Sergio Pino re-opens construction site after workers test positive for Covid-19

Rendering of 850 Le Jeune and Century Homebuilders’ Sergio Pino

Rendering of 850 Le Jeune and Century Homebuilders’ Sergio Pino

Days after shutting down his construction site after workers tested positive for Covid-19, developer Sergio Pino said the project is open again.

Pino, who has been pushing for a shutdown of construction in South Florida, said there is a limited crew on the site at 850 LeJeune Road, near Miami International Airport. About 40 workers are on site out of about 220, he said.

“We are definitely not going as fast,” Pino said. “We cannot be the only ones to shut down, because if we do that the workers will go to other locations and that defeats the purpose.”

The Miami developer said he respects the decisions of other developers to continue working, acknowledging that he has not received any support from his peers at this time.

Two workers at his 850 LeJeune project tested positive for Covid-19 last week, and Pino informed his general contractors, Wechsler Construction and Conconcreto, to stop working.

The project site underwent a deep cleaning and disinfecting.

Pino stressed that fewer workers are on the site today, and the project superintendent is ensuring that workers are not congregating in groups larger than six to eight people. The developer said the site is following guidelines from the Florida Department of Health, the Centers for Disease Control and Prevention, and other government entities to keep workers safe.

Construction has been allowed to continue in Miami-Dade County, despite the pandemic. It is included in the county’s definition of essential businesses that are not required to shut down. On Wednesday, Florida Gov. Ron DeSantis announced he will be issuing a statewide stay-at-home order.

Nearly 7,000 people in Florida have tested positive for Covid-19, as of Wednesday, according to data from the state’s health department. At least 87 people have died. In Miami-Dade County, 2,202 people have tested positive, and seven have died.

Pino’s Century Homebuilders Group and its partner, Pactia USA, are building 230 multifamily units and about 200,000 square feet of office space at 850 LeJeune. The project will consist of two, five-story office buildings; a six-story apartment building and a parking garage on a 4-acre site.

Pino still believes a shutdown of construction is needed to limit the spread of coronavirus, and is pushing for it to be shut down for 10 business days. He would like to be given enough time to secure his tools and materials, and close sites to “try to avoid a bigger problem.”

“We’re concerned.” he said. “There are thousands of people that work in our industry.”

Ginnie Mae to use natural disaster program to help struggling mortgage servicers

Ginnie Mae principal executive vice president Seth Appleton (Credit: Wikipedia Commons; MHS)

Ginnie Mae principal executive vice president Seth Appleton (Credit: Wikipedia Commons; MHS)

Nonbank mortgage lenders, who are bracing for a massive cash crunch as borrowers across the country seek loan forbearance because of the coronavirus crisis, are set to get some relief thanks to a government program reserved for natural disasters.

Ginnie Mae, an agency within the Department of Housing and Urban Development that guarantees more than $2 trillion worth of mortgage-backed securities, plans to implement a pass-through assistance program through which it will advance principal and interest payments to investors on behalf of servicers who are short on cash.

“We have heard from our issuer and servicing partners that borrower forbearance arrangements that are nationwide in scope could place an enormous strain on issuers,” Ginnie Mae senior official Seth Appleton wrote in a blog post Friday. “Please know that we are taking action to address these concerns and potential liquidity challenges faced by Ginnie Mae issuers.”

The necessary changes to the program will be implemented within two weeks, Appleton wrote. Under existing rules, the advancing of funds due to a natural disaster is considered an event of default — which will not be the case for coronavirus-related advances.

Loans guaranteed by Ginnie Mae tend to have a much higher risk profile than Fannie Mae or Freddie Mac loans, and are expected to require more forbearance as the U.S. faces a severe economic crisis. Fannie and Freddie have also announced relief measures for landlords struggling to make mortgage payments.

Mortgage industry leaders have praised Ginnie’s move, but former Ginnie head Ted Tozer called it a “band-aid,” noting that a funding facility is still needed from the Federal Reserve and Treasury to aid servicers of other types of government-backed mortgages. [WSJ] — Kevin Sun

Publix to offer rent relief to retail tenants

Publix (Credit: iStock)

Publix (Credit: iStock)

Publix has become the latest landlord to offer rent relief to its retail tenants due to the impacts of Covid-19.

