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Morris Southeast Group Closes 100,000 Square Feet in South Florida Commercial Real Estate Transactions

Morris Southeast Group Closes 100,000 Square Feet in South Florida Commercial Real Estate Transactions

Sunrise, FL; December 16, 2020 – Morris Southeast Group President Ken Morris, SIOR, RPA, announced 100,000 square feet of recently completed South Florida lease and sale transactions, plus a new listing in Plantation, FL.

Ken Morris, SIOR & Adriana Lilly represented Keratin Complex in a seven-year lease for 55,134 square feet at the Hillsboro Technology Center from Bristol Development and Butters Development. Keratin Complex is a leading maker of shampoos, conditioners, and related hair-care products. The company revolutionized the beauty industry in 2007 when a group of industry innovators discovered a new way to care for hair by merging proven keratin science with cutting-edge technology. They created Natural Keratin Smoothing Treatment, a first-of-its-kind smoothing treatment that pioneered the way to healthy, smooth, frizz-free hair. Keratin’s products are favored by salon professionals.

Ken Morris, SIOR, RPA

Ken Morris, SIOR, also represented Buena Vista Terminal, LLC in the sale of a property located at 123 NW 51st Street in Miami, FL. The property consisted of a 21,450 square feet building currently used for storage in the Buena Vista neighborhood of Miami and sold for $1,875,000. The Buena Vista Bus Terminal Building was originally constructed in 1939 and was a major transportation hub in South Florida. Used for decades as warehouse space, the property is ripe for conversion to multifamily housing, office suites, art storage, an art gallery, and several other options.

In addition, Ken Morris represented Polenghi USA Inc. in their 36-month lease renewal of 24,047 square feet of industrial space located at 720 Powerline Road in Deerfield Beach, FL. The Milan, Italy subsidiary of Polenghi Group converted a vacant warehouse building into a lemon juice bottling plant. These lemon specialists import about 25,000 liters of lemon juice weekly from Italy and then bottle it for distribution in the U.S. Morris originally put Polenghi in this space in July 2015, when the Italian company opened its U.S. operations.

Earlier this quarter, Morris completed a lease transaction on behalf of a longtime client, The Legacy Companies, for 78,585 square feet at 2555 Kuser Road in Hamilton, New Jersey. It was the third distribution center transaction Morris has completed for Legacy in 2020. Earlier this year, Morris represented The Legacy Companies in a 110,000-square-foot industrial property

lease in Reno, NV (also owned by Scannell Properties). The firm also executed a renewal of 61,137 square feet plus 8,700 square feet of expansion space at a Weston, FL property on behalf of Legacy in a building owned by a U.S. subsidiary of UBS.  

In addition to the closed transactions, Morris has been hired by BHT Partners to lease the Medical Services Building located at 4101 NW 4th Street in Plantation, FL 33317 that consists of a total of 48,560 square feet. The building is a medical office building located on the campus of Plantation General Hospital.

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 Sunrise, FL, Morris SE is a full-service firm specializing in owner and tenant representation, multi-market services, and investment sales in the office, industrial, and retail sectors throughout Miami-Dade, Broward, and Palm Beach Counties. Further, the firm serves corporations, private investors, and entrepreneurs in various U.S. markets through its membership in the Society of Industrial and Office Realtors® and other professional real estate relationships developed over years of industry networking. For more information, contact President Ken Morris at (954) 474-1776 or visit www.morrissegroup.com.

Morris Southeast Group Completes Third Industrial Lease with The Legacy Companies this Year

2555 Kuser Road in Hamilton, New Jersey

Sunrise, FL; November 30, 2020 – Following a record third quarter in leasing and sales activity for his firm, President Ken Morris, SIOR, RPA, of Morris Southeast Group announced a recently completed lease transaction on behalf of his longtime client—The Legacy Companies—for 78,585 square feet at 2555 Kuser Road in Hamilton, New Jersey.

Ken Morris, SIOR, RPA

The owner of the Hamilton property is Scannell Properties. Terms of the lease were not disclosed. Mike Witco, a principal with Chilmark Real Estate Services LLC based in Morristown, NJ, provided local market knowledge and participated in the lease with Morris in representing The Legacy Companies.

