I’m Ken Silberling, I’m a commercial real estate broker in South Florida. It’s March 2020 and with the world pretty much shut down, I thought it would be productive to learn how to put my blog, KensTrends on video. I’ve also been learning Garageband and you can hear the results of that. The text of my intro is below, or just click on the video. Or catch the KensTrends Podcast!
Just for a little introduction, I began my career a market analyst for Cushman & Wakefield, Colliers and Commercial Florida which would become Newmark.
For about 10 years, I wrote one of the most widely read reports our market and investors paid hundreds and some thousands to subscribe to and read my work.
But that’s changed – today you can write a great blog and people certainly aren’t going to pay for it. You’re doing well if people make the effort to read it.
Personally, I’ve become a big podcast fan and I realize that in this mobile era, the best way to reach people is audio and video. So I thought I’d give this a shot. All I can hope for is that you enjoy my original content and that you call or email me or my company Levy Realty Advisors if you’re looking to buy, sell or lease commercial property.
My content is generally original and unconventional and I always try to inject a little humor. I started blogging about 10 years ago on my company’s websites.
I started my current blog kenstrends.com in 2015. After syndicating my blog on The Broker List.com 2018 I got their award as newest blogger. It wasn’t best blogger or most influential blogger – it wasn’t even new, but I’ll hey take what can get. And for an added bonus, I can legitimately call my blog the award-winning kenstrends
Whether in its written form or as video or audio, I hope you enjoy kenstrends and I welcome any comments or suggestions. Let’s all work together to beat this virus, be safe out there, and I’d like to wish a quick recovery to all those affected.
You can read the blog below, or click above for the video version. So the economy was riding high, businesses were thriving and the commercial real estate market was seeing all-time high rental rates and historically low vacancies. Then a virus hits and everything is in chaos. On March 18, the CEO of Cheesecake Factory sent a letter to all of his landlords saying they won’t be paying their rent on April 1. I don’t think anyone told him that April Fool’s day was postponed due to the coronavirus, but this is no joke.
As I work for a company that owns, manages and or leases 3.5 million square feet of space, I urge you “please don’t try this at home.”
The majority of my business involves representing tenants in their office and industrial leasing. We’d all love to skip our April rent payments, but that can cause major problems. Everybody is hoping that the current crisis will be short-lived and the economy will come roaring back. So what should you do as a tenant if paying your rent becomes a hardship?
The worst thing you can do is to ignore the problem and do nothing. I had a front row seat representing a Landlord through the 2008 market crash, and the best advice I can give tenants is to communicate with their Landlords.
If you can’t pay your rent, contact your Landlord. They’re better off working with you than spending time and money drafting 3-day notices and preparing eviction papers. Believe me, it’ll cost your Landlord a lot more to refill your space that it does to negotiate a workout. And if they want to play hardball, they were going to do it either way.
If you do nothing, you’ll be responsible for back rent, late fees and legal and administrative expenses. And if you signed a guaranty, your personal assets are also at risk. But a reasonable Landlord also realizes that they may never collect and it’s better to be proactive about finding a win-win solution that can forge a stronger relationship for years to come.
It may be possible make an agreement to defer your rent as long as you pay back over time. But that can sometimes serve to dig a deeper hole. The most popular tool in the prior market downturn was the “blend and extend,” where a tenant can get rent concessions in exchange for extending their lease term. I’ve always said that a Landlord’s biggest expense is vacancy. So they may be willing to take a temporary hit in order to avoid the expense of refilling a space a couple of years down the road.
What we don’t know right now is where rental rates are headed. During the great recession, rental rates dropped drastically, so tenants paying above market rents could use the blend and extend to lower their rates. But today, rental rates are increasing rapidly. Whether the current crisis will cause rents to ease remains to be seen. So we may see the blend and extends signed at above market rents.
Depending on whether you take Landlord or Tenant site, there are arguments to extend at higher rates or at lower rates. It depends on who is making the argument. So it comes down to having someone on your side that knows the market and can support your side.
So you can probably guess my final point. Whether you’re a Landlord or a tenant, you need a commercial real estate professional on your team in order to make the best long-term decisions to overcome what we hope will be a short-term problem. Stay tuned to the new and improved KensTrends – now with video; or call, text or email me at Levy Realty Advisors.
And when this thing is finally behind us and you find yourself sitting at the Cheesecake Factory, please tip your waiters and waitresses generously! And maybe they take that monster menu and put it on video.
CBD is one of the most commonly used terms in commercial real estate, but the definition of CBD has changed dramatically. As a young researcher, I first came across statistics for the CBD and non-CBD market. “Central Business District” or CBD was a more impressive way to say Downtown and non-CBD was basically suburban. Today, CBD is impacting the Commercial Real Estate market in a different way.
CBD also stands for cannabidiol, which according to the Harvard Medical School is the second most prevalent chemical in the cannabis sativa (hemp or marijuana) plant. The other, THC (tetrahydrocannabinol) is the chemical that produces the psychoactive effects or “high.” But we are seeing an ever-increasing number of CBD products in stores, medicinal marijuana is now legal in Florida and legalization of recreational use is almost inevitable.
Proponents claim CBD can treat all of these
From my understanding, and I don’t claim to be an expert, both CBD and THC are extracted from the hemp plant. Hemp fibers have been used for centuries to make rope, paper and even clothing. Thomas Jefferson actually drafted the Declaration of Independence on hemp paper. But the cultivation of industrial hemp has only been legal in the U.S. since 2018. Legal hemp, defined as having a THC content of less than 0.3 percent can be grown and distributed across the U.S. It is only when the hemp is specifically grown to produce flowers with THC content in the 20 to 30 percent range, that it’s legality comes into question. Proponents claim that CBD helps with pain, inflammation, anxiety and insomnia. While many medicinal benefits of CBD are unproven, the FDA has approved a CBD product to reduce epileptic seizures among children.
Denver industrial rents increased by 12% Annually for 4-year period after announcement that Cannabis would be legalized in Colorado Source: CoStar
The explosion of new CBD and Cannabis businesses is having a major effect on the Commercial Real Estate Market. CBD sales, which totaled $500 million in 2018 are expected to triple to $1.5 billion in 2022. Legal sales of cannabis worldwide are expected to increase by 853 percent to $104 billion between 2018 and 2027. As brokers, we are all getting calls from CBD and cannabis related business owners. While 11 states have legalized marijuana and 22 have approved it for medical use, cannabis is still illegal according to Federal Law. We are seeing dispensaries paying a “cannabis premium” as landlords charge higher rents based on the risk of government intervention. In Colorado, the first state to legalize recreational cannabis in 2014, growers have paid two to three times market rent for industrial property and the increasing demand has raised prices across the board.
There are now actually Cannabis Real Estate Investment Trusts that invest in retail and industrial property involved in the Cannabis industry. You can now get in on the trend by investing in companies like Treehouse REIT and Innovative Industrial Properties, Inc. which aim to generate “higher” returns than traditional REITs by investing in properties leased to Cannabis related companies. There are also numerous Cannabis Businesses that are also now publicly traded with market caps in the billions.
So real estate analysts and consumers must be sensitive to the new double meaning for CBD which will have an increasing impact on Commercial Real Estate. But I don’t think we have reached the point where “non-CBD” will refer to THC. In a future KenTrends, we will talk about “flex space,” another definition that is changing.
In 2002, the last time a spec Class-A Office tower was completed in Downtown Fort Lauderdale, rents were $30 per sf – today they are pushing $60.
As a tenant/buyer representative, it is my mission to find value in South Florida commercial real estate. Working with office tenants throughout the South Florida market, I am finding it increasingly difficult to find space for less than $30 per square foot. Rates are now nearing $60 in Downtown Fort Lauderdale and topping $65 in Downtown Miami. In my January’s KensTrends I showed how the main points of my most recent office market report still hold true today – even though I wrote the report back in 1998.
When comparing 1998 to 2020, the vacancy rates are similar. The current recovery, like that of 1998 has been the result of a strong economy, population growth, tax advantages and the lack of new office construction. While vacancy rates have risen slightly over the past 12 months, they remain only slightly above 1998’s historical lows.