The Lakeland-based grocery store giant is waiving rent for two months for businesses operating at Publix-owned shopping centers, according to a press release. Publix is also waiving two months of payments for common area maintenance fees and taxes.

Publix is following similar moves by other landlords in Florida and across the country whose tenants are experiencing hardships due to the novel coronavirus. Some national tenants, such as The Cheesecake Factory, have told their landlords they are not going to pay rent in April.

In South Florida, all non-essential businesses have been ordered to shut down. Grocery stores are allowed to remain open since they are considered essential businesses.

A Publix employee at one of its Miami stores at 9420 Southwest 56th Street has tested positive for the coronavirus, the Miami Herald reported.

Publix has increasingly purchased the retail centers that it occupies. Out of the company’s 1,239 supermarkets, Publix owned the land and the building at 351 locations, according to the company’s annual report. Publix reported that sales were $38.1 billion for the 2019 fiscal year, up 5.6 percent from 2018.

Publix has made a number of large acquisitions in South Florida. In June, the company purchased the Doral Plaza Shopping Center for $70 million from Chicago-based ShopCore Properties. In March 2018, Publix paid $15.7 million for a shopping center at 3339 West 80th Street in Hialeah. It also paid $21.58 million for the 85,060-square-foot shopping center at 12100 Southwest 127th Avenue in Miami.

New Yorkers ship Upstate and to the Hamptons to wait out coronavirus

New Yorkers are booking vacation rentals outside the city (Credit: iStock)

New Yorkers are booking vacation rentals outside the city (Credit: iStock)

It’s no secret to New Yorkers hunkering down in the city: many of their neighbors are missing.
New Yorkers have fled the city in droves, but where did they get off to? Those who can afford it are renting homes in rural communities upstate, the Hamptons, and small towns across the Northeast.

The owners of Home Sweet Hudson, an Airbnb listings and management company, said that inquiries are way up. Many people are asking to rent homes for several weeks to several months.

Co-owner Vanessa Vargas said that clients frequently ask about “internet service and Wi-Fi” so they can keep working and otherwise stay connected far from the city.

Jennifer Grimes, who runs a rental service for properties in the Catskills and Hudson Valley, said she’s working 70 hours a week to process all of the business that’s come her way. Some vacation property owners have canceled renters’ reservations so they can stay at their own properties, she said.

It’s the same story out in the Hamptons, said Town & County agent Steven Zellman.

“My phone is ringing off the hook with one- and two-month rentals,” he told the Post. “I have done 11 rentals in the last five days, and am working on four others as I write this.”

On the bright side for those still in the city, at least there’s more parking. [New York Post] – Dennis Lynch 

Bernie Sanders throws support behind New York rent-suspension bill

Bernie Sanders (Credit: Getty Images)

Presidential candidate Bernie Sanders has thrown his weight behind Sen. Michael Gianaris’ rent-suspension bill.

“Along with pausing mortgage payments, evictions, and utility shutoffs, we must place a moratorium on rent payments, especially in states hardest-hit by the coronavirus like New York,” Sanders tweeted on Saturday morning. “We must build on the important work [Gianaris] and others are doing to make this happen.”

Gianaris’ bill is quickly gaining momentum. Along with the national attention, Senate Bill 8125 has 21 co-sponsors in the state senate, just one week after having been formally introduced.

According to the legislation, rent and mortgage payments would be forgiven rather than postponed. An executive order issued by New York Gov. Andrew Cuomo last week urged banks to defer mortgage payments for 90 days for homeowners suffering because of the health crisis, but offered no such equivalent for apartment owners and renters.

A relief package for landlords with mortgages backed by Fannie Mae or Freddie Mac came earlier this month. Most renters will receive some financial assistance from the government in the form of a one-time payment of $1,200, in a $2 trillion federal stimulus package which passed on Friday. But there is little else in the package for multifamily real estate owners or renters.

Along with waiving rents for 90 days, the Queens Democrat’s bill would allow landlords in financial distress to apply for forgiveness of their mortgage payments in an amount equal to that of unpaid rent stemming from coronavirus-caused hardship.

For renters, late fees would not apply during the 90-day period, and any lease that expires during that time would be automatically renewed, with the monthly rent unchanged.

Critics of the legislation question how such a waiver would be enforced, and are instead pushing for relief for landlords in the form of a tax abatement, which could be passed on to tenants in the form of a rent reduction.

