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Recertification Voting Continues For Miami’s Wynwood Business Improvement District

After approval by the City of Miami Commission, starting Apr. 14, the Wynwood Business Improvement District (BID) has been up for a recertification vote by all property owners within its boundaries.

The Wynwood BID, which began in July 2013, is the largest one of its kind in Florida, covering a 50-city-block neighborhood that has experienced an exciting transformation, taking it from an abandoned industrial zone to a bustling arts and nightlife destination.

More recently, Wynwood has become a desirable location for new office and residential developments, and now, major new hotels from the world-renowned Arlo brand and the soon-to-be-launched Moxy by Marriot.

For three weeks, all 400-plus property owners within the BID’s boundaries have been asked to sign affidavits supporting its renewal, which the BID will then collect and count. To proceed with the recertification process, more than 50 percent of the votes, plus one, must be in favor. Once the three-week voting period has concluded, all affidavits will be forwarded to the City of Miami Commission and Mayor Francis Suarez for review and final approval.

“We are excited to collect votes from our area property owners to recertify the BID,” said Manny Gonzalez, long-time executive director of the Wynwood Business Improvement District. “The district has entered a new phase, with the ongoing expansion of residential and office capacity that did not exist previously. Our goal is to have another successful decade of embracing change like urban planning and landscape design while also working to maintain Wynwood’s place as an appealing cultural destination and creative center.”

BIDs function as special tax districts that allow for an additional assessment to support initiatives and programs that governments cannot fully cover. In addition to Wynwood, they have been successful locally in places such as Miami Beach, Coconut Grove and Coral Gables, and other major cities like New York.

In partnership with area businesses, owners, developers and residents, working with the City of Miami, the Wynwood BID has been a significant catalyst in the neighborhood’s growth, improving quality of life, and in ongoing synergies between new investors, and existing businesses and cultural venues.

During the past decade, Wynwood has experienced an exponential increase in visitors, with the number rising from 240 thousand in 2013 to 15 million annually in 2023. Today, Wynwood supports 5,000 new jobs and generates more than 20 percent of the City of Miami’s parking transactions.

In partnership with the City of Miami Planning Department and Plusurbia, the Wynwood BID developed Miami’s first Neighborhood Revitalization District (NRD) plan to maintain the neighborhood’s distinctive street art and industrial feel, while encouraging a 24-hour community for live, work and play lifestyles.

The BID has accomplished significant successes through its partnership with the City of Miami Police Department, resulting in a 60 percent reduction in crime. Additionally, the BID has made a substantial contribution of $3.5 million towards Wynwood Works, a program aimed at developing 5,000 micro units of affordable housing and invested $1 million towards office development in the area.

The BID also has created a Clean Team to remove trash and debris daily to maintain a clean and attractive neighborhood. These notable achievements have garnered national recognition for the BID in the past decade, with awards such as being one of the greatest neighborhoods in America and being recognized for its Economic Development Planning by the American Planning Association (APA).

In the arts, Wynwood continues to thrive and be the home of the iconic Wynwood Walls, Museum of Graffiti, Margulies Collection, Mana Wynwood, Gary Nader Art Centre, the recently opened Paradox Museum, and many more.

The neighborhood remains a center for over 3,000 units of unique retail, restaurant and nightlife businesses, including Zak the Baker, Oasis Wynwood, 1-800-Lucky, Gramps and UNKNWN. Annual special events such as Miami Art Week, Miami Music Week and Wynwood Pride fill the community with pedestrian traffic and excitement.

Major developments in the area include the recently opened Arlo Wynwood hotel and The Dorsey, as well as upcoming projects such as The NoMad Residences, 29N Wynwood, 545 Wyn and The Wynwood Plaza.

Additionally, the neighborhood is experiencing growth in mixed-use residential and office spaces with developments including Strata Wynwood, WYND 27 & 28, Society WynwoodSentral Wynwood and The Gateway at Wynwood. Currently, there is 600,000 square feet of commercial retail space under construction as Wynwood continues to evolve.