But one major submarket has been largely unaffected by the resurgence, which is why I see it as the best value in South Florida. The “Submarket That Time Forgot” also happens to be where I currently have my office and where I have completed hundreds of lease transactions. I am sitting in my office in a Class-B office tower at the Spectrum Building off Commercial Boulevard, 15 minutes from Downtown, with completely modernized features and finishes and free parking – at an all-in rate in the low $20s. So my advice to business owners looking for value is to revisit Fort Lauderdale’s “Uptown” (aka Cypress Creek) Market consisting of the Cypress Creek Road and Commercial Boulevard corridors along I-95.
Quality Class-B space at the Spectrum Building off Commercial Blvd. at rates in the low $20s.
Gross rental rates including operating expenses have increased by approximately 50% in Broward and Palm Beach County since my 1998 report, a compound annual increase of 1.8 percent. In the red-hot Southwest Broward market, rates have increased by 68.4% or 2.7% annually. At the peak of the market’s resurgence from 2015 to 2018, rental rates in Downtown Fort Lauderdale increased at annual rates from 5.5 to 9 percent.
But in the Uptown market, rates have increased by 25% or only 1% annually since 1998. Rental rates average $26 in the uptown market as compared to $39 in Downtown Fort Lauderdale and $33 in Southwest Broward. In addition, parking can cost an additional $3-$4 per square foot downtown.
But you can still get uptown Class-A space, minutes from I-95 with free covered parking, for under $30 per square foot. Regarding location, in 15 minutes, you can be in Downtown Fort Lauderdale, and it is around 40 minutes to Downtown Miami or West Palm.
Cypress Creek also offers an abundance of single-story office and office/warehouse (flex) space. I personally appreciate the convenience of drive-up space without having to ride elevators and navigate parking garage ramps. These spaces can also be improved with upscale finishes to rival Class-A buildings without the added expense of upgrading common corridors and lobbies. I recently represented a tenant in the building shown above in a 2,300 sq. ft. lease with a custom buildout for well under $20 per square foot – about the same as my client would have paid 15 years ago. My favorite selling point of the Uptown market is its access to business owners and employees throughout South Florida. I live in Boca Raton while my former leasing partner on three uptown properties lived in Northern Miami-Dade County. So a property in the 954 area code could easily be represented by agents in the 305 and 561.
Brightline pulls into Downtown Fort Lauderdale as new residential construction continues.
Yes, there is value in Fort Lauderdale’s rapidly expanding Downtown market. Thousands of new residential units have created a live-work-play environment, helping to attract and retain employees. There are also great places to eat and Brightline (Virgin Trains) provides direct access to Downtown Miami and West Palm Beach. In 2018 and 2019 I worked at One Financial Plaza in Downtown Fort Lauderdale. It was nice to walk down the block and have lunch at YOLO or Morton’s. I also was able to hop on a Lime Scooter (KensTrends May 2019 Miami With a Twist of Lime) for a five minute ride to Brightline or to Rocco’s Tacos. But rush hour traffic on the 2 mile stretch along Broward Boulevard from I-95 to Downtown was an ordeal and $100 per month to ride the ramps to level 5 of the parking garage was no bargain. For the few times a year I have lunch Downtown or take the Brightline to Miami, I will gladly jump in the car or even an Uber for 15 minutes – and hope there is no construction on Broward Boulevard.
Mayor Wayne Messam boasts Miramar is home to more Fortune 500 Companies than any other South Florida municipality
So what has kept rates from increasing in the Uptown market? A lot of it can be attributed to Southwest Broward. This submarket emerged in the early 1990s with the completion of the Sawgrass Expressway and I-75 providing access to Miami and Fort Lauderdale. New residential developments and Hurricane Andrew in 1992 created a perfect storm with a mass migration from South Miami-Dade to Southwest Broward. Many companies, particularly in the expanding healthcare and tech sectors capitalized on the trend, relocating from Cypress Creek to Miramar, Plantation and Sunrise. Surprisingly, Miramar in Southwest Broward is home the most Fortune 500 firms of any city in South Florida. Of the 18 million sf of new office construction in Broward County since 2000, Southwest Broward captured 6 million and its neighbor Sawgrass/Plantation 3.8 million.
In contrast, the uptown market has seen only 188,000 square feet completed since 2004. The market has always been a great alternative for companies looking to service customers along the Southeast Florida coast and attract a tri-county labor force. It is also home to Executive Airport, (FXE) the nation’s eighth busiest general aviation airport. The success of the Downtown and Southwest Broward Markets has driven rents in those areas well above those uptown. For those companies seeking fast access to I-95 and affordable rental rates, Uptown is a very attractive alternative. The one missing component of this market has been residential development. While millions of people live within 30 minutes of I-95 and Commercial Boulevard, there are few upscale residential alternatives in the area. That could soon change with the approval of the 353-acre Uptown Urban Village which promises over 2,500 new residential units.
The 353-Acre Uptown Urban Village runs along I-95 at Cypress Creek Road and is a potential game changer for the submarket with over 2,500 residential units proposed.
Pulte Homes is also under construction on a 405-unit residential development on the former site of the Oak Tree Golf Course at Commercial Boulevard and Prospect Road. And InterMiami CF, David Beckham’s MLS Soccer expansion franchise begins its inaugural season at Executive Airport in the rebuilt Lockhart Stadium on March 14, 2020. (Can Soccer Be Successful in South Florida? – KensTrends 11-2019) So the window of opportunity for tenants and investors may be short-lived. But for now, if your company is looking for value in office space with great access to the tri-county labor market, there is still time to take advantage of the “Submarket that Time Forgot”.
Two weeks until opening – the new Lockhart Stadium, home of InterMiami CF on 2-28-20. Opening day is March 14.
We’ve watched the new stadium take shape from the elevator of the Spectrum Office Building.
I recently presented highlights of my most recent office market report to the South Florida Office Brokers Association.
The key points:
Our tremendous job growth and population growth have positioned South Florida as a highly attractive investment market.
In addition, the relative absence of new construction has driven office vacancies to historical lows while rental rates are showing
Click Above for Article
Firms will continue to be drawn to our market due to our warm weather, quality of life, favorable tax structure, government incentives and the region’s role in trade with Latin America.
So what is wrong with this picture? While I started my career in research, my most recent office market report was written in 1998. But those points are still spot on. It seems that the more things change, the more things stay the same. So what has changed?
First, what used to take weeks and hundreds of phone calls can now be accomplished with a few keystrokes on CoStar which provided the statistics here. The industry has a love-hate relationship CoStar which has become our primary source of information. While there is a lot happening in the world of Commercial Real Estate technology, and I personally spent a majority of 2018 and 2019 in the field, there is still not a worthy competitor to CoStar. The value of this data is clearly illustrated by CoStar’s capitalization, which has increased nearly 1,000 times from $27 million to $24 billion since it’s 1998 IPO. But CoStar provides an easy way to compare my 1998 report to the current market (which will be the subject of Part 2).
In addition, since 2019, residents of these states now pay federal tax of up to 37% of these amounts. Talk to your tax advisor for more info.
The tax environment has also changed to our benefit. The absence of a state income tax has always been an advantage. But with state income tax no longer deductible, there is additional incentive for firms to relocate from the northeast.
Another major change is the advance in technology. Back in 1998 I was rocking a 56K modem which transferred data at a rate of 7KB per second. Today, I download music over my cable modem at over 7MB per second which is 1,000 times faster. And the Iphone in my pocket has 100 times the memory, 40 times the storage and 5 times the computing speed of my 1998 desktop PC. Clearly, you can now work from anywhere – why wouldn’t you want your company in South Florida?
One drawback of South Florida is a perceived talent gap when compared to other markets. But that is changing as well. The growing population has resulted in our colleges becoming increasingly selective, attracting better students and better faculty. According to US News, The University of Florida now ranks 7th and Florida State 18th among US public universities. We have also seen tremendous growth within the state system at the University of South Florida (#44), Central Florida (#79), Florida International (#105) and Florida Atlantic (#140). My own child got a degree from the prestigious engineering school at the University of Florida only to be recruited to Seattle by Amazon. It is up to us to bring in companies that will allow us to keep our talent and our families in state.
Brightline arrives in Fort Lauderdale
In addition, with the influx of population, getting from point A to point B is increasingly difficult. While we have made great strides in mass-transit with Brightline and an expansion of Tri-Rail, we still have a long way to go. While mass transit will not service our western suburbs any time soon, Transit-Oriented Developments (TODs) along the major north-south routes are gaining momentum and will be a key trend affecting where South Floridians live and work in the future.
