Tenant vs. Landlord Representation – Is There A Conflict?

One of the most controversial issues in tenant representation is conflict of interest. It is ok to represent both landlords and tenants in the same market and even on the same transaction? I have faced that question and I believe you can. Still, many brokers exclusively represent landlords while others work only with tenants. There are brokerages like CRESA, Savills and Mohr Partners that are tenant-only or “occupier-centric” houses and they promote themselves on the premise of no conflicts.

Occupier-Centric Brokerages

I spent 13 years of my career as an in-house leasing and acquisitions agent for a regional investor/developer. I later spent two years with an online commercial marketplace exclusively representing tenants. In my current position, I am doing about 2/3 tenant and 1/3 landlord representation. I am comfortable working either side of a transaction and by understanding the needs of both sides, I believe I am more effective in whichever role I play.

I don’t deny that a conflict exists, but as long as it is disclosed to landlord and the tenant, it will generally not stand in the way of a fair transaction. It is a matter of transparency and it is also a matter of integrity. Whether you are the landlord or the tenant, it is a question of whether you trust your broker. In my 30+ years in the market, I have worked with hundreds of brokers. Most of us who have been in the industry for a long time are here for a reason. We are professionals, we generally value our long-term relationships with both landlords and tenants and we will not take any shortcuts for short term gain that can damage our reputation over the long haul.

One additional key point – whether your broker represents the tenant or landlord side of a transaction, it is industry practice for brokers on both sides to be paid by the landlord. So even when you hire a tenant-only broker, there is an inherent conflict of interest. Even though they represent the tenant, their check is coming from the landlord.

Win-Win negotiation – create a larger pie

I am not recommending against hiring a tenant-only broker. There are many excellent brokers exclusively representing occupiers and the same is true on the landlord side. In my case, I have worked both sides and I understand the needs of both landlords and tenants. I work to represent the interest of my client while developing win-win solutions that benefit both sides. It is often not a matter of splitting up the pie, it’s a matter of creating a larger pie.

So when selecting a tenant representation broker, my advice is to be less concerned with whether my broker is “tenant only” and more on the broker’s overall reputation and experience. It’s not necessarily a matter of who your broker represents, it’s a matter of integrity, market knowledge, and the ability to identify and resolve problems. I understand there are strong opinions on both sides of this issue and I welcome your comments.

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Tenant Representation – The Best Deal in Commercial Real Estate?

As a tenant representative, my job is to help my clients to find the best deal on the ideal location for their business. One of my key points in selling tenant representation is that it costs the tenant absolutely nothing. Not bad when you compare your tenant rep broker with your attorney, your accountant, your financial advisor and your doctor.  But is tenant representation really free? The short answer is yes. If you are comfortable with that answer you can stop here, but if you’d like an explanation, let’s continue.

Sure you can find space on your own. Thanks to services like Loopnet and more recently CREXI and their residential counterparts Zillow and Trulia, there is more real estate information online than ever before. But in a recent search for a tenant requirement, I came up with over 100 possibilities. Do you have the time, the patience and the expertise to reduce this to a manageable number, to be sure you haven’t missed something, to understand the differences in pricing structure, and to make the calls to verify availability? And is the agent even going to return your calls or emails? Then, do you fully understand the intricacies and potential hidden costs in leases than go on for over 30 pages and seem to be getting longer every year?

Personally, I am a notorious do-it yourselfer. I am constantly working on projects around the house and take a lot of pride in my accomplishments. But years ago I realized I was better  handing my 401K to an advisor who lives, eats and breathes the stock market, having my taxes done by a professional and I certainly wouldn’t have attempted my own knee surgery.

Tenant representation involves gaining a thorough knowledge of the tenant needs including budget, layout and image in addition to location, location and location. Your tenant rep has an intimate knowledge of the market, the properties and the players. Your tenant rep will create competition between landlords and skillfully negotiate the best possible deal on your behalf. I provide a professional service that saves my clients time, money and aggravation. Tenant reps are highly paid for providing a valuable service.

So what is the true cost of my services? The market fee right now for a tenant rep is 3 to 4 percent of the lease value. Most of the major landlords in the market are paying 4 percent.  But that fee is paid by the landlord not by the tenant. So there is no direct out of pocket cost for the tenant.

But my fee has to be added indirectly into your lease payment, right? Not really. The market fee for a landlord broker is 6 percent. If the tenant is represented, that 6 percent is split between the landlord’s broker and the tenant’s broker. So the landlord pays the same 6 percent whether the tenant is represented or not.  So if you don’t have representation, you are essentially cheating yourself and paying the entire fee to the landlord’s rep. By not hiring a tenant rep, you are basically throwing 3 percent of your rent out the window.

Yes, the landlord will often add one more point for the tenant rep broker so they will pay 7 rather than 6 percent. You may also see a landlord rep taking a little less on a direct deal without a tenant rep. So in some cases, my services may cost the landlord one extra point. But landlords have already budgeted for commissions for tenant brokers and it generally has no effect on your rate.

