COVID-19 Won't Stop Florida Real Estate Boom in 2021, Fort Lauderdale Attorney Says

The coronavirus pandemic hasn’t thwarted South Florida real estate development with the exception of hotels and offices.

Fort Lauderdale attorney Keith Poliakoff’s clients will embark on $2.5 billion of projects next year, more than half of that in Hollywood.

Developers think that by the time the final slab of concrete is poured, a COVID-19 vaccine will be available and people would be less wary about renting in an apartment tower where they have to share a gym, pool and elevators.

Developers “see the light in the end of the tunnel,” said Poliakoff, a partner at Saul Ewing Arnstein & Lehr who represents developers seeking project approval from local governments. “They believe once herd immunity is reached, the economy will rebound.”

New York-based pharmaceutical maker Pfizer Inc. applied for emergency U.S. Food and Drug Administration approval after tests showed its vaccine is 95% effective. Moderna made the same move Monday with the FDA and European regulators with a 94% effective claim.

“If the vaccine as expected is supposed to start rolling out by the end of this year and the beginning of next year, we are all very hopeful we are going to see a significant recovery,” Poliakoff said.

Developers are timing their projects to open in early 2022 in expectation vaccines will be widely available by then.

Poliakoff, who also is the town attorney for Southwest Ranches, said a lot of construction is to start next year based on the amount of building permit approval this year.

It’s obvious that developers are more cautious about building hospitality products given the hard hit by the pandemic on the industry. Why are they also wary of building offices/? 

Employees got used to the massive work-from-home shift and remained productive, prompting companies to evaluate their future office needs.

“Major companies that have large offices will be consolidating those offices in order to save money and to encourage more people to use their home offices,” Poliakoff said.

Some companies are thinking about keeping a small central office where employees can come in sporadically, although they are to work from home most of the time, he added.

Companies also are considering moving out of expensive downtowns in favor of more affordable suburbs. In downtown Fort Lauderdale, office rents run up to $45 or $50 per square foot triple net, according to Poliakoff.

“If they can either downsize or pull their office outside the downtown area, they can save considerable dollars,” he said.

What projects are coming to Hollywood, and why is the Broward County city a big draw? 

At least five projects are on tap in Hollywood. BTI Partners LLC, based in Fort Lauderdale, is leading redevelopment around the 10-acre circular ArtsPark at Young Circle with plans for a mixed-use multifamily, office and retail project on two lots.

On the site of the vacant Bread Building, BTI will build a 361-unit apartment tower with 17,000 square feet of retail space. On the site of the Young Circle Shopping Center, it will build a twin-tower, 700-plus unit multifamily project with 100,000 square feet of retail and 75,000 square feet of offices, according to BTI’s website.

Construction is to start next year, said Poliakoff, who represents BTI.

The long-stalled Block 40 multifamily-hotel project by developer Charles “Chip” Abele is progressing with workers already past the structure’s seventh floor. The project is near BTI’s development sites on the southwest side of ArtsPark.

To the west, Pinnacle is working on an affordable-housing project at U.S. 441 and Johnson Street. Poliakoff obtained city approval on behalf of Miami-based Pinnacle, one of the region’s biggest affordable-housing developers.

Hallandale Beach-based PPG Development LLC and Dania Beach-based real estate investor Taillard Capital are developing a small part of the 67-acre Club at Emerald Hills golf course with more than 400 apartments, townhouses and golf villas. Golf great Jack Nicklaus is redesigning the golf course, Poliakoff said.

Developers are turning to Hollywood after years of focusing on downtowns since land prices are cheaper. The city has a beach and Interstate 95 exits.

“My clients are very bullish about the future of that city and the economic opportunities that present themselves there,” Poliakoff said.

The coronavirus pandemic has pushed residents out of crowded downtown towers and into single-family home purchases and rentals. What makes your multifamily developer clients confident there will be enough tenant demand for their supply? 

“I don’t necessarily agree with that philosophy,” Poliakoff said. “Millennials, which are the bulk of the tri-county region clientele, are looking for more affordable apartments, and they like being in apartment settings with more people and more amenities and more ability to walk and shop and dine in a small region.”

Developers still are bullish on the live-work-play concept that in recent years revitalized downtowns. The population shift to suburbs is “slight,” and the downtown apartment market will stay strong, Poliakoff added. ”They 100% believe the desire for people to live in vibrant downtowns is going to be the trend for the near future.”

What are the other construction hot spots outside Hollywood? 

Saul Ewing is working on behalf of developers building apartments in Delray Beach. It also obtained permits for Joia Beach day club to open this year on Miami’s Watson Island. The day club with Mediterranean cuisine has its own beach and can be accessed by car and boat.

Overall, was there a drop in construction permits issued this year given uncertainty over the pandemic? 

“It’s strange because everyone expected a slowdown,” Poliakoff said.

The dollar value of permit requests stayed high, although the raw number of requests could have dropped, he said.

The economic impact of the virus may have stopped average homeowners from pulling a permit, but that wasn’t the case with well-heeled developers.

“While a single-family homeowner may not have utilized corona … because of the economic realities for an average person, large development deals have still gone in for permitting,” he said, and he expects permit requests to remain high in 2021.

“My colleagues tell me how busy they are in getting ready for the next wave,” Poliakoff said. “Developers are under contract on properties and working through their entitlement processes, which a year later would lead to building permits. We have not slowed down one bit in corona.”