It goes without saying that COVID-related lockdowns and panic caused a significant slowdown in South Florida’s service economy. Tourism, conventions, and general business travel are vital to the region’s financial stability, given the money they bring in every year.
An October study by Florida International University suggests that the hotel and restaurant industries in South Florida combined to take a $3.36 billion economic hit because of COVID-19. Few industries can sustain those losses for long, but there’s hope on the horizon. Passenger traffic at Miami International Airport has rebounded to 80% of its pre-COVID peak, and hotels across South Florida recently averaged roughly 80% occupancy.
Here’s a look at the numbers and what we can expect from South Florida’s hotel industry:
Overall occupancy is up in South Florida, with rates hovering around 70-80% in various areas. This isn’t too far off what the figures were from the same time of year before COVID.
Most of these gains have come from leisure travel, which represents about $500 billion of the $800 billion spent on travel statewide every year. But while commercial flights to South Florida have increased recently, “the same can’t be said for business travel” overall. The result is a disproportionate impact on different property classes and locations; beachfront resorts are faring better than downtown business hotels.
The hope is that as more of the population receives vaccinations, larger-scale conventions and routine business trips will reappear in South Florida and once again fill hotel rooms.
It’s also worth mentioning that there haven’t been significant decreases in the nightly rates hotels are charging, as there’s enough demand to keep them near traditional levels.
One trend as hotels begin filling up again is that tourists looked for places on or near the beach, particularly last winter. For example, Miami alone reported 80-90% occupancy in beachfront hotels on weekends between November and January, which was far higher than the city’s overall occupancy rate of 54%.
“The hotels and resorts that have water view are in great shape, but when I think about those that are west of Miami Beach, west of Biscayne Bay and the Intercoastal, they are still under challenge because those hotels rely on the business travelers,” Scott Berman, principal and industry leader of the Hospitality & Leisure Group PwC told CBS Miami.
These numbers suggest that pent-up demand for leisure is exploding as lockdowns end and vaccines become available. The much slower return of business travel may be due to continued health and liability fears about the virus or durable changes in how companies operate after the pandemic. Remote work and virtual meetings have become the norm, and businesses may realize how much money they save on digital interactions vs. in-person events—especially those that involve costly travel.
Despite the arrows pointing in the right direction, it’s important to remember that we aren’t out of the woods yet, and some factors could stall South Florida’s hotel recovery.
First, there’s always the risk of vaccine-resistant COVID variants emerging in force and rolling back gains against the virus. While this is a worst-case scenario that doesn’t seem likely, the economic effects in South Florida would be devastating for hotels.
There’s also the chance that we won’t get enough vaccine participation to reach herd immunity. As long as the virus is still circulating at high levels, a significant number of people may consider travel risky. Even if this situation no longer leads to additional lockdowns or social distancing measures, a percentage of the population restricting travel could impact the overall numbers.
Finally, even as travel resumes, there is the problem of not enough workers to keep up with hotel demand. By September 2020, over 76,000 hotel workers had lost their jobs statewide. And now that properties all over Miami-Dade and Palm Beach County are looking for employees, they are experiencing a labor shortage. Many business owners and managers in the hospitality industry nationwide claim enhanced employment benefits that include federal aid have made finding workers harder.
There could be public policy help coming soon, though, as Florida’s new unemployment requirements go into effect on May 29. Anyone receiving unemployment benefits must prove they’re searching for a job. The result could be more workers returning to the hotel industry.
The exact nature of South Florida’s hotel recovery is uncertain, with many analysts taking a wait-and-see approach that puts “after Spring Break” or “the end of summer” as crucial benchmarks. And business travel remains a fundamental hole in pre-pandemic occupancy levels and profits. Nevertheless, things are looking up for South Florida’s hotels. Stay tuned.
Morris Southeast Group keeps an eye on economic and commercial real estate trends to better serve our clients and partners. Give us a call at 954.474.1776 to discuss our investing, leasing, or property management services. You can also speak with Ken Morris directly at 954.240.4400 or firstname.lastname@example.org.
COVID-19 has been on everyone’s mind for the past year. And for CRE investors, the pending return to “normalcy” and economic recovery are crucial topics. But the pandemic has taken a lot of attention away from a long-term issue to which there isn’t a definitive solution.
Climate change is a problem that could significantly impact our lives, particularly in coastal areas. We could be approaching a point where sea levels reach dangerous levels and mega-storms batter properties on the shoreline multiple times per year.
Here’s a look at how climate change affects South Florida right now and what we might expect in the future.
Climate change is the result of an increase in the amount of carbon dioxide in the air. And estimates suggest that we have 40% more CO2 than we did in the late 1700s, warming the lower atmosphere and the planet’s surface in the process.
