South Florida is a region with artistic lifeblood pumping through its veins. From Wynwood and Little Haiti in Miami to FAT Village in Fort Lauderdale, creativity has lifted neighborhoods, boosted economic vitality, and changed lives. Mural art has long been a fixture of area communities, on both public and privately-owned buildings. This trend, once seen as a harbinger of neighborhood decay, has in recent years become a beacon for economic vitality and community engagement.
Real estate in particular has seen this trend as a great boon to property values, and a great advertisement for the communities themselves.
Although developers and landlords had been talking up this trend for years, it wasn’t until 2016 that researchers in the U.K. used Flickr to prove the connection between public art and property values. Up until then, there wasn’t a reliable method of getting a tally of the amount of art in a specific area. They used the social media platform’s image tags and location data to track the locations of photos labeled “art” from London neighborhoods taken from 2004 and 2013. Each photo was coded with a geotag, providing authentic geographic information. They then overlaid residential property prices and watched them shift over those nine years.
The results matched the anecdotes that real estate professionals had been mentioning for years – neighborhoods with a higher concentration of art saw prices rise more than those with little or no art.
A city with an abundance of art brings with it a sense of joy, pride, and fun. It takes blank walls and turns them vibrant, making the building and surrounding neighborhood a place far more livable and walkable. A structure that was simply a building with a corporate function – a bank, drug store, or insurance office – can become a local landmark, something that people travel to see, and want to live near.
With ecommerce taking a huge bite of the retail industry, local businesses have to create new reasons for people to unplug, put on their sneakers, and walk into their stores. Mural art can signal to potential customers that excitement and value live within a business’s walls.
Public mural art has come a long way. From its radical roots as a form of vandalism-inspired protest to its current place of honor in museums, galleries, and at economic development board meetings, it is now recognized as a valuable part of urban and suburban centers. Art’s role as a brand ambassador has also been solidified, with corporate behemoths from Coca-Cola to Nike sponsoring advertisements in the form of original murals.
The funnel of art to dollars runs a fairly simple path: high-quality neighborhood art shows improvement in the area and attracts more artists. Funky, independent businesses follow, such as cafes, restaurants, and local retailers. Young, hip (and often newly-moneyed) professionals want to live where the action is and put down their own stakes. Realtors see the shift and raise prices accordingly.
One of Miami’s newest properties may very well be ground zero for this trend. Canvas Miami, a 37-foot tower with 513 condos in the heart of the city’s Arts and Entertainment District, was designed to be a literal work of art. Topping out at $630,000 per unit, the space boasts work ranging from freestyle to interactive chalkboard art. Amenities include pool decks, a yoga garden, squash fields, and a playroom for kids.
The team at Morris Southeast Group wholeheartedly supports the use of art to fundamentally improve the neighborhoods and larger economy of South Florida. 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 firstname.lastname@example.org.
A lot has been written in recent years – on this blog included – about the evolution in the commercial real estate market, particularly as a string of retail giants
For an answer, one only needs to look at the rapidly changing demands being placed on healthcare real estate. Some of the final product, as developers, researchers, and other parties come together, is not only good for the business of medicine, it benefits the common good – even providing hope for patients and their loved ones.
Once upon a time, healthcare real estate meant the construction of bed-filled towers but insurance costs and delivery of services have changed in recent years. In today’s marketplace, there is a greater focus to provide more localized services that focus on specific populations.
With this in mind, new medical office construction was the go-to solution. Such an effort can take 18 months or more, and in the world of healthcare, that is often entirely too long. For healthcare providers, one solution was hiding in plain sight: vacant storefronts in malls and strip malls. What was once a supermarket or retail store can be transformed into a state-of-the-art medical facility via a thorough remodel.
When it comes to specific populations, the fastest growing one is people dealing with dementia or Alzheimer’s. As the Baby Boomer generation ages, so too is the number of diagnoses which in turn places a tremendous strain on the healthcare system.
A treatment that has shown great promise is reminiscence therapy, in which caregivers encourage patients to actively talk about past events and their own lives. When combined with prompts that stimulate memories, such as photographs and music, patients experience a marked improvement in mood, cognition, and communication.
To further enhance the reminiscence therapy experience for patients, there is a global effort to develop safe spaces that encourage memories. From Amsterdam and Miami to San Diego, healthcare professionals, developers, and designers are entering partnerships to create villages and town squares that bring patients – most of whom are in their 70s and 80s – to the world that existed between the years 1950 – 1961. As this population passes, memory prompts can be updated to better reflect the experiences of a new group of patients.
While some of these projects are new construction, such as Miami Jewish Health Systems Health Village (set to open in 2020), other efforts are filling already existing warehouse spaces. The George G. Glenner Alzheimer’s Family Centers partnered with the Senior Helpers and the San Diego Opera Scenic Studio to build a reminiscence therapy town square in a 9,000-square-foot warehouse. There, 14 storefronts and memory-stimulating activity stations greet patients.