This was the third distribution center transaction Morris SE has completed for Legacy in 2020. Earlier this year, Morris represented The Legacy Companies in a 110,000-square-foot industrial property lease in Reno, NV (also owned by Scannell Properties). The firm also executed a renewal of 61,137 square feet plus 8,700 square feet of expansion space at a Weston, FL property on behalf of Legacy in a building owned by a U.S. subsidiary of UBS.  

Based in Weston, FL, The Legacy Companies is a leading foodservice manufacturer and consumer appliance company that sells a host of brands and products, including refrigerators, freezers, ranges, microwave ovens, wine refrigerators, ice makers, water dispensers, laundry appliances, and much more.

Learn more at https://www.thelegacycompanies.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 Sunrise, FL, Morris Southeast Group is a full-service firm specializing in owner and tenant representation, multi-market services, and investment sales in the office, industrial, and retail sectors throughout Miami-Dade, Broward, and Palm Beach Counties. Further, the firm serves corporations, private investors, and entrepreneurs in various U.S. markets through its membership in the Society of Industrial and Office Realtors® and other professional real estate relationships developed over years of industry networking. For more information, contact President Ken Morris at (954) 474-1776 or visit www.morrissegroup.com.

Morris Southeast Group Reports Record Quarter 3 Results

Morris Southeast Group Reports Record Quarter 3 Results

Sunrise, FL; October 26, 2020 – In the teeth of the pandemic, President Ken Morris, SIOR, RPA, of Morris Southeast Group announced one of the best quarters in history for his South Florida commercial real estate services business. In the 3rd quarter this year, the firm completed 151,753 square feet in leases and was awarded new leasing and management assignments totaling an additional 220,000 square feet.

“To say it has been an unbelievable year would be an understatement; however, business goes on. The companies and people we were grateful to serve in recent months represent a mix of essential services and professional services that companies, corporations, and individuals need. It is a strange time to report a record quarter for our practice, yet we are certainly pleased with the results,” said Ken Morris, SIOR.

Recently closed transactions include:

  • Ken Morris, SIOR and Adriana Lilly represented Keratin Complex in a seven-year lease for 55,134 square feet (sq. ft.) at the Hillsboro Technology Center in Deerfield Beach from Bristol Development and Butters Development. Tom Hotz of Butters Realty represented the landlord.
  • Ken Morris, SIOR and Adriana Lilly represented The Legacy Companies in its lease extension for 61,137 sq. ft. for six years at 3355 Enterprise Avenue and an expansion of 8,037 sq. ft. at 3265 Meridian Parkway. Both leases are in Weston, FL 33331, and from UBS, represented by Tim Talbot of Comreal Ft. Lauderdale. 
  • Ken Morris, SIOR and Adriana Lilly represented Realogy Brokerage Group for its five-year lease for 1,500 sq. ft. at 1840 Main Street. Harry Chaskalson of NEG Property Services represented the landlord, Golen Real Estate Enterprises.
  • Ken Morris, SIOR, Adriana Lilly, and Maria Alicia Wild represented Zerep Towers, LLC in its three-year lease with attorney William F. Rhodes for 1,002 sq. ft. at Airport Executive Towers II, located at 7270 NW 12th Street, Miami.
  • Ken Morris, SIOR represented Corporate Insurance Advisors in its four-year lease extension for 6,005 sq. ft. at 1401 East Broward Blvd. from Southern Farm Bureau, which was represented by Jeff Holding of Cushman & Wakefield.
  • Ken Morris, SIOR represented Mad 4 Marketing for its three-year lease extension for 3,171 sq. ft. at 5255 NW 33rd Avenue, Fort Lauderdale, FL 33309; Keith Graves of Berger Commercial represented the landlord, AKF3 SF LIGHT INDUSTRIAL, LLC.
  • Ken Morris, SIOR represented the Law Office of Scott Sobol in its three-year lease extension for 1,475 sq. ft. at 351 SW 136th Avenue in Davie from S-H Financial LLC; the landlord was represented by Brad Dineen of Stiles Realty.
  • Ken Morris, SIOR represented landlord Sawgrass Business Plaza in several lease transactions in Sunrise:
  • IOA – Insurance office of America extended its lease for 60 months and expanded into a total of 5,447 sq. ft. at 13790 NW 4th Street.
    • Nano Dimensions USA leased 5,319 sq. ft. for three years at 13798 NW 4th Street.
    • Orkin Pest Control Extended its lease for 3,526 sq. ft. for an additional year at 13798 NW 4th Street.