Possibly the biggest challenge is that we live in a highly fragile environment. While it may be a controversial topic, we are vulnerable to rising seas and catastrophic storms. A small segment of the commercial investment market is avoiding South Florida for these reasons.
You can save some turtles by purchasing paper straws on Amazon.
Drinking from paper straws is a positive step, but it won’t solve the problem. I believe the solution lies in research and technology and our region is poised to lead in that direction, potentially creating thousands of jobs.
Overall, the outlook for South Florida remains as bright in 2020 as it was back in 1998. Part 2 of this post in February will provide more information and a comparison of the office market from 1998 to 2020.
It is now 2020 and as Miami prepares to host Super Bowl LIV, I thought it would be a good time to dust off a blog article I wrote in 2012 about a Commercial Real Estate Super Bowl Ad as one of Ken’s Klassics. I revisited the story in 2015. The key points remain as valid today as they were then. I also updated some stats. Most importantly, I added a cat video to hammer home my main point. I’d also like to add one other point. Many of us who now live and work in South Florida first came here as visitors. The Super Bowl is a great showcase for our community with many benefits to our economy that will last long after the big game.
Here is my updated 2012/2015 article:
As the Seahawks and Patriots prepare to take the field for Super Bowl 49, (yes it’s 49ers and Chiefs in 54) it’s a time to reflect on the great teams and the great games. Some of us think of Deflate-Gate. I think about the Dolphins’ perfect season. But we all look forward to the great commercials. As a commercial real estate blogger, I also reflect on a 2012 Super Bowl ad that never was. The ad was produced by LoopNet, which at the time was a mere $400 million commercial real estate search site – before it was absorbed into the now $6 billion Costar empire. ($27 Billion in 2020)
LoopNet had a brilliant idea. They would produce their own Super Bowl ad to be shown only on the Internet. As I recall, it was a cute ad, a bit edgy, and it gave me a chuckle. But it wasn’t the message that was important, it was the medium. You see, LoopNet showed that anyone can make their own Super Bowl ad. We all have the ability to create a YouTube video that can be seen by millions. And we can do it for about $4.5 million less than it cost Budweiser or Pepsi in 2015. (Up to $5.6 million for a 30-second Super Bowl Ad in 2020) Somewhere out there in cyberspace, one of my own videos has generated 1.5 million hits (up to 2 million in 2020). While a Super Bowl Ad will get you 115 million viewers (less those making a pit stop or a run to the fridge), the angry cat video below is nearing a record 90 million views. Social media makes it possible to reach 100 million viewers for substantially less than $5.6 million.
I was probably one of a select few who saw the LoopNet ad thanks to a Linked-in post by Duke Long. You see, LoopNet’s Super Bowl ad had one fatal flaw. The fact that they called it their “Super Bowl Ad”. Unfortunately, the National Football League owns the trademark on the term “Super Bowl.” Mysteriously, the LoopNet ad was taken down within about an hour. Yes, the NFL may be more powerful than even CoStar.
The takeaway? First, if you want to create your own Super Bowl ad, you may want to call it your “Big Game” ad, so as not to anger our friends at the NFL. But even more important is what is says about the internet. Anybody can now reach millions or even billions of people via social media.
Yes, you’ll need to create some compelling content and that’s not an easy thing to do -especially if you don’t own a cat. But there is some great commercial real estate content out there, and a few select individuals are using the internet to enhance their brand and make more deals. Hopefully, I can continue to make my own contribution and effectively use the internet to make my phone ring more often. If you’re looking for office or industrial space or commercial real estate investments in South Florida, I’m happy to help.
While you were out celebrating New Years Eve, I was already sipping my January 1 morning coffee in Bangkok.
I rang in 2019 from Bangkok, twelve hours before most of you, making it the longest (non-leap) year of my life. It was a crazy year full of ups and downs, but things are definitely looking up for 2020. I wish all you a great holiday season and a healthy and prosperous 2020. Here is my 2019 year in review and a sneak peek at 2020.
I started the year in the midst of a trip of a lifetime. We went to visit my daughter who was on a fellowship in Luang Prabang, Laos. (more on our trip) We spent 2 weeks in Laos, Cambodia, Vietnam and Thailand. The highlight of the trip was an excursion to Halong Bay near Hanoi, cruising and kayaking though breathtaking views of islands and caves (below is some amazing video shot by my wife Lisa). It was fascinating to learn about the turbulent history of the region and to gain a true appreciation for our veterans who sacrificed so much fighting a very controversial war. But it was walking 8 miles and climbing the equivalent of 12 flights of stairs at Halong Bay which led me to another pivotal decision – to undergo double knee replacement.
Throughout the first half of the year, I continued to build an online marketplace for South Florida office space and placed tenants in space from South Miami to West Palm Beach. But that project came to an end in early June. Less than two weeks later I underwent the surgery.
I was on my feet the next day, off opioids (my $0.02 on the opioid crisis) in three days and climbing full flights of stairs in four days. I continued to close office leases throughout my recovery. Within three weeks, I was back behind the wheel and back on the job with my own company KensTrends, LLC. Thanks to cycling, yoga and some great physical therapists, my recovery has been way ahead of schedule. I’m back on the golf course and tennis court and hope to return to the ballfield very soon.
In October, I joined Levy Realty Advisors. While I enjoyed having my own company, the synergy and opportunities created by aligning with a great group of people that own, lease and manage 3.5 million square feet in South Florida were too good to pass up.
2020 (which will actually be 12 hours longer than my 2019) is shaping up as an exciting year. Technology continues to make commercial real estate information more available than ever, although the bulk of the information continues to come from only one source.
My strategy for 2020 will be to leverage the use of this data with new technology as well as old-school networking and communication. Emailing, blogging and social media are tools we can use to to touch more people more often. That is the purpose of KensTrends. But there is still no substitute for the old fashioned phone call and face-to-face meeting.
I look forward to sourcing new investment opportunities for Levy, while continuing to represent tenants and buyers in finding South Florida office and industrial space. Let me know if I can help you.
Happy holidays from the KensTrends and the Silberling family – this was taken at Mandalao Elephant Conservation in Laos. My son Michael wasn’t able to join us. Luckily, my daughter Amanda very talented on Photoshop!
I’m pleased to announce that I’ve joined Levy Realty Advisors as Senior Vice President of Brokerage and Tenant Representation. It’s basically an extension and expansion on what I’ve been doing for the past 30+ years in South Florida; creating value for owners and occupiers of commercial property in Miami-Dade, Broward and Palm Beach County.
I continue to work through online sources and my own relationships, but I see tremendous opportunity in aligning with Levy Realty Advisors. I’ve known Alan Levy for over 20 years and he has steadily built a great organization and a portfolio of over 3 million square feet of office, industrial and retail space owned and or managed.
Alan recognized that there was a large pipeline of untapped business in finding additional locations for companies in his portfolio, and finding space for companies he couldn’t accommodate. In addition, we expect that by working with owners of properties across the market, we will uncover new investment opportunities to spread our footprint in the South Florida commercial real estate market.
And don’t worry, I’ll still be publishing KensTrends to inform, entertain and continue to generate new business. Read more at www.SFOBA.com
“I am excited and pleased to announce that after many years of knowing Ken Silberling, he will join our company to head up the Brokerage and Tenant Representation division,” said Alan Levy, Broker/President of LRA. “Ken comes to the company with over 30 years of industry knowledge and experience and is well respected amongst his peers in the South Florida Commercial and Industrial market. Ken will be handling brokerage and tenant representation opportunities that we have been passing up for many years due to our focus on our own portfolio of properties.”
“We feel very fortunate to have Ken represent our company,” added Josh Levy, LRA COO. “This is a new chapter in the evolution of our company. Ken’s extensive experience and exposure in the market will help us to continue to expand our footprint throughout South Florida. He will also bring an extended level of service to our tenant base of over 1,000 companies occupying over 3 million square feet of space.”
