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Is Your New CRE Opportunity in a Shipping Container?

Is Your New CRE Opportunity in a Shipping Container? on morrissegroup.com

The possibilities of thinking inside the box

Tourists travel to South Florida because the region has plenty of sunshine. But take one look at Port Miami and it’s pretty clear there’s an over-abundance of something else: shipping containers. They’re lined up along the docks, stacked on top of one another, and suspended in mid-air as they’re loaded and unloaded each day.

Where some people see something that’s completely utilitarian, others see the vast possibility for repurposing these big boxes as residential and commercial spaces.

Shipping containers and the new mindset

The idea of using shipping containers as a building certainly isn’t a new one. Homeowners and architects around the globe have turned to them as a practical means of home construction for years. As a result of the tiny living movement and a new environmental awareness that promotes sustainability, what was once seen as an architectural oddity has slowly gained mainstream acceptance – just do an online search to see the number of companies now specializing in shipping container conversions.

In a natural evolution, though, the idea has crossed over from residential uses to commercial ones. In an area like South Florida, where there is strong competition between neighborhoods to attract residents, shoppers, and visitors repurposed shipping containers can be a sensible solution for revamping zombie properties or attracting entrepreneurs and pop-ups.

Uses for shipping containers

Shipping containers come in a somewhat standard size. Height is either 8.5 feet or 9.5 feet, and lengths are 8, 10, 20, or 40 feet. This allows for a variety of uses, including stacking options; think of it as Legos for adults. Just like that childhood toy, the possibilities of configuring the containers are nearly endless.

Single-family homes are one of the most popular uses since square footage costs run between $80 and $120. Consequently, it’s not a big leap to convert the containers into duplexes or even larger multi-family complexes.

In terms of commercial space, shipping containers are able to house things like small coffeehouses or motels to healthcare facilities, office space, and everything in between and beyond. In Asheville, NC, the Smoky Park Supper Club – made from 19 containers – is currently the nation’s largest shipping container structure.

Things to remember before attempting a shipping container conversion

Depending on the company, alterations such as window and door cutouts can occur offsite or onsite.

Although the structure began life as a shipping container, its use as a building still requires that codes are followed and permits pulled. Permanent and semi-permanent codes may vary, and it’s a good idea to understand the local codes in advance to know that the intended use will be allowed.

Stacking containers often has its own set of issues, such as stability and waterproofing.

In the long term, shipping container conversions are less expensive than traditional brick-and-mortar buildings. They can be relocated to a new location or repositioned on the same property – all without demolishing the structure and starting from scratch.

Similarly, repurposing shipping containers are better for the environment. They can be re-tasked for new projects, while rubble and debris from demolished buildings will be added to landfills.

Morris Southeast Group supports novel CRE solutions

The professionals at Morris Southeast Group are excited about the possibilities borne out of the repurposing and sustainable movements. While this shipping container trend isn’t fundamentally reshaping South Florida, it does hold promise for both temporary structures that enable a quick repurposing of property, as well as more durable options that make creative, economical and environmentally-friendly use of space.

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.

Tech-Cities 2.0: South Florida a Rising Tech Star

Tech-Cities 2.0: South Florida a Rising Tech Star on morrissegroup.com

Tech savvy, diversity, low cost of living, and access to capital are all great indicators for CRE

South Florida’s ascent as a major player in the tech sector is highlighted by its recent inclusion in the Cushman & Wakefield Tech Cities 2.0 annual report, which documents the state of current and rising tech centers and their effect on local commercial real estate.

The comprehensive report included major North American markets and breaks them down into three categories:

  • Tech is a critical component
  • Tech is a key driver
  • Tech is important

The Miami-Fort Lauderdale-West Palm Beach market is in the “Tech is important” category, which indicates that the area has many important sectors in which tech is a growing force.

Miami-Dade is the hub of Florida tech

There are many positive indicators pointing to South Florida – and the Miami-Dade area in particular – as a rising tech star.