Lennar scores $45M construction loan for Wynwood apartment project

Stuart Miller, Wynwood Green

Stuart Miller, Wynwood Green

A subsidiary of Lennar scored a $44.8 million construction loan for an apartment project on the former site of Wynwood Yard.

The Miami-based company secured the loan from Santander Bank to construct the 11-story, 189-unit apartment building with nearly 17,000-square-feet of commercial space and 324 parking spots, records show. The project will be known as Wynwood Green.

Lennar purchased the 1.26-acre property in January 2019 for $17 million. The property is at 48, 56, 64, 70, 82, 90 and 98 Northwest 29th Street, as well as 63 Northwest 28th Street, in Miami’s Wynwood neighborhood, property records show.

David Lombardi, principal of Lombardi Properties and one of Wynwood’s pioneering land owners, sold the site to Lennar. It was most recently home to Wynwood Yard, an outdoor venue that featured an array of food and beverage concepts and a performance stage. It was also home to O Cinema, a nonprofit independent movie theater that operated out of a converted warehouse.

Lennar is one of the largest homebuilders in the country and is known for its “Everything’s Included” design of efficient but reasonably priced homes.

Brightline, Versailles, Cafe Boulud to lay off hundreds in South Florida

Brightline, Versaille restaurant, Cafe Boulud (Credit: Google Maps)

Brightline, Versaille restaurant, Cafe Boulud (Credit: Google Maps)

Layoffs are spreading across South Florida, as the coronavirus pandemic inflicts damage on nearly every aspect of the region’s economy.

Brightline, the high-speed train service that runs from Miami to Fort Lauderdale and West Palm Beach, is laying off 250 employees after it suspended operations, according to a spokesperson. The company is a subsidiary of Florida East Coast Industries, which is backed by the private equity firm Fortress Investment Group.

The high-speed train has spurred major office, retail and residential development near its stations, but has struggled with ridership. The rail service is expected to expand to Orlando, as well as make additional stops in Aventura and Boca Raton. The spokesperson said that the suspension of service has not affected construction of its planned Orlando rail line.

South Florida resorts, hotels, and restaurants are also experiencing layoffs, based on WARN Act notices filed with the state.

This week, Daniel Boulud’s French-American restaurant Cafe Boulud in Palm Beach laid off 99 employees. The restaurant announced on its website that it is closed temporarily. The property at 301 Australian Avenue is near the Brazilian Court Hotel and close to Worth Avenue.

Isla Bella Beach Resort in Marathon, a 199-room resort at 1 Knights Key Boulevard, Mile Marker 47, also let go of 130 people. And Waterstone Resort & Marina in Boca Raton, a 139-key resort at 999 East Camino Real, laid off 111 people, according to WARN Act notices filed this week.

Companies tied to the Valls family restaurant group, including La Carreta and Versailles in Miami’s Little Havana, are laying off 419 employees. The grocery chain Sedano’s Supermarket has agreed to hire up to 400 full-time and part-time employees laid off from the Valls family’s restaurants, according to the Miami Herald.

Restaurants are struggling to get by, after South Florida counties shut down restaurant dining rooms and bars, only allowing them to stay open for takeout and delivery.

Last week, Miami-Dade, Broward and Palm Beach counties each ordered all non-essential businesses to close. Several cities, including Miami Beach and Miami have issued stay-at-home orders and curfews. On Wednesday night, Miami issued a 10 p.m. to 5 a.m. curfew, to start Friday night.

Across the country, states have issued shelter-in-place orders, including California, Illinois, New York, New Jersey, Connecticut, Michigan, Massachusetts, Indiana and Delaware.

Unemployment has skyrocketed in Florida and throughout the U.S, due to the outbreak of the novel coronavirus. In Florida, over 74,000 people filed for unemployment on Saturday, up from 6,463 the previous week. Nationwide, almost 3.3 million people filed unemployment claims, according to data from the Department of Labor.

Mac Papers inks deal, sells warehouse near MIA for $15M

5900 Northwest 176th Street (Credit: Google Maps)

5900 Northwest 176th Street (Credit: Google Maps)

A major paper supplier sold its warehouse near Miami International Airport for $14.6 million.

Jacksonville-based Mac Papers sold the 137,872-square-foot warehouse at 5900 Northwest 176th Street in Miami for $105 per square foot, records show. Spirit Master Funding X LLC, tied to Dallas-based Spirit Realty Capital, purchased the property.

