Recent News

  • Jun
    6

Chapel Hill is for rent

June 6, 2016

by Mark Zimmerman via The News & Observer 

Why apartments? The fourth building at East 54. Most of Obey Creek. The Edge. The Alexan on Elliott Road. Amity Station. American Legion. The housing approved or proposed for all these developments will be rented, not owned.

As a college town, apartments have long been a large percentage of Chapel Hill’s housing stock. Currently, 51.4 percent of housing units are not occupied by owners. But the recent trend to focus almost exclusively on rental development will meaningfully increase that share.

Before the recession, Chapel Hill’s major new developments centered on selling instead of renting. From Southern Village and Meadowmont to the first three phases of East 54, Greenbridge and 140 West Franklin, single-family homes, townhouses and condominiums dominated our landscape.

What changed? Both national and local trends caused the shift.

Nationally, the great recession changed people’s housing habits and financiers’ lending patterns. People who lost their homes couldn’t buy another. Millennials didn’t have the jobs or income to purchase a home, and many were leary of the investment after seeing what happened to their parents’ generation. They were forced to rent, but many did so gladly.

Meanwhile lenders faced new federal loan restrictions. The hangover from empty half-finished condo buildings lingers to this day. (140 West Franklin was one of only a handful of large condo projects nationally to be built after the recession hit. It was largely self-funded by the developer.)

Combining those trends led to concentrating on multi-family apartment complexes. Post-recession rental demand was up, and developers and financiers answered it. Apartment construction has been the strongest sector of commercial development for several years.

Areas like Chapel Hill are particularly attractive to this investment for several reasons. First, our supply of housing has been artificially constricted by policy for decades, so pent-up demand allows for premium-priced (i.e. luxury) projects. That’s fortunate for investors because of the cost of scarce, developable land and additional expenses incurred in our special-use permitting process. New construction must be high end to be financially successful here.

Low supply and high demand also drives up the price of housing in Chapel Hill. The average price of a house in our school district is 33.9 percent more than in Wake County and 75.6 percent more than in Durham. That leaves some who would could afford to buy a home elsewhere unable to qualify here. They have no choice but to rent, adding to the apartment demand.

The national trend to apartments is beginning to soften, but demand in submarkets like Chapel Hill will continue to fuel it here. It is our “new normal”; our future growth path, like it or not.

The shift to apartments isn’t necessarily a bad thing. Smaller, luxury apartments don’t attract many families with children, meaning they don’t require as many government services as some traditional detached housing does. More apartments are also needed to house the employees of businesses we are trying to attract. New businesses won’t move here unless their workers can move here also.

Due to our high costs, today’s new apartments will be luxury priced. But that’s a temporary issue because they will become tomorrow’s more affordable ones. As apartments age, they become relatively less expensive. When we largely stopped building apartments for at least a decade, we created a gap in our pricing. We now have new expensive units and very old low-end units. The middle class is left out because we didn’t keep building. The current Town Council is about to repeat that mistake if it refuses to continue approving new projects. Our pipeline barely keeps pace with historic low growth.

There’s not much from a policy standpoint that can change this trend to becoming more of a rental community. Instead, we should take advantage of it. Areas like Ephesus-Fordham, where we have already committed to more dense commercial development, need a lot more residential units within walking distance to change from a suburban-like strip mall to becoming a second town center. Apartments are a great solution.

For once let’s stop fighting the market and use it to help achieve our strategic goals instead.

  • Jun
    3

Ram begins construction on Boynton apartments with $47MM loan

June 3, 2016

By Sean Stewart-Muniz via The Real Deal

With $47 million worth of financing in hand, Ram Realty has begun construction on its modern-style Cortina apartment complex in Boynton Beach.

The developer simultaneously closed on its loan from JPMorgan Chase Bank and filed a notice of commencement to break ground on the complex Friday, according to county property records.

Cortina will be a seven-building complex with a combined 350 luxury units on the eastern side of Renaissance Commons Boulevard, between Old Boynton Road and East Gateway Boulevard.

Though rental rates have yet to be released, Ram has said the community will boast amenities like a 24-hour fitness center, clubhouse, business lounge, outdoor kitchen, children’s playground, pool and spa area.

