Florida real estate

  • 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.”

  • Oct
    22

ARA Newmark Announces the Sale of a 260-Unit, Core Plus Community in Jensen Beach, FL

October 22, 2015

Jensen Beach, FL (October 2015) — ARA, A Newmark Company (ARA Newmark) announced the sale of Pineapple Cove, a 260-unit, luxury, garden-style apartment community located in Jensen Beach, Florida in Martin County. The property sold for an undisclosed price and was approximately 97 percent occupied at the time of sale.

The seller, Ram Realty Services (Ram) was represented by the ARA Newmark team of Executive Managing Directors Avery Klann and Hampton Beebe, Transaction Manager Jonathan Senn and Vice Chairmen Dick Donnellan and Marc deBaptiste, in the transaction.

Founded in 1978 and headquartered in Palm Beach Gardens, Florida, Ram is an affiliated group of companies and partnerships that acquire, develop, manage and finance retail as well as residential properties in the Southeast. Ram has notable history in Martin County, having developed Martin Downs, Martin Downs Town Center, Martin Square Mall, Pineapple Commons, Coquina Cove and Willoughby Cove. Currently, Ram has an active pipeline of over 2,500 units throughout the Southeast including exciting urban infill projects in West Palm Beach, Hollywood, and Doral, Florida.

PCCP, LLC (PCCP), in a joint venture with Silverpeak Real Estate Partners (Silverpeak) and Atlanta, Georgia-based Carroll Organization (Carroll) were the buyers. Carroll is a privately held owner and operator of multifamily real estate with approximately $2 billion of assets under management, and 18,000 units owned and operated. PCCP is a premier real estate finance and investment management firm focused on commercial real estate investments. Silverpeak is a full-service, diversified real estate investment and advisory business with over $10 billion of gross real estate assets under management. The company also manages real estate on behalf of commingled funds, separate accounts and for its own account.

Built in 2004, Pineapple Cove features lush, tropical landscaping and Spanish-style architecture surrounded by more than 55 acres of pristine wetlands. Community amenities include a tiki bar, a sparkling saltwater pool, a spa, a business center and a fitness center. Apartments are thoughtfully appointed with washers and dryers, spacious balconies, walk-in closets, wood plank flooring and vaulted ceilings.

“The acquisition of Pineapple Cove represents a unique opportunity for Carroll to own one of the top performing assets along Florida’s Treasure Coast, also known as Florida’s Research Coast, which consists of Martin, Indian River, Okeechobee and St. Lucie Counties,” said Klann. “We have seen a strong trend of South Floridian’s moving north along the coast, resulting in stellar growth in the area. The population within the Research Coast has increased nearly 37% in the last five years, attracting investment with the construction of new retail, entertainment and housing opportunities. Furthermore, incomes in the area are 14% higher than the state average – an excellent economic indicator for the area’s future potential.”

“We are very pleased with the outcome and what it means for our institutional partners; Pineapple Cove was one of Ram’s longest held and best performing assets,” commented Jennifer Stull, Ram Managing Director of Asset Management. “This is a bittersweet moment for us. Ram’s roots are in Martin County, but today we are focused primarily on urban infill projects like The Mark (Boca Raton, FL) and The Alexander (West Palm Beach, FL). To have achieved so much success in Martin County is a great affirmation of our vision, strategy and execution.”

About ARA, A Newmark Company 

ARA, A Newmark Company is the largest full-service investment advisory firm in the nation that focuses exclusively on the brokerage, financing and capital sourcing of multihousing properties including conventional, affordable, distressed assets, notes sales, seniors, student & manufactured housing and multihousing land. ARA Newmark comprises the country’s top investment professionals who leverage a unique and fully integrated cooperative business platform of shared information, relationships and technology driven solutions. ARA Newmark’s unified enterprise approach ensures that clients are delivered the broadest asset exposure, effective matching of buyers and sellers, and the shortest transaction timeframes in the industry. The combination of global resources, unparalleled market expertise and nationwide presence in the multihousing marketplace has resulted in an annual production volume of more than $12.4 billion in real estate transactions in 2014. For detailed information on ARA Newmark’s extensive multihousing investment services, visit www.aranewmark.com.

About Newmark Grubb Knight Frank 

Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF’s 12,800 professionals operate from more than 370 offices in established and emerging property markets on six continents.

With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. NGKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage

services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.

NGKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.

About Ram 

Founded in 1978, Ram is an affiliated group of companies and partnerships that acquire, develop, manage and finance retail and residential properties in the Southeast. The group also selectively acquires debt secured by retail and residential properties. Ram is currently investing Ram Realty Partners III LP, a value-added fund targeting retail and multifamily properties in select high growth markets in the Southeast. Since 1996, the company has deployed in excess of $2.0 billion of capital. Ram is headquartered in Palm Beach Gardens, Florida and has offices in Fort Lauderdale, Florida and Charlotte, North Carolina. For more information, visit www.ramrealestate.com.