The group is expanding to other markets, with another town square in Maryland and its first franchise in Chicago. The organization is now moving away from warehouses and toward spaces that are centrally located, such as empty box stores, shopping centers, and strip malls.
South Florida, it seems, is an ideal location for these efforts. An aging population in which many are diagnosed with dementia and age-related cognitive impairment makes reminiscence therapy particularly valuable for local citizens – and there are available properties that can be transformed into villages and town squares.
For a free consultation with Morris Southeast Group 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 email@example.com.
Miramar, FL; January 29, 2019 – President Ken Morris, SIOR, RPA, of Morris Southeast Group announced that he has represented the worldwide leader in marine propulsion systems, ZF Marine Propulsion Systems Miramar, LLC in a 62,552-square-foot industrial warehouse lease in Miramar, a southern Broward County community near Hollywood and Pembroke Pines.
The 10-year lease, at 15351 SW 29th St. – Bldg. C, in Miramar Centre Business Park, which has a total of 125,104 square feet and was built in 2008. The rental rate was not disclosed. Mercury Marine-Miramar and Aero Accessories are the other tenants in the building.
International property investor and asset management firm, Heitman, owns the property. Larry Dinner with CBRE represented Heitman in the transaction.
“After evaluating 17 peer locations in the southwest Broward County submarket, and factoring in where employees live and related considerations, the Heitman property was clearly the best choice for our client,” said Ken Morris.
ZF Marine manufactures a complete line of propulsion systems for commercial boats and pleasure-craft boats, including transmissions, propellers, shift and control systems, surface drives and thrusters for numerous applications. In the commercial field, ZF Marine products can be found on tugboats, inland river-tow boats, passenger ferries, fire/police and naval patrol boats. Its pleasure-craft components are suitable for speedboats, yachts, sail, sport fishing and related watercraft. ZF Marine serves customers throughout the U.S., Canada, Mexico and the Caribbean from its Miramar headquarters. https://www.zfmarinepropulsion.com/
About Morris Southeast Group
For more than 35 years, Morris Southeast Group has been recognized as one of South Florida’s leading providers of commercial real estate services. Located in Weston FL, Morris Southeast Group is a full-service firm specializing in owner and tenant representation, corporate services and investment sales in the office, industrial and retail sectors throughout Miami-Dade, Broward and Palm Beach Counties. For more information contact President Ken Morris at (954) 474-1776 or visit www.morrissegroup.com.
The View from 50,000 Feet
The U.S. economy remains on solid footing and by summer this year is expected to surpass the longest economic expansion in history, and the 120-month mark set from March of 1991 to March of 2001. Even so, it seems we are trying to talk ourselves into a recession, with frequent media reports variously titled “The recession, when will it strike?” Yet no one bothers to remind us that Australia is entering its 29th consecutive year without two consecutive quarters of negative economic growth, otherwise known as a recession. Economic expansions don’t stop from fatigue – something must cause them.
The Nasdaq Composite Index inched toward exiting the bear market in entered on Christmas Eve, rebounding nearly 20 percent to a Feb. 8 close of 7288.24. It would have to reach 7431.50 to make it official, and if it does, it would be its second-fastest exit from bear marketing territory in history. The rally was led by the FAANG stocks of Facebook, Apple, Amazon, Netflix and Google.
Turning to the property markets, strong Q4 activity pushed 2018 above 2017 for investment volume in the U.S.
The View from 20,000 Feet
Broward County added 15,800 net-new jobs during 2018, bringing the Ft. Lauderdale-Pompano Beach-Deerfield Beach MSA to an employment base of 866,300, and with a jobless rate 3.3 percent. Trade, transportation, utilities and professional services led job growth, according to Florida’s Department of Economic Opportunity, Bureau of Labor Market Statistics. Construction (3,300), education and health services (2,100), leisure and hospitality (1,500) were other job sectors that posted gains. However, the county lost 600 financial services jobs and 500 government jobs in 2018.
South Florida should receive increased flows of investment capital into commercial real estate as a result of the Tax Cuts and Jobs Act of 2018, according to Miami law firm Berger Singerman and the firm’s fifth annual survey of over 2,000 local real estate professionals and property investors. Indeed, the Miami condo market was recently featured in national news as the most likely relocation target for New Yorkers and people from Connecticut.
This is the first year that people will be filing tax returns under the new law, and with new limit for SALT deductions (State and Local Taxes) set at $10,000, high-income earners and families with large mortgages are expected to flee high-cost states, including California, where it is not uncommon to pay property taxes of $20,000, $30,000 and even more annually – 100 percent of which was deductible under the old tax rules but won’t be starting this year.
