Coming Retailers in Soon-To-Be-Developed Kendrick Brookhaven

The Fitness Center, Juice Bar, And Beauty Parlor Are Opening In Soon-To-Be-Developed Kendrick Brookhaven.

Florida-based Caliber Brookhaven has plans to develop Kendrick Brookhaven, a new two-story retail project near the Town Brookhaven mixed-use community.

Crews Wednesday began demolition on the Shell Gas Station, at 4260 Peachtree Road NE, for the forthcoming development, Justin Berryman of Franklin Street, the real estate firm representing Caliber, told What Now Atlanta (WNA) in an email Wednesday.

Berryman and his team have been pre-leasing the space, 5,000 square feet on each level,10,000 square feet in total.

The ground floor is completed leased to Orangetheory Fitness, Kale Me Crazy, and a yet-to-be-named Nail Salon.

The second floor might still be available.

“I can’t reveal the tenant for the entire second floor as we are finalizing lease negotiations,” Berryman said.

Construction on Kendrick Brookhaven should be complete by November or December 2015.


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Let the Retail Bidding Wars Begin

ATLANTA—Lots of demand and limited inventory. That’s the storyline about Atlanta retail these days.

We know that population and employment growth are driving a retail resurgence in Atlanta. We know that the retail recession recovery is on overdrive.

But what’s actually happening on the ground? We caught up with Monetha Cobb, managing director of Franklin Street of Atlanta, to ask her a series of pointed questions about Atlanta’s retail market.

The first question is broad but her answer is telling: What trends are you seeing in the Atlanta retail market?

“We are seeing lots of demand in conjunction with limited inventory, especially in markets where density and income are above average and climbing,” Cobb tells “There is so much demand for high-profile submarkets that whatever is available is out-pricing many users.”

According to Cobb, space is limited for everything from in-line shops and outparcels, all the way up to junior boxes. Against this backdrop, she says, many concepts are beginning to entertain more non-traditional locations in order to expand, especially in what each considers their “core market.”

“Land prices continue to rise, which is limiting many concepts that have historically grown through new construction,” Cobb says. “Restaurants remain the hottest retail category coming to the city, ranging from fast food to high-end. Chef-driven restaurants continue to be hugely successful, so much so, they have ventured into secondary markets and have been met with huge demand. The competition for restaurant space is intense, and in many areas has created a bidding war for the right space.”


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An influx of urban residents is transforming downtown Fort Lauderdale

The national trend of people moving into the urban core has hit downtown Fort Lauderdale in a big way and is transforming the central business district by putting more people on the streets at all hours.

The downtown area has over 12,000 residents and should exceed 15,000 in the next two or three years, given all the residential projects in the works, said Chris Wren, executive director of the Fort Lauderdale Downtown Development Authority. City planning documents show the capacity for more than 25,000 residents, he added.

More than $1 billion has been invested in projects in the CBD in the last year and a half, Wren said. Much of that has been for apartments. There are 3,000 new, under construction or approved for development and funded, said Robert Given, vice chairman of the institutional group at CBRE and a downtown resident. An additional 1,500 apartments are in the pipeline, seeking approval. 

Given compares downtown Fort Lauderdale to Miami’s Mary Brickell Village 10 years ago.

“It’s a macro movement across the country to want to be in more urban centers – millennials moving into areas with a high degree of walkability and entertainment,” he said. “It’s a very attractive place to work, the retail amenities are starting to come, and a critical mass of residents is being created.”

Given said large investors are taking notice of a prime property he’s marketing downtown: the 3.7-acre Las Olas Riverfront.

Merrimac Ventures President Dev Motwani, who bought the property after it was nearly emptied of tenants during the recession, said he’s looking for a joint-venture partner to develop it as a large-scale project.

While there’s little office development in South Florida now, it should be no surprise that’s under consideration here. Office rents on Las Olas Boulevard are comparable to Brickell Avenue, and the vacancy rates are low, Given said. Several groups are looking to build office towers on Las Olas, Given said.

