Which real estate executive just got promoted?

Mark Pateman, Cushman & Wakefield managing principal for Palm Beach County
Mark Pateman, Cushman & Wakefield managing principal for Palm Beach County

The New Year is bringing new changes to the commercial real estate scene.

Cushman & Wakefield, the international brokerage firm, has named Mark Pateman to lead its Palm Beach County office.

Pateman, with the firm since 2006, has been a broker specializing in office leasing and investment sales.

His promotion to the newly-created position of Palm Beach County managing principal is part of a move by the company to decentralize leadership. Larry Ritchey, managing principal and Florida Market Leader, previously had run all counties.

But Pateman said this move will put the leadership “closer to the client.” Pateman will supervise about 25 brokers in the firm’s West Palm Beach and Boca Raton offices.

At Cushman, Pateman has worked on deals involving West Palm Beach’s most prominent office buildings, including Phillips Point, Esperante and Flagler Center. He also was involved in transactions involving One Boca Place in Boca Raton and 3801 PGA Blvd. in Palm Beach Gardens.

Exclusive: Judge to Trump: No getting out of Jupiter golf club lawsuit

President-Elect Donald J. Trump at Mar-A-Lago on Palm Beach
President-Elect Donald J. Trump at Mar-A-Lago on Palm Beach

U.S. District Court Judge Kenneth Marra on Wednesday refused yet another request by Donald Trump to toss a 2013 lawsuit filed against his Trump National Golf Club in Jupiter.

The Dec. 7 order means the case continues against Donald Trump’s country club, even though Trump is set to be sworn in as the 45th president of the United States in January.

Club members say Trump hasn’t returned an estimated $6 million to members of his country club off Donald Ross Road. Trump bought the club from the Ritz-Carlton Golf Club & Spa for $5 million in 2012.

When the Ritz owned it, deposits ranging from $35,000 to $210,000 were refundable. But once Trump bought the club, some club members say Trump changed the rules and refused to return their deposits.

In July, Marra denied Trump’s request to throw out the lawsuit against Trump National. He also denied a request that the lawsuit not go forward as a class-action case.

In his Dec. 7 order, Marra made it clear that the issue raised in the July request were raised also in the trial held in West Palm Beach in August.

Eric Trump appears at federal court in August to testify in Jupiter golf club trial
Eric Trump appears at federal court in West Palm Beach in August to testify in the lawsuit involving the Trump National Golf Club in Jupiter, Fl

“The best course of action is for the Court to resolve these issues with the benefit of a full trial record,” Marra wrote.

In other words, Marra isn’t going to let Trump out on an easy procedural move.

Rather, he’ll make his decision on all the issues when he renders a decision based on the two-day August trial.

Trump lawyer Herman J. Russomanno III of Miami issued this statement: “Although the Trump Club would have been pleased if the Court granted their motion, it is the Trump Club’s position that as to the ultimate ruling following the bench trial, that the Court should find in favor of the Trump Club.”

Trump lawyer Herman Russomanno III of Russomanno & Borello in Miami
Trump lawyer Herman Russomanno III of Russomanno & Borello in Miami

Russomanno said the trial showed that the members had resigned from the club and therefore didn’t have the right to use the club after they had resigned.

The issue of whether members resigned, or were terminated as members by Trump, is a major sticking point in the case.

Club members who are plaintiffs in the case say Trump breached their contract, misled them and then refused to give them back their deposits. But at the trial, Trump son Eric Trump testified that the Trump Organization had saved the ailing club.

Donald Trump, who at the time was campaigning as the Republican presidential nominee, did not appear at trial. But his deposition was entered into the record. In it, he described how the Trump Organization had revived the club.

“We have done a substantial upgrade to virtually all the facility: the clubhouse, the courts, the course, the public areas, the dining areas. Everything,” Trump said in an April deposition. “It’s like a brand-new place.”

Donald Trump sent a Dec. 17, 2013, letter to club members that is a key piece of evidence in the case. In that letter, Trump said Ritz members could “opt in” to his new club, in exchange for agreeing their memberships were nonrefundable.

If members weren’t interested in opting in, and they remained on a club resignation list, Trump said he didn’t want them, anyway.

