusia Point shopping center to hold as a redevelopment opportunity. The publicly traded firm is embarking on a $12 million campaign to renovate and rebrand the center, now known as Shoppes at ONE DAYTONA. New tenants signing on at Shoppes include First Watch, Zen Nails and Fantastic Sams, which opened in March. The existing Smoothie King store will undergo an exterior renovation as part of the redevelopment.

“Shoppes will remain more servicebased, and our existing tenants are excited about the redevelopment,” says Boerger. “It will help elevate the entire campus and create more jobs for the community.”

ONE DAYTONA’s two primary retail anchors, Bass Pro Shops and the 12-screen Cobb Daytona Luxury Theatres, have been open for several months and have driven significant traffic to the campus. Bass Pro Shops spans more than 67,000 square feet and in addition to its typical outdoor merchandise, features murals depicting nature scenes from the Daytona Beach area and the racetrack.

“The Bass Pro Shops and Cobb Luxury Theatres are exceeding expectations,” says Boerger. “We’re encouraged by the response. When the rest of the retail opens we’re sure the stores’ revenues will increase even more.”

Other uses at ONE DAYTONA will include a 145-room Marriott Autograph Collection hotel and a 105-room Fairfield Inn & Suites by Marriott property, as well as 276 residential units. ISC owns an additional 120 acres on the site that it will hold for additional development opportunities.

Like ISC, Sutton Properties is also underway on a retail project that will provide a one-of-a-kind atmosphere. The developer purchased a 38-acre tract at the entrance of Minto Communities’ upcoming Latitude Margaritaville, a 7,000-home development for adults age 55 and up that is inspired by singer Jimmy Buffett’s laid back, beach-centric lifestyle.

Situated off LPGA Boulevard near Interstate 95, the new 200,000-squarefoot project will feature a grocery anchor, service-oriented retailers and a Margaritaville restaurant in its first phase. Phase II will be more of a lifestyle center that will feature entertainment concepts, specialty retailers and dining with outdoor seating. The development will be designed to accommodate golf carts, which is expected to be the preferred method of travel for residents at Latitude Margaritaville.

“Retail in general may be a little more challenging than it was in the past, but with the Margaritaville brand support, it’s going to be a slam dunk retail development, and it will be very fun to do as well,” says Sam Sutton of Sutton Properties. (See page 52 for more.)

Other projects that opened recently include the 350,000-square-foot Daytona Beach Tanger Outlets mall that opened last November. On the investment sales front, Publix Super Markets purchased a Publixanchored center in New Smyrna Beach and Festival Properties Inc. purchased Volusia Marketplace, a 131,361-squarefoot center leased to Big Lots, Cost Plus World Market, T-Mobile, Panera Bread and Chipotle Mexican Grill.

Butler Town Center is Butler Enterprises’ open-air lifestyle development that will house retailers and restaurants
like P.F. Chang’s and a revamped Regal theater in a Main Street-style complex.


Miami isn’t the only Florida city with a billion-dollar development in its pipeline. Strategic Property Partners (SPP) is underway on a $3 billion mixed-use project that is redefining Tampa’s retail market.

Water Street Tampa, the product of a real estate investment joint venture between Cascade Investment LLC and Tampa Bay Lightning owner Jeff Vinik, will span 50 acres and add over 9 million square feet to the Tampa Bay skyline. Located on the Garrison Channel and Hillsborough Bay in downtown, the development will feature office, retail, cultural, residential, entertainment and hospitality space, making it a true livework-play environment, according to John Stoner, director of leasing at Clearwaterbased Bruce Strumpf.

“The living units will be the driver,” says Stoner. “They will bring the restaurants, bars, entertainment, grocery, furniture, drug stores, title companies, insurance providers and the retailers that support the more affluent homeowner. It will have an environment where people will be living, working and shopping all within walking distance.”

The first phase of development on the property will break ground this year, with subsequent phases slated for completion by 2027.

