Posts

These 37 tenants want space in Lake Nona Town Center

Some of the biggest retailers in the U.S. — from Dick’s Sporting Goods (NYSE: DKS) to Michael Kors Inc. — are targeting the yet-to-open $780 million Town Center, one of the biggest developments underway in southeast Orlando.

About 37 major retailers are interested in opening shops inside the development, according to documents obtained by Orlando Journal. Orlando-based Tavistock Development Co. LLC is currently working on the town center’s $300 million second phase.



The town center is expected to introduce about 80 shops and restaurants, a hotel, office space and more into the fast-growing 17-square-mile community. The documents are preliminary, and it’s unknown which retailers, if any, have signed lease agreements. The town center’s general contractor is Birmingham, Alabama-based Hoar LLC.

“This was an aspirational list that was not intended to be shared and includes retailers that are not yet confirmed,” Jessi Blakley, senior director of Development Co., said in an emailed response to a request for comment. “We continue to be excited about Lake Nona Town Center, which will serve as the defining anchor and amenity for Lake Nona, the fastest-growing community in Orlando. Ultimately, the 100-acre destination will feature more than 4 million square feet of entertainment, commercial, retail, and restaurant space at build-out. We look forward to making official announcements about confirmed tenants soon.”

Retailers and other companies have been attracted to the 17-square-mile Lake Nona, one of Central ‘s hottest communities. It notched the No. 15 spot among the nation’s top-selling master-planned communities with 523 home sales in 2017, John Burns Real Estate Consulting reported. Additionally, the community already boasts more than 11,000 residents, 5,000 employees in its 650-acre life sciences hub, plenty of new activity in the 300-acre Sports & Performance District, and more than 11,000 students at its schools.

At least three Lake Nona projects, including pop-up shops in shipping containers and a new corporate office, are expected to open by the end of the year.

UCF-HCA joint venture secure more land for Lake Nona teaching hospital

 

is putting more property into play for a new teaching hospital it’s building with Hospital Corp. of America in ‘s .

The UCF Board of Trustees on June 20 approved assigning UCF’s option to buy an 11.4-acre site on Lake Nona Boulevard — which is adjacent the 25-acre parcel already set aside for the UCF Lake Nona Medical Center teaching hospital — to Central Health Services, a joint venture between UCF and Nashville, Tenn.-based HCA (NYSE: HCA). The option, which is set to expire on June 25, would allow completion of the planned hospital campus and facilitate future growth, documents showed.

Central Florida Health Services would buy that parcel for about $6.8 million, or $600,000 per acre, from Development Co. LLC’s related Lake Nona Land Co., documents showed. The land is now appraised at about $10.4 million, according to Orange County records.

The purchase is expected to close by the end of June.

“We are thankful to the trustees for giving us this opportunity to acquire more land for the UCF Lake Nona Medical Center. The approval provides space for a growing hospital – and more equity for UCF,” UCF College of Medicine Dean Dr. Deborah German told  Journal in an emailed response. “We are eager to open this university hospital for our community, patients, physicians, researchers, and learners.”

The first phase of on the 100-bed UCF Lake Nona Medical Center is set to start on Oct. 25, and the property will open in 2020 next to the UCF Health Sciences Campus, between the UCF College of Medicine and Sanford Burnham Prebys Medical Discovery Institute at Lake Nona. UCF plans to take over the Sanford Burnham’s assets once the institute vacates the property.

The university also is considering relocating its nursing college to Medical City.

Meanwhile, the new UCF Lake Nona Medical Center will help fulfill German’s goal of creating an environment that includes a great hospital affiliated with a top-notch medical school. The hospital will be a living/learning lab for training medical, nursing, physical therapy, pharmacy and social work students in teamwork skills and communication.

“If you’re sick and have exhausted all the treatments of your local hospital, where do you go for the next level of care? Many people say Harvard, Johns Hopkins, Stanford, Cleveland Clinic. All of those are teaching hospitals,” German previously said.

The UCF Lake Nona Medical Center also will address a serious statewide lack of doctors. The Teaching Hospital Council of Florida and the Safety Net Hospital Alliance of Florida forecast that the state will have a shortage of 7,000 physician specialists by 2025. UCF started building residency programs a few years ago to address the shortage and now has 255 slots and expects to have more than 560 by 2020 through the partnership with HCA, German has said.

s Home Affordability at Breaking Point?

 

 

 

 

The combination of steadily increasing home prices and rising interest rates has impacted home by pushing up the monthly mortgage payment on median-priced by $150/month in just the first five months of 2018, according to the latest Mortgage Monitor Report released by Black Knight on Monday.