“You’re probably not going to be a very good club member … you’re out,” Trump wrote in the letter. “As the owner of the club, I do not want them to utilize the club nor do I want their dues.”

Sometimes judges give hints as to their trial decision in procedural matters such as this one, lawyers said.

But it remains unclear whether Marra will rule in favor the former club members or in favor of Trump.

The Jupiter golf course remains one of the last major lawsuits still unresolved against the billionaire real estate developer and reality TV star.

A federal lawsuit filed in California involving allegations of fraud at Trump’s now-defunct Trump University recently was settled. The case had been set for trial Nov. 28.

And Trump dropped his $100 million lawsuit against Palm Beach County over jets flying near Mar-A-Lago, his private club in Palm Beach.

 

 

 

 

Jupiter Medical to open urgent care center in Palm Beach Gardens

John Couris, chief executive of Jupiter Medical Center
John Couris, chief executive of Jupiter Medical Center

While Jupiter Medical Center plots its expansion to downtown West Palm Beach, the medical complex is opening up another urgent care center in northern Palm Beach County — this time in Palm Beach Gardens.

Jupiter Medical Chief Executive John Couris said an urgent care center is in the works for 3250 PGA Boulevard, across from The Gardens mall. The 96,920-square-foot building was sold last year to an affiliate of Stiles, a South Florida-based real estate developer.

This marks the third separate urgent care center in north county for Jupiter Medical Center, based at 1210 S. Old Dixie Highway

Jupiter Medical already has two standalone urgent care centers in Jupiter: One is at 1335 W. Indiantown Road and the other is at 5430 Military Trail in the Abacoa Shopping Center.

Couris said it’s likely Jupiter Medical will expand to western Palm Beach County, possibly Wellington, through the opening of an urgent care center and a physicians’ practice group, too.

Jupiter’s expansion to Palm Beach Gardens comes as the non-profit plans an urgent care and medical offices with Mount Sinai Hospital of New York. The two hospital companies are taking 15,000 square feet in the ground floor space of the Bank of America Centre at 625 N. Flagler Drive. Plans are to rename the building the Jupiter Medical Center Mount Sinai New York Plaza.

The center will offer urgent care and physician services affiliated with Mount Sinai, a respected center of clinical trials and research and a national leader in cardiac care.

It’s possible some medical services will compete with nearby Good Samaritan Medical Center, up the street at 1309 N. Flagler Drive. But the Jupiter Medical/Mount Sinai complex is not a hospital, and it will not have an emergency room or hospital beds.

Urgent care is a hot trend in the health field, and hospitals are opening up offices for minor emergency visits throughout the county, in a bid to compete with independently owned urgent care centers.

But urgent care centers owned by hospitals raise concerns that patients may be directed to that hospital if in-patient care is required, even if the hospital is not located close to the urgent care centers.

Couris sought to allay those concerns about Jupiter Medical’s new West Palm Beach location, which should open in the next six months.

Couris said if any patient comes into its urgent care centers and is diagnosed with a condition that requires immediate hospitalization, that patient will be directed to the nearest hospital — and not necessarily Jupiter Medical, if it’s not the closest facility.

For example, if a patient visited the West Palm Beach facility and say, tests showed alarming heart symptoms, “they will go to the nearest hospital,” even if it’s Good Sam, Couris said.

“We will always do the right thing by the patient,” Couris said. “You’ll go to the closest facility. Period.”

 

 

BofA building sells for $23 million in WPB

share467A medical office building in downtown West Palm Beach is one step closer to being a reality.

The Bank of America Centre in West Palm Beach sold Oct. 14 for $23 million to a group that plans to bring medical offices to the waterview property, including Jupiter Medical Center and Mount Sinai Hospital of New York.

The 10-story, 110,000-square-foot office building overlooks the Intracoastal Waterway at 625 N. Flagler Drive.

Bank of America Centre
Bank of America Centre

Developer Michael McCloskey of FRI Investors is the buyer, along with Palm Beach investors Tom and Leslie Quick. They formed an entity called 625 Flagler Acquisition LLC, according to a deed recorded with the Palm Beach County clerk’s office.

