It’s easy to understand why some investors and tenants get discouraged about CRE space in South Florida. Gentrification projects are well underway, empty lots are fenced and prepped for new construction, and the tremendous amount of traffic creates a sense that prices are in the stratosphere because all of the good space is gone.
Nothing could be farther from the truth. Depending on the type of real estate owners, tenants, and investors are considering, there are millions of CRE square feet of 2nd- and 3rd-generation space available in South Florida. Finding the intersection of the right real estate at the right price in the right place can certainly still be done – though it’s not always easy.
No matter the market – Los Angeles, New York, Atlanta, or Miami – there are essential considerations when matching the unique needs of clients with the proper space.
A key to making this link is flexibility. In South Florida, for example, there is an abundance of warehouse space that has the potential to be repurposed into something else. The low ceilings of many 2nd- and 3rd-generation warehouses are no longer suitable for today’s industrial/distribution center needs. They are, however, perfect for converting into office space or other uses.
Before embarking on such a project, it’s essential to understand the cost of the conversion. Parking, air conditioning, and roofing may need to be updated, and these costs could be very high.
While conversion costs can certainly hamper development plans, another issue can be as much of a hindrance: zoning regulations. The last place any buyer, renter, or seller wants to be is at the table while the deal falls apart because no one thought to investigate zoning regulations and restrictions.
To prevent surprises, it’s essential to understand the zoning rules that are specific to the municipality where the property is located. What’s allowed in location A may not be permitted in location B, and that can make all the difference.
The zoning departments in all municipalities tend to not like surprises. Sooner or later, they will discover the work being done on a property and issue fines and/or work stoppage orders. To prevent these costly consequences, take the time to visit the zoning department in which the property is located. Ask questions and help to bring the municipality on board with the property’s new concept.
Marijuana provides a great example of how a potential business trend can interface with flexible CRE space. In 2016, Florida voters overwhelmingly approved medical marijuana. Ever since, the proposal has been in a sort of limbo – tied up in hearings and court cases.
Soon after voters approved the measure, the Florida legislature passed a law preventing patients from using smokable marijuana. This then resulted in a circuit court judge ruling that patients have the right to use medical marijuana in any form – and this led to an appeal from the Florida Department of Health, which means an automatic stay so the judge’s ruling cannot go into effect.
This back-and-forth means many obsolete warehouses – many of which can be quickly converted into indoor grow spaces for medical marijuana – remain empty. Florida CRE investors are waiting – and looking at the example of Denver, CO, where marijuana has been legalized and it’s now nearly impossible to find available warehouse space.
When investigating CRE possibilities, it’s important to work with an agency that knows the rules of the market and looming trends. Morris Southeast Group has a 40-plus year history, which translates into a team of professionals who are not only aware of opportunities but also know the ins and outs and changes in zoning regulations in the municipalities which we serve.
For a free consultation or to learn more about our property investment opportunities and 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 email@example.com.