While many studio developers are lying low as the sting of last year’s twin entertainment strikes still lingers, and as doubts are raised regarding continued soundstage demand, East End Studios is staying busy.

The company debuted its first ever ground-up studio project in Glendale earlier this year and has three other local studio campuses underway in efforts to expand its footprint and accommodate modern sets.

“I don’t know if you’ve seen any of the other facilities that have grown organically over time,” Shep Wainwright, one of the managing partners of East End Capital, said. “For the most part, they’re pretty old and stale. They weren’t purpose-built for today’s workflow.”

East End Studios is a Glendale-based subsidiary of New York-based East End Capital, a real estate investment firm that has its hands in a variety of asset classes – including office, multifamily and retail.

Wainwright said while the company still evaluates deals on a rolling basis, it took a leap of faith in 2020 when it saw immense value in studio space from a real estate perspective and pivoted its business accordingly.

Since then, East End Studios has grown to encompass 2.7 million square feet of studio campuses existing and currently in development, totaling 38 soundstages.

“East End is one of the most active soundstage developers certainly in Los Angeles,” Sam Glendon, a first vice president at CBRE Group Inc. specializing in industrial, soundstage and office properties, said. “These projects…they’re years in the making.”

Purpose-built studios

East End opened the doors to its first ever ground-up development studio project – a 97,000-square-foot studio campus – in Glendale in June after three years of work. Located on Glendale Avenue, less than two miles from The Americana at Brand, the campus features two soundstages, over 40,000 square feet of production and office support space, a rooftop terrace, and on-site parking.

The company is currently under construction on two new campuses – its 303,000-square-foot, five-stage and $230 million Mission campus in Boyle Heights and its 340,000-square-foot, four-stage Sunnyside campus in Queens, New York.

Griffith, which will begin construction next year, will become a 611,000-square-foot, 11-stage campus on the border of Burbank and Hollywood. And lastly, ADLA, which is almost fully entitled and set to cost $1 billion, will be the company’s biggest project yet featuring 16 stages and ancillary spaces spread over 1.28 million square feet in the Arts District.

While the campuses each vary in size and number of soundstages – and all have the ability to accommodate feature films – Wainwright said he anticipates mostly streaming or network episodic television to be the primary use of these facilities, with one series likely to lease up their entireties – at least this will likely be the case for the Glendale, Mission and Sunnyside campuses.

“Television series have always been the highest demand group for soundstage use in Los Angeles, in addition to other things like commercials and music video shoots,” Nicole Mihalka, a managing director at Jones Lang LaSalle Inc. specializing in creative office and entertainment real estate, said. “But the thing that really keeps the stages running on the long-term, and what keeps the occupancy up, are television shows.”

Since the Glendale studio opened, it’s already welcomed a handful of clients, including Apple Inc., ABC, Amazon.com Inc., Hulu, Fox Corp. and Target Corp. – although Wainwright said East End hopes to secure a long-term tenant for the space soon. The company is currently in talks to pre-lease its Mission and Sunnyside campuses prior to their delivery.

Fleeting production

All this expansion comes especially notable at a time when many productions are leaving Los Angeles, opting for more business-friendly markets.

States like New York, Georgia, Nevada and New Jersey have famously drawn productions out of Los Angeles over the last few decades due to attractive tax laws, but now overseas destinations are becoming more popular too – namely Canada, Mexico, Australia, Ireland and the U.K.

“People want to film in Los Angeles,” Glendon said. “The majority of the industry lives in Los Angeles so the idea of flying to Western Europe or Mexico or Canada for six months and being away from your family and your world is not ideal. They do it because of the financial benefits.”

And while experts acknowledge it may be tough to convince motion picture films to return to Los Angeles, it is the television market that has become really the lifeblood of Los Angeles entertainment and is essential to retain.

“We have not been as big on the film side, but what we really can keep is growth in television because those are longer-term cycles and that’s what drives soundstage occupancy in Los Angeles,” Mihalka said. “That’s what folks want to see – those shows that get picked up and get renewed and then can feed all of the entertainment workers in Los Angeles – and that’s driven by showrunner preferences. The showrunners sort of lead where the shows are going to be, and those are the ones that want to stay in Los Angeles because they have kids that are going to school here. They don’t want to have to be in New Mexico for seven months. Sometimes they are, but it’s not the preference.”

Campus amenities

As Los Angeles attempts to rally with these international, more-business-friendly markets, experts believe expanding and updating the city’s current studio supply will be critical in enticing production back.

“We need new stages,” Mihalka put bluntly. “We have been underserved on the amount of stages – especially new stages. We are severely lacking in that department. We need more stages in Los Angeles in order to compete with these other markets.”

Besides having commissaries and mills, Wainwright said East End’s campuses feature excellent soundproofing, high clearance heights, automated grid systems, IDF rooms, full LED wall technology and other modern resources, as well as fully amenitized support spaces and on-site parking – which can provide casts and crews with the privacy and security that productions usually demand.

And, unlike most legacy product in Los Angeles – or even converted warehouse to studio projects that are usually somewhat restrictive in terms of design – purpose-built studios allow for the full absorption of consumer preferences. All of East End’s soundstages, for example, are column-free – a trend that’s becoming increasingly desirable but is less commonly found in already-crafted spaces.

“If you look at how these productions actually use the stages, they build their sets and they film in these areas. If you have a big pole sticking right in the middle of where you want to build your stage, obviously there are ways around it, and productions are becoming more and more accustomed to working around it, but it limits what you can do and is a bit of an inconvenience,” Glendon said. “To offer these clear-span areas that you typically only see in purpose-built studios is definitely a nice feature.”

The 30-mile zone

But perhaps among the Los Angeles campuses’ most prized amenities are their locations – all within several miles of each other in Hollywood’s prime studio zone.

The studio zone, or TMZ, which stands for 30-mile zone, is an area defined by a 30-mile radius of Hollywood commonly referenced in the entertainment industry to determine employee benefits and per diem rates – with the core areas typically being Hollywood, Culver City, Burbank, Studio City and downtown. The closer to the core you can be, the more attractive your studio likely is.

“There’s a reason why downtown Los Angeles from an office perspective is less desirable than other areas of town and that’s just the nature of the beast,” Wainwright said. “Film studios are no different from that. If you’re near where the decision makers are and you’re at the center of the TMZ, generally speaking, you’re going to have a higher chance of success in that. That’s always been our thesis from the beginning.”

And in terms of East End’s choice to develop multiple smaller format studio campuses simultaneously as opposed to one consolidated one, Wainwright shared it really boils down to scarcity of space.

“I don’t think that if we had found like a 50-acre campus that it would have made sense,” Wainwright added. “I think it’s nice to have optionality because certain productions want to be in certain parts of town. I’m happy that we have more facilities and just more offerings in different locations that we can provide to tenants.”

Investors wary

While Wainwright admits East End got lucky in the sense that it was granted equity for all five projects pre-strikes, he said, going forward, lenders are investing more cautiously and waiting on the sidelines until occupancy numbers rise.

“It’s gotten more and more challenging,” Wainright said. “Obviously with inflation, construction costs went up and, again, this is speculative lending on construction that is not coming with a long-term lease so, yes, it’s gotten more challenging over the last few years for sure.

“I think that’s going to ease going into 2025 and 2026,” he added. “I think that as Los Angeles gets back to work and gets back to its normal occupancy and production cycles, lenders who are looking to finance these types of facilities will get back into the market.”

And as Hollywood enters a new era – defined by themes like streaming dominance, content contraction and threats of artificial intelligence – Wainwright is all the more confident in the continued demand of new studios.

“I think that there’s been a shakeup amongst a lot of the producers and the streamers and the networks in an effort to try to get profitable,” Wainwright said. “And I think they’re now starting to learn what that new world looks like, and the good news is that they continue to know they need to spend and continue to spend more money on productions in order to stay competitive. It’s just a matter of where they do it and how they do it.”

Industry outlook

So as the world moves further away from Covid, and as Los Angeles now comes off over one year post-strikes, it seems like the general sentiment is optimistic.

“I just want to get them open,” Wainwright said. “What I’m really excited about is to get Los Angeles back to work. New York has been pretty steady, but it’s exciting to see some of the moves being made.”

Earlier this year, Gov. Gavin Newsom proposed $750 million in annual film tax credits – which would more than double the size of the state’s film tax incentive program – a major stride to attract and retain local production.

“We need this tax credit expansion to go through, without a doubt,” Mihalka said. “We need our local politicians on point, pushing for that, and also pushing for the things that our entertainment companies need – (such as) increased public safety (and) having an easier system to approve these projects. I would appeal to our lawmakers locally and in the state to really ensure that the entertainment companies that are here stay here and that they’re keeping shows in Los Angeles. My outlook is positive, there’s really nowhere to go but up, and I think with these new studio lot projects, it’s going to help that endeavor.”

While East End Studios doesn’t have any immediate plans to open more studios beyond the four already in the pipeline, Wainwright said the long-term goal is to keep expanding – maybe even venturing into new markets and reaching bigger audiences.

“I think nobody has given up on Los Angeles,” Wainwright said. “It’s still the largest studio market in the world and I don’t think that’s changing. Well-located, well-built studios have generally always been full in Los Angeles, and I don’t think that’s going to change.”

East End Studios, a New York-based independent studio management and development company, unveiled plans to construct a 15-acre studio campus in the DTLA Arts District. The city planning department recently published its Final Environmental Impact Report (FEIR), allowing the project and its 16 new, state-of-the-art soundstages, to come to life

Located at the corner of Alameda and Sixth streets, the East End Studios Arts District LA Campus will introduce 16 state-of-the-art soundstages totaling 299,012 square feet. Designed by the architecture firm Grimshaw, this expansive project also includes 307,407 square feet of Class A office space and 69,192 square feet of studio support areas, or 675,611 square feet of leasable space.

Aside from its 16 soundstages, the Arts District LA Campus’ entire square footage will include parking and direct-to-stage loading. The facility is also equipped to handle all modern XR/VR workflows.

“East End Studios is overseeing the development of the project, with ADLA being one of the most exciting areas in America,” said Shep Wainwright, East End Studios managing partner.

“It’s a great residential and easy access space for people needing a soundstage facility. We’re expecting this new project to become the next big media hub for LA.”

The entertainment industry is critical to LA’s economy and cultural identity. As other major cities expand their production capabilities, LA must keep pace. East End Studios is meeting this need, having launched its Glendale facility earlier this year and broken ground on a smaller production campus near the Sixth Street Park, Arts and River Connectivity Project over the summer.

“These soundstages are vital to DTLA because they can be difficult to find in such a great location,” Wainwright added. “It’s a special feeling to be at the center of this project. There will be amazing access for people living or working from either the east or west sides of LA. It’s a great spot for anyone working in the media or entertainment business.”

The recent release of the FEIR represents a crucial step forward for the East End Studios ADLA Campus, with the city’s final approval anticipated early next year.

“I’m so excited to be a part of this project,” Wainwright noted. “This is going to be the largest state-of-the-art facility that’s been brought to LA in the last 50 years — it’s an incredible project. Luckily, everything with the project has been so successful. The only challenge has been keeping on schedule due to its lengthy process, but we’re working on building as soon as possible.”

Local property professionals are looking for a proposed increase in California subsidies for Los Angeles film and television productions, planned to be among the highest offered by any U.S. state, to help revive real estate demand in the world’s entertainment capital.

The proposal announced this week to expand California’s Film & Television Tax Credit Program from $350 million to $750 million annually is aimed at providing a shot in the arm for an industry that’s been struggling for years to compete with other shooting locations around the country, especially after the pandemic and last year’s Hollywood writers and actors strikes.

The industry contributes $115 billion annually to the local economy, and “everyone is feeling the slowdown,” said Chris Bonbright, a principal and managing director at Avison Young who represents entities tied to the entertainment industry in Los Angeles.

Office vacancies are up, deals are down, and the industry’s fastest growing players are expanding in other markets, Bonbright notes.

Other states and countries — such as Georgia, New York and Canada — have all adopted tax credit programs in recent years to lure productions away from Los Angeles. Hundreds of thousands of square feet of sound stage space is expected to come online over the next three years in such regions, including cities in Europe and Australia, according to a report from the California Film Commission.

While there’s no guarantee Los Angeles’ increased funds will drive real estate deal making in the region, the California plan announced by Gov. Gavin Newsom, a Democrat, represents the most subsidies to be offered by almost every state, except Georgia, and could lure some of that lost production back to the city and help drive new construction and deals.

Real estate pullback

The increased funds are set to be included in Newsom’s January budget and, if approved, would take effect by July 2025.

The proposal would funnel some $3.75 billion in tax credits to the film and television industry over five years.

