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Tricera Capital, Related Group Announce Schonfeld Strategic Advisors Lease Expansion At Wynwood’s The Dorsey

Tricera Capital, the Miami-based commercial real estate firm led by Ben Mandell, Alex Karakhanian’s LNDMRK Development and market leader Related Group finalized a lease expansion with New York-based hedge fund Schonfeld Strategic Advisors at the partnership’s Dorsey in the Wynwood neighborhood.

Schonfeld is doubling its office space at the Dorsey, adding a second floor to its previous lease at the mixed-use development. The lease expansion brings the Dorsey’s office component to 100-percent occupancy.

The roughly 18,000-square-foot lease expansion brings Schonfeld’s total Dorsey footprint to about 37,000 square feet. Terms of the lease were not disclosed.

“This is a testament to the quality of not only the Dorsey, but the Wynwood neighborhood as a whole,” Related President Jon Paul Perez said. “Firms like these can go anywhere in South Florida, but Wynwood is at the top of every list. The neighborhood has truly hit its stride and we look forward to continuing to drive its thoughtful growth.”

Tricera, LNDMRK and Related teamed up to develop the Dorsey, with renowned Arquitectonica designing the project. The property includes more than 300 apartments, 78,000 square feet of office, 33,000 square feet of retail and ample parking and open space.

“This is another example of high-profile financial firms showing their commitment to the Miami office market, with Wynwood remaining especially attractive to these firms,” Tricera President/Head of Leasing Dustin Ballard said. “The pandemic-era corporate migration to South Florida continues to take shape, as our region’s office sector keeps outperforming other major U.S. metropolitan areas. Relocation demand is still incredibly high as we begin 2023.”

Randy Abend and Paul Mas of JLL’s New York office and Matthew Goodman, formerly with JLL’s Miami office, represented Schonfeld in the Dorsey lease, while Cameron Tallon, Emily Brais, Eric Groffman and Randy Carballo of CBRE represented ownership.

 

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South Beach Office Building By Lincoln Road Trades For Nearly $50M

JLL Capital Markets closed the $49.5 million sale and financing of 1688 Meridian, a boutique Class A office building along with two parking lots in Miami Beach.

JLL represented the seller, Ivy Realty, in the sale of the property to 1688 Property Owner, LLC, a newly formed Delaware-based foreign limited liability company led by Ophira Cukierman, founder and principal at Greenacres Management. Additionally, JLL worked on behalf of the buyer to secure a loan with Värde Partners for the acquisition.

Renovated in 2019, 1688 Meridian is a 10-story, 88,419-square-foot office tower with ground floor retail space fronting Meridian Ave. and 17th St. In addition to the office tower, the sale included two land parcels at 1699 and 1709 Jefferson Ave., which are currently used as parking lots. The property is 81.4% leased, offering significant leasing and development upside.

1688 Meridian is positioned on a high-profile corner location at the intersection of 17th St and Meridian Ave. just steps away from Lincoln Road, Miami Beach’s most iconic open-air pedestrian promenade. The property is surrounded by numerous amenities, including the Lincoln Eatery, Miami Beach Convention Center, Sunset Harbour, New World Symphony, The Filmore and countless restaurants, major retailers and luxury hotels.

Miami continues to attract new capital, companies and residents due to the low tax-rate environment, pro-business culture, fast growing economy, development of a tech hub and superb quality of life. According to JLL’s Second Quarter Office Outlook, Miami has achieved new all-time highs for rents within the Miami CBD posting 5.6% year-over-year growth.

The JLL Capital Markets team representing the seller was led by Managing Director Ike Ojala, Senior Managing Director Hermen Rodriguez, Director Matthew McCormack with support from Associate Max La Cava.

JLL Managing Director Melissa Rose led the Capital Markets team representing the borrower with support from Analyst Max Lescano and Associate Jimmy Calvo.

“1688 Meridian is a fully renovated building in the heart of world-renowned South Beach and is experiencing record tenant demand, which generated very strong interest from the investment community,” Ojala said.

 

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Sleepy No Longer, Downtown Miami Evolves Into Urban Hub

Once a place that emptied at 5 p.m., Downtown Miami is in the midst of a dramatic transformation. Overlooked no longer, the city’s central business district is getting denser, growing taller and attracting new attention.