“There is so much buzz around Mr. Vinik, and his vision for shaping Tampa into a ‘real metropolis,’” says Joe Morrow, investment associate at Tampa-based Franklin Street. “I’ve always thought of Tampa as a small town with the amenities of a big city — we have steady population growth, a low cost of living and a higher quality of life.”

Anticipation of Water Street Tampa has also prompted redevelopments in other neighborhoods in the region. In the SoHo district, one project will transform a former gym into a mixed-use development: The Morrison. Leasing of the development is being spearheaded by Franklin Street.

“When it comes to choosing a retail site, location, visibility and access are most important,” says Morrow. Located at 936 S. Howard Ave., The Morrison is situated within the walkable Hyde Park neighborhood, home to the upscale shopping and dining destination, Hyde Park Village.

The Morrison will feature 13,890 square feet of retail space, 6,950 square feet of office space and 46 residential units. Spanish-inspired tapas restaurant Bulla Gastrobar and Mediterranean chain Zoe’s Kitchen will open their first locations in the Tampa market at the development, and Club Pilates and Blind Tiger Café will open their second and third locations, respectively.

The Channel Club, a mixed-use development that will include 323 rental units and a 36,000-square-foot Publix, is currently under construction in Tampa’s Channel District. The project is scheduled for completion in December 2018. Blackwater Resources is underway on plans for Mitchell 54 West, a mixeduse development that will include shops, restaurants, a movie theater, Class A office space and roughly 800 homes. The 330- acre project is expected to break ground later this year.

Boutique grocers are also expanding their presence in the metro. Sprouts Farmers Market opened its first Tampa location at Carrollwood Commons shopping center in February, and has subsequently opened locations in south Tampa and Palm Harbor.

According to CoStar Group, 18 buildings totaling 126,935 square feet were completed in the Tampa/St. Petersburg retail market during the first quarter of 2017. CoStar reports that the metro’s rental rates ended the first quarter at $14.83 per square foot, representing a 2.6 percent increase from the fourth quarter of 2016 and a 5.9 percent increase from three quarters ago.

“We will continue to see a positive trend in Tampa’s retail rental rates,” says Stoner. “Occupancy is going to remain fairly steady and put an upward pressure on those rental rates.”

Retail vacancy decreased in the first quarter of 2017, ending the quarter with a positive net absorption of 467,579 square feet , according to CoStar. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, going from 5.1 percent in the second quarter of 2016 to 4.7 percent in the first quarter of 2017. As the availability of retail space in the marketplace shrinks and both new and existing retailers and restaurants look to expand in Tampa, the search for the ideal location has become more competitive.

“In today’s market, you must be willing to pay, but you may not have as much time to analyze the decision as you once had,” says Morrow. “The space you may want will not be available for as long.”

Ford’s Garage, a restaurant chain licensed by Ford Motor Co., is one of the restaurants expanding its presence in the Tampa region. The development is located in Wesley Chapel’s planned mixed-use development, Cypress Creek Town Center. With Model Ts hanging from the ceiling, smoke coming out of the mufflers and car horns that actually honk, the restaurant caters to the experience consumers are craving from today’s retailers.

“You go in and see antique gas pumps,” says Stoner. “They have all of the old replicas — you can even eat in the bed of an old Ford pickup truck.”

Other planned restaurants in Cypress Creek Town Center include Chuy’s, an Austin, Texas-based Tex Mex restaurant, and Mellow Mushroom, an Atlanta-based pizza chain. German-based grocer Aldi and an organic boutique grocer have also proposed plans to build within the development.


The newest iteration of the massive Butler Enterprises development at Interstate 75 and Archer Road in Gainesville is Butler Town Center, an open-air lifestyle development that will house retailers and restaurants like P.F. Chang’s and a revamped Regal theater in a Main Street-style complex. Set to open by late 2018, the project will be bookended by two apartment developments known as The Terraces at Butler and The Residences at Butler.

On the ground floor of The Residences will be North Central Florida’s first food hall, Stengel Field Food Hall. The site of Butler Town Center was once Stengel Field, a dirt airstrip that opened in the 1920s during the golden age of aviation when legends like Charles Lindbergh and Amelia Earhart were in their heyday.

