Canopy hotel update: We’re starting construction soon after all

Rendering of Canopy Hotel planned for West Palm Beach

A Canopy Hotel set for West Palm Beach will start construction this fall and not in early 2018, despite what an executive for the hotel’s developer told the Palm Beach Post last week.

This is according to Carlos Rodriguez Jr, chief operating officer of Driftwood Acquisition and Development, an affiliate of Driftwood Hospitality of North Palm Beach.

In an interview Monday, Rodriguez said Driftwood has the $50 million necessary to build the Canopy hotel, a Hilton brand. Construction is slated to start in late September or early October on the 14-story, 150-room hotel.

The sexy, millennial-oriented Canopy is set to rise on the southeast corner of South Dixie Highway and Trinity Place.

In an interview last week, Driftwood executive Andrew Stevens said the hotel needed to raise more money from the EB5 foreign investor program in order to commence construction, which he said wouldn’t begin until the first quarter of 2018.

The hotel originally was slated to be completed by December, then it was supposed to start construction this summer.

But Rodriguez said delays in the project’s construction are due to technical and redesign changes, not financial ones. “We don’t have any issues with capital,” Rodriguez said.

Right now, the building permits have been going through the normal tweaking process by the city of West Palm Beach, Rodriguez said.  But just last week, the latest comments came back from staffers, which means Driftwood is even closer to its construction start, he added.

In addition, Rodriguez said the company is close to signing Verdex Construction of West Palm Beach as the project’s general contractor.

The hotel is slated to take 18 months to build, with completion expected by March 2019.

Driftwood is an experienced hotel operator and builder, with properties across the country. But unlike other Driftwood projects, this planned Canopy hotel has been anything but a day at the beach.

The deal first started back in 2014, when a Driftwood investor group first signed a 200-year lease with the property’s land owner, real estate baron Burt Handelsman.

When details of the plan were unveiled to the community, residents of the Two City Plaza condominium objected because they said the hotel would block their western views. The hotel would be less than 75 feet from the 21-story, 467-unit condominium at  at 701 S. Olive Ave.

Rodriguez said the hotel project went through a time-consuming redesign so that it would not need any variances. The project received site plan approval from the city late last year.

The only neighborhood issue outstanding is an October 2016 lawsuit filed by 17 condo owners at Two City Plaza. The group is suing the city of West Palm Beach and the property owner Handelsman’s Love 718 Dixie LLC.

The Palm Beach County Circuit Court lawsuit claims the city failed to follow its comprehensive plan when it approved the hotel. The lawsuit seeks to stop the hotel’s construction.

Rodriguez said Driftwood is confident the lawsuit has no merit. It has intervened in the case to join with Love 718 Dixie in asking a judge to dismiss the lawsuit.

When the hotel is completed, “everyone is going to be really happy. It’s going to be a great neighborhood hotel,” Rodriguez said.

 

Darth Vader 2.0: Office tower gets reboot

Northbridge Centre in West Palm Beach

The Force is awakening at the old Darth Vader building in downtown West Palm Beach.

Plans are in the works to do a major upgrade of the Northbridge Centre, the 21-story office building informally named after Luke Skywalker’s father, thanks to its ominous black-glass exterior.

Inside, however, plans are to brighten the 515 N. Flagler Dr. tower with a $10 million upgrade.

Rendering of lobby renovation planned for Northbridge Centre

The goal is to lure new office tenants to the city’s downtown, before talked-about new office towers start rising during the next couple of years.

City business and government leaders have been crying for months there’s not enough office space in the city’s core, prompting developers such as The Related Cos, Charles Cohen and Jeff Greene to draft or consider plans for new office towers.

But owners and brokers at Northbridge say there’s plenty of space in their waterfront building, especially for those coveted hedge funds and private equity firms that the county’s Business Development Board is trying to hard to lure.

“We’re the last game in town, and we’ll be the best game when these renovations are completed,” said Peter Reed, managing principal at Commercial Florida Realty Services in Boca Raton.

“With nearly 100,000 square feet of vacancy, we’re the only building with any appreciable waterfront space left in the market,” added Angelo Bianco, managing partner of Boca Raton-based Crocker Partners, a co-owner of the building.

Commercial Florida is representing Northbridge, along with Tower Commercial.