The news follows Ram’s $15.75 million acquisition of the 14.4-acre Cortina development site in March. Ram seems to working on schedule as it said at the time Cortina would break ground in May, with an estimated completion date in Spring 2017.

The project will be part of the 45-acre Boynton Village development that’s slated to bring more than 1,000 condos, apartments and single-family homes to the city.

“We are excited to begin construction at the Cortina site and bring a modern take to Class A apartments in Boynton Beach,” Hugo Pacanins, manaaging director of multifamily development at Ram, said in a statement. “Residents will enjoy a walkable lifestyle that is rare in Boynton Beach in addition to a host of best-in-class amenities.”

  • May
    4

Durham retail center sells for $16.8 million

May 4, 2016

via Triangle Business Journal by Amanda Hoyle

A Kroger-anchored shopping center at the corner of U.S. 70 and North LaSalle Street in Durham has been sold to a Texas real estate investor for $18.6 million – a 67 percent premium over the price that was paid for the property in 2009.

Epic Real Estate Partners of Austin, Texas, acquired the Durham Festival retail center in Durham from an affiliate of Florida-based Ram Realty Services, according to county records.

Ram had bought the 134,000-square-foot property from a public REIT during the global financial crisis for only $11.1 million and shortly thereafter set about a renovation of the property and expansion of several tenants. The Kroger store also added a fuel station and remodeled its own anchor location.

Durham Festival was 89 percent occupied at the time of sale to Epic, and the shopping center is so far its only real estate asset in North Carolina. Other tenants at the center include Dollar General, Dunkin Donuts, and SunTrust Bank.

David WebbRob CarterAlex Quarrier and Rad von Werssowetz of Berkeley Capital Advisors of Charlotte assisted Ram Realty in the transaction.

“We are excited about this outcome and the positive impact for the fund and for our institutional partners,” stated Ram CEO Casey Cummings in a news release about the deal with Epic. “We were able to deploy capital during a difficult time, allowing us to acquire quality real estate at a discount and create value through the downturn. We are continuing to invest in other exciting opportunities throughout the Triangle.”

Ram Realty Services also announced that it has broken ground on the next phase of development at Pavilion East in Durham. Ram in December had acquired Pavilion East, a 97,000-square-foot office, condo and retail building with a 700-space parking deck. It will be building next a 263-unit luxury apartment development on the property. Pre-leasing for its first units is expected to begin in spring 2017.

  • Apr
    27

Altis Sand Lake Becomes Largest Green Certified Multifamily Community in Orlando

April 27, 2016

via Multifamilybiz.com

ORLANDO, FL – The Altman Companies has a lot to celebrate in Orlando. It just finished up construction on the 315-unit Altís Sand Lake in the Dr. Phillips neighborhood.  A ceremony was held Wednesday, April 13 at Altís Sand Lake and at the same time, the company was awarded the National Green Building Standard (NGBS) Green Certification by Michael Luzier, president and CEO of Home Innovation Research Labs.

Altís Sand Lake is the largest NGBS Green Certified multifamily community in Orlando, in terms of number of certified buildings. The development has 13 separate buildings.

The NGBS is an ANSI-approved national rating system used to gauge the performance of residential construction based on six key categories: energy efficiency; water efficiency; resource efficiency; lot development; operation and maintenance; and indoor air quality.

NGBS Green Certification is provided by Home Innovation Research Labs, an accredited third-party testing and certification agency and an independent subsidiary of the National Association of Home Builders.

Altís Sand Lake is an amenity-rich, luxury rental community with one-, two-, and three-bedroom homes. Some of the key green features include programmable thermostats with humidistats, high-efficiency water heaters, individual unit electric meters and sub-meters, 100 percent energy-efficient designer lighting, and ENERGY STAR refrigerators.  All of these features allow renters to use less energy and save money on their power bills.

Altís Sand Lake saves enough energy to power 41 homes per year, saves enough water to fill 60 swimming pools per year and diverts 159 tons of waste from landfills per year.

“We are very proud that our company has achieved its first NGBS Green Certification,” said Joel Altman, chairman of The Altman Companies. “We at Altman are committed to see that our residents have an Exceptional Living Experience, and we are also environmentally conscious and care about a sustainable lifestyle. At Altís Sand Lake, we are able to give our residents both.”

