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Monthly ArchiveFebruary 2018

Buyer covers most of the price of Tampa-area rentals by assuming Fannie Mae loan

Tuscany Villas in Brandon

The buyer of a Class B apartment complex in the Tampa area covered most of the $28.3 million price by assuming a Fannie Mae loan from the seller.

Phoenix Realty Group paid $114,112 per apartment for the 248-unit complex in Brandon, an eastern suburb of Tampa.

According to commercial real estate services provider Yardi Systems Inc., Phoenix Realty assumed a Fannie Mae loan with an $18 million balance in connection with its acquisition of the rental property, called Tuscany Villas Apartments.

The ten-year loan, originated in the amount of $18.4 million, has an interest rate of 3.6 percent per annum.

The seller was Toronto-based Canadian Apartment Properties Real Estate Investment Trust, doing business as CAPREIT.

Phoenix Realty plans to renovate Tuscany Villas and rename it Alvista Sterling Palms, joining other properties Phoenix operates under its Alvista brand.

The property has apartment floor plans ranging from one bedroom and 672 square feet to four bedrooms and 1,344 square feet. [Multihousing News] – Mike Seemuth

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Boca firm pays $60M for Baltimore office building

Mukang Cho, CEO and managing principal of Morning Calm Management (Credit: FamilyOffices.com)

A company based in South Florida acquired a 13-story office building in Baltimore for $60 million.

Boca Raton-based Morning Calm Management bought the 280,000-square-foot office building from TIER REIT, a Dallas-based real estate investment trust.

Mukang Cho, CEO and managing principal of Morning Calm, described the office building at 500 East Pratt Street as “a premier asset located in the center of Baltimore’s bustling commercial district.”

The building, located across from the National Aquarium in Baltimore, has a 93 percent occupancy rate. Its tenants include Deloitte, JLL and UBS.

The office building, which opened in 2005, is appraised by the state of Maryland for tax purposes at $58.9 million.

It is the third office property in Maryland that Morning Calm has acquired. The company also has acquired office complexes in two Maryland suburbs of Washington, D.C., Greenbelt and Landover.

According to its website, Morning Calm is a vertically integrated real estate management company that owns and manages more than four million square feet of commercial real estate across the United States on behalf of individual and institutional investors. [Sun-Sentinel] – Mike Seemuth

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Office building planned at Tampa airport

Rendering of a planned office building with a landscaped terrace (right) at Tampa International Airport. (Credit: Business Observer)

The aviation authority that runs Tampa International Airport is selecting a developer to build a 270,000-square-foot office building at the airport.

The Hillsborough County Aviation Authority, which runs the airport, would occupy about 100,000 square feet in the planned 11-story office building, which could open by 2020.

Airport officials plan to select a developer for the office development, estimated to cost $122 million, from among three finalists: Lincoln Property Co. in Dallas, Jacksonville-based VanTrust Real Estate LLC and Orlando-based BTV Aviation Developers.

The office building at the airport would compete with others in Tampa’s nearby Westshore area.

Vacancy rates among Class A buildings in Westshore are around 5 percent, the lowest in a decade, according to Clay Witherspoon, a principal at the Tampa office of real estate brokerage firm Avison Young.

Witherspoon said the office development at the airport is among three in the Westshore area that would add 400,000 square feet of new space to the market.

The office project at Tampa International Airport is part of the second phase of the airport’s master plan for development, which also includes two hotels with as many as 350 rooms combined.  [Business Observer] – Mike Seemuth

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About 11,000 acres in St. Johns County sell for $40M

St. Johns County, shaded in yellow (Credit: Wikipedia)

Real estate investment trust Rayonier sold about 11,000 acres in northeast Florida for $40 million, and the buyer’s plans for the land are unclear.

The 11,000 acres is a nearly contiguous property in southern St. Johns County, which has potential for greater development, according to Steve Merten, president of the Northeast Florida Division of home building company Toll Brothers.

Rayonier, based in the Yulee community, just north of Jacksonville, sold the land in two closings, the first in December and the second this month.

