By Julia Echikson

No one thinks conditions are as hot and sunny in South Florida commercial real estate as they were for much of the pandemic. But no one’s quite forecasting a cold spell, either. That was the takeaway from Commercial Observer’s South Florida Multifamily & Mixed-Use Forum event last week, which assembled top owners, lenders, brokers and attorneys in Miami.

Both Mitch Sinberg, senior managing director of mortgage banking at Berkadia, and Gregory Freeman, co-founder and co-CEO of BH3 Management, agreed: “There’s a lot of capital sitting on the sideline.”

“The banks here are out of business,” commiserated Stephen Bittel, founder and chairman of Terranova.

Not everyone agreed. It’s all “relative,” said moderator Tony Fineman, senior managing director and head of originations at Acore Capital. Despite his love for New York, Simon Ziff, president of Ackman-Ziff Real Estate Group, spends many months in South Florida in part because of its active market.

Some developers have Greg Newman, senior managing director at Bank OZK (OZK), to thank for that. Newman, who “remains in growth mode,” has closed three construction loans worth upward of $200 million each in recent months. Just last week, the lender closed a loan for a mixed-use project in Edgewater, spearheaded by Erik Rutter’s Oak Row Equities.

Buyers remain hungry, too. Alex Witkoff is under contract to sell a penthouse at his Shore Club development in Miami Beach for $120 million, which could become Miami-Dade County’s most expensive condo sale ever.

“COVID has supercharged our growth,” said Daniel Schwimmer, chief investment officer at the Allen Morris Company, in a panel moderated by Ryan Bailine, an attorney at Greenberg Traurig.

But Miami didn’t always have all this glitz. It’s easy to forget the transformation the city has gone through over the past three years, let alone the past three decades.

When Nitin Motwani, managing partner at Miami Worldcenter Associates andMerrimac Ventures, got started on Miami Worldcenter — now one of the largest private developments in the country and the location of CO’s event — the area was home to several vacant sites as well as industrial and low-rise buildings.

“It took us 10 years to do the first $1 billion — 10 months to do the next billion,” Motwani said.

Dan Kodsi, founder and CEO of Royal Palm Companies, was also a pioneer as one of the first to develop a luxury condo in Edgewater, when the neighborhood was known mostly for drug dealing and other crime in the 2000s. Now the area is seeing a rush of luxury development.

Similar transformations could be coming to other South Florida asset classes such as office.

“It’s all cyclical. Office will come out,” said Sondra Wenger, CBRE Investment Management’s head of commercial real estate in the Americas.

Some are already preparing for the recovery. Late last year, Constellation Group, led by principal Eduardo Ignacio Otaola, another CO panelist, secured a $33 million construction loan for a mixed-use project with a sizable office component in Coral Gables.

Now retail is recovering from the depth of the pandemic, especially in Miami, according to speakers of the next panel, “Hospitality & Retail: What Disruption and Innovation is Impacting the Market?” which included Nick Falcone, founder and CEO of Rentyl Resorts.

“If you buy at the right basis, you wake up in five years in the right location; Miami retail should trade right,” said Ben Mandell, managing partner and CEO of Tricera Capital.

Curation is key. “Finding those tenants that are really involved, that are going to be incredible advocates for the neighborhood, is something very important,” added Jessica Goldman Srebnick, co-chair of Goldman Properties.

But success brings on new sets of challenges. “Miami got a little greedy and priced itself a bit too high,” said Cassie Resnick, managing director at Mast Capital. “It’s expensive to build.”

Harvey Hernandez, chairman and CEO Newgard Development Group, and Alfonso Costa, COO of Falcone Group, agreed. They were panelists on “Challenges and Opportunities in Luxury Multifamily Development in South Florida,” which was moderated by Philip Rosen, a partner at Shutts & Bowen.

“The difference between the bid and the asking price [is wide],” said Jeffrey Ardizon, principal at The Estate Companies. “We’re being picky.”

The increased cost has forced some to change their business models. “We were a dominant rental high-rise developer just a few years ago in South Florida. Now we are categorically out of that business,” added Greg West, CEO of ZOM Living. “It’s pushed us into the suburbs, where we build garden-style communities and get more in rent.”

These days, perhaps the greatest opportunity of all right now is in affordable housing, thanks to Florida’s Live Local Act. The legislation, enacted last year, grants developers tax breaks and density incentives in return for adding workforce housing units.

“It gives you an arsenal” to get projects done, said Lissette Calderon, CEO of Neology Development.

And “affordable is one of the only products getting financed today,” said Buwa Binitie, founder and CEO of Dumas Collective.

