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There’s A New COVID-19 Store In Miami & It’s The First Of Its Kind

There is a store in South Florida that is dedicated to protecting you from the novel coronavirus. COVID-19 Essentials in Miami is open for business in the Aventura Mall. The pop-store is gearing Floridians with all the necessary tools for the pandemic.

COVID-19 Essentials sells any-and-everything novel coronavirus related, but with a dash of Miami flare added to the mix. Nadav Benismitzky, the owner of the store, has been operating the brick-n-mortar shop for about three weeks.

Before you even set foot in the store, patrons are prompted to a thermal imaging machine. Working with Kent Services, the machine checks prospective shoppers’ temperature and ensures that they’re wearing a mask before entry.

After passing the scanner, you’ll enter the chicest COVID-19-centric store you will ever lay your eyes on.

They sell $9 hand sanitizers, portable UV lamps, infrared thermometers, and fashionable face masks.

All of the store’s masks are made with 100 percent cotton, N95-grade material, and some are fashioned with LED lights, Benimetzky told Narcity. In short, these aren’t your Walmart face coverings on display.

In Miami, there is zero-tolerance for drab, so Benismitzky set out to change the lackluster mask scene in the area. He says he got the idea to open the store because he was “tired of seeing the ugly N95 masks around town.”

Working with Aventura Mall, he was able to land a lease for a space in the Nordstrom wing of the shopping center.

With most of South Florida now under some form of a face mask mandate, and a continued spike in cases in-and-around the region growing more worrisome by the day, Benimetzky’s unique store could see more business.

For now, the store is a pop-up, but Benimetzky says they’ll “be here as long as the pandemic is here,” with hopes that it’ll be a permanent fixture at Aventura.

The next time you’re on South Beach with your cool LED mask, raise a glass to Bemimetzky.

 

Source:  NARCITY

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Developers Plan Mixed-Use Project At Former Museum In Wynwood

New York developers L&L Holding Co. and Carpe Real Estate Partners formed a joint venture to build a mixed-use project in Miami’s Wynwood.

The developers have three acres at the northeast corner of Northwest 29th Street and Northwest First Avenue under contract. The property to be redeveloped would include the former Rubell Family art museum building at 95 N.W. 29th St.

Don and Mera Rubell relocated their art museum to Allapattah in 2019. The old building was listed for sale. Given how much development has been taking place in Wynwood, which is popular for its street art, dining and entertainment, it didn’t take long to find buyers.

L&L and CREP said they expect to close on the land in mid-2021, although they didn’t disclose the price. The site would allow for up to 800,000 square feet of development. Their project would combine offices, indoor and outdoor retail space, and multifamily. The size of the project hasn’t been disclosed.

“We are thrilled about this opportunity to create a one-of-a-kind 21st century mixed-use development in one of the world’s coolest and most eclectic neighborhoods,” said David Levinson, chairman and CEO of L&L. “CREP is the perfect partner given their successful track record in Miami and vision for further transforming Wynwood into a vibrant and dynamic place that celebrates the rich culture and history of the district. More importantly, our two firms share an affinity for bold, visionary projects that complement and enhance the surrounding neighborhood.”

Led by Levinson and Robert Lapidus, L&L is currently building a 670,000-square-foot office building at 425 Park Avenue in Manhattan. It’s also developing TSX Broadway, a luxury hotel in Times Square.

CREP, led by Erik Rutter and David Weitz, is known in Miami for the Oasis, an adaptive re-use project featuring restaurant, retail and offices. It landed Spotify as a tenant.

“When we entered the Wynwood submarket we were immediately attracted to its character – to the intangible buzz and energy you feel when walking the streets of the neighborhood,” Weitz said. “Our goal with this project on 29th Street and the Oasis is to preserve that character, and let it inspire our projects’ design and ethos.”

 

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A Medical Complex Is Coming To Miami Worldcenter

A $60 million medical center is planned for Miami Worldcenter, the mixed-use downtown development.