The buyer is Florida Coast Land and Timber LLC. An agent for the buyer, Jacksonville attorney John Sefton, was unavailable for comment.

The buyer’s offer to buy the land was unsolicited, according to Alejandro Barbero, director of strategic development at Rayonier. He declined to speculate on the buyer’s plans for the land.

Rayonier sold another big piece of land in northeast Florida last year to Florida Power & Light Co. The utility paid the real estate investment trust $13.1 million for 1,311 acres in Nassau County. [St. Augustine Record]Mike Seemuth

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Fort Lauderdale adopts 3-D software tool for zoning matters

Jason Doyle, CEO of Gridics LLC

The city of Fort Lauderdale adopted a three-dimensional software application designed to help municipal governments to manage, alter and communicate their zoning regulations.

Fort Lauderdale’s Department of Sustainable Development will use the Zonar.City software to support its development application review process and its urban design and planning activities.

Zonar software, developed by Miami-based Gridics LLC, combines the measurable mandates of a zoning code with property records, parcel shapes and mapped zones.

Developers who are paid Zonar subscribers will be able to produce customized studies of the feasibility of potential developments in Fort Lauderdale.

Zonar software also will help Fort Lauderdale’s planning staff and policy makers to visualize the impact of zoning regulations and zoning changes on the built environment.

Fort Lauderdale’s installation of Zonar will result in “streamlined communication between the public and private sectors,” Jason Doyle, CEO of Gridics, said in a prepared statement. – Mike Seemuth

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Canadian buyers loom larger in South Florida’s residential market

Canadians comprised 9 percent of foreign buyers of South Florida homes last year, up from 6 percent in 2016, according to the Miami Association of Realtors and the National Realtors Association of Realtors.

Canadians’ interest in South Florida vacation homes has increased as an especially cold winter continues in their home country.

Record-breaking cold weather hit Canada in December and January. During a six-day cold snap in Montreal, temperatures didn’t exceed -17 degrees Celsius (1.4 degrees Farenheit).

In addition to cold weather, Canadians also have loomed larger in the South Florida real estate market this winter because of the sustained strength of  Canada’s housing market, which has encouraged them to sell their primary residences.

The Four Seasons Private Residences condominium development in Fort Lauderdale got 221 inquiries from Canadians in the six months that ended in January, far more than in the preceding six-month period.

Despite Hurricane Irma’s destructive landfall in Florida in September, the appeal of warm-weather living apparently has trumped Canadians’ concerns about hurricane risks and rising sea levels.

Florida’s hurricane season “isn’t a major concern” among Canadians shopping for second homes in the Sunshine State, said Rob Siemens, director of marketing for the Siemens Group.

He said Canadians own about 15 percent of the 3,400 condo units at the Boca West Country Club in Boca Raton, and he expects that population to grow as Canadians buy into Ayoka Boca West, a 139-unit condo that Siemens Group is developing on the grounds of the country club property. Prices for condos at Akoya Boca West start at $1 million.

Approximately 34 percent of inquiries about Ocean 2000, a 64-unit condo development in Hallandale Beach, have come from potential Canadian buyers, compared to 24 percent from U.S. residents, said Shahab Karmely, founder of KAR Properties, the developer of the oceanfront boutique condo, which is now under construction. Unit prices start at $3 million.

KAR Properties will try to lure more Canadians to Ocean 2000 by visiting real estate brokerage firms Montreal and Toronto in March and April, Karmely said.

Canadians comprised 9 percent of all foreign buyers of South Florida homes last year, compared to 6 percent in 2016, the Miami Association of Realtors and the National Realtors Association of Realtors reported.

Canadians bought $19 billion of residential property in the United States last year, more than double their $8.9 million of purchases in 2016, according the National Association of Realtors. [Mansion Global] – Mike Seemuth

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Construction of boutique condo on Okaloosa Island gets under way

Blu Condominium rendering

The developers held a groundbreaking ceremony for a 47-unit condominium on Okaloosa Island off Fort Walton Beach.