Companies committing to office space in Wynwood include Founders Fund, Spotify, Technology SA and Pricewaterhouse Coopers.

The BID supports its City of Miami partners and surrounding communities by running numerous safety and cleanliness initiatives, including state-of-the-art interactive outdoor digital kiosks, neighborhood-wide security cameras and a dedicated Clean Street Team.

“Wynwood property owners and businesses believe in the wisdom of investing in infrastructure enhancements, safety initiatives, forward-thinking planning and destination branding that are key to the BID’s work,” Gonzalez concluded.

For more information, visit wynwoodMiami.com.


Source:  Community News

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South Beach Retail Property Trades For $39 Million

Three months after selling a retail strip along Alton Road to Michael Shvo for $39.3 million, Robert Shor is back to buying, scooping up a vacant retail property across the street for $10 million.

Through an affiliate, Shor bought a commercial condominium at 1665 Alton Road from an entity tied to Orlando Garcia of Coral Gables-based Secured Debt Investments, according to records. The 9,000-square-foot condo is on the ground floor of a two-story building immediately north of the 1111 Lincoln garage and retail building.

Irma Figueroa and Vicki Freeman of the Comras Company represented the seller. Seth Gadinsky of Gadinsky Real Estate represented Shor.

In June, Shor sold the 60,000-square-foot commercial strip across the street at 1656-1680 Alton Road, as well as an adjacent 0.2-acre parking lot at 1677 West Avenue, to Michael Shvo, who plans to redevelop the property into a 250,000-square-foot office and retail complex. The property includes the former Epicure Gourmet Market & Café building.

Shor said an Ace Hardware store on that strip, set to close next year, will reopen in April in the vacant retail space he bought this week.

Alton Road, a main north-south connector on the western end of Miami Beach, is poised for more development after city residents in August approved a zoning referendum that allows for bigger projects in the Alton gateway area.  The vote allows developers Russell Galbut and David Martin of Terra to build a taller mixed-use project at 710 Alton Road.


Source:  The Real Deal

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Turnberry Proposes Office/Retail Project Near Aventura Mall

Jackie Soffer’s Turnberry Associates wants to build a 14-story office and retail project near Aventura Mall — and link it through a pedestrian overpass to a future Brightline station.

Turnberry Associates is asking the city of Aventura for conditional use approval for the extra two stories of height from the currently allowed 12 stories on the 3.4 acre site at 2750 Northeast 199th Street, according to the city’s commission agenda documents.

The project, called Two Turnberry, would have 240,000 square feet of offices and 20,000 square feet of retail.

Two Turnberry also would have a bank, food and beverage concepts, and space for Brightline station-related activities, although details are yet to be finalized, according to agenda documents. The building would have an access point to a planned bridge over Biscayne Boulevard leading to the Brightline station, which is currently under construction and is expected to be completed this year.


Source:  The Real Deal

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Miami Worldcenter Locks Up 90,000 SF Of Retail Space In 90 Days

The $4 billion, 27-acre mixed-use development Miami Worldcenter in Downtown Miami has signed leases accounting for 90,000 square feet of retail space within the last 90 days:

*Sephora is taking 6,000 square feet along Miami Worldcenter’s 7th Street Promenade fronting the development’s World Square Plaza.

*Lucid Motors is taking nearly 23,000 square feet along Miami Worldcenter’s 1st Avenue and 10th Street.

*Bowlero, a retro-inspired entertainment center, will occupy more than 31,000 square feet within the development’s glass-encased ‘Jewel Box’ retail building overlooking World Square Plaza.

Miami Worldcenter’s newest tenants will occupy a total of 60,000 square feet of retail space, joining restaurants Chicago’s Maple & Ash and etta, and Chef Michael Beltran’s Brasserie Laurel and El Vecino.

Retail leasing at Miami Worldcenter is led by CIM Group and The Comras Company. CIM Group and Comras represented the landlord all three transactions while the Comras team represented Sephora and Bowlero on the tenant side.