The 100,000-square-foot Center for Health + Performance, or CH+P, will sit on the ground floor of the Legacy Hotel & Residences, according to a release from the tower’s development firm, Royal Palm Companies.

A medical center was planned long before the pandemic, Dan Kodsi, CEO of RPC, said in a statement. But the pandemic is leading to some changes.

The development team is expanding the center’s air purification system and anti-microbial and chemical-resistant surfaces. Think voice-activated elevators, touchless room key access, UV-sterilization wands and robots for common areas — through the building.

Construction will begin on the tower at 942 NE First Ave. in the fall. The tower will have 274 condo units and 256 hotel rooms.

“While it’s been over a year in the making, COVID-19 was the driving force in enhancing some of our features that would allow the hotel to continue operating during any future pandemics,” Kodsi said in an email.

The center will have surgery rooms, capabilities for MRI, CT, mammography, X-Ray, ultrasound scans, on-site pharmacy, on-site laboratory for test results, and on-call doctors, nurses and nutritionists. The healthcare organization that will run the center has not been decided.

“One of the many impacts of COVID-19 will be a more informed and hyper-cautious traveler that will be looking for hotels and vacation homes that prioritizes their health and safety without sacrificing that luxury lifestyle they are accustomed to,” said Stephen Watson, head of medical and wellness projects for RPC.

The Miami Worldcenter is a 27-acre, $5 billion development that broke ground in 2018 with the construction of Paramount Worldcenter. The project includes hotels, condominiums and retail spaces.

Source:  Miami Herald

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Pandemic Transportation Changes In Miami Could Become Permanent

Miami-Dade’s transportation picture has been in flux since the onset of the coronavirus pandemic, and many changes – including new safety strictures, increased telecommuting and a rise in non-motorized mobility – could prove permanent, experts say.

“This is a lifetime event that’s really going to change a lot of things, including transportation, how people work and where,” said Javier Betancourt, executive director of the Citizens’ Independent Transportation Trust. “And if anyone tells you they know for sure what’s going to happen, they’re lying to you.”

That’s not to say there aren’t indicators of where things are going. Following a nationwide shutdown to stem the spread of the virus, once-bustling workplaces have been replaced – either temporarily or permanently – by home offices connected digitally through email and apps like Zoom and Slack.

Working remotely, or telecommuting, has increased in recent years, but Covid-19 accelerated what would have been a much slower evolution. Only 7% of US workers telecommuted at least once weekly prior to the pandemic, according to the Pew Research Center. Once the virus hit, the figure shot up to 50%, an analysis by research group Brookings Institute found.

If a significant portion of people continue to work from home, Mr. Betancourt said, Miami-Dade’s transportation decision-makers must take a hard look at whether some transit and roadway expansion projects should proceed as previously planned.

“All these capacity-building projects need to be examined in light of reduced demand,” he said.

A directive to launch the first such examination here is incoming, said Aileen Bouclé, executive director of the county Transportation Planning Organization (TPO).

On June 18, the TPO Governing Board, comprised of every county commissioner, elected representatives from nine cities and a school board member, will consider an item from Dennis Moss and Rebeca Sosa that, if approved, will order a study of how telecommuting could reduce congestion across Greater Miami.

“They’ve made a very next-step request for us to start seeing what that looks like and if we can adopt any guiding principles or policies to help even out the demand on our infrastructure over a long period of time – where we can reduce the peak demand and congestion and have a better overall picture of a congestion-reduction strategy,” she said.

Another potential change that comes as a result of fewer cars on the road is fewer cars in driveways and garages, said Transit Alliance Miami Executive Director Azhar Chougle, whose nonprofit advocacy group has spearheaded the Better Bus Project to redraw Miami-Dade’s Metrobus route network.

Because driving to and from work is often the primary utility of a personal vehicle, he said, it becomes an unnecessary expense once that need is no longer there.