Temperatures in Florida have increased by over one degree Fahrenheit in the last century. While this might seem like a minor difference, we live in a very sensitive ecosystem—and throwing off this balance even slightly can have significant impacts.
Because of the increasing temperatures, sea levels in Florida are climbing one inch per decade, and storms are becoming more severe. Since 1958, the amount of precipitation during intense rainstorms has increased by 27% throughout the Southeast, bringing heightened flood risks to inland locations, too.
Scientists aren’t certain whether the recent surge in massive hurricanes is a long-term trend. But there have been more of them in the last 20 years, and warming ocean levels contribute to a storm’s potential energy. All signs point to climate change causing issues in South Florida in the decades to come.
In terms of solutions, problems, and financial safeguards, climate change isn’t cheap. Increasing storms and flooding alone have a very high economic cost.
In 2019, storms caused $45 billion in losses. While that number is high, it was down from the $91 billion in losses from 2018 and the record $306 billion in 2017. The numbers for 2020 aren’t official yet, but it was the most active storm season on record. Twenty-two storms caused at least $1 billion in damage apiece, and estimates suggest that the total cost could approach $100 billion.
The direct expenses are significant. And the bad news for commercial real estate investors is that insurance premium increases often follow as insurers assess the risk they’re taking on in these areas. Because of this risk, investors in specific areas should double down on protecting their buildings from severe storms.
Those with CRE investments in hurricane zones should closely evaluate the current climate change assessments and what they mean for the future. And some proactive measures can reduce property damage in the event of a major storm.
First, have a contractor regularly check all roofs for damage. The better a roof’s condition, the more likely it is to protect the rest of the building during the storm. Installing perimeter flashing is also a good idea because it protects the roof’s edge, keeping the cover in place. If necessary, replacing a roof with hurricane-resistant materials may be a solid investment.
Buildings with equipment on the roof will want to make sure it’s appropriately mounted so it can’t slide, lift, or overturn in heavy winds. Not only will this equipment damage the building if it isn’t securely fastened, but it can also become a danger to people in the area if it’s blown off the roof. This, of course, could cause a tragedy and expose a building owner to liability.
You’ll also want to make sure any commercial doors on the building are securely connected to their frames and install retractable hurricane shutters over the windows. Hurricane-proofing a building, to the extent possible, mitigates damage and may result in lower insurance costs.
Investors can also do their small part to reduce climate change effects by pursuing LEED certification and other green-building certifications. Tax incentives may offset these expenses. Another benefit of sustainable buildings is that they can attract tenants and improve indoor air quality, an appeal that has gained renewed focus during COVID-19.
Examples of LEED-certified buildings in Miami include Brickell World Plaza, 1 Hotel, and Met II Office Core & Shell.
Despite the effects that climate change is sure to have on South Florida, this isn’t a hopeless situation. Technology and science are advancing quickly, and there are some potential solutions to these issues on the horizon.
One possible step is the 13-foot-high seawall that the Army Corps of Engineers has proposed for downtown Miami. This wall would protect buildings in that area from incoming storm surges and, hopefully, reduce flooding. And researchers are raising the alarm that investments in climate change protection are necessary, noting that every dollar spent will save or generate many more in the form of jobs and less property damage.
Morris Southeast Group is watching South Florida trends and strives to provide valuable insight and expertise for commercial real estate investors. Call us at 954.474.1776 for more information. Ken Morris is also available directly at 954.240.4400 or email@example.com.
COVID-19 has created a situation where consumers spend less time in brick and mortar retail shops. Not only does fear of getting sick accompany shopping in stores, but social distancing rules are increasing wait times at some retailers, making the process inconvenient.
This trend is boosting e-commerce, as consumers don’t want to deal with the risk and inconvenience of shopping at a store. Online shopping is becoming more popular in nearly every industry, even for essential goods like groceries.
From a commercial real estate standpoint, prolonged or permanent reliance on online shopping increases the demand for warehouses and fulfillment centers. Here’s a look at what the future could hold for e-commerce and the distribution spaces that make it possible:
First things first: online shopping isn’t going anywhere. While the early post-pandemic days could lead to an influx of consumers heading back to the stores that they couldn’t visit for some time, these same people are learning the convenience of buying remotely.
In the early days of COVID, less than 30% of consumers were buying online, according to a survey by e-commerce website PYMNTS. By as early as May 23, that number increased to over 35%.
This 5% increase is significant because most brick and mortar shops were closed at the beginning of the pandemic, but many had reopened by May 23. Despite having the option of heading out to buy their goods, more people were still shopping online.
This shift to e-commerce had been happening for some time, but COVID has accelerated the process. And it’s likely that consumers—including and notably less tech-savvy seniors—will continue shopping online because they’ve become more comfortable with the process.
Seniors are often considered slower to adopt technological advancements. However, COVID made it impossible for older members of society to continue living their lives the same way, leading to an increased reliance on smartphones and the internet.