The monthly report, which looks at a variety of issues related to the mortgage finance and housing industry looked at the share of median income required to buy a median-priced home, while also exploring potential scenarios of home price appreciation, interest rate movement, and income growth to calculate their impact on home affordability over the next five years.

It found that even with incomes growing at a stronger-than-average rate, they haven’t been able to keep up with rising home prices and interest rates. Of all the states examined by the report, seven were less affordable than others and another 12 were heading up on the unaffordability index, the report said.

The seven states included Washington, D.C. that required 7 percent more of median income to make a monthly mortgage payment. Second on the list was California with a 6 percent increase, followed by Hawaii (5 percent); Oregon (3.5 percent); Maine (2.4 percent); Washington (0.7 percent); and Colorado (0.1 percent). It found that led by Washington, D.C., 14 states had a payment-to-income ratio higher than the national average of 23 percent.

“Though much of the country remains more affordable than long-term norms, the current trajectory would change that sooner rather than later,” said Ben Graboske, EVP of Black Knight’s Data & Analytics division. “We’ve modeled out multiple economic scenarios, some more conservative than others, and even with historically strong income growth, the current combination of home price and interest rate increases isn’t sustainable.”

Black Knight looked at multiple potential economic scenarios to get a sense of where affordability could be heading over the next five years and found that at the current pace of increases, affordability was an unsustainable prospect.

In the first scenario, Black Knight assumed that incomes continued to see strong growth, home prices kept rising at the current rate and interest rates rose by 50 basis points/year. With these numbers, the study found that in five years, home affordability would hit an all-time low.

For the second scenario, it was assumed that incomes remained strong, rates rose by 50 basis points/year, and home price growth decelerated to its 25-year average of 3.75 percent/year. Even with slower home price increase, Black Knight found that in five years it would take 30 percent of median income to make the monthly mortgage payment.

However, in the third scenario where home price appreciation slowed to 3.75 percent, interest rate increases were capped at 25 basis points/year and incomes remained strong, Black Knight found a more sustainable scenario emerging over the long run with national home affordability levels gradually rising to long-term averages in five years.

National Association of Realtors

Pending home sales slid in April to their third-lowest level over the past year according to the latest Pending Home Sales Index data released by the National Association of Realtors (NAR) on Thursday. The report indicated that the index declined 1.3 percent in April to 106.4 from an upwardly revised 107.8 in March. On a year over year basis, the index was down 2.1 percent and declined for the fourth straight month.

“Pending sales slipped in April and continued to stay within the same narrow range with little signs of breaking out,” said Lawrence Yun, Chief Economist at NAR. “Listings are typically going under contract in under a month and instances of multiple offers are increasingly common and pushing prices higher.”

Watch what Yun had to say about the other factors that impacted pending home sales and his take on the :

 

Lake Nona-area plaza, tenants for future

A plaza near Lake Nona, a fast-growing community in southeast Orlando, is expanding and gaining medical and retail tenants.

The Narcoossee Retail Center, developed by Reich Properties Inc. at 865 N. Narcoossee Road in St. Cloud, will have two urgent care centers as tenants for its planned 10,800-square-foot second phase. A building that size may cost roughly $1 million to build, based on industry standards.

Nemours Children’s Primary Care, an urgent care center for children, will occupy 4,200 square feet. In addition, the St. Cloud Regional Medical Center will have a 2,000-square-foot urgent care center, Reich Properties President John Reich told Orlando Journal. “St. Cloud Regional Medical Center and Nemours both decided Narcoossee Road is a good place to be — it’s where St. Cloud meets .”

Medical City is a life sciences hub in that includes Nemours Children’s Hospital, the University of Central medical school, the Orlando VA Medical Center and more.

Nearly 5,000 square feet of the second phase remains available for tenants.

Reich Properties spokeswoman Coleen Taylor said the $2 million second phase is nearing constriction and will be delivered in first-quarter 2019.

Orlando-based Jordan & Associates Consulting Inc. is the engineering consultant for the project.

Plans for a third phase will bring an additional 11,000 square feet or more to the plaza. No timeline was given for that phase.

The first phase of Narcoossee Retail Center is complete and fully occupied by Building Brains Academy Language Immersion Preschool, Domino’s Pizza Bakery, All Flooring USA and The Nail Lounge & Spa.

Reich said the growing residential development in the area is driving demand for more commercial space. “Osceola County is a somewhat rural lifestyle, and you have to go to Osceola for that lifestyle. That’s why there are so many rooftops going up. There are enough rooftops now to support developing commercial,” Reich said.

He envisions the plaza’s second and third phases being fully occupied by health care providers such as dentists and orthopedics, along with restaurants.