The area has been poised for a breakout since the Great Recession, and its moment finally seemed to arrive during the pandemic. Out-of-state companies, most notably Blackstone Group, are opening offices downtown. And a widely noted study said Miami’s urban core has experienced the largest downtown population surge in the nation over the past two decades.

As Miami gains momentum, developers are making big bets on the city’s appeal to both employers and their employees.

“It’s like a snowball effect,” said Nitin Motwani, a developer of Miami Worldcenter. “Downtown Miami, over the past 10 years, has completely evolved into one of the great, 24-hour metropolises in the world.”

Motwani is part of a particularly ambitious project: Miami Worldcenter, a $4 billion mixed-use development, includes apartments, retail space, condos, hotels and offices spread across 10 blocks of downtown parcels.

Just south of downtown, OKO Group and Cain International are building 830 Brickell, a 640,000-square-foot tower that will test office tenants’ appetite for Manhattan-style rental rates. And the 13-story Nikola Tesla Innovation Hub, with 136,000 square feet of office space, is set to begin welcoming tenants next year.

“It feels like we’re on the precipice of something big,” said developer Ryan Shear, managing partner of Property Markets Group (PMG). “Downtown has so much potential, an untapped amount of it.”

PMG is developing the Waldorf Astoria condo and hotel project, which will be the highest tower south of New York, Shear said. PMG also expects to break ground this year on E11EVEN Hotel & Residences, a 400-unit condo project. The units are priced at $250,000 to $12 million.

The E11EVEN project quickly sold more than 70 percent of its units, reflecting what Shear sees as Downtown Miami’s move into the top tier of urban cores.

“Miami, for a long time, has been an undervalued city,” he said. “Miami has a lot of catching up to do.”

The flurry of investment offers a sharp contrast to downtown’s former vibe. For years, downtown boosters touted a vision of a thriving, round-the-clock urban core. And, for years, the city’s central business district remained a place that filled up at 9 a.m. but couldn’t sustain a nightlife.

Downtown workers who liked an urban vibe commuted from Miami Beach or Coral Gables. The rest of the labor force put up with gridlocked commutes from Kendall or Weston.

“Until 10 or 15 years ago, Miami was a city that existed in spite of its downtown,” said Andrew Trench, a managing director at Cushman & Wakefield. “Downtown had office space, and the Miami Heat played downtown, and that was kind of it.”

However, during a building boom before the Great Recession, developers inundated downtown and the Brickell district with high-rise residences. As new residents filled those units after the crash, Miami’s downtown population ballooned. This was the first signal that downtown couldn’t remain a mere business district forever.

According to research by Brookings, Miami had the fastest-growing population of any major downtown over the past two decades. Miami’s urban core posted population growth of 202.5 percent from 2000 to 2018.

The soaring head counts enticed new grocery stores, restaurants and bars downtown, fulfilling the vision of the district as something more than a place to leave at the end of the workday.

Whole Foods opened a store in Downtown Miami in 2015, and the crowds quickly became legendary. “You can barely move in the store,” a Whole Foods executive reported in a 2016 earnings call.

Trey Davis, an associate director at Cushman & Wakefield, lives on Brickell — downtown and Brickell are distinct neighborhoods, but both are part of the central business district — and walks to work and shopping areas.

“I barely use my car,” he said. “There will be times when I go three to four weeks without using it.”

While new residents have been plentiful, office users have proven more elusive. That’s changing, too.

In one noteworthy recruiting win, Blackstone Group last year signed a deal to open a 215-person office in downtown. The private equity giant leased a 40,000-square-foot office at 2 MiamiCentral, the office building adjacent to the Brightline train station.

Blackstone expects to pay its Miami workers an average salary of $200,000. Microsoft and hedge fund Citadel also are said to be shopping for office space in downtown.

Big-name companies, it seems, finally are taking note of Miami’s oft-repeated selling points: low taxes, a business-friendly climate, and comparatively affordable real estate costs.

Despite that pitch, the tenants from New York and California arrived in a trickle rather than a torrent. Then came the COVID-19 outbreak, and companies took a fresh look at their locations.

“The pandemic was the accelerator. We have a great migration happening right now,” said Alan Kleber, a managing director at JLL. “You have people thinking, ‘If we were ever going to move our headquarters, or move a component of our operation, now is the time to do it.’”

The new interest in Miami follows years of efforts by the city to pitch itself to financial firms in the Northeast and to tech players on the West Coast.

“We felt it was only a matter of time before this happened,” said Cushman & Wakefield’s Trench. “I never thought a pandemic would be the catalyst.”