New management and leasing assignments

The firm has been hired to manage and lease the Airport Executive Towers located at the

 Southwest edge of Miami International Airport, comprised of two office buildings consisting of approximately 170,000 square feet. The Morris team is already hard at work replacing the entire HVAC system in Tower I and repositioning the properties for the new market conditions.

The firm has been hired by BHT Partners to lease the Medical Services Building located at 4101 NW 4th Street in Plantation that consists of 48,560 square feet. The building is located on the campus of Plantation General Hospital.

New hires and a promotion

In addition to the firm’s deal-making successes during the quarter, Adriana Lilly was promoted to Vice President of Morris Southeast Group, Maria Alicia Wild has joined Morris SE as the Tenant Services Coordinator in Miami at the Airport Executive Towers, and Daphne Sullivan has joined the team as Marketing Coordinator.

Ms. Lilly joined the firm in July 2016, shortly after securing her license to sell and lease real estate, after years of working in the hospitality, health, and fitness industries in South Florida. She has been instrumental in growing Morris Southeast Group by sourcing, serving, and closing real estate transactions on behalf of tenants and landlords in Broward and Miami-Dade counties.

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 Sunrise, FL, Morris Southeast Group is a full-service firm specializing in owner and tenant representation, multi-market services, and investment sales in the office, industrial, and retail sectors throughout Miami-Dade, Broward, and Palm Beach Counties.

Further, the firm serves corporations, private investors, and entrepreneurs in various U.S. markets through its membership in the Society of Industrial and Office Realtors® and other professional real estate relationships developed over years of industry networking. For more information, contact President Ken Morris at (954) 474-1776 or visit www.morrissegroup.com.

Things To Consider When Leasing To A Medical Marijuana Dispensary

Medical marijuana

Some essential CRE steps when leasing to an essential business

At the height of lockdowns and quarantines, it quickly became apparent that what was considered essential expanded far beyond first responders and hospital staff. Truck drivers working long shifts to get goods to supermarkets, and the employees stocking shelves with those products quickly rose to the top.

Another business that quietly made the essential list was medical marijuana dispensaries. In many states where medical marijuana is legal, including Florida, the dispensaries were allowed to remain open through the shutdown. 

In fact, many dispensaries expanded their operations to get products to regular and new clients, many of whom were diagnosed with PTSD and anxiety linked to the stay-at-home orders, via delivery services and drive-thru windows.

Navigating the grey zone

Getting to that point, though, was no easy task, primarily because the cannabis business operates in a grey zone. Although some states have legalized medical marijuana, the substance remains a controlled one on the federal level—and how stringent the feds follow that law depends greatly on who happens to be inhabiting the White House and who is Attorney General. 

While there are indications in many regions around the country that the medical marijuana business is steering property values upward, there’s a fair share of risks and considerations for landlords looking to lease space to dispensaries and growers. 

For a CRE owner to get involved in the marijuana business, it’s imperative to make sure that all T’s are crossed, and I’s are dotted.

A key concern: if there’s a mortgage on the property

One of the first issues is if the owner is carrying a mortgage. If so, it’s imperative to review if there is a clause in the terms of the loan that stipulates that the borrower, the property, and its use will comply with “all applicable laws, rules, and regulations.”

Because there is a disparity between how marijuana is viewed at the federal and state levels, and because federal law technically preempts state law, many banks are less likely to allow a borrower to lease to any party involved in the marijuana business. The cannabis-related leasing deal may be dead before it is even on the table. 

Similarly, the property owner may have to seek alternative funding sources for the property as long as the lease with the marijuana business exists.

