A new mixed-use project may soon transform undeveloped land in south Orange County.
Developer Chris Miller — CEO of C. Miller Capital, which has offices in Orlando and Miami — plans to build a hotel, 11 commercial parcels, a 2-acre storage unit, 350 apartments and 150 condos northwest of John Young Parkway and the future Holden Avenue extension, Miller told Orlando Business Journal.
Miller is under contract with entities related to the landowners. The project, called Millenia Place, is subject to city of Orlando approvals.
Those involved with the project so far include Kevin Hipes, Millenia Place's exclusive broker and founder of Orlando-based Hipes Consulting & Brokerage LLC; and Orlando-based AVID Group is the engineer. A general contractor and architect haven't been selected. The project may cost more than $100 million to build — which may create roughly 1,000 construction jobs, based on industry standards. Miller may sell some parcels to developers and may build some of the project himself.
Miller went under contract for the roughly 60 acres around August and plans to buy the land on Dec. 6. Construction may start in mid-2021 and take one year to complete.
"The entire area is bursting at the seams," Miller said.
Meanwhile, Orlando is in the midst of a building boom. The value of commercial construction starts in metro Orlando — when a permit is issued to a general contractor for a new project — grew by 43% year-over-year to $2.6 billion, the most recent data from New York-based Dodge Data & Analytics showed.
And demand for land continues to rise. Some of the biggest Central Florida land sales closed during this past quarter, as total volume topped $1 billion in August. Out-of-town investors who are lured by population growth continue to want more Orlando-area property for new commercial and residential development.
That means more commercial projects are in the works.
“There’s still extreme confidence in Central Florida,” Andy Slowik, director of the land advisory group for Chicago-based Cushman & Wakefield PLC, who keeps track of these transactions in Orange, Seminole, Osceola and Lake counties, previously told Orlando Business Journal. “I definitely anticipate the momentum will continue into 2020.”
CFCAR Leadership joined hundreds of business owners and community leaders to celebrate the expansion of the Joe R. Lee Branch of the Boys & Girls Clubs of Central Florida in late November of 2019.
The Fundraising Breakfast was designed to showcase the expanded facility that includes a new gym and other expanded facilities that will allow 100 more children to participate in the award-winning programs offered by this organization and to celebrate 75 years of success in the community.
CFCAR 2019 President Carol Tanner, CCIM, explained that CFCAR is dedicated to the future of Central Florida’s youth and said she was honored to represent CFCAR in donating to this community initiative. CFCAR leadership was invited by fellow CCIM Jennifer Pollock to attend the event.
At the Joe R. Lee Branch, located in the historic community of Eatonville, the center serves roughly 500 young people who need support and focuses on an outcome driven club experience that includes priority outcomes such as 97% of the teens abstaining from smoking and drinking, 99% of the club members advancing to the next grade level and where 96% try to help others when they see them in need.
Adam Neumann’s charisma was almost enough to take WeWork, the shared-office-space company he co-founded, public. But a delayed IPO process marred by investor concerns about his behavior, the company’s governance, and valuation, pushed Neumann to step down as CEO this past week.
The move will partially mollify the company’s critics, but it will do little to change the risk inherent in WeWork’s business model. WeWork’s real estate portfolio is filled with leases that are far longer than what’s typical in the industry. Under its leases, WeWork owes a whopping $47.2 billion, according to the company’s IPO paperwork.
“The average length of the initial term of our U.S. leases is approximately 15 years,” WeWork noted in its IPO filing.
By contrast, from 2006 to 2017, the average term for leases signed by U.S. publicly traded real estate investment trusts was 6.8 years, according to Morgan Stanley.
WeWork’s long leases look particularly problematic when you consider that its client base is seeking shorter, more flexible commitments. The typical WeWork member agreement is on average less than two years, the company’s filing says.
“In many cases, our members may terminate their membership agreements with us at any time upon as little notice as one calendar month,” the company’s IPO filing says.
WeWork declined to comment on the gap between the company’s leases and its customer commitments. The company said in its S-1 filing that its annual revenue run rate was $3.3 billion.