Landlords often tell me they love paying commissions because it means they are getting good tenants who will provide steady income over the long term. And most prefer negotiating with brokers who understand the process rather than tenants who may not.

Can I help you to negotiate a deal that is one percent better than you can do yourself? And can I protect you from mistakes that can cost many more percent?  The short answer on this is absolutely yes.

Call, text or email me and I would be happy to represent you to negotiate the best deal on the ideal space for your company. I will save you time, money and aggravation, and best of all, (and I hope you now have a better understanding) it costs you nothing!

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Tenant Representation and Whatever Happened to Price Transparency?

This is the latest in my continuing series on tenant representation.  No time to read? Click here  or on the video above. This month’s article is about price transparency – or the lack thereof. What is price transparency? Let’s take a look at Dollar Tree. At Dollar Tree, everything’s a dollar. No questions,  no negotiation, no drama – and that is generally good for the consumer. What isn’t price transparency? Think about the auto industry. Who wouldn’t want a Lexus for $199 a month, but if you read the fine print, there is an additional $5,000 in up front fees.

While other issues are dominating the headlines, price transparency has been very much in the news. In October 2020, the U.S. Department of Health and Human Services enacted new rules on price transparency in the healthcare industry. Insurers will  be required to post prices for standard medical procedures starting in 2022. By bringing pricing into the open, regulators hope to enhance competition and reduce costs to the consumer.

 

That’s great for healthcare, but price transparency is sorely lacking in commercial real estate. In fact, leasing an office space is probably worse than leasing a car and the fine print takes the form of a 30 to 40 page lease. Business owners today face an increasingly complex leasing marketplace.

There are net leases, gross leases, full service or modified gross. These leases can vary widely is in the way tenants are billed for operating expenses, and there are with many potential hidden costs. Who gets the electric bill,  who pays when the air conditioner breaks? In some leases, tenants are responsible for insurance deductibles after a natural disaster. And what is the cost to build out the space, whs’s paying and how long will it take?  In Florida, we also have sales tax on rent. To make it even more confusing, as I covered in an earlier blog, a square foot in one building can be larger than a square foot in another.

Property owners make it difficult to compare rates on an apples-to-apples basis and that is often by design. With my former company, we developed databases that allowed tenants to search for spaces by price. Our plan was to disrupt the office leasing market using artificial intelligence and price transparency. But our company was acquired and price transparency, at least for now, dissolved with it. Even on CoStar and LoopNet, the industry’s primary data source, you still can’t effectively search by price.

While price transparency helps simplify the process, no two spaces are the same and no two leases are the same. There are qualitative issues that can be more important than price. Does the space allow your employees to be more productive, does it help you to attract top talent and does it encourage collaboration with other businesses?

So how can the average tenant get information on pricing and other factors in order to make the best decision regarding their office space? I hope I’ve made a strong case for why you need someone who can help navigate you through the process. That is the job of a tenant representation broker.

You may sign a lease every three to five years, but I’ve negotiated up to sixty leases in a year. As a tenant representative, I know the buildings, I know the numbers and I know the pitfalls to avoid. I’ll answer all your questions plus a few you didn’t even know you needed to ask. I’ll find you the best deal on the right space and my fee is paid by the landlord so you get professional representation at no cost to you.

And everything’s a dollar

I can walk into Dollar Tree, buy a few things and feel confident I’ve gotten a good deal. But  I won’t buy or lease a car without my auto broker. The less price transparency, the more you need professional representation.  Maybe someday there will be a major disruption in the way we lease commercial space. But considering the qualitative aspects as well as the potential for hidden costs, a tenant representation specialist can save you time and money and help you position your company for success. And best of all, it costs you nothing.

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Back to The Office

It’s been a year since the onset of the COVID lockdown in the U.S. and for millions of Americans, work from home has become the new norm. We still have a long way to go and some major logistical roadblocks to overcome. But there is a glimmer of light at the end of the tunnel and it won’t be long before we are all “Back to the Office.” I have learned to appreciate working from home occasionally, but there is no substitute for the interaction and collaboration that can only be attained through physical presence and the office experience. Special Preview – Tenant Representation and Whatever Happened to Price Transparency?

With that in mind, here are some great office space for lease in Fort Lauderdale and North Broward County:

Prisma at Cypress Creek is a three-story boutique office renovated in August 2020. We have space from 1,831 to 5,319 square feet. Below is a virtual tour of Suite 103/105 at 5,319 square feet. Flyer and Plans

6101 Professional Plaza is a renovated two-story office building for medical or professional use with immediate occupancy from 1,200 to 4,900 square feet. It is close to 3 hospitals and conveniently located between the Cypress Creek and Coral Springs markets. Flyer and Plans

Cypress Creek Medical Pavilion is Uptown Fort Lauderdale’s newest office building with surgical center a diagnostic facility and a cafe onsite. I have a great 2,680 square foot office sublease with 12 offices and flexible terms as short as 18 months. Flyer and Plans

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A Shot In the Arm – Thought I’d Share One of My Better Email Blasts

I generally tend to blog on items related to office space leasing and commercial real estate. If all I did was promote my properties, I probably wouldn’t get a lot of attention. But sometimes I come up with promotional pieces that I think are worthy of putting out on the blog. This is one. 


