Asi Cymbal loves the neighbors at his 1,000-apartment development on Fort Lauderdale’s New River.
Marina Lofts is just west of acreage held by the Related Group, the powerhouse developer investing nearly $200 million in two luxury projects west of Andrews Avenue.
“The Related Group is positive for any market,” said Cymbal, president of Miami-based Cymbal Development. “It’s only positive for us because it affirmatively places the south side of the river as superior address, which wasn’t the case a few years back.”
And that superior address has prices to match.
Related’s New River Yacht Club at 400 SW Frist Ave, features outdoor bars, two-story lobbies and rents from $1,400 for a studio to $4,000 for three bedrooms.
“Clearly, their strategy is working,” Cymbal said. “They’re commanding record-breaking rents in Fort Lauderdale.”
Where the Related Group goes, money follows.
Founder Jorge Perez and his company have a reputation for creating quality projects that draw deep-pocketed investors and buyers paying top dollar for homes in tony neighborhoods in Florida and Latin America.
In early October, the firm completed one of the year’s biggest land deals, paying more than $20 million per acre for a parcel in Miami’s emerging Museum Park district. But it’s also turned its attention – and its ability to raise millions in capital for staggering deals – northward in an aggressive push into Broward County’s multifamily market. Plans include more than a $1 billion in new development for thousands of apartments in Davie, Pembroke Pines, Plantation and Fort Lauderdale.
“People think Related is all about Miami-Dade County but that’s not really true,” said vice president Patrick Campbell. “We’re the most active multifamily developer in Broward by a long shot. We’re probably doing more than our second- and third closest competitors combined.”
“Everyone’s asking why we’re more committed to Broward now than we were in the past boom, but it’s the next logical choice,” Campbell said. “Unlike Miami, this is a market that had no inventory. And what I know for sure is that there’s going to be more demand now than there was, just because of changing demographics.”
Broward’s strong fundamentals favor new development. At 5.2 percent, its September unemployment rate was one of the lowest in Florida with job growth expected to outpace the national average.
The county is even outshining Miami on some national real estate measures. This month, the Fort Lauderdale metropolitan area was named a hot spot among the nation’s top college towns for multifamily investments in a report by housing analytics firm RealtyTrac. And Cushman & Wakefield’s third-quarter analysis of national office statistics placed Fort Lauderdale’s suburban office market as a national leader for occupancy gains and low vacancy.
“It’s always a good thing to have more units coming in and higher incomes moving into the area,” said Barry Wolfe, vice president of investments and senior director of the national retail group at Marcus & Millichap in Fort Lauderdale. ”There is a need. All the data point to a significant in flight of millennials to the urban areas.”
The county’s wealth remains concentrated in its coastal and western suburban edges, but analysts expect an influx of affluent residents drawn by billions of dollars in infrastructure developments at area ports and a $1.8 billion project to upgrade I-595, Broward’s primary east-west thoroughfare.
“Long term, there’s big momentum in Broward,” said Gregory Matus, South Florida regional managing partner for Franklin Street Real Estate Services. “That’s why the multifamily sector is coming together.”
And as Miami land prices reach dizzying heights in frenzied trading, analysts say activity will spill over county lines and drive demand for all asset classes in Broward and beyond.
“Related’s following the buyers, and the easy answer is it’s a valuation thing. European and South American buyers are pretty amazed when they see what they get for $1,000 per square foot if they look outside Miami Beach and the areas that get the most press and buzz,” said Jason Kapit, an EWM Realty International broker who specializes in million-dollar Fort Lauderdale listings. “And from a developer standpoint, it’s pretty compelling to be able to build at 40 to 60 cents on the dollar, compared to Miami prices and still deliver the same square footage and waterfront settings.”
Years in the Making
But while developers applaud the move north, opponents, economic drivers and nuanced logistics caused some of Related’s biggest projects to languish.
It took 15 years for Related to start work on Icon Las Olas, a $150 million project set to break ground in November at 500 E. Las Olas Blvd. The site is next to Fort Lauderdale’s oldest building, the Stranahan House Museum, and activists feared the new project would threaten the historic building. A state appeals court dismissed a claim from Stranahan House advocates in 2011, and Related was able to push forward with the project it announced in 1999.
A second site less than one mile away from the Icon parcel stood vacant for more than five years, derailed by the housing crash. Related didn’t start work until 2012, years after it envisioned the project.
“Fort Lauderdale wants the growth, but it also wants to keep its small-town feel,” said Peggy Fucci, president and CEO of One World Properties. “There’s such an opportunity for growth. I think this is great for Fort Lauderdale. We’re far from build out. Fort Lauderdale is just beginning.”
Developer Camilo Lopez agrees.
“It’s a trend. Everything is moving north,” said Lopez, president of the Solution Group in Miami. “If you can project six to seven years down the road, Fort Lauderdale will be one of the hottest areas.”
His development company is looking outside Miami-Dade County for two land deals of up to $10 million to build 100 town houses near the newly expanded Fort Lauderdale-Hollywood International Airport.
“It makes all the sense in the world to do a project in Fort Lauderdale, and it’s a smart move for Related,” Lopez said. “The Jorge Perez who built Brickell 10 years ago is at a different age now. He’s probably in a more conservative position. I assume down the road he plans to do condo conversions. But for now, there’s more appetite if you present a rental building and a pro forma that makes sense.”