“Attaining our third-party ‘seal of approval’ allows quality-minded builders like The Altman Companies to distinguish their properties from the competition,” according to Luzier. “Earning NGBS Green Certification means going beyond what’s simply required by code, to provide consumers with a better place to call home – an energy cost-saving, healthier, and more comfortable place to live. I applaud Altman for making this commitment at Altís Sand Lake for the benefit of its renters and the larger community.”

  • Apr
    21

Ram Realty Trades Plantation Shopping Center

April 21, 2016

via The Real Deal by Sean Stewart-Muniz

Ram Realty just sold its Plantation shopping center anchored by Publix for $29.3 million.

The deal includes Jacaranda Plaza, a 173,044-square-foot shopping center at 8171-8373 West Sunrise Boulevard near the Sunrise Country Club.

Ram acquired the center out of foreclosure in 2012, according to county records. The real estate firm then put $1 million into renovating Jacaranda Plaza and its facades.

Now, through a deed recorded this week, Ram sold the shopping center to an affiliate of Texas-based Epic Real Estate Partners.

The investment firm, which specializes in buying grocery-anchored shopping centers, paid about $169 per square foot for Jacaranda Plaza. It financed the deal with a $19.95 million loan from BankUnited, according to county records.

Besides its newly acquired Plantation property, Epic owns one other Florida property: the 176,341-square-foot Alafaya Square in Oviedo, a small city in Seminole County.

The company’s counterpart in this deal, Ram, grabbed headlines late last year when it sold a newly built Boca Raton apartment complex for nearly $82 million. The firm has since bought another development site in Boynton Beach for $15.75 million, where it’s planning a new Class A rental community.

  • Apr
    20

HFF closes $29.3 million sale of and arranges $19.9 million financing for Fort Lauderdale-area retail center

April 20, 2016

MIAMI, FL  – Holliday Fenoglio Fowler, L.P. (HFF) announced today that it has closed the $29.3 million sale of Jacaranda Plaza, and secured $19.9 million in acquisition financing. The 173,044-square-foot, Publix-anchored retail center is located on 16.20 acres at 8249 West Sunrise Boulevard in the Fort Lauderdale-area community of Plantation, Florida. Situated on the “going home” side of Sunrise, the center is at the signalized intersection of University Drive and Sunrise with combined traffic counts of more than 105,000 vehicles per day.

HFF marketed the property on behalf of the seller, Ram Realty Services (Ram). Epic Real Estate Partners purchased the asset. Additionally, working on behalf of the new owner, HFF placed the five-year, 3.6-percent, fixed-rate loan with BankUnited.

The HFF investment sales team representing the seller was led by senior managing director Daniel Finkle, managing director Luis Castillo and associate director Nat Scarmazzi.

The HFF debt placement team representing the new owner was led by senior managing director Paul Stasaitis and managing director Adam Herrin.

Originally developed in 1974, Ram acquired interest in Jacaranda Plaza in October 2011 on behalf of Ram Realty Partners III through the purchase of a promissory note. Ram took title to the property in early 2012 through foreclosure.

Ram completed significant improvements to Jacaranda Plaza in 2013, including façade enhancements, fresh landscaping, and roof replacement. Ram also added Planet Fitness and Dollar Tree to an already-strong tenant mix including anchors Publix and Stein Mart, and a diverse mix of shop tenants, such as Regions Bank, T-Mobile, GNC and Gamestop. The shopping center was 86-percent occupied at the time of sale.

“Jacaranda Plaza is a remarkable success story for the Fund,” said Ram President Jim Stine. “We were able to secure a sub-performing loan at a significant discount and implement a value-add strategy that saw major improvements to the center. This is the type of retail deal we continue to pursue: we want to deploy our people and our capital in a way that creates a real impact in our core, urban markets and generates positive results for our investors.”

  • Apr
    18

Mainstreet at Midtown Introduces Five New Tenants

April 18, 2016

Palm Beach Gardens, Fla., April 18, 2016 – Ram Realty Services and Mainstreet at Midtown are excited to introduce five new restaurants and shops coming to Midtown in 2016. Blaze Pizza, OXXO Care Cleaners, and Iconic Eye Care Center are open for business. Bonefish Grill and 18/8 Fine Men’s Salon are scheduled to open in August 2016. The new tenants occupy a combined 13,078 square feet bringing total occupancy at Midtown to 96.5%, the highest in the mixed-use center’s history.