“The industry here is increasingly on life support,” Newsom said during a press conference at Raleigh Studios in Hollywood. “It needs a pattern interrupt. We need to jolt. There was an expectation that things would turn around after the labor unrest was settled and that hasn’t happened.”

Between 2020 and 2024, California film and television production spending dwindled due to limited tax credit funding and increased competition in other states and countries, Newsom said. In recent years, 71% of the films and television programs that could not secure California tax credits took their projects and the associated spending outside of the state.

The number of days productions spent shooting in L.A. totaled 7,589 in the third quarter of 2021, According to Film LA, a non-profit organization that manages the film permit process for the City and County of Los Angeles and other local municipalities. By the third quarter of this year, L.A. shooting days were down almost 60% to 3,107.

The pullback, coupled with remote work trends, has contributed to a weak Los Angeles office market. The area’s vacancy rate of 16.3% is ahead of the 15.4% vacancy rate a year ago, according to CoStar data, and is ahead of the 13.9% national average. Tenants gave back 5.2 million more square feet of Los Angeles office space than they leased in the past year.

‘Back to work’

The planned 675,611-square-foot East End Studios Arts District LA Campus is among projects that could benefit from the expanded credit. The 15-acre campus in Downtown Los Angeles’ Arts District will include 16 soundstages totaling 299,012 square feet; 307,407 square feet of office; and 69,192 square feet of studio support spaces. The project recently finished its final environmental review, with anticipated approvals from the city early in 2025.

“This critically needed investment is a huge step toward getting everyone in the entertainment industry back to work,” Shep Wainwright, managing partner of East End Studios, told CoStar News via email. “The entertainment industry is vital to Los Angeles’ economic health and its identity. While other major cities are adding to their inventory of production space, Los Angeles must do the same.”

California’s Film & Television Tax Credit Program has generated more than $26 billion in economic activity and supported more than 197,000 cast and crew jobs across the state since 2009, Newsom said. A study by the Los Angeles Economic Development Corp. found that, for every tax credit dollar approved, the program generated at least $24.40 in output, $16.14 in GDP, $8.60 in wages, and $1.07 in initial state and local tax revenue from production in the state.

One limitation of the new subsidies proposed by Newsom is that, like the existing subsidies, they only apply to below-the-line expenses, meaning they can’t be used to pay for actor’s salaries like in other states.

“It’s not about subsidizing superstars,” Mayor Karen Bass said at the press conference. “It’s about working folks and building a sense of community. It’s about Main Street. Small businesses benefit from this kind of investment.”

The governor is considering additional restrictions to the program as well as other incentives, such as the newly formed Entertainment Industry Council, created to advise officials on how to bring more show business back to Los Angeles.

“We’re creating new studio and sound stage concierge services, which cuts red tape and provides direct assistance with city departments,” Bass said at the press conference. The council is helping push forward an existing pipeline of 7 new studios and sound stages including 8.1 million square feet of sound stage media production and associated creative office space, she added.

East End Studios has broken ground on its downtown Los Angeles Arts District facility, East End Studios Mission Campus.

Demolition and excavation are currently underway with the vertical phase of construction set to begin this summer. The project, with a total cost of approximately $230 million, is expected to be completed by the end of 2025.

“The Downtown Los Angeles Arts District has long been on our radar as a premier and thriving development market,” said Shep Wainwright, Managing Partner at East End Studios. “With its abundant cultural richness and distinctive charm, the area is an exceptionally fitting location for a best-in-class, fully integrated film & television studio campus.”

Wainwright continued, “We are proud and honored to have the support of the City of Los Angeles and Mayor Karen Bass, whose dedication ensures that Los Angeles retains its position as the epicenter of the entertainment industry.”

East End Studios Mission Campus will be a 245,000-square-foot Class-A facility featuring five stages ranging in size from 14,000 square feet to 35,000 square feet. The campus is expected to create 1500 construction jobs in the city of Los Angeles and upon completion, will create 750 permanent jobs.

LA Mayor Karen Bass said, “Right now, our legacy industry needs support and this campus is the type of initiative that will help save jobs and help spur production in our area. From the hundreds and hundreds of jobs created at the campus to the many writers, set and costume designers, electricians, florists and so many surrounding local businesses – we are creating jobs and energizing our signature economy.”

Pat Swinney Kaufman may have enough ceremonial shovels in her office to start her own small construction firm. As commissioner of the New York City Mayor’s office of Media and Entertainment, based above the Ed Sullivan Theater in Manhattan, Kaufman helped break ground on a number of new studios and soundstages to accommodate the TV and movie producers shooting in the region.

Next Year, Sunset Pier 94 Studios will open on the West Side of Manhattan, adding six state-of-the-art soundstages blocks away from Midtown and the Theater District. In Queens, a new facility called Wildflower, backed in part by Robert De Niro, will add 91,000 square feet of stage space. And East End Studios, which has four soundstage facilities in California, is scheduled to open a new space in Sunnyside, Queens, in 2025.

“We are the creative and artistic capital of this country and we are very committed to building on that,” Kaufman said. “We want it to flourish.”

The aggressive studio expansions signal New York’s continued determination to double down on the film business and compete with its main rival, Los Angeles, for a bigger slice of the Hollywood pie – even as the industry is struggling to rebound nationwide.

last year, the New York state legislature boosted the annual film tax credit allocation to $700 million, up from $420 million. it also raised the credit on qualified expenses (including actors’ salaries) to 30% (with an extra 10% for upstate productions) and accelerated the timeline for claiming credits – a big issue for producers.

the changes were intended to help the state better compete with other states such as neighboring New Jersey, which also is adding studio space and pulling work away from New York.

New York’s film industry grew rapidly after the state enacted its first credit in 2004. Production jobs grew at an average rate of 3% annually over the next 15 years – outpacing New York City’s overall job growth in that time and adding about 35,000 jobs, according to the mayor’s office.

But the dual strikes of the writers and actors last year brought production to a standstill at a time when the region was still recovering from the pandemic.

As in Los Angeles, work has been slow to return since the new labor deals were signed in the fall, creating some jitters in an industry that accounts for 6.5% of New York’s economy.

In a sign of the slowdown, Brooklyn-based Broadway Stages, which has been in operation since 1983, was at 50% capacity in April, the lowest level in memory according to its communications director, Barbara Leatherwood.

“Before the pandemic, everybody was just packed,” said Leatherwood in a recent interview. “We were packed. We were at 95%.”

And more studio space is coming online. Great Point Studios, which also has locations in Atlanta, Buffalo and New Jersey, recently completed a facility in Yonkers, located 15 miles north of Midtown Manhattan.

Kaufman acknowledged that production work isn’t back to the level it was before the strikes. “We’re watching with bated breath,” she said.

She pointed out that the number of permits to shoot in New York has grown steadily since the Writers Guild of America strike ended last September. The commissioner’s office counted 212 projects shooting in the city during April, up from 187 for the same month in 2023.

Still, the additional new studio space comes at a time when there is concern that television and movie production sis at an inflection point in the streaming age.

While broadcast and cable TV series once provided a reliable number of episodes each season, from 13 to 22, season orders from streamers typically are shorter. One long-running New York-based hit, CBS’ “Blue Bloods,” will end this year after 14 seasons. Broadcast networks that once stocked up on such shows now rely more on reality competitions, game shows and live sports to fill their schedules.

As media companies such as Paramount Global and Warner Bros. Discovery face headwinds, further consolidation seems likely. After a spending spree on content in recent years, media executives are talking about making fewer films and shows in an effort to reduce costs and improve profitability.

Amid the industry challenges, some veteran soundstage owners question whether there will be enough production for the new studio space to thrive long-term.

Doug Steiner, who opened Steiner Studios at the Brooklyn Navy Yard in 1999 and recently broke ground on a 15-acre location in the Sunset Park neighborhood in Brooklyn, believes some of the newcomers will face challenges. Steiner’s soundstages provided homes for Amazon’s hit “The Marvelous Mrs. Maisel” as well as movies including “The Joker.”

“There is an explosion of proposed new studios both nationally and globally,” Steiner said. “People who have never done it have no idea what they are getting into, and it’ll be a disaster for most of them.”

The new studio entrants say their expansion is based on an increased demand for larger spaces that can handle the more elaborate and expensive productions.

“What we saw in 2019 is an accurate shortage of modern infrastructure for how films are made today,” said Robert Halmi, founder of Great Point Studios. “The shows that are being made for the streamers are much bigger than the shows that were being made for broadcast television 10 years ago.”

Andrew Kimball, president of the New York City Economic Development Corporation, believes employment levels in the film and television business will be back to pre-pandemic levels within six months; the city pegs that figure at 185,000 jobs.

“The forms of content creation are evolving as technology changes,” Kimball said. “Having the talent and stages is absolutely fundamental to the industry, and we remain very bullish even with the changes.”

The corporation partnered with Vornado Realty Trust, Hudson Pacific Properties and Blackstone to develop Sunset Pier 94 Studios, the first facility built in Manhattan specifically for film and TV production. The site, with six soundstages totaling 85,000 square feet, is set to open next year.

Halmi and others attribute the slow recovery to uncertainty surrounding the Alliance of Motion Pictures and Television Production’s talks with the International Alliance of Theatrical Stage Employees, which represents film and TV crew members. Some productions have decided to set up in Canada, rather than risk a holdup from another possible job action.

“i think we’re just in a place where the industry is right-sizing itself,” Leatherwood said. “The thirst for good entertainment that we produce in the United States has not gone away.”

One factor that soundstage owners believe they have in their favor is the support of New York City Mayor Eric Adams and Gov. Kathy Hochul, who backed the 66% increase in the state tax credit last year even as some critics have questioned its effectiveness.

“The New York credit is completely competitive in all respects,” Steiner said.

Production stages are at the core of the state’s tax credit. While Hollywood-based film and TV studios own their lots, most of the New York production spaces are independently owned businesses. If a production wants to benefit from the tax credit, it must use one of the stages recognized by the state.

“You don’t get the incentive if you come here and spend three weeks shooting outside,” said Kaufman, who helped develop the first tax credit when she was executive director of the state’s film office. “You must shoot in one of our soundstages. In our opinion this is how we build an industry.”

It took decades for New York to establish itself as the largest production hub outside of Los Angeles. While feature filmmakers always sought out New York when needed for a backdrop, attracting cost-conscious TV series wasn’t easy.

New York City was a mecca for TV during the industry’s golden age of the 1950s. Playwrights and theater-trained acting talent were based in the city and provided a steady flow of talent for live original plays, which made up much of prime-time programming in those early years.

Once Hollywood became involved in TV, production headed west. Studios such as Warner Bros. and Universal had expansive lots and crews with experience on feature films, providing the scale and convenience needed for TV to grow.

Filmed TV series dwindled in New York in the 1960s and ’70s, as the city and its residents were not always cooperative. The streets became more unruly and crime-ridden.

ABC’s gritty late-1960s cop series “N.Y.P.D.” used members of the Hell’s Angels motorcycle gang to provide security around its East Village studio space. Producers found that doing business in Los Angeles was simply more trouble-free.

As New York’s economy rebounded in the 1980s and ’90s, TV production started to trickle back in. More stars and filmmakers with roots on the East Coast wanted to work near home, which has remained the key reason for filming in the city. (When inveterate New York actor Tony Randall did the NBC sitcom “Love, Sidney” in the early 1980s, his contract guaranteed the show would be produced in the city.)

“(Filming in New York) will always be a bottom-line decision,” Steiner said. “But there is some very sought-after talent that lives here and that will only work on `a project if it’s here.”

Producer Dick Wolf is the trailblazer for the current New York production scene. He was insistent about making New York his base for “Law & Order” when it launched in 1990.

Wolf even negotiated his own deal with craft unions so he could keep “Law & Order” in the city when under pressure from NBC to cut the show’s budget in the early 1990s.

When HBO became a major producer of original series in the late ’90s, the premium cable channel generated New York-based hits such as “Sex and the City” and “The Sopranos.” The shows became cultural touchstones that enhanced the city’s image as a place to film. (“And Just Like That…,” the “Sex and the City” sequel on Max, now shoots in New York.)

But the enactment of the state’s film production tax credit in 2004 was the true catalyst for production growth. The credit was designed to allay the economic impact of the Sept. 11, 2001, terrorist attack on New York, which jolted the entire city’s economy and led to a slump in the number of motion picture and video production jobs.

Prolific producers who set up shop in New York tend to stay put. Wolf’s three “Law & Order” shows and three FBI-themed series for CBS are in production at Broadway Stages.

Robert and Michelle King made their long-running CBS hit “The Good Wife” and its sequel “The Good Fight” in New York. Their newest series, “Elsbeth,” the quirky police-legal drama recently renewed by CBS, is New York-based, as is the fourth and final season of the Kings’ Paramount+ horror series, “Evil.”