Recent transaction feature
Morris Southeast Group represented the worldwide leader in marine propulsion systems, ZF Marine Propulsion Systems Miramar, LLC in a 62,552-square-foot industrial warehouse lease in Miramar.
The View with Boots on the Ground
The industrial market led other South Florida property sectors in 2018 (again) by posting 5,149,470 square feet of positive net absorption for the year. The overall vacancy rate stood at an historic low of 3.8 percent at year end, with the average quoted asking rental rate for available space at $10.33 per-square-foot at the end of the fourth quarter. Total industrial inventory in the South Florida market amounted to nearly 439 million square feet, or about the same size at Boston’s industrial market.
Total industrial building sales declined on a year-over-year basis and through the first three quarters of 2018, with 167 buildings of 15,000 square feet or larger traded hands, for a total volume of $1,051,381,525, according to CoStar. That compares with 171 building sales in the first three quarters of 2017 with a total volume in excess of $1.3 billion. Cap rates compressed during the year, falling from 7.18 percent in 2017 to 6.59 percent in 2018. At the close of the year, over 7.4 million square feet of industrial property was under construction, led by North Miami Beach industrial submarket (1.75 million square feet), Miami Airport (1.09 million square feet) and Southwest Broward County (1.07 million square feet).
The South Florida office market was stable during 2018 and ended the year with an overall vacancy rate of 9.1 percent on tepid positive net absorption for the year of 115,133 square feet. The overall office vacancy rate was 8.9 percent at the beginning of last year. Two of the quarters posted negative net absorption last year while two quarters were positive. At the end of the fourth quarter, 3,522,479 square feet of new office space was under construction.
The average quoted asking rental rate for all classes of office product was $32.86 per-square-foot at the close of the fourth quarter. Class A space averaged $39.71, while Class B space was $27.76 and Class C space was $14.87 per foot. Total office inventory at year end was 233,380,457 square feet.
Total office building sales of 15,000 square feet or larger increased in 2018, when 87 office transactions closed in the first three months last year, with total volume exceeding $1.5 billion,
compared with 2017 when 107 office buildings sold, also with total volume greater than $1.5 billion. The average price-per-foot was $215.43 in 2018, versus $213.15 in 2017. Cap rates changed little, averaging 6.81 percent last year compared with 6.72 percent during the same period of 2017, according to CoStar.
Retail real estate in South Florida finished 2018 with a slightly higher vacancy rate then where it started, moving from 3.7 percent to 4.1 percent, yet overall the property sector had a good year, given the onslaught of ecommerce and its affects in other U.S. markets. For the year, 735,202 square feet of retail space was positively net-absorbed, and rental rates increased 3.05 percent from a year earlier, finishing 2018 at an average of $28.16 per-square-foot.
During the four quarters last year, nearly 2.6 million square feet of new retail space was delivered to the market. At the close of 2018, approximately 5.3 million square feet of retail product was under construction, reported CoStar. Retail real estate encompasses Shopping Centers – including community centers, neighborhood centers and strip centers), Power Centers, General Retail Properties, Malls and Specialty Centers, such as outlet malls, airport retail and Theme/Festival Centers.
During the first nine months of 2018, 92 retail properties were sold with a total sales volume of $1.03 billion, compared with the same period in 2017, when 80 retail properties sold for a total sales volume of $1.08 billion. Cap rates came down for retail real estate in 2018, moving from 7.07 percent in 2017 to 6.48 percent last year.
Ken Morris attended the Society of Industrial and Office Realtors (SIOR) Fall World Conference in Denver, CO this past fall. With nearly 1,000 fellow SIORs and sponsors in attendance, it was excellent networking with Thought Leader breakout sessions, panels and brilliant speakers. One of the best speakers at an SIOR event in years – Four-Star Admiral and Navy SEAL William McRaven, presented the keynote address during the Friday session.
Click here for the story “You Just Don’t Quit” Says SEAL Team Six Boss McRaven
Sponsored by Prologis, Four-Star Admiral and Navy SEAL William McRaven was a special speaker for a number of reasons, among them, SIOR has been trying to get him as a keynote speaker for four years but his schedule did not allow it until the Denver conference.
McRaven shared SEAL training stories, stories from his 37 years in the military and of course, the story about the raid on Osama Bin Laden’s compound. He said he was always impressed how people stood up in their darkest moments. “That’s when you have to be your very best – in dark, dark moments when everything is on the line.” He also pointed out that “risk is only relative to you – if someone else is taking a risk, it’s not relative to you.”
Operation Neptune Spear
McRaven is credited for organizing and overseeing the execution of Operation Neptune Spear, the special ops raid that led to the death of Osama Bin Laden on May 2, 2011. CIA Director Leon Panetta delegated the raid to McRaven, who had worked almost exclusively on counter-terrorism operations and strategy since 2001.
