The Weekly Dirt: Fed pumps life back into real estate

It would be an understatement to say the real estate industry was excited following the Fed’s announcement last week.

Federal Reserve Chairman Jerome Powell said on Wednesday that the Fed was keeping interest rates unchanged and signaled it would make three 0.25 percentage point rate cuts next year. 

Following a series of rate hikes that began in 2022, residential and commercial brokers, developers and lenders see the latest news as a sign that the markets are turning a corner. 

So I turned to Real Estate Twitter (Real Estate X just doesn’t sound the same). Commercial broker Jaret Turkell had the energy we all need to wrap up the year. 

“We are back baby. LFG!!!!!!” reads one tweet. Turkell told me that the sentiment changed nearly overnight. He and others hope that “massive distress” is off the table for South Florida heading into 2024. 

On a call with Turkell and his colleague, Charles Foschini, Foschini said it will take some time for that confidence to translate into action, especially since the high cost of insurance and construction will continue to hamper deals. 

Mostly everyone I spoke with was hopeful, excited or just saw it as good news. But I was surprised they also expressed a lot of caution in their comments. (With the exception of resi brokers — read more on why that is here.) 

“On the surface it’s good news. I don’t think it’s a savior for most issues. We have a lot of problems, especially in Florida,” said Ben Jacobson, a partner at Forman Capital. “I see trouble in credit, broken capital structures, borrowers that can no longer hang on. There are challenges that haven’t worked their way through the system.” 

What we’re thinking about: Will Miami-Dade County end up overpaying for a pair of aging office buildings? The commission deferred an item that would have had the county pay $133 million over market value for the properties. Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Edward London’s London Financial South Ocean LLC paid $21.5 million for the incomplete oceanfront spec estate at 1460 South Ocean Boulevard in Manalapan. Nigerian oil mogul Onajite Okoloko, chairman of both Midwestern Oil & Gas and Eroton Exploration & Production, sold the property. 

Commercial: Blackstone sold the 394-unit Pinebrook Pointe apartment complex at 3495 Pinewalk Drive in Margate for $93 million. Bar Invest Group paid about $236,000 per unit for the 33-acre property, which includes 45 two- and three-story buildings. 

— Research by Adam Farence

NEW TO THE MARKET 

A waterfront lot in Fort Lauderdale returned to the market for nearly $50 million. The Rio Vista property at 1818 Southeast 10th Street was subdivided, and two of the lots are listed together with Tim Elmes and Angeline Earnest of Compass. Elmes had the listing about a year ago for $60 million. The overall property has 720 feet of water frontage. 

A thing we’ve learned 

Twenty two renters competed for the same apartment on average in Miami-Dade County this year, according to a report by RentCafe, which found that the county was the most competitive rental market in the country.

Elsewhere in Florida 

• A group of teachers sued the Florida Department of Education, education commissioner Manny Diaz and other state education officials and local school boards alleging a new state law that restricts pronouns at schools is unconstitutional. Two transgender teachers and one nonbinary teacher are alleging in their federal complaint that the law discriminates against transgender and nonbinary educators, according to CBS News. 
• A Miami code inspector testified that his virtual signature was used without his permission on a document that allowed Miami City Attorney Victoria Méndez’s husband to “skirt” nearly $300,000 in city fines tied to a family property, according to a WLRN investigation. 

The Central Florida Tourism Oversight District spent up to $360,000 to create a report on Disney’s Reedy Creek Improvement District, according to the Orlando Sentinel. The authors said that the previous Disney-controlled board was “the most egregious exhibition of corporate cronyism in modern American history.”