The city wants to remove any barriers to production coming in. It has a free “Made in NY” training program for production assistants, which has seen more than 1,200 participants since its inception.

“We’re working hard to say ahead of the game and make sure we’ve got enough workforce here,” Kaufman said.

New York City Mayor Eric Adams, film commissioner Pat Kaufman, labor leaders and film and TV partners broke ground today on a East End Studios‘ new film and TV complex in Sunnyside, Queens that will create nearly 1,000 construction jobs and roughly 750 permanent, full-time jobs.

It’s the second new site rising as the city recently broke ground on Sunset Pier 94 Studios. That 266,000 square-foot project backed by Vornado, Hudson Pacific and Blackstone includes six soundstages. The two projects are kicking off the return of the city’s film and TV production industry after the actors’ and writers’ strikes ended.

“Thanks to SAG-AFTRA and the Writers Guild of America securing fair deals for their workers, film and TV production is back in New York City — helping more than 185,000 New Yorkers get back to work,” said Adams. “New York City is back, but our work is not done until every New Yorker has a pathway to success. We’re thrilled to see East End Studios bringing…jobs to the city and joining the ecosystem of successful local production spaces that are continuing to elevate Western Queens as a worthy rival of Hollywood.”

The new 340,000-square-foot campus will include three full-service, ground-floor soundstages totaling 75,000 square feet and a 15,000-square-foot rooftop flex-stage that offers sweeping views of the Queens, Brooklyn, and Manhattan skylines. The stages are supported by 125,000 square feet of production, office, and mill spaces. The Sunnyside facility will be fully integrated with extended reality and virtual reality infrastructure, including the capability to shoot on a virtual stage and high-speed fiber connectivity with scalable production-level internet.

The project — with a total cost of approximately $275 million — is expected to be completed by the first quarter of 2025.

Commissioner Kaufman, the head of the Mayor’s Office of Media and Entertainment, called the groundbreaking “not only an indication of this city’s commitment to the future of our world-famous film and TV industry, but also a moment to celebrate the historic resolution of the 118-day SAG-AFTRA strike.”

“Combined with the recent expansion of the New York state film tax credit, today’s groundbreaking will serve as an economic driver for local businesses, create jobs for New Yorkers, and further our city’s reputation as a global creative capital,” she said. New York’s latest budget includes significant sweeteners for film and TV production through 2034 — but it was passed in May the day after the WGA went on strike and most production was halted.

Film and TV production is a big driver of New York City’s economy, supporting 185,000 jobs, generating over $18 billion in wages, and contributing more than $82 billion in economic impact, according to MOME’s latest study. It was hit hard by Covid but was recovering before the dual strikes.

Jonathon Yormak, founding partner, East End Studios, which has campuses in LA and Glendale, said he’s “exceptionally proud to participate in the city’s ever-growing place in the production landscape.”

East End Capital’s largest L.A. area studio development to date faces a key hurdle on November 9, when it goes before the Glendale Design Review Board for consideration.

The project at 5426 San Fernando Road, planned just south of the SR-134 Freeway, calls for 406,000 square feet of new construction on a roughly 10-acre site, including 10 soundstages, approximately 165,000 square feet of production offices and other ancillary spaces, and a 533-car garage. Those uses would replace more than 120,000 square feet of existing improvements consisting of warehouses, surface parking, and loading areas.

The design by Gensler, revealed in an environmental study published earlier this year, would place offices at the perimeter of the site in a new six-story structure fronting San Fernando Road. The contemporary structure would include terrace decks on its upper levels to provide open space for occupants.

The environmental study stated that the forecasted buildout for the San Fernando studio campus would take 18 months, with completion expected in the second quarter of 2025. That schedule assumed a groundbreaking date in the fourth quarter of 2023.

While the San Fernando campus is one of the larger new production campuses in the works for Los Angeles County – it is not even the top dog in East End’s portfolio. In the Arts District, the New York-based firm has proposed an even bigger development which would include 16 soundstages and nearly 300,000 square feet of offices at Alameda and 6th Streets.

Other East End projects include a smaller 72,000-square-foot studio complex now under construction at 1239 S. Glendale Avenue, as well as a 236,000-square-foot development which would rise just south of the Sixth Street Viaduct in Boyle Heights.

Queens remains the frontrunner in New York City’s burgeoning film production industry.

East End Studios has secured at $193M construction loan for the development of the latest film production facility in the borough, a 275K SF studio known as Sunnyside Campus, which is located in the Queens neighborhood of the same name.

Canyon Partners Real Estate and JPMorgan co-originated the senior loan for the Class A facility, which will feature three ground-floor sound stages, each with a 75K SF floorplan, 37-foot clearance heights, with a 15K SF rooftop flex-stage with 26-foot clear heights.

The ground-up studio development also will include 125K SF of production and office space and eight loading bays for full-sized trucks.

Located on an entire city block between Queens Boulevard and the Long Island Expressway, Sunnyside Campus is scheduled to be completed in Q1 2025.

The Empire State recently expanded it Film Tax Credit to incentivize TV productions to relocate to NYC. According to Pat Swinney Kaufman, commissioner of the Mayor’s Office of Media and Entertainment, the television industry in NYC accounts for 6.5% of the metro’s GDP.

Over in Astoria, in February, city officials, including Mayor Eric Adams and Queens Borough President Donavan Richards, gathered next door to the historic Steinway & Sons piano factory on 19^th Street to celebrate the topping off of the new Wildflower Studios production studio backed by Robert De Niro and his son, Raphael.

The $600M Astoria studio village will feature 11 sound stages and additional production space. Its completion this year will mark the arrival of the third major film production studio in the borough, joining Silvercup Studios in Long Island City—built at the site of the famous local bread bakery—and Kaufman Astoria Studios, the original home in 1920 of Paramount Pictures, in Astoria.

In September 2020, Hackman Capital Partners and Square Mile Capital purchased Silvercup Studios; in November 2021, the partnership acquired Kaufman Astoria Studios. Steiner Studios operates facilities in the Brooklyn Navy Yard and Sunset Park.

Wildflower, which De Niro helped finance, acquired the site from Steinway & Sons in February 2020, cutting a deal that will allow the piano factory to remain an occupant in about half of the bulding.

The studio village at Wildflower will include a carpentry studio, dressing rooms, offices and a commissary, according to a report in the Queens Eagle. The project also has committed to build a park on the Luyster Creek waterfront off the East River across from Riker’s Island.

The project became mired in a labor dispute when unions rallied outside the construction site last year, claiming that only 20% of the construction workers were union labor. Following the rally, union labor was increased to 50% on the construction site and Wildflower committed to employ more than 1,000 union employees when the studio is fully operational.

None of the studios mentioned above will be fully operational until the actors and writers’ unions settle their strike with TV and motion picture film production studios, which the governor of California reportedly is trying to mediate.

Project plans and a new draft environmental study offer a look at East End Capital’s latest L.A. area studio development at 5426 San Fernando Road in the City of Glendale.

The proposed East End Studios San Fernando Campus, which was first reported on last year, would rise from a roughly nine-acre property located just south of the 134 freeway, replacing a series of warehouses, surface parking, and loading areas. In their place, plans call for the construction of three new buildings featuring 10 soundstages, approximately 165,000 square feet of offices, and various ancillary features. Likewise, parking for more than 530 vehicles would be provided through a new structure and surface stalls scattered around the site.

Gensler is designing the San Fernando Campus, which would place the new production office space in a new six-story structure facing the western property line. Renderings show a series of terrace decks on the office building, providing open space for tenants, as well as perimeter landscaping.

According to the project’s draft environmental study, East End Capital expects to complete construction of the new studio complex in a single 18-month face, with full build-out expected in the second quarter of 2025. That schedule assumes a groundbreaking date in the fourth quarter of 2023.

Despite its scale, with more than 400,000 square feet of new construction proposed, the San Fernando campus is only the second largest facility which East End Capital has in the works for Los Angeles. In the Arts District, the New York-based firm has proposed a new project which would include 16 soundstages and nearly 300,000 square feet of offices at Alameda and 6th Streets.

Other East End projects include a smaller 72,000-square-foot studio complex now under construction at 1239 S. Glendale Avenue, as well as a 236,000-square-foot development which would rise just south of the Sixth Street Viaduct in Boyle Heights.

A private dining club that sold $14 million in memberships through NFTs early this year has leased its first space.

The Flyfish Club has landed in 11,000 square feet on three levels at 141 E. Houston St., a new office building that was developed on the site of the former Sunshine Theater by East End Capital, Grandview Partners and KPG Funds.

Flyfish was founded by the VCR Group’s restaurateur David Rodolitz, entrepreneur Gary Vaynerchuk, celebrity chef Josh Capon and chef Conor Hanlon — with membership through non-fungible tokens that were purchased on the blockchain and are now being resold on Opensea.io.

Those resales bring in another 10% fee, and are providing capital for the buildout and other private events for members.

Rodolitz said in a statement, “We chose this location due to the dynamic neighborhood, the beauty of the building, and the shared vision with ownership of the future of members clubs.”

According to VCR’s website, the Flyfish Club will have a “bustling” cocktail lounge, an upstairs restaurant and outdoor space.

An “intimate” omakase room will additionally have a menu being created by Masa Ito, a partner with VCR Group in the Ito restaurant, and entered through a separate token. Here, members are allowed just one guest, which is the same for regular members in the cocktail lounge. But diners can bring a number of guests depending on their table size and reservation.

Last year, Rodolitz told Nation’s Restaurant News that he held back some of the tokens to ensure they weren’t all snapped up by overseas collectors for investment, but who wouldn’t attend their events or restaurant, which is expected to open at the end of 2023.

Diners will have to pay for their meal with US dollars and is another reason the founders want active members.

“I have another set of tokens that, if need be I could sell, I could gift or do collaborations,” Rodolitz told NRN. “I could give to developer partners … I can make sure that people who want to enjoy it and utilize it will be there.”

According to Rodolitz, so far they have sold 1,294 regular memberships with the club reserving 1,423 and 318 omakase memberships with 67 reserved by the club. Tokens started at 2.5 Ethereum ($8,400 in January) and are now being listed for 3.5 Ethereum, or $5,390, to as much as 150 Ethereum, or $190,170 — and provide entry to the restaurant and cocktail lounge.

The Omakase token was first offered for 4.25 Ethereum ($14,300 in January) and now is offered for as much as 22.8571 Ethereum, nearly $29,000 — and provides access to that exclusive space.

Tokens can also be “leased” by the month, providing income to members.

Both the Flyfish Club and the building were represented by Richard Skulnik and Lindsay Zegans of RIPCO Real Estate. Sources said the asking rent was $225 per foot on the ground and less for the lower levels.

“We built 141 East Houston to attract visionaries like Gary Vaynerchuk and David Rodolitz,” said Jonathon Yormak, founder and managing principal of East End Capital. “Flyfish Club, much like our anchor office tenant, Solana, is a leader in the blockchain ecosystem and the decision to open the inaugural club at 141 East Houston speaks volumes.”

Designed by architectural firm Roger Ferris + Partners, the property’s four remaining office floors have an asking rent of $115 per square foot.

East End Capital is going Hollywood.

The New York-based company has filed plans to add to its budding portfolio of content-creation space with a new studio in Glendale in Los Angeles’ San Fernando Valley. Urbanize first reported the plans, citing a study published by the City of Glendale for a project with 10 new soundstages, three flex spaces, offices, other support space and a four-level garage.

The future San Fernando Soundstage Campus will replace 10 warehouses and surface lots at 5426 San Fernando Road and 753 West California Avenue with four new buildings containing more than 406,000 square feet on 9 acres designed by Relativity Architects.

The new plan comes shortly after East End Capital filed plans to build a 720,400-square-foot studio development with 16 soundstages and Class A office space in Downtown L.A.’s Arts District. East End Capital also has plans for 72,000 square feet in two soundstages, as well as attached office space, at 1239 South Glendale Avenue.

Glendale is next to Burbank, which is perhaps the top media market in the country with companies like Disney, Netflix, and Warner Bros. For example, last year, Brookfield Properties acquired the headquarters for DreamWorks Animation in Glendale for $327 million.

Savills released a report this month showing occupancy for studios and soundstages remains well above 90 percent in L.A., and streaming services have budgeted an estimated total global content spending of around $100 billion, including $33 billion earmarked by Disney, and $18 billion each from Netflix and Warner Bros.

With movie and television production surging, a warehouse property near the newly famous 6th Street bridge in downtown Los Angeles is set to be turned into an $800-million studio to serve the entertainment industry.

East End Studios will submit an application to the city Monday to build a studio on 15 acres at 6th and Alameda streets where streaming services and other entertainment creators could make TV shows and movies.