Predicting the Housing Market and Economic Health

 

The next recession is likely to be triggered by monetary and trade policy according to experts surveyed by Zillow, and that could happen as early as 2020. Through its 2018 Q2 Zillow Home Price Survey, the real estate engine asked more than 100 real estate experts and economists about their predictions for the as well as the triggers for the next recession and when it would begin.

A very few, only nine, of the over 100 experts surveyed believed that the next downturn would be triggered by the housing market. “By most measures, the is doing well; GDP is growing steadily and unemployment is near historic lows. This has prompted the Federal Reserve to raise short-term interest rates four times since the start of 2017,” Zillow said in its survey. With two more rate hikes expected this year, the experts surveyed believed that raising rates too quickly could push the economy towards slower growth, leading to a recession.

Despite these misgivings, the respondents also thought that the housing market would continue to experience strong appreciation, predicting that home values in the U.S. would rise 5.5 percent in 2018 to a median of $220,000. They had predicted home values to rise 3.7 percent in 2018 during the same period last year.

“As we close in on the longest economic expansion this country has ever seen, meaningfully higher interest rates should eventually slow the frenetic pace of home value appreciation that we have seen over the past few years, a welcome respite for would-be buyers,” said Aaron Terrazas, Senior Economist at Zillow. “Housing is a critical issue in nearly every market across the country, and while much remains unknown about the precise path of the U.S. economy in the years ahead, another housing market crisis is unlikely to be a central protagonist in the next nationwide downturn.”

On average, panelists said they expected home value growth to slow further in coming years – to 4.1 percent by the end of next year, 2.9 percent in 2020, 2.6 percent in 2021 and 2.8 percent by 2022.

On mortgage credit, most of the respondents had a positive assessment of residential lending with 51 percent saying that today’s mortgage underwriting standards were “just about right, neither too tight, nor too loose.” Around 25 percent of respondents felt that underwriting standards were somewhat tight, whereas 21 percent said that they were somewhat loose.

A Record-breaking Month for the Housing Market

April was a quick selling month for the , according to Redfin. sold faster during the month than any other month Redfin has recorded since 2010, with homes staying on the market for just 36 days on average. This is six days faster than April of 2017. Homes were more expensive as well, with the national home sale price crossing the $300,000-mark for the first time in Redfin’s history. The median national home price was $302,000.

“Despite rising prices and low inventory, sales in 2018 so far are slightly higher than last year, which was the best year on record since the 2006 housing boom,” said Redfin Chief Economist Nela Richardson. “As we enter peak homebuying season, new listings will be key in maintaining sales growth and moderating the rapid price increases we’ve seen this year.”

In April the market gained a 5.7 percent month-over-month increase in newly listed homes , a welcome relief in a month that saw a 9.2 percent year-over-year decrease in available homes. Of all the homes for sale in April, 26.2 percent sold for above their list price, a year-over-year increase from April 2017’s 24.9 percent.

Redfin also notes that only 2.8 months of supply remained at the end of April, while six months of supply is the signal of a healthy market. Tough competition due to the limited supply has raised prices in every large metro; no metro area with a population of 750,000 or more saw any decline in prices in April.

 

 

According to Redfin, Michigan metros were the most competitive and fastest growing in the nation. Detroit experienced a 21.2 percent year-over-year price increase, the second highest in the nation behind San Jose, followed by Grand Rapids, where homes spent on average just nine days on the market.

“Detroit and Grand Rapids are no different than other cities dealing with low inventory. In addition, buyers are pouring in from the east coast, west coast, and Chicago, which is adding to the demand,” said Kent Selders, a Redfin Market Manager in Michigan.

See how inventory shortages and price increases are impacting other metros here.

Tavistock buys 1,000-plus acres of Orlando airport land for $64M

Lake Nona is expanding its boundaries south of and it now owns the land it needs.

Lake Nona developer  Development Co. LLC’s related entity TDCP LLC spent $63.9 million, or roughly $55,700 per acre, on May 10 for nearly 1,147 acres south of International Airport from the Greater Orlando Aviation Authority and the city of Orlando, Orange County records showed.

The three different parcels, two in Orange County and one in Osceola County along Narcoossee and Boggy Creek roads, will be used by Tavistock to develop a portion of a mixed-use project west of Narcoossee Road, north and east of Boggy Creek Road near the Orlando VA Medical Center, Tavistock spokeswoman Jessi Blakley told Orlando Business Journal.

The project, known as the Poitras planned development, includes:

  • 2,973
  • 100,000 square feet of commercial use
  • A school on 25 acres

Tavistock previously sought approval from the city earlier this month to rezone the property as a planned development with aircraft noise.