The 13,000-square-foot food hall, which will feature a Pitts Special acrobatic airplane hanging from the rafters, will house between 11 to 15 vendors, including chef Bert Gill’s L’Avion French bistro concept, which translates to “The Plane” in English. Food halls can be a transformative addition to the community fabric, but Deborah Butler, owner of Butler Enterprises, warns that food halls are not simple undertakings.

“At a food hall you have to have restaurant management; it demands it because it’s a different animal,” says Butler. “You’ve got to do your homework because it’s not a simple food court.”

Gill will oversee the operations of the food hall and curate the vendor mix. The food hall is expected to include kiosks for fresh flowers, fruits and vegetables, a craft beer taproom and a rotating list of food concepts.

The new food offerings are expected to pair well with the center’s new Whole Foods Market. In April, the grocer scratched its plans to open a 29,000-squarefoot Whole Foods 365 concept at Butler Town Center, instead opting to develop a typical 41,000-square-foot Whole Foods Market location. The new store will be the first Gainesville location for the Austinbased grocer, which was recently acquired by Amazon in a $13.4 billion deal.

“Gainesville is ripe for a high-end grocer and we have the spending power to support it, it’s a great fit,” says Butler. “We’re looking at retailers that understand that people want the latest and the greatest and know how to reinvent themselves to keep up with what people want.”

According to Butler, the new Whole Foods has helped spur additional interest in Butler Town Center from retailers because it’s a known entity and is widely admired by customers. Ray Hayhurst, senior vice president of Avison Young’s Orlando office, feels Gainesville has proved to be a popular landing spot for grocery concepts of all kinds.

“Given the demographic makeup of the city, it is not surprising that many of the specialty grocery chains have opened stores in Gainesville, including Luckys Market, Earth Fare, The Fresh Market and Trader Joe’s, along with several local specialty grocers,” says Hayhurst.

Gainesville’s retail market is in a favorable position for new construction as its fundamentals are trending in the right direction and there are barriers to entry due to the city’s infamously long entitlement process. About 2.4 million square feet of retail space was delivered in the past 12 months, according to CoStar. That figure is more than three times the five-year average of 653,794 square feet.

“The Gainesville market is so unique to other Florida metros because of the 12-county region. We’re the heart and economic hub of North Central Florida,” says Butler. “Gainesville is ready for more development.”

The market is absorbing the new wave of construction and then some, with absorption totaling nearly 2.5 million square feet in the past 12 months, more than four times the five-year average, according to CoStar.

Landlords like Butler Enterprises are able to push rents in Gainesville. According to CoStar, triple-net rental rates ended the first quarter at $16.84 per square foot, up nearly $3 per square foot over the trailing five-year average. The metro’s vacancy rate was 3.7 percent at the end of the first quarter, down 150 basis points compared to the five-year average.

Butler’s success is partly owed to the nearly 50,000 students at the University of Florida (UF); Santa Fe College, which recently became a four-year institution; and the medical care community including University of Florida Health Shands, the Malcolm Randall Veterans Medical Center and North Florida Regional Medical Center. UF Health will also open a $415 million project involving new heart and vascular and neuromedicine hospitals in 2018. The healthcare and higher education communities have provided the spending power to support the Butler development, as well as Celebration Pointe, a massive mixed-use project underway on the other side of I-75.

In May, Celebration Pointe Development Partners announced a group of restaurants and retailers that will open this fall during Phase I of Celebration Pointe. The new tenants will be situated in the development’s City Walk section near the new Bass Pro Shops, which opened in November.

The restaurants include Liquid Ginger Restaurant; Miller’s Ale House; Kilwins Quality Confections; Reggae Shack Café; and MidiCi Pizza. The retailers include Lee Nails, Azulene Day Spa and Uniform Destination.

Other uses at Celebration Pointe will include nearly 1,000 residential units, a 140-room Hotel Indigo, 300,000 square feet of office space and a new Regal theater.


As with other cities in Florida, Jacksonville is experiencing strong population and wage growth. The market has experienced a 2 percent growth in population annually over the past two years. That same pace is expected to continue for the next several years, according to CBRE’s 2017 Southeast U.S. Real Estate Market Outlook.