With 16 soundstages, East End Studios’ ADLA Campus would be one of the larger studio projects in the pipeline for Los Angeles County, where several developers are rushing to add new facilities to meet demand.

Existing soundstages in the county have been almost fully rented for years, which can make it hard for new productions to find places to work, said Paul Audley, president of FilmLA, the nonprofit that handles film permits in the region.

“We’ve seen streaming growing at an average rate of 35% a year,” he said. “Even if that backs off, which some people are now predicting, we still don’t have enough stage space to deal with that.”

In addition to the soundstages, ADLA Campus would include four office buildings with a combined total of nearly 300,000 square feet of offices and more than 100,000 square feet of production support space. All the facilities would be for rent, perhaps to a single tenant such as a large streaming service.

With as many as 1,000 people working there on a given day, the studio could inject some street life into a part of the Arts District that retains much of its historical use as an industrial center, said Shep Wainwright, managing partner of Irvine-based East End Studios. The ADLA Campus would replace a pair of produce distribution warehouses and surface parking.

The design calls for office buildings and landscaping to face the sidewalk, a more publicly open style than is found in many historic studios that are isolated from their surrounding neighborhoods.

Past studio construction often called for high concrete walls creating “fortresses,” Wainwright said, that revealed little to outsiders about what was going on inside.

“We’re saying that we don’t have to hide, it’s OK to know this is a studio,” he said. “We’re trying to engage with the street in a way that’s more pleasing to the neighborhood.”

Plans call for a public open space on Mill Street, the eastern boundary of the studio. Getting into the studio would still require passing through security checks, but Wainwright hopes that people working there will find it appealing to walk outside and head to lunch at neighborhood restaurants.

The design by London-based architecture firm Grimshaw is intended to stack the elements commonly found in a suburban-style studio campus into an urban setting.

Grimshaw architect Andrew Byrne described the style as “campus on top,” in which people could collaborate and move about on landscaped outdoor terraces above while vehicles move below between soundstages and production basecamps where trucks, equipment and actors’ trailers are placed. Most of the parking would be underground.

The developers hope to secure city approval for the ADLA Campus within two years and complete it two years after that. It’s the fifth and largest entertainment development for East End Studios, which has a project in New York and four others in the Los Angeles area, including Glendale.

One of them is near the ADLA Campus across the recently opened 6th Street Viaduct, a $588-million span connecting the Arts District to the historic Eastside and Whittier Boulevard. At Jesse Street and Mission Road, East End Studios plans to build a facility with five soundstages.

The studio projects are part of a wave of development that includes nearby downtown competitor 8th & Alameda Studios on the site of the current Los Angeles Times printing plant. That planned project would eventually have 17 soundstages on 26 acres.

Surging interest in studio properties, fueled in part by the growth of streaming media, has prompted new projects across Los Angeles. At the heart of all these new developments is a need for studios to keep up with a rapidly changing industry that is on the precipice of big changes in the way entertainment is made.

“While we do have, certainly from a quantity perspective, the largest number of stages of any production hub, many of the soundstages that we do have are legacy soundstages — they’re older, they may not have the technology necessary to cater to today’s customer demand and the changing and evolving nature of the industry,” Hackman Capital Partners Senior Vice President Zach Sokoloff said at Bisnow’s Los Angeles Studios and Entertainment Real Estate event earlier this week.

Hackman Capital is overseeing a $1.25B modernization and expansion of the 25-acre Television City campus formerly owned by CBS.

Sokoloff and other commercial real estate professionals speaking at the event cautioned that with other states like Georgia actively trying to capture film production and building new infrastructure for the film and television industry, building new production facilities is a key to making sure that LA continues to be the center of this industry.

An April 2022 report from FilmLA, the film office for the city and county of Los Angeles, found 5.4M SF of dedicated stage space in the county, far ahead of the UK’s 4.7M SF; Ontario, Canada’s 3.3M SF or Georgia’s 2M SF.

“What we’re finding is that the number of days out in the real world versus the number of days in the studios is becoming inverted now and so the actual box has enough bells and whistles where people can spend less money going out into the real world,” East End Capital Managing Partner Shep Wainwright said.

One of East End Capital’s projects in Los Angeles is the site at Sixth and Alameda streets, which it purchased for $240M with plans to build as many as 17 soundstages and up to 400K SF of office and support space.

LED walls or LED sets, which create vivid backdrops that look convincingly like an on-location shoot, are among the technological advancements allowing soundstages to be used more broadly. While the technology is still growing in prominence, speakers at the event agreed that ensuring studios have flexible space to accommodate this and other tech innovations is key.

Increased power capabilities, high ceilings and a mill that can produce sets on-site for shoots that aren’t yet utilizing LED walls are other features that help expand the flexibility of a site and what’s able to be filmed there.

Ancillary uses on-site at these properties are also key, according to panelists.

Though studios as a property type are unique, like offices, they are a place where people go to work long hours. With that in mind, many developing these spaces agreed that building an ecosystem with spaces to eat, outdoor areas for breaks and plentiful parking was another important consideration for the next wave of entertainment real estate.

“I think the entertainment industry was maybe a little bit slow to catch up on that, because people had just lived with certain environments that other people have been kind of outpacing for years,” Wainwright said.

Amenities on studio properties are more geared to efficiency and production, Relativity Architects principal Tima Bell said. Even the offices are not just standard offices like one might find in a law firm or other business.

“A typical [production] office is not the same as my architecture offices are,” Bell said. “An office that’s on a production site has to be close to the stages, and has to have some sense of hierarchy, because there are a lot of egos in this business, right?”

East End Capital has spent $240 million on a 15-acre site in the Arts District of Downtown Los Angeles, where it’s planning to build a studio complex, The Real Deal has learned.

The New York-based firm bought two warehouses at 1338 East 6th Street and 1321 Wholesale Street, according to public property records filed with Los Angeles County.

Dell Technologies Inc. founder Michael Dell’s MSD Capital joined with private industrial investment firm Access Industries Management and an entity linked to Irvine-based developer SunCal to sell the property, records show.

A limited liability company linked to Oxford Properties Group provided a $160 million loan in connection with the purchase. Terms of the lease were not disclosed.

East End is planning to build up to 17 soundstages on the site, as well as up to 400,000 square feet of ancillary office and support space.

Last month, East End said the purchase was made at an undisclosed price through its partnership with investment firm King Street, Canadian pension fund Alberta Investment Management Corporation, and an unnamed sovereign wealth fund. In October, the groups announced plans to collectively buy and develop up to 750,000 square feet of production space across L.A.

The new facility is located about a mile from another one of East End’s planned studios. At 2233 Jesse Street, the firm is converting a cold storage facility into a 237,000-square-foot complex with four soundstages.

Though the new Arts District studio will operate independently, co-tenancy and shared parking may be available across both complexes, East End’s Jonathon Yormak told TRD last month.

East End has three other studio projects under development, though this new one will by far be the largest.

In Glendale, the company is adding two soundstages to an existing production studio at 1239 South Glendale Avenue, and building a 410,000-square-foot complex at 5426 San Fernando Road.

The Glendale Avenue project is set to be finished in the next 18 months, while the San Fernando Road development is still going through permitting stages.

Year-to-date through April, Miami’s office market has seen $350 million in investment volume, with the average price reaching $367 per square foot, according to CommercialEdge data.

In the first quarter of the year, the metro’s office investment volume added up to merely $209 million, but an acceleration in April saw ten properties traded, comprising a combined of 425,000 square feet. In the first four months of 2021, office product worth $474 million had changed hands in Miami, at an average price of $310 per square foot.

Across gateway cities, Chicago ($202 per square foot), Boston ($266 per square foot) and Washington, D.C. ($343 per square foot) recorded the lowest average prices through the first four month of 2022, while Manhattan ($949 per square foot), Seattle (538 per square foot) and the Bay Area ($515 per square foot) were the priciest.

The largest sale that month was the trade of 555 Washington, a 68,000-square-foot, five-story building in Miami Beach. Boston-based The Davis Cos. picked up the asset for $52.3 million, or $768.5 per square foot—more than double the metro’s average up to that point in 2022. The seller, a partnership of BentallGreenOak and East End Capital, picked up the property in 2018, for $38 million, or $558.8 per square foot.

The trade of the 50Forty on 7th, a medical and professional office building, marked another notable sale in April for the metro. Valoro Capital Partners paid $18 million—or $217.5 per square foot—for the nearly 83,000-square-foot asset to Northeast Capital Group. The seller purchased the property in early 2021, for $14.5 million, or $175.2 per square foot.

A new, glass-encased boutique office and retail project in the Bowery has landed an anchor tenant.

San Francisco-based Solana Labs, has agreed to lease the top four floors of 141 East Houston Street, a ground-up project by East End Capital, Grandview Partners and KPG Funds. The firms acquired the site by buying the Sunshine Theater in 2017 for $31.5 million.

In announcing the lease, the firms identified the tenant only as “a global leader in the blockchain space,” but it was revealed to The Real Deal by other industry sources.

“We built 141 East Houston with the vision of attracting leading companies in tech forward industries,” said Jonathon Yormak, East End’s founder and managing principal.

A spokesperson for Solana Labs said it was sold on the combination of the building and the location, where Soho, the East Village and the Lower East Side converge.

“The building is the same high-quality new construction you see in other parts of the city, but located in a vibrant neighborhood with good public transit accessibility,” the spokesperson said. “Because this office space will, in part, be used to incubate teams building on the Solana blockchain, we wanted a location that gave teams a quintessential New York experience, which being in The Bowery provides.”

Good bike lane infrastructure was also a factor, based on employee feedback. Solana leases a floor in EmpireDAO, a web3 co-working space at 190 Bowery.

Besides the sixth through ninth floors at the 63,000-square-foot, Class A office project designed by Roger Ferris + Partners, Solana will have the 1,935 square-foot rooftop patio. Its sixth floor also has a private, L-shaped terrace. Solana is expected to take occupancy before the end of this year after the space is built out by the owners.

Making its first real estate bet in South Florida, Brick & Timber Collective bought the Wynwood Annex office building in Miami for $49 million.

The San Francisco-based commercial real estate firm closed on the 65,000-square-foot building at 215 Northwest 24th Street in an off-market deal, according to a press release.

Tony Arellano and Devlin Marinoff with DWNTWN Realty Advisors represented both sides of the deal.

Arellano and David Lerner, also with DWNTWN, handled marketing and lease-up efforts for Wynwood Annex, leasing more than 60,000 square feet of rentable office space within six months, the release states. The building is 100 percent occupied with several new-to-market tenants such as venture capital firms Founders Fund and Atomic and Field Trip Health, a psychedelic therapy company.

The successful lease-up attracted unsolicited offers from potential buyers from all over the country that led to the deal with Brick & Timber, the release states.

Out-of-state tech firms are leading a migration of new tenants to Wynwood, where a slate of mixed-use office projects have opened or are scheduled for completion later this year.

Blockchain.com, one of the largest cryptocurrency exchanges, recently signed a lease to take the top two floors at Cube Wynwd at 222 Northwest 24th Street. The 22,000-square-foot space will serve as the company’s Miami headquarters. Last year, a joint venture between Tricera Capital and Alex Karakhanian’s Lndmrk Development paid $28 million for the new Class A Miami office building. Redsky Capital developed Cube Wynwd.

Biotech company Veru signed an eight-year lease for its 12,155-square-foot global headquarters at The Gateway at Wynwood, a recently completed mixed-use project at 2916 North Miami Avenue. New York-based R&B Realty developed and owns the 12-story building.

East End Capital is building a second studio complex in Glendale, continuing its push into the hot market for soundstage space across the Los Angeles area.

The New York-based firm is planning to develop about 410,000 square feet of soundstage and studio space, according to documents filed with the city of Glendale earlier this month.

East End Capital’s Jonathon Yormak confirmed the plans were for a second studio in Glendale, where the firm’s studio arm, East End Studios, already has a film studio campus at 1239 South Glendale Avenue.

East End bought two sites for the complex it plans to develop on the 5400 block San Fernando Road for $91 million from Vince Dundee in August, records show. The company obtained a $70 million loan for the property from a limited liability company linked to New York-based Oxford Properties.

All existing buildings on the site — a range of smaller industrial facilities built from 1946 to 1977 — will be demolished. East End will include 538 parking spaces on the site.

The development plans come on the heels of East End’s recent deal with King Street, Canadian pension fund Alberta Investment Management Corporation and an unnamed sovereign wealth fund that aims to eventually acquire and develop up to 750,000 square feet of studio space across Los Angeles.

Together, the entities will fund the two projects in Glendale, as well as a third in Downtown Los Angeles, where East End has filed plans to convert an existing cold storage facility at 2233 Jesse Street into a 237,000-square-foot facility.

