Stiles planning a large-scale office development in Fort Lauderdale

Financing is the biggest challenge for apartment developers, Morgan Group exec says

Dec.December 07, 2016 03:45 PM
Fort Lauderdale skyline. Inset: Doug Eagon and Evan Schlecker

Fort Lauderdale skyline. Inset: Doug Eagon and Evan Schlecker

Stiles Corp. built the last major office tower in downtown Fort Lauderdale in 2008 and may build the next one.

“We are getting ready to start the planning and development of a 350,000-square foot-office building downtown, which would be downtown,” Doug Eagon, vice chair of Stiles, said Thursday at an event in Fort Lauderdale. “That is our next Class A office building.”

Eagon spoke on a panel Wednesday at a meeting of the Urban Land Institute Southeast Florida/Caribbean in downtown Fort Lauderdale.

After the event, he told The Real Deal that Fort Lauderdale-based Stiles plans to build the office building on the site of a Bank of America drive-through facility the firm recently bought and on adjacent land the company is trying to lease from Broward County.

An affiliate of Stiles bought the 1.45-acre site of the drive-through and financed the transaction with an $8.03 million loan from Iberiabank.

The drive-through banking facility is one block north of the Las Olas Boulevard corridor, where the office vacancy rate is 6 percent, well below the overall vacancy rate of 12 percent in downtown Fort Lauderdale, Eagon said.

He said Stiles in 2008 opened the last major office building in downtown Fort Lauderdale, the corporate headquarters of auto retailer AutoNation, located at 200 Southwest First Avenue.

Eagon said large-scale office development hasn’t happened in downtown Fort Lauderdale since 2008 for a variety of reasons. “There have been structural changes in the marketplace with technology and mobility. And corporate America is packing more people into the same square footage,” he said.

Eagon spoke on a panel that included Evan Schlecker, regional vice president of the southeast U.S. for the Morgan Group, which last year sold a 332-unit apartment development near downtown Fort Lauderdale called the Edge at Flagler Village to institutional investor TIAA for $114.4 million.

Schlecker said financing is the biggest challenge for apartment developers: “The state of the construction financing market is pretty challenged. Some of that has to do with the supply that has been built over the last six or seven years … Banks are getting a little worried” about an oversupply of new rental housing.

Another panel member, Chris Wren, executive director of the Downtown Development Authority of Fort Lauderdale, said construction of a long-planned electric streetcar system called the Wave is expected to start in six months.

Wren said after the panel presentation that construction of the equipment storage building for the Wave is also expected to start in six months, and installation of streetcar tracks on city streets in about 18 months. The Wave’s original design was a loop connecting downtown Fort Lauderdale to employment centers south of the New River. An expanded design extends the streetcar service into the Flagler Village area north of downtown.

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