The seller is EFN Flagler Property LLC, an entity owned by car dealer Ed Napleton, who bought it in 2014 and flipped it to Flagler Acquisition for about double what he paid.

Another bidder for the building confirmed the property’s note was sold for a price in excess of $11 million to Napleton, although the recorded deed shows a price of only $2.9 million.

McCloskey tried to bring the medical tenants to the city owned “tent site” on Okeechobee Boulevad and South Dixie Highway last year. The deal didn’t go through.

But medical tenants remain interested in catering to wealthy Palm Beach residents across the bridge. The Bank of America building is well-located to the island, next to the Flagler Memorial Bridge.

Even though the property is known as the Bank of America Centre, the bank no longer is in the building. Bank of America moved to the nearby Esperante office center this year.

Signs touting the incoming medical tenants are expected to rebrand the building.

 

Two WPB apartments to get multi-million dollar upgrades

Arium apartments in West Palm Beach
Arium apartments in West Palm Beach

An Atlanta-based company that turns around old apartments has swooped into West Palm Beach and purchased  two apartment complexes, with plans to spend a whopping $20 million renovating them.

Cortland Partners, an investment and management firm, purchased 396-unit Arium Palm Cove and 416-unit Arium at Laguna Lakes.

Cortland plans to combine the apartment complexes into one community to be called Portofino Place, in a bid to make the properties operate more efficiently. The apartment communities are north of Palm Beach Lakes Boulevard, to the west of Interstate 95.

The purchase closed on Oct. 14. Terms were not disclosed. The seller was Carroll Communities, which bought the apartment complexes just last year for $112 million.

A top Cortland executive said the purchase price was a premium over the previous $112 million sale, but still was less money than new construction would have cost.

John Builder of Cortland Partners
John Builder of Cortland Partners

 

As a result, Cortland will be able to rehab the apartments and make them as luxurious — or better — than new apartment complexes coming onto the market, said John Builder, Cortland director of investments for Florida.

Cortland’s move could signal a shift away from developers seeking to build new apartments, and instead indicate that some real estate players think it might be cheaper to buy old ones and fix them up.

After all, construction costs are going up and bankers are demanding stricter lending terms, according to a recent real estate forum featuring the region’s top apartment builders.

During the next two years, Cortland will take units as they are vacated by tenants and completely redo them. Kitchens will receive 42-inch cabinets, granite countertops, tile backsplashes and stainless steel appliances. Bathrooms will receive new plumbing and lighting.

A Laguna Lakes pool will be rebuilt because it is too small.

When the upgrades are completed, Builder expects rental rates will rise to between $230 to $250 a unit. Online rents now range from about $1,200 to $2,000 for one to three-bedroom apartments at Arium Palm Cove, according to apartments.com.

Although some apartment developers are starting to be wonder if rental rates can go much higher, Builder said Cortland is thinking of long-term housing trends. And those trends shows increasing apartment dwelling, Builder said.

A major reason: Young people in their 20s are putting off buying homes until they are well into their 30s.

“They’re more tied to a career than what they perceive as a financial anchor,” Builder said.

Cortland thinks Palm Beach County shows positive signs for continued job growth, a positive trend for apartment owners.

Cortland has been impressed by deals such as  UTC’s decision to build the Center for Intelligent Buildings in Palm Beach Gardens. The center, which will showcase UTC products and brands, is expected to create hundreds of new jobs.

Builder said Cortland has been eager to enter the Palm Beach County market, and this was a strong first deal.

“We needed a tent pole in Southeast Florida, and 812 units is a great way to have a tent pole,” Builder said. “It’s not going to be our last (deal) either. We’re bullish on the area over the long-term.”

Cortland owns 35,000 apartment units throughout seven states, mostly in the Southeast U.S. and also Texas.

 

 

 

 

 

 

 

Seven things to know about Palm Beach County’s real estate market

From left to right: Joel Altman, the Altman Companies; Mike Belmont, Minto Communities; Jeff Greene; Bob Vail, Kolter Urban; Michael Wohl, Pinnacle Housing
From left to right: Joel Altman, the Altman Companies; Mike Belmont, Minto Communities; Jeff Greene; Bob Vail, Kolter Urban; Michael Wohl, Pinnacle Housing. Photo courtesy Green Advertising.