Additional considerations, with or without a mortgage

Even without a mortgage, there are some additional issues, outlined by the American Bar Association, that the landlord should consider:

  • How will rent be paid? Cash and federally-illegal substances raise eyebrows, and the property owner’s bank may become suspicious of how involved the owner is in the marijuana business. The consequence could be the bank terminating the relationship with the property owner.
  • How will the rent be computed? In traditional tenant leases, rents are either fixed or determined by a percentage. With marijuana-related businesses, though, a percentage-based rent may result in interpretations that the owner is involved in the sale of marijuana.
  • What are the local and state laws? Many jurisdictions have specific guidelines on dispensary licensure, zoning, and inspection rights.
  • What sort of lease works best? This all depends on the role the tenant is playing in the marijuana trade. For example, growing operations will have higher utility costs for water and electricity, and they also raise the risks of fire, electrical issues, and mold. In this case, a triple-net lease may be a better option than a gross lease.

Lease clauses to protect the landlord

If a property owner is interested in leasing to a marijuana-related business, there are a few clauses to consider within the lease terms. While many of these may seem obvious, putting them in writing indicates the owner has taken steps to ensure the lease is following the law and eliminating any grey areas or misinterpretations of the landlord’s position.

  • A specific permitted-use provision that spells out what the dispensary is allowed and not allowed to do. Very often, this can follow local and state laws.
  • A clause that explicitly stipulates the tenant will comply with all laws and guidelines.
  • An early termination rights provision so that the landlord can terminate the lease should the tenant violate the law, face criminal prosecution, or if the landlord receives nuisance complaints.
  • A clause that prohibits the tenant and their employees and clients from using marijuana on the premises.
  • An indemnity clause that requires the tenant to compensate the landlord for any costs stemming from damage to the building and common areas due to vandalism, burglaries, break-ins, etc.

Medical dispensaries in SoFlo

Although the road to legalized medical marijuana in Florida has been a long and rocky one, its presence is seen as a boom for the commercial real estate market. Still, there are key areas of concern that all parties must examine before entering any leasing agreement. The pros at Morris Southeast Group can help both landlords and tenants negotiate the legal twists and turns.
To learn more about what Morris Southeast Group can do for you now and in the future, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Can Proposed Seawalls Protect Miami From Storm Surges?

Seawalls on Downtown Miami

The Magic City could see walls become a permanent part of the downtown area if an Army Corps of Engineers plan comes to fruition

Downtown Miami has one of the planet’s most spectacular coastlines, featuring buildings that seemingly jet from the ocean as you approach from the air or water. 

This beautiful location comes with challenges, however. Namely, the impacts of climate change, which may be causing more frequent and severe hurricanes and leading to rising sea levels, are paramount.

The U.S. Army Corps of Engineers has a $4.6 billion plan to build a 10 to 13-foot-high wall along Biscayne Boulevard to reduce storm damage. In theory, these walls could save the city about $2 billion in damage every year—but there’s more to the discussion than protecting the city.

Would they work?

In short, yes, walls could be an effective way of reducing storm damage in downtown Miami. However, there is some dispute over where the Army should build the walls and whether some neighborhoods would still find themselves underwater.

The current plan calls for constructing moveable storm surge barriers on the Biscayne Canal, Little River, Miami River, and in the Edgewater neighborhood. These barriers would have gates that close as a hurricane approaches, preventing surges from overflowing the rivers and flooding low-lying communities.

The walls would extend north and south of these barriers, providing even more protection for the surrounding neighborhoods. Some buildings would remain outside of the walls, though, leaving them in a tough spot during an incoming storm.

It’s also worth noting that these measures wouldn’t protect the city from rising sea levels. That’s because Miami is built on porous rocks that would let water seep through, even with the walls in place.

To address rising sea-level concerns, Miami intends to elevate roughly 10,000 properties and flood-proof 7,000 more. While this is a good start, that investment would still leave thousands of buildings exposed.

Investors and developers will want to keep a steady eye on this situation. If this proposal ends up going ahead, properties with wall protection will likely retain more value than the buildings that sit outside the walls and remain exposed to storm surges.

Problems with the walls

Property owners around Miami aren’t unanimously in favor of the wall-building strategy because of how it would change the Magic City.