The strong office market attracts wealthy workers to live nearby, as reflected in the $101,000 average household income in the 33301 ZIP code. Given said the household income of the new occupants of downtown Fort Lauderdale apartments is more like $120,000. These projects are attracting wealthy renters with high-end appliances, fixtures and amenities, he said. 

The new downtown residents are a mix of young professionals, retirees and empty nesters from the suburbs looking to downsize – and they prefer an urban lifestyle, Stiles Corp. President Douglas Eagon said. The Fort Lauderdale-based company has developed more than 3 million square feet dowtwon. Its latest project, in partnership with Rockefeller Group, is a 254-unit apartment tower along LAs Olas Boulevard.

Eagon said the new apartments, downtown and extending north into Flager Village, have changed the are area from a 9-to-5 business district to a vibrant, 24-hour city.

As opposed to the Miami high-rise market that’s primarily driven by condos for foreign investors, Fort Lauderdale has mostly new apartment towers, and the renters are primarily people who live and work in the area – although there are some part-time residents, Eagon said.

“The baby boomers have sold their homes, but aren’t sure what they want to do next,” he said. “You have people who are pure renters by choice. There are some people who aren’t in the position to purchase a home because of past credit history of losing a home or their inability to make a down payment.”

Miami-based the Related Group has bought into the downtown Fort Lauderdale market with four rental projects. The Manor at Flagler Village and New River Yacht Club I are completed, Incon Las Olas is under construction and New River II is set to break ground soon.

Carlos Rosso, president of Related’s condominium division, said it’s building apartments there because the rental market is strong and it doesn’t want to compete with the condos at its Fort Lauderdale beach projects such as Auberge Beach Residences. However, he expects to eventually convert Icon Las Olas into condos.

The city hasn’t attracted the same kind of international attention that Miami has, Rosso said.

“Fort Lauderdale isn’t known as being a fashion place, and they are losing to Miami Beach in that respect,” he said. “They could market themselves and try to upgrade the image as a place people to to celebrate and sell cheap T-shirts to a place that is high end.”

As for the existing downtown Fort Lauderdale condo market, there’s very little inventory available and prices are increasing, said Athena Rossano, director of market research at Related ISG Realty. The entire Fort Lauderdale market, including the beach, absorbs about 470 units annually and has 711 units under construction, with 32 percent of them sold, she added.

The influx of residents has boosted the restaurant and retail market near downtown, especially along Federal Highway (U.S. 1) just north of the city, said Gregory Matus, regional managing partner for commercial brokerage Franklin Street in Fort Lauderdale. Retail rents are approaching $60 a square foot along that corridor, and the vacancy rate is low, he said.

“People are already going downtown for the quality of the restaurants and nightlife, so the next logical step is for hospitality and shopping,” Matus said. “It’s a  great alternative for retailers because rents are lower than the [Miami] Design District or Brickell. For Lauderdale is benefiting from the growth in Miami because businesses are moving up in our direction.”

Eagon said the downtown population density isn’t large enough to support a mall yet, but there’s strong demand for ground-floor retail space in office and residential buildings, especially on Las Olas Boulevard. Given said conditions are good for a high-end grocer to open.

For Lauderdale is counting on transportation projects to boost mobility for city residents and visitors, and energize properties along transit routes. The $143 million Wave Streetcar is expected to begin operations in late 2017 along a 2.7-mile track between Southeast 17th Street and Sistrunk Boulevard. The city projects it would carry over 3,200 riders daily. Wren said the DDA is in the midst of installing dozens of interactive maps to show visitors where the attractions, events and transit connections are.

“People now, especially millennials, want to live in urban environments where they don’t have to buy cars,” he said. “The stations will be like little town squares.”

A station for All Aboard Florida, a passenger rail connecting Fort Lauderdale to Miami, West Palm Beach and Orlando, is also slated to open in 2017. Given said it would be a major advantage for both residential and office in downtown Fort Lauderdale because people will have easy access to Miami’s large job market and populations center.