“Most cars are idle for more than 90% of the day,” he said. “Miamians who are used to just driving, even for the smallest possible trips, when you take the work trip out of the equation, there are interesting possibilities.”

One possibility already gaining traction is broader bicycle use across the county. But the shift from cars to bicycles and e-scooters isn’t as simple as swapping one mode for another. While some small pockets of the county have proper accommodations for so-called micro-mobility modes – bike paths, widened sidewalks and programs with bike- and scooter-share companies like Citi Bike and Jump – most of Miami-Dade is still inhospitable to non-motorized travel.

Before the pandemic, those deficiencies and others across Miami-Dade – including many parts of the county’s unincorporated area, where sidewalks on major roads are frequently nonexistent – were largely the concern of habitual bicyclists and residents who didn’t own cars.

Now, with half of the county’s workforce homebound, the absence of a safe, comprehensive route network for pedestrian and two-wheeled travel is glaring, Mr. Chougle said.

“Everyone has realized biking infrastructure here is terrible,” he said. “What we’ve discovered is just outright, major government failure.”

That failure, he said, is most pronounced in Miami and Miami Beach, the subjects of Transit Alliance’s most recent study, “Build it – Bike it,” which shows both cities have sorely undelivered on promises to create safe, usable, interconnected bike paths.

Miami Beach, which in 2015 adopted a comprehensive bike master plan, has to date built just 0.1 miles of protected bike lanes and has 3 miles of shared paths still under construction. Transit Alliance recommends 6.8 miles of protected lanes and 3.7 miles of shared paths.

Miami, which in 2009 adopted a similar plan, still has miles of its core network incomplete, with missing links between key arterial roadways across the city and no protected bike lane across the Venetian Causeway.

“Whoever is in charge of this network in the City of Miami, and whoever was responsible for the 2020 objectives in Miami Beach and them not having been completed, should be fired,” Mr. Chougle said. “It’s at the point where, can our decision-makers hold anyone responsible for these major failures, or are they just going to be looking at the same map 10 years from now?”

The good news, Mr. Betancourt said, is that the countywide pause everyone is experiencing provides a rare chance to rethink and refocus priorities and, compared to other infrastructure projects in the developmental pipeline, bike-specific enhancements are much cheaper.

“Transit and roadway expansions are investments that take billions of dollars to see through and decades to come to fruition,” he said. “Telecommuting and first-last-mile connectivity is low- to no-cost and can be done in short order. And people have now gotten used to it. There’s really a potential to continue that and build it up.”

Critical roadway and transit improvement projects will still come, including transit upgrades to six key commuting corridors outlined in the countywide Smart Plan. But questions of future capacity and ridership have made many local transportation experts rethink advocating for more expensive modes.

Talks on the subject among county, state and federal transportation officials are ongoing, according to Ms. Bouclé, who said a federally required transit ridership study planned for the fall will further help to inform the TPO of what demand will be for different transit modes.

“From where I’m standing today, the range of that demand is really something we have to focus on,” she said. “It’s a fair statement that our pre-Covid forecast may be quite different moving forward.”

Even if ridership never returns to levels prior to the pandemic, Miami-Dade will still need a transit system to serve a core ridership dependent on its services. In mid-April, roughly a month into pandemic-related closures, ridership on Metrobus, Metrorail and Metromover fell 80% below normal.

As of last week, according to figures provided by the county Department of Transportation and Public Works, ridership across the three modes combined, at 110,000 between June 8 and 12, is about 47% of what it was the same time last year.

Director Alice Bravo said her department is bringing on additional vehicles to accommodate the ridership increase while still providing enough space to minimize the spread of Covid-19.

“In terms of trains, when our numbers really fell off, we went to nine trains per hour but have now increased that to 14 and can increase it to 19 trains as demand grows,” she said. “In terms of buses, we’re going to bring some through vendors … for the I-95 express service and other vehicles to intersperse between ours on routes where ridership is increasing and they’re needed for social distancing.”