The new Lockhart Stadium from the elevator of Levy Realty Advisors’ Headquarters – Spectrum Office Park, Fort Lauderdale 11-18-2019
Major League Soccer is coming to South Florida much sooner than you think. And it is the centerpiece of one of the largest real estate deals ever proposed for South Florida. From the elevator of Levy Realty Advisors’ headquarters in Fort Lauderdale’s Spectrum Office Park, I can see a new $60 million soccer stadium take shape. The site of the recently demolished Lockhart Stadium and Fort Lauderdale Baseball Stadium will be the temporary home for Inter Miami CF. The new Major League Soccer (MLS) franchise will open their inaugural season here on March 14, 2020. Meanwhile, negotiations continue on the voter-approved 131-acre Miami Freedom Park; a $1 billion stadium, mall, hotel, technology hub and park proposed for the site of the Melreese Golf Course near Miami Airport. This would be the permanent home for the team starting in 2022. So the $1 billion question is:
Can pro soccer be successful in South Florida? As a long-time South Florida sports fan, I was extremely skeptical. This may make you change your mind:
Corner End Zone Nosebleed Seats in Section 300 for the 11/10/19 MLS Championship were selling for $345 on Stub Hub.
My son was in town from Seattle, where he has attended some Seattle Sounders MLS games and enjoyed the experience. We watched on ESPN as Seattle beat Los Angeles FC and earned a spot in the MLS Cup Championship. He thought it would be fun to attend the game and we went online to check on tickets. We found out that the Sounders sold out 70,000 seats in 20 minutes and the worst seats in the stadium were selling for $345 on StubHub. He decided to watch the game on TV and the Sounders wound up winning the championship in front of a raucous record crowd.
A Record MLS Crowd of over 72,000 Packs Atlanta’s Mercedes Benz Stadium
Soccer has definitely caught on in Seattle with an average attendance of over 40,000 per game. In Atlanta, in the football-crazed South, their MLS expansion team posted a winning record in its 2017 inaugural season. Atlanta United now leads the league in attendance at over 53,000. In addition, the culture is changing. Organized youth soccer was very rare when I was growing up in Miami. But my millennial kids and their friends all played soccer and you can’t drive by a field these days without seeing a game going on.
Pele, Soccer’s Greatest of All Time, Leaps Celebrating a Goal vs. Strikers in Front of 77,000 fans in New York, 1977.
For professional soccer in South Florida it has been a rocky road. The Miami Toros started play in the North America Soccer League (NASL) in 1972 and became the Fort Lauderdale Strikers in 1977. I recall sitting in a loud and packed 15,000 seat Lockhart Stadium in the late 1970s as the Strikers posted the league’s best record. The Strikers and the NASL reached their peak in 1977 when Pelé and the New York Cosmos defeated the Strikers in the playoffs in front of 77,000 fans. But attendance began to fade, the Strikers relocated to Minnesota and the NASL folded in 1984. Major League Soccer (MLS) was formed in 1988 as a condition (quid pro quo?) for the US to host the 1994 World Cup. South Florida’s potential as a pro soccer market is illustrated by a 2014 exhibition between the national teams of Brazil and Columbia which drew over 73,000 fans.
Another “friendly” between Brazil and Columbia draws 65,000 to Miami’s Hard Rock Stadium, September 6, 2019.
In 2014, a new group headed by Brazilian superstar Ronaldo purchased a new Strikers franchise hoping to elevate them to their past glory. I negotiated a lease with the team to lease 1,512 square feet for their corporate headquarters minutes from the old Lockhart Stadium. But interest in the re-formed minor league NASL was limited and the deteriorating stadium proved to be a disaster. The team moved to Lauderhill and folded in 2017. At the same time, however, David Beckham began searching for a South Florida home for a new MLS franchise.
So the question is, can soccer survive and even thrive in South Florida? South Florida has always supported a winner as shown by the success of the Miami Heat and until recently, the Dolphins. The financial success of the new team will be closely linked to the success of the team on the field. But can we field a competitive team?
Rendering of the $60 million new Lockhart Stadium, scheduled for completion in time for Inter Miami CF’s opening game in March 2020.
Atlanta United has proven that you can quickly put a winning MLS soccer team on the field and develop a fan base. Beckham can draw from a worldwide talent pool and Miami’s multicultural community and abundant sunshine should prove attractive to players. I believe the key lies in the organization. The Dolphins have always been king in this market. Despite some recent down years, they have consistently been one of the best managed and most successful franchises in the NFL. The Miami Heat took the court in 1988. Mickey Arison has put together an organization and a culture that breeds success and has the championship banners and attendance to prove it. Meanwhile, the Miami Marlins have two championships, but poor management decisions have led to losing teams and anemic attendance. I personally enjoy Marlins Park and think it’s a great facility, but the team’s former owners walked away with all the profits and left Miami taxpayers holding the bag.
Plans for the $1 Billion Miami Freedom Park
David Beckham and his group have billion dollar plans to bring big time soccer to South Florida. And local entrepreneur and co-owner Jorge Mas plans to finance Miami Freedom Park at no cost to taxpayers. Regardless of what happens with Melreese, which has some environmental issues to overcome, Inter Miami CF will take the field in March in Fort Lauderdale. If the Miami deal falls through, Fort Lauderdale could still become the permanent home. Interest in soccer across the US in on the rise. MLS has a contract with ESPN and the English Premier League is televised nationally on NBC. A recent Gallup Poll shows soccer as the second most popular sport behind football among the 18-34 demographic in the US. The attendance for the Colombia – Brazil matches also shows the potential for soccer in our market. I don’t know if Inter Miami seats will be selling for $345 on StubHub any time soon, but MLS appears to be thriving. Personally, I’m a baseball and football guy. But if Beckham and Mas can put together a winning organization which fields a winning team, pro soccer in South Florida will finally be a success.
While I was recently recognized as “newest blogger” by thebrokerlist.com, I have actually been blogging since 2010. At my former company, we began to explore the use of this “new” tool called Social Media to create a sense of community among our 200 corporate tenants, while enhancing awareness across the Boca Raton office and industrial market.
In 2011, I produced a blog video that has generated nearly 2.2 million views. I believe it is the most viewed video ever produced by a commercial real estate company. (Can you beat 2.2 million? Let me know!) It serves as living proof that you never know what will make social content go viral. The key is to keep producing content, cover topics you’re passionate about and as they say, “just do it.”
I started my latest internet venture, KensTrends.com back in 2015. I’m proud of the original content I have produced, and I send a monthly blog and newsletter to nearly 1,000 people. But I have never again come close to 2.2 million views.
The video was the result of a lease I did with ProSource Baseball, a now defunct 11,600 sf training facility at Boca Industrial Park. Miguel Valdez, former coach for the Cuban National Team, was an instructor at ProSource. Aroldis Chapman, who defected from Cuba in 2009, came over to ProSource in March of 2011 to work with Valdez. In 2010, his rookie year, Chapman threw a pitch at 105.1 mph, the highest speed ever recorded in a major league game. Since I was a fan, a player, and the parent of a high school pitcher, ProSource invited me to meet Aroldis and watch him throw a bullpen session at the nearby American Heritage High School. I asked if I could shoot video, and they obliged.
I included the edited and branded 55-second video in a blog post. While most of the 2.2 million viewers were baseball fans and players attracted by the headline “Aroldis Chapman 105 MPH Pitcher,” I’d like to think we developed some additional traction throughout the business community.
A lot of the comments debated whether or not he was throwing 105 in the video, but it didn’t matter. I’m a pretty good judge of pitching speed and believe he was throwing in the upper 90s that day. It really didn’t matter how hard he was throwing. Whether it was 85 or 105, my video gave viewers a close-up study of the pitching mechanics that produced that 105.1 mph fastball. In the ensuing years, Chapman has lived up to expectations, becoming one of baseball’s premier closers for the New York Yankees.
Was this my best blog post and video ever? Probably not. My best blog video, in my opinion, is an interview I did with author Josh Dean in May 2012, which had a total of 326 views at last count. The owner of my former company owned one of the top show dogs in the country, and arranged an interview with Dean, author of “Show Dog: The Charmed Life and Trying Times of a Near-Perfect Purebred.” We recorded the interview on Skype. I’m no Anderson Cooper, but I enjoyed Dean’s book and think I came up with some good questions, learned to use the technology, spliced in some related footage, and created something that was fairly entertaining and informative. And the cameo appearance by Niko, my beloved but now departed Shih-Tsu shows I do have a passion for our furry friends.
Niko, my co-pilot
While animals are often the subject of some of the most viral videos on the web, in this case it was my passion, baseball, that garnered such a wide viewership. My former company still receives checks from Google from advertising on my baseball video. But it was only three months after the Dean video that my 13-year run at my former company ended.
So, what did we learn here?