“That will draw businesses back from the suburbs,” Given said. “There’s no doubt that, when those stations open and when that streetcar opens, it will spur a whole new wave of development in downtown Fort Lauderdale.”

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Redevelopment into ‘shopping experiences’ part of region’s growth

The North Florida retail market continues to develop, as growth in the number of fast-casual restaurant concepts in the area and more shopping center developments have led to growth in occupancy and rental rates across Greater Jacksonville.

“Today’s retail market is poised for the redevelopment of shopping centers,” said Whitney Kantor, director of retail leasing at Franklin Street. “Shopping centers are no longer just a location of stores, they are a shopping experience. North Florida is a healthy market and is well-positioned for shopping center owners to take advantage of this trend and offer quality shopping experiences that retailers seek.”

Much of that growth can be attributed to the success of the St. Johns Town Center, Kantor said. It continues to help draw new retail to the area and allows for others such as Ulta to expand and open additional stores in areas like the Beaches.

When a restaurant or retailer enters a market, they look at the area based on a number of items, including demographics and co-tenancy, Kantor said. “Most come in with a multistore strategy seeking locations at St. Johns Town Center first and then expanding into surrounding markets.”

Other areas like Mandarin also are experiencing a great deal of activity, Kantor said, but because of low vacancy rates are having difficulty finding sites.

New restaurant concepts like the fast-casual model continue to be very active, said Katy Figg, a broker associate at Franklin Street.

“Restaurant expansion is a trend throughout the country. Consumers are spending a significant portion of their discretionary income on dining out,” Figg said. “The fast-casual market continues to grow with the area seeing an uptick in new concepts coming to the market.”

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Franklin Street hires Insurance Services Marketing Analyst

Mathew Emidy
Date added: June 26, 2015
Submission Type: New Hire
Current employer: Franklin Street
Current title/position: Insurance Services Marketing Analyst
Industry: Commercial Real Estate
Duties/responsibilities: Emidy works directly with senior brokers on catastrophe modeling, complex property insurance programs, alternative risk solutions, and risk management strategies. He also serves as a customer service representative and helps negotiate the best possible coverage and pricing for the client.

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Development Boom in the Sunshine State

Multifamily development is surging across Florida with many developers racing to satisfy pent-up demand. Approximately 25,000 units are recently built or under construction, with another 13,000 units planned in the South Florida metro area of Palm Beach, Broward and Miami-Dade counties. There’s an additional 25,000 units planned or under construction in Orlando, Tampa and Jacksonville combined. 

There are nearly 2.4 million renters living within 1.3 million apartment homes in the state of Florida. These renters make an economic contribution of $44.8 billion per year while supporting over 270,000 jobs, according to data compiled by the National Multifamily Housing Council and the National Apartment Association.

Florida’s multifamily sector continues to experience consistently high occupancies, steady rent growth, a restrained development pipeline and a healthy debt market. The confluence of these factors has given apartment markets in the Sunshine State remarkably solid fundamentals. There is continued compression in cap rates for properties across virtually all markets in Florida as demand continues to outpace supply, and there is a lack of product for sale compared to the last two years. With limited supply available, core and value-add opportunities continue to be highly sought after by institutional buyers, large private groups and individual investors. The interest rate environment is still very attractive, which should continue through the first half of 2015. 

According to the U.S. Census Bureau, the national homeownership rate peaked at 69.2 percent in 2004, fell to 64.8 percent by the first quarter of 2014, and is forecasted to drop to 55 percent over the next few years. Each 1 percent drop in the homeownership rate adds approximately 1 million renters to the market, and the state of Florida estimates that 1,000 people move to the state every day.

Another strong factor driving the hot multifamily sector is the Millennial generation, poised to become the largest U.S. demographic this year, surpassing baby boomers. Millennials are driving demand for higher-end housing closer to the urban core, fueling rental increases, which in turn is making homeownership more cost effective in many cases.