They are working to draw attention to the sometimes-overlooked property that was acquired last year by Greenfield Partners of Connecticut and Crocker. The companies paid $68.24 million for the 294,000-square-foot building, which includes a separate four-story pavillion with a rooftop garden.

Northbridge, which now houses a number of law firms, is about 70 percent leased. The property was built in 1984.

Plans are afoot to make the building physically as appealing as those waterview vistas, Bianco said.

For starters, gone will be those red stripes on the outside of the building. (Darth Vader didn’t have them; Northbridge soon won’t have them, either.)

Inside, plans are underway to build an upscale conference center that will be able to hold about 140 people. The roughly 3,000-square-foot space will feature all the latest high-tech gadgets and will serve as a building amenity to tower tenants, Bianco said.

Crocker also will add expand the health club and build a brand new café. Bathrooms and floor lobbies will be upgraded and new elevator cabs put in, Bianco said.

Bianco said the building is well-positioned in the market. Physically, it’s right next to the new Flagler Memorial Bridge, which is nearing completion.

Once this north bridge opens, Reed said it will provide less congested traffic flows with easy access to the property, compared to other office towers clustered around the middle bridge at Okeechobee Boulevard.

“Follow the compass rose north, the direction West Palm Beach is moving,” Reed quipped.

From a price perspective, Northbridge’s rental rates are a better bet, too, Reed said.

Rents at Northbridge go for around $30 per foot not including taxes, maintenance and insurance. That’s about $20 per square foot less than buildings such as Phillips Point or CityPlace Tower, where rents start around $50 per square foot, Reed said.

Not surprisingly, Northbridge’s’ brokers are going after the same tenants everyone else in town wants: Mid-sized tenants needing 3,000 to 7,000 square feet of space.

The building upgrades are expected to be completed by May 2018.

 

 

 

 

Tall tower plan prompts dueling petitions, snipes from builders

Related Cos.’ proposed 25-story tower on the waterfront in West Palm Beach

Sensing blood in the water, New York developer Charles Cohen has sent West Palm Beach city officials another letter urging them to act quickly on his proposal to build an office tower on the city-owned “tent site” land.

The move comes as city officials held two meetings this month, where impassioned city residents voiced opposition to The Related Cos.’s plan to build a 25-story office tower along the city’s waterfront.

The One Flagler tower would be on Flagler Drive, next to the First Church of Christ, Scientist. The land now is zoned for only five stories.

Related’s bid to build One Flagler has mobilized some city residents who don’t like the plan. They say the tower is too tall, will worsen traffic, will block some of their views and will forever ruin the city’s waterfront.

They’ve circulated a petition and now claim nearly 1,000 names on it from nine condos, including the powerful One Watermark condo. They’ve flooded city officials with emails, formed teams and organized a Facebook page, dubbed Preserve West Palm Beach Citizens Coalition. Now they’re working on slogans.

Their effort has become so aggressive that Related has started pushing its own petition, this one with the names of tower supporters collected during neighborhood meetings. The petition has about 700 names.

Related’s petition drive made a public showing this past weekend at CityPlace, which Related built.

At the shopping and dining center, bewildered Easter tourists encountered a table in front of retailer Anthropologie, seeking petition signers.

The table was meant to provide people with tower information and drum up support, said Rick Asnani, a principal with Cornerstone Solutions, the group hired by Related for community outreach.

In meetings with neighborhood groups, “once we explain what we’re trying to do the opposition melts away and we find people are neutral or gravitate to it,” Asnani said. “It’s amazing how quickly people are supporting this project.”

Unfortunately for Related, a lot of tourists were hanging around CityPlace this past holiday weekend, so Cornerstone officials couldn’t reach as many residents as they hoped.

Nonetheless, “it was a good experiment. We were happy to bring awareness,” Asnani said.

Related officials say there is demand for a new Class A office building that will bring more jobs to the city. Money from the sale of the land will preserve the 1928 Christian Science church, they add.

But residents in nearby condos aren’t buying it. Their growing opposition has prompted Cohen and another billionaire real estate developer, Jeff Greene, to openly criticize Related’s efforts to try to rezone the low-rise waterfront site.

This is especially the case since business and city leaders have been crying for some time about the need for new, Class A office space downtown.

“The site in play and the development planned does not comply with current zoning and has received community opposition that will delay any forward movement,” Cohen said of the Related site in his letter to city officials, including Mayor Jeri Muoio.

