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By cliggittvaluation 26 Mar, 2024
According to the Wall Street Journal, U.S. office markets are facing significant challenges with rising vacancy rates, an unprecedented amount of sublease space available, and increasing defaults. Despite these challenges, office rents remain stable or are even on the rise. Data from CoStar Group reveals that the average asking rent for U.S. office spaces is currently $35.24 per square foot, up from $34.92 in the fourth quarter of 2019. This increase in asking rents highlights the unique dynamics of the commercial real estate market. Rents play a crucial role in determining a property's value, and property owners are reluctant to reduce them. This reluctance stems from the fact that lowering rents can negatively impact the appraised value of their buildings, potentially leading to loan defaults or difficulties in refinancing, as noted by David Bitner, head of global research for Newmark Group. Experts anticipate that office rents will eventually decline, especially as property owners and lenders are compelled to restructure mortgages or sell distressed properties. In the meantime, landlords are offering attractive incentives to lure tenants, such as costly interior build-outs, extended periods of free occupancy, and other perks. Phil Mobley, CoStar's national director of office analytics, mentioned instances where tenants were offered a year of free rent for a 10-year lease term, a departure from the previous standard of one month free rent for every two years. However, this strategy of offering incentives may be reaching its limits. Record-high office vacancy rates continue to climb as companies, many of which have adopted flexible workplace strategies during the pandemic, require less office space. According to CoStar, businesses occupy 200 million square feet less than they did before the recession, with an additional 150 million square feet of "negative absorption" expected in the next two years. The delinquency rate for office mortgages that have been securitized has surged to 6.63%, more than triple the rate of 1.87% in January 2020, according to Trepp. As a result, some properties will undergo restructuring, sales, or foreclosures, resetting property values to reflect actual market conditions rather than inflated rents. An MSCI index indicates that the average value of office buildings in central business districts has dropped by nearly 41% from July 2022 to the beginning of this year. As new owners acquire properties at these reduced prices, they will have less need to maintain high rents. In fact, they may be incentivized to lower rents to attract tenants away from competitors. Cities like San Francisco, which has experienced distressed property sales, are already witnessing sharp declines in asking rents. CoStar reports that average prices have fallen to $53.78 per square foot in the first quarter of this year, down from $75.93 in the fourth quarter of 2019. Adyen, a global fintech firm, recently secured 150,000 square feet of sublease space in San Francisco for its North American headquarters. Davi Strazza, president of Adyen North America, acknowledged that the deal reflected the current market conditions. With more than 70% of current office leases signed before the pandemic, many businesses are poised to benefit from softer market conditions when their leases come up for renewal. Companies adopting hybrid workplace strategies are also contributing to the downward pressure on office rents. According to Scoop Technologies, which tracks workplace strategies, companies with hybrid approaches required employees to be in the office an average of 2.57 days in February, only a slight increase from 2.49 days a year ago. As these companies renew their leases, they tend to occupy less space, further pushing down rents, as observed by Rob Sadow, CEO of Scoop.
By cliggittvaluation 25 Mar, 2024
Townhouses, a hotel, and a winery could soon occupy an empty lot at 265 Causeway Boulevard . The lot is located just off the Dunedin Causeway and has been vacant for over a decade. The Local Planning Agency heard from residents and unanimously approved a design review of the proposed 1.5-acre, four-building, mixed use project that will include townhomes, swimming pool, a hotel, surface parking, and a wine shop, and other amenities. The Dunedin City Commission will have a hearing on the $14 million project on April 4. Setbacks were one of the more prominent concerns, but speakers at the meeting expressed support for the project. The zoning of the property is tourist facility, which allows a maximum building height of five stories. The project in total is proposed to have: -Two residential buildings – each with four townhomes. Both buildings are proposed to be 3-stories, with 2 floors of living area and rooftop patios over the ground floor parking. - A three-story mixed-use building, which will have four townhomes and a 1,796+ SF winery. The townhomes will have two stories of living area, and the winery will consist of two floors, including ground floor parking and a rooftop patio. - A four-story, seven room hotel with three floors of guest rooms over ground-floor parking. According to managing partner for development and construction with Coastal ICF, Doug Anderson says the hotel will be utilized by the Blue Jays organization along with the public when the Blue Jays are not occupying the rooms. - Surface parking, a swimming pool, and cabana. “Staff has determined that a three- or four-story mixed-use at the proposed density and intensity on this property, together with what’s going on around it, does comply and is consistent with our compatibility requirements in our comprehensive plan,” said Joseph DiPasqua, assistant director of community development.