Wage growth was 10 percent over the previous year in 2016 according to CBRE, and supply and demand metrics are still well below what was seen in 2006 in Jacksonville, indicating that the market as room for expansion and a population with a growing level of discretionary income.

Occupancy rates have gone up yearover-year to 91.1 percent and the retail sector currently has 748,000 square feet of new space under construction, according to JLL’s 2016 Florida Retail Report.

An upcoming mixed-use development in St. Johns County, roughly 30 miles outside Jacksonville, titled the Pavilion at Durbin Park is looking to add 2.4 million square feet of retail to the Jacksonville market. The project by Gatlin Development Co. and Gate Petroleum will also include 2.8 million square feet of office space, 999 multifamily units and a 350-key hotel. Plans for the property also include green space, bike trails, lakes and entertainment venues.

Regency Centers Corp. is also wrapping up several developments around the Jacksonville metro. “We are finishing up a few developments in town,” says Patrick McKinley, vice president, market officer at Regency. “We are adding 27,000 square feet of retail at our Nocatee Town Center project in Jacksonville. Notable tenants include Starbucks Coffee, Orangetheory Fitness, Tijuana Flats, Jersey Mike’s and a few locals like Artsy Abode, Gwen Berlin and Timoti’s Seafood Shack. We will be complete with landlord work in August, and we are already 97 percent leased.”

“We are adding a First Watch pad building in our Bartram Park Shopping Center and we are close to finishing our redevelopment at Old St. Augustine Plaza where we eliminated small shop space to make way for a LA Fitness pad,” continues McKinley. “We are also about to add an additional 10,000 square feet of space at our Seminole Shoppes project in Neptune Beach. Kickoff is set for August with an early 2018 delivery.”

Much of the space that comes on line in Jacksonville is quickly absorbed. This is the fourth year of strengthening net absorption for Jacksonville, and demand is expected to be stable in the most sought after submarkets, according to CBRE. Vacancy has also trended down below 6 percent.

“The activity for space in well positioned and well-merchandised, grocery-anchored centers is strong,” says McKinley. “To give you a sense, we had five move outs in the second quarter. Three of the spaces have newly signed deals, one is at lease and the other is currently being marketed.”

Hot neighborhoods in Jacksonville that are expected to continue to see strong demand are the Beaches, Town Center, Nocatee, North St. Johns County, San Marco, Riverside and Brooklyn, according to McKinley. “Certain markets are getting over restauranted,” he says. “There are a handful of markets around town that hit all the hot buttons for restaurants with strong performing restaurants in operation. The problem is that the restaurants still keep coming and the proverbial pie is just getting split up into smaller pieces. Great operators with unique food, first class service and of course good food will be fine, but run of the mill operators will start to feel the squeeze in these markets over the next 12 to 18 months.”

With supply scarce, Doral offices are 91% full, prices rising

With supply scarce, Doral offices are 91% full, prices rising

Week of Thursday, August 3, 2017

By Katherine Lackner

Codina Partners build 8333 Downtown and has three more office buildings on the way in a tight market.

With scare supply and no new product in the pipeline, the Doral office market continues to be robust, observers say.

“Institutional capital now accepts that Doral is a mature, exciting and deep market, and one they want to be in,” said Doug Okun, Senior Vice President at CREC. “It’s become a first-class city.”

The new residential stock “is a driver,” he said, as are the ever-increasing amenities, including retail, schools, restaurants and infrastructure. Most buildings offer plentiful parking, which is not the case in urban markets or even some suburban markets, he said.

With about a 91% occupancy, pressure is being put on lease prices and concessions are becoming rarer, he said. Space in a class A building can fetch $40 per square foot, “which was hard to image five or 10 years ago,” Mr. Okun said. Class B space leases in the high $20s or low $30s per square foot, he said.

Most developers consider mixed-use projects or residential units to be the highest and best use for their land, he said. That, combined with high construction costs, suggest that the dearth of new office buildings will continue, further driving up demand for existing space.