They sold more than 50 percent of the units during the pre-construction phase of the development of Blu, a six-story condo that will front the Gulf of Mexico along a 300-foot beach.

Prices start in the high $700,000s. Each unit has a view of the Gulf or the coastline.

The Blue development has four floor plans ranging from three bedrooms and 1,837 square feet to four bedrooms and 2,203 square feet. Unit interiors feature quartz counter tops, porcelain tile flooring and private terraces as deep as 10 feet.

Shared amenities include two Gulf-front swimming pools (one heated), a hot tub and a gym, plus covered parking.

The developers are Crossgate Partners, LLC, led by Randy Moore, and Olson Land Partners, led by Richard Olson.

The leaders of the sales and marketing team for Blu are ResortQuest Real Estate agents Cindy Blanton and Janette Klein. – Mike Seemuth

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Gramercy buys Amazon fulfillment center in Jacksonville for $95.5M

Amazon fulfillment center at 13333 103rd Street in Jacksonville (Credit: Jacksonville Daily Record)

Gramercy Property Trust Inc. paid $95.5 million for a 1 million-square-foot fulfillment center in Jacksonville operated by online retailer Amazon.

New York-based Gramercy also acquired a $59.3 million mortgage loan from New York Life Insurance Co. in connection with its Amazon-facility acquisition.

Hillwood Development Co. was the seller of the Amazon facility at the Cecil Commerce Center in Jacksonville.

Dallas-based Hillwood served as the master developer of the Cecil Commerce Center for the city of Jacksonville before buying the property from the city in January 2017 for $783,341 and then developing the Amazon fulfillment facility there, which opened in October.

The Amazon facility, located at 13333 103rd Street in Jacksonville, is one of four in the city.

Gramercy is familiar with the city’s office market. Last year, the company sold Grammercy Woods, a five-building Jacksonville office complex anchored by Bank of America, for $115 million. [Jacksonville Daily Record]Mike Seemuth

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Sneak peek: Get a glimpse at Austin's most-alluring modern homes

From clean-cut Scandinavian styles to sparkling chandeliers, the 2018 Austin Modern Home Tour is packed with eye candy for design enthusiasts. Readers can get a sneak peek of the tour set for Feb.24 by browsing the slideshow of Pinterest-worthy photos above. To mark the 10th annual tour, GoodLife Luxury and Modern Architecture + Design Society have scheduled a week of design and architecture-related events across the area.

The events aim to give ticket holders the opportunity to explore modern architecture…

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Here’s the little secret to winning a bidding war that could totally backfire

Escalation clauses are a double-edged sword

From TRD NYC: Going up?

In a hot real estate market, buyers will often put in offers with an escalation clause – something akin to an auto bid in the event a bidding war breaks out. But there are drawbacks for those on both sides of the negotiating table, according to the Wall Street Journal.

An escalation clause is an addendum to a contract that automatically raises a buyer’s offer by predetermined increments up to a maximum amount.

But they come with risks. Namely, if a buyer says they’re willing to increase their bid up to a maximum amount, they’re tipping their hand to the seller as to how much they’re actually willing to pay.

“A buyer can think of an escalation clause as a ‘have your cake and eat it, too’ clause,” said David Reiss, a professor at Brooklyn Law School who specializes in real estate. “But in real estate, as with cake, it is hard to have it all.”

The seller can make a counter offer at the buyer’s maximum escalation clause price, but there are drawbacks for the seller too.

Say an owner lists a house for $1 million, and a buyer puts in an offer of $950,000 with an escalation clause that rises in increments of $5,000 to a maximum of $1 million. A second buyer comes along with an offer of $980,000, the escalation clause kicks in and the first buyer wins the property at $985,000.

If the seller hadn’t agreed to the escalation clause and simply asked for the best and highest offer, it’s possible the first buyer would have made their maximum bid of $1 million. The seller potentially left $15,000 on the table.

But while these kinds of clauses become more common in hot markets, they’re seen less often in high-end real estate, where the increments would have to be substantially higher. [WSJ] – Rich Bockmann



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