Every Business Can Use A Shot in The Arm


Every business can use a good shot in the arm. At Prisma, we have great office space from 1,831 to 5,319 square feet. We’ve recently renovated our common areas and we provide one of the best values in town to inject new life into South Florida businesses.


Socially Distant Virtual Tours at:
www.PrismaCypress.com
1000 NW 65th Street, Fort Lauderdale, FL 33309

Virtual Tour Of Suite 103-105 at Prisma

Click Above for Virtual Tour Of Suite 103-105 at Prisma 2,385 to 5,319 SF

    • Contemporary Boutique Building
    • New Responsive Ownership
    • Floor to Ceiling Glass
    • Individually Metered Electric
    • I-95 Cypress/Powerline Location
    • Virtual Tours for all Availabilities
    • 1,831/2,384/2,835/3,661/5,319 SF
    • $16 NNN + $9 Operating + Elec.
    • Plans, 360 Tours & Interactive map Website

Download Flyer & Plans

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The South Florida Office Market Post-COVID – a Year-End Snapshot

I began my career as a commercial real estate market analyst and built a paid subscriber base of top investors and lenders. My reports were also featured in the local and national press. Today, I spend more time doing deals than reporting on them, but I try to share my insights via KensTrends as well as other sites across the web. What can I say that hasn’t already been said? As a market analyst and a stakeholder, I wanted to gauge the effects of the pandemic on the South Florida office market and search for a silver lining on what has been quite a cloudy 2020. So here is my holiday gift to you: “The South Florida Office Market post COVID – a  Year-End Snapshot.”

One of the great things about having my own platform is that I can focus on the market sectors that are of interest to me. I can also publish my reports on my own time frame, so I can beat the national brokers in releasing year-end numbers. 

Crunching the Numbers

I took a look at four submarkets to see how they have fared since the initial lockdown this March. Miami’s Brickell Avenue and Downtown Fort Lauderdale are both premium CBD (Central Business District – not that CBD) markets commanding the highest rental rates in South Florida. Are law firms and financial institutions looking for more economical space while fleeing to the suburbs? Boca Raton is more of a suburban market catering to upscale residents. But is that wealth resistant to the impact of a pandemic? Finally, Cypress Creek, just north of Downtown Fort Lauderdale, provides some of the best value for office space in the region and is very accessible for suburban residents. Will this attract new businesses looking to reduce costs while escaping city congestion?     

The advantage to doing a market analysis in 2020 is that the data is readily available thanks to CoStar. I have set up my own sets of buildings to analyze, and what used to take weeks of phone calls, faxes,  (what’s that?) data entry, and number crunching, can now be accomplished with a couple of keystrokes.  While I noticed a few issues and errors with the data,  as long as it is collected in a consistent manner, we can still spot market trends.

With the onset of the pandemic, the rise of “work from home” and the flight from congested cities, I expected to see increasing vacancy rates and declining rental rates. This would also be more pronounced in the CBD markets than in the suburbs. With that in mind, let’s take a look at the numbers: 

From the end of (Q4) 2019 though the end of the first quarter of 2020, the market continued to strengthen. The end of Q1 2020 is when the lockdowns started, so Q1 2020 represents the market’s crest. So we will focus on the market from Q1 through Q4 2020. My Q4 figures are accurate as of December 20, 2020, and shouldn’t change a whole lot over the next 2 weeks.   

How Has South Florida Fared?

Main on Las Olas Fort Lauderdale Office Space

Rendering- The Main on Las Olas

Kaplan University - Cypress Creek Office Space

Kaplan University – Cypress Creek

Downtown Fort Lauderdale saw the largest increase in vacancies from 15.2 to 18.0 percent. But with the completion of the Main on Las Olas – the first major building added to the market since 2002 – that rate is actually 23.0 percent. Meanwhile, Cypress Creek, with the lowest rental rates in the group, saw vacancies increase only marginally from 14.6 to 15.0 percent.  The Cypress Creek Class B market (where I am marketing Prisma at Cypress Creek) is the only segment in this survey where vacancies decreased. As expected, the highly affluent and largely suburban Boca Raton market saw less change than most of the other submarkets.  You would also expect an increase in sublease space, but that has not materialized to date. One notable exception is Kaplan University’s 97,000 square foot space in Cypress Creek, which has yet to be recognized by CoStar.

But the most surprising aspect of the current market is that rental rates continue to increase across the board. The Class A market on Brickell is the only segment that saw a decrease, but rates remain over $50 per square foot. A couple of observations here that I believe are important. First, we are only nine months into what has been called the “coronaconomy.” Office leases generally run on a three to five year cycle. A lot of office tenants have not yet had the opportunity to address their changing office needs, so we may not see the full effect of the pandemic on the office market f

Brickell Office Space

Brickell via Ken’s Iphone

or a couple of years. I was also told by another market analyst that it took eighteen months before rental rates began to decline after the 2008 stock market crash, so it could get worse before it gets better. While landlords have not begun to reduce rental rates, we are seeing an increase in promotions and concessions. 