In 2017, Miami ranked eighth in venture capital funding among U.S. cities, bringing in $1.3 billion for local startups and placing it squarely between heavyweights Seattle and Chicago. In addition, the Miami-Fort Lauderdale area placed first for new business creation in the Kauffman Foundation’s 2017 Index of Startup Activity. This development is being mirrored in other areas of the U.S., with new tech hubs emerging in such disparate places as Philadelphia and Provo, Utah.

Unsurprisingly, hiring in South Florida tech has been robust, reaching a 16-year high. The sector has grown steadily – 27.6 percent from 2012 to 2016 – and 69 percent of entrepreneurs said they planned to grow their staffs in 2018, up from 64 percent the year before.

New companies and vibrant partnerships pop up regularly, including The LAB and Refresh Miami, “a community of hackers, early adopters, entrepreneurs and change artists,” in a diverse array of neighborhoods like Overtown, Coconut Grove, Brickell, and Wynwood. Neighboring Fort Lauderdale also has its fair share of tech companies, a number that is rapidly growing.

The tech landscape has also branched out of literal “technology” to encompass innovative aspects of the media, law, and retail sectors, all of which have stepped up to compete for talent and space, which leads to another area affected by this boom – real estate.

Of the many areas that have felt the impact of South Florida’s growing tech industry, the local commercial real estate market is one of the most significant. Starting in 2017 and continuing into the middle of 2018, the tech and life sciences industry made up 10.8 percent of all leasing activity in Miami-Dade, 5 percent in Broward, and 4.4 percent in Palm Beach.

Although there are many bright spots in the region’s tech fortunes, research is not yet among them. South Florida spends approximately $565 million annually on academic research and development. While that may sound impressive, it only ranks 24th in the U.S. and 43rd when adjusted for population.

Diversity, low cost of living, and regional capital are assets

One ace in the hole for South Florida is the rich diversity of its population. The local tech sector has begun to play a significant role in enabling a diverse workforce that sets it apart from the hiring issues in Silicon Valley.

In addition, Miami’s lower cost of living gives it a recruitment advantage over more expensive areas like New York, Boston, or San Francisco. It has a wide pool of fields under the tech umbrella, including hospitality, travel, transportation, and logistics. And the city’s reputation as the gateway to the Americas gives it unique access to capital from that region.

South Florida’s compelling blend of culture, talent, and, yes, sun and sand, make it a shiny new gem in the realm of promising tech areas. The impact on commercial real estate is clear: The Tech 2.0 report concludes that promising tech “markets typically experience more rent growth and larger property value increases than peer cities.”

Morris Southeast Group is excited by this development and we stand ready to help CRE investors and companies in the tech sector meet their growing real estate needs. For a free consultation or to learn more about our property investment opportunities and/or other services, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

5 Ways to Increase the Value of Your Commercial Property in 2019

5 Ways to Increase the Value of Your Commercial Property in 2019 on morrissegroup.com

The New Year is the perfect time to make property resolutions

By the time this is posted, the New Year will already be weeks old – and in that time, many personal resolutions will have been tossed, amended, and forgotten. That fresh start gusto is difficult to maintain unless you have the drive and a great reason to keep it going.

As much as the New Year is a time to reassess personal goals, it’s also a great time to do the same with real estate investments – including your goals for a specific property and looking at ways to increase its value. And because the added value will increase your return, property resolutions may be a whole lot more successful and easier to measure than the personal ones.

Here are some suggestions to get your CRE off on the right foot in 2019:

1. Is it time for a facelift?

Cosmetic changes to property generally come in two sizes: great and small. They can range from improved security measures or new exterior paint to a remodel of the lobby or a completely new facade. They can also be as simple as new landscape plantings and lighting, or even getting creative with local artists – and in a place like South Florida, these last three items can go a long way.

2. Gaining value through efficiency

In examining previous operating expenses, there may be a few areas where money can be saved. Two major ones that can be addressed are electric bills and water usage. Switching to energy-efficient bulbs and replacing windows could lower monthly electrical bills, while changing out flush valves on commercial toilets can mean water savings without replacing the fixtures. It’s also better for the environment, and this, in turn, is more attractive to the mindset of many of today’s tenants.