Source:  ConnectCRE

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Miami Is A Hotspot For Retail Development

Miami is one of the top markets in the country for retail development, according to a report from Marcus & Millichap. The firm’s second quarter 2021 outlook report forecasts nearly 1.5 million square feet of retail space will deliver into the market this year, the highest level since 2017.

Mall redevelopment and mixed-use projects are driving the development activity, and much of it wrapped up in three projects. One of the largest projects in the market is the Miami Worldcenter, a mixed-use development with residential hospitality and 300,000 square feet of retail space. In Miami Beach, Bal Harbour Shops is adding 350,000 square feet, which is scheduled for completion in 2023. Finally, the Aventura Mall is in the middle of a 215,000-square-foot expansion, which is expected to hit the market later this year.

Last year, the pandemic hampered retail development. According to the report, retail deliveries were half of what they were for the previous five-year average and the lowest level in a calendar year in more than a decade. Still, retail projects continued to come to market. Miami Beach added nearly 100,000 square feet of space, and South Dade added more than 71,000 square feet of space. This year, developers will make up for the lost time, delivering 1 million square feet more year-over-year.

Developers are clearly bullish on the Miami retail sector, but the market has certainly seen an impact from the pandemic. This year, the report expects vacancy rate to climb 80 basis points to 5.2%, the highest rate since 2010. The slowed leasing activity along with increased retail development will also drag asking rents down 1.3% this year to $31.83 per square foot. In 2020, the vacancy rate was unchanged, and asking rents fell 3.1%.

Miami’s downtown area is experiencing a renaissance that his helping to fuel development activity and growth. The market is attracting out-of-state investment. Earlier this year, New York-based developer Time Century Holdings entered the Miami market to transform the Metro Mall into a luxury jewelry center. The developer secured a $23.6 million construction loan for the $50 million project through City National Bank of Florida.


Source:  GlobeSt.

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Biscayne Boulevard Dev Site Hits Market For $11M

A multifamily and commercial development site along Biscayne Boulevard near North Miami hit the market for $10.5 million.

Owner Alex Silberman purchased the 3.2 acres of land at 11240 Biscayne Boulevard in August 2012 for $2.9 million from Biscayne 114 Center of New York, property records show.

The asking price shows a significant uptick in valuations since then.

Colliers’ Gerard Yetming, Julian Zuniga and Mitash Kripalani listed the land for sale on behalf of Silberman.

The Biscayne Boulevard site has two different zonings, as 2.17 acres is designated for 10 to 21 multifamily units per acre, and the remaining 1.06 acres is designated for a commercial use such as retail, according to a press release.

Yetming said in the release that the site is centrally located and comes at a time when the multifamily market is doing well.


Source:  The Real Deal

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Growing Number Of Landlords Are Offering Restaurants Percentage-Only Rent


A recent survey by the NYC Hospitality Alliance helps illustrate the dire straits of America’s restaurants.

The survey found that 87 percent of New York City’s restaurants, bars and nightlife venues couldn’t pay their full rent in August. The culprit, of course, is pandemic restrictions imposed on these businesses.

Further complicating the situation, 60 percent of the businesses surveyed said their landlords hadn’t waived any of their rent in response to the coronavirus pandemic. But in New York City and across the country, a number of landlords are offering concessions for restaurants and other hospitality businesses in the form of percentage-only rent.

Some restaurant landlords are temporarily switching from fixed-rate rents to rents based only on a share of the tenant’s gross sales or revenue, in an effort to help these businesses survive, says Ken Lamy, founder, president and CEO of The Lamy Group, a Mandeville, La.-based financial management consulting firm. Landlords are then leaving the door open to revisiting the rent structure at a later date, perhaps 12 to 18 months down the road, he notes.

“Rent is a function of revenue, and with restaurant revenue getting decimated in certain types of trade areas, one way to protect the financial stability of a restaurant—and provide a cushion before we recover from COVID-19—is to structure a percentage-only rent deal and fix the restaurant’s rental expense with an acceptable percentage of gross sales,” says Jason Kastner, managing director of the national advisory group at Washington, D.C.-based Dochter & Alexander Retail Advisors, which represents restaurant and retail tenants.