Looking Toward a Better Year

So where are we and where are we going? I will preface this by saying that we might all be wrong. Who would have predicted a worldwide crisis 12 months ago? But as things begin to crystalize throughout 2021, we will have a much clearer picture. 

I remain highly optimistic about South Florida. I am personally seeing a lot of new activity coming out of the Northeast. Just as the pandemic has accelerated the acceptance of work from home,” it is also accelerating acceptance of “work from anywhere.” Technology and financial firms are eyeing Florida as an escape from both frigid winters and state income tax. The recent relocations of Oracle and Tesla from California to Texas are prime examples, while Goldman Sachs and JP Morgan are reportedly considering Florida. 

We still don’t know how behavioral changes will affect the office market. Will “work from home” reduce the need for space, or will social distancing increase the required square footage per employee? Office leasing has slowed, but

My Previous Nationally Syndicated Article on COVID and The Office Market

Click above for link to my earlier national article on COVID and the office market

it’s only a matter of time before things begin to pick up as we move out of our living rooms, put on our pants, and head back into the office. Our needs for office space are changing, but we still crave the collaboration, social interaction, and productivity that you can’t get on Zoom.

I expect a bit of a downturn as leases turn over in the next 18 to 24 months. For landlords in South Florida, there is no need to panic. It makes sense to aggressively pursue quality tenants in order to make the best of the next 18 to 24 months. But any downturn should be relatively short-lived. For tenants, it is a time to look for value and try to lock it in for the long term. We are in the midst of a fundamental change in the way we use office space and what we hope is a temporary economic downturn caused by unforeseen external factors. But there is a much stronger trend drawing business toward South Florida that should more than offset the decline. I have already seen cases of buyers waiting for prices to come down that now wish they had acted earlier. There may be some opportunities to wait and take advantage of a market downturn, but that window of opportunity is closing quickly as South Florida is well positioned to lead the nation’s economic recovery.  

In the meantime, happy holidays, stay safe, wear your mask (and your pants), and let’s look forward to a better year in 2021.

 

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Not All Square Feet Are Created Equal

I thought it would be a good idea to add a reference section with some leasing fundamentals to my website. And with KensTrends, I to try to do it in an entertaining way  – all while showing off my new backyard “studio.” So here is the first in a new series on office leasing concepts: “Not All Square Feet are Created Equal.”

You’re probably wondering what the picture below has to do with commercial real estate. Well, it has everything to do with commercial real estate. The tile is exactly one square foot. I’m in the business of leasing and selling square feet. But when you lease a square foot of office space, the red piece is what you generally get – about 15 to 20 percent less. 

Office Space Leasing Usable and Rentable

What does this have to do with  real  estate?  Click for the video.

When I first meet with a prospective tenant, will we discuss total square footage required and ideal layout. For instance, I recently worked with a health insurance agency looking for 3,000 square feet with 3 offices, a break room, a conference room and an open space  for 8-10 cubicles. That sounds reasonable, and I wound up leasing them 2,928 square feet. But in reality, their space was only 2,499 “usable” square feet. Was the Landlord cheating the tenant? No, this was a multi-tenant building with a lobby, common area restrooms, elevators and corridors. It is perfectly acceptable for the Landlord to apply an “add-on factor” to account for the tenant’s share of those common areas which comprise 17.2 percent of the building.

Most traditional office buildings apply add-on factors of 15 to 20 percent. There are strict guidelines established by BOMA, the building owners and managers association, and most owners will follow these guidelines. But tenants should know that when they lease 1,000 “rentable” square feet they are only getting from 830 to 870 “usable” square feet.

But in some cases, such as single-story offices or buildings with exterior corridors, there is no add-on factor. This type of building usually has its restrooms within the suite and they can account for 5 to 10 percent of the rentable square footage.

I know that price per square foot is how most people compare different spaces and there is nothing wrong with that. But there are add-on factors to consider and some layouts are more efficient than others with fewer corridors and dead ends.

As a tenant representative, my job is to find you the ideal space that best meets your needs regardless of the measurement.  I work with my clients to find the workspace that allows them operate to most efficiently while  also helping in recruiting top talent.

While Landlords generally quote price per “rentable” square foot, it is more useful to consider price per “usable” square foot, price per employee or simply total monthly cost of occupancy just like you’d compare a car payment or a mortgage payment.

Square footage and price per square foot are reliable guides but there is more to consider because “not all square feet are created equal.”

It’s best to have a tenant rep on your side who can navigate this and other important issues and best of all, it costs you nothing. Call text or email me for more information and stay tuned to kenstrensds.com.

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My Summer Staycation, A Flurry of Deals and Market Outlook

In the early days of the lockdown, I got pretty good at creating videos and podcasts while gearing up to do my own virtual tours. Then, my activity level began to take off. So how did I spend the lockdown and my summer staycation?