The emergence of Miami as a corporate location spurred 830 Brickell’s decision to quote rental rates of $75 to $85 per square foot.

“These are the highest rates Miami has ever seen,” said Trench, who’s marketing the space.

Even so, 830 Brickell’s rates are lower than the typical rents for Class A space in San Francisco or Midtown Manhattan. The building is scheduled for completion in 2022.

Features will include a building-wide app that lets users order coffee or reserve a treadmill in the gym, Trench said. While work-from-home trends during the pandemic have reduced demand for office space, Trench expects a return to the office.

“As much as we’ve seen we can all work from home, it’s tough to be at home 24 hours a day,” he said.

Miami boosters are banking on a return to offices after the pandemic. In a bid to raise the city’s national profile, the Miami Downtown Development Authority (DDA) last year launched its Follow the Sun initiative, which pays incentives to businesses that move to the central business district.

To qualify, an employer must create at least 10 new jobs that pay at least $68,000 a year. In return, employers get $500 per employee, up to a maximum of $50,000 a year, and up to $150,000 over three years.

In February, the DDA said eight companies won grants that will bring 684 jobs downtown. In all, the companies will receive $560,000 from the initiative.

One of the recipients is Blackstone. Other grant winners include an unnamed California wellness company and a Connecticut hedge fund, along with a number of employers moving from elsewhere in South Florida.

Downtown developer Motwani is a member of the board of the DDA. He said the incentives aim to make employers feel welcome, especially those from markets, such as New York and California, where business owners often complain about red tape and bureaucratic mazes.

“It’s more of a gesture,” Motwani said. “What can we do?”

The idea for Follow the Sun started in 2013. Miami had embarked on a marketing campaign aimed at hedge funds and other financial firms in Manhattan and Greenwich, Conn. The DDA pitched itself as a sunny and carefree destination, a place with lower taxes and a more welcoming business climate.

The Follow the Sun initiative is funded from property taxes collected by the DDA. Motwani said the outlay will be more than repaid as hundreds of high-earning workers take jobs downtown.

Some also will live in the district. Even those who commute from other areas will still spend money at downtown restaurants and support cultural institutions. What’s more, some of the incentive money will be pumped into building improvements as the new tenants set up shop downtown.

“They’re giving back more than they’re taking,” Motwani said. “We want the jobs. We want the diversity to our job base.”

 

 

Source:  Commercial Observer

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Why Healthcare Is Returning To The Campus Model

For the past several years, healthcare operators have spread out ancillary services, like dialysis and oncology. Now, healthcare providers are returning to the campus model, consolidating services in a medical campus setting. Rising demand for these services and a customer preference to the campus model is fueling the new trend.

“The expansion has been fueled by the demand of the healthcare consumers to have their healthcare services located near their homes,” Bryan Lewitt, managing director at JLL, tells GlobeSt.com. “In most cases healthcare consumers do not live close to the hospital campuses. This has forced the hospital systems operators other and other ancillaries service providers to relocate their services to the community where they want to serve.”

In addition to demand, the campus model is also more sustainable, particularly due to a changing regulatory environment.

“After being in the community in the past five to seven years the hospital system operators are finding it very difficult to run a profitable business off-campus. Due to all the regulations placed upon hospitals and reduced reimbursements most of their off-campus ventures are losing money,” says Lewitt. “However, in some instances where the hospital system has a very good market share in a very wealthy neighborhoods off campus locations work for them.”

This shift in strategy has had a major impact on leasing activity for both on- and off-campus medical buildings.

“There are many well located retail centers that have been beneficiaries of healthcare providers to their centers,” says Lewitt. “Currently 10% of all healthcare facilities in Southern California are located is in a retail center. This has doubled from only 10 years ago. Secondly, off-campus medical buildings have also benefited. The off-campus medical buildings have benefited because it is now acceptable for the investors and the financing world to value these off-campus buildings close to an on campus medical building due to the credit of these tenancies.”

Smaller medical start-up models will be most impacted by the new trend.

“The major shift is for the vacuum of hospital operators going back to the campuses for the disruptors. The disruptors have less regulations and they are not embroiled in a mission like many of the hospitals,” says Lewitt. “They also know how to make money. Therefore, we see smaller start-ups and publicly back companies looking for off-campus locations to fill the void of where the hospital operators wanted to be in the past.”

 

Source:  GlobeSt.

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