Percentage-only rents are especially helpful in an industry with notoriously thin profit margins of around 3 percent to 6 percent and, now, with slumping sales. In September, sales at U.S. eating and drinking establishments totaled $55.6 billion, compared with the pre-pandemic tally of $65.4 billion in February, according to the National Restaurant Association, an industry trade group.

The percentage applied to a restaurant’s rent in a pandemic-era agreement typically ranges from 5 percent to 15 percent, according to Lamy. The figure sometimes includes common-area expenses like property taxes and insurance, but sometimes excludes them, he says. In some cases, the percentage-only rents come on the heels of rent deferrals that went into effect earlier in the pandemic.

Not every restaurant can take advantage of percentage-only rent, though. For instance, some landlords are limiting percentage-only deals to tenants that operate multiple restaurants rather than just a single “mom- and-pop” location.

At the other end of the spectrum, some landlords are being quite generous. For instance, San Francisco-based Presidio Bay Ventures, a commercial real estate investor and developer, has let Merkado, a Mexican restaurant and open-air market in San Francisco’s SOMA neighborhood, operate rent-free since March.

A prime example of the percentage-only approach to rent is New York City’s Grand Central Terminal. The Metropolitan Transportation Authority, which operates the terminals, has proposed percentage-only rents for restaurants at the famed train station that are run by small businesses. The percentage, to be based on gross revenue, hasn’t been revealed. The rents would likely return to fixed rates once business reaches pre-pandemic levels.

Without percentage-only rents in place for some restaurants, vacancy rates would climb even higher, according to Lamy. (In the second quarter, the average vacancy rate in the retail sector, which includes restaurants, jumped to 20 percent, according to Statista.)

“A store that’s empty is not a good situation anytime. It’s even more damaging to the landlord today,” Lamy says. “So, is it better to have some dollars flowing with a store that’s open? Or would you rather have an empty store because you think you can re-lease it at a better rent? But when is that going to happen?”

Some restaurant landlords might even benefit from percentage-only rent if a tenant’s sales numbers happen to rise above the average, says Allan Perales, chief operating officer of Chicago-based Gold Street Partners, which represents commercial real estate landlords and tenants. Still, the most important consideration for a landlord agreeing to percentage-only rent is to simply keep a restaurant space occupied, Perales says.

The National Restaurant Association reports that in the first six months after pandemic shutdowns took effect, nearly 100,000 restaurants closed either permanently or for a long-term period. Thousands more could be on the chopping block.

For the percentage-only rent structure to work from the landlord’s perspective, a restaurant must supply up-to-date sales and revenue data, according to Lamy. This puts landlords in a “trust but verify” position, he says.

“What’s your average sale today? What was it pre-pandemic? Those metrics are critical to understanding what was happening before, what is happening now and what has happened during this time,” he notes.

Kastner believes the percentage-only rent model will remain as a restaurant lifeline for the next year or two before traditional rent structures kick in again. Unfortunately, the percentage-only setup won’t be enough to save some restaurants.

“For already open and operating restaurants, given the enormous impact to sales because of COVID-19, we will continue to see what feels like daily announcements of permanent closures,” he says.


Source:  NREI

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Covid Pummeled Shopping Centers, But Their Parking Lots Are Thriving

While many traditional streams of income for landlords have slowed or dried up due to the pandemic, one has proven to be a surprising earner: parking lots.

Landlords of large parking lots and garages have been renting out those spaces for a variety of activities, including open-air retail, job fairs, polling stations and drive-through COVID-19 testing, the Wall Street Journal reported.

Retailers like Walmart and Target are using their parking lots as makeshift distribution centers, while owners of parking garages are similarly renting out their spaces for storage and distribution to nearby neighborhoods.

Some parking lot owners are turning their spaces over to more creative uses: One at the Rosedale Center in Roseville, Minnesota has been repurposed for a drive-in haunted house. Participants stay in their car and pay $75 to watch a performance from the safety of their vehicles.