Many of the protective measures put in place – from disinfecting transit vehicles multiple times daily and nightly, maintaining hand sanitizers in all vehicles and at train stations, social distancing at county facilities, and installing vinyl curtains and polycarbonate doors to isolate bus drivers and their ventilation systems from riders – will likely continue “for a long time,” she said.

Ms. Bravo’s department is also experimenting with one possible solution to low ridership on some Metrobus routes: Go Nightly, a partnership with Uber and Lyft in which the companies provide rides in lieu of buses that before ran on eight nighttime routes.

Rather than take buses, transit users are instead asked to follow instructions posted at bus stops along the routes to use a smartphone app or call a number to get a voucher-paid ride along the routes and within a quarter-mile radius of the corridor.

“This is maybe something we can explore to provide some type of transit connectivity in areas where density is too low to provide bus routes,” she said.

As for other answers, Mr. Chougle said, the county may do well to examine how other large metropolitan areas proceed in improving transit in the wake of the coronavirus.

Miami-Dade has “responded really well” to the pandemic, he said. The question for every leader here is whether the county will emerge with a stronger or weaker transportation and transit system than before.

“Right now,” he said, “it’s not clear how that will go.”

 

Source:  Miami Today

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COVID-19 Will Accelerate Property Repurposing

In many ways, COVID-19 is accelerating transitions that had already been occurring in the commercial real estate world.

“People think we should open up the economy sooner,” says Newmeyer Dillion partner Mike Krueger. “But I don’t think anybody’s saying that this isn’t going away anytime soon.”

Ultimately, Krueger predicts that COVID-19 will force “some very creative repurposing of properties.”

“We’re going to see very creative developers come in and repurpose those properties for their next use,” Krueger says. “At this stage, we don’t even know what the best use of some properties will be.”

Krueger says that is already happening in malls. In some places, they’re being repurposed by medical organizations.

“You may have a J.C. Penney’s in a huge building that could be perfect for an oncology department or maybe perfect for outpatient medical treatment,” Krueger says. “The rest of the stores might still be vacant, but that one building is great for that a medical use.”

Malls may have other advantages for conversion to other uses. For instance, a large mall will be ADA compliant.

“It’s going to have elevators and escalators,” Krueger says “Maybe an abandoned mall is a perfect opportunity to put a nursing home or some assisted living facility because you already have all these access points.”

Malls, which are also near public transit and bus lines, would also provide plenty of space to create completely independent units that are not on central air, if ventilation is a concern, according to Krueger.

“I think we’re still waiting on a lot of guidance,” Krueger says. “The insurance companies are really going to be the ones that are going to dictate this.”

But malls are just one example of how COVID-19 could change spaces.

“We are now looking at a complete revolution in what retail and commercial spaces are going to look like, especially in the restaurant industry,” Krueger says. “Depending on where you are, you’re going to have different counties with different restrictions. At least in the Bay area, we know that the post-COVID-19 restaurant experience is not going to be the same as pre-COVID-19, namely and the occupancy space.”

Offices are another place ripe for change. While teleworking had been growing steadily as a trend for a while, Newmeyer Dillion partner Mike Krueger thinks the news that Twitter is allowing its employees to work remotely indefinitely will spark discussions at a lot of large firms in The Bay Area.

“For large tech companies that are renting out giant spaces in downtown San Francisco or anywhere in the Bay area, anywhere where commercial real estate is very expensive,” Krueger says. “Now, all of a sudden, you see some of the most visible tech companies out there saying, ‘We don’t even need our commercial space.’ I think you’re going to see a significant change around what that space is going to be useful and how that space is being used.”

 

Source: GlobeSt.

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Moishe Mana Unveils First Phase Of Downtown Miami Development

Moishe Mana could use the 50 buildings he owns to develop a mass of towers in the core of downtown Miami, but he’s moving forward with a different vision.

Mana will renovate buildings to attract tenants and limit the construction to about four stories, said Bernard Zyscovich, CEO Zyscovich Architects, which crafted the plan with Mana.

