Jose Antonio Hernandez-Soluan, president, The Easton Group and and Paul Douglas, president, Easton Development. (Melanie Bell)
Trucks often back up to the edge of a 49-acre lake in the middle of an industrial pocket in Pembroke Park to dispose of construction and demolition debris.
But they’re not just dumping. They’re laying the groundwork for a $55 million commerce park by DCT Industrial Trust Inc. of Denver and the Easton Group of Miami.
The developers say land is so scarce in South Florida that they’re forced to create their own site for a 606,000-square-foot project they envision. They’re filling in about 35 acres of the lake to construct three Class A buildings on submerged land at 3450 W. Hallandale Beach Blvd. in the Seneca Commerce Park.
“There’s such a need for land and such a lack of it that companies are having to get creative,” said Easton Group president Jose Antonio Hernandez-Solaun.
Broward County records describe the lake as a rock pit, and an expensive one at that, selling for about $3.5 million, or more than $71,400 per acre last year, according to a deed recorded Dec. 16. The deal with Easton and DCT Industrial hinges on the condition that the lake’s former owner, a general contractor, complete the reclamation before the sale closes.
But time is also a factor.
The infill depends on the availability of construction debris, plus it could take up to 18 months to plat the site and apply for zoning. It means Easton isn’t likely to deliver the first phase, a 225,000-square-foot office and warehouse building, until the end of 2015.
“It’s a lengthy process, and it takes more time, but it’s worth it,” said Paul Douglas, president of Easton’s development division.
Economic indicators point to opportunities for investors, if they can find the land. In Miami, for instance, asking rental rates for industrial properties increased by 43 cents per square foot to about $8.27 in the last year, while vacancy declined 70 basis points, according to the latest data from CBRE Inc.
But in South Florida, where vacancy hovers between 4.6 percent in Miami-Dade County and 6.1 percent in Palm Beach County, industrial developers are hard-pressed to find enough acreage for sprawling distribution centers and warehouse complexes.
“We contacted the owners of the lake because we’re running out of land in South Florida for new projects,” Douglas said. “We have to get very creative to find new sites that have adjacency to ports, roadways and places where our tenants want to locate their businesses.”
Easton’s reclamation is the latest example of developers taking extraordinary steps to acquire land for projects in a market so tight that prices are on the rise for once-overlooked parcels now considered prime redevelopment sites, and not just for industrial projects.
The trend is so prevalent that Easton executives say the company is at work on a white paper due by the end of the year outlining recent acquisition and land use strategies by South Florida developers.
Investors like New York-based Property Markets Group, the developer of Echo Aventura, Echo Brickell and Sage Beach, report paying premiums on individual units to persuade condominium owners to sell in bulk to make way for new projects.
Others in Miami’s historic districts purchase air space and transfer development rights to create higher density projects in areas with restrictive zoning. And in emerging neighborhoods like Miami’s Edgewater, developers like mckafka Development Group are paying for public parks, street lights and other improvements as they transform old neighborhoods into trendy suburban corners.
“It’s well worth our time and effort to find land like this,” Douglas said. “It’s close to Port Everglades and international airports and adjacent to an existing industrial park. So far, we’re ahead of schedule and in very good shape.”