However, it seems like many in the real estate industry don’t realize that. When the panel — titled “What’s Being Done to Help Miami’s Affordable and Workforce Housing Crisis?” moderated by Natalie Levkovitz, co-founder and CEO of Equally Crafted Management — started, the crowd turned over.

And, yet, the importance of affordable housing could not be overstated. “You don’t want your service worker living hours away,” said Alexis Bogomolni, founder and CEO of ABH Developer Group.

The Live Local Act “allows us to bring below market rents for a luxury product,” added Asi Cymbal, chairman of Cymbal DLT Companies.

“I think Live Local is the seminal piece of affordable housing legislation post the low-income tax credit,” said Donahue Peebles III, executive vice president at The Peebles Corporation. The bill “solves the most pernicious issue, which is the missing middle, when folks in the middle get squeezed.”

Then there was the big elephant in the room throughout last week’s forum: Will South Florida experience a crash? Apparently not, according to global power player Miki Naftali, chairman and CEO of Naftali Group: “We’re gonna have a slowdown, but it won’t be as severe as before because of the lack of quality product.”

Panelists also included Joe Berko, CEO of Astor Realty Capital; Carlos Melo, owner of Melo Group; Eugene Rutenberg, CEO and founder of Celestial Fund; Nick Gati, team lead at analytics firm Yardi; and Jess Johnson, global head of partnership at office experience platform HqO. Moderators included Sabina Covo, co-founder of Sabina Covo Communications; Manuel Crespo, a partner at Greenspoon Marder; and Mark Mindick, partner and national real estate practice leader at Citrin Cooperman.

By Alexandria Sands

Almost eight years after Mecklenburg County chose a developer to rebuild Brooklyn, the highly scrutinized project is moving along at a sluggish pace.

• Recently, the master developer put a part of the property up for sale. The move could unnerve those already skeptical about the project.
• But stakeholders say it's all part of the plan.

Why it matters: Some community members are frustrated with the pace of the 17-acre Brooklyn Village redevelopment. Descendants of Brooklyn, once Charlotte's largest Black neighborhood, have waited decades for some type of restitution.

• In the 1960s and '70s, the city razed Brooklyn in the name of urban renewal, displacing families and destroying a prosperous hub of Black business.

The latest: Donahue Peebles III, executive vice president of The Peebles Corporation, tells Axios it was always their intent to bring on a third-party purchaser that would build in line with the vision for Brooklyn Village.

• Horizontal construction of infrastructure and roads is underway to prep the site for multi-family and hotel buildings. Peebles expects that work to finish late this year.

Catch up quick: In 2016, Mecklenburg County selected BK Partners — a partnership between New York-based The Peebles Corporation and Charlotte-based Conformity Corporation — for the redevelopment. The first phase was supposed to finish in 2021.

What happened between 2016 and 2023: Mecklenburg County attributes the prolonged timeline to negotiations over contracts and site plans, developer due diligence and an 18-month closing period, which was extended another five months.

• "There's nobody more incentivized than we are to move forward quickly," Peebles says. "Owning vacant land doesn't make anybody money. Owning buildings does."

Flashback: Mecklenburg County sold 5.7 acres in July for Brooklyn Village's first phase for $10.3 million — a price agreed upon in 2016.

• Today the 1.56 acres on the market are valued at $8.2 million, according to Mecklenburg County property records.
• That's up from 2019 when the land (not including the now-demolished Walton Plaza building) was appraised at $6.9 million. The larger 4.6-acre parcel increased in value from $27 million to $35 million.
• In exchange for the discounted price, BK Partners agreed to the county's wish list for the site: build workforce housing, incorporate a park and pave new streets, says county asset director Mark Hahn.
• Between 10% and 12% of more than 1,200 residential units will be considered affordable, Peebles says.

Zoom in: Real estate company JLL is marketing the site as a rare opportunity with "vast by right development optionality" — meaning the buyer likely could avoid going through a tedious city rezoning process and build whatever they want.

Yes, but: If the land is sold, the county's contract with BK Partners still stands and requires that what's supposed to be built, is built.

• "I know it set off some alarm bells," county commissioner Mark Jerrell says of the real estate listing, "but it's really consistent with the master redevelopment agreement."

Between the lines: In the seven years since Brooklyn Village was agreed upon, transformative plans shaped for The Pearl, next to Brooklyn. Construction is moving fast for that "innovation district," which will be home to Wake Forest School of Medicine.

• Brooklyn's incoming neighbor could help BK Partners attract a commercial buyer.

The other side: Construction is slowing in Charlotte and nationwide amid high interest rates and low demand for office space.

• But Peebles is optimistic about securing a buyer, ideally a developer experienced in the life science sector.

Another important aspect of the project is Peebles' commitment to hiring minority and women-owned businesses for 35% to 40% of the work. Peebles anticipates exceeding that benchmark once vertical construction gets going.