“I remain bullish on the Doral office market,” Mr. Okun said. “I think it will continue to get better, and almost every data point supports that.”

“We are witnessing Doral become more of an urbanized environment,” said Ericka Witkowski, associate with Avison Young. “The ‘live-work-play’ play dynamic, in addition to the already acclaimed economic benefits of leasing in Doral, is really creating the ideal ambience that attracts major corporate headquarters. That will continue to grow this submarket. Doral continues to be one of the most sought-after markets in South Florida, which is attested to by a less-than-9% vacancy rate.”

“County-wide year-to-date leasing activity remains up 6% year-on-year, driven to a notable degree by non-CBD submarkets that had been unsettlingly quiet through 2016,” said JLL’s second-quarter 2017 office market report. One of the larger deals inked that quarter was the Everest Business Funding lease of 27,000 square feet in Downtown Doral, the report noted, but, on the whole, transactions were smaller.

JLL lumps Doral into the Miami Airport submarket, where rents overall are $30 per square foot and vacancy is 9%, according to the report. Class A space in that submarket can be had for $33 per square foot (and the vacancy rate is 8%), while class B space leases for $27 per square foot and the vacancy rate is 11%, the report said.

CREC Selected To Exclusively Lease Iconic Miami Beach Office Building

CREC has been selected as the exclusive leasing agent for Meridian Center, located at 1680 Meridian Avenue, steps from Lincoln Road in the heart of Miami Beach.

The iconic, 55,000-square-foot boutique building, recently underwent remodeling to exude an artistic flair synonymous with Miami. Street artists were commissioned to make each office floor lobby unique, personifying the city’s culture, while modernizing the space.

CREC Partner Steven Hurwitz, Senior Vice President Douglas Okun and Senior Leasing Associate Teri Jarp will oversee leasing, which includes targeting those in the creative industries and professional services companies. Current tenants include Apple and Keller Williams.

“We are thrilled to be spearheading the leasing efforts for this highly-sought office property, located just around the corner from Miami Beach’s premier outdoor retail and dining destination,” said Hurwitz. “Meridian Center’s proximity to the amenities of Lincoln Road and surrounding Miami Beach neighborhood, coupled with its creative ambiance, makes the building appeal to a wide range of tenants who appreciate design and location.”

Harry’s Pizzeria®, James Beard Award-winning Chef Michael Schwartz’s neighborhood American pizzeria, recently signed a retail lease to occupy the ground floor of Meridian Center.

Lyle Stern and Sara Wolfe of Koniver Stern Group represented the landlord in the transaction.

This new location will open in 2018, part of the chain’s expansion plans that include locations in Aventura and Sawgrass in Florida, Atlanta, Georgia, and Cleveland, Ohio, joining the three restaurants currently serving South Florida in Coconut Grove, Kendall’s Downtown Dadeland and the chef’s Miami Design District original.

Acquired in 2015, Meridian Center is in walking distance to more than 200 retail stores, cafes, and restaurants, and enjoys easy access to both I-395 (MacArthur Causeway) and I-195 (Julia Tuttle Causeway).

Three Ways To Overcome Self-Imposed Career Limitations
Don’t let the naysayers stop you from achieving your dream, says Carol Greenberg Brooks.

Carol Greenberg Brooks, co-founder and president of CREC, a commercial real estate firm in Florida, started the company nearly 30 years ago with her best friend, Warren Weiser. “I knew less than zero about real estate,” she says. Brooks had just graduated from the University of Miami and was deciding what to do next when Weiser asked her to help lease two large commercial properties, Continental Plaza and Grand Bay Plaza. “I fell in love with transactions, negotiating and selling a dream to people,” she says.

Brooks helped start a company in the very male-dominated real estate industry and has never looked back. “It never occurred to me that being in a man’s world would be a difficult thing to do,” she says, in part because her father introduced her to accomplished and successful women when she was growing and in part because she has a third-degree black belt in karate.

