-->
MENUMENU
(954) 474-1776 |   |       |  Click Here to Receive our Free Market Report

Archives

Surviving the Zombie (Property) Apocalypse

Is it a good idea to lease a neglected fixer-upper?

These days, zombies are big business. From television shows to movies, books to bumper stickers, zombies are everywhere. Not only have Abraham Lincoln and Jane Austen jumped into the flesh-eater-fighting fray, but the Internet is full of expert advice on how to survive a zombie attack. There’s so much zombie stuff out there, it’s as if the apocalypse has already begun.

In the CRE world, though, zombies are a whole new breed of monster. What may work for the undead doesn’t work on a property, leaving many tenants to wonder if it’s financially wise for them to lease what’s called a “zombie” space.

What is a zombie property?

In markets around the country, including South Florida, there are many Class B and C and older tiered properties suffering from neglect. In a perfect world, many of these properties can be repurposed and fixed up into something new and exciting, but the owners of these properties lack the capital to provide even adequate maintenance.

In time, the fixer-upper looks more and more like a zombie, a battered, dusty shell of its former self: parking areas full of weeds, dead landscaping, water-stained ceilings, AC and plumbing issues, falling rents, and mostly-vacant spaces.

Is leasing a zombie property worth it?

There’s a sadness when it comes to zombie properties. Neglect of any kind is never easy to witness, and for tenants, that unease often translates into walking by some really good deals. In other words, some zombie properties shouldn’t be ignored, but should be considered with even greater caution than usual.

To help navigate that path, it’s important to develop a relationship with the landlord and or the management company and to get a firm understanding of their current financial state and financial wherewithal.

Finding comfort in a zombie property

When a potential tenant is interested in leasing a space, the owner can request to see the financials of that tenant to determine if it’s a financially secure deal. The tenant, though, often doesn’t have that same ability when it comes to getting a better sense of the landlord’s financial status.

While paper proof isn’t an option, there is a way of establishing a comfort level through a few key questions. For example, if you’re going to lease a facility that requires some additional work after you take occupancy or you’re aware of some issues, such as HVAC units that are older than five years or a roof that will need replacing during the time of your lease, tenants can ask the landlord/management team:

  • Do they have specific plans in place for the repairs?
  • Do they have adequate reserves for the repairs?
  • Do they have access to financing to solve those problems?

The definitive solution for survival

Many states, including Florida, have detailed laws that explain a commercial landlord’s building management responsibilities. As a result, many commercial leases have a maintenance clause that stipulates that responsibility, and the consequences if the landlord fails to address those issues.

That’s why it’s always a good idea to work with knowledgeable professionals in the commercial property – zombie and otherwise – leasing business; professionals like the team at Morris Southeast Group.

For a free consultation or to learn more about our CRE investment opportunities and/or other services, including finding a great lease or property management, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Ft. Lauderdale’s Changing Coastline

Ft. Lauderdale’s Changing Coastline on morrissegroup.com

Including new waterfront projects that embrace the view

These days, any discussion of South Florida’s changing coastline inevitably resorts to a debate on climate change and rising sea level, pumping stations, and adding ground height to new construction.

In Ft. Lauderdale, that conversation must also include the amount of new construction that will forever alter the city’s beachside appearance. While downtown is already in the midst of a makeover and luxury hotels are now a staple along the north end of Ft. Lauderdale Beach, these new projects – already approved by the city – provide a re-do of where Las Olas Boulevard meets the sea.

Ft. Lauderdale’s most controversial project

Perhaps the most controversial project is the current site of the Bahia Mar, a 38.6-acre peninsula-shaped property that sits on the Intracoastal. Because the city owns the land, there has been a years-long tug-of-war between investors, developers, residents, special interest groups, and commissioners.

City approval was finally given in December 2017 and has a 2028 completion date. The new Bahia Mar will include:

  • Seven high rises with 651 rental apartments and one high-rise hotel with 256 rooms. The towers will have an open-aperture design, so visitors will have a view of the water and of the yachts;
  • one five-story mixed-use building with a grocery store, office space, and parking;
  • one two-story restaurant;
  • a yachting amenities complex;
  • an above-ground parking garage;
  • a marina village that will feature kiosks, cafes, and a state-of-the-art 1,900-space, underground, two-level parking garage; and
  • a public promenade.

Las Olas Boulevard and A1A get a makeover

To help make the beach a more exciting place for tourists and investors seeking the beach life, Las Ola’s luxury is moving closer to the shore. At the intersection of Las Olas Boulevard and A1A, six projects are already underway:

  • The parking lot at A1A and Las Olas, across from the iconic Elbo Room, will be converted into Oceanside Park, with public restrooms, water-play features for children, and a beachgoer drop-off area.
  • To compensate for the loss of this parking lot, there will be a 670-space public parking garage to the north of the Las Olas Bridge and adjacent to the Intracoastal. During peak beach times, the city plans to provide free shuttle service so beachgoers do not have to make the two-block walk to the shore.
  • Just south of the Las Olas Bridge, a city parking lot will be converted into additional green space.
  • The Las Olas Marina, off of the Birch Road parking lot, will be rebuilt and expanded to include two restaurants.
  • The historic Fort Lauderdale Aquatic Center, home to the International Swimming Hall of Fame Museum, will be upgraded and modernized so pools there meet the latest standards for swimming competitions.
  • An additional parking project will be added near Sunrise Boulevard, just south of Bonnet House Museum and Gardens.

On the Ft. Lauderdale waterfront

Earlier this year, an additional 4.46 acres with 500’ of beachfront just north of the Elbo Room also came on the market – and developers have already started talking about luxury residential space and high-end commercial possibilities.

The professionals at Morris Southeast Group are excited to witness Ft. Lauderdale’s renaissance. Investors and developers are at last seeing this jewel as we’ve always seen it – a city that’s more than mobs of spring breakers. Ft. Lauderdale is simply stunning.

For a free consultation or to learn more about our property investment opportunities and/or other services, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Listings

Follow us on Twitter