East End Capital has acquired an industrial warehouse in the Sunnyside neighborhood of Queens for $41.7 million, Commercial Observer has learned.

Empire Office sold the 140,000-square-foot property, according to property records, with Meridian Capital Group‘s David Schechtman, Lipa Lieberman and Abie Kassin leading the deal.

“After four years of careful consideration, our clients have decided to sell their surplus corporate real estate as their business thrives nationwide,” Schechtman said. “This opened the door to East End’s affiliate and partners Jonathan Yormak, David Peretz and Shep Wainright to acquire a rare vacant site of this size ripe for redevelopment.”

In conjunction with the sale, Meridian Capital Group arranged $34 million in acquisition financing on behalf of the buyer. Calmwater Capital provided the loan, according to a source familiar with the deal. The floating rate, non-recourse loan features economic terms and the flexibility needed for East End Capital to implement its business plan. The loan was negotiated by Meridian’s Ronnie Levine and Ben Jacobs, according to the press release.

Located at 48-02 48th Avenue, the property is situated on over 2.53 acres in Sunnyside and was delivered 100 percent vacant. The three-story industrial complex features 143,600 gross square feet, plus a 10,500-square-foot parking lot. Over the last three years, Empire Office spent over $2 million on property-wide improvements that include a partially new roof, upgraded electrical and the installation of two new loading docks.

Officials at Empire Office and Calmwater Capital did not immediately respond to a request for comment. East End Capital declined to comment.

A presentation from the December 9 meeting of the Glendale Design Review Board offers a first look at plans for new soundstages and office space from East End Capital.

Last year, the New York-based developer reportedly purchased a 2.2-acre site located at 1239 South Glendale Avenue for $20 million last year, and converted two buildings into soundstages named East End Studios.

Plans now being reviewed by Glendale city officials would retool those offerings, doing away with those offerings, razing the existing structures to clear the way for a new three-story edifice featuring two soundstages at street-level and approximately 36,000 square feet of office space above. Plans also call for a rooftop deck and parking for 113 vehicles in a surface lot at the rear of the property.

Relativity Architects is designing East End Studios concrete, fiber cement panels, blackened steel mullions, and wood-finish cement louvers.

The proposal for East End Studios comes at a time where Los Angeles-area soundstages are in short supply, as, as streaming services like Netflix and Hulu gobble up real estate in an effort to produce more content. Companies such as Hackman Capital Partners have invested heavily in studios, paying eye-popping prices for properties such Television City, which is slated to add new space under a $1.25-billion expansion plan.

The Glendale project is not East End Capital’s first entry into the market. Just east of the L.A. River in Boyle Heights, the developer is planning to convert a cold storage facility into a larger office and studio complex.

Experts agree there is one asset type, in addition to industrial, which investors are keen on now: studios.

As streaming services are creating an increasing amount of content, real estate developers are finding ways to keep up with the surge in demand for more production space.

“The need for content is like no time before,” said Craig Peters, an executive vice president at CBRE Group Inc. “All of these different distribution channels that didn’t exist five years ago need content and need a lot of content.”

And that increase in demand has made developers and property owners interested in the asset type as well.

“It was one of those Covid-proof or even Covid-driven businesses,” said Nicole Mihalka, a managing director at Jones Lang LaSalle Inc. and the chairwoman of the Hollywood Chamber of Commerce.

Mihalka said there has always been interest in stage space in L.A., but one thing that has changed is that more institutional capital is now interested in soundstages.
She said this started when Blackstone Property Partners acquired a 49% stake in Brentwood-based Hudson Pacific Properties Inc.’s Hollywood portfolio.

Another major change, experts agree, is stages being leased for longer periods of time. Traditionally, productions would lease for a few months at a time, but now they are doing so for longer time periods.

“Instead of these six- to 12-month leases that productions typically sign for a lot of the real prime, core stage properties, a lot of these streamers are making long-term commitments,” said Sam Glendon, a first vice president at CBRE.
Some are signing multiyear leases.

Green light

All that interest in studios has led to a plethora of studio project announcements in recent years.

When it comes to existing properties, Culver City-based Hackman Capital Partners and affiliate MBS Group are planning a $1.25 billion investment in Television City, which could include up to 15 soundstages. Hudson Pacific and Blackstone, meanwhile, are roughly doubling the size of the Sunset Gower Studios in Hollywood.

Developers have also announced also announced plans to build new studio projects in L.A. County as well.  East End Capital has filed plans for a studio at 2233 Jesse St. in Boyle Heights with four soundstages, office space and storage. West Hollywood-based Bardas Investment Group and Bain Capital are planning Echelon Studios, a $450 million project at a former Sears store in Hollywood. And Atlas Capital Group is planning the $650 million 8th and Alameda Studios with 17 soundstages at the Los Angeles Times downtown printing plant. There are many other plans in the works as well.

“They see that this is a timeless type of real estate. Soundstages have been around for 100 years and will continue to be a product that is desirable,” Mihalka said of why there are plans for so many stages now.

Location scouting

But experts caution that not all projects being discussed now will come to fruition.
“Nearly daily there’s an announcement on some new studio project,” Peters said. “Some of those that are being announced may never happen.”

Soundstages and studio campuses, experts agree, can be difficult to build.
“First and foremost, you need quite a bit of land,” Mihalka said. “They are usually looking for much bigger sites. Critical masses of stages is important.”

And excess land for trucks, parking and circulation is also important.

She added that the size requirements as well as the cost to build soundstages limits what’s actually built.

“I think there’s a lot of stuff in the pipeline, but when these developers pencil it out, I don’t think all of it will get built,” she said.

Still, experts agree that studios are going to continue to be a hot commodity for content producers who want to film here and companies who want to own the valuable real estate.

“You’re going to see more money move into the market. You are going to continue to see record trades … as more money competes for a finite number of deals,” Peters said.

Mihalka said that while she expects demand for stages to continue, what remains to be seen is how many long-term leases there will be for stages moving forward.

She also expects some developers to find it is much cheaper to build distribution and last-mile industrial properties than spec stages, something some developers might do with land instead, especially since industrial is also in such high demand right now.

This summer, developer East End Capital, which is based in New York, filed plans with the city of L.A. for a studio space at 2233 Jesse St. in Boyle Heights. The company is looking to convert a cold storage industrial property into a production studio with four soundstages, office space and storage. The project, which is being designed by downtown-based Relativity Architects, would total 237,000 square feet.

West Hollywood-based Bardas Investment Group and Bain Capital are working on the $450 million Echelon Studios. The project sits on a 5-acre site at 5601 Santa Monica Blvd., which was previously a Sears store, and is expected to have 370,000 square feet of creative office space, four soundstages, a flex stage and 93,000 square feet of bungalows.

Atlas Capital Group is planning a $650 million project, dubbed 8th and Alameda Studios, to redevelop the Los Angeles Times printing plant downtown into a studio campus. The project is expected to have 17 soundstages in addition to feature-screening theaters, executive offices, production workspace, restaurants and fitness amenities on 26 acres. It is being designed by Bastien & Associates Inc.

Culver City-based Hackman Capital Partners and affiliate MBS Group are planning a substantial upgrade to Television City, which Hackman purchased from CBS in 2019. The $1.25 billion investment in Television City includes developing up to 1.13 million square feet of additional space on the 25-acre property. That could include up to 15 soundstages, production offices and support facilities.

The Los Angeles City Planning Commission has approved plans to nearly double the size of Hollywood’s historic Sunset Gower Studios. Roughly 480,000 square feet will be added to the property, which dates back to 1918. It is owned by Brentwood-based Hudson Pacific Properties Inc. and Blackstone Property Partners and is being designed by Gensler.

Investment firm King Street and Canadian pension fund Alberta Investment Management Corporation are out to tap into the booming demand for studio space in Los Angeles.

The firms have teamed up with an unnamed sovereign wealth fund and New York-based East End Capital’s studio platform to acquire and develop up to 750,000 square feet of production space across Los Angeles, according to a Wednesday announcement.

The joint venture will also focus on three of East End’s existing studio projects — two in Glendale and a third in Downtown Los Angeles, according to an announcement.

East End has already filed plans with the city to build two new soundstages at its existing studio campus in Glendale and convert a cold storage facility at 2233 Jesse Street near the Arts District into a 237,000-square-foot facility.

Outside of Los Angeles, the firms are targeting developments in “other major U.S. film hubs” and international markets, following Blackstone and Hudson Pacific’s move to build a $1 billion studio project outside of London.

King Street was attracted to the “supply-demand imbalance in the studio sector,” the firm’s David Walch said in a statement. More than 1.2 million square feet of studio space is currently under development in Los Angeles as of June, driven by a surging demand for content creation, according to CBRE data.

Field Trip Health, a psychedelic therapy company, picked one of Miami’s trippiest neighborhoods for its first location in Florida. The Toronto-based company plans to open in Wynwood, The Real Deal has learned.

Field Trip inked a lease for a 7,500-square-foot space at The Wynwood Annex, an office building that the Related Group and East End Capital built at 215 Northwest 24th Street, said Jonathon Yormak, who leads East End Capital. The eight-story, 65,000-square-foot building was completed more than three years ago and is now fully leased.

Field Trip is part of a wave of new psychedelic therapy companies that have raised tens of millions of dollars to invest in the treatment of depression and post traumatic stress disorder with drugs such as ketamine. Ketamine is the only hallucinogenic that’s currently legal for patients outside of a clinical study in the U.S., the New York Times reported.

Two bills proposed in the Florida Legislature would direct the Florida Department of Health and the state’s board of medicine to study the efficacy of ketamine, MDMA and psilocybin, the Daytona Beach News-Journal reported last week. Oregon was the first state to legalize the therapeutic use of psilocybin, the substance found in magic mushrooms. Other cities and states have decriminalized the drug or are considering similar legislation.

Field Trip has locations in New York, Toronto, Los Angeles, Chicago, Atlanta, Houston, Seattle, Amsterdam and Fredericton, Canada, according to its website. Forbes reported in July that Field Trip plans to have 20 clinics by the end of this year and 75 by 2024.

Yormak said Field Trip has been interested in the Miami market, and the company approached the developers to lease a space at the Annex. Other tenants in the building include venture capital firms Founders Fund and Atomic; Live Nation; and e-commerce company OpenStore.

Tony Arellano of Dwntwn Realty Advisors represented the landlord in the majority of leases at the Annex, including Field Trip. Miles Glascock at JLL represented Field Trip.

Modified gross rents have exceeded $62 per square foot, Yormak said.

The Annex is reportedly on the market. Yormak said that the partnership has not made a decision whether to sell, but confirmed that potential buyers have made offers to acquire the property.

The artsy neighborhood of Wynwood is in the midst of a major transformation, with major office, residential and retail developments in the works or recently completed.

“The [office] market has been incredibly strong since the fall of 2020, with a lot of new tenants coming to the market,” Yormak added.

East End Capital is also looking to sell the office building at 555 Washington Avenue in Miami Beach, which it owns with BentallGreenOak. JLL has the listing.

Exterior work is nearing completion on 141 East Houston Street, a ten-story mixed-use building on Manhattan’s Lower East Side. Designed by Roger Ferris + Partners for East End Capital and K Property Group, the 68,000-square-foot structure will yield offices and retail space on the ground floor and two cellar levels. CM & Associates is the general contractor for the property, which is located between Forsyth Street to the west and Eldridge Street to the east on a plot formerly occupied by the Sunshine Cinema.

At the time of our last update in August, the structure was completely enshrouded in black netting and metal scaffolding. Since then, the protective network has been dismantled, revealing the look of the glass curtain wall.

Photos from along East Houston Street show the main northern façade of 141 East Houston Street entirely covered in floor-to-ceiling glass. Only a minimal amount of netting and scaffolding was seen on the eastern side of the edifice, which is mostly clad in gray metal panels. The opposite western profile features a mix of glass and black paneling separated by the exterior hoist still attached to the superstructure.

In between the development and the adjacent building to the west is a narrow alleyway that will serve as a courtyard surrounded by an open-air framework of columns and beams.

Construction broke ground in the first half of 2019 after the developers secured $90 million in financing. This included a $67 million construction loan from CapitalSource and $19 million of mezzanine financing from Canyon Partners. When finished, 141 East Houston Street will boast nearly 5,100 to 7,100 square feet of column-free floor plans with 12-foot-high ceilings for abundant natural light, multiple private outdoor terraces overlooking the nearby streets and low-rise neighborhood, a shared conference center, concierge service, keyed elevator access per floor, individualized temperature control for greater energy efficiency, and a 1,935-square-foot rooftop patio level.