By cliggittvaluation 22 Mar, 2024
Central City YMCA’s redevelopment project has come a step closer to becoming reality. Yesterday, the Tampa City Council approved preliminary plans to redevelop 6.2 acres along North Florida Avenue. The mixed-use development will be 1.25 million SF and be anchored by a new YMCA that will be nearly double the size of the current facility. Leading the redevelopment efforts is Ellison Development, based out of Tampa and led by Casey Ellison and co-founded by Sidd Pagidipati. The redevelopment was awarded three approvals towards moving forward: rezoning of the property, vacating of multiple alleys near the property, and an amendment to the city’s comprehensive plan to change the future land use of the property. The new YMCA facility will be built across the street on North Florida Avenue from the current facility. There will be a sky bridge over North Florida Avenue to connect the new YMCA to the Tampa Metropolitan Area YMCA’s corporate offices and parking. The current YMCA facility will remain open until the new one is built. The rezoning request was passed in a 5-1 vote, with Councilmember Luis Viera voting against the project, and Bill Carlson recused himself from the vote, citing conflict of interest with a “shareholder’ in the project, who is a client of public relations firm Tucker Hall, where Carlson is president. The Pagidipati family is a Tucker Hall client. Ellison Development and the Tampa Metropolitan YMCA hope to develop the following on the property: - 110,000 SF YMCA Facility, that will have a rooftop pool. - A 200-key luxury lifestyle hotel - 400+ multi-family units, with a minimum of 10% dedicated to affordable housing. - 184,000 SF of office space - 100,000 SF of retail space, with portions being dedicated to small & minority-owned businesses. - 1.444 parking spaces - 20,000 SF of greenspace The Standard Oil building at 110 E. Oak Avenue will be preserved and potentially used as a hotel lobby and restaurant space, according to Sol Fleischman, an architect who's firm FleischmanGarciaMaslowski designed the development. Retail space is said to include incubator space for minority-owned businesses. Kimley-Horn is the engineer; Dark Moss is the arborist. Tyler Hudson, a partner in Gardner Hudson Brewer, is the zoning attorney representing Ellison. Central City YMCA Parcels in the project include: - 106 E Palm Ave - 110 E Oak Ave - 2005 N Tampa Street - 1905 N Florida Avenue - 1708 N Florida Avenue - 1813 N Franklin Street - 2003 N Tampa Street
By cliggittvaluation 15 Mar, 2024
Beloved grocer Trader Joe’s has announced they will open a new location in Palm Harbor. The new location will be at 33591 US Hwy. 19 N., a former Stein Mart location that has been rumored to have a Trader Joe’s opening in the spot by locals for years. A Trader Joe’s Spokeswoman told the Business Journal that “We look forward to providing our customers the outstanding value of the best quality products at the best everyday prices. Through our rewarding products and knowledgeable, friendly Crew Members, we have been transforming grocery shopping into a welcoming journey full of discovery and fun since 1967." A detailed timeline is not yet available, but the company intends to open the new location sometime in 2024. Trader Joe’s participates in a Neighborhood Shares program that donates 100% of unsold but fit to enjoy products to nonprofit community-based organizations. This is the second Trader Joe’s location in Pinellas County.
By cliggittvaluation 05 Mar, 2024
A new affordable housing community for family and senior apartments will be built on a 1.35-acre site at the corner of Hartford Street N. and 32nd Avenue N in St. Pete. The project will bring a total of 95-units, thanks to the city council approving a rezoning request for the site on February 15th which allowed for higher density at the location. The original plan only included 47 units. Blue Sky Communities Partner Scott Macdonald said in a release “We are very excited to reach this milestone and begin working with the St. Petersburg Housing Authority, the need for this housing in St. Petersburg is enormous.” The land is currently owned by the St. Petersburg Housing Authority (SPHA) and the project will also include recreational space for pickleball and shuffleboard. As a part of the same project, the team will also renovate the SPHA property located at 3475 32nd Avenue (Saratoga Apartments), an affordable community with two two-story apartment buildings. 34 one and two-bedroom apartments are spread amongst that apartment community. SPHA serves over 4,000 low-income households throughout St. Petersburg. “We could not be more thrilled to pursue this development opportunity as the latest step in fulfilling our mission to provide safe, affordable housing to the residents of St. Petersburg, especially in a time of such great need,” SPHA Board Chairman James Dates said in a release. “Our board will always lend our support in this critical effort.” Source & Resources: SPHA | TBBJ | Blue Sky Communities
By cliggittvaluation 29 Feb, 2024
A 3-2 vote on Tuesday evening (February 27 th ) by the St. Pete Beach City Commission ended months of deliberation and testimony from the public and involved parties with approval for the Sirata Beach Resort expansion. A conditional use permit (CUP) for the construction of a 290-key luxury JW Marriott Hotel, 130-key Hampton Inn, and revamp of the existing 382-key resort was approved.  Tuesday’s decision came after a five-hour discussion and was a continuation of a nearly 11 hours hearing last week where commissioners deferred the decision. Commissioners Nick Filtz and Mayor Adrian Petrila were in opposition of the approval, citing concerns of traffic backups, designs of each hotel, and obstruction of views that the expansion will cause for neighboring developments. The plans were initially filed in early 2023 and called for over 50 rooms at the Sirata Beach Resort to be eliminated and replaced with a freestanding pool and restaurant. The proposed JW Marriott hotel would have a permitted fourth floor rooftop deck with a bar and dining area at the northern portion of the property. The Hampton Inn hotel will rise at the southern end of the property. The Sirata Beach resort is located at 5300 Gulf Boulevard. When completed, the development will contain 646 hotel rooms, an increase from the existing 264 units. Kentucky-based hotel management company, Columbia Sussex, purchased the hotel in 2022 for $207 million and plans to pump $250 million into the expansion plan. The Sirata expansion plans also include construction of a public boardwalk that runs along the beach which is fully funded by the developer. Additionally, they plan to widen sidewalks along Gulf Boulevard to 10 feet, have on-site parking, and add lighting restrictions and special film on the new building's windows for sea turtle nesting safety. Commissioners made comments on redesigning certain aspects of the project, such as the parking garages, and have asked developers to go back to the drawing board. The developers will host a design charrette soon to get community feedback on the parking garage design. The Sirata does not conform to today’s building codes, so they are unable to rebuild without a conditional use permit. The commissioners considered more than 40 proposed building conditions, including a wind impact study, which Columbia Sussex rejected as it would delay the process by at least nine months. The developer will now begin permitting the project, though a construction timeline has not yet been announced.
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Please note that none of the information or opinions expressed herein are meant to convey nor should they be construed as real estate appraisal practice, brokerage practice, legal, tax, or financial advice.


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