The warehouse is on a 304,746-square-foot lot. The property was last purchased for $1.6 million in 1996 and the warehouse was built in 1997, records show.

Mac Papers was founded in 1965 by Frank and Tom McGehee and provides paper and print, packaging materials and equipment, wide format products and equipment, facility supplies and office products. On March 12, the company announced it would sell its businesses to Monomoy Capital Partners, a private investment firm with $1.6 billion in capital, for an undisclosed price, according to its website.

Spirit is a triple net-lease real estate investment trust (REIT) with 1,752 properties, according to its website.

The industrial market near Miami International Airport has taken off in recent years due to rising demand for e-commerce and last-mile distribution.

In Miami-Dade County, industrial vacancy rates were at 4.06 percent at the end of 2019, despite an onslaught of new construction, according to a report from Avison Young. Rents rose $8.89 per square foot in the fourth quarter of 2019 from $8.36 per square foot in the fourth quarter of 2018, according to the report.

CenterPoint buys an industrial property near MIA for $30M

CenterPoint Properties CEO Bob Chapman and South Florida Logistics Center

CenterPoint Properties CEO Bob Chapman and South Florida Logistics Center

CenterPoint Properties Trust bought an industrial property near Miami International Airport for $29.5 million.

Oak Brook, Illinois-based CenterPoint Properties purchased the 42.5-acre property at 3200 Northwest 67th Avenue for $694,117 per acre, records show. FDG Hialeah, tied to Florida East Coast Industries, sold the warehouse site.

The property is part of South Florida Logistics Center, a 200-acre logistics complex adjacent to Miami International Airport. It was developed by Florida East Coast Industries, the parent company to the high-speed Brightline train.

CenterPoint Properties has 326 properties or 61 million square feet of space, and focuses on logistics parks, according to its website.

In November 2018, FECI sold one part of South Florida Logistics Center to a subsidiary of JPMorgan Asset Management for $31 million.

Industrial remains one of South Florida’s hottest asset classes.

In 2019, industrial completions in Miami-Dade County reached an all-time high, according to a recent report by Avision Young. Over 5.6 million square feet of industrial product was added to the market, increasing local inventory by nearly 3 percent.

WeWork gears up for potential legal fight with SoftBank

Softbank CEO Masayoshi Son (Credit: Getty Images, iStock)

Softbank CEO Masayoshi Son (Credit: Getty Images, iStock)

SoftBank recently advised WeWork shareholders that it might renege on part of its rescue package, and a pair of independent directors for the co-working firm are considering all options in response, including legal action, according to Bloomberg and the Wall Street Journal.

SoftBank had struck a deal to buy $3 billion worth of stock in WeWork, effectively rescuing the company after a disastrous initial public offering attempt. However, the conglomerate sent a message to stockholders saying it could withdraw from the agreement in the wake of several government inquiries into WeWork from agencies including the Manhattan district attorney and the Securities and Exchange Commission.

SoftBank has said it is still honoring its obligations laid out in the agreement and has given WeWork more than $5 billion since October, but not every condition for its offer has been met. It can walk away from the deal if government inquiries or investigations result in material liability for WeWork.

“The main beneficiaries of the tender are Adam Neumann, large institutional investors, and some prior officers of the company,” a SoftBank spokesperson told Bloomberg. “Current WeWork employees have already benefited greatly from the repricing of their options in an earlier phase of the tender offer and would receive less than 10% of the proceeds.”

SoftBank is changing its stance on the deal amid plunging markets as the coronavirus spreads. The Japanese conglomerate also said it intends to sell as much as $41 billion of assets to buy back its shares and redeem debt in an effort to halt its falling stock and bond prices, according to the Journal.

Several WeWork locations are still open, but the company could be on the hook for billions in long-term lease liabilities if widespread “work from home” mandates cause tenants to choose not to renew their short-term leases.

Venture capitalist Bruce Dunlevie and former Coach CEO Lew Frankfort make up WeWork’s special committee, and discussed ways they think they could force SoftBank to follow through with its investment during a phone call Thursday night, according to the Journal. The offer was supposed to be completed by April 1.

A WeWork board spokeswoman told the Journal that they were “committed to taking all necessary actions to ensure that the tender offer, which SoftBank has promised to our employees and shareholders is completed.” [Bloomberg, WSJ] — Eddie Small