3. Sub-metering utilities

This third item goes hand-in-hand with number two. Most tenants understand that they will have to pay for utilities, and for many, the monthly total is divided up among all of the tenants. By installing a sub-metering platform, however, each tenant will have his or her own meters. This makes tenants responsible for managing their own utilities rather than an average by square footage based on the entire building – and this can be a huge selling point for prospective tenants who are looking to control costs.

4. Change the intended usage

Neighborhoods always seem to be changing, especially in fast-growing South Florida. What was once an industrial area becomes an arts center, and then that may transform again into retail and residential. If the neighborhood in which a property is located is becoming something other than for what it was originally zoned, then perhaps it might be time to get a zoning variance so the property can keep up with a changing location.

5. Rent to reflect improvements

The quickest way to raise value is to raise rents, but there really needs to be an asterisk next to this final suggestion. Before upping the rent, it’s important to look at the data on the property, as well as that of surrounding properties to discern whether or not your tenants are paying a market rate and if there is even the potential for a reasonable increase. A great way to make an increased rent more palatable for a tenant is to have it specifically reflect tangible improvements made to the property.

A partner in making and keeping smart CRE resolutions

When coming up with property resolutions for the coming year, it’s important to remember that you’re not in this alone. The Morris Southeast Group team is skilled at not only property management but also help you devise ways to make your property achieve the most value.

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.

Can Tiny CRE Be Big In SoFlo?

Can Tiny CRE Be Big In SoFlo on morrissegroup.com

Size may not matter when it comes to investing in South Florida commercial real estate

For several years now, many Americans have had a love affair with the small things in life. Families and millennials embraced smaller homes and micro-units as a means of living affordably in the wake of the Great Recession, of embracing efficient and sustainable ideas, and of simply owning something. Whatever the reason, micro-living represents a popular shift in the collective mindset.

It was only a matter of time before some entrepreneurs and CRE developers, investors, and business owners also embraced the Lilliputian life. In cities across the country, small and awkward spaces – once seen as empty in a bigger-is-better world – are literally getting a new lease on a profitable life.

The reasons why less is more

The small space CRE movement is a natural byproduct of cities across the country creating high-density, pedestrian-friendly neighborhoods – very much like the building boom along Fort Lauderdale’s Las Olas Boulevard. The results are that space is at a premium, parking is limited, businesses must rely heavily on foot traffic, and residents require a variety of convenient services.

For the owner/investor, that spells opportunity. A BISNOW article on the tiny boom mentions the CBS sitcom Two Broke Girls, in which two waitresses made a deal to convert an old supply room behind their dinner into a small cupcake business with a sidewalk window. That may be fiction, but many entrepreneurs are using similar tactics – and many of the new multipurpose ventures are giving small a big name.

Looking at space differently

Clearly, not every small space will double as a gourmet cupcake shop, but looking to repurpose unused, underused, or vacant small spaces requires a degree of similar creativity. You have to understand what local consumers need, reach out to the right entrepreneurs, and think outside of the box (store, if you will).

A current tenant may want to try a new venture on a smaller scale, while a new business might be eager to get a foothold in a high-rent area without the astronomical overhead of a dedicated space. It could also mean bringing several small boutiques together under a single roof in a micro-mall located in the shell of a brick-and-mortar space or, as in Miami’s Upper Buena Vista, under the canopy of some magnificent trees.

Big brands are also going small

At the same time, larger brand names – Nordstrom and IKEA, to name two – are expanding into smaller spaces to meet the changing demands in the retail market. Normally located in malls, box stores, and any location that requires a car to get there, these big-things-in-small-packages venues allow these national retailers to reach the new urban dweller.

These smaller locations provide more limited merchandise as well as an opportunity for customers to interact with store personnel, ask questions, and then place an online order to be picked up at the same location.

Going small in a big way

At the end of the day, efficiency, convenience, and ROI are necessary to make tiny CRE a big success. Those three values are also at the heart of Morris Southeast Group as our professional team works to make big CRE goals come true.

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

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