In April, I took on an assignment to lease Prisma at Cypress Creek, a boutique office in Fort Lauderdale. The owners completed a major renovation and I personally developed the website and virtual tours for the property. This team effort has resulted in our successfully leasing nearly 10,000 sq. ft. We are now 95 percent leased, but with upcoming rollovers, I can still accommodate tenants up to 5,319 Square Feet.

Also this month: – My top 10 articles in 10 years of blogging.

Prisma at Cypress Creek Office Space Fort Lauderdale

Prisma At Cypress Creek: Tour our upgraded lobby plus Suite 103/5 5,319 SF.


Virtual Tour – Prisma Suite 110 – Leased to QOL Investments

I’ve also been busy with a number of office and industrial tenant representation assignments, which included the sale of an office condo, which has been a favorite blog topic of mine.

The Exchange 3363 W. Commercial Boulevard, Fort Lauderdale, FL  – Represented Sharma & Associates Accounting as occupier and investor in purchase of 6,000 SF Office Condo.
 
Overall, the market has seen a temporary downturn tied to the pandemic, but office and industrial vacancy rates are up only up one percentage point in Broward County since the onset of the lockdown at the end of Q1 2020. Demand remains strong, particularly among owner/users as “work from home” seems to be accelerating the exodus from the northeast to sunny South Florida. I therefore remain highly optimistic about our market as we move into 2021.
Plantation Medicial Plaza Office Space

Plantation Medical Plaza – 2 for 1 – Relocated and downsized existing tenant to accommodate new lease for medical practice.

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My Top Ten Articles In Ten Years of Blogging

Yes, here we go – just what the world needs in these troubled times – another top ten list.

Also this month – My Summer Staycation, a Flurry of Deals and Market Outlook.

It was just over ten years ago that I started blogging as a way to improve the search engine visibility for my former firm. My content eventually found a permanent home site at kenstrends.com. I’ve always aimed for quality and originality as opposed to quantity. I’m proud that my work has appeared on numerous platforms including TheBrokerList, Propmodo, Commercial Café, the South Florida Office Brokers Association, and CRE Sources. While I’ve taken a couple of months off, I generally post articles on a monthly basis and I realize that I do need to post and repost my work to boost my following. 

Ken blogging from Luang Prabang, Laos – December 2018

As much as I enjoy writing, I have realized that in our digital society, people do not sit still for long enough to read 1,000 words or even 280 characters. I have pivoted to podcasts and video and will continue to grow in those areas.   

My topics generally relate to Commercial Real Estate, CRE Tech and South Florida. I try to be informative while occasionally hoping to get a smile if not a full LOL. So after the vote of a prestigious committee consisting of … myself, here are my top ten articles (plus one) in my ten years of blogging.

Honorable Mention –  A lot of my early blogging promoted a champion poodle owned by my former employer and his significant other.  I am a dog lover myself and I think I did a great job interviewing Josh Dean, Author of “Show Dog The Charmed Life and Trying Times of a Near-Perfect Purebred.” I also produced the video on Skype long before there was a Zoom. But views of this video are in the 300s while I drew over 2 million views for a baseball video (see below). It is no wonder I am no longer with that company.  

#10 Be Do #1 on Google – This first entry on the list was done just for laughs – the purpose of my blogging is to be number one on Google. This is an article I originally wrote in 2012 about a guy wanted to Do #1 on Google. KensTrends does not condone public urination

#9 Tryin’ to Reason with Hurricane Season – I stole the title from Jimmy Buffet. A humorous look at the serious issue of Hurricanes and the relentless efforts of the media to keep you glued to the screen.

#8 My Favorite Super Bowl Ad. Did you see LoopNet’s Superbowl Ad in 2012? I am one of the few who did, because the NFL forced them to pull it down. This is my commentary on cat videos and the power of Social Media to draw more viewers than the “Big Game.”

#7 Prose and Condos – I closed my most recent office condo sale at the height of the COVID crisis in May 2020. Commercial condos are not for everybody, but for some companies, they are a brilliant real estate strategy. This is a series of articles on with everything you need to know about commercial condos.

#6 Miami with a Twist of Lime – With iPhone in shirt pocket, Ken shoots a video of a Scooter ride from his Downtown Fort Lauderdale office to Brightline and eventually to Downtown Miami. This article covers micro-mobility, its link to mass transit in South Florida  and the impact on the CRE market.

#5 Ken’s Confessions of a Coworking Convert Part 2 – This one actually prompted a coworker to respond “You are my favorite human”.  This piece compared Microsoft’s traditional offices vs. coworking. strategy.  

#4  Not sure if it falls into my best articles, but this one is included as it got a wide distribution via an interview I did with Commercial Café, an international Commercial Real Estate Blog and contains my insights into real estate in the COVID era. I also turned it into a podcast.

#3 Another worldwide syndication via Propmodo sharing my insights on why Miami and South Florida is such a great market for Commercial Real Estate.  

 

#2 The significance of this one is that my 2012 YouTube video for this article is now over 2 million views which has to be some kind of record for #CRE. I had leased a warehouse at Boca Industrial Park a baseball training facility. As a baseball player, coach and parent, the owners invited me to watch a bullpen session with then rookie sensation Aroldis Chapman, who at 105 mph, threw the fastest pitch ever recorded in a major league game.  While my close-up video study of his mechanics generated a debate over how fast he was throwing, the views and the royalty checks from Google kept coming.