According to The New York Times, “In February, Mr. Panetta called then-Vice Adm. William H. McRaven, commander of the Pentagon’s Joint Special Operations Command, to CIA headquarters in Langley, Virginia, to give him details about the compound and to begin planning a military strike. Admiral McRaven, a veteran of the covert world who had written a book on American Special Operations, spent weeks working with the CIA on the operation, and came up with three options: a helicopter assault using U.S. Navy SEALs, a strike with B-2 bombers that would obliterate the compound, or a joint raid with Pakistani intelligence operatives who would be told about the mission hours before the launch.”
Of course the SEALs opted for the helicopter assault and SEAL Team Six executed the raid on Osama Bin Laden’s Pakistan compound, accomplishing their mission.
President Obama, Vice President Biden, Secretary Clinton, Secretary of Defense Robert Gates, Chief Counter-terrorism advisor to President Obama John Brennan (he later became CIA Director) and others tracked the progress of Operation Neptune Spear with impassioned interest and concern. Most people believe this photo was taken in the Situation Room, but McRaven said it was not; rather, it was taken in an adjacent room of the White House.
McRaven’s greatest point during his talk was on toughness, saying “training brings out the toughness in people” yet mostly, “you just don’t quit,” whether it is as a special operations warrior, or in life, sports, and business, if what you want is worth fighting for.
During the Q&A with McRaven, he was asked about Millennials and the generation behind them, or young people just entering and graduating from college. He was very optimistic about this generation and expressed “great confidence in young kids today.” He reminded us that earlier generations of Americans had little faith in what the Baby Boomer generation might accomplish, and it turns out that we have done okay.
Buying, selling, leasing space or do you own commercial property that requires third-party management to take care of the asset? Call Ken Morris at 954.240.4400 or email him at firstname.lastname@example.org.
Last November, 300 scientists and 13 federal agencies collaborated to produce the latest National Climate Assessment, a congressionally-mandated quadrennial report on climate change and its expected effects on our nation and the world. The results presented a stark picture of what kind of world we may leave our children if nothing is done to change our role in this global issue.
South Florida is well-known as the canary in the coal mine for how climate change may affect U.S. coastal areas, as many of the worrisome predictions in the report are already taking place here and have been for some time – rising tidal levels, hotter temperatures, potentially stronger hurricanes, increased flooding, vanishing coral reefs, and longer mosquito seasons.
Luckily, the region is also known for its proactive response to this issue, particularly in the real estate market.
Real estate buyers and investors are showing their concern about climate change in their purchase decisions. They want to be sure the view (and the property itself) will be there for generations to come.
South Florida has shown its commitment to solving the problem and put its money where its mouth is, to the tune of $200 million dollars to counteract flooding associated with higher sea levels. The Florida Keys are preparing to spend as much as $500,000 for each mile of road that will be raised up out of harm’s way.
Key structural elements of coastal cities, particularly those in South Florida, are at great risk. These include bridges, roads, transportation, and power grids. If left unchecked, sea levels could render sections of the U.S. coastlines uninhabitable.
Local efforts to combat this go back a decade or more. In 2009, four counties – Broward, Miami-Dade, Monroe, and Palm Beach – teamed up to form the Southeast Florida Regional Climate Change Compact to coordinate efforts across county lines. Their initiatives have included:
Planning and zoning boards across the region continue to scrutinize building codes and implement proactive changes to raise height limitations for sea walls, place roads, water, sewer, and electrical systems on the higher ground, and install massive pumps to send water back into the sea.
The most commonly-understood impact of climate change is on the natural world. It should, therefore, come as no surprise that the National Climate Assessment cites many environmental concerns which play a major role.
South Florida is home to a growing number of municipalities who embrace green building standards to combat climate change and support sustainability. Support from investors and property owners have spawned some significant efforts in Miami. According to the 2017 National Green Adoption Index, 12.29 percent of the city’s commercial real estate is certified as green, or 33.91 percent of total square footage in green buildings.
In addition, with the assistance of the Office of Miami Resilience and Sustainability, city officials have racked up the following accomplishments:
Green construction pays off not only for the environment but for the bottom line. According to Miami-Dade Green, businesses that opt to go green save 15 to 30 percent on cleaning costs, 35 percent on energy bills, and as much as 60 percent on water.
Eighty-five percent of the U.S. population lived in major cities in 2015, and this trend is expected to continue well into the future. Cities are responsible for around 80 percent of greenhouse gas emissions, which gives them significant influence on local policy on how to handle the problem.
The South Florida real estate market has seen opportunity on the horizon and dipped its toe into the tiny space and micro-unit movements, opening doors to a more sustainable and affordable way to live in the heart of a major city.
Morris Southeast Group is certain that South Florida’s best days lie ahead, despite the challenges posed by climate change.
Let us help you find the property that fits your budget and needs. For a free consultation, call Morris Southeast Group at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at email@example.com.