The organizer has sold 1,000 tickets so far, and the mall’s landlord hopes that some of those attendees will make their way into the shopping center itself.

That might be a tough sell: A survey this month found only 45 percent of respondents planned to shop in a mall this holiday season. Traffic at the country’s largest malls dropped 51 percent in the first eight months of the year compared to last year.


Source:  The Real Deal

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Retail Rent Collection Has Nearly Returned To Pre-Pandemic Levels

While national chains still face financial woes, there are some signs of recovery within the retail sector — particularly in categories such as gyms and clothing stores.

National retailers paid 86 percent of their September rent, according to the latest Datex Property Solutions report. That’s about 10 percent below what they paid in 2019, but slightly above last month’s 83 percent.

“Month by month, we’ve been digging ourselves out of this hole we found ourselves in in April,” Datex Property Solutions CEO Mark Sigal said.

The major chains included in the survey all have a minimum gross monthly rent of $250,000, or lease 10 or more locations. The report does not account for any rent relief provided to the retailers by their landlords.

Among the categories making a comeback are apparel, where retailers were able to pay 77 percent of rent, and fitness, where retailers paid 65 percent. Those categories have lagged behind in prior reports.

Gold’s Gym paid 53 percent of its September rent, which was a 137 percent increase over what it paid in August. Men’s Wearhouse paid 82 percent of its September rent, a 355 percent increase from what it was able to pay in August, when its parent company filed for bankruptcy.

While the majority of retailers increased rent payments, a few floundered. Regal Cinemas stopped paying rent completely after paying 37 percent of August rent. The chain recently announced that it would temporarily suspend its U.S. operations.

On the whole, movie theaters paid under 10 percent of their September rent, compared to 43 percent in August.

Pier One also dropped 27 percent, from 90 to 66 percent. The home furnishing and decor company announced in May that it would liquidate its assets.

The latest report also includes a breakdown of sales per square foot. Although many retailers have struggled to return to pre-pandemic levels, some are seeing sales surpass that of a normal year. HomeGoods, for example, surged 128 percent from $248 to $564 in that category. Sporting goods stores are also up 52 percent, from $167 to $255.

Additionally, the report includes occupancy costs for each category, nearly all of which have seen increases. Department stores in particular have suffered, with costs rising from nearly 4 percent in 2019 to 17 percent in September — a change of 375 percent.

“Rent ends up eating up your gross margins,” Sigal said. “And so when you bring in occupancy costs, [it] reveals real instances where operators are seeing fundamental changes in their business.”

Even though retailers have been doing better, the coming months will heavily impact rent collections, according to Sigal. The results will be dependent on a few factors: another federal stimulus package, rent relief expiration, potential lockdowns throughout the country and the seasonal impact on outdoor activities.

“We keep turning over the next card, the next card and so far, the cards have been generally better each month than the prior month,” Sigal said. “But there are multiple variables that introduce risk.”


Source:  The Real Deal

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Landlords Eye Taking Cut Of Retailers’ Online Sales As Rent

Landlords are familiar with percentage rent — taking a portion of retail tenants’ in-store sales — but now, some are thinking of bringing online sales into the mix.

As shopping habits shift towards the digital, some property owners think demanding a portion of online sales is not only fair but might be necessary. However, with little precedent set, it may be difficult, according to the Wall Street Journal.

The increased interest comes as Covid causes retailers to fall behind on rent, even as their online sales remain steady or increase. Many of their landlords have taken a beating.

Unibail-Rodamco-Westfield and Hammerson, for example, have seen their stock values fall around 80 percent since the start of the year. They now trade at a fraction of net asset value.

“How do you value your assets if they are based on turnover that is constantly going up and down?” Tom Whittington of global real-estate agent Savills told the Journal.

Hammerson will now let U.K. tenants switch to turnover-based leases if they pay an “omnichannel top up.” The company will factor in sales from practices such as click-and-collect — in which shoppers buy goods online, then pick them up in stores — to calculate the amount of rent due.


Source: The Real Deal 

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