The retail component will offer 60 feet of frontage along East Houston Street, 3,550 square feet of usable ground-floor space with 17-foot-high ceilings, built-in capacity for a commercial kitchen with venting that goes all the way to the roof, and outdoor seating along Houston Street. The first cellar level is expected to have 3,928 square feet of usable square footage with 12-foot-high ceilings, while the second cellar level includes 3,971 square feet of usable square footage with 12-foot-high ceilings.

YIMBY last reported that 141 East Houston Street is scheduled to be finished in the fourth quarter of 2021, according to East End Capital’s website.

It’s official: Yet another famous New York City restaurant is making the trip south to Miami.

Joe’s Pizza, the family owned-and-operated Greenwich Village institution that set the standard for the quintessential New York slice will open its first Florida location at Wynwood 25. The restaurant is scheduled to open in spring 2022.

Last week, Joe’s Pizza owner/president Joe Pozzuoli, Jr., confirmed he has signed a deal for a long-term lease in the heart of Wynwood, at 240 NW 25th St.

Joe’s founder Joe Pozzuoli, Sr., is from Naples, Italy, and, at the age of 84, still owns and operates the Greenwich Village flagship. His son, Joe Jr., and grandchildren Sal and Pino Vitale, are part of the ownership and operations team in Miami.

Locals and tourists alike will no doubt visit Joe’s Miami for its authentic New York pies. The institution has been in operation since the 1975 opening of the first location, on Carmine Street. Joe’s is legendary for its thin-crust pies, blocklong lines, and celebrity clientele, whose photos are displayed on the walls. The chain now operates five locations across New York City, as well as one out-of-state outpost in Ann Arbor, Michigan.

According to DWNTWN Realty Advisors executive Joe Fernandez, who represented the landlords Related Group and East End Capital, the building’s central location and wide range of tenants attracted them to the space, which in addition to 289 apartments includes retail space occupied by the likes of Japanese restaurant Uchi Miami, Danny Meyer-backed Salt & Straw, Connecticut-based Bartaco, and Dogfish Head Miami.

“After an extensive search, Joe’s Pizza was attracted to Wynwood the most. The location is excellent — literally in the heart of Wynwood. Because they have a lot of walk-up and to-go business, the mixed-use space and central location for delivery was a perfect fit,” Fernandez tells New Times. “And with such a huge following up north, Joe’s will greatly benefit from the New York migration into Wynwood and the substantial pipeline of new office and residential development.”

Joe’s Pizza is just one of many New York-based restaurants to choose Miami for expansion since the onset of the pandemic. Other establishments include NYC square-pie spot Prince Street Pizza at the Oasis food court), Italian eatery Carbone in South Beach, Cote Korean steakhouse in the Design District, the forthcoming Pastis, which will be a Wynwood neighbor.

Construction has topped out on 141 East Houston Street, a ten-story mixed-use office building on Manhattan’s Lower East Side. Designed by Roger Ferris Architecture and developed by East End Capital and K Property Group, the 68,000-square-foot structure will yield office space as well as retail on the ground floor and two cellar levels. The property is located between Forsyth Street to the west and Eldridge Street to the east on a plot that was formerly occupied by the Sunshine Cinema.

Construction broke ground on the project in the first half of 2019 after the developers secured $90 in financing, including a $67 million construction loan from CapitalSource and $19 million of mezzanine financing from Canyon Partners. Recent photos show that the steel superstructure is now topped out, and work is proceeding behind a shroud of black netting and scaffolding. It will likely still be some time before these are dismantled, revealing the floor-to-ceiling glass curtain wall framed by dark panels.

141 East Houston Street will feature nearly 5,100 to 7,100 square feet of column-free floor plans with 12-foot-high ceilings for abundant natural light, multiple private outdoor terraces overlooking the nearby streets and low-rise neighborhood, a shared conference center, concierge service, keyed elevator access per floor, individualized temperature control for greater energy efficiency, a 1,935-square-foot rooftop patio level, and a courtyard running along the eastern side of the building housed within an open-air framework of columns and beams.

The retail component will come with 60 feet of frontage along East Houston Street, 3,550 square feet of usable ground-floor space with 17-foot-high ceilings, built-in capacity for a commercial kitchen with venting that goes to the roof, and outdoor seating along Houston. The first cellar level will feature 3,928 square feet of usable square footage with 12-foot-high ceilings, while the second cellar level will contain 3,971 square feet of usable square footage with 12-foot-high ceilings.

SoftBank Group Corp. is looking for a big block of expansion space in Miami in the latest sign that this city’s tech sector is flexing its muscles.

The Tokyo-based company, one of the world’s largest tech investors, is searching for as much as 100,000 square feet of space, according to executives in the real-estate and technology industries. A SoftBank spokeswoman confirmed that the company is looking for expansion space in Miami but declined to go into detail.

SoftBank, which currently occupies about 14,000 square feet in the city, said earlier this year that its funds would commit $100 million to startups in the region. That decision was based partly on the 40% growth in the region’s tech sector between 2012 and 2018, according to a LinkedIn post in February by Marcelo Claure, SoftBank’s chief operating officer and head of the firm’s SoftBank Latin America Fund.

He also cited the “global shift to flexible work” spaces which has accelerated during the pandemic. “People are increasingly choosing where they want to live rather than where they have to live,” Mr. Claure said.

In other tech news in Miami, developers Related Group and East End Capital are expected to disclose this week that their Wynwood Annex project has signed office leases with two venture-capital funds, Founders Fund and Atomic, as well as an e-commerce startup named Open Store. The three companies leased a total of 22,000 square feet in the 65,000-square-foot development that was completed in 2019.

Also, Microsoft Corp. is on the prowl. The Seattle-based tech giant, which has a Latin American sales group based in the region, has been looking for space in Miami’s Brickell neighborhood, according to real-estate and tech industry executives. A Microsoft spokesman declined to comment.

Miami has been one of the urban success stories of the pandemic partly because of Florida’s tax advantages over high-tax states like New York and California. Big financial companies like Blackstone Group Inc., Starwood Capital Group and Goldman Sachs Group Inc. have either decided to lease office space in the region or are considering such plans.

Miami’s tech industry has only recently begun to make a big contribution to the city’s growth. An effort by the city to develop a tech hub during the dot-com bubble of the 1990s lost steam after the bubble burst.

Just one decade ago, “if you wanted to scale a high-growth tech entrepreneurship you had to go elsewhere” like New York, San Francisco or Silicon Valley, said Matt Haggman, executive vice president of the Beacon Council, a public-private economic development partnership for the Miami region.

But lately the city’s efforts to build a tech industry have been gaining traction. Chewy Inc., the online pet-product retailer that is based in the Miami region, raised over $1 billion in an initial public offering in 2019.

Another homegrown startup: REEF Technology Inc., which transforms underused urban spaces into food-delivery kitchens, Covid-19 testing centers and other hubs for goods and services. REEF last year announced a $700 million fundraising from investors including SoftBank’s Vision Fund.

Miami also has begun attracting big tech investment companies like SoftBank and Founders Fund. “To have a premier funder with an office in your community is key,” Mr.Haggman said.

Tech neighborhoods are beginning to sprout in the city. For example, the Related development that attracted Founders Fund is in the Wynwood neighborhood north of downtown Miami that is becoming popular among tech firms for its mixed uses and gritty but hip vibe.

Related’s project also has leased space to Live Nation. Last year Spotify announced plans to move its south Florida headquarters to the neighborhood.

As in most other cities, leasing activity in Miami vanished in the early months of the pandemic. But it began rebounding in the summer, said Jon Paul Perez, the president of Related Group.

“You started hearing about people buying expensive homes. Then you started hearing about people moving their offices,” Mr. Perez said. “That’s when it all started taking off.”

If there was any doubt about the willingness of some of Silicon Valley’s leading venture capital firms to make Miami their new home base, they may be put to rest now.

Founders Fund, the multi-billion dollar venture capital firm led by PayPal co-founder (and new Venetian Islands homeowner) Peter Thiel, announced Tuesday it has signed a multi-year lease at the Wynwood Annex, the recently completed class-A office tower developed by Jorge Pérez’s Related Group along with real estate group East End Capital.

Founders Fund’s lease will accompany ones being signed by Atomic, a venture capital and startup building firm led by Jack Abraham, a serial entrepreneur already living in Miami; and OpenStore, a new company led by Founders Fund’s Keith Rabois. The leases total more than 22,000 square feet — housing as many as 50 workers — within the Wynwood Annex, encompassing three full floors, with commitments extending up to 10 years.

According to an interview Abraham gave to Fortune magazine, OpenStore is aiming to capitalize on the “non-Amazon” part of e-commerce, especially more boutique retailers.

“We have plans to scale massively in Miami and make OpenStore the largest company in the city’s history,” Abraham told Fortune, adding that OpenStore is one of three startups Atomic is currently working on out of Miami.

In a statement to the Miami Herald, Abraham said: “Miami is the perfect city to start the next generation of technology companies, such as OpenStore. It’s incredibly diverse with amazing entrepreneurial talent, and Atomic plans to invest and scale significantly here.”

Founders Fund previously signed a one-year lease in Brickell; the new lease represents a long-term commitment to the city. The news represents another marquee relocation in a city now awash in them. Since global real estate giant Blackstone announced it was opening an office in Miami, the city has seen Miami announcements from firms including Microsoft, Barry’s Bootcamp, Point72 and Subway. They join a list of firms, especially ones in finance, that had announced Miami moves earlier in 2020.

“The signing of leases by Founders Fund, Atomic and OpenStore in Wynwood is proof that Miami is well on the way to becoming the capitol of capital,” said Miami Mayor Francis Suarez in a statement. “I am excited about all of the opportunities for impact that will be unlocked for founders, job seekers and innovators as a result of the arrival of these iconic firms to Miami.”

Added Jon Paul Pérez, president of Related Group, in a statement: “Wynwood’s tech transformation is real and here to stay. Founders Fund and Atomic are leaders in their sectors, and their decision to plant their flag in Wynwood speaks volumes to the potential of the neighborhood and Miami as a whole.”

East End Capital founder and managing principal Jonathon Yormak said the Wynwood Annex is at the forefront of a trend that is likely to make Wynwood less of a destination neighborhood and more of a “365-day-a-year” one, with a mix of commercial and residential alongside its traditional food, beverage, and retail reputation.

At the same time, he said, no one is challenging its zoning code of strictly low-rise construction and incorporating its traditional design and street art elements.

“The origination of Wynwood as an art community, one with great murals — that is going to continue,” Yormak said.

Jonathon Yormak, founder and managing principal of East End Capital, was in the middle of renovating a more than 100-year-old, 120K SF office building in New York when the coronavirus hit. He’d already decided to completely overhaul the air and ventilation system in the building.

“It’s only a 26-story building, so it wasn’t so big as to make it impossible, but we essentially went from a central system to a VRF system [a high-capacity, ductless HVAC system], which basically allows each tenant on each floor to manage their own heat and air, and the system was designed to have an excess of a Merv 13 filtration system [enough to filter fine particles from smoke and bacteria], which is pretty high,” Yormak said.

Now he’s even exploring adding in UV filtration or plasma filtration.

Speaking on a Bisnow webinar with Blanca Commercial Real Estate CEO Tere Blanca and Sage Glass regional sales director Carl Newhouse, Yormak acknowledged he’s only able to afford the upgrades because he bought the building cheaply. Still, he said landlords should consider physical and psychological aspects of leasing, and adjustments both cheap and expensive, to lure tenants and even get them to pay premium rents.

Commercial property owners are always looking for ways to have their assets stand out in the marketplace and have a competitive advantage, and many have long been aware of air filtration and ventilation as potential draws.

“The question was: Who would pay for them, and was a tenant prepared to pay more?” Yormak said.

Now, “I think tenants will pay a premium for knowing that they’re in a building where they have clean air,” Blanca said.

Cheap solutions can be effective, too. Signage reminding people to stay 6 feet apart or hand sanitizing stations placed at entrances and exits remind everyone to behave a certain way and give visitors a sense of security and send an implicit signal that the building is attentively managed, Yormak said.

“I think wayfinding has a psychological impact — the second you walk into a building, to know that that building owner is seeking to manage the property properly in this context is helpful,” Yormak said.

Studies show the coronavirus is transmitted through air, but surface cleaning still makes occupants feel comfortable, he said.

Yormak predicted that office vacancies will continue to rise in the near term, hampering landlords’ ability to upgrade buildings. Well-capitalized and newer buildings will incorporate new systems right away, but those only comprise about 10% to 15% of the overall stock in any given city.

“So I think this is going to take a long time to play out in a more permanent way,” he said. “I think all the things we’ve been talking about will happen, but this is probably like a 20-year cycle.”

Blanca said she’s “very cautiously optimistic” about Miami’s office market, which has been off the mark in leasing by about 25% but has a healthy pipeline of middle-market companies coming in, seeking 100K SF to 160K SF, she said.

