Shovel-ready Development Sites Hit Prime Time
In today’s real estate market, CRE developers want to break ground as soon as possible to avoid missing the current cycle. That urgency is fueling a trend that I am noticing among sellers. Developers who acquired land earlier in the cycle and recently received entitlements to develop their site are quickly turning around and putting their development sites back on the market. While many of them would have no problem developing the projects themselves, they would rather capitalize on the growing demand for shovel-ready development sites.
As the market lingers in a seventh-inning stretch, there are promising All-Star possibilities. For instance, one of my clients recently listed a vacant site in West Kendall with entitlements to build an office building of about 39,700 rentable square feet and 141 parking spaces. The 86,580-square-foot site, listed at $2 million, is in the bustling community east of Miami Executive Airport. This market has some of South Florida’s lowest vacancy rates and rising rental rates. My client, Tamiami Metro LP, is also selling the fully-occupied Class A office building adjacent to the vacant development site. The demand for new office space in West Kendall is increasing property values. The 39,000-square-foot Tamiami Metro building is listed at $8.3 million.
Other development sites that highlight this trend include Wynwood Square, north of downtown Miami. The 1.78-acre parcel recently hit the market after securing entitlements for a 12-story mixed-use project. Another example is a 0.81-acre site on SW 8th Street that was recently listed after the seller completing a two-year entitlement process for a five-story self-storage building.
This trend is spanning the region. An 8.96-acre development site in West Palm Beach’s Okeechobee Road was recently listed with approvals to build 179 units. As if in a race against time, shovel-ready projects are gaining popularity in South Florida as the real estate market turns full cycle.