First, there are the aesthetics of the change. Ten-foot walls in the downtown area would eliminate ocean views for some buildings, potentially hurting their value. And from a functional standpoint, the walls would cut off boat traffic from sections of downtown Miami and could make the Baywalk obsolete. 

These factors are definitely worth considering, of course. But if Miami ends up underwater, the issues will be moot.

Once the official proposal is released, investors will have the opportunity to see the re-imagined downtown Miami, which will provide a clearer view of what the future holds.

Alternative options

For that reason, the Downtown Development Authority is asking Miami-Dade to consider nature-based solutions to the storm surge problem, such as restoring nearshore coral reef, building artificial islands, and growing more living shorelines. 

Environmental groups, including the Everglades Coalition and Miami Waterkeeper, have seconded that idea. And other groups would like to see the Army Corps of Engineers include flood protection in more impoverished neighborhoods, rather than focusing exclusively on downtown. 

There’s still a lot to be decided on this project, as the Army will work with Miami-Dade to develop a locally preferred plan. From there, the project is brought before Congress before funding is approved.

Much work remains on potential protections for the Miami shoreline. But it’s only a matter of time before we get something to stop the influx of storm surges in the downtown area.

Figuring out the solution

Morris Southeast Group knows that climate change affects not only the environment but also creates significant economic issues for Miami and other coastal areas in South Florida. 

Developers need to know that their investments are safe and that they’ll provide value moving forward, which becomes challenging when hurricanes and flooding are a persistent worry. Simultaneously, a massive wall along the coast could take away from Miami’s beauty, walkability, and appeal.

Coming up with a solution that’s effective and balances the concerns of various stakeholders will be vital. 

For information on potential CRE impacts, or to learn about Morris Southeast Group’s commercial real estate investment or property management services, give us a call at 954.474.1776. You can also reach Ken Morris directly by phone at 954.240.4400 or through email at kenmorris@morrissegroup.com.

Are Big Cities a COVID Casualty?

Looking into the rising sun up a deserted Brooklyn, DUMBO, backstreet at dawn.

Or has the pandemic merely spurred the need for a new beginning?

Consider it the essay that was heard ‘round the world. James Altucher, a former hedge-fund manager, author, and comedy club owner, penned his opinion that New York City was dead because of the fallout from the COVID-19 pandemic. In the piece, he laments the loss of business opportunities, cultural venues, and restaurants. 

Naturally, that propelled a series of opposing opinions—most notably, from Jerry Seinfeld. Many of the rebuttals predicted a rosier future for NYC with a nod toward residents’ grit and determination. But these pieces seem to overlook some real-world economic problems. And many of these have been bubbling under the surface for decades.

Before we engrave the tombstone or send out re-birth announcements for New York, it may be wise to answer a basic question: If it can happen there, can it happen anywhere?

What COVID did to NYC

In many ways, COVID-19 decimated NYC. With one of the densest and largest urban populations in the world, the virus spread quickly and efficiently—and it was deadly. There were 19,000+ confirmed deaths, 4,400+ probable deaths, and thousands more in the boroughs and counties surrounding Manhattan. 

Shutdown measures were swift and severe, and many—such as a darkened Broadway—have lingered despite lower case counts. Simultaneously, residents, reminiscent of those battling plagues of the past, fled the city to their Hamptons homes or their parent’s suburban tract houses. The rest of the nation followed NYC’s lead—and the longer the shutdown continued, the louder the non-virus-related questions became.

A look at some of the issues

Some of what NYC is experiencing may have been inevitable; COVID just exacerbated some long-simmering crises and accelerated their impacts:

  • As residents fled NY to work remotely from their childhood bedrooms, or simply lost their jobs due to the shutdown, millions realized how cost-burdened they were when it came to rent. And if people can now work anywhere, why should businesses and workers continue to pay it?
  • Similarly, many NYC commercial spaces were also struggling long before COVID. According to a pre-pandemic January 2020 article, the combination of overhead costs—labor, benefits, rising taxes, rent increases, and city fees—meant hundreds of NYC restaurants and bars were already perched on the ledge of financial collapse, while other commercial properties just joined a growing list of vacancies.
  • In the years leading up to the pandemic, there was also a shift in population. For example, downstate New York led the state’s population loss for two consecutive years. Similar stats can be found in Los Angeles and Chicago, while smaller cities, such as Denver, Washington, DC, and Miami, all experienced slower growth. At the same time, millennials—the generation that pioneered remote work—have spent years flocking to smaller cities and suburbs in search of affordability, opportunity, and space for their young families. 