Within the multifamily market, asking rents across Florida are above pre-recession levels and show no signs of abatement. Additionally, occupancy throughout Florida remains above 95 percent and the condo market is strengthening with converters back in the market looking for multifamily product to reposition as for-sale, which will further constrain supply. This shortage is due partly to changing demographics, the fact that 60,000 rental units were converted to condominiums in the last cycle and that the recession halted development for a number of years. Value-add properties are also recording strong activity. Investors seeking stronger returns on investment properties are acquiring older vintage properties and adding value through interior and exterior upgrades. 

Apartment prices as measured by the Moody’s/RCA CPPI were up 10 percent in the year after the first quarter of 2015 and are now 21 percent ahead of peak prices seen in 2007 prior to the global financial crisis. Investors hungry for yield still find the immediate returns from the apartment sector attractive, and this strong appetite is also fueling development activity as there is more appetite than availability of product.

Tampa Bay

Approximately 13 percent of the Tampa Bay area’s population live in apartments. There are more than 366,000 renters living in 204,000 apartment homes and they contribute $7.2 billion to the local economy per year while supporting over 74,000 jobs. An improving local economy in Tampa helped drive significant new apartment construction in 2014 and the metro recorded a 10-year high in terms of new demand in 2014.

There is significant infill apartment and condo development taking place in and around the downtown. St. Petersburg and downtown Tampa cores. While downtown areas can be challenging places to build apartments due to a constrained supply of land, the “live-work-play” lifestyle is appealing to Millennials and urban dwellers. The trend has motivated developers to get creative and find unique ways to build vertically with enhanced amenity packages in order to overcome land limitations, while also attracting renters seeking proximity to jobs, shopping, entertainment and transportation.

SkyHouse, an upscale multifamily project under construction in Tampa, is an excellent example. It rises 23 stories over the Channelside area with sweeping views of the waterfront Amalie Arena and downtown Tampa. Similar developments are planned in Tampa, including Related Group’s 340-unit, 21-story tower on Harbour Island; The Residences at the Riverwalk, a 380-unit, 36-store tower adjacent to the Straz Center on the Hillsborough River that will be complemented by a promenade of shops and restaurants; a mixed-use tower planned by Tampa Bay Lightning owner Jeff Vinik that could include 50 luxury residences with a concierge; and the Martin at Meridian, a 316-unit, 24-story tower also in the Channel District that may incorporate a grocery store. Similar projects in downtown St. Petersburg include Beacon 430, a mid-rise, 326-unit development on Third Avenue South; Modera Prime, a mid-rise, 309-apartment development on Third Avenue North; and 330 Third St. S., a 17-story, 348-unit development. Several condo projects are also planned, including the upscale 18-story Bliss project overlooking Beach Drive and The Salvador, a 13-story tower on 2nd Street South and Dali Boulevard.


Apartment fundamentals in the Orlando metropolitan area are very strong. Approximately 15 percent of Orlando’s population, or 330,000 people, reside in nearly 165,000 apartment homes in the metropolitan area, and these rents make an economic contribution of $5.8 billion per year while supporting nearly 60,000 jobs. Healthy job creation, high occupancy rates and strong rent growth has been fueling great momentum for the Orlando apartment market. Nearly 6,000 new apartments planned for completion between 2015 and 2016 are resulting in roughly a 3 percent increase in total inventory. The potential economic impact of those new units is nearly $1.3 billion, with an estimated 11,800 jobs created, 2,048 of which are permanent.

The most active developers right now are Crescent Communities, which has two developments underway totaling $74.3 million and 529 units; Epoch Properties, with three communities totaling 706 units; LeCesse Development with two communities totaling $65 million and 476 units; and Integra Land with two new developments totaling $68 million and 547 units. The majority of the new development is taking place in North Seminole County; in the southwest Orlando near The Mall of Millennia, Sea World and the town of Celebration; and in south Orlando’s Lake Nona area. The Altman Cos. has established itself in the Dr. Phillips neighborhood with Altis at Sand Lake, a 315-unit Class A multifamily community. Several additional infill projects are cropping up in and around the downtown core catering to Millennials and urban dwellers.