The 11,000-acre Lake Nona already has billions of dollars worth of underway and there’s even more growth ahead. See the photo gallery above for a sampling of Lake Nona projects in the works, and read more from OBJ‘s Doing Business in Lake Nona event from earlier this month.

UCF plans to move its Research Park nursing school

 

The University of Central Florida’s College of Nursing has outgrown its current location in Research Park and the school wants to build it a new home in .

faculty members are seeking approval on May 24 for a concept that will lead to a potential operating lease arrangement for a future Health Sciences and College of Nursing building near the existing College of Medicine.

The change is part of UCF’s plan to create several new colleges by July 2, including an Academic Health Sciences Center and the College of Health Professions & Sciences at Lake Nona, which eventually will include the College of Medicine and the College of Nursing. The goal is to help better organize the campuses to connect students with employers from industries in which they are earning degrees.

A presentation submitted by UCF College of Medicine Dean Dr. Deborah German and UCF College of Nursing Dean Mary Lou Sole says the UCF Real Estate Foundation will sell one of 50 acres of Lake Nona gift land to Alter+Care at fair market value for the project. Alter+Care is an existing partner with UCF that develops and finances health care, educational and outpatient facilities.

The proposed plans say Alter+Care would provide an operating lease for a Health Sciences and College of Nursing building adjacent the College of Medicine.

Alter+Care would design, build and finance a 150,000-square-foot building, with 90,000 square feet for College of Nursing and 60,000 square feet reserved for expansion and future Academic Health Sciences Center use, documents showed.

In exchange, UCF would offer a 25-year lease with renewal options for $17 per square foot, or $2.6 million. UCF will maintain the building, which the university estimated will have $1.5 million in operating expenses.

If the UCF Board of Trustees approves the plans, the next step is for Alter+Care to create schematic drawings of the building and develop the final terms of the operating lease.

  • Develop of schematic drawings and complete due diligence: June-October 2018
  • Finalize operating lease terms: October-December 2018
  • to start: January-June 2020
  • Targeted opening date: Spring semester 2022

The College of Nursing has nearly 3,000 students across three campuses, and colleges are being encouraged to produce even more as the state expects a shortage of 50,000 registered nurses by 2025, according to UCF.

The new college building would join the nearby UCF and Hospital Corp. of America’s (NYSE: HCA) 100-bed teaching hospital, which will be built in Lake Nona and open in 2020.

It also would pair nicely with the existing Sanford Burnham Prebys Medical Discovery Institute’s Lake Nona facility, whose assets UCF is seeking to take over and turn into a cancer research center.

“A campus containing all of UCF’s health-related programs will move one step closer to becoming a global destination for education, research and patient care — the Johns Hopkins of the future, only better,” German previously said regarding UCF’s plans to establish an Academic Health Sciences Center in Lake Nona.

The Impact of Supply Shortage on Luxury Housing

 

 

 

The supply shortage of is not limited to the median home only. The first quarter of 2018 saw the also feeling the heat of inventory shortage as prices for high-end homes saw the strongest appreciation in four years, according to a report on the luxury housing market by Redfin.

This quarterly report tracks home sales in more than 1000 cities across the country and defines a home as a luxury property if it is among the top 5 percent most expensive homes sold in the city during the quarter.

Prices for luxury homes rose nearly 8 percent to an average of $1.8 million during the quarter, Redfin found. However, this did nothing for sales of these homes which fell 20 percent marking four consecutive quarters of declining sales in this segment of the housing market.

“For the first time since changes to the tax code went into effect, luxury buyers could no longer deduct more than $10,000 in state and local property taxes or interest for mortgages over $750,000,” said Nela Richardson, Chief Economist at Redfin. “In a world of balanced supply and demand, these changes would have dampened price growth. Instead, this quarter saw the strongest luxury price appreciation in four years, demonstrating that the current inventory crunch is extremely broad-based and affects buyers at every price range.”

The inventory shortage is also escalating competition for luxury homes. The report indicated the average luxury home that sold last quarter went under contract after 82 days on the market, nine days faster than the same period last year. While only 1.5 percent of luxury homes were bid up over the asking price, that’s up from 1.3 percent in the first quarter of 2017.

In terms of regions, Florida and Nevada saw strong growth in prices of luxury homes with average sale prices in Vero Beach increasing 68 percent to $2.65 million over last year while those in Reno going up 51.3 percent. On the other hand, some cities known for their luxury homes actually saw a decline in prices.

Homes in Long Beach, California led this group of cities with prices falling 26.1 percent year-over-year in the first quarter. Prices in Washington, D.C. also saw a decline of 9.6 percent as did Fort Lauderdale, which saw prices falling 7.3 percent.