Living in an experiment

The problem with the current state of city affairs is there’s no rulebook. Because of the pandemic, people are behaving differently—and much of their new behavior does not reflect how they wish to live their lives. As a result, it’s difficult to predict how NYC and other cities can respond. 

Until there’s a vaccine, it’s impossible to estimate a timeline of when business will get back to normal—or if it ever will. For example, the virus and remote working have forced office tenants to re-examine just how much space they actually need.

The closest example we have to an experiment in progress is Detroit. Perhaps no other city in the country exemplifies urban failure better than the Motor City. Once the crown jewel of American industry, Detroit has for years suffered under the weight of rampant unemployment, poverty, and enormous debt. In the five years after filing for bankruptcy, millennials moved in, investors took notice, and the downtown area boomed, earning the city a new nickname: “Comeback Capital of Urban America.”

Things, though, didn’t go according to plan. With development came higher rents for residential and office spaces, higher construction costs, and gentrification—all of which steered millennials away from the city while driving impoverished residents into greater despair. Then, COVID arrived. Just as in NYC, the virus capitalized on Detroit’s weaknesses. 

The view from South Florida

Perhaps it has to do with the sunshine and palm trees, but South Florida cities and COVID are an anomaly. Despite being a COVID hotspot for the state since March, new construction and leases in South Florida have continued to move forward. In addition, the region has also seen its share of New Yorkers and other northern urban snow birders relocating to Florida’s warmer climate for the duration of their home states’ lockdowns, as well as millennials flocking to the suburbs. 

This doesn’t mean, though, the region is not without its share of problems. Like other large metropolitan areas, South Florida has its own affordable housing crisis. Additionally, in 2017, Miami had the second-lowest median household income in the United States, as well as the second-highest percentage of people living in poverty.  

Although these numbers improved slightly in 2018, COVID-related unemployment has undoubtedly made the numbers skyrocket. Complicating this is the Florida economy’s heavy reliance on tourism, which has caused some experts to predict the job market may suffer into late 2021 and beyond.  

South Florida businesses and real estate may have been less impacted by the pandemic than NYC, but they share many fundamental challenges. A new way of working and evolving COVID measures and restrictions are changing priorities. Commercial properties such as office high-rises with a large footprint, for example, will have to adapt to the new normal—and some investments may not make it. 

Are cities dead? 

While COVID has clearly placed extreme burdens on large metropolitan areas, is it time to ring their death knell? Probably not. 

There is a good reason to believe that cities will recover, although it remains unclear just how that recovery will actually look. Most certainly, things will be different. Technology will undoubtedly play a role, as will smaller office footprints.

A recovery for New York (and other major metropolises) will take leadership, vision, and work. At the same time, there is a need to address the underlying economic issues that made so many of our cities and people vulnerable, including wages, population density during a pandemic, and affordability. 

For assistance determining how to proceed with an investment or to find the right investment property for your needs, please 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.

A Message on Weathering the Coronavirus Storm

We will get through this. And we are here to support you.

To our friends, clients, and colleagues:

Like you, we are closely watching events unfold surrounding the COVID-19 pandemic and the resulting disruption to the financial markets and our society. This impact will likely continue for several more months as the Coronavirus eventually peaks throughout the United States and the rest of the world.

We remain in regular contact with infectious disease specialists who tell us that the best things you can do right now are wash your hands frequently, avoid touching your face, and try to avoid large groups of people. Elderly individuals and those with preexisting medical conditions such as diabetes and cancer should take extra precautions to avoid crowds. If you can avoid traveling at present, it is the safest course of action.

