Tag Archive for: newmark grubb knight frank

Remembering Industry Veteran Robert H. McCullough

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It is with deepest sympathy that we learned of the passing of our good friend and colleague Robert H. McCullough on Monday, January 23rd after a prolonged illness.

Robert had more than 24 years of experience in the South Florida commercial real estate industry, with an extensive background specializing in professional office as well as industrial product, with proven expertise in medical product as well. His primary focus was landlord/seller agency representation, but had enjoyed success with select buyer and tenant representation clients.

Robert had completed well over two million square feet of new and existing commercial lease and sale transactions, valued at over a quarter billion dollars.

He served as Managing Director with Newmark Grubb Knight Frank (NGKF) since 2008.

Prior to joining NGKF, Robert represented landlords and tenants at Property Trust Realty, Inc., which was purchased by Codina Realty Services. Flagler Real Estate Services later purchased Codina Realty and, during his tenure there, he was awarded Broker of the Year 2000, 2001, 2002, 2005, 2006 and 2007.

The family requested that donations be made in Robert’s name to:

Berean Christian School
8350 Okeechobee Blvd., West Palm Beach, FL 33411

or

Church in the Palms
3812 Jog Road, Greenacres, FL 33467

Please keep Robert and his family in your prayers as we mourn the loss of this special man.

SFOBA December Recap and January Preview

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In preparation for the 2015 SFOBA kickoff meeting Thursday January 15 at noon, hosted by Steelbridge Capital and Jones Lang LaSalle at Cypress Financial Center 5900 Andrews Avenue, here is our December recap and January preview. I also tried to include some of my own “borderline insightful” market commentary.

Thursday, December 11 marked the final meeting of the South Florida Office Brokers Association for it for 2014. The meeting was hosted by Donna Korn of Taylor and Mathis, agent for Brookdale Group, owners of a five-building portfolio totaling over 400,000 square feet of Class-A Office space in Sawgass International Corporate Park. The meeting was held at Brookdale’s International Place.

Our first speaker was Eric Messer, Research Manager for Newmark Grubb Knight Frank. Eric gave us a brief synopsis of the overall state of the office market. The news was very bright for the market as 2014 is shaping up to be the best year since 2005.

Approximately 685,000 sq. ft. of office space was absorbed in 2014 in Broward County, reducing vacancy rates from 15.0% to the current 13.4%. An interesting observation was that the Class B market was unusually strong, which according to Eric is the result of tenants being priced out of the Class-A market. This assertion was further supported by our panel discussion.

The December meeting featured a panel discussion featuring three top brokers in the market..The panel consisted of Scott O’Donnell, a CBRE investment broker specializing in private equity investments, Caroline Fleischer, a tenant representation specialist at Cushman and Wakefield and Chris Gallagher, a leasing specialist for Duke Realty. The panel was moderated by Paul Marko, President of Stiles Realty.

According to Scott, we are in the third strong year of a robust investment cycle. We are seeing a new layer of foreign investment as the market’s strong demographics are attracting funds from Latin and Asian sources. It does seem however, that many domestic investors are being priced out of the market due to the demand from these offshore sources.

Caroline discussed the vibrant CBD market in Fort Lauderdale. Properties along Las Olas Boulevard have seen net rent increases of $5-$10 per square foot over the past 12 months. Downtown tenants are urged to jump on leasing opportunities as spaces are disappearing rapidly and rents continue to increase. Chris Gallagher concurred with Caroline’s assertions, saying that he felt bad coming up with higher rates and fewer concessions in his Weston and Plantation properties. He felt like he was taking the first born from brokers with whom he had grown up in the business. But that is where the market is today.

This led to the inevitable question of whether the market is right for new development. According to Gallagher, Duke has recently signed 100,000 sq. ft. of leases in Weston and he could use a new building to lease. Caroline believes that we are 12 months away from needing new space in Fort Lauderdale CBD. But here’s the interesting piece that will have a major impact on the near term future of the office market. Residential developers will pay three times what office developers will pay for sites. With this price difference, as well as the pre-leasing requirements demanded by lenders, new office development may very well lag behind demand. Therefore, we can expect a trend of increasing rental rates and declining vacancies over the foreseeable future.

Other key trends in the market discussed by the panel included the trend toward urbanism. Fort Lauderdale has seen increasing residential development in the downtown core and the upcoming wave streetcar project will soon provide a mass transportation alternative. With millennials expressing a preference to live and work in an urban environment, the CBD should remain red hot. The panel and our host Donna Korn also pointed out the strength of the West Broward market which has been enhanced by the completion of the new express lanes on I-595 that are reducing travel times for commuters. In addition new mixed use projects such as Metropica will continue to draw residents to the western submarkets.