In a statement to this reporter, Cohen said the tent site “provokes much less consternation than any site that would compete with it.”

The letter comes one month after Cohen, the Oscar-winning owner of the Carefree Theater property, sent a letter to city officials notifying them of his interest in building a 300,000-400,000-square foot office building on the tent site. That land is at Okeechobee Boulevard and South Dixie Highway.

Meanwhile, Greene poked holes at Related’s efforts to create the Okeechobee Business District to justify One Flagler. A previous effort to create a waterfront historic district that would have allowed this tower failed.

“What’s next? The One Block From The Water District?” Greene asked. “We should just call it what it is: Spot zoning. And everybody knows it.”

Greene said the city’s citizen referendums are the reason the land is zoned for only five stories. If that cap is to change, “the city can have another referendum,” he said.

Greene is planning to build a 30-story, twin-tower complex featuring office space at 550 Quadrille Blvd. He said he plans to start building soon.

 

 

 

 

 

 

Related’s Perez to Trump: I’m not interested in building your wall

Ivanka and Donald Trump at a January 2007 event for the proposed Trump Tower Palm Beach condo on North Flagler Drive in West Palm Beach.
Ivanka and Donald Trump at a January 2007 event for the proposed Trump Tower Palm Beach condo on North Flagler Drive in West Palm Beach. Photo by Allen Eyestone.

President Donald Trump, seeking to find a builder for his proposed border wall between the United States and Mexico, is turning to old real estate friends for help.

Full Donald Trump coverage: Galleries, news, video

Among them: The Related Group’s Jorge Perez, who once partnered with Trump on a proposed West Palm Beach condo dubbed Trump Tower Palm Beach.

In a recent Wall Street Journal story, Perez said he received an email  from Trump with this message: “Any interest in building a 2,000 mile wall—30’ high—between U.S.A. and Mexico? Call me.”

“I told him I thought the wall was immoral and it wouldn’t achieve the goals he wanted to achieve,” Perez told the Journal. “Plus, I have lots of business in Mexico—I’d be finished here.”

During the real estate boom ten years ago, Related partnered with Trump to try to develop a 23-story, 150-unit condominium at 4308 N. Flagler Drive.

Originally called Icon Palm Beach, Perez changed the name to Trump Tower Palm Beach because the Trump name would be a lure for international buyers. “The Trump brand is so strong, it expands your universe of buyers,” Perez said.

... A model of the Trump Tower Palm Beach in the sales center. Real estate mogul Donald Trump unveiled his new condo project in partnership with the Related Group.
A model of the Trump Tower Palm Beach in the sales center. In 2007, Trump unveiled the condo project in partnership with the Related Group. Photo by Allen Eyestone.

Ten years ago, Trump Tower Palm Beach held a glitzy event to show off a model of the proposed luxury condo.

Attendees included real estate brokers, prospective buyers, city bigwigs and the media.

RELATED: A peek inside Donald Trump’s historic Palm Beach palace

As guests dined on sushi, the Trumps held court.

Present at the glamfest were Trump, his wife, Melania, and The Donald’s daughter, Ivanka.

Ivanka and Trump sat for television interviews and chatted with print reporters about the Intracoastal Waterway project.

Despite the hype (and the sushi), the project’s timing wasn’t great: The recession’s cold winds already were starting to blow as the demand for condominiums slowly sank, then cratered.

By October 2007, Trump acknowledged to this reporter that the real estate market was looking iffy.  “The market in West Palm Beach is not exactly great-looking,” Trump said. “We won’t go forward unless we see a robust market.”

When pressed for details about Trump Tower Palm Beach sales, Trump was vague: ” “We’ve done very well with pre-sales. We’ve had substantial sales,” he said. “There’s no reason to be specific.”

But a Related executive gave some hints in June 2007. At that point, less than half the project’s 150 units had sold (prices ranged from $900,000 to $2.4 million). Developers were shooting for at least 60 percent, or about 90 units, before starting construction. But that didn’t happen and the condo wasn’t built.

Now it’s a decade later and there’s a new real estate boom.

And Related Group still is building condos on Flagler Drive, but a little farther south, at the Rybovich Marina.

The company also built a number of apartments and condominiums in West Palm Beach’s downtown, including CityPlace South Tower, The Slade, The Prado and the Tower Condominium at CityPlace. The Related Group’s most recent Palm Beach County project is an apartment complex in Delray Beach.

