on the MOVE
market snapshot BROWARD COUNTY By Crystal Proenza
RETAIL FOLLOWS ROOFTOPS INTO A SHARP DECLINE
The strain on the economy is affecting of Shopping Centers’ 2008 Florida Retail
the retail market in South Florida over- Report, overall average rental rates in
all, but Broward County, the 15th-most Broward’s six major submarkets have
populous county in the US, is being hit lowered slightly from 2007, from $17.25
especially hard, according to second- to $17.19 at mid-year 2008. Concessions
quarter brokerage market reports. are on the rise throughout the region, as
“Our population growth is declining,” landlords try to hold on to old tenants
says Marc Strauss, vice president of in- and gain new ones despite a waning mar-vestments and senior director with Mar- ket. In Broward County, Strauss says
cus & Millichap in Fort Lauderdale. “Also, concessions are between 8% and 10%,
we had such a massive rise in home val- correlating with the vacancy rate.
ues and people were using their homes as New construction for this year has
their equity. Now that there’s so much dropped to 1. 5 million sf from 1. 9 million
foreclosure activity and home values have sf last year, with almost all construction
declined, there’s a lot less money out happening west of Florida’s Turnpike, ac-there. We were going so far into our home cording to Marcus & Millichap. “I believe
equities and prices were rising so fast. that it’s happening in the west because the
Now they’re falling very fast.” population and density is still there,” ex-
According to Marcus & Millichap re- plains Strauss. “Most of what was built to
search, Broward County’s vacancy rate the east in terms of residential develop-has climbed 70 basis points this year ment were condominium units,” which
alone, and is expected to continue rising are suffering right now, he says. The new
through the end of the year. Overall va- inventory will create a 1.6% increase in
cancy rose 210 basis points from a year supply, according to market reports.
ago to about 8% overall, says Strauss, with Transaction activity in the county has
rents and vacancy expected to continue slowed, but investors are still bidding on
to slip. Much of the increase is being newerpropertiesand are willing toinvest
caused by small retailers that were forced in value-add properties. The biggest sale
to close, creating vacant space mostly in in the first half of the year took place in
older, class B and C shopping centers. Hollywood at Fountains of Miramar
“However, in the class A retail market shopping center. The 139,400-sf, 100%
there’s not as much vacancy,” says occupied complex commanded a price
Strauss. “My biggest concern when you of $39.5 million from seller Newman Re-
see vacancy rising in B and C properties alty Group to buyer Morris Cos., ac-
is that it could lead to properties being cording to the ICSC report.
taken back by lenders.” Brokers are confident that next year
Strauss notes that many of these prop- will bring a better report for Broward
erties were bought with 75% or even 80% County, assuring that it is not the only re-
leverage over the last three years, in an- gion of the state experiencing a downturn
ticipation of a continued runup in com- in retail. “These are sentiments expressed
mercial real estate values. If owners’ debt not only about Broward and South
service can’t be met, it’s possible that Florida, but about Florida as a whole,”
those properties will go back to the says Strauss, who attended this year’s
lenders, he says. ICSC Florida Conference in Kissimmee
According to the International Council in August.
John Breistol, a 20-year-veteran in the
construction and development industry,
has been named senior executive of de-
velopment, design and
construction of all projects in South Florida for
Foram Group, based in
Miami. He will lead the
Brickell Financial Centre
team, focusing on the
Breistol completion of the
602,721-sf class A office
tower by January 2010, as well as a mixed-use project including 300 hotel rooms, office space and retail, to be completed by
2012.
Lori Schneider has been
promoted to senior vice
president of investments
at Marcus & Millichap in
Fort Lauderdale. Her new
designation represents
excellence in client rela-
tionships, investment Schneider
real estate expertise and
sales volume. Schneider will continue to
focus on single-tenant and multitenant investment sales nationwide.
Clinton M. Casey has
joined Colliers Abood
Wood-Fay in Miami as a
senior commercial associate. Prior to joining the
firm, Casey was the
owner of DC Casey Com-
pany. In his current posi- Casey
tion he will specialize in
landlord representation, land and commercial property sales as well as site selection advisory services.
matter of FACT
Miami International
Airport’s respective
rankings among the
nation’s and world’s leading cargo airports, according to Air Cargo News and
data from the Airport Council International. Last year, MIA handled 1. 7 million
tons of international freight.—REFLA