Mana spent hundreds of millions of dollars in recent years snapping up property downtown, especially along Flagler Street. The area has some of the oldest buildings in the city. Many of those Mana-owned buildings have vacant space on the ground floors as he works on development plans.

Now, Zyscovich says Mana has a multi-phase plan for his downtown properties, and he’s ready to start construction this summer.

While many of Mana’s properties are zoned for 50 to 80 stories, that’s not his vision, according to Zyscovich.

“We are looking at spreading development throughout downtown instead of coming up with tall buildings out of the box,” Zyscovich said. “We don’t think downtown is ready for high-rise max buildings. We need to develop it as a neighborhood.”

Mana will begin by renovating the 13-story building at 155 S. Miami Ave. Built in 1980 and totaling about 166,000 square feet, the building formerly house federal immigration offices and it looks the part of a staid government office. Zyscovich said its facade will be stripped away and replaced with an artistic facade, which will resemble an optical illusion. The ground floor of the building is currently not accessible from the street and will be opened up so there can be a coffee shop and social space.

Mana wants the building to house office and technology tenants.

“It’s a good first project because there’s enough square feet to occupy the building with many new uses,” Zyscovich said. “We have financing in place and hopefully before the summer is out we will start construction, which is really deconstruction.”

Mana will follow with another project on the same block, at South Miami Avenue and S.W. 2nd Street. That includes a modest-sized new building along with renovations to the parking garage and some historic structures that could house restaurants.

The second area Mana will develop is Flagler Station, at 48 E. Flagler St., Zyscovich said. That will include new storefronts.

“It will become a cool neighborhood with the idea of providing urban services to innovators and technology people,” he said.

As the projects are completed, Mana plans to introduce a membership group called Mana Commons. Members would receive living quarters, office space, and discounts on local food and beverages, Zyscovich said.

“Moishe likes to say he’s not a developer,” Zyscovich said. “He’s a venture capital guy who wants to create something more innovative with real estate than renter space. We rent space, of course, but space oriented toward particular uses that might exchange rent for a venture capital interest.”

 

Source:  SFBJ

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More Tech Firms Eye Miami As COVID Carries On

In late February — before Covid-19 became a pandemic — Spotify inked a lease for 20,000 square feet to house its South Florida headquarters in Miami’s Wynwood neighborhood.

The music streaming service’s deal for all of the office space and large courtyard at the mixed-use development Oasis at Wynwood on North Miami Avenue was another sign of momentum for TAMI (technology, advertising, media and information) companies taking office space in South Florida.

But then coronavirus hit, prompting nearly half of the American workforce to set up shop in their homes and leading Twitter and Facebook to announce work-from-home policies that could lead to a potential void in the office markets in New York City and Silicon Valley.

South Florida, however, could benefit from the pandemic.

As residential brokers in the area report an uptick in sales and rentals largely fueled by homeowners fleeing dense markets like New York, office brokers say they’re starting to see a similar trend play out among tech firms.

Cushman & Wakefield’s Brian Gale, who was part of the leasing team that closed the deal with Spotify at 2335 North Miami Avenue, said he’s given five virtual presentations to major tech brands to take large spaces at 830 Brickell — one of South Florida’s largest office projects under construction.

OKO Group and Cain International are building the 57-story tower, which the developers say will be anchored by WeWork, with an expected delivery date of 2022. The property will have 490,000 square feet of office space, and will mark the first major office building to rise in Miami’s urban core in the last decade.

Facebook, Apple, Google, Uber and Chewy are among the many companies that already have a presence. Tech firms take up nearly 3 million square feet in South Florida. Broward has the largest share, with nearly 1.7 million square feet, compared to about 765,000 square feet in Miami-Dade and just under half a million square feet in Palm Beach County, according to CoStar data provided by CBRE.

