Spec Industrial Surge

Spec industrial development's heated up this year, mostly in Miami-Dade. But now other South Florida markets are getting a piece of the action. (Sorry, Miami-Dade, you have to share.)

Demand is growing in the West Palm Turnpike corridor, McCraney Property Co CEO Steven McCraney says, as job growth and residential development strengthen. Not much has been developed there for years, and that dynamic has allowed McCraney to pull the trigger this week on a 100k SF warehouse/distribution project in its Vista Business Park project in West Palm Beach, the first for the park in five years. Snapped: Steven (in yellow) at the summit of Aconcagua, the highest mountain in the Western Hemisphere at nearly 23k ft. (His goal is to climb the highest peaks on every continent.)

Initial interest from prospective tenants has been strong, Steven says. The project consists of two buildings on more than seven acres, featuring spaces from 10k SF to 100k SF. The buildings will have clear heights of 24' and depth of up to 130'. Edwards Construction Services is the GC, with financing provided by City National Bank.

While local demand is driving spec in places like West Palm Beach, international trade and major infrastructure projects are still driving Miami-Dade. This week, Chicago-based Bridge Development closed on 17 acres at NW 112th Avenue and 146th Street in Hialeah Gardens for the development of its 242k SF Bridge Point Crossroads West. The company is eager to build more industrial in South Florida, because the demand is rising for new product, principal Kevin Carroll tells us. (It's also probably been scarred by the winter and wants to be here to warm up.) This will be the third spec industrial building by Bridge in South Florida over the past 12 months; the other two are in Broward.

Retail Refi Rolls On

South Florida Class-A retail's recovery is so complete that refinancing is once again the relatively smooth process that it used to be, says Aztec senior managing director Howard Taft (right, with colleague Charles Penan). The two recently secured an $11M first mortgage for the 81k SF Sunset Strip Plaza in Kendall (a seven-year term, 3.8% fixed interest rate, and 70% LTV). It's the latest example of well-located assets securing sound financing, Howard says, provided the tenant mix is good. Sunset Strip Plaza is anchored by Presidente Supermarket, and Sherwin Williams and Family Dollar are also tenants. He says he expects to execute a lot more deals like this.

No Slowdown in Overseas Buyers

Overseas buyers aren't losing interest in South Florida, ONE Sotheby's International Realty's Jonathan Garcia tells us. If anything, they're more interested as the US dollar depreciates against various other currencies (the Brazilian real, for instance, has grown stronger in the last six months; soccer has that effect). But it's also for less tangible reasons: For one, they want to be part of the Miami renaissance, Jonathan says. The overseas interest is also keeping prices buoyant. He recently repped ONE Bal Harbor in the sale of a unit in the property for $4.5M, making it the highest-price, three-bedroom ever to sell there.

Storm Front Coming

Hurricane season is upon us, and that means Arthur and his ilk. The 2014 CoreLogic Storm Surge Report, which was released today, has quantified the risk to South Florida properties, and it turns out that metro Miami-Dade is once again No. 2 in the country, topped only by greater New York (Tampa, Virginia Beach, NC, and New Orleans rounded out the top five.) Roughly 562,000 Miami-Dade properties are potentially affected by all categories of hurricanes, with a total structural value of $103B, give or take a few mil.

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