At Morris Southeast Group, we have been through many shocks to our society and financial systems since our company was formed. These include:

  • 1979: The oil market shock
  • 1987: The stock market crash kicked off by “Black Monday”
  • 1989–1995: The savings and loan crisis
  • 1990–1991: Gulf War I 
  • 2000–2002: The bursting of the dot-com bubble
  • 2001–2002: The 9/11 attacks, the invasion of Afghanistan, and the resulting market correction and change to U.S. and global markets
  • 2003–2011: Gulf War II
  • 2005–2011: The housing bubble, the subprime mortgage crisis, The Great Recession, and their after-effects

Each of these events was incredibly disruptive—and each caused a lot of fear about the future and our personal and collective ability to survive change. But in every case, we not only recovered, but our society and economy grew and became stronger. Stay safe and take appropriate precautions. But please keep this perspective in mind as the media bombardment of minute-by-minute Coronavirus updates continues. And remember that our team at Morris Southeast Group is here to help support you during this difficult time.

If you have any commercial real estate questions or concerns, get in touch with 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.

The War Of The Tenants: How Landlords Can Broker Peace

Landlord can be another word for mediator

When most landlords and developers decided to enter the CRE marketplace, they probably had lots of reasons. Perhaps it was the chance to give back to a particular community, or to reap the rewards of a strong investment, or to provide a high-quality service that others can enjoy. Hardly any of them, though, thought that CRE would be an excellent opportunity to be a mediator.

Nevertheless, that’s exactly what they’re called to be when tenants are at war with one another. As more commercial tenants seek shared spaces and as retail tenants amp up competition for a population adapting to e-commerce, tenant conflicts have expanded beyond the multi-family housing arena.

And adopting some proactive solutions not only heads off potential conflict between tenants, it also comes in handy when a landlord has to take a firm stance.

A strong lease is the number-one tool

To head off any potential conflicts between tenants, a strong lease can set the proper tone from the beginning—especially in an environment where several tenants may be sharing everything, from adjoining walls and amenities to kitchens and parking.

The lease is the landlord’s chance to spell out specific rules that address two of the top concerns residential and commercial tenants have: safety and a peaceful environment. This is a chance to define expectations for tenant behavior and consequences for making threats against or harassing other tenants, as well as violating noise restrictions.

Get the balance right

Where commercial properties are concerned, especially those that house multiple tenants, landlords often try to achieve a sense of balance. This effort, though, has become more complicated in light of a sharing economy, where everything from offices to parking spaces are being used by more than one tenant.

When looking for new commercial tenants, it’s critical to have a full understanding of their business. This includes hours of operation (so that shared parking is achievable) to demographics (so that a yoga studio with evening classes is not next to a music venue) to not filling a complex with high-use tenants (so that customers have trouble parking, which results in their avoiding the complex … which results in a loss of revenue for tenants and the owner).

Develop a resolution policy

It’s especially helpful for landlords and owners to have a procedure to follow when mediating disputes. This guarantees that all tenants and their complaints are handled equally.

  • Consider creating a welcome package for tenants. This information can include basic information about living or working in a specific property, but it’s also a chance for the landlord to again spell out the expectations of good tenant behavior. This can include suggestions on how tenants can appropriately solve a conflict with another tenant on his/her own, as well as steps to take if the matter should escalate.

  • The welcome package should include instructions on how to file a complaint against another tenant with the landlord. Forms for such a complaint document can be included, with specific instructions on how and when to contact the landlord, owner, or property manager.

  • As the person receiving the complaint, there is a tremendous responsibility to respond in a timely manner. The tenant making the complaint wants to know that his or her concerns have been heard. This can be done with a return phone call, email, or letter to assure the tenant that you will investigate and that you take lease-violating behavior seriously. Each complaint, no matter how trivial it may seem, must be taken seriously.

  • At the same time, the landlord should contact the tenant named in the dispute to inform him or her of the situation. While the source of the complaint should remain confidential, this call is the perfect time to remind the tenant that violations of the lease—the landlord’s number-one tool—are grounds for eviction. A written summary of this interaction should be sent to the tenant in question.

  • It cannot be said enough times: document everything. This includes the initial complaint—using the complaint form in the welcome package or an online format—and logs and summaries of conversations and steps taken. This protects the landlord should the infraction result in an eviction and/or if there is future legal action as a result of this dispute.