Banks are turning off their money spigots.  Apartment rental rates aren’t likely to go up.

But people still need to live somewhere, and five prominent housing developers told a crowd of about 70 on Thursday they remain mostly bullish about the Palm Beach County housing market.

The speakers were Jeff Greene, a Palm Beach billionaire and West Palm Beach land investor;  Mike Belmont, president of Minto Communities Florida; Bob Vail, president of Kolter Urban; Joel Altman, chairman of The Altman Companies; and Michael Wohl, president of Pinnacle Housing.

They addressed a crowd assembled at Morton’s Steak House for the aptly-named Real Estate Developer Power Lunch. The lunch was hosted by Green Advertising and chairman Phyllis Green, in celebration of the company’s 30th anniversary representing a range of businesses, especially developers.

Although the real estate developers were enthusiastic about their own projects, they candidly voiced concerns about housing affordability, demand for rental apartments and the future of new projects proposed in the county.

And, in a one-on-one interview with a reporter, one developer  dropped a bombshell.

Here are seven takeaways:

  • Minto is not promising to build parks and recreational facilities at Westlake, a city created after the county gave Minto approval to develop 4,500 homes in a portion of the Acreage. “That’s up to the city (of Westlake),” Minto’s Mike Belmont told this reporter. Minto is the primary landowner in the Seminole Improvement District, whose boundaries now roughly equate those of Westlake. The project calls for 200 acres of parks and 15 miles of trails for horses, bikes and walkers. After Westlake was created, county officials worried Minto would not keep its promises and instead, punt to Westlake.
  • Boca Raton is about to become a hot market for apartment rentals.  Altman’s soon-to-open 396-unit apartment complex, Altis Boca Raton, is expected to attract professionals working in the nearby Park at Broken Sound. Altis is under construction on Military Trail and is expected to open in March. Rents will range from $1,800 to the high $2,000s for one, two and three bedroom apartments.
  • West Palm Beach remains an iffy market for more new apartments. Greene said there’s a limited pool of people who can afford pricey rents. At the Strand apartment building and City Palm condos, where Greene owns bulk units and rents them out, he consistently has a 10 percent vacancy rate. “We don’t have robust demand,” Greene said.
  • Housing affordability is a problem. Belmont said Westlake will provide for-sale homes for working families, but other developers who build apartments acknowledged rents are starting to become too pricey. In Boca Raton, Altman said rental rate increases will soon start moderating because the supply of apartments is increasing. In West Palm Beach, Greene said rental rates increases are “constrained” because there isn’t a huge pool of renters. This means rental rates are less likely to rise in the future, he said.
  •  Fewer condominium and apartment projects will be built, thanks to tightened lending practices. Making matters worse: Bank regulators are clamping down on banks that already have broad exposure to the housing market. Minto’s Belmont said one major bank dropped out of its lending group, but the company was able to replace it with another bank. “The (lending) pool is shrinking, and the banks participating in the pool are getting tougher,” agreed Kolter’s Vail. Kolter is building The Alexander apartments in West Palm Beach and the Water Club condominium in North Palm Beach.
  • West Palm Beach has a lot of proposed projects, but “of eight or 10 proposed projects, maybe one or two will get built,” Greene said. Greene said obtaining bank financing will be a problem for some developers, but not for him: He plans to self-finance construction of One West Palm, a twin-tower complex featuring office space, hotel rooms and apartments. “I’m taking a shot here, but it won’t ruin me if it doesn’t work out,” said the billionaire. Greene expects to break ground on the 30-story towers at Quadrille Boulevard within about four months.
  • Everybody wants the West Palm Beach condominium, The Bristol, to succeed. The ultra-luxury condo, now under construction on Flagler Drive, could provide a “viral” boost to the local real estate market, once the 25-story building is completed and word gets out, said Kolter’s Vail.

Need a job? This company is hiring hundreds of workers

employment

Global Response, a call center company in Margate, is hiring more than 700 workers.