Landlords benefiting from the steadily declining vacancy rate have seen increasing rents, resulting in forecasted rent growth of 6.0 percent by year-end 2015.

South Florida

With more than 1 million renters, or 18 percent of the Greater Miami area’s population, South Florida has re-emerged as both a lucrative investment market and an explosive development market. Solid rent growth of 7.5 percent is forecasted by year-end with new apartment, retail and mixed-use projects planned or under construction across the area. Many of these are clustered in the high-demand Brickell area of Miami. According to, there are 345 new condo towers in the pipeline, of which 95 are proposed, 117 are planned, 193 are in pre-sale, 106 are under construction and 27 are completed, including Brickell House in Miai, Adagio on the Bay in Fort Lauderdale, Beachwalk in Hallandale Beach and Apogee Beach in Hollywood.

The biggest development new in South Florida is the $2 billion Miami Worldcenter project, now slated for groundbreaking in the third quarter of 2015. The first phase of the 27-acre project will incorporate a 765,000-square-foot mall developed by Forbes Co. and Taubman and anchored by Bloomingdale’s and Macy’s, a 470-unit condominium developed by Daniel Kodsi, and a 429-unit apartment building to be built by Orlando-based ZOM.

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Franklin Street Sells Two-Property Multifamily Portfolio in Florida for $2.8M

LARGO AND CLEARWATER, FLA. — Franklin Street Real Estate Services has brokered the $2.8 million sale of Liv @ Jefferson and Liv @Jasper. Liv @ Jefferson is a 20-unit garden-style apartment community, built in 1976, that is located at 55 Jasper St. in Largo. The property contains a unit mix of one-, two- and three-bedroom units ranging from 900 to 1,550 square feet. Liv @ Jasper is a 33-unit, garden-style apartment community, built in 1971, located at 121 N. Jefferson Ave. in Clearwater. The property offers studio, one-, and two-bedroom floor plans ranging from 415 to 770 square feet. Darron Kattan, Robert Goldfinger, Kevin Kelleher, and Zachary Ames of Franklin Street represented both the seller, DRW Real Estate Management LLC, and the buyer, a private investor from the West Coast. In addition to these properties, the buyer recently bought three other apartment communities of varying sizes in Pinellas County. The buyer plans to operate them all centrally out of one of the larger properties they acquired, according to Franklin Street. Liv @ Jefferson and Liv @ Jasper were financed with a newer product being offered by Freddie Mac and Fannie Mae.

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Where to Find Value-Add Opportunities

IRVINE, CA—Properties in and near Millennial-friendly core business districts of secondary cities represent value-add potential, Sperry Van Ness’ VP of organizational development Solomon Poretsky tells We spoke exclusively with several experts in value-add and opportunistic investments to get their take on where the greatest opportunities lie in this category. Here, their thoughts and predictions. And stay tuned for a more in-depth look at the value-add and opportunistic-investments sector in the June issue of Real Estate Forum. Where do the greatest opportunities lie in value-add and opportunistic investments?

Poretsky: I’m still very excited by the emergence of the 18-hour city as identified by ULI back at the beginning of the year. Assets in and near the Millennial-friendly CBDs of these secondary cities represent real opportunities to go in, update and add value. I love buildings with open spaces. Regardless of the property type, more creatively designed spaces are becoming increasingly desirable. Blank-slate buildings offer room to create without having to pay for existing buildouts and for the cost of demolishing them.

Jim Shelton, vice chairman, Carter: The greatest opportunities lie in asset classes where there is still a gap in two places. The first is on the acquisition side, where there is a gap between market rents and new-construction replacement-cost rents. The second is in the development arena, where there is very strong rent growth. If you believe you are in a growth market where year-over-year rent is growing 5% to 7% and absorption is very high, you can rationalize development.