Midtown’s newest tenants will join a host of prominent shops and restaurants including Christopher’s Kitchen, Chipotle, J. Alexander’s, III Forks Steakhouse, Saito’s Japanese Steakhouse, California Closets, Gymboree Play & Music, and JFK Emergency Care Services.

Midtown’s New Tenants

Iconic Eye Care Center brings the Palm Beach area the finest in exceptional eye examinations combined with innovative and exciting eyewear from the best brands and independent designers from around the world. Iconic Eye Care’s own Dr. Adam Ramsey travels the world to view eyewear, searching for unique pieces not found elsewhere. Iconic unites form, fashion, and function to deliver the best eye care experience.

OXXO Care Cleaners is the ultimate in garment care with their dedication to quality service, the most technologically advanced garment care equipment, and environmentally friendly solvents. OXXO provides the convenience of round-the-clock service; drop off your clothes any time and access them any time using their Automatic Retrieval Machines. OXXO also uses non-toxic solvents that provide superior garment care without harming you, your clothes, or the environment.

Blaze Pizza fast fires top quality pizza at lightening quick speed. The creation of Executive Chef Bradford Kent, Blaze stocks their pizza assembly line with made-from-scratch dough, and healthy, artisanal ingredients. Get inventive with hundreds of custom pizza combinations or opt for one of the classics. Either way, your crisp, cooked-to-perfection pie will be ready to enjoy in 180 seconds.

Bonefish Grill specializes in market-fresh fish from around the world as well as savory wood-grilled specialties and hand-crafted cocktails. The Bonefish experience is based on the premise of simplicity, consistency and strong commitment to being incredible at every level. Founded over 15 years ago in St. Petersburg, Florida, Bonefish is proud to call Florida home and welcomes you to their newest Palm Beach Gardens location.

18/8 Fine Men’s Salon is the reinvention of the barbershop, designed to bring out the best in men. Thanks to their expertise in men’s hair care, styling, grooming products, and consultation, 18/8 provides the best services in a relaxing environment. 18/8 Salon is your trusted stop for a professional grooming experience.

About Midtown

Midtown is Palm Beach Gardens’ premier mixed-use community, embodying the “live-work-play” philosophy. Located on PGA Boulevard just west of Military Trail, Midtown boasts 96,000 square feet of nationally recognized restaurants, specialty boutique retail, and inviting event space, adjacent to a distinct condominium neighborhood. Midtown also hosts fun and exciting family events including Music on the Plaza, Eat to the Beat Food Truck Festival, and the Peace, Love and Wellness Festival. For more information visit http://www.midtownpga.com.

  • Apr
    8

A Rising Multifamily Movement

April 8, 2016

via The Real Deal by Mike Seemuth

While sales of South Florida condominiums have begun to soften, the brisk pace of rental apartment construction appears unlikely to wind down any-
time soon.

The speed of such construction continues to accelerate in South Florida, especially in suburban locations in Broward County, as the pool of renters deepens amid population growth, new employment opportunities and reduced demand for home ownership.

The national real estate brokerage Marcus & Millichap forecasts that 10,200 new apartments will come to market in the tri-county region this year, compared to 8,700 in 2015, marking a 17 percent increase. The firm expects 5,500 new apartments to open this year in Miami-Dade County alone, plus another 4,700 units in Broward County and Palm Beach County combined.

The Miami-based Related Group, one of the largest multifamily developers in the United States in recent years, has built 2,700 rental apartments — mostly in South Florida — since 2010. The firm’s rental development division, Related Development, has another 4,000 units in the pipeline.

“The whole notion of the great American dream meaning owning a home is over,” Related Development’s president and chief executive officer, Steve Patterson, told The Real Deal. “Financial independence and quality of life has become much more important.”

Most of the rental apartments that Related has built in the last six years are located in Fort Lauderdale and other Broward municipalities, including Lauderdale-by-the-Sea, Pembroke Pines and Plantation. Broward County is one of the top three markets in the country for luxury rentals, Patterson noted. “I think there’s still a lot of depth there,” he said.