#1 First,  a personal favorite and second, I am writing a follow-up. Is Commercial Real Estate Data worth more than a guy in a Chicken suit. (Although I hate to link to my former companies’ blog) Ten years later, despite countless threats to disrupt their stranglehold on the market for Commercial Real Estate data, CoStar remains the undisputed  king of Commercial Real Estate Tech.

So there it is – ten years of blogging. So much has changed but so much remains the same.  COVID, Technology, Climate and Politics will shape the next ten years.  I’ll continue to share my perspective,  while continuing to help my clients make the most informed decisions regarding their commercial real estate needs. Please call, text or email if I can help you buy, sell lease or analyze commercial property.

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Coming Full Circle – Words of Hope, 360° Tours and My Return to Cypress Creek

I remain optimistic that some good will come out of our recent struggles. In a recent facebook post celebrating my 30th wedding anniversary, I quoted Marvin Gaye’s 1971 classic What’s Going On. “We’ve got to find a way to bring some lovin’ here today.” Nearly 50 years later, we’ve come full circle and are facing the same issues. But maybe this time is different and finally “love will conquer hate.” 

It’s already June 2020 and most of us have been in some degree of lockdown for nearly three months. Somehow, I find myself working harder than ever.  KensTrends is now on video (intro below) and podcast, I’ve stepped up my production schedule and I continue to close deals which is the point behind the blogging. I’ve also added 360° Tours to my repertoire.
I also joined the leasing team on some Levy Realty assignments and added some new ones of my own. While I’ve spent the past 2 years working primarily with tenants, I am now also representing Landlords. It is also a kind of homecoming for me to be back in the Cypress Creek or “Uptown” market of Fort Lauderdale. I closed my first investment deal in Cypress Creek over 20 years ago and have completed hundreds of sales and  leases since then, including a 6,000 sf office condo sale last week.

I am now leasing the renamed Prisma at Cypress Creek, (click to visit my new website) a three-story boutique office off Cypress Creek and Powerline Roads. We can lease from 1,650 to 3,850 square feet. The renovations in progress will make it one of the coolest boutique buildings in the market. I’m also working on The Spectrum Building west of I-95 off Commercial Boulevard. With it’s high-end modern finishes and 5-story atrium lobby, it is one of best office space values in South Florida. At the Gateway Building 6500 NW 15th Avenue, just north of Cypress Creek I have 10,000 square feet with 57 percent office and 43 percent warehouse for under $12 per sf including expenses. We have a lease out on another 3,300 sf of 50-50 office warehouse “flex” space at Powerline Business Center on Poweline north of Commercial. I had previously handled the acquisition of property in 2000 when we paid $5.3 million and worked on the 2008 sale of the property for $9.7 million.

So my return to Cypress Creek is kind of a homecoming. You can say I’ve come full circle, and to continue the full circle theme,  I thought it would be interesting to discuss my implementation of 360° virtual tours in my marketing program.  I’ve always been known for my use of cutting edge technology in commercial real estate. I was one of the first to use computer databases to track the South Florida market and find space. I also posted one of the first websites for a South Florida commercial real estate firm, and was one of the first in our market to initiate an investment deal over email. More recently, I believe I was the first in our market to lease a space with the aid of an artificial intelligence bot.
Prisma Suite 110 Virtual Tour on Ricoh Tours App – 1,650 – 2,200 or 3,850 sf Available

My former company emphasized the use of 3D virtual tours for tenants, and I have embraced the concept. They say it reduces the search time by 60 percent and makes spaces twice as likely to lease. While I don’t recommend leasing a space by virtual tour alone, it can help eliminate some choices, which I believe drives the 60 percent time savings.  

The problem with my former company’s use of the 3D imaging is that we needed to hire a 3D photographer with a backpack-sized $3,400 Matterport camera with 9 lenses.  That can run  $0.12 or more per square foot.  I recently shot and created 3 tours totaling 10,000 square feet in about 45 minutes and edited the tours in about an hour. It could have cost $1,200 to outsource. Two hours to save $1,200 is pretty efficient.  It is even more economical to delegate, but I kind of enjoy it.

The Gateway Building as captured by the Ricoh TC2 – click and then click “exterior” to see how the software converts it to a 360 view of the flat facade.