Jon Pharris, co-founder and director of acquisitions, CapRock: In industrial, each individual submarket is unique. In Orange County, lease rates are increasing, so anything with short-term roll could be attractive. The office market is recovering, so converting an older industrial building into a more contemporary layout by increasing parking or removing square footage is an opportunity. There is also pend-up demand for smaller owner-users less than 10,000 square feet to acquire their own building, and it is difficult to build new buildings that small, so converting multi-tenant for-lease projects into for-sale products is a successful niche. CapRock has successfully implemented all of these strategies in Orange County over the past 18 months.

L.A. infill is another area of opportunity. The L.A. market is the tightest industrial market in the country, so it is difficult to find value-add opportunities because there are frequently owner-users who will pay more than an investor can justify. And, many of the buildings are older and smaller, so finding scale can be difficult, but when an opportunity is uncovered, it can be well worth it.

In the Inland Empire, many of the buildings are newer, and there is less opportunity for “pure” value-add. CapRock has had success in the I.E. for value-add by purchasing buildings with excess land or taking appropriate entitlement risk.

Robert Dougherty, partner, Buchanan Street Partners: Buchanan prefers to measure the “greatest opportunities” in terms of risk-adjusted vs. absolute returns. Naturally, more return comes with taking greater risk. However, we see a compelling opportunity in the “forgotten middle.” Capital raising has taken on a “barbell effect,” with institutional investors flocking to core on one end and high-value-add-to-opportunistic strategies on the other end of the continuum. As a result, less competition prevails in the core-plus-to-low-value-add arena, where investors can earn 11% to 13% net leveraged IRR returns (8% to 10% unleveraged IRRs). High-quality properties in primary (but not “gateway”) cities can be purchased with strong current cash flow at 30% to 35% discounts to replacement cost. Value-creation activities for these properties include lease-up, marking below-market rents to market and modest renovation/repositioning. All the while, these investments generate strong cash flow, creating a balanced return profile with profits composed of roughly 50% current cash flow and 50% asset appreciation. We also see less competition and, thus, enhanced returns in “middle market” properties valued at $30 million to $80 million. These tend to be beyond the reach of private buyers and syndicators, yet below the radar of the mega-funds, which have captured such a massive share of institutional capital in the current cycle.

Bryan Belk, director, Franklin Street Real Estate Services: Many opportunities lie in the suburbs of major markets where stores have closed and active tenants like Walmart Neighborhood Market, Hobby Lobby, Academy Sports, etc., can backfill retail spaces with strong credit and immediately create value for a center.

David Schwartz, CEO and founder, Waterton Associates: There is no thematic opportunity where markets and values fully recovered past prior peak. There’s been a lot of asset inflation. For us, it’s back to basics. We have bought in prior cycles at this stage, but it’s a matter of finding something with a lot of value left, whether it’s the rent roll or the NOI level is far below its potential. That’s what we try to find: opportunities where we have the best chance of bringing that rent roll and NOI to maximum potential. We also create value in residual by doing smart value-add to a property to bring down the residual cap rate for the next buyer. If we do those two or three things, and hopefully we’ve picked the right market with good growth rates and turned it into core-plus, then the next buyer gives you a better cap rate than what you’d get today. That’s value-add 101.


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Franklin Street hires Research Assistant

Matt Alexander
Date added: June 17, 2015
Submission Type: New Hire
Current employer: Franklin Street
Current title/position: Research Assistant
Industry: Commercial Real Estate
Duties/responsibilities: Alexander works with Franklin Street executives on providing market and property-related research including market studies, global and national economic trends, and general industry research.

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Franklin Street hires IT Manager

Paul Ciura
Date added:June 17, 2015
Submission Type: New Hire
Current employer: Franklin Street
Current title/position: IT Manager
Industry: Commercial Real Estate
Position level: Manager
Duties/responsibilities: Ciura handles daily computer, server, telephone, and network issues, software compatibility, website/intranet support, systems upgrades, and all computer-related support for various technologies throughout the company.

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