1. Just do it – put quality content out there, and eventually people will pay attention;
2. The content doesn’t need to be about your business – it can be tangentially related as long as it generates interest;
3. Now that I have my own company, this does not apply, but if you have an employer, it may be a good idea for your most popular blog content to reflect the passion of the person who signs the paycheck.
KensTrends is back after a short hiatus. It’s been four weeks since my June 13 double knee replacement. While I continue to work on deals for Truss, I am now an independent contractor with access to the Truss platform among others. More on that at a later date.
My recovery has been in the top percentile, I was off opioids less than 3 days after surgery, I’m back on my feet and walking faster than I was before, I’m climbing stairs, working on chipping and putting and hope to return to baseball in the next couple of months. I continue to work with tenants and buyers of office space throughout South Florida. But I am now a free agent and ready to explore additional opportunities.
You can see the bone on bone situation prior to surgery on the left. Now, the new titanium knee joints have replacements for my long-missing anterior cruciate ligaments and are lined with plastic to replace the cartilage. I am pain-free for the first time in 40 years.
This issue of KensTrends goes in a different direction focusing on America’s opioid crisis. It comes from an absurd occurrence in my hospital stay, where I asked for Tylenol for a headache but was only authorized to receive Percocet. Even more absurd is that Percocet is a combination of Oxycodone, a highly addictive synthetic opioid and Acetaminophen (Tylenol). So I could get Tylenol mixed with Oxycodone, but I couldn’t get Tylenol alone.
Tylenol is generally considered to be the safest over the counter pain reliever, safer than traditional aspirin, ibuprofen (Advil, Motrin), or naproxen sodium (Alleve). I consider Tylenol to be the “Diet Coke” of pain relievers. This comes from one of my favorite moments in the Austin Powers Trilogy when Dr. Evil appears on the Jerry Springer show with his son Scott Evil. He tells Scott he is not evil enough, “You are the margarine of evil, you are the Diet Coke of Evil.” Hence, the “Diet Coke of Pain Relievers.”
Meanwhile, Percocet is a prescription painkiller containing Tylenol and the opiod Oxycodone. Like other narcotics, Percocet is highly addictive because it attaches to opioid receptors in the brain, triggering dopamine release and associated feelings of happiness and euphoria. Many Percocet users start with a necessary and legitimate medical prescription only to tragically slip into addiction.
Anyway, rather than succumb to a highly addictive opiod to fight a minor headache, I decided I would drink a lot of Gatorade to fight my dehydration, which was clearly my best alternative. I asked the nurse what I could do about my situation and she said it was up to the hospital administration. Broward Health North, where I was recuperating, is run by the County Government and there was nothing she could do. I told her that I guess the only thing I could do would be to write my congressman.
That gave me a great idea, why don’t I write my congressman (or woman)? I had never done it before, but I have a few personal connections to Ted Deutch, who represents District 22, adjacent to my own District 21 and home to Broward Health North. I was able to email Ted via the congressional website, as well as District 21 representative Lois Frankel. I also passed this along to my former office leasing partner Betty Geller who has some very strong relationships in State and County government.
Broward Health North – I-95 at Sample Rd.
Stay tuned to KensTrends to see what happens.
Here is the letter originally written to Ted Duetch and also sent to Congresswoman Lois Frankel:
This June 13th, about 4 weeks ago, I checked into Broward Health North at I-95 and Sample Road in Pompano Beach for simultaneous bilateral total knee arthroplasty or double total knee replacement. I am pleased to report that my recovery is in the 99th percentile and I feel great. This success is due to (1) getting my body into excellent physical shape prior to surgery and (2) the amazing staff at Broward Health North which is a credit to a highly successful public-private partnership.
I am very proud that I had the surgery on a Thursday morning and I took my last opioids, 2 Percocet, at 10 AM Sunday the 16th, less than 3 days after surgery. Since then, I have been off opioids and have treated the pain with ice, and the over-the-counter remedies ibuprofen (Motrin) and acetaminophen (Tylenol).
My only complaint, and the purpose of this letter is the way that these opioids were offered to me by the staff. This was a matter of policy. I understand that the nurses were only following protocols and would be risking their livelihoods to go against them. I was smart enough to refuse the opioids when offered. I understand how dangerous these drugs are. I also know that regardless of which side of the aisle you sit on, controlling opioids is a national issue that should unite all Americans.
I checked into Broward Health North on Thursday morning June 13 and had the double knee replacement performed in the 2nd floor operating room. By late that afternoon I was in recovery. The next day, they had me up on my feet in the 3rd floor joint replacement center and I started physical therapy. At that point, the use of Percocet and OxyContin was warranted as the procedure involved saw cuts to both major leg bones and the therapy was extremely painful. By Saturday, I was transferred to the 4th floor inpatient therapy center. Prior to my physical therapy on Sunday, less than 72 hours after surgery, the pain specialist recommended I take 2 Percocet and I agreed. That was the last time I used the opioids.
I was looking forward to going home on Friday the 21st, 8 days after surgery. On the night of the 20th I believe my body was draining itself of the much of the fluid buildup on the knees. I was using a bedside urinal and had filled up a liter bottle and would eventually fill a second. I felt a bit feverish and weak, but having grown up in the South Florida heat, I recognized the signs of dehydration.
I called the nurse and twice had her bring me about a liter of water to drink. I also had a slight headache when the nurse came in around 3 AM. Here’s where things could have gone totally wrong. I asked for some Tylenol which would gently relieve my headache. But my last dose of Tylenol was at 1 AM and I was scheduled for Ibuprofen at 5 AM. The nurse could not offer me Tylenol or Ibuprofen. But I was authorized to get Percocet on demand and she could bring them to me immediately.
I explained to the nurse how ridiculous it was to offer an opioid for a minor headache after five days of narcotic-free recovery. She agreed, but rules are rules and I understand that she could not offer me anything more mild than Percocet without putting her job at risk. Ultimately, I drank a lot of water mixed with an electrolyte enhancer that basically turns the water into Gatorade. The mild headache was cured by hydration and I didn’t need the Tylenol or the Percocet.
The point here is that I have no medical training, but I know enough about my own body to help guide my own recovery. I am likely in a minority of patients that understand the danger of taking the Percocet. If even one patient at this point were to give in to the opioids and later spiral into drug dependency, it would be one too many.
I am not an expert on policy and do not necessarily have a solution, I just want to point out a problem that needs to be addressed by professionals. My suggestion is that (1) patients need to be warned every time that they are offered narcotics that those drugs may be habit forming and (2) any time a patient is offered an opioid pain reliever, they should have the opportunity to substitute an non-opioid alternative.
In my discussion with the nurse, I joked that it would take an act of Congress to change the obviously flawed rules. That’s when it occurred to me that it was my right and my duty as an American to write my Congressman. I live off Glades and Lyons in unincorporated West Boca Raton and Ms. Frankel is my congresswoman. But Ted, you may remember me as I toured office space with you off I-95 and Congress at 950 Peninsula Corporate Circle. My daughter Amanda was also at Waters Edge Elementary with your girls, and my Brother-in-Law, Roy Kobert was your partner at Broad and Cassel. I am also copying my good friend and former business partner Betty Geller to pass along. Betty is the wife of State Representative Joseph Geller and sister-in-law of Broward County Commissioner Steve Geller.
I believe this is an issue that needs to be addressed and I am happy to help in any way I can. Again, I must emphasize I have only the highest praise for the wonderful staff at Broward Health North. Thank you for your consideration.
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Ken scooters from One Financial Plaza to Fort Lauderdale Brightline Station. At 6x Speed so 10 MPH looks like 60 MPH. No GoPro – just an iPhone and a shirt pocket!