Pew Research Center reports that about two-thirds of seniors aged 65 and older now use the internet, and about 42% of these individuals own a smartphone. Digging into the numbers further, 82% of people between the ages of 65 and 69 use the internet, and 59% of them have smartphones.
These stats show that younger seniors are adopting technology at extremely high rates, which could further the popularity of online shopping. About ten million seniors are now buying on the internet.
The increase in online shopping rates is good news for many retailers, but it doesn’t stop there. As e-commerce becomes even more popular, additional stores will have to join the trend or risk losing their businesses. And both new and established e-commerce companies need warehouse space and distribution centers to meet the growing demand.
As a result, such spaces—already experiencing a boom—will likely remain a solid investment moving forward as more organizations look for these building types. Additionally, there could be an opportunity to repurpose empty spaces into warehouses. Many retail and office buildings are sitting empty, so converting them into fulfillment centers could turn a challenging situation into a beneficial one for investors.
As with any investment, there’s a risk involved when assuming that warehouse space will be a smart play. And much of the inherent value of a distribution center relies on the current and potential make-up of the space and where it is positioned, including access to highways.
It’s worth getting expert advice as the situation unfolds, including a partner who will conduct intense due diligence on a candidate property. Speaking with a professional can help ensure your space is what these retailers and their partners are looking for in distribution centers.
Morris Southeast Group is here to help as you make the most of your current and possible commercial real estate investments. We will assist as you develop an investment plan for the post-COVID world and the economic shift it brings.
Give us a call at 954.474.1776 to learn more. You can also reach Ken Morris directly at 954.240.4400 or via email at firstname.lastname@example.org.
There’s no doubt many businesses are feeling COVID-related economic struggles because of issues like high unemployment, social distancing rules, the changing workforce, and limited population mobility.
The economy will recover from this, but we don’t know how long it will take or its long-term effect on all sectors. Much of the rebound will depend on the vaccine roll-out and how quickly life returns to normal once the pandemic is over.
Here’s a look at how the recovery could play out and the influence the pandemic may continue to have on the commercial real estate industry.
We don’t have a full picture because economic growth will depend on the vaccine roll-out’s speed, the spread of new variants of the virus, and potential government interventions. Recovery could also vary by industry—hard-hit sectors like hospitality businesses are probably in for a longer haul than specific retail companies.
A visualization of the overall economic recovery can take on many different shapes:
The Z-shaped economic recovery is when a temporary boom follows a quick downturn as people are allowed to get back out. After that, there’s a return to “normal” pre-pandemic levels.
A V-shaped recovery occurs when there’s a downturn, followed by a quick return to pre-pandemic levels. It’s like a Z, but the temporary boom isn’t all that temporary.
With a U-shaped recovery, the recession lasts longer than with a V-shape before a gradual upturn occurs. A “swoosh-shaped” recovery is similar, except the economy bottoms out for a bit longer before slowly returning to norms.
Perhaps the most volatile recovery is a W-shaped one, which would see the country start to recover, only to have the bottom fall out again. It would then inch toward pre-pandemic levels long-term.
The worst-case scenario is an L-shaped recovery, where we stay in a lengthy recession with no recovery in sight.
Finally, there’s what we believe may happen, particularly for commercial real estate. In a K-shaped recovery, some sectors recover quickly and enter a boom period, while others struggle for the foreseeable future.
Opinions on where we’re headed vary, although a K-shaped recovery is occurring, to some extent. A V- or U-shaped recovery could also be in our future, but that’s likely dependent on a swift vaccine roll-out for the entire country.
Of course, the country’s economic recovery is dependent on many different elements. After all, the virus remains part of our everyday lives for the time being, limiting activities in every sector.
One significant risk factor is virus mutation. With new strains and variants emerging from places like the UK, Brazil, and South Africa, COVID cases could increase substantially before a widespread vaccine roll-out. The existing vaccines might not be as effective against these new variants either, slowing down economic recovery even further. COVID variants becoming a significant issue could drive a W-shaped curve.
Rolling out a vaccine to 330 million people was always a logistical challenge, and that has not changed. It will take some time to get enough individuals vaccinated to defeat the virus, and there could be supply chain problems like we’ve seen in Europe and Canada, too. Delays to the roll-out could slow recovery in the coming months. A lengthy delay could bring about a U-shaped economy, with a worst-case scenario turning it into a W or L.
In addition, there’s uncertainty surrounding how lenders and the government will handle foreclosures and debt service. From a commercial real estate standpoint, there are many empty retail and office buildings and many more tenants who have taken on significant debt to stay in their facilities.
Lenders will want to avoid mass foreclosures, but that might not be possible without government money coming in to support them. And widespread foreclosures and bankruptcies could cause a W-shaped recovery.
