Commercial Real Estate Still Hot in South Florida
At a time when South Florida home values are falling, commercial real estate properties are still fetching big bucks.
In the first half of 2007, investors poured about $3 billion into office, retail and industrial developments across Broward and Palm Beach County, according to Grubb & Ellis Co.
The region is attractive because of its robust job growth and population base and proximity to Latin America.
“We are seeing numbers down here that nobody would have imagined,” said Peter Reed, a broker with the Rendina Cos. in Palm Beach Gardens.
Reed was one of about 300 people who attended a commercial real estate conference Friday at the Westin Diplomat Resort & Spa in Hollywood.
Even at a time when the Florida housing market is slowing, the burgeoning office market reached a high point in July with two mega-deals.
Investment firm BentleyForbes LLC of Los Angeles bought Las Olas Centre, a 469,000-square-foot office-retail landmark in downtown Fort Lauderdale, for $230.9 million.
One of the sellers, Colonial Properties Trust, said the $492-a-square-foot price makes it one of the richest deals for an office in the Southeast.
Last month, Colonnade Properties of New York nabbed Phillips Point, a signature office property overlooking the West Palm Beach waterfront, for $200 million, or $474 a square foot.
Four years ago, the 422,000-square-foot complex sold for $138 million.
So far this year, office building sales over 100,000 square feet in Broward County have totaled $483 million, according to Cushman & Wakefield.
Palm Beach County sales have hit $429 million.
Institutional investors also are bullish on once-sleepy Wellington and its bustling retail corridors along U.S. 441 and Forest Hill Boulevard.
A group affiliated with Prudential Real Estate Investors recently paid $37.25 million, or $405 a square foot, for the 92,000-square-foot Wellington Green Square Shopping Center.
While the region’s once-hot housing market has been in a prolonged slump, due to widespread Florida mortgage concerns, demand for some commercial properties is fueled in part by the lack of development.
Few major office projects have been built in Broward and Palm Beach counties in the past few years because of higher construction costs and permitting problems.
As a result, occupancy levels and rental rates for existing commercial space are at all-time highs in both counties.
Rental rates, not including expenses, for the most prestigious buildings are about $25 a foot in downtown Fort Lauderdale and $30 a foot in downtown West Palm Beach.
Follow the link to continue reading this South Florida Sun-Sentinel piece on the booming market for commercial Florida real estate …