• "We're gonna hold their feet to the fire on that," Jerrell says.

What's next: BK Partners has legal deadlines it must meet, according to the county.

• Horizontal construction has to wrap up by March 2025. BK Partners has until August 2025 to start vertical construction of the multi-family component.
• Peebles was hesitant to share exact dates but expects the first buildings to open within two to three years. The entire buildout could take at least 12 years.

Credit: Fox Business

By Linda Laban and Katie Jackson

You’re lucky to get into Miami’s glitziest bars and restaurants these days. But the city’s real money-movers shun those oversubscribed venues. They spend their days and evenings in exclusive spaces.

“I feel the vibe of Miami now is centered on private clubs,” said Alana Oxfeld, who moved to Miami from New York in 2018. She first tested the waters, as so many do, at Soho House’s Manhattan outpost and retains her membership. But Oxfeld soon began looking for a club that would offer a beach-centered, family-friendly environment to her 3-year-old son. She landed at the Miami Beach Edition’s Beach Club, where membership gives access to a 70,000-square-foot private beach and two pools.

The Edition opened its club in 2014, four years after the mothership of modern membership-only clubs, Soho House, landed on Collins Avenue. Soho House, which now has two clubs in Miami, helped spearhead what has grown into a proliferation of private clubs in brand-name hotels and luxury residential developments across the city.

In 2020, Baia Beach Club Miami opened at the Mondrian South Beach — 1 Hotel followed, adding a revenue-boosting members-only enclave. At the Faena Hotel Miami Beach, the arts focused Faena Rose — a select salon at the Faena Hotel Miami Beach — opened in 2016.

New York’s Major Food Group recently opened ZZ’s Club, a private adjunct to its Mexican restaurant Chateau ZZ’s. It’s set in a lavish 1931-built mansion in the Miami Design District.

Miami’s latest club is at celeb dining hotspot Seaspice Brasserie & Lounge, which created the members-only Air this winter on its second floor.

Overlooking the Miami River, the bright space has the trappings of a luxury yacht complete with porthole windows and a “Yellow Submarine”-inspired sunken DJ booth. Priority boat dockage and waived dockage fees are among the many membership perks.

This spring, the Club at the Moore, located on the second floor of the landmark Moore building in Miami’s Design District, is due to open. The 20,000-square-foot club adds multiple mingling spaces including bars and lounges, all off limits to the hoi polloi.

And that’s the point: no lines and a guaranteed seat at the table.

But Miami’s oldest members-only club, the Bath Club, opened in 1926 and is all that and a lot more.
“Edition or Baia, these hotel clubs have a different purpose,” said real estate developer Don Peebles, who owns the Bath Club. “They are the hotel’s additional revenue sources. That is not our mission. Our club exists for the purpose of serving our members and they want impeccable service and a predictable environment.”

“We’re not the wild party scene — for people who want to dance on tables, we’re not for them.”
Don Peebles, Bath Club ownernone

The Spanish Colonial Revival club is once again going strong following a more than $9 million renovation. Its membership list once boasted names such as William Vanderbilt II, and even president Herbert Hoover hobnobbed here.

Peebles joined the Bath Club in 1996 and became its first African-American member. Soon after, he purchased the property. But today it’s an “exclusively inclusive” spot, Peebles said — inclusive in terms of person, but exclusively for those with enough cash and caché to get in.

Members pay “six figures to join,” he says. That’s a lot when considering it only costs $3,000 to $4,000 a year to get into most hotel clubs.

“It’s like Bemelmans Bar at the Carlyle, it has that feeling to it,” Peebles adds of the iconic Manhattan spot.

Like Bemelmans, the Bath Club’s is designed to stand the test of time. Something a flash-in-the-pan beach club at the latest trendy hotel can’t hope to replicate. “One member celebrated his 13th birthday here and he’s my age, in his 60s,” Peebles said. “We’re not the wild party scene — for people who want to dance on tables, we’re not for them.”

Tired of competing with TikTokers for the hottest table in the house? We have good news: The new Delilah Miami doesn’t care how many followers you have.

“We have never done influencer trades,” Milo Frank, marketing director for the club’s owner (Hwood Group), told The Post. “We want everyone to feel comfortable in our restaurant.” That means that like its sister properties in LA and Vegas, this new Jazz Age-themed supper club located in Brickell — opened at last Art Basel — has a strict no-photos policy.

That should please Drake, one of Delilah LA’s biggest fans. The “Champagne Poetry” rapper hasn’t dropped by the Miami location yet due to his upcoming tour, “but he’s definitely looking forward to his first experience with us,” insisted Frank.