For WeWork, taking on long-term risk is part of the value proposition they offer to both tenants and landlords, the latter seeking certainty and the former seeking flexibility.
WeWork’s most direct competitor, IWG (ticker: IWG.LN), which operates the Regus brand of coworking spaces, manages the same risk in several ways.
First, it’s more geographically diverse than WeWork, with office locations in over 1,000 cities globally. That leaves them less exposed to the regional or national economic swings than WeWork, which has locations in 111 cities. Second, IWG simply has a lower level of lease of total lease obligations than WeWork at £6.6 billion, or about $8.4 billion, according to the company’s 2018 annual report. And third, IWG signs shorter leases: 62% of its lease obligations are due within the next five years.
IWG has good reason to be relatively prudent: after the dot-com bubble burst, its U.S. business filed for bankruptcy.
WeWork’s landlords are, of course, aware of its risk. And they’ve been increasingly asking for WeWork to guarantee larger portions of the long-term leases that the company signs. Columbia Property Trust (CXP) and SL Green (SLG) both discussed guarantees they sought and received from WeWork on conference calls last year, The Wall Street Journal reported.
To make its revenue more predictable, WeWork has expanded its enterprise business, which now accounts for 40% of its membership base. Those customers come with relatively longer contracts and penalties if they are broken. WeWork also says in its filing that its revenue will rise in coming years as newly opened locations mature, which could reduce the gap between its assets and liabilities.
Neumann may be out as CEO, but the need to get potential investors’ comfortable with WeWork’s risk hasn’t changed. The task will likely be high on the priority list of the company’s new co-CEOs Artie Minson and Sebastian Gunningham.
On Thursday night, the Financial Times reported that WeWork has stopped signing new leases with landlords in an effort to reduce costs.
The company denies that report.
On Friday the company told Barron’s: “WeWork continues to sign new lease agreements with our landlord partners. We expect the pace of entering new lease agreements to slow over the next several quarters as we pursue more strategic growth and focus on accelerating our path to profitability.”
In May of 2019, RPR announced a strategic partnership with CREXi, a commercial real estate listings portal, community and marketplace.
Today, the RPR-CREXi listings partnership goes live, which will offer REALTORS® and RPR users access to more than 84K for sale properties, 180K spaces for lease, and 50K historical sale/off-market properties. These listings will be searchable in RPR nationwide, making RPR’s commercial inventory more robust than ever before.
Together, CREXi and RPR enable NAR’s commercial members to streamline, manage and grow their business. This data integration between RPR and CREXi will allow commercial practitioners to manage their for-sale and for-lease properties in a more streamlined fashion. Bottom line: it will simplify transactions and boost business for all commercial users.
Watch the video below to learn more about the RPR-CREXi partnership.
Another big advantage for REALTORS® is an exclusive 35% discount to join CREXi Pro, a premium version of CREXi that includes more features and has the potential to increase property marketing efforts.
Orlando is the fifth-fastest-growing flexible office space market in the U.S. according to a new report from CBRE. The market’s flexible-space inventory grew to 485,000 sq. ft. by Q2 2019, up 180,000 sq. ft., or approximately 59 percent from a year earlier.
Flexible space now accounts for 1.2 percent of Orlando’s total office inventory, up from 0.7 percent a year ago. The ratio comes in below the U.S. average of 1.8 percent, indicating there is room for even further growth in this sector.
In the past year, two new-to-market flexible-space operators established operations in Orlando, adding nearly 100,000 sq. ft. to the total inventory. Today, there are 15 flexible-space operators spanning 27 locations, most of which are highly concentrated in Orlando’s Downtown/CBD submarket (56.5 percent).
“Flexible office space is a growing, viable solution for remote workers, entrepreneurs, and startups here in Orlando,” said Jim Gray, Managing Director at CBRE. “As Orlando’s tech sector continues to expand, demand for flexible office space is highly likely to grow as well.”
CBRE outlines several growth scenarios for the flexible office space sector, which currently occupies a cumulative 71 million sq. ft., or 1.8 percent of the office space in 40 U.S. markets. CBRE’s baseline forecast calls for flexible office space to expand to approximately 13 percent of office space by 2030, reaching up to 600 million sq. ft. Even in a low-growth scenario, CBRE sees flexible office space claiming up to 6.5 percent of the market by 2030.
