Hollywood has more than $1.4 billion of commercial and residential real estate development planned or under construction – but precious few office projects.
“There is an under-supply of quality office space in downtown Hollywood,” said Michael Feinstein, founder and CEO of co-working office space operator Büro, which recently opened its sixth location in Hollywood.
Feinstein, a panelist at an Urban Land Institute and the Greater Hollywood Chamber of Commerce event Thursday, and other speakers agreed that Broward County’s second-largest city is an underdeveloped office market.
“Certainly, for the size of city we have, for the tax base, I don’t believe we have sufficient high-quality office space,” said Wazir Ishmael, Hollywood’s city manager, citing the scarcity as an obstacle to luring new companies to Hollywood.
“We’ve missed out on some opportunities, in fact, where we see people coming through the Broward Alliance [economic development agency] looking for space. And we didn’t have it, and we had to pass,” Ishmael said.
The market’s response to Büro’s new 15,000-square-foot location on Harrison Street in downtown Hollywood “has been great,” Feinstein said. “We’ve had about 30 companies move in, mostly local, some relocating from Aventura and Fort Lauderdale.”
Panelist Seth Bour, president of Firm Realty, said his company plans to break ground in six months on a 50,000-square-foot office building at a downtown site on the corner of Tyler Street and 19th Street. Bour said he expects to draw office tenants new to Hollywood from such densely developed areas as downtown Fort Lauderdale, largely because of “the premiums you have to pay to be in those urban cores.”
CBRE Senior Vice President Larry W. Genet, another panelist, said the office vacancy rate in Hollywood is 6 percent, and financing terms restrain the delivery of new office space. “These days, it’s not impossible to get an office building financed for development,” he said. “But you have to have some tenants ready to take the space.”
According to a report on real estate trends in Hollywood that the city government distributed at the ULI event, more than $1.4 billion of real estate developments are planned or under construction in Hollywood.
Among those under construction are Related Group’s 342-unit Hyde Beach House condominium on South Ocean Drive; Block House, a downtown mixed-use project that is combining 166 apartments and 103 hotel rooms; and an eye-catching, guitar-shaped hotel at the expanding Seminole Hard Rock Hotel & Casino along State Road 7, in the northwest corner of the city.
But relatively little office space is in the local development pipeline. The city government’s 43-page report on development activity listed three boutique office projects.
That pipeline could fill up, however, with an office-heavy redevelopment of Oakwood Plaza, a commercial hub and shopping center in Hollywood just south of Fort Lauderdale-Hollywood International Airport.
Kimco Realty, the owner of Oakwood Plaza, may redevelop the 140-acre property with a mix of apartments, offices and a hotel. “We’re looking at a master plan redevelopment of Oakwood Plaza … We want to redevelop it into a mixed-use center,” said Peter Flint, senior director of business development, Southeast, for Kimco.
Speaking as a panelist, Flint said Kimco’s redevelopment of Oakwood Plaza could include the construction of as much as 1 million square feet of office space over a decade. He said Kimco will submit a proposed site plan to the city in six months. The New York-based, publicly held company is the master developer of the nearby Dania Pointe mixed-use center, a 103-acre project in Dania Beach, just north of Hollywood.