Coronavirus’s impact showed in the Q2 data; a Colliers International report from July shows cruise- and aviation-related tenants were especially hurt. While Morgan Lewis signed an 18K SF lease at Brickell World Plaza and IberiaBank signed a 14K SF lease at 1111 Brickell Ave., Miami-Dade County’s vacancy rate increased to 9.5% and net absorption recorded negative 480K SF.

“A heavy pipeline of 3.7M SF remains under construction,” the report said. “Looking forward, landlords are considering increasing concessions for new tenants, however, rental rates so far have remained stable.”

East End Capital secured approval for a co-living development in Wynwood.

The Miami Urban Development Review Board this week approved Foyer Wynwood, a 12-story, 236-unit project on North Miami Avenue, between 24th and 25th streets, according to a press release. Rents at Foyer Wynwood are expected to start at about $1,500 a month, inclusive of furniture, electricity, common area cleaning and WiFi.

East End Capital, which developed Wynwood 25 with the Related Group, is planning to break ground on the co-living project next year.

The 375,000-square-foot project, which is being designed by Kobi Karp Architecture & Interior Design, will have amenities such as a gym, juice and coffee bar, pool deck, a shared chef’s kitchen and entertainment space, coworking and art, podcast and green screen studios, according to the release.

Foyer will match roommates together using a proprietary compatibility algorithm.

The developer’s Foyer-branded projects will include high ratios of furnished micro-units and co-living bedrooms with en-suite bathrooms, as well as traditional studio, one- and two-bedroom apartments.

Jonathon Yormak, founder of East End Capital, said earlier this year that the company is planning to build at least 10 co-living projects over the next five years.

Co-living projects are spreading throughout South Florida, as developers easily pencil out profits from the higher-density rental properties, though it’s unclear what impact the pandemic will have on the multifamily sector.

In Wynwood, Property Markets Group plans to build a Society-branded co-living project. W5 Group is developing a co-living project with the Related Group, and The Collective is planning a project on Second Avenue.

Wynwood has changed quickly from the early 2000s, when it was home to a number of galleries that came alive the second Saturday of the month, to an established tourist destination with an active nightlife scene. Today, it has residents and short-term rentals, restaurants, breweries and bars, and hotels on the way.

Now, it’s also emerging as a new office submarket in Miami, even amid the coronavirus pandemic.

Wynwood is seeing a number of new office projects, as major developers target the artsy district, aiming to add hundreds of thousands of square feet of office space. Big name tenants have signed leases, like Spotify, Live Nation and WeWork. Apple Music, Google, Dentsu and other creative marketing agencies have also been looking in the market, brokers and developers say.

The office vacancy rate in Wynwood is expected to spike this year, when most, if not all of the office space is delivered. Already, there is 180,000 square feet of new space in the market, with another 350,000 square feet under construction. That doesn’t include 500,000 square feet more office space in the pipeline, according to Albert Garcia, board member of the Wynwood Business Improvement District.

Garcia and others expect that the new supply will get absorbed.

“We’ve seen development happen evenly. We’re very pleased with how the market has reacted to zoning guidelines,” he said.

“You have to remember, prior to that there was zero Class A office in the neighborhood. Over the next six to 24 months, you’re going to see new office leases moving within the market from Brickell, Doral, Coral Gables.”
Covid-19’s effects

And now, with the uncertainty surrounding the Covid-19 outbreak, Garcia and others believe that Wynwood will be well-positioned to attract new office tenants to the neighborhood.

“The good news is that these are all state-of-the-art office environments that will be adaptable and scalable in ways that the new office tenants are going to be looking for, places that are safe, that offer flexibility in workspace,” Garcia said.

Yet, some developers are pulling back, attorney Steve Wernick of Wernick & Co. said. The pandemic will likely cause a correction in the market and slow down office absorption, forcing landlords to adjust their pricing and the types of tenants they’re trying to attract.

“Wynwood is resilient, it always bounces back. We had Zika,” Wernick said. “Businesses that have capital and have long-term growth potential might be able to secure the office space they need that’s advantageous to them.”

Other market sectors

Brokers and developers expect space to also be absorbed in multifamily and other sectors of the market. Besides Related and East End, the Kushner Companies with Block Capital Group, as well as homebuilding giant Lennar Corp. have multifamily-anchored mixed-use projects in the works.

“At the end of the day, it’s a real neighborhood,” said Gaston Miculitzki of BM2 Realty, a Wynwood-based brokerage.

It’s unclear yet how deep the impact of coronavirus will be. Brokers Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors said the pandemic will eventually result in opportunities for tenants – and for investors.

“Now if you’re buying something, you’re buying it at a good value,” Arellano said. “All of the foam of the market got taken off.”

Grocery stores and major pharmacy chains are also eyeing the market, according to commercial broker Tere Blanca.

Office space supply

Sterling Bay, a Chicago developer that has built and leases space to McDonald’s Uber, Glassdoor and Twitter, officially entered the Wynwood market in 2018. Sterling Bay is building 545 Wyn, a 10-story, 325,000-square-foot Class A office building that will be completed later this year. It’s the biggest office project under construction in Wynwood.

Michael Lirtzman, director of leasing, said the developer’s aim is for tenants to move in by the end of the year. At 545 Wyn, the developer has secured Gensler, a major design and architecture firm, which signed a lease for 13,000 square feet.

Gross rents are in the high $50s and $60s per square foot for new construction in Wynwood, brokers and developers said.

Lirtzman said the push into a neighborhood like Wynwood is typical for Sterling Bay. “We tend not to go for the traditional downtown high-rise markets. We’ve gone into neighborhoods with a little more live, work, play,” he said.

Wynwood, previously home to a number of industrial warehouses, is similar to Chicago’s Fulton Market district, near the west side of Chicago, where Sterling Bay is looking to sell the McDonald’s global headquarters building, Lirtzman added.

Amenities in Wynwood are comparable to those offered by residents of new apartment towers in downtown Miami, Edgewater and the Arts & Entertainment District.

Once completed, 545 Wyn will include a 4,700-square-foot fitness center with spinning and yoga, a 17,000-square-foot terrace on the fifth floor with a full kitchen and bar, and 26,000 square feet of ground-floor retail space for three large food and beverage and entertainment tenants.

The companies the developer is courting “want their people to be comfortable in the building,” Lirtzman said. “They’re using their real estate as a recruitment tool.”

More projects completed and planned

When Sterling Bay went under contract on the Wynwood land more than two years ago, the developer had no competition.

But now, new office projects are popping up throughout Wynwood. 545 Wyn is being built on the west side, fronting I-95, where larger office projects were or are planned. The Oasis in Wynwood, a mixed-use adaptive reuse project under construction at 2335 North Miami Avenue is east of that, on the northeast corner of the neighborhood.

In January, New York-based R&B Group broke ground on the Gateway at Wynwood, a 460,000-square-foot mixed-use building on the northern outskirts of Wynwood, at 2916 North Miami Avenue. The project will have about 195,000 square feet of office space, plus retail, a rooftop terrace and a garage.

About a year ago, CIM Group closed on a $71.2 million construction loan for a 12-story Wynwood Square mixed-use development at 2201 North Miami Avenue. The project, with 241 apartments and about 27,000 square feet of retail, will have about 60,000 square feet of Class A office. One Real Estate Investment is a co-developer of the project.

The Annex, a 52,000-square-foot office building that Related Group and East End Capital completed last year next to their Wynwood 25 apartment building, is west of Second Avenue, Wynwood’s “cultural spine,” said Garcia, of the Wynwood BID.

Tenants there include Live Nation Entertainment, which took nearly 8,000 square feet.

Jonathan Yormak, founder and managing principal of East End Capital, said full service asking rents are about $57 per square foot at the Annex.

Directly across the street is Cube Wynwd, an eight-story, 86,000-square-foot Class A building developed by RedSky Capital and equity partner JV Capital Partners. Regus was the first tenant to sign and open, taking 21,000 square feet at the Class A building. Shari Neissani, senior vice president of RedSky Capital, said the developer has more projects in the works, including another eight-story building with 145,000 square feet of office space and about 36,000 square feet of retail space on Northwest 27th Street.

In addition to tenants relocating from downtown Miami and Brickell, Nessan and others said there are a number of new-to-market companies looking to plant their flag in Wynwood.

WeWork opened last year at the Wynwood Garage, taking 30,000 square feet at 301 Northwest 26th Street, marking the largest office lease in the neighborhood, according to broker George Pino, president of State Street Realty. The office market in Wynwood is just now in its infancy, he said.

Wooing tenants

Some of the largest TAMI (technology, advertising, media and information) tenants have their eyes on Wynwood – but not necessarily on specific buildings.

Take Spotify. The music streaming company toured 545 Wyn and other projects in the neighborhood before deciding to take all of the 20,000 square feet of office space at the Oasis in Wynwood.

“What’s important about the Spotify lease is Spotify had identified Wynwood. It wasn’t like they were between the Oasis in Wynwood and two buildings in Brickell and Coconut Grove,” said David Weitz, co-founder of Carpe Real Estate Partners, developer of the Oasis.

Not every company is choosing to be in Wynwood, though. Yext, a New York City-based brand management technology firm, looked at Wynwood before deciding to open its Miami office at 600 Brickell Avenue, near Brickell City Centre, sources said.

Erik Rutter, co-founder of Carpe Real Estate Partners, said Spotify wanted to create a campus for its employees where the company could create programming. A rendering of the space shows a stage in front of the Spotify logo.

As a gateway to Latin America, Miami has long attracted a number of creative marketing agencies, but the tech scene has been much smaller, beginning with the LAB Miami, the first co-working space and first coding academy, Wyncode.

Now, that’s changing.

“Wynwood is very culture rich. A lot of submarkets in Miami, from an office market perspective, [prospective tenants] don’t feel like there’s a lot of character,” Weitz said. “I think the low-story pedestrian-oriented nature in Wynwood really makes it attractive. It has culture. It has character. It’s walkable.”

Shops, offices slated for Hallandale Beach

Grupo Eco is seeking approval for the third phase of Atlantic Village in Hallandale Beach with a mix of shops, restaurants and offices.

The first phase – 31,144 square feet of shops and restaurants – opened in fall 2018 and is now fully leased, said Daniel Chaberman, head of Grupo Eco. The second phase, with 38,000 square feet of offices and retail, is under construction.

The $18 million third phase, pending approval, would total about 125,000 square feet in six stories and have a 400-space parking garage. It would go on the 2.26-acre site at 601 N. Federal Highway.

Chaberman said the third phase would have 30,000 square feet of primarily food and beverage outlets on the third floor, 30,000 square feet of retail on the second floor, and 65,000 square feet of Class A offices on the top four floors. There would be a host of amenities for office tenants, including a soccer field on the roof, and locker rooms with showers and saunas.

Mixed-use project planned in Wynwood

New York-based East End Capital proposed a mixed-use project in Miami’s Wynwood.

The 525,000-square-foot project would be developed in two 12-story towers at 2400 and 2500 N. Miami Ave., Managing Principal Jonathon Yormak said.

The southern site would have 12,000 square feet of retail and 236 apartments, most of them micro units ranging from 360 to 400 square feet. It would include 30 co-living units, with rent by the bedroom.

The northern site would have 6,000 square feet of retail, plus a 140,000-square-foot office building.

Auto dealership proposed in Delray Beach

James O’Neill, the managing principal of Delray Acura and Delray Hyundai, wants to rezone a vacant property in Delray Beach for an automotive dealership.

He has the 3.85-acre site at 2419-2605 N. Federal Highway under contract from Adoodledoo LLC. The rezoning would permit a full-service dealership up to 167,754 square feet. The application didn’t disclose the automotive brand.

Grupo Eco is moving forward with the third phase of Atlantic Village in Hallandale Beach with a mix of shops, restaurants and offices.

Landlords brace for requests from struggling tenants

The COVID-19 pandemic is hitting many restaurants, entertainment establishments and hospitality-focused retailers in South Florida hard. Their headache will become their landlords’ headache as the businesses have trouble paying rent.

The combination of drastically reduced travel and tourism, restrictions on operating hours and capacity at many businesses, the cancellation of most events, people working from home when they would otherwise be dining out for lunch, and general self-isolation is an unmitigated disaster for South Florida’s largest industry. No doubt, service workers and small-business owners will be hit hardest.

While there hasn’t been much disruption for tenants yet, it’s likely coming soon, said Katy Welsh, senior director of retail services at Colliers International South Florida and state operations chair for the International Council of Shopping Centers.

“At this point, we are all bracing ourselves and preparing to help tenants make it through this time,” she said. “I’m sure tenants will ask for rent relief, like they did in the downturn of 2008 and 2009.”