  • Follow up with the tenant who made the complaint to ensure that the situation was resolved.

  • It may be necessary to conduct a face-to-face mediation with both parties. If this is the case, it is imperative for the landlord to remain professional and impartial. Both parties should air their grievances, and the landlord can rephrase these to help the parties understand that their concerns have been heard. The landlord can then produce documentation, such as the signed lease (there’s that number-one tool again) with the specific expectations for a safe and peaceful environment and the consequences for violating those expectations.

Being a commercial or residential landlord involves the art of mediation

Whether you’re a tenant or a landlord, being part of a dispute—either as a complainant or a mediator—can be messy, time consuming, and complicated. Morris Southeast Group’s property management services can assist in the mediation process. In addition, our tenant and owner representation skill set can help match your vision with the right property to prevent potential conflicts. To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com

The Importance Of Due Diligence In CRE

Doing your homework is part of the deal.

When most of us were in elementary school, little did we realize that each time a teacher or a parent lectured us on the importance of doing homework, they were actually preparing us for … commercial real estate. Due diligence — really, just an adult word for homework — is an essential part of the commercial transaction process.

And just like the educational — or tearful, weekday-afternoon — debate over homework, many people wonder how much due diligence is enough? Perhaps, the best way to respond is with another question: Can there ever be too much due diligence?

Due diligence is your time

While true due diligence happens long before a transaction is started or a property is even chosen, in the simplest and most-conventional terms, due diligence is the process that occurs during the time period between a buyer signing a contract and making the decision to move forward with the purchase. It’s during this time that the buyer has the chance to conduct a full review of all data that relates to the property. The more thorough the due diligence process, the more informed the buyer will be in deciding to complete or cancel the purchase.

The actual time period fluctuates in accordance with the complexity of the transaction, however. And it’s possible to incorporate a due diligence checklist into the sales contract with a stipulation that the process will commence once the seller produces the last of the requested documents.

The key elements of due diligence

When it comes to creating a due diligence checklist, there are five basic areas that need to be addressed. These, in turn, can be adjusted to meet the needs of the transaction, the complexity of the deal, and other reasonable items that the buyer may require to make an informed decision.

  1. Probably the most obvious of the data to gather is information on the property. This includes: legal and physical descriptions, property type, current use, zoning, parking, the most recent title policy or title commitment, blueprints, engineering plans, recent surveys, easements, etc. This information is then cross-checked with public data. Any discrepancies should be thoroughly investigated. Be wary of any information that cannot be verified independently.
  • The guts of the property are just as important, if not more so, than its outer appearance. All systems — structural, electrical, plumbing, drainage, security, fire protection, elevator, gas, and heating and cooling — need to be inspected and evaluated. This is also a good time to understand how utilities are delivered and metered, as well as service-agreement terms.
  • When it comes to inspections, it’s an excellent idea to leave no stone unturned. It may be necessary, for example, to work with pest inspectors, engineers, and environmental consultants — to name a few. Additionally, it may be necessary to review building permits, violations, certificates of occupancy, and court cases.
  • If the property has one or more tenants, it will be necessary to gather all legal contracts made between that party and the seller. In addition to lease terms, it’s essential to review security deposits, rent schedules, utility obligations, and any sweetheart clauses, such as a lease extension deal. 

  • Finally, it’s time to talk about the financial health of the property and/or the seller. Information here includes copies of the three most recent years’ tax statements, assessments, property income and expenses, insurance policies and claims, and pending litigation against the property or the seller.

Due diligence is a team effort

Embarking on the due diligence process can be a daunting and overwhelming task. Failure to gather all information by the due diligence deadline can result in the buyer losing his or her deposit if they find something that requires them to back out of the deal.

Fortunately, you there are experts that can help you with this process. In fact, many other experts recommend working with an experienced team that can compile the information, present it, and then advise on the next step. Morris Southeast Group is that team. To learn more about what Morris Southeast Group can do for you, call us at 954.474.1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Want a Killer Real Estate Investment? Follow the Art.

Where the artists go, higher property values may follow

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.

The art/commerce connection

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.

Creating community

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.

Driving business

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.

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