Until very recently, I never thought I’d be using South Florida and mass transit in the same sentence. But through a combination of the latest mobile technology, cooperation between the public and private sectors and some serious investment capital, I am on my way from my Downtown Fort Lauderdale office to an event in Downtown Miami at 80 mph on Brightline. Brightline is the fastest, most stress-free route from Downtown Fort Lauderdale to Downtown Miami or West Palm. But getting to the station – the last mile – has been the biggest problem. Enter the Lime scooter – app-operated and perhaps a bit dangerous, but a great solution for the last mile. Trains and e-scooters are a formidable combination when it comes to improving mass transit in South Florida. This is Miami with a Twist of Lime. (Continued below slide show)
Perfect - a scooter right outside my office lobby
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The Lime Scooter and its “micro mobility” competitors Bolt, Bird, Jump and Gotcha are two-wheeled electric versions of the original foot-powered razor scooters. They are now available in many areas of South Florida, including Downtown Miami and Fort Lauderdale as well as Coral Gables and Coconut Grove. The Lime app is very intuitive and easy to use. Each e-scooter is GPS enabled, so the app will show you the locations of all available vehicles. You will need to add some money to your account (there are also some good promo codes for new riders), you then scan the QR code on the handlebars to unlock the scooter, jump on, get it moving Flintstone style, and then hit the throttle to reach speeds of up to 10 mph. It costs a dollar to unlock the scooter and then 15 cents per minute. When you reach your destination, lock the scooter on the app, use the kickstand and leave it in a safe place (please – otherwise it can get messy). The City of Fort Lauderdale allows Scooter operation only on sidewalks and you do need to yield to pedestrians. Lime is also a green solution which further enhances its appeal. A new innovation is the ability to hire a Lime scooter through the Uber App. Lyft scooters are also now available in Miami. In addition, General Provision, a Fort Lauderdale coworking operator is offering Gotcha scooter credits as part of their membership.
Are you taking your life in your hands? Maybe. I ran into one of South Florida’s most influential economic development officials during the recent eMerge Americas conference on Miami Beach, who was on crutches for a hip fracture. “I clipped a stop sign on a scooter,” he said. “Not sure why it was on a sidewalk.” He did still believe that the scooters are one viable solution to our transit needs. But please be careful out there.
Watch Brightline at 80 MPH cruising by 40 MPH traffic along Dixie Highway in Hollywood, FL
Excited to try a scooter? Petrified? Wait, I’ve got another great solution. True to its name, Freebee is an ad-supported electric car service that costs nothing. You can request a ride via their app, and you can go anywhere within a defined area for free. My Freebee operated within downtown Fort Lauderdale and was great to get from a restaurant to a show at the Broward Theater. It was also a great alternative to the scooter in the rain. The car was kind of a mutated offspring of a golf cart and a Prius wrapped in a Bacardi ad (coincidentally Bacardi with lime). Freebee also operates in areas like Coral Gables, Coconut Grove, Miami Beach and Doral. Please tip your drivers!
For about a $2 Lime ride or a small tip to a Freebee driver, I can do the half-mile trip from my Downtown Fort Lauderdale office to the Brightline station in less than 10 minutes. From there, the trip on Brightline is a pleasure. Brightline is the first privately built passenger train venture in the US. It was started by Florida East Coast Railroad and was recently purchased by a group that includes Richard Branson and will be rebranded as Virgin Trains. It presently connects a 70-mile stretch between Miami, Fort Lauderdale and West Palm Beach and will eventually be expanded to Orlando, Tampa and beyond. The prospect of an easy connection from the cruise ships at the Port of Miami and Fort Lauderdale’s Port Everglades to Orlando’s Theme Parks is great for tourism and the connection between downtown, Miami, Fort Lauderdale and West Palm Beach is great for business.
Lime and Brightline – Mass Transit and Micro Mobility are a formidable combination.
The ride is luxurious, the Wi-Fi is great and it gives me the opportunity to blog from a luxury coach when I would have been fighting traffic on a rainy South Florida morning. It’s a 36 minute ride to Miami Central which is super convenient as my event is at the Two Miami Central Office Building, located above the Brightline/Virgin Terminal. It would been 47 minutes to drive according to Waze. With the rain and parking it would probably be a lot longer and certainly a lot more stressful. The round trip on Brightline cost $18 with the handy BEBRIGHT promo code plus $4 for the Lime Scooter round trip. This compares to around $6 in gas, $10 in parking and $5 in wear and tear on the car at a conservative $0.10 per mile. So we’re already about even, and add over an hour of productive time to my day and it’s a no-brainer.
In Miami, the last mile is a bit easier thanks to Miami’s free Metromover service which is an elevated train connecting Downtown Miami, Brickell Avenue and the Omni Arts district. Metrorail, a paid elevated train extends to Miami airport and South Miami-Dade County. Later this year, we will see further enhancements as Tri-Rail will add service connecting West Palm Beach and Fort Lauderdale to Downtown Miami. It is more of a local compared to the Express service by Brightline.
So where do we go from here? Most South Floridians are still a long way from abandoning their cars, although I have met a few entrepreneurs in Miami who have. I first encountered Lime with their dockless bike service in Seattle two years ago. They are now offering Lime Pods, a car-sharing service in Seattle which will likely be heading our way. The jury is still out on the scooters. Safety concerns and the problem of keeping the scooters parked in an orderly fashion will continue to be challenges. But are we better off than we were a year ago? Absolutely. The last mile will continue to be the biggest challenge to getting cars off the streets, but autonomous cars are already here and will only be getting better. The Miami Metromover already operates without drivers. Some residential developers in Miami are offering transit vouchers in lieu of parking spaces to renters. Fort Lauderdale recently rejected $73 million in grant for the Wave Streetcar as many, including myself felt it was obsolete before it was constructed. Freebee and Lime are already picking up the slack and not costing the city a dime.
That brings me to one of the key takeaways to come out of the 2019 Miami Office Market Report event that I attended via Brightline and Lime. The top amenity being requested by tenants today is access to mass transit. One of the sponsors of the event, law firm Carlton, Fields recently leased 50,000 sf at Two Miami Central choosing access to transit over bay views. Akerman, another major law firm recently located to Brickell City Centre which has its own Metromover stop, again choosing access to transit as well as 500,000 sf of shops and restaurants over a traditional Brickell address.
Mass transit may never be as important to South Florida as it is to markets like New York and Chicago, but we have certainly made progress. It won’t be a matter of expanding mass transit to reach more people, it will be a matter of developing projects along the routes to bring people in. Shorenstein Properties just placed a $159 million bet in acquiring the Two and Three Miami Central Office buildings. Thousands of new residential units are also under development along Brightline’s path as millenials continue to urbanize. When we add accessibility by scooter, thousands more residents and businesses will be within minutes of the Brightline and soon Tri-Rail Routes. I believe consumer demand for authentic, transit-oriented, walkable and now scooterable neighborhoods will be the most important factor shaping the growth of our market in the coming years.
So it’s time to jump on your scooter, be very careful, park it responsibly; and as they say on Brightline: enjoy your care-free car free experience.
Welcome to the award-winning KensTrends. I was just named “Newest Blogger” in the Top 10+ CRE Blogs of 2018 by theBrokerList, a top online community of Commercial Real Estate Professionals. No, it wasn’t Best Blogger, Most Comprehensive Data Insights, or even “Top CRE People to Follow on Twitter”, which I made in 2011 under a different persona. But I’ll take what I can get.
I’ve managed to develop a bit of a worldwide cult following and people are stopping me at events to tell me they like what I’m doing. So I’ll continue to post my own somewhat quirky take on real estate, technology, buffalo cheese and whatever else pops into my head at 3 in the morning. Speaking of awards, this month I focus on an Academy Award winning movie and it’s impact on what I do. “Best Supporting Actor” is probably the Oscar equivalent of “Newest Blogger” but it looks just as good as “Best Picture” on my virtual mantle…
City Slickers is an Oscar winning comedy classic in which Billy Crystal and his friends battle mid-life crisis by joining a cattle drive across the Southwest. In the movie, we meet brothers Barry and Ira Shalowitz, ice cream moguls whose characters are based on the real-life Ben and Jerry. Barry’s claim to fame is that he can determine the perfect ice cream flavor to follow any meal.
What goes with sea bass, potatoes au gratin and asparagus? Rum Raisin! How does he know? “1,400 retail locations across the country, that’s how we know.”
So what does that have to do with commercial real estate? With years of research experience and hundreds of leases closed, I believe I can pick the perfect South Florida office building just like Barry can pick the perfect ice cream. Office space comes in all different shapes, sizes and flavors and you need the right flavor to compliment the way you do business.
Easy access to Miami or Fort Lauderdale, high image 15-20 employees? Presidential Circle in Hollywood. Downtown Miami, executive suite, lots of privacy, financial firm? Regus at The Wells Fargo Building. Glitz and glamour of Miami’s Brickell Avenue, small space, short-term lease? The Latitude. Live/work/play, access to 2 airports and all of South Florida? Main Street Miami Lakes. Tech startup, millennial employees, rapid growth, close to Mass Transit? WeWork at Miami’s Security Building. Friendly coworking atmosphere, lots of natural light, half-hour from Downtown Miami or West Palm via Lime scooter and Brightline Train? Pipeline Lauderdale.
