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A recently converted warehouse in Fort Lauderdale’s Progresso Village is now 100% leased with retail and office tenants that will altogether employ about 100 people.

Called Fabrick, the former industrial space at 801, 807, 815, and 819 N.E 2nd Ave. has 24,000 square feet of office and retail. The developer, BH3 Management, moved its headquarters from Aventura to the project’s office component in April. It’s larger than BH3’s previous office in Aventura, which was only 5,000 square feet.

The other seven businesses leasing space in Fabrick will employ an estimated 75 people. The final employee count for all tenants will not be known until they have completed their build outs and are open for business, Freedman stated in an e-mail to the Business Journal.

A subsidiary of BH3, BH3 DJ Flagler LLC, bought the warehouse in November 2017 for $2.8 million, according to online records from the Broward County Property Appraiser office. Another subsidiary, BH3 DJ Sub LLC, purchased the warehouse from BH3 DJ Flagler LLC for $1.64 million in May 2020.

After receiving $350,000 in incentives from the Fort Lauderdale Community Redevelopment Agency in December 2020, BH3 launched an adaptive reuse project of the warehouse building.

Besides the incentives, the project was financed through a $5.1 million loan from New York-based Maxim Capital Group.


Source: SFBJ

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There’s some good news for the office market, according to Transwestern. In the company’s 2021 Q4 review, there was quarterly office absorption of 644,000 square feet, which the company described as “turning a corner,” as “33 out of 51 tracked markets registered positive net absorption as market correction is underway.”

The five areas with the biggest increases in net absorption were in Boston, San Jose-Silicon Valley, Dallas-Fort Worth, Seattle, and Charlotte. When looking at trailing four-quarter net absorption, the top five were Austin, Raleigh-Durham, San Jose-Silicon Valley, Oklahoma City, and Nashville. About 30% of the markets that Transwestern tracks showed positive net absorption over the previous 12 months.

Seattle, San Jose-Silicon Valley, Charlotte, Austin, Salt Lake City and Raleigh-Durham had all been experiencing an expansionary trend, meaning positive net absorption percentage of office space before the pandemic.

The December job numbers were up 199,000, with about a quarter of them being office-using jobs. That segment of employment was up 1% to 46.8 million, so the number of people potentially needing someplace to work is on the rise.

But there are still strains evident on office space. For one, there’s still an ongoing recovery that has taken wind out of the sails of the market from both the ongoing pandemic with new variants, people and businesses still adjusting to broader working from home, and macroeconomic factors like inflation and supply chain issues pushing up property values but also imposing greater costs on companies.

The Q4 national average vacancy rate crept up 10 basis points to hit 12.6%. That includes demographic shifts from north to south, which means that there is likely some duplication in office space as new units are built to house the shifting companies without necessarily having someone to backfill the old space.

There were 152.7 million sq. ft. under construction in the quarter, which was up 3.1% quarter over quarter, but down 9.1% year over year. That would seem likely due to uncertainty about the market and the large amount of space already available. Why build more when so much could be had?

The asking base rent saw 2.1% annual growth to $25.72 per sq. ft., below the five-year average of 3.3%. Some traditional powerhouses were hit. “The largest, densest and most developed markets have historically commanded significantly higher rental rates, yet pandemic-related trends have diminished these markets’ lead,” the report read. “Since the beginning of the pandemic, the two most expensive markets, San Francisco and New York, have experienced the largest declines in rental rates at -19% and -9% respectively.”

According to Transwestern, “Markets with strong tailwinds prior to the pandemic may be better positioned coming out of the downturn” when looking at three-year net absorption percentage of stock.


Source:  GlobeSt.