About Carroll Organization 

Carroll Organization is among the leading privately-held real estate companies in the United States. Founded in 2004 and based in Atlanta, Carroll Organization focuses on multifamily properties, including acquisitions, property and asset management services, and fund management. The firm provides investment vehicles for a broad range of investors to access the multifamily real estate asset class and has raised over $700 million of equity through Carroll Organization sponsored funds and joint ventures. Carroll has successfully purchased and developed over $2 billion of real estate. Carroll Organization’s regional offices are located in Houston and Miami. Today, the company manages approximately 18,000 multifamily units in six states and has purchased other multifamily owner/operators throughout the U.S. The firm has also developed student housing, single-family residential and retail properties, and has overseen $50 million of construction management for both its owned and fee partners. From due diligence to execution, Carroll Organization has the internal capabilities and the external relationships to identify, underwrite, and close transactions. For more info, visit www.carrollorganization.com.

  • Jul
    23

Ram Sells Florida & Waters Shopping Center

July 23, 2015

  • Ram sells Florida & Waters Shopping Center to Saglo Development Corporation
  • Florida & Waters Shopping Center is a 159,097 SF asset located in Tampa, Fla.

Tampa, Fla., July 22, 2015—Ram Realty Services, a leading developer and real estate investment manager throughout the Southeast, has announced the sale of Florida & Waters Shopping Center to Saglo Development Corporation.

The 159,097 SF center is located on the southwest corner of North Florida Avenue and Waters Avenue in Tampa, FL. Notable tenants include Save-A-Lot, Citi Trends, Magic Mall Flea Market, CAC Medical Center, Wendy’s and Dunkin’ Donuts. Florida & Waters was 87.9% occupied at the time of sale.

Ram acquired Florida & Waters in November 2004 from The Greco Family, LP as part of its Community Reinvestment Partners Fund. Ram completed significant capital improvements in 2009, including an updated façade, roofing, parking lot improvements, and additional signage.

About Ram

Founded in 1978, Ram is an affiliated group of companies and partnerships that acquire, develop, manage and finance retail and residential properties in the Southeast. The group also selectively acquires debt secured by retail and residential properties.  Ram is currently investing Ram Realty Partners III LP, a value-added fund targeting retail and multifamily properties in select high growth markets in the Southeast.  Since 1996, the company has deployed $1.7 billion in real estate transactions.  Ram is headquartered in Palm Beach Gardens, Florida and has offices in Fort Lauderdale and Tampa, Florida and Charlotte, North Carolina. For more information, visit www.ramrealestate.com.

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  • Jan
    7

Ram Sells Citra at Windermere

January 7, 2015

Ram sells multifamily development to JRK Property Holdings

  • Ram sells Citra at Windermere to JRK Property Holdings
  • Citra is a 360-unit Class “A” multifamily asset located in Windermere, FL

Palm Beach Gardens, FL, January 7, 2015 – Ram Realty Services, a leading developer and real estate investment manager throughout the Southeast, has announced the sale of Citra at Windermere to JRK Property Holding. Engler Financial Group, LLC brokered the sale.

Citra at Windermere is a core, Class “A” garden apartment community located in Windermere, Orange County, Florida along Winter Garden Vineland Road. The ground-up development comprises 360 units across18 three-story buildings as well as clubhouse, dog agility center, fitness studio, pool, outdoor kitchen and entertaining area, and detached garage buildings. Citra features “best-in-class” amenities, condo-quality finishes, and energy-efficient construction.

Ram secured the 22-acre parcel on which Citra stands from Avatar Properties, Inc. and a private investor in August 2012. Development commenced in September of 2012 with substantial completion in February 2014. Ram engaged a rapid lease-up strategy that saw an average of nearly 30 leases per month.

The buyer, Los Angeles-based JRK Property Holdings, owns and manages 55,000 multifamily units nationwide as well as multiple hotels and over 2 million square feet of office, industrial, and storage properties. In 2013, JRK was recognized as the 20th largest owner of apartment properties according to National Multifamily Housing Council rankings.

About Ram

Founded in 1978, Ram is an affiliated group of companies and partnerships that acquire, develop, manage and finance retail and residential properties in the Southeast. The group also selectively acquires debt secured by retail and residential properties.  Ram is currently investing Ram Realty Partners III LP, a value-added fund targeting retail and multifamily properties in select high growth markets in the Southeast.  Since 1996, the company has deployed $1.7 billion in real estate transactions.  Ram is headquartered in Palm Beach Gardens, Florida and has offices in Fort Lauderdale and Tampa, Florida and Charlotte, North Carolina. For more information, visit www.ramrealestate.com.