As with most office landlords and leasing agents in other cities, South Florida’s office brokers aren’t convinced that working from home will become a long-term result of the pandemic. Companies that were looking to take advantage of the tax benefits, weather and more favorable housing costs are still planning moves to Florida, according to local real estate players.

“Companies like Twitter put their foot in their mouth too early. I believe that it’s really hard for people long term to work from home,” said Daniel de la Vega, whose firm One Commercial is marketing Creative HQ, an office condo in downtown Miami.

“Only the really wealthy ones would move in the past, the Barry Sternlichts of the world,” he added. “But now people our age want to get out of the major cities and they want to come to Miami and Fort Lauderdale.”

Ripe for the picking

Commercial brokers are negotiating a number of “blend and extends” where the landlord offers some free rent or concessions in exchange for longer leases. And for new leases, prospective tenants with the budget to do so are more concerned with building measures and office floor plans that follow the latest public health guidelines.

“Unless a landlord has got a lot of capital saved, it’s an ideal time for tenants to restructure leases. We’re going to see the markets change in favor of tenants.”

Keith Edelman, Colliers International

Carpe Real Estate Partners’ Erik Rutter, one of the developers behind the Oasis at Wynwood, said larger spaces and the ability to be outside will prevail, he argued.

“There will still be a demand for office space. The growth of Miami will continue, if not be propelled by, this pandemic,” Rutter said.

While some brokers believe there will be hesitation about returning to a high-rise office building versus a suburban, low-rise corporate campus, Gale said he’s negotiating nearly 200,000 square feet of proposals at 830 Brickell. Those conversations include one with a major tech tenant that is “very serious” about opening an office in Miami, he noted,

“People now are looking at new buildings as having better air quality, giving tenants the ability to really plan out how they’re going to look post-Covid,” Gale said, adding that many “are concerned with mass transportation and being on top of people” in New York City.

Local entrepreneur Brian Breslin echoed that point.

People who run their own tech startups or work remotely for larger companies are increasingly relocating to South Florida, said Breslin, the founder of Refresh Miami, a nonprofit that focuses on tech networking in the city. He said he believes more companies will follow recent WFH policies put in place by Twitter, Facebook and Shopify.

“Most people don’t have it in their budgets to space out employees six feet apart,” Breslin noted. “It would be unwise for us to think this is a short-term thing. A lot more of the traditional tech companies are rethinking their hiring processes.”

Keith Edelman, executive managing director of Colliers International South Florida, said most long-term deals are on hold as companies evaluate their office setups, which could put pressure on rental rates.

Edelman, who recently returned to his office, had been working remotely for more than two months, speaking with The Real Deal from his car. He said he believes work from home culture could take a toll on camaraderie and collaboration among employees — giving office tenants an incentive to be proactive in their leasing negotiations.

“Landlords are scared,” Edelman said. “Unless a landlord has got a lot of capital saved, it’s an ideal time for tenants to restructure leases. We’re going to see the markets change in favor of tenants.”

More pouring in

The wave of companies moving to South Florida isn’t limited to just tech, industry sources say.

Investment firms, insurance companies, hedge funds and family offices have also been making the move, driven by the lack of a state income tax.

Sandy Rubinstein, CEO of New Jersey-based digital marketing and advertising firm DXagency, bought a two-story office building just north of Wynwood for $2.25 million during the pandemic.

The Miami native plans to make the 2,678-square-foot property at 3634 Northwest Second Avenue the new headquarters for her firm, which counts Mastercard, Univision, NBC, Viacom and Green Valley Organics among its clients.

“A lot of our employees up here have asked if they could transfer,” Rubinstein told TRD in April. “Miami is such a good market for talent so I also want to take advantage of that now.”

 

Source:  The Real Deal

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How COVID-19 Could Inform The Future Of Medical Office Design

Imagine the last time you went to the doctor. You likely rode up an elevator and sat in a lobby or waiting room, elbow-to-elbow with other patients. You probably filled out paperwork, either with a pen and paper or maybe a touch screen device. Unless you were sick, you probably didn’t wear a mask.