 

Carefree Theatre’s Cohen expresses support for banned Iranian director

Charles Cohen, chairman of Cohen Media, which is the co-distributor of The Salesman. The film's Iranian director is barred from entering the U.S. under Trump's executive order
Charles Cohen, chairman of Cohen Media Group. Photo by Damon Higgins.

Charles Cohen, the owner of West Palm Beach’s Carefree Theatre site, is the co-distributor of The Salesman, the foreign film whose director now is barred from entering the United States.

On Monday afternoon, Cohen Media Group tweeted a message of support for Asghar Farhadi,  the Iranian director of The Salesman, which was nominated for an Academy Award in the category of Best Foreign Language Film. The film opened Friday.

On that same day, President Donald Trump issued an executive order that bans citizens of seven Muslim-majority countries from entering the U.S. for 90 days, Farhadi is banned from traveling to the United States for the Feb. 26 award ceremony in Los Angeles.

On Sunday, Farhadi said he wouldn’t attend the ceremony even if he were granted an exception.

In a statement, Farhadi condemned the executive order, and then said the following: “To humiliate one nation with the pretext of guarding the security of another is not a new phenomenon in history and has always laid the groundwork for the creation of future divide and enmity.”

Cohen Media Group co-distributed the film with Amazon Studios in a 50-50 partnership.

On Monday afternoon, Cohen Media tweeted this message: “Asghar Farhadi, @CohenMediaGroup understands and supports your decision not to attend the Oscars.”

In a December interview, Cohen called the film “fabulous….it’s a fascinating film. Really wonderful. I’m keeping my fingers crossed” for an Oscar nomination.

Cohen Media has distributed several award-winning foreign language films, including two Oscar nominees: 2014’s French-Mauritanian Timbuktu and 2015’s Turkish drama, Mustang.

Cohen has a condominium in Palm Beach as well as homes in New York, Los Angeles and Connecticut.

He runs two businesses: New York-based Cohen Brothers Realty Corp., which owns and manages more than 12 million square feet of U.S. office space; and Cohen Media Group, which produces films and also owns an array of American classics, British cinema, foreign classics and a range of avant-garde films.

Cohen wants to rebuild the Carefree Theatre on Dixie Highway in West Palm Beach and turn the property into a complex featuring six auditoriums, totaling 750 seats for classic, art house and foreign films. About 97 apartments and space for restaurants and stores also are part of the plan.

If you’re curious about The Saleman, check out the trailer. Or broaden your cultural horizons and consider other top Iranian films.

 

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.

Publix center in North Palm Beach sells — but not to Publix

A very large inflatable grocery bag in front of the new Publix in the Belmont Plaza at 500 Belvedere Road in West Palm Beach, December 12, 2015. (Greg Lovett / The Palm Beach Post)
Greg Lovett / The Palm Beach Post

The Northlake Promenade Shoppes in North Palm Beach just sold for $12.6 million, broker Avison Young said Tuesday.

The 83,000-square-foot center, anchored by Publix, is on 21 acres at the southwest corner of Northlake Boulevard and Federal Highway. Other tenants are CVS, Chase and BP.

The buyer is Woolbright Development of Boca Raton. Lakeland-based Publix has been an aggressive buyer of real estate, but not in this case.

“Publix has been extremely active in buying their own stores when available,” said David Duckworth, a broker at Avison Young. “However, with this project featuring such a valuable land component, it was a much better fit for a prominent developer like Woolbright Development to create maximum value for the center.”

Boynton Beach apartment complex sells for more than $100 million

real-estate

The Las Ventanas at Boynton Beach apartment complex just sold for $109.4 million, according to property records.

The 494-unit property is at Woolbright Road and Federal Highway. Monthly rents range from $1,360 to $2,337, according to Apartments.com.

The seller is Prudential Insurance Co. of New Jersey. The buyer is CH Realty VII of Delaware.

West Palm Beach office building sells for small gain

1601

The 295,000-square-foot office tower at 1601 Forum Place in West Palm Beach just sold for $26 million, according to property records.

The property last sold in 2008 for $25 million. The seller is TA Associates Realty of Boston. The buyer is C-III Capital Partners of Irving, Texas.

Tenants include Bill Koch’s Oxbow Corp., commercial real estate brokerage NAI Merin Hunter Codman and accounting firm BDO.

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.