Our kickoff meeting for 2015 will be held at Cypress Financial Center in Fort Lauderdale’s uptown market and will be hosted by Sandra Andersen and Chase Kulp of Jones Lang LaSalle. Our guest speaker will be discussing All Aboard Florida, the proposed high-speed rail system that will be connecting our state’s major markets.

Stay tuned to the SFOBA blog as we continue to keep you updated on trends in The South Florida office market. And special thanks to Joanne Diaz and Ted Harris who do such a great job in creating programs to keep South Florida’s office brokers connected and informed.

It’s A Great Time To Be An Office Landlord

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A new report from Newmark Grubb Knight Frank shows positive net absorption for 18 consecutive quarters in Miami, an occupancy rate of nearly 85 percent and a market where demand continues to outpace supply.

“The rents have finally escalated enough that they can justify new construction,” said Patrick Duffy, a vice chairman in Newmark Grubb Knight Frank’s Miami office. “Usually in the past, new construction compressed pricing a little bit because we had new supply. But I don’t think we’ll see that this cycle.”

In Broward County, the resurgence rested on a spike in investment transactions. Buyers picked up 1 million square feet in the sale of six major office complexes, including the $119.5 million trade of the Royal Palm at Southpointe complex in Plantation and the $32.55 million sale of the Cypress Financial Center to Steelbridge Capital in September.

“Investment activity was in full swing,” Newmark Grubb reported.

Palm Beach County‘s office sector is at its strongest in two years with falling vacancy rates and rising demand. Tenants leased more than 405,000 square feet in 131 transactions at average asking rents of $28.12 per square foot. That pushed the vacancy rate to 19.2 percent, down from 20.3 percent a year earlier.

To download Newmark Grubb Knight Frank‘s complete reports, click on the following links:

 

Newmark Grubb Knight Frank-3Q14 Fort Lauderdale Office Market Report

Newmark Grubb Knight Frank-3Q14 Palm Beach Office Market Report

Newmark Grubb Knight Frank-3Q14 Miami Office Market Report

 

Source: DBR

Taylor & Mathis Inks 65,000 SF At Phillips Point

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Phillips Point continues to enjoy a historically high occupancy rate with $46.5 million in recent leasing transactions.

Taylor & Mathis Principal Brian Gale has secured four leases totaling 65,600 square feet, with additional deals in the works.

In a new to market deal, Connecticut based Wexford Capital signed a 7,400 lease.  The $4.5 million deal was co-brokered by Neil Merin and Shelbi Quinn of NAI/Merin Hunter Codman. The towers have received strong interest from Northeast based hedge fund and wealth management firms like Wexford. “These types of firms are choosing South Florida because of lower taxes and beautiful weather,” said Taylor & Mathis Principal Brian Gale.

ESPN radio West Palm office of Good Karma Brands will be relocating to Phillips Point Tower, having signed a one million dollar lease for 4,635 square feet. “Phillips Point continues to attract the highest quality tenants in the market, with its unparalleled views and quality of ownership,” said Gale.

The key testament to Phillips Point’s iconic stature in the market is the tenants choosing to stay at the property. In the last couple of years, Taylor & Mathis has reported nearly 150,000 square feet in renewals and expansions, with heavy weight tenants, such as Gunster and Morgan Stanley.  This year has seen two notable renewals.  International law firm, Greenberg Traurig, LLP signed an early renewal for an additional 13 years at the property, signing a 30,254 square foot lease for their West Palm Beach office.  Co-broker Jon Bourbeau of Newmark Grubb Knight Frank represented the law firm in the deal valued at $23 million.

AMG Properties has more than doubled the size of their offices signing a 12,805 square foot expansion along with a 10,518 square foot renewal.  Co-broker Darren Goldstein of Virtual Global Realty represented the real estate management firm in the 23,323 square foot, $18 million deal. “We anticipate seeing additional growth from them yet this year,” stated Gale.

“These tenants conducted extensive due diligence during their search for office space before signing leases at Phillips Point,” stated Gale.

The building is home to internationally recognized tenants including, Gunster, Squire Sanders, Goldman Sachs and Akerman.

 

Small Gains Chip Away At Vacant Space Throughout Region

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According to Newmark Grubb Knight Frank’s (“NGKF”) latest reports for South Florida, office sector fundamentals in the South Florida market continue to improve, albeit slowly, according to the latest reports on the South Florida office market from Newmark Grubb Knight Frank (NGKF).

Miami-Dade and Broward County both posted positive absorption for the quarter; however, Palm Beach County, where absorption was relatively flat, continued to struggle with vacancy over 20%. Strong demand for Class A office space throughout the region is driving overall improvement, which may fuel speculative construction in 2014.