The next time you go to the doctor, the experience is likely to be quite different. As a result of COVID-19, how medical office space—and office space in general—is used is going to change.

As physical offices are beginning to reopen and elective procedures are allowed, we are starting to have a better understanding of what a doctor’s visit could look like in the future.The next time you go to the doctor, the experience is likely to be quite different. As a result of COVID-19, how medical office space—and office space in general—is used is going to change.

Instead of waiting in a crowded reception room, patients may be asked to remain in their cars as a means to physically distance until they are called via text or phone by the physician’s office. They may fill out and submit paperwork online leading up to their appointment, a day or two before. And check-in and check-out are also being completed by phone when possible, and perhaps in the exam room itself, when not possible before the visit.

While protocols will vary by building, most of our healthcare physician clients have started screening patients by phone in advance and asking them if they have had a fever, other symptoms, or have tested positive. Temperature checks may occur before a patient is admitted into the space.

The medical office and traditional office will align in several ways going forward.

The number of people allowed in an elevator at any one time will be limited, and buildings will probably need to provide separate ingress and egress, and perhaps create “one-way” traffic through common areas.

Because of the need for physical distancing to prevent infection spread, future office space design may entail larger rooms, hallways, and reception areas.

The need for additional sanitation and other infectious disease precautions may increase janitorial costs, which leads to the question of whether or not these services will be provided as building amenities or paid for by tenants through CAM charges.

Overall, the construction costs for new development and renovation may also increase, especially for mechanical, electrical, and plumbing systems if requirements for more sophisticated HVAC filtration systems emerge. Accordingly, because of the increased operating expense and construction cost, rents may increase, or yields will decrease.

The new normal will dramatically affect both the healthcare and commercial real estate industry. Our best recommendation is to make sure both landlords and tenants read their leases and understand what those documents say.

While they likely won’t include pandemic protocols, other clauses and provisions will likely apply, and resuming “normal business operations” or “patient visits” may require implementing some new protocols that will require that landlord and tenant collaborate to ensure patient, occupant and visitor safety.

Open communication between the parties to discuss what healthcare tenants plan to do to ensure patient safety (as well as that of other tenants) and to understand what measures the landlord is taking to assure occupant safety are vital to both parties and should help to ensure that the patients can receive care safely.

 

Source:  DMagazine

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Apartments With Ground Floor Retail Take A Hit On Rent Collections

COVID-19 precipitated shutdowns have crippled the retail sector and those troubles have been well-documented.

And the businesses that rent spaces on the ground floors of apartment buildings are generally not big stores or national chains and have had even more trouble meeting their obligations in recent months. As a result, multifamily owners have had to be forgiving in negotiating concessions with their retail tenants, even as rents from apartment tenants have generally held up better than expected.

“We know that small retail businesses have been hit very hard based on payroll figures,” says Kevin Cody, market analytics senior consultant for CoStar, based in Boston. “Their distress from the pandemic was likely amplified due to them having small cash buffers.”

The vast majority—over 80 percent—of the retail space located in apartment buildings can be found in urban areas, according to CoStar. In recent years, these areas were performing well due to strong demographic growth, employment growth, and high levels of tourism, says Cody.

That strong performance stopped with the spread of the coronavirus in early 2020.

“Retail assets in dense, urban areas have been heavily impacted by the current period,” says Cody. “People are working from home at a high rate and tourism has greatly diminished.”

Not surprisingly, the retail tenants that have held up the best for apartment owners in recent months are those that were deemed essential. Drugstores, convenience stores, restaurants equipped to do takeout business are among tenants that been able to continue operating amid the vary levels of shutdowns throughout the country.

From the landlord side, apartment owners have largely been willing to work with their retail tenants on an as-needed basis.

“We have heard that owners of retail space are offering rent deferrals or relief to some tenants that have been impacted by the virus,” says Cody.

