I had a chance recently to visit the Bisnow Fort Lauderdale State of the Market update and communicate with some of the best minds in real estate.
These are the folks who have been ahead of the curve and focused on Fort Lauderdale long before others have taken notice.
Their foresight and patience are paying off, as you will see.
Edens
First up, I spoke with Nicole Shiman, Vice President – Investments for Edens, a national retail developer, investor and operator investing in downtown Fort Lauderdale.
It’s a $6.5 billion company with 130 shopping centers, mostly grocery anchored.
Nicole is having a great time. The last few years, she said, have demonstrated a move back toward the grocery-anchored, open-air space. Tenants want to be on the street and next to a grocery anchor.
There’s a shift toward lifestyle retailers – places that offer experiences.
“I think the consumer today, truthfully, wants to have an accessible mixed-use experience. They don’t really want to go to a destination and park the car and walk 10 minutes,” she said.
In Edens’ River Market project on Federal Highway, for example, Lululemon and Pottery Barn have left the Galleria Mall to take up space in that Whole Foods anchored center.
That would not have happened 10 years ago, she said.
Native Realty Co.
Next was Jaime Sturgis, CEO of Native Realty Co., who is focused on finding retail in the urban cores of Fort Lauderdale and other Broward County markets.
The Flagler Village neighborhood, he said, is developing quickly and defining itself. Warehouses from the 1950’s era are being re-purposed in a way reminiscent of Wynwood.
Various Fort Lauderdale corridors have their own character, he said, like Sistrunk and the south side of the Tarpon River. But they are works in progress. The future is unfolding before our eyes, and it remains to be seen how those markets will take shape.
Jaime said Oakland Park, just north of Flagler Village, is generally overlooked and represents an untapped market that Sturgis finds especially interesting.
Stiles
Then came Norm Adams, SVP for Stiles, a household name in Broward County and all of South Florida, for that matter.
Downtown Fort Lauderdale, Norm said, is far from exhausted in terms of opportunity.
“We are embarking on some of our most exciting projects ever. Today, we have over $1 billion of projects in the pipeline, and about half a billion of that is right in our downtown core,” he said.
What is the trend that is driving development? Simply put, it’s amenities. The tenants want walkability to work, necessities and play, Norm said. New projects in the vicinity of Stiles’ new 201 East Las Olas Class A office tower all include ground-floor lifestyle enhancements.
Norm said South Florida is getting about one-third of all new move-ins to the state, which accounts for the job growth here, which drives the demand for residential and office space.
Eden Multifamily
Last, but certainly not least, was Jay Jacobson, President/CEO of Eden Multifamily, which focuses on urban and suburban residential development.
Jay has built some 25,000 units in his career, so he know a bit about the subject.
Residents of South Florida make their housing decisions based on traffic patterns, he said, and what follows is the development of sites that incorporate a multitude of land uses.
“I think the days of single-purpose land use designations are over – or should be over. There is no reason to segregate housing from commercial from retail from entertainment districts. No one wants that anymore,” he said.
Now, there was some scuttlebutt at the conference about so-called “microunits” – which feature several living spaces around a common area. Jay thinks that has some value in extremely congested areas that also have lots of very high-paying jobs, it’s not something for South Florida yet.
“In South Florida, to think that you’re building a microunit just to deliver a cheaper product is, I think, a fallacy. I think what you’re doing is building a future hotel,” he said.
My take
As you can see, I’m in good company in my belief that Fort Lauderdale is the market to watch for the next several years. What’s developing are basically vertical neighborhoods. Places where you can work, go to school, find necessities and play – all without spending much, if any, time behind the steering wheel.
But what about the rest of South Florida? And what about the commercial real estate markets, in general?
Well, many new apartment projects are delivering. You’ll find new locations, new finishes, new features. The common thread? Everything is in an urban location.
You won’t see much attainable housing, but it’s coming. When it does, you’ll see small projects – anywhere from six to 24 units. These are niche opportunities for the right developers in the right locations.
If you want to build a condo, now is the time to start. The money is there if you can prove you’ll reach the pre-sales threshold. That’s what the construction lenders are telling me.
Don’t overlook self-storage as an opportunity. Nobody ever wants to throw anything away, so these are going up next to the new apartment buildings. And you know as well as I do, once the stuff goes in, it never comes out.
Beautiful office buildings are going up in Coconut Grove. Also by the Palmetto Expressway and in Wynwood. They’re all near the places where people want to live and shop.
Fort Lauderdale, an overlooked market for years, is taking off. And other once-overlooked markets are continuing their climb out of obscurity. Wynwood keeps cranking. Doral too.
By now you’re noticing a theme. Everything in South Florida’s built environment now revolves around transportation – getting people back and forth efficiently and with a minimum of stress.
If you can capitalize on that, you’ve got a winner.
Click here to listen to the full coverage of the Bisnow Fort Lauderdale State of the Market update.