Drake and other boldface names will soon arrive via watercraft as Delilah rushes to ready its private boat slip — the only owned by a restaurant in Brickell.

While serving up usual suspects like Delilah’s “World Famous Chicken Tenders,” new entrees specific to the Miami joint will include lobster ravioli and red snapper. For a glitzy appetizer, indulge in the $230 100-layer potato, smothered in duck fat and garnished with chives and, of course, Kalluga caviar.

Expect prime people watching, pop singers debuting unreleased songs on the custom-built stage, professional athletes at the bar and live jazz.

So how hard is it to get a table? Frank doesn’t sugarcoat it. “It is pretty difficult to get a prime-time reservation,” he said.

Credit: NY Post

Don Peebles, The Peebles Corporation CEO and chairman, joins ‘The Exchange’ to discuss the challenges of valuing buildings in today’s climate, the government’s involvement in commercial real estate assessment, and more.

Credit: CNBC

By A.R. Shaw, Executive Editor

Several of the top business and social leaders made their way to Atlanta for the 2024 TSP Game Plan. The three-day event featured workshops designed to help business owners and entrepreneurs reach business growth.

Some notable names include Master P (Founder, P. Miller Enterprises and No Limit Records), Don Peebles (Chairman & CEO, The Peebles Corporation), Dr. Boyce Watkins (Founder, Black Business School) Arlan Hamilton (Founder, Backstage Capital).

Former Atlanta Mayor Keisha Lance Bottoms served as a headliner for Mastermind Day which also featured Mastermind Day featured Clate Mask (Founder of KEAP) and Arlan Hamilton (Founder, Backstage Capital).

Lamar Tyler spoke with ADW and shared how attendees can maximize the event.

Lamar Tyler spoke with ADW and shared how attendees must implement action plans after the event.

“I want people to execute,” Tyler said. “They come and take all the notes and they feel like they are the notebook champion. What can you actually take out of here, get done and the next time they come back be at another level. We do this every six months because entrepreneurship is a roller coaster. And people leave here, they are at the top and feeling great. But life can happen and you can fall off track. So we’re here to keep you going.”

Credit: Atlanta Daily World

Peebles Corporation founder and CEO Don Peebles discusses the commercial real estate market and explains why he has not endorsed a 2024 presidential candidate on 'The Big Money Show.'

Credit: Fox Business

By Kristen Altus

A New York Times bestselling author and a real estate entrepreneur have started to echo similar warning signs amid "massive" issues within the commercial sector.

"It's a slow-moving train wreck," The Bear Traps Report founder Larry McDonald said on "Mornings with Maria" Tuesday. "This is why the Fed is the beast in the market, it has the Fed by a stranglehold because it's close to $2 trillion of maturities in the commercial real estate space. And then, if you look at high-yield leverage loans and investment grade bonds in the U.S. corporate market, it's another $1.9 trillion. So the Fed is going to be forced this year to cut rates dramatically."

"These buildings cannot service the debt," Peebles Corporation founder and CEO Don Peebles added on the panel. "They're worth a fraction of what the original values were when these loans were made. And you're going to see massive defaults because there's no solution in many of these instances."

Their comments are strikingly similar to Cantor Fitzgerald CEO Howard Lutnick’s warning last week that a "generational" shift was on the horizon, painting a "very ugly" picture for America’s real estate market in 2024.

"I think $700 billion could default… The lenders are going to have to do things with them. They're going to be selling. It's going to be a generational change in real estate coming, end of 2024 and all of 2025. We will be talking about real estate being just a massive change, $700 billion to $1 trillion in defaults coming," Lutnick stressed to Maria Bartiromo at the World Economic Forum in Davos.

Larry McDonald and Don Peebles discussed commercial real estate in a "Mornings with Maria" panel Tuesday. (Fox News)

The factors causing default worries is "two-fold," Peebles explained: "One, that these buildings, the contract vacancy rates have increased significantly, up to about 20% in places like New York City, for example. And then of that remaining 80%, less than half of it gets occupied. And that's because there's been a seismic shift on how people work and where they are working."

McDonald agreed with Peebles’ analysis, and both argued the "only way" to help the situation and slow down the default process is with "aggressive rate cuts" from the Federal Reserve.

"I completely agree," McDonald chimed in. "I think somewhere between like March, April, May, the probability of a soft landing in the eyes of Wall Street is going to come down dramatically. And that beast in the market, because of this emerging credit risk, all these maturities within the next two years, that eventually triggers a significant rate cut in the middle of the year."

"And remember, this is the most progressive Fed we've ever seen," McDonald continued. "It's a very left-leaning Fed. So they're going to try to help the current White House. They'll do everything possible."

Credit: FOX Business