Fueling that growth is demand from small businesses and enterprise users alike that favor the flexibility of office accommodations on relatively short-term leases, allowing them to expand or contract their space according to the needs of their business. Additionally, the flexible office space category has room to grow in every U.S. market. Even markets where flexible office space is well established – such as San Francisco at 4 percent of its office market and Manhattan at 3.6 percent – aren’t as penetrated as major international markets like London and Shanghai, both at 6 percent.
“We’re seeing a fundamental change in the expectations that organizations and their employees have for the workplace. This change is spurring an increasing number of companies to engage with flexible office solutions that provide the physical environment and business terms they prefer. This shift is ongoing,” said Julie Whelan, CBRE’s Americas Head of Occupier Research. “There are some very bold predictions in the marketplace – with some calling for flexible space accounting for as much as 30 percent of office space in the future. There is simply not enough available office space to support this supply without even more drastic changes in tenant behavior.”
CBRE believes flexible space can account for as much as 22 percent of office space by 2030 under the most aggressive flex-space adoption scenario.
CBRE’s analysis found the majority of flexible-space supply in the U.S. concentrated in top markets, many of them tech hubs. Several of those markets also registered the fastest growth rates in the past year.
Get excited everyone! Our first committee week leading up to the January 14th start of the 2020 legislative session took place this week. The big news was the designation of Representative Chris Sprowls, a Palm Harbor Republican, as Speaker-Designate. This means he will be the Speaker of the House for the 2021 – 2022 term.
He highlighted a number of important things during his speech, but the most pertinent news for REALTORS® was his remarks concerning the environment. Not only did he reinforce the importance of protecting and preserving our natural resources, but he also called on lawmakers to “stop being afraid of words like ‘climate change’ and ‘sea level rise.’” He added that “Floridians want good jobs, clean water, and ample, sandy beaches, and they want to know we are working on practical ways to mitigate the risk of flooding in our coastal communities.”
The other news of the week that is important to REALTORS® were the updates provided to legislators on affordable housing. There were three separate legislative committees that received updates and information on this topic.
The House Local, Federal & Veterans Affairs Subcommittee heard presentations from the Florida Housing Finance Coalition and the Florida League of Cities. Both groups provided information on the subject and encouraged lawmakers to fully fund the State and Local Government Housing Trust Funds to help them be as successful as possible.
The House Business & Professions Subcommittee heard from a variety of “tiny home” manufacturers and had a panel discussion on the subject. The main takeaway from this meeting was that these builders need lawmakers to break down the barriers of state and local regulation of tiny homes so they can be more accessible to Floridians.
Lastly, the Senate Appropriations Subcommittee on Transportation, Tourism and Economic Development heard presentations from the Florida Housing Coalition and the Shimberg Center for Housing Studies. Both groups gave detailed breakdowns of Florida’s affordable housing needs and encouraged full funding of the State and Local Government Housing Trust Funds.
Overall, it was a very busy start to the committee week process filled with many productive meetings with legislators. Stay tuned for my next legislative update which will be on Friday, October 18th, following the conclusion of the next committee week.
Vice President of Public Policy
Development Ventures Group (DEVEN) and Ustler Development Inc., in a public-private partnership with the City of Orlando, have delivered UnionWest at Creative Village on the University of Central Florida’s campus.
UnionWest is a 15-story building with 644 student housing beds, 100,000 square feet of academic space, 11,000 square feet of ground-level retail space and a 600-space parking garage.
Construction on the $105 million development began in October 2017.
The building is located at the corner of West Livingston Street and North Terry Avenue in downtown Orlando, which grants access to both University of Central Florida and Valencia College students.
Five of the six ground-floor retail locations in UnionWest are leased. Tenants include Vera Asian, Addition Financial, Subway, Dunkin’ and Qdoba Mexican Grill. The student housing portion opened in time for the fall 2019 semester at 97 percent occupancy.
Source: RE Business
A Fort Lauderdale developer bought nearly 1,400 undeveloped acres in Osceola County, paving the way for more residential and commercial development in Central Florida.