We all have fictional notions of who we are that limit what we can achieve, Brooks says. “ Recognize that you can’t be whoever you want to be but you can be yourself ,” she says. For instance, Brooks admits she will never be a linebacker or a rock star but she was able to obtain a third-degree black belt. Whatever path you choose, there will be obstacles along the way, she says, but if you’re doing something that really matters to you, then those obstacles won’t have the power to limit you.

Here Brooks offers three ways to overcome self-imposed limitations.

Find your authentic self

Think back to any point in your life when you felt the most peaceful, the happiest and most inspired and you will see a pattern. One way to figure out what is limiting you, Brooks says, is to spend some time in quiet reflection. “When you’re having a million thoughts at once and are stressed, that’s never the time to say to yourself, ‘That’s a brilliant idea,’ ” Brooks says. Our best ideas tend to happen in a place that is still and quiet.

There’s no substitute for hard work

“Whatever you decide you want to be, you have to practice, practice, practice,” Brooks says. When Brooks decided she wanted to become a black belt, she practiced six days a week for more than 15 years. “It was hard and scary but I never saw that as a limitation,” she says. “If it hadn’t been authentic as to who I am, I would never had endured the training. I would have seen a million limitation.”

Listen to your own voice

Once you know what you’re meant to do, drown out the naysayers with your own voice. “If your vision is authentic, you won’t be deterred by what people say,” she says. “If I had listened to all the reasons I couldn’t have a real estate company or be a black belt, I wouldn’t have endured.”

AEW sells West Palm office tower for $42M to Dallas investment manager and CREC

AEW sells West Palm office tower for $42M to Dallas investment manager and CREC

One Clearlake Centre, with 18 stories, is 47 percent leased

AEW Capital Management just sold a Class A office tower in West Palm Beach to a joint venture between a Dallas-based private equity real estate manager and CREC for $42.3 million, The Real Deal has learned.

Velocis and CREC acquired the 218,500-square-foot, One Clearlake Centre “at a significant discount to replacement cost,” Mike Lewis, principal of the Texas firm, said in a press release. The buyers financed the sale with a floating rate, five-year $34.84 million mortgage from Mesa West Capital, a debt fund with offices in Los Angeles and New York.

The 18-story building, at 250 South Australian Avenue, is only 47 percent leased. The property includes a five-story, 662-space parking garage. It traded for nearly $195 per square foot.

“The vacancy is really attributable not to market factors, but rather the prior ownership’s investment strategy … The prior landlord had a philosophy to not break up spaces,” Carol Brooks, president and co-founder of CREC, told TRD. “There are 7 full floors that have not been multi-tenanted. It creates a really extraordinary opportunity for us. There’s not a lot of product out there with these outsized opportunistic returns.”

The joint venture plans to start a multimillion-dollar capital improvement program to update the building, which was built in 1986. The new owners will also create a modern tenant lounge and conference center and spec office suites. CREC will handle leasing and management.

Current rents are in the low $30s per square foot, gross, said Andrew Remick, CREC vice president of acquisitions. The firm aims to push rents up about $5 per square foot. Class A trophy buildings that are more than 95 percent leased sign deals between $60 per square foot and $70 per square foot, he said.

Current tenants include Rosenbaum Mollengarden PLLC, BB&T, Keyes, Prudential, Robert Half International and Northwestern Mutual.

A majority of the leasing in downtown West Palm is by smaller tenants, CBRE’s José Lobón said.

Lobón and Chris Lee represented the seller, and Amy Julian arranged the financing. CBRE began marketing the property without an asking price a little more than three months ago. Lobón said the value-add opportunity brought in “a plethora of offers.”

Property records show AEW affiliate One Clearlake Centre LLC paid $38.6 million for the building in 2005. It’s fronts the Clear Lake on the west side of the city’s central business district. The glass office tower is also near All Aboard Florida’s Brightline station and the Tri-Rail station.

Velocis, created in 2011, owns 24 properties in Texas, Colorado, Georgia, Florida, Arizona, Virginia and North Carolina.

AEW manages investments primarily on behalf of institutional and private investors with about $64 billion worth of assets around the world, including properties in South Florida, according to its website.

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.’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

►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.”