In South Florida market forecasts, based on data from CoStar Group and Real Capital Analytics, Marcus & Millichap said it expects apartment owners in Broward and Palm Beach to collect higher average rents than their counterparts in Miami-Dade this year — largely due to population growth and employment growth. The brokerage projected monthly rents in 2016 to average $1,476 in Palm Beach and $1,500 in Broward, compared to $1,355 in Miami-Dade, and expects those higher figures to encourage more apartment development in the two counties.

Amaray Las Olas, a 30-story rental building with 254 apartment units, is planned for an April opening in downtown Fort Lauderdale. The property will tower over a cluster of newer apartment buildings in the Flagler Village area just north of the city’s downtown.

“A lot of what you see is eight-story [buildings] or below, so 30 stories will offer city views, Intracoastal Waterway views and ocean views that are unmatched,” said Jeff McDonough, president of Fort Lauderdale-based Stiles Residential Group, which is developing the property in a joint venture with the New York-based Rockefeller Group.

By early March, as construction neared completion, the developers had pre-leased about 30 percent of the apartments, which have monthly rents ranging from $2,000 to $5,800. McDonough said Stiles is scouting other urban locations in South Florida for a high-end rental development similar to Amaray Las Olas.

“There is a very strong demand for multifamily rentals,” he said, noting that one of the driving factors is a movement to live in “urban, walkable” locations.

That preference for rental apartments in lively, pedestrian-friendly neighborhoods is also apparent in downtown West Palm Beach, where billionaire developer Jeff Greene plans to build a 12-story “micro-apartment” building with 400 units — each about 450 square feet. Those apartments are expected to rent for $995 to $1,200 a month.

A similar project opened last year after Palm Beach Gardens-based Ram Realty Services converted an old Southern Bell Telephone building in downtown West Palm Beach into an 85-unit rental building called Alexander Lofts. Apartments there go for $1,300 to $2,300 a month.

“Most of the units are fairly small,” said Hugo Pacanins, managing director of residential development at Ram Realty. “A lot of studios.”

Pacanins said Alexander Lofts appeals to millennials who prefer to rent because they value mobility. “I think that trend is going to continue for a while,” he added. “That younger crowd is more likely to rent for a longer period of time before getting into home ownership.”

The firm completed construction on the property early last year and now has fewer than 10 rental units on the market, according to the developer. Across the street, Ram Realty and West Palm Beach-based Kolter Group are building a pricier 16-story, 205-unit rental building similarly called the Alexander. That property will have one- and two-bedroom units only, with rents that start at $2,400 a month.

“There are a lot of people who are moving from the suburbs and selling their big houses and moving downtown,” Pacanins said. “It’s happening in Delray Beach, it’s happening in Boca Raton, it’s starting to happen in West Palm Beach, it’s even happening in downtown Boynton Beach.”

Demand for rental housing on the low end of the South Florida market is also strong. The Coconut Grove-based affordable-housing developer Housing Trust Group operates in an affordable-housing market where demand far outweighs the current supply.

Matthew Rieger, HTG’s CEO, said several of the company’s rental developments were 100 percent leased the day they opened and that most of them are located in Palm Beach County. Farther south, the need is even greater, he said.

“Over the last few years and going forward, we’ve been concentrating more on Dade and Broward to supplement that footprint we have in Palm Beach County,” Rieger told TRD.

Much like other affordable-housing developers around the country, HTG qualifies for 9 percent federal tax credits that it can sell to investors to raise funds for construction, as long as it charges affordable rents as defined by the U.S. Department of Housing and Urban Development. But the supply of those highly valued tax credits is capped, while demand remains strong among those who invest in affordable housing, Rieger said.

Meanwhile, investor interest in market-rate rentals is heating up even more. A national survey by Ten-X.com, formerly known as Auction.com, ranked Fort Lauderdale as the third-best metro market for buyers of multifamily properties. The company projected that the monthly rent per unit there will increase from $970 in 2015 to $1,169 in 2019, marking a 20 percent growth. Ten-X ranked Miami as the third-best market in the nation for sellers of rental buildings and projected that the monthly rent per apartment there will increase from $1,240 in 2015 to $1,359 in 2019.