“There [usually] isn’t a public balance sheet or strong capitalization,” adds Todd Siegel, senior vice president, CBRE, based in Chicago. “The solution to mutual success requires an individualized and bespoke approach.”

Fortunately, apartment properties generally don’t rely much on the income from  small retail tenants.

“On a pure, net operating income basis, it shouldn’t skew the balance sheet to warrant a default,” says Siegel. “Mixed-use retail in general doesn’t drive the overall value [of an apartment property].”

The managers of apartment properties are also not yet desperate to squeeze money where ever they can get it. That’s because the income from apartment rents has remained strong, so far.

“I would expect apartment owners to have a greater ability to offer rent deferral or relief for their retail tenants, due to the greater rate at which they have been able to collect rent from apartment renters,” says Cody.

As for down the line, while they will need to implement social distancing measures until a vaccine or reliable treatment becomes available, multifamily owners will continue to include ground-level tenants.

“Mixed-use was a strategy we really liked heading into the pandemic,” says Cody. “In the long-term we still believe in it… we expect urban areas to come back, but in the near to medium term, retail will experience reduced spending and foot traffic. We expect migration to slow; there has been a shift to working-from-home, which will sustain to some extent; and tourism has slowed, which will take time to recover.”

 

Source:  NREI

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These Big Retailers Stiffed Their Landlords In May

About 40 percent of national retail chains once again skimped on their rent in May, according to the latest monthly report on collection rates.

Among those are 24 Hour Fitness, AMC Theaters and Pier One, all of which have either announced potential bankruptcy or plans to liquidate assets.

Overall, national retailers paid 60.1 percent of rent, a small increase from April’s 56.7 percent collection rent, according to a report from the data firm Datex Property Solutions. Total collections – from both national and local retailers – checked in at 58.56 percent in May, up from 54 percent in April, according to the data.

However, an increase in collections may not be a silver lining. Many retailers have negotiated rent relief with their landlords, which could make the numbers seem higher than they actually are, according to Datex CEO Mark Sigal.

At the end of May 2019, national retail chains were able to pay 96 percent of their rent. Even just two months ago, that figure was at 94 percent.

The plummet in rent collections is largely a consequence of the coronavirus pandemic, which has shuttered stores, in some cases permanently.

Fifteen companies, out of the 131 companies included, have not paid a dime of rent last month. Bed Bath & Beyond, H & M, Century City, AMC Theaters, Regal Cinemas, The Gap and Party City are among those. Seven others have paid very little, including Barnes & Noble and DSW Shoe Warehouse. On Wednesday, The Real Deal first reported that Simon Property Group sued The Gap for $66 million for withholding rent in April, May and June.

“A lot of the growth has been around more lifestyle oriented retail, the kind of retail where there’s a goodness to being present,” Sigal said. “With social distancing, the retailers that most build around that, folks like gyms and yoga studios or movie theaters — the types of operators where people are in the same space and close quarters — are the ones that have been most existentially impacted.”

The report counts major chains as those that have a minimum gross monthly rent of $250,000 or lease 10 or more locations. It is based on verified collections from Datex’s portfolio of clients that report payment information from thousands of U.S. properties.

However, not all companies are on their landlord’s naughty list this month. Unsurprisingly, grocery stores like Giant and Aldi have paid almost all their rent.

Between competitors, companies’ collections differed greatly. PetSmart, according to Datex, paid 89 percent of its collective bill, while Petco paid 42 percent. Hobby Lobby similarly paid 99 percent, while Michael’s trailed behind at 39 percent, per the data.

In part, this may be due to different franchisees or unsuccessful expansions in different areas, according to Sigal.

“This is a tsunami that is unanticipated,” Sigal said. “Within that, you may have heard of this quote, ‘bad companies are destroyed by crises; good companies survive them; great companies are improved by them.’ Retail is that story”

The restaurant sector experienced similar contrasts. McDonalds and Taco Bell, for example, paid the majority of their bills, while Jamba Juice and Five Guys paid less than half of theirs.

 

Source:  The Real Deal

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