🧊 Financing & Fridges

Happy New Year Highest & Best!

Sending an abbreviated post this week to finish out the year. We got: a construction lending bonanza, a $113 million refrigerator; and (shocker) New Yorkers are still looking to migrate to Florida.

Thank you for reading, forwarding and commenting. See you all in 2024.

—Oshrat

It’s one thing to plan a big condo or apartment development. It’s another thing, in an era of high interest rates and persistent worries about commercial property values, to get a lender to finance that project.

Add a few more layers of tough if you’re seeking a loan to build an office tower.

Well, the final weeks of the year ended with a flurry of South Florida developers announcing they’ve secured the money to move forward with their projects:

💰 Sundy Village, an office and retail project just off the nightlife-heavy strip of downtown Delray Beach, secured a $173 million construction loan from Monroe Capital and JPMorgan, according to the developer, Pebb Capital.

The firm is developing 180,000 square feet of offices and more than 28,000 square feet of retail along Atlantic Avenue, with plans to open the first buildings in the summer of 2024.

It certainly helps that Pebb has signed commitments with tenants for over 140,000 square feet of the space under construction. Those takers include: Barcelona Wine Bar; a restaurant venture by a celebrity chef; and a new headquarters for Vertical Bridge, “the largest private owner and operator of communications infrastructure in the United States,” according to Pebb.

💰 FAT Village, a planned arts and cultural district in downtown Fort Lauderdale, got a $220 million construction loan for the first phase of its project, which includes 600 apartments and 180,000 square feet of offices, within walking distance to the Brightline train. The lender is Bank OZK, an Arkansas firm that’s long favored high-profile New York and Florida investments.

More details on FAT Village, and interviews with its developers, Hines and Urban Street Development, can be found here, in August’s first-ever issue of Highest & Best.

💰Ritz-Carlton Residences Pompano Beach: Two under-construction towers, with a combined 205 condos along the beach, secured a $259 million loan from Bank OZK, the South Florida Business Journal reported.

It was the largest construction loan ever for a residential project in Pompano Beach, a waterfront locale that’s drawing interest from Miami developers seeking new frontiers.

The project, where condo prices start at $1 million, has buyer commitments for 90% of the units, fully two years before its expected completion in 2025, according to the developers Fortune International Group and Oak Capital.

Miami’s $113 Million Refrigerator

The founder of clothing retail chain Zara, has paid a sizable sum for what’s becoming a fashionable investment in South Florida: warehouses.

The investment firm of Spanish billionaire Amancio Ortega, paid $113 million for a cold storage warehouse in Hialeah, Florida, near Miami, according to data from Vizzda, and disclosures from Ortega’s office.

It’s the second biggest deal of 2023 for a single warehouse property in South Florida, according to data from MSCI Real Assets.

The property, Bridge Point Cold Logistics Center, is a 312,000-square-foot warehouse, with the capacity to keep Miami’s perishable goods pretty darn cold: between 55 degrees to negative 10 degrees, the South Florida Business Journals reported.

South Florida’s population surge has sent investors clamoring to buy warehouses in the region. They’re betting that, as warehouse landlords, they can lease out space at ever higher rents to grocers or retailers like Amazon who will need extra room to stash items in proximity to all those new consumers.

In the first three quarters of this year, investors spent a total $1.36 billion on individual warehouse properties in South Florida, according to data compiled by MSCI. That’s 38% more than what they spent on average for such properties during the same period between 2015 and 2019.

Pandemic Migration Boom Is Slowing — Not Quite in Florida

The share of U.S. homebuyers looking to move to a different metro area declined for the third straight month in November, according to a report this week from brokerage Redfin.

Only 23.9% of home searchers in the three months through November were looking to relocate to another region, the lowest share in 18 months.

Los Angeles and San Francisco topped the list of places homebuyers were looking to leave— though there were fewer potential departures this November than there were a year ago, Redfin reported.

Not so much for New York. There were 24,900 New Yorkers searching for properties outside of their region between September and November. That’s 20% more than were looking in the same period of 2022, Redfin said.

The number one location where those New Yorkers were looking to buy: Miami.

That’s it for today!

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