A portfolio of 15 apartment buildings in Miami Beach’s South Beach neighborhood sold in February for $59 million — one of the largest South Beach apartment portfolio sales to ever close. The local real estate firm Boardwalk Properties snapped up the 240 rental units from a Miami-based investment management firm led by Herve Barbera, according to CoStar.

“We got a tremendous amount of interest in that deal from local investors, a lot of people from New York, as well as people from overseas,” said Calum Weaver, a senior vice president at CBRE who represented the seller.

But those in search of smaller transactions are finding a limited supply. The number of buyers looking to invest less than $20 million in South Florida’s multifamily market outweighs the opportunities that are available right now, Weaver noted.

That imbalance has roots in the explosion of condo development during the 2000s before the housing market crashed and the financial crisis and recession hit. Many of the South Florida rental properties built from 1999 to 2005 were sold between 2004 and 2006 and converted to condos, said Robert Given, a South Florida-based vice chairman of CBRE.

“That’s about 35,000 units that were sold and converted to condominiums, which really decimated the Class A inventory leading into 2005,” Given said. “From 2006 to 2011, we were going through the recession, and there was no product built.”

In 2016, land values remain substantially higher in Miami-Dade County, in large part because condo development there has continued to boom in recent years.

“It’s very difficult for us to compete on land price with condominium developers,” Patterson of Related said, noting that his team even competes in-house. “At Related, there’s a lot of internal competition for capital,” he said.

Looking ahead, South Florida’s supply of rental housing may fall short of demand for years to come, even if the pace of new rental construction accelerates, according to industry sources. The region’s population of 6 million people has been growing by about 91,000 residents a year for the last four years, which translates to about 14,000 additional rental households a year, according to research from CBRE. That growth exceeds annual deliveries of about 11,000 new apartments there in recent years, the numbers show.

All obstacles accounted for, the most prolific multifamily investors in the Sunshine State’s tri-county region may see even greater returns in the years to come. Israel Schubert, who oversees the New Jersey and Florida offices at the national commercial mortgage brokerage Meridian Capital Group, said South Florida’s rental market has brighter days ahead. He, too, pointed to Fort Lauderdale and its growing number of young workers as a lower-cost alternative to Miami.

“Clearly the first movers back into multifamily after the downturn were rewarded with outsized returns, but the reality is that the deals we’re financing still have healthy upside potential,” Schubert told TRD. “The South Florida market is strong and just because something is selling now, doesn’t mean there is no more opportunity left for the new buyer.”

  • Apr
    1

Parking deck to be built at Design Center of the Carolinas

April 1, 2016

via The Charlotte Observer by Ely Portillo

The owner of the Design Center of the Carolinas in South End plans to start construction soon on a new parking deck at Hawkins and Doggett streets that’s meant to relieve long-standing parking struggles.

The deck will include 520 spaces, built on a surface parking lot that currently has a fraction of that total. Chris Kieffer of Ram Real Estate, the Design Center’s owner, said the company plans to break ground on the parking deck in May.

“Parking has been an issue at the DCC (Design Center) and in South End in general for some time, so we’re taking steps to alleviate that problem,” said Kieffer in an email.

  • Mar
    30

Developers break ground on 16-story apartment building downtown

March 30, 2016

via SFBJ by Brian Bandell

The 16-story Alexander apartment building broke ground in downtown West Palm Beach after securing a construction loan from Wells Fargo Bank.

SoDix Fern LLC, a joint venture between West Palm Beach-based Kolter Group and Palm Beach Gardens-based Ram Realty Services, got a $42.4 million advance on its mortgage to make it total $50.7 million. It’s building the 205-unit project at 333 Fern Street.

The Alexander is slated for completion in the third quarter of 2017. It will include a 377-space parking garage, a 24-hour fitness center, a pool deck with spa, an outdoor kitchen, a meeting room, and a public park. Units will range from one bedroom in 832 square feet to two bedrooms in 1,419 square feet.

Kast Construction Co. is the general contractor for the Alexander, which was previously called the Isis before changing its name for political reasons.

The developers acquired the 1.45-acre site for $5.1 million in 2012. It’s next to the Alexander Lofts, a historic building that Ram Realty Services renovated into 84 units.

There’s been an influx of development proposals in downtown West Palm Beach recently, including mixed-use projects by Jeff Greene and the Related Cos.