Many of the jobs will be for the upcoming holiday season, but the company said it tends to hire permanent workers from the pool that works the temporary holiday period. In fact, 80 percent of the company’s management started as entry-level phone agents.

Spokeswoman Margie Plunkett said the company draws workers from throughout South Florida, including Palm Beach County, to serve as customer service representatives fielding calls for Global Response’s numerous clients.

These companies include Crate & Barrel home furnishings retailer; Anthropologie and Urban Outfitters women’s fashion retailers; and Rack Room Shoes. Global Response also represents many Fortune 500 companies.

Global Response has more than 1,500 employees companywide, but most are at the Margate facility.

For information, call 954-969-2433.

See how much West Palm Beach apartments sold for

money-house-nt

The Jefferson Palm Beach apartment complex in West Palm Beach traded hands in June for $56 million, or $198,936 a unit, according to county property records.

The new owners are Dedicated West Palm Beach LP and GP Florida LLC.

The address of Dedicated West Palm Beach is listed as the address of Brass Enterprises, based in Toronto, Canada. Brass is a real estate investor in multifamily housing in both the U.S. and Canada.

The newly built rental community was completed a year ago. It consists of 281 units. Monthly rents now range from $1,547 for a one-bedroom unit to $2,041 to a three-bedroom unit.

The Jefferson Apartments are at 300 Courtney Lakes Circle, near the Palm Beach Outlets, off of Palm Beach Lakes Blvd.

The Jefferson’s sales price was a nice premium for the apartment’s developer, JAG-Star, an affiliate of Starwood Capital of Greenwich, Ct. JAG-Star bought the 11-acre parcel of land in 2012 for $4 million.

 

 

Law firm markets client battling sex, tax fraud claims

simone

The law firm defending Boca Raton real estate mogul James Batmasian in several lawsuits filed by his ex-employees just emailed a letter to clients and friends, endorsing Batmasian’s business and urging clients to lease Batmasian’s commercial and residential properties.

Simon & Sigalos LLP of Boca Raton is defending Batmasian in lawsuits alleging tax and bank fraud, unpaid wages and sexual harassment.

The firm’s letter raised eyebrows among lawyers who are experts in legal ethics.

“Wholly inappropriate,” said Gerald Richman, a West Palm Beach lawyer who previously served as president of the Florida Bar and chair of the Bar’s professional ethics committee.

“Slimy and stupid,” added D. Culver “Skip” Smith, a West Palm Beach lawyer, former Florida Bar board member and expert in representing attorneys in ethical matters. “I’m pretty sure the Florida Bar and the (state) Supreme Court could find one or more rules to hang a violation on.”

Both lawyers say they’ve never heard of a law firm endorsing and marketing a client to others.

Read the Simon & Sigalos letter to clients

In the Aug. 25 emailed letter, partner George Sigalos urged his clients to lease from Batmasian’s “huge inventory” of commercial and residential properties in Palm Beach and Broward counties.

“I have personally known the owners, Jim and Marta Batmasian, for many years. I would highly recommend them and their company to all clients and friends,” Sigalos wrote.

The Batmasians own Investments Limited in Boca Raton. They are the largest private owners of downtown commercial property in Boca and own the Royal Palm Place shopping center.

James Batmasian is a felon who pleaded guilty and went to federal prison in 2008 for failing to pay $253,513 in withholding income tax for employees.

Simon & Sigalos represents the Batmasians in several pending cases filed by former employees. Sigalos is the main lawyer handing the cases.

One case is a whistleblower case by a former comptroller who  alleges the Batmasian real estate empire is a “financial crimes enterprise,” replete with bank, mortgage and tax fraud, and inflated tenant charges for common area maintenance, or CAM.

Another lawsuit is by a former agent alleging sexual harassment by Batmasian, whom she claims indicated he was romantically interested in her and also directed her to lease commercial space to people involved in the sex trade, so Batmasian could demand sexual favors from the tenants for him and his friends.

The third is a federal court case alleging unpaid overtime by an ex-employee who claims he received gift cards to Batmasian’s tenants instead of overtime pay.