BTI Partners' Edgewater Property Florida Holdings LLC purchased the land — which is along the west side of Florida’s Turnpike from Kissimmee Park Road to the Three Lakes Toll Plaza — on Aug. 27 for $40 million, or roughly $28,571 per acre. It's likely the largest price for a land deal this year in the Orlando area. The sellers were entities related to the Whaley family.
Development may start in mid-2020. The land has approvals for roughly 5,000 residential units and 2 million square feet of commercial uses.
"We are preparing to make similar pointed land investments across the country and will be significantly increasing the number of homesites we supply to the homebuilding industry,” Justin Onorato, chief investment officer at BTI Partners, said in a prepared statement.
A development of this size likely will deliver more affordable housing to the area, said Brad Parker, a land expert with Longwood-based Southern Realty Enterprises Inc., who wasn't involved in the deal. That's important in Orlando where nearly half of the City Beautiful’s households are cost burdened, meaning they’re spending at least 30% of their income on housing.
In addition, metro Orlando has just 13 affordable, available rental homes for every 100 extremely low-income renter households. Orlando is also among the most expensive housing markets in the U.S.
But large residential developments keeps costs down for builders, which in turn can sell homes for more affordable prices.
"Everyone would like to have Isleworth-type communities,” Parker said. “But for the health of the marketplace, we’re going to have to continue to produce entry-level housing.”
Meanwhile, BTI Partners continues to build at The Grove Resort & Water Park, a large condo-hotel property west of Walt Disney World. The developer filed plans in June for a new condo-hotel property just north of its existing towers on 5.4 undeveloped acres. The documents show the company wants to build a 160-room hotel with 9,800 square feet of support facility space and parking, as well as a swimming pool and more.
Many of our members need to meet specific CE credits by end of September so we thought we would post a few resources you may not be aware of.
Florida Realtors Offices-Southeast Orlando
This case study-driven course provides agents, brokers, students, and allied professionals with an understanding of the skills, resources, and business practices that pave the way for success in commercial real estate. Learn how to analyze leases and investment value, and develop a plan to kick-start your career. Foundations for Success is not just about how the commercial real estate business works, it is about working the business.
CLICK HERE TO REGISTER FOR THE FOUNDATIONS FOR SUCCESS COURSE
We also have a commercial focused courses available for our members via our VANED agreement.
CLICK HERE TO REVIEW DETAILS OF EACH COURSE AND REGISTER
Florida Realtors® recognized a dedicated CCIM, ALC, and member of CFCAR as recipient of their annual Commercial Realtor Achievement Award on Thursday, August 22nd during the state association’s annual Convention & Trade Expo at Rosen Shingle Creek in Orlando.
The Commercial Realtor Achievement Award honors a Realtor’s lifetime of contributions to commercial activities at the local, state, national and community levels. Benjamin Crosby, CCIM, ALC, a member of the East Polk County Association of Realtors, received the 2019 Commercial Realtor Achievement Award.
He also is a member of the Central Florida Commercial Association of Realtors and the Florida Gulf Coast Commercial Association of Realtors, as well as the Greater Lake and Sumter Counties, Osceola County and Tallahassee associations.
With 37 years in the real estate industry, Crosby has served his local association in numerous ways, from teaching courses to chairing its Commercial, RPAC and Professional Standards committees, and serving as a former president of the organization.
On the state level, he teaches for the Land Institute and developed several courses for continuing education (CE) credit used by various local associations. In 2010, he received the Realtors Land Institute’s Florida Land Realtor of the Year Award as well as its Excellence in Instruction Award. He served as president of the Florida CCIM (Certified Commercial Institute Member) Chapter in 2012 and has been a trustee for Florida Realtors Political Action Committee. He has been a respected member and teacher of the REALTORS® Land Institute since 2004 having earned the Accredited Land Consultant (ALC) designation.
A long-time and passionate supporter of RPAC (the Realtors Political Action Committee) on the local, state and national levels, Crosby’s name appears on the National Association of Realtors’ D.C. “RPAC Hall of Fame.”
WHO WE ARE
Code of Ethics
WHAT WE DO