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Most urban dwellers agree that development projects such as renewable energy, homeless shelters, public transportation, and affordable housing are good for their communities. But when it comes to where those projects are located, many local residents come down with a case of NIMBY (Not in My Backyard). One of the many results of this syndrome is an increase in land use restrictions, which a 2015 study estimated cost as much as $1.5 trillion in lost productivity.
In South Florida, developers have had their successes and failures in countering the NIMBY response. Below we detail several thoughtful, proactive ways to engage a community and respond to concerns about a new development.
It can be tempting to adopt a defensive posture when a community group pushes back on a project. In these situations, step back and imagine the scenario from their side. We all have families, live in neighborhoods, and want a quiet, safe place to call our own. Anything that seems to threaten that can be seen as dangerous and scary. Show respect for local residents and take the time to listen to their concerns.
To effectively mitigate this opposition, it’s crucial to address its root causes, which often fall into these buckets:
Personal connections made in one-on-one conversations or meetings of small groups are the most effective way to build support. Large, public hearings are more difficult to manage and can often fuel the fire of resistance by giving potential opponents an opportunity to network on site.
Most people are not economists or urban planners. They don’t care about the 30,000-foot view; they care about the view from their porch.
An essential starting point in working against any NIMBY opposition is to find those who already believe in your cause. People will follow the crowd and if they believe that a majority of their friends and neighbors support your project, they are more likely to follow suit.
If you can rally supporters to speak out on your behalf – in person or online – even better. Residents who may be on the fence are more likely to lean in your favor if they hear testimony from their neighbors in a public forum or see positive chatter on social media.
Identify and target specific pockets of support:
A comprehensive communication strategy can work wonders to convey a message consistently and clearly. As one-on-one interactions with residents inform your understanding of the issues involved, incorporate them into your messaging. Proactively address the most glaring concerns – traffic and parking, environmental impact, strain on services, neighborhood preservation –and your message will be one of collaboration rather than confrontation.
Share as many details of the project as possible so that they become familiar and, frankly, unremarkable, to your core audience. The more ordinary your plans seem, the less misinformation is likely to circulate.
Every NIMBY movement has its own unique motivations and local roots and thus requires a unique and locally-inspired approach. The more time you take at the outset to listen, understand and reflect back the community’s values, the more likely you are to gain supporters and minimize naysayers. We at Morris Southeast Group are proud community partners and are always tuned to the needs of our neighbors. For a free consultation on commercial real estate investment or property management 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.
Automation is the new black when it comes to speed and cost efficiency. Miami’s own Sedano’s grocery outlets, in partnership with Massachusetts-based Takeoff Technologies, is wearing this new style proudly as they deploy what is being called the world’s first “robotic grocery store.”
If successful, this new model will offer other retailers a brave new world of online growth at a fraction of the current cost of doing business. They will roll out the technology in 14 of Sedano’s 34 locations, and Takeoff plans to launch similar programs at five additional regional and national U.S. retail chains.
The process is fairly simple: customers order groceries from their phone or laptop, artificial intelligence-enabled robots at Takeoff’s automated fulfillment centers fetch the items, and Sedano’s staff helps sort and get them ready for in-store pickup or out the door for delivery. Takeoff’s system then automatically restocks inventory as needed, filters customer service requests, and provides reporting and analytics.
The grocery business can be cutthroat. Its low margins and high volume have companies always on the lookout for an edge. Robots bring a new opportunity to simplify processes and cut down on labor expenses. And the sector is growing, expected to reach $100 billion by 2022, with the overall warehouse robotics market expected to increase at a compound annual growth rate (CAGR) of 11.8 percent between 2017 and 2022, putting it at $4.44 billion in value.
These automated shoppers can yank 60 items off the shelf in a manner of minutes; 900 per hour. By contrast, living, breathing shoppers can only grab 60 per hour. Every week, the system processes as many as 3,500 online orders per location, with promises of delivery within two hours. These numbers dwarf those seen by traditional stores that rely almost exclusively on manual processes.