But we go one better at Truss. While Barry has a great partner in his brother Ira, I have an even better partner in Vera. Vera is Truss’ artificial intelligence bot. Vera asks tenants where they want to be, how many people will use the office, how long a lease they are willing to sign, what type of layout they prefer and whether price or size is more important.
Vera then searches our inventory of over 12 million square feet of available office space and over 100 coworking facilities in South Florida, rating each space on a 1 to 100 scale. In each of our 9 (and expanding) US markets, Truss employs a seasoned professional broker who uses his or her experience and Vera’s technology to find our clients the best space at the best value. Vera makes sure I don’t miss any buildings and supplements my own market knowledge and experience with hard data. One of Vera’s most important features other than her great smile is that she provides our clients with full price transparency. Net lease, gross lease, modified, who cares. Vera is able to boil it all down to a monthly or annual cost to compare all alternatives on an apples-to-apples basis. Technology will never fully replace a broker, but a seasoned broker armed with the latest technology is a very dangerous creature indeed. Vera herself actually found a perfect space for a client for my client tour this morning.
Login to www.truss.co and Vera and your Truss broker will find the perfect flavor of office space to suit your appetite.
Okay – I am going to start my article with the surprise twist. A couple of days after I started writing this post, I was asked to find a location for a tech startup looking to open a Miami satellite office in early March. Spaces at Two Miami Central was perfect. The ultra-modern center at Miami’s new transportation hub was set to open in late February. Employees could live along the Metrorail and Metromover lines and take mass transit to work. They could also hop on the Brightline Train and service accounts in Fort Lauderdale and West Palm Beach. I sent info to my client who was very excited. I called my Regus Rep only to find out that all 500 seats have been leased to a major local company. So it appears that Corporate America will be very receptive to the Spaces concept. Thankfully, I was still able to identify some great alternatives for my client on the Truss platform.
As we head into 2019 Truss is beginning to generate a lot of traction with businesses seeking South Florida office space. As I sit in my coworking space at Pipeline in Downtown Fort Lauderdale, I am wrapping up a lease on Miami’s Brickell Avenue, invoicing a deal in Kendall south of Miami, getting pricing on a Brickell coworking space, setting up one tour in Miami’s red-hot Airport/Doral submarket and another in West Palm Beach.
WeWork at Brickell City Centre
One thing is certain – as I pointed out in Ken’s Konfessions episode 1 and 2, coworking is exploding. I now have well over 100 South Florida coworking centers listed for lease on the Truss Platform. Miami leads the nation with 3 percent of its total office inventory dedicated to coworking, occupancy is remarkably strong and lease rates continue to climb. WeWork is constantly in the news based on their explosive growth and their $20 billion valuation. Their facility in Miami’s $1 Billion Brickell City Centre is spectacular and remains the standard by which all other local centers will be judged.
Pipeline’s trendy nautical decor, open spaces and ample glass create a community feel. BONUS! Click for a super-cool 3D Virtual Tour From Truss
I lease a great space at Pipeline in Downtown Fort Lauderdale with lots of interior glass, nautical decor and friendly open public spaces. (as shown in our virtual tour) Quest, Buro, Anex, Office Edge and most recently Venture-X also compete in the coworking market with multiple locations in South Florida. But WeWork may finally be seeing formidable competition and it comes from a familiar but unexpected source.
Proof of their international coverage, I was able to snap a photo of this Regus location in Hanoi.
IWG Plc, with it’s flagship brand Regus is the world leader in executive coworking space with over 3,000 locations. Regus centers are generally in top Class-A buildings in major cities. They are elegant, but they exemplify the previous generation of executive suites with long corridors lit by fluorescent tubes. Coffee is billed as an add-on. It is not surprising that Regus has been losing market share to WeWork, which caters to millennials with hip open spaces, ample glass and free artisan coffees, cold brew and even cold brews.
Brightline at Two Miami Central
But IWG is fighting back with its new Spaces division. Spaces is a new concept aimed at capturing WeWork’s market. The first two South Florida Spaces locations are opening this month at Las Olas Square in Fort Lauderdale and Two Miami Central at Downtown Miami’s Brightline Station. I was honored to get a preview of Spaces’ Fort Lauderdale location and wanted to pass along my first impressions and pictures of the new concept. My thanks to Arash Jamali, Area Manager for Regus.
Spaces will occupy the second and third floor of Las Olas Square’s Annex building at 515 Las Olas Boulevard. Las Olas is Fort Lauderdale’s premier address for shopping, dining and business. The area is known for its great restaurants, galleries, boutiques and premier Class-A office towers. Downtown Fort Lauderdale is a hotbed of activity with over $2 billion of new development underway including upscale residential condos and rentals, hotels, retail and offices.
An example of the past generation Executive Suite. The long corridors of Regus at 801 Brickell will be updated with natural light when it is converted into a Spaces location
Spaces features two floors of offices with floor to ceiling impact glass. While it lacks the ocean views of some of the Las Olas towers, it offers great views of the palm-tree lined Las Olas Corridor; and the ample interior glass lets in plenty of Florida sunshine. It is a huge step forward from traditional Regus offerings. There are open coworking areas and large lounges to encourage collaboration among members. While I didn’t get the chance to preview Spaces at Miami Central, it will have the additional advantage of being a free Metromover ride from Bayside, Brickell City Centre and the American Airlines Arena. It will also have immediate access to Brightline (soon to be Virgin Trains) which transports you in style to Fort Lauderdale in half an hour and West Palm Beach in an hour. Spaces will be worthy competition for WeWork’s Brickell City Center location and it doesn’t hurt that the WeWork location has little if any space available. (Update – I guess someone else figured this out and leased the entire facility)
Love water views? Check out Anex Office, 27 stories above Biscayne Bay at Miami’s Brickell Bay Office Tower
As a coworking consumer myself, I will be facing the decision of renewing my lease at Pipeline vs. moving over to Spaces. My decision will be based on views, price, quality, networking opportunities and overall vibe. For views, I never get tired of looking at the ocean. I can see the expanding Fort Lauderdale Skyline and an occasional spec of blue from my 10th floor Pipeline office, but it doesn’t compare to the neighboring Carr Workspaces and Office Edge or Miami’s Anex Offices. I love the natural light from the floor to ceiling interior and exterior glass at Spaces. The second and third floor views are pleasant and you are close to the action along the Las Olas corridor. A key for me and for Truss is the ability to network and meet people who will eventually need office space and become customers. Pipeline’s ample glass, open spaces and tenant events help create community. WeWork’s first Fort Lauderdale location reportedly at The Main Las Olas will not open until the project is completed in 2020.
Regarding price, Spaces is going to be expensive. Interior offices will start at around $1,100 – $1,200 per month and exterior will start around $1,700. That is close to $300 per square foot. Sure, you get internet, a phone and the use of the lounges, kitchen and meeting rooms. But that is more than five times the $55 per square foot that you would pay for Class-A traditional office space on Las Olas. A $1,700 rent bill isn’t outrageous for a business owner looking for a windowed office in a premier building. And every office has ample natural light with the floor to ceiling glass on the interior.
Microsoft – an enterprise tenant within WeWork’s Brickell City Centre location.
Quest has successfully competed in the local coworking market for 30 years by focusing on service and continuing to modernize their facilities.
But here is where I have concerns. Spaces, like WeWork, is targeting major corporations, or enterprise users, who are increasingly turning to coworking to accommodate overflow, satellite offices and special projects. Nearly a quarter of WeWork customers are Enterprise users. Spaces will be asking around $30,000 per month for a 1,300 sf Enterprise space – roughly $276 per square foot. The question is whether this flexibility is worth the price. I can lease 1,300 square feet with ocean views for five years on Las Olas for less than the annual cost of the 1,300 sf enterprise space. Can Spaces do it? I wish them luck and hope that I can be the broker that finds the tenant to take that deal.
Office Edge at 701 Brickell focuses on providing services to their many legal clients. Translucent panels provide privacy while still filtering natural light creating a more modern feel.