After researching  the various platforms and cameras, I purchased a $300 Ricoh SC2 that fits in my shirt pocket and the mini tripod is like carrying an umbrella. It connects to your cellphone whihc acts as a remote control via onboard wifi.  You can view individual 3D images directly in Google Photos, but you generally need a service to provide software and to assemble and host the tours in the cloud. Matterport is the leader in the field and they have a $10 monthly plan to host 5 tours. There is an upgraded $69 plan for 25 tours it goes up from there. I’m currently using the Ricoh Tours app that was bundled with the Theta and is available for $195 annually with unlimited uploads. Matterport has recently opened their platform to non-Matterport cameras and I can shoot Matterport tours on my $300 Ricoh Theta. Matterport’s software and tours are clearly superior to Ricoh, but I’ve been investigating some very competitive alternatives including Kuula, Lapentor and Theasys. My Ricoh rep tells me they will be making improvements as well. My biggest issue right now is that Matterport is the only provider that is fully supported by Loopnet/CoStar, the dominant player in commercial real estate online search. I can provide links to my Ricoh Tours on these sites (Scroll Down on the Gateway Listing), but not linkable images. Matterport, like CoStar is a dominant force in its market, but I see more opportunity for disruption in 3D tours.  More on CoStar in a future KensTrends.

Anyway, I don’t want to give away too many of my secrets and the ROI on my 3D investment remains to be seen. I do see it helping me win more assignments. I’m also doing my part to use virtual touring to promote social distancing and I have a fun new hobby that is helping me in my business.

“Circling” back to my February article, I believe the Cypress Creek Submarket in Fort Lauderdale provides the best value for office space in South Florida. I represent the owners of some great spaces for you to lease. Also keep in mind that I represent tenants and buyers to help  find the best value on the best spaces throughout South Florida.   And if you have concerns about venturing out in today’s environment let’s do a zoom meeting and do some virtual touring.

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Expert Insights: Ken Silberling on CRE in the Time of COVID-19

Ken Silberling - Commercial Real Estate COVID-19

Click  Picture For Article

I’m always looking for new ways for KensTrends to reach a wider audience within the #CRE Commercial Real Estate Community. I was asked by www.commercialcafe.com to comment on the South Florida market, the impact of COVID-19 and my career. Commercial Cafe, an online property search site, is a division of Yardi, one of the world’s top developers of commercial property management and investment software. The article was posted on their blog HERE.

The interview was actually conducted by email by Alexandra Usru and written by Patrick McGregor of Yardi from Romania.  I thought it would be a good idea to convert the interview into a podcast (my podbean page). You  can use the player below or search (or click) KensTrends on Apple Podcasts or Spotify to listen. 

Rather than fly the authors into South Florida, I decided to have my wife Lisa stand in as interviewer from the KensTrends Boca Raton Studios. Whether in written form or in the expanded podcast version, I hope you enjoy Expert Insights: Ken Silberling on Commercial Real Estate in the Time of COVID-19.

As I discuss in the article, more and more commercial real estate deals are initiated by internet search.  Therefore, a key element in my marketing and personal branding strategy  is to continue to grow my footprint on the web. 

This includes a prior article regarding Miami on Propmodo, my appearance on a #CRETECH panel with the Miami Chapter of the Florida CCIMs and featured on The Real Deal and  the syndication of my blog on thebrokerlist.com. I am always looking for new opportunities to share my experience, to demonstrate my market and industry knowledge and experience. 

 

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Special for 4/20: CBD vs. CBD – A New Definition for a Key Term in Commercial Real Estate

I am told the number 420 and the date 4/20 have special significance.  The term CBD has been used in Commercial Real Estate for years. More recently it has taken on a new meaning in cannabis culture. Here is my special 4/20 edition of KensTrends. I also want to take this opportunity to make a special shout out at the bottom of this article.

Miami CBD – As we know it today

CBD is one of the most commonly used terms in commercial real estate,  but it’s definition  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.

Miami CBD – Original Definition

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 Oil UK 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.

A Special Shout Out

I’ve used this lockdown to learn some new tricks including the production of 3D tours, blog videos and podcasts. I normally schedule one blog post per month – this is my 4th in April. I promise to take it a bit easier on your inbox going forward. I’ve also put a few deals together and enjoyed the time with my family.

But barely a moment has gone by in the past month where I wasn’t thinking about Alan Levy who was fighting and is now winning an intense battle against an invisible enemy, Covid-19. I am very thankful that he’s out of the hospital and wanted to thank all those who have reached out to me. 

Alan is one of the most knowledgeable and best liked people in the business. That is why I joined his company and I look forward to continuing to help Alan and Josh Levy expand a great organization.

I continue to publish this blog because it’s something I enjoy. It also helps me to build my personal brand so that you will contact me for your commercial real estate needs. My brand is built on market knowledge combined with the ability to present original content in a fun and entertaining way.

But we are in the midst of an unprecedented crisis and that is serious business. Let’s hope we can all pull together and join Alan in fighting off the effects of this pandemic, both biological and economic.

Posted in Industrial, Office, Video | Comments Off on Special for 4/20: CBD vs. CBD – A New Definition for a Key Term in Commercial Real Estate

Eight Years Later – The Week the World’s Two Most Powerful Men Came to Boca Raton

I’m Ken Silberling. In today’s edition of KensTrends, we are celebrating a very special anniversary. It was eight years ago this week that the worlds 2 most powerful men came to my home town of Boca Raton, Florida. In today’s presentation I’ll be discussing some famous people from the world of entertainment and politics. I generally write about commercial real estate, economic development and social media. Sometimes I deal with serious subjects, other times – like today, I just try to have a little fun. I try to steer clear of politics and try not to go too far right or too far left. Too bad I can’t say the same about my golf game.