These automated micro-fulfillment centers offer efficient service and significant cost savings because, among other reasons, they don’t take up as much room. They each need only 8,000-10,000 square feet, sometimes installed in the grocery store itself, which greatly shortens the distance between supplier and retailer and saves a boatload of cash, since they don’t have to build a physically separate distribution center.
It also shortens the distance between warehouse and customer, with orders able to be picked up mere steps away from where they are stored and delivery options being that much faster.
While a pioneer in many respects, Sedano’s is not the only grocer to dip their toe in automation.
In its quest to solve the conundrum facing all modern supermarkets – offer a robust and changing selection of products at a reasonable cost and still bring in enough profit to pay the bills – South Florida’s own Sedano’s has embraced disruption and is charting an exciting course towards the future. The impact on CRE will be interesting, especially if automation moves grocers toward finding smaller spaces in strategic locations – not to mention the impact the technology will have on other retail businesses.Morris Southeast Group keeps abreast of innovation and trends in South Florida business and their potential impact on CRE, and we’d be happy to help you find your next investment opportunity. For a free consultation, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.
If there’s one thing that’s been made perfectly clear over recent years, it’s that e-retail has had a tremendous impact on commercial real estate. As consumers have changed their shopping habits and as retailers of all sizes have had to keep up with the digital times or close their doors permanently, building landlords, owners, and developers are holding vacant spaces.
Before nailing shut the coffin on brick-and-mortar stores, now – today – would be a great time to rethink how to fill these vacancies on a short-term-but-profitable basis. The pop-up economy is a solution that may boost CRE. These limited, seasonal or otherwise short-term businesses that need to lease space fast can rejuvenate the economy in areas while salvaging a CRE investor’s ROI on an empty space.
Ironically, the pop-up phenomenon is an outgrowth of e-commerce. In a digital field that is growing increasingly crowded, online retailers have had to find new and creative ways to reach consumers and to test out new products and brands. At the same time, a younger consumer demographic accustomed to swiping left or right for everything is, at the same time, craving experiential activities that can be shared on social media.
The answer, as it turns out, is the one thing e-commerce has decimated … the one thing retailers have known since the dawn of the marketplace: There is really no substitute for face-to-face interaction between shop owner and consumer. And the pop-up seems to check all of the necessary boxes while delivering this in-person experience.
Most people are familiar with seasonal pop-ups, such as costume stores in the weeks leading up to Halloween. As a $50 billion industry, though, there is a lot more variety in the pop-up world. In fact, pop-ups encompass a broad range of themes, including new businesses, product introductions, museums, art galleries, and spaces filled with selfie opportunities. Furthermore, there are now several online services to help link building owners and pop-up tenants.
To help attract tenants, pop-up leases are short term, generally running from six weeks to a year, although – depending on the business – this could be modified. In addition, pop-up rents can be as much as 50% lower than those with a traditional lease. The justification for this is that very little space modification needs to be done to the vacant space. Tenants require ease in moving and moving out, while landlords do not want to get bogged down with constantly remodeling or providing extensive maintenance.
Pop-ups come in all shapes and sizes, from a store within a store to a collection of pop-ups under a single roof to vacant street level space to kiosks to mall locations. With the success of a pop-up comes buzz, which then leads to increased foot traffic, publicity, a rejuvenation of the property and surrounding neighborhood, and a chance to put an energized spotlight on the desirability of the property’s location.
For the landlord/owner, all of this adds up to generating revenue – either from a single or a series of pop-ups, a short-term pop-up that may want to make a longer commitment, or a long-term tenant that sees your property in a whole new light.
At Morris Southeast Group, we’ve written extensively about the impact of e-commerce and the potential in repurposing buildings. In each case, we’ve always been excited. It’s the same with pop-ups because South Florida has already witnessed their impact – just take a look at Wynwood in Miami and MASS in Ft. Lauderdale – and there are more opportunities all around us. To learn more about pop-up possibilities, property investment opportunities, and/or our 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.
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 kenmorris@morrissegroup.com.
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 kenmorris@morrissegroup.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 ken@morrissegroup.com.
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 kenmorris@morrissegroup.com.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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Phone: (954) 474-1776 | kenmorris@morrissegroup.com