Much like everywhere else, there’s a lot of uncertainty surrounding commercial real estate. Big banks are currently holding over $2 trillion in commercial real estate loans, and the losses they absorb from those who default could hinder the entire economy.
Office space drives much of the commercial real estate sector, and it is experiencing rising vacancies and falling rents overall. If these results hold, office property values—specifically in specific configurations and areas—could decline significantly, with hotels and various retail buildings falling even further.
There’s hope that a swift vaccine roll-out will convince consumers and businesses to return to their previous habits, like dining out, buying at stores, and working in downtown offices. But there’s no guarantee.
That said, one of the hallmarks of a K-shaped recovery is that certain sectors will thrive—and are thriving. Warehouse space that underlies e-commerce, big-box retail that sells essential goods, and even office space in certain areas (like the suburbs) either may do well or are already seeing great returns. By carefully choosing investments, there are paths to navigate the COVID CRE economy successfully.
Since CRE and the economy remain uncertain—and the trend could continue for some time, it remains crucial to evaluate each potential investment and property carefully.
Morris Southeast Group can assist as you assess the best course to take during changing conditions. For investment or commercial property advice, give us a call at 954.474.1776. Ken Morris is also available directly at 954.240.4400 or email@example.com.
There’s a non-trivial chance that we’re heading toward a lengthy period of high inflation because of the Federal Reserve slashing interest rates and government debt reaching unprecedented levels. The result would be money being worth less, lowering the value of stocks and other long-term investments.
While this trend seems like bad news for all investments, tangible goods, or hard assets, tend to increase in or maintain value to counteract the forces of inflation. Therefore, these vehicles are worth considering when interest rates fall precipitously, debt expands, and inflation may rise.
Periods of high inflation cause issues in many segments of the economy, albeit in different ways.
For investors, they can erode the value of stocks and reduce corporate earnings. The average consumer will also have less purchasing power. At the same time, inflation favors those who borrow before its onset because the borrower will make repayments in lower-value dollars.
Investors should have a firm grasp on how to prepare for periods of high inflation to ensure they protect their money and capitalize on this shift in the value of a dollar.
Investing in hard assets like gold and oil is one commonly recommended strategy during a period of high inflation. The reason is that these assets have tangible utility and theoretically stable value.
For example, if the US dollar tanks, it’s argued that gold will retain more value because it’s a useful commodity. The same goes for oil, as some analysts believe the overall demand for petroleum products isn’t going anywhere, no matter what happens elsewhere in the economy. Putting money into these assets is considered protectionary against other economic downturns. Even if stocks and bonds stop producing, hard assets will still hold onto their value.
Commercial real estate is also on this list of hard assets—and it’s specifically worth considering for various reasons.
One element that makes commercial real estate a desirable hard asset is its income-generating potential.
Unlike an asset like gold that the investor will have to sell to turn a profit, real estate can generate monthly income to further protect against inflation. Additionally, the amount tenants are willing to pay can increase exponentially during an inflationary period, reducing the risk associated with the property’s resale value.
Assessing risk is a crucial factor when making any investment. And a hard asset that generates monthly income has particular value because it significantly reduces this risk. Rather than holding onto the investment and weathering losses during an economic downturn, owners can continue collecting rent and profit.
Another reason to consider commercial real estate investments during an inflationary period is the lower interest rates. Taking advantage of these rates reduces the real risk of purchasing the property. That said, cheap money does not always mean easy money. For example, while interest rates moved to historic lows after COVID hit, lenders also started closely scrutinizing borrowers to ensure they would recoup their investment.
Another consideration is that commercial properties require time and energy to achieve an ROI. How much time and energy depends on the property, its location, and the tenants it attracts. Finding a long-term, low-maintenance tenant takes effort, but achieving this makes a property incredibly rewarding in any economy.
We’re still sorting out the long-term effects of the COVID-19 pandemic, and portions of the economic recovery will take years. However, interest rates are extremely low, making it a good time to borrow if an investor has a well-researched opportunity backed by requisite credit-worthiness and resources. We also know that government debt is at an all-time high, which could drive an inflationary period.
Commercial real estate investments in specific business sectors may become an increasingly valuable option if inflation soars, by providing immediate returns through rental income while holding value long term. And given that CRE can be an excellent investment in almost any economic conditions, diversifying a portfolio into income-generating real estate as a hedge against inflation may provide additional benefits.
For more information on current CRE trends and the ever-changing market, call Morris Southeast Group at 954.474.1776. Ken Morris is also available directly at 954.240.4400 or by email at firstname.lastname@example.org.
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, 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.
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.
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.
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/.
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.
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:
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.
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.
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.
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.
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.
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.
Even without a mortgage, there are some additional issues, outlined by the American Bar Association, that the landlord should consider:
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.
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 email@example.com.
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.
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.
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.
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.
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 firstname.lastname@example.org.