“Across South Florida, over 7.3 million square feet of office leasing activity was tracked during 2013,” said Jon Bourbeau, vice chairman in NGKF’s Miami office. “The majority of deals continued to come from tenants already in the market in the form of expansions, renewals and relocations as companies took advantage of favorable market conditions to upgrade into higher-end buildings.

He continued, “While the markets may not see pure new requirements, many tenants are projecting revenue growth in 2014 which we expect to translate into significant organic growth via additional expansions. We may be at the starting point of the next development cycle.”

Broward County and Miami-Dade County ended the quarter with vacancy at 15.3% and 16.7%, respectively. Although Broward County still holds the lowest office vacancy rate in the region, Miami experienced the greatest year-over-year drop, which is consistent with NGKF’s earlier projections of moderate growth and improving conditions. Additional market highlights include:

MIAMI

  • Class A product led market improvements as a flight to quality dominated during 2013.
  • Investment sales remained level compared to 2012 with strong interest in downtown Class A buildings.

FORT LAUDERDALE – BROWARD COUNTY

  • The vacancy rate is forecasted to dip below 15% during 2014, bringing it to its lowest level since year-end 2008 when the recession began to take hold.
  • Office moves and space upgrades from submarket to submarket are projected to continue in 2014.

PALM BEACH COUNTY

  • Maintaining the highest vacancy in South Florida since the recession began, the market has posted a rate above 20% every quarter for five consecutive years.
  • UTC Fire & Safety’s move out gave back 98,000 square feet to the market in the fourth quarter of 2013.

Download the reports in their entirety by clicking on the links below:

Newmark Grubb Knight Frank’s 4Q13 Fort Lauderdale Office Market Report

Newmark Grubb Knight Frank’s 4Q13 Palm Beach Office Market Report

Newmark Grubb Knight Frank’s 4Q13 Miami Office Market Report

 

 

Newmark Grubb Knight Frank Releases Q313 Reports For South Florida Market

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According to Newmark Grubb Knight Frank’s (“NGKF”) latest reports for South Florida, market fundamentals in the industrial sector have fully recovered when measured by third quarter vacancy rates, while the office sector continues to make modest, but encouraging, improvement.

Broward County and Palm Beach County ended the quarter with industrial vacancy around or below the 8.0% mark, while Miami’s industrial vacancy rate is still hovering near 6.0% despite the recent addition of over one million square feet of new inventory delivered since the beginning of 2012.

“The improved demand we are seeing for industrial properties, in part, stems from a recovering residential real estate market, most notably in the multi-family sector,” said Adam Greenberg, executive managing director in NGKF’s Miami office. “As homeowners look to remodel existing properties and homebuilders deliver new projects, the need for manufacturing, warehouse and distribution space grows and in turn boosts demand for retail space.”

In response to robust demand, an additional 750,000 square feet of speculative industrial projects is underway in Broward County with the anticipation that tenants will begin to move north in search available quality spaces.

The office sector, to a lesser extent, also experienced modest growth during the third quarter, with the vacancy rate falling slightly across the three counties. Broward County ended the quarter with the lowest level in the region at 15.8%. Miami followed closely behind at 17.0% but experienced the strongest year-to-date absorption numbers with over 400,000 square feet of absorbed office space. According to the NGKF report, this is a positive sign and is consistent with earlier projections of moderate growth and slowly improved conditions.

“Across South Florida, over 1.7 million square feet of office leasing activity was tracked in the third quarter,” said Jon Bourbeau, vice chairman in NGKF’s Miami office. “The majority of deals continued to come from tenants already in the market in the form of expansions, renewals and relocations. The flight-to-quality trend persists as companies take advantage of market conditions to upgrade to higher-end, significantly more efficient buildings.”

Download the complete reports below:

Newmark Grubb Knight Frank’s 3Q13 Fort Lauderdale Office Market Report

Newmark Grubb Knight Frank’s 3Q13 Fort Lauderdale Industrial Market Report

Newmark Grubb Knight Frank’s 3Q13 Palm Beach Office Market Report

Newmark Grubb Knight Frank’s 3Q13 Palm Beach Industrial Market Report

Newmark Grubb Knight Frank’s 3Q13 Miami Office Market Report

Newmark Grubb Knight Frank’s 3Q13 Miami Industrial Market Report

 

About Newmark Grubb Knight Frank

Newmark Grubb Knight Frank (NGKF) is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, NGKF employs more than 12,000 professionals, operating from more than 320 offices in established and emerging property markets on five continents.

With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, NGKF serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.ngkf.com.

NGKF is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.