The ultimate decision on which coworking space to lease comes down to numbers as well as overall quality and vibe. Some people like the quiet, elegance and feel of the traditional executive center. It may be your father’s executive suite, but your father still needs an office and that market segment remains strong. Carr Workspaces is renovating and Regus will be converting a lot of their facilities worldwide to the modern Spaces concept. I can’t yet speak for the vibe at Spaces. Pipeline is cool while at the same time feeling warm. Buro, who has a number of centers in Miami also exudes cool and WeWork wrote the book. There is a fine line between cool and cold – the question is whether Spaces will be cool – I think it will. My decision on a space for 2019 will be based on whether the networking potential of being in a larger center like Spaces will be worth the extra expense.
For Spaces, I am fairly certain that the small offices will be a big hit. Whether the enterprise tenants will be willing to pay those rents remains to be seen. (Update – I assume the tenant for Two Miami Central will paying more than the $55 market rent but less than the $300 enterprise rental rate) And if they are, how long will it be before property owners accelerate the process of bringing their coworking operations in-house? And will Ken renew at Pipeline or go to Spaces, or go for the ocean views at Carr? For the answers to these questions and more, stay tuned to Ken’s Trends and Ken’s Konfessions of a Coworking Convert.
I am writing my special holiday edition of KensTrends from Luang Prabang, Laos. While my usual blog involves office leasing, today I cover the slightly more obscure topic of buffalo leasing. I am in Laos visiting my daughter Amanda who is on a fellowship through Princeton in Asia as a festival coordinator for The Luang Prabang Film Festival.
Blogging from the balcony of our room in Luang Prabang
While Luang Prabang was not on my bucket list of preferred vacation destinations, it probably should have been. It has become increasingly popular since being named a UNESCO World Heritage Site in 1995. It’s only been 2 days since we arrived and it’s already been an amazing experience. I wanted to pass along some thoughts on technology and sustainability that may make you feel a little better about the future.
My daughter’s roommate in Laos works at the Laos Buffalo Dairy. Since Amazon delivers to Boca Raton but not to Laos, we were asked to bring out supplies to help them in their cheesemaking. The dairy has quickly become one of the top attractions in Luang Prabang. It is located 30 minutes from the city on the road to the Kuang Si Waterfall, one of the most beautiful in the world. On the way back from visiting the waterfall, we were treated to a VIP tour of the dairy with Rachel O’Shea, one of its founders. The dairy has only been open for about 3 years, but they are doing some great work.
Kuang Si Waterfall
The concept behind the dairy is to lease buffalo from their local owners. The dairy feeds, vaccinates, cares for and breeds the buffalo. For generations, Lao farmers have been raising buffalo for their meat, but they never considered milking them. Enter in a group of American and Australian cheese lovers who were frustrated with importing expensive French cheeses into Laos and learned how to milk buffalo on Youtube. One buffalo can generate its owner around $1500 in rental income, about equal to the average annual income in Laos. I didn’t ask whether it was a net or gross lease and have no idea about buffalo cap rate trends.
Ken, Amanda and Lola the most photogenic water buffalo in Laos.
The family with Rachel, one of the founders of the Dairy
Lisa with our new friends at Mandalao.
But as my daughter explains it, owning a buffalo in Laos is like winning the lottery. And sustainability creates a win-win scenario. Give a man a fish he eats for a day, teach a man (or woman) to fish, he eats for a lifetime. But this is even better. The dairy covers the cost of medicine and vaccinations which are often too costly for the locals. This reduces the mortality rate. And the dairy has been able to reduce inbreeding and has introduced crossbreeding to strengthen the herd. The buffalo population is now growing, milk yields are up, and the dairy is providing outreach to the villages. Many local children are malnourished on a diet consisting primarily of rice which lacks protein. By teaching the locals to boil the rice in buffalo milk, the Lao children get a chance at a healthier, more productive life. And the founders get to satisfy their cravings for buffalo mozzarella, ricotta and feta which we were also able to sample. The ice cream was also outstanding and I hear the cheesecake is too. We saw another example of sustainability at the Mandalao Elephant Sanctuary. Laos, known as the land of a million elephants is now down to only around 1,000 and the population was decreasing by 5 percent annually due to poaching and habitat reduction. With the help of the World Wildlife Fund and groups like Mandalao, the population is beginning to increase. Instead of getting to ride the elephants which is harmful, visitors to Mandalao get to experience these incredible creatures in their natural habitat. Elephants like to eat, to walk and to play and we got to join the elephants in those activities. It is important to avoid the dangerous back legs of the elephant and you certainly need to watch were you step. (A sustainable skill my wife Lisa and I learned the hard way in Boca Raton’s Canine Cove dog park)
We had to photoshop in our one missing family member who had to stay behind in Seattle. Michael is the one in the blue shirt, not the one with the big ears. Happy holidays from our family.
So maybe the moral of the story is that sustainability is not an either-or proposition. Rachel can have her cheese and eat it too. She can lease buffalo and sell the cheese to Luang Prabang’s new 5-star hotels while helping children and improving the standard of living for the Lao villagers. Rachel is also raising pigs using a litter made from rice husks, a waste product which is usually burned. The “piggie litter” is then used to fertilize the grass that is fed to the buffalo. Another initiative at the dairy is teaching the locals to breed rabbits as an alternative protein source. The advantage of rabbits is that they breed…like rabbits. Technology is also helping reverse the decline of the Lao and Thai elephant population. Back in Boca, I recently did an office space tour in my client’s Tesla. It is sportier, faster and more luxurious than just about anything on the road. It runs without gas, and the latest models are getting more and more affordable. Yes, we have problems and we do need to acknowledge them. But it is our modern technology that provides the hope for a solution. There are some major hurdles to overcome, but for now, my glass of buffalo milk is half full. Happy Holidays from KensTrends and the Silberling family. And as our clocks are 12 hours ahead of yours on the east coast, let me be the first to wish you a Merry Christmas and a Happy New Year. You can click on the links on the blog to find out more about visiting, contributing or investing in the Laos Buffalo Dairy and Mandalao Elephant Sanctuary.
Can’t get enough of Kuang Si – amazing the Floridians were the only ones crazy enough to jump into the cold water.
And don’t forget to visit Truss.co, we can’t lease you a buffalo…yet, but we are the smartest fastest way to find office, coworking, industrial or retail space.
If you search the commercial real estate blogosphere, you are bound to come across hundreds of articles defining what is a net lease, a gross lease, full service, modified gross lease etc. Mine is probably going to be the only article that says “Why Care?” I don’t take that answer lightly as it comes with hundreds of leases negotiated and decades of experience which has included the designing of sophisticated lease analysis templates.
Truss is all about price transparency. As a business owner, you understand that real estate is one of your largest expenses. It doesn’t matter what type of lease you have, you need to know what your space will cost you every month and you need to be able to evaluate it on an apples-to-apples basis across all of your alternatives. That also includes the ability to compare traditional office space to coworking scenarios. Price transparency means boiling down all of the components of a lease into one monthly number just like a car or mortgage payment. The other most popular listing sites on the web are still all over the board when it comes to pricing. Only Truss provides true price transparency.
Whether net, gross, full service or otherwise, no two leases are exactly the same. As your Truss professional, it is my job to understand the cost components of each lease and make sure they are properly reflected on our tech-enabled platform.
I was recently setting up a tour with a client who had an office space budget of $4,000 per month. The tenant was able to search the Truss platform and come up with four excellent spaces to tour. When I told the tenants that our tour would be finished by 4:00, they said great because they wanted to see a space with another broker at 4:30. That took me by surprise because I was sure I had the market covered and we generally represent tenants exclusively across the entire market.
They told me they were going to see a 2,200 square foot space at an asking rate of $18 per square foot. Through my own market knowledge, I instantly knew the building and the space they were scheduled to tour. It looked pretty good on the surface at $3,300 per month. But I also knew that the $18 rate was a “Triple Net” rate that did not include about $10 per square foot in operating expenses (also known as CAM) and an estimated $1.75 per square foot in electric. When I told the client that the space would actually cost them over $5,000 per month, (which is why it did not show up on the Truss search) they quickly cancelled the appointment. Time is money and by touring a space that cannot work financially, the tenants are wasting their own time, my time and the other broker’s time. Price transparency means no surprises, no jargon, no wasted time and makes Truss the smartest, fastest way to find your ideal space.
Yes, your space does affect productivity and your ability to attract top talent, but the first step is to understand cost. That is precisely what you get when you and Vera, our artificial intelligence bot, search for your perfect space on Truss.co. And as your Truss professional, I’ll arrange the tour, negotiate the lease and help you understand cost as well as other factors to make sure you are getting the most value from your real estate decisions.
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