The Batmasians have denied all the allegations. They say these ex-employees are trying to shake them down for money because they are rich.

The Sigalos letter prompted a blunt response from Sigalos’ longtime partner, Michael Simon, who said he was not consulted about the letter prior to it being sent.

“It’s not good. He shouldn’t have done it,” Simon said. “We’re not a marketing firm. Jim is a client.”

Simon added: “We’re defending Jim in all these lawsuits and this letter endorses the client and (seems to) take a personal interest in his business practices…” Simon said, his voice trailing off.

In fact, Simon & Sigalos represents lots of other property owners, not just Batmasian, Simon said.

Understandably, other clients were pretty steamed about seeing their law firm advocating for one particular client, Simon said. “It makes the clients look at us and think, ‘Whose side are you on?’ ”

Richman said the letter was a violation of the privacy of other Simon & Sigalos clients, whom he doubt gave their consent to be marketed to in this way.

Smith said the letter also lacks disclosure of Batmasian’s litigation history and felony conviction. He cited Florida Bar 4-8.4 (c), which prohibits a lawyer from “engag(ing) in conduct involving dishonesty, fraud, deceit or misrepresentation.”

Silence that misleads can fall within this category, Smith said.

“If someone relies on the recommendation and is harmed as a result of that reliance, a civil action for damages probably would be sustainable,” Smith said.

Making matters worse, the letter includes what sounds like a referral arrangement.

Sigalos wrote that anyone interested in commercial or leasing property can call Jim directly and “tell them that you were referred by George L. Sigalos, Esq. of Simon & Sigalos, LLP.”

Lawyers are allowed to receive real estate commissions, but Simon said he doesn’t permit the practice to take place at his firm.

So he’s not sure what Sigalos had in mind.

“I’ve got to ask George about that, if he’s getting a commission. On my letterhead,” Simon said unhappily.

Sigalos did not return a phone call and emails seeking comment.

 

 

 

Five things to know about a new WPB condo

Condo planned by Great Gulf of Canada on 1515 S. Flagler Drive in West Palm Beach
Condo planned by Great Gulf of Canada on 1515 S. Flagler Drive in West Palm Beach

So Canadian developer Great Gulf is teaming with the owner of the former 1515 Tower land to build a new luxury tower along Flagler Drive in West Palm Beach.

The property is at 1515 S. Flagler Drive, once home to the crumbly 1515 tower, and then briefly planned as the very large Modern condo.

Toronto-based Great Gulf just submitted plans to the city of West Palm Beach to build a different condo plan on the waterfront property.

So what does Great Gulf plan to build? Here are five things to know:

  1. Less is more. Sure, Great Gulf could build the same mass as approved for the never-built Modern condo. But the company doesn’t want to. Great Gulf’s Christopher Wein thinks a condo would look and perform better if it could “breathe” and have better site lines for residents and nearby neighbors. So Wein said he “right-sized” the old Modern design. Great Gulf’s tower will be slimmer, about half the mass of the Modern’s design. This means condo units will be roughly 2,000 square feet, about half of the Modern’s size, and cost between $1 million to $3 million.
  2. Visuals are everything. To sell the idea to the city, Great Gulf used a 3-D printer to create a model of its design and a model of the Modern condo design. The Great Gulf model ended up being slim enough fit into the Modern design, a visual that impressed city officials and made it easier to imagine the building when completed.
  3. The condo may be thinner, but it still will be tall. Great Gulf expects to go up 27 stories for 84 units. This means the unnamed condo still would tower over the neighborhood just as the 1515 Tower did, before it was demolished in 2010 following damage from hurricanes.
  4. Wein is really into aesthetics. He doesn’t like the notion of a building that’s “heavy on the skyline,” as he put it. He also doesn’t like a design that feels like it’s going to fall on you as you walk by. So he’s proud the plans features lots of landscaping and hefty setbacks, including along Flagler Drive. “Toward Flagler, it really steps down. We want (people) to get a sense of lush, beautiful landscaping,” Wein said. “We’re very big on landscaping.”
  5. Once approved, expect the tower to go up quickly. Great Gulf is a fully-integrated company, which means it has its own in-house construction, design, sales and marketing team.