The following is an update to an article I wrote on April 13, 2012.

Fagen/Rundgren “He’s Comin’ Down the Escalator”

It was a simpler time – still years before a real estate developer and reality show host would head down an escalator to begin an improbable run to the presidency. Back then, it was unusual for the leader of the free world to tackle issues of global importance from the fairways of a Palm Beach County golf course. So the week of April 13, 2012 was pretty remarkable with the two most powerful men in the world descending upon Boca Raton, which is about 20 miles south of Mar-A-Lago. 

On April 13, 2012, Justin Bieber, with 42 million Facebook likes and 20 million Twitter followers had a speaking engagement at the St. Andrews School in Boca Raton. Three days earlier, the other guy – who had previously occupied the White House, delivered an address at Boca’s Florida Atlantic University.

That guy, Barack Obama, came to Boca with 36 million likes and 14 million Twitter followers. Seven months later, he would be reelected receiving 65 million “likes” in the form of votes. The guy on the escalator got 63 million votes in 2016. His opponent, Hillary Clinton got 66 million in defeat.

But those numbers are “trumped” by Bieber’s 79 million current Facebook likes and 111 million Twitter followers. Incidentally, Obama has now passed Bieber as the most followed person on Twitter at 114 million. The only thing more astounding than these numbers is the fact that Justin Bieber is still relevant eight years later.

The number of Twitter followers may be only slightly less arbitrary than the electoral college as a means of selecting a President. Obama is now ineligible due to term limits and Bieber would be disqualified as he is only 26-years-old and he was born in Canada. The winner, if selected by Twitter, would be Katy Perry, (108 million followers) who meets the requirement of being American-born and who recently turned 35, the minimum age for a president as set by the Constitution. Does that sound far-fetched? What if I told you in 1951  that the star of “Bedtime For Bonzo” or in 2004 that the star of “The Apprentice” would become president? Who’s to say that in this age of Social Media, we couldn’t elect a pop star? She is a judge  – even if its on American Idol. And how do we know we won’t live to see a President Kardashian-West (Kim has 63 million followers but Bernie may not approve of her billionaire step sister). 

Katy and Hillary would be a tough to beat.  Is it too late?

Stepping out of this crazy parallel universe, let’s get back to my 2012 story, which other than a few updates in italics, is taken verbatim from here on.

What was most interesting to me about Bieber’s visit to Boca was the way I found out. It was a clear early sign of how media was changing. We can all remember where we were when we found out about the monumental news stories of our time. Granted, this is a far cry from monumental news for non-millennials; but it was important enough to make the front page of the South Florida Sun Sentinel.

So, how did I find out? Was it a TV news story, was it on my car radio, was I on the South Florida Sun Sentinel web site? No, I was one of the first to know because of a text my 15-year-old daughter (now 23 and an accomplished writer and filmmaker herself) received from a friend who goes to St. Andrews. Between the internet and our mobile devices, we are more connected than ever and that has major implications on how we get our news and even bigger impact on how we sell our products (I had this right in 2012).

To a social media marketer, Justin Bieber is highly powerful and represents an opportunity to reach his mass of followers and their parents as well. Bieber was in town to congratulate three students who raised $51,738 for Pencils of Promise, one of Bieber’s favorite charities. The nonprofit group has built more than 50 schools around the world (up to 524 as of 2020). You have to give the kid a lot of credit. With all of the international fame, he seems to be doing things the right way and has kept himself remarkably clean. (may have missed on this one a bit, but still better than most) And his music isn’t nearly as annoying as some of the other stuff out there. (still agree, but can he compete with Steely Dan or even the KensTrends Theme?)
My tweets on the Obama and Bieber visits were listed alongside major news organizations and political groups. My objective at the time (and today as well) was to promote Boca Raton and get the interest of corporate executives who would consider relocating their companies to our community.

The Boca Raton and South Florida business community needs to embrace these opportunities to get our community in the news with positive stories. That is what will help to draw more quality business and create high-paying jobs. This will help us to fill our office buildings, make your businesses more successful and improve upon what is already a great quality of life here in town. And if you are looking to buy, lease or invest in South Florida Commercial Real Estate, please call, text or email me at Levy Realty Advisors. I’m Ken Silberling and I approve this message.

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VIDEO – Corona and the Cheesecake Conundrum – Please Don’t Try this at Home

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.

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VIDEO – KensTrends is Now on Video!

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.

Back in 2011 and 12 the twitter account I ran for my company made Duke Long’s list of the top 100 Commercial Real Estate People to follow on Twitter. I also believe I have the record for the most viewed commercial real estate video on youtube. I had leased space to a baseball facility and they invited me to take a video of Aroldis Chapman, who a few months earlier set the record for the fastest pitch ever thrown in a major league game. My close-up study of his mechanics is now up over 2 million views.

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.

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Finding Value in South Florida Office Space – “The Submarket that Time Forgot”

Click For KensTrends November 2019 Article

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.

 

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