Most landlord-tenant agreements include a clause allowing the landlord to terminate the lease early, she said. Landlords rarely have an obligation to help tenants impacted by a pandemic.

Jaime Sturgis, founder and CEO of Native Realty in Fort Lauderdale, said COVID-19 concerns will hurt business at many restaurants, stores at enclosed malls, and movie theaters.

He added that many small businesses don’t have 30 or 60 days of cash reserves, but some restaurants will try to make up for lost foot traffic by boosting their delivery business.

On the other side, property owners have their own bills to pay. Mortgages, insurance and property taxes don’t stop just because their tenants are struggling.

Gabriel Navarro, managing partner of Miami-based retail center owner MMG Equity Partners, said tenants that require assistance should share their financial statements so he can understand how much their sales have been impacted and whether they can still turn a profit or if they will be burning through cash.

If a tenant is quickly depleting their cash reserves, a landlord could offer a short-term rent deferment, where the reduced amount is paid back once the economy improves, Navarro said.

“The most important thing in any good landlord/tenant relationship is transparency, sharing both the good things and bad that are occurring in the business, in order to together best determine how to manage through it,” he said.

Doral industrial property could be seized

An electronics maker could lose its Doral headquarters facility over a $3.64 million foreclosure lawsuit.

First Citizens Bank filed a foreclosure lawsuit against 4636 Falcon LLC, Vioss Electronics, Vioss Vision and Vioss Camera Production, plus loan guarantors Jose A. Maldonado, Jose S. Rivero and Angel O. Rivero.

The lawsuit targets the 13,271-square-foot industrial condo at 4636 N.W. 74th Ave., Unit 1.

Attorney Emily A. Dominguez, who represents the lender, didn’t respond to a request for comment.

Vioss Vision makes LCD and LED displays, often for showing ads in waiting rooms and public areas. Vioss Electronics makes security cameras for homes and businesses. Officials with the company couldn’t be reached for comment.

4636 Falcon acquired the industrial condo for $1.5 million in 2015. The same year, the company secured a $1 million mortgage on the property from Biscayne Bank, which was acquired by First Citizens Bank in 2019.

In 2017, Biscayne Bank granted two $1.5 million loans to Vioss Electronics, Vioss Vision and Vioss Camera Production. Those loans were cross-collateralized with the mortgage on the industrial condo.

According to the complaint, the borrowers missed payments starting July 15, 2019, and owe a combined $3.64 million in principal, plus interest.

$45.5 million

Price that Slate Office REIT agreed to pay for Cypress Financial Center in Fort Lauderdale

182,000 square feet

Size of Turnpike Commerce Center, which Cadence Partners and RREEF started building in west Miami-Dade County

$32.5 million

Price that Vital Pharmaceuticals paid for 23.2 acres at South Florida Distribution Center in Pembroke Pines

436

Homes that 13th Floor Homes plans to build on the Villa Del Ray Golf Course after buying it for $5.6 million

$28.5 million

Price that Starwood Capital Group paid for the Villa Biscayne apartments in south Miami-Dade

24,000 square feet

Size of Addison Medical Centre, which Azure Development started building near Delray Beach

The Lower East Side, a neighborhood infamous for cooler-than-thou clothing boutiques, hipster-filled cafes, and (sometimes faux) gritty bars, is certainly not a place associated with a preponderance of Class A office properties. In fact, until very recently, those spaces were virtually non-existent. But, with the first phases of multi-use Essex Crossing now open, plus other large development projects on the horizon, the neighborhood appears ripe for a metamorphosis.

For many who have worked and lived in the area, it’s almost surprising that it has taken this long for the transformation to start. The Lower East Side, bounded by Houston Street, Canal Street, Bowery and the East River, is adjacent to neighborhoods that have greatly outpaced it in terms of commercial development, most notably Soho and Nolita. There’s decent subway connectivity and, perhaps hardest to quantify, it’s always been known as a bastion of cool, from its architecture to its inhabitants.

Gregory Kraut, co-founder and CEO of KPG Funds, recognized its potential as territory for commercial office before many others. His New York-based firm is a value-add owner and operator that purchases architecturally noteworthy Class B and C properties to convert them to more appealing Class A structures.

“We had been noticing that tenants were migrating not just down to Soho, but also to the Lower East Side; to certain areas where, historically, there just wasn’t a lot of commercial office space,” Kraut said. “But, because the transportation is still really good in that area, we thought that it would be a good area for us to start — for lack of better word — gentrifying.”

KPG’s first foray into the neighborhood, in conjunction with East End Capital, is 141 East Houston Street. The project, between Forsyth and Eldridge Streets, is being built on the site of the former Sunshine Cinema, a neighborhood fixture that screened independent and foreign films. When completed in about two years, it will deliver 65,000 square feet of column-free space wrapped in a glass facade. The building will be designed by architecture firm Roger Ferris + Partners, who also helmed The Related Equinox Hotel in Chicago and the RBS headquarters in Stamford, CT.

“There really is no other brand-new Class A office product in the traditional boundaries of the Lower East Side,” said Jonathon Yormak, a founder and managing partner of East End Capital. “Part of the appeal and the allure was to deliver office space to an underserved portion of the city.”

Yormak is hoping that the floor-to-ceiling windows, private terraces, and a concierge service will draw a specific type of tenant to the building.

“We’re assuming it’s going to attract pioneering people; that’s really the best way to put it,” he said. “Someone who wants to have his or her company branded with the hip, cool, progressive, Lower East Side. So, we’re anticipating that it’s certainly likely to be creatively driven companies in one way, shape, or form. But, there are creative companies in every asset class, whether it’s finance, technology, advertising, media, or professional services.”

William Richmond-Watson, owner and CCO of brand and ad agency Watson & Company, is perhaps the type of tenant that 141 East Houston will be looking for when they open. He moved his company from Chelsea to 99 Canal Street, between Forsyth and Eldridge Streets, five years ago. “Because we’re focused on placemaking as a creative agency, we like to be in areas that are more up and coming and I felt Chelsea was getting homogenized,” he said. “I also wanted my team to be among other creatives and fall in love on their lunch break. We relocated to what I believe is the new creative capital of Manhattan.”

Since moving, Richmond-Watson has seen a slew of his contemporaries join him in the neighborhood, from fashion boutiques to curated stationery stores. “All the galleries have since followed us down here from Chelsea. You know what they say about following the art,” he added.

In addition to being surrounded by other creatives, the lower rent as compared to neighboring Soho is also quite attractive.

“Instead of having to spend $100 a foot on Class A office space in Soho, you can now spend $50 to $70, and all you have to do is walk literally five minutes away,” said Kraut. “We’re going to give tenants the same kind of experience, but at a lower price point, which everybody wants.”

But according to Jason Misrahi, COO of Misrahi Realty Group, the discount might not hold for long, especially for boutique spaces: “With the influx of the big office spaces from Essex Crossing, we expect those smaller spaces to increase in value, as people are willing to pay a premium for something unique,” he said.

New development Essex Crossing, near Essex and Delancey Streets, is already making a significant mark on the neighborhood, both from an office and retail perspective. When completed, it will contain over 350,000 square feet of office space, as well an additional 300,000 square feet of retail. The century-old Essex Market has already moved in, and The Market Line, a large, bazaar-like marketplace with over 100 vendors, has opened its first phase and will be fully operational next year.

“It’s exciting, as we are meeting with businesses of all realms who are looking for something different,” said Matthew Weir, senior vice president of commercial asset management at Taconic Partners, one of the developers on the Essex Crossing. “This is not your typical Midtown Manhattan office experience. The company who chooses Essex Crossing isn’t afraid to go against the grain.”

Those who study the LES are already noticing the changes Essex Crossing has made.

“It has had a huge impact on this neighborhood by attracting a new group of new residents, condo buyers, and patrons to its many retail offerings,” said Aaron Gavios, chairman and CEO of Gavios Realty Group. “It’s increased the overall desirability of the neighborhood and the daytime and nighttime foot traffic.”

Misrahi concurs, and is optimistic about the new demographic: “It’s an exciting time to work here and be a part of this changing landscape,” he said. “Office tenants aren’t limited to small spaces anymore, so we suspect to see larger companies moving in, which will help support the local community businesses during the daytime.”

The neighborhood’s retailers are facing the same headwinds as the broader retail environment, with the area’s vacancy rate hitting as high as 15 percent, Gavios said.

Essex Crossing and 141 East Houston aren’t the only two developments moving into the area, either. Eldridge Commons, located at 101 Canal Street between Forsythe and Eldridge Streets, will bring Class A construction to a stretch of the neighborhood that has almost none currently. When completed, it will encompass almost 60,000 square feet of office and retail space, at the particularly buzzy intersection of the LES, Chinatown, and Little Italy neighborhoods. Boutique hotel Nine Orchard, located at 9 Orchard Street between Canal and Division Streets, is also poised to bring a new veneer of sophistication (and more foot traffic) to the neighborhood. Developed by DLJ Real Estate Capital Partners, the completed hotel will have 116 rooms spread across 12 floors.

Retail brokers, like Richard Skulnik, executive vice president and partner at RIPCO Real Estate, are certainly using the proliferation of office space as a selling point for potential retail clients.

“One of the main talking points right now is that a market that didn’t have any office population or any office density, now is going to have all brand-new product,” he said. “Now, companies have a choice: Do I want to be on the Lower East Side?”

East End Capital scored initial approval to build two mixed-use projects in Wynwood that will include the company’s first branded co-living development.

New York City-based East End is launching its co-living brand, called Foyer. The developer plans to build Foyer-branded, operated and managed buildings nationwide and is targeting New York as its next market, said Jonathon Yormak, founder of East End Capital. The company is planning to build at least 10 co-living projects over the next five years.

Along with its partner the Related Group, East End completed the Wynwood 25 apartment building and the Wynwood Annex office building last year.

East End’s newest project, at 2400 and 2500 North Miami Avenue, will have co-living and micro units, flexible co-working space, Class A office space, and retail. The two buildings will total more than 525,000 square feet and will be built in two phases.

Yormak said the project, approved by the Wynwood Design Review Committee on Tuesday, will go before the Miami Urban Development Review Board next.

The first, a 375,000-square-foot, 12-story apartment building, will have 348 bedrooms in 236 units, shared amenities that include a gym, juice bar, coffee bar, pool deck, chef’s kitchen, work areas and a recording studio. The residential building will have a high ratio of furnished co-living and micro units, as well as studios and one- and two-bedroom units. Studios will be about 360 square feet.

The 128 co-living bedrooms, which will include their own bathrooms, will start at about $1,400 a month, a price that includes furniture, electricity, common area cleaning and WiFi. Foyer will match roommates together using a proprietary compatibility algorithm.

Yormak said he hopes the residential building will be completed within about 30 months.

Co-living projects are spreading throughout South Florida, as developers easily pencil out profits from the higher-density rental properties. Developers can increase their bedroom count, charging more for a co-living unit at per-bedroom prices that are typically lower for the average renter compared to a traditional apartment. In Wynwood, Property Markets Group plans to build a Society-branded co-living project, W5 Group is developing a co-living project with the Related Group, and The Collective is planning a project on Second Avenue.

East End Capital’s second 12-story building, on the northwest corner of 25th Street and North Miami Avenue, will have 150,000 square feet of Class A office space, 5,700 square feet of ground floor commercial space, and an eighth floor amenity level with a covered terrace, fitness center and conference rooms. The floorplates will range from 7,000 square feet to more than 14,000 square feet.

Office development is also starting to take off in Wynwood. Cube Wynwd and the Wynwood Annex are among the projects that have already been completed, and Sterling Bay is expected to deliver the largest office project in Wynwood later this year. Spotify recently announced it’s taking the office component of the Oasis in Wynwood, at 2335 North Miami Avenue.

Kobi Karp Architecture & Design is designing both East End Capital buildings. They will be built near the Oasis, Veza Sur Brewery and the planned Arlo hotel.

East End Capital has proposed its second major mixed-use project in Miami’s Wynwood neighborhood.

The New York-based developer has proposed Foyer, a 525,000-square-foot project at 2400 and 2500 N. Miami Ave. featuring apartments, offices and retail, said Jonathon Yormak, managing principal of East End Capital. Its plans for Foyer will go before the Wynwood Design Review Committee on March 10.

East End Capital previously co-developed the Wynwood 25 apartments and the Wynwood Annex office building with the Related Group. That was the first large apartment building completed under Wynwood’s new zoning code, which started a wave of residential and office project proposals in the neighborhood known for street art, entertainment and dining.
Foyer would have two towers of 12 stories each, one for apartments and the other for offices.

The 236 apartments would be on the 1.16-acre site at 2400, 2412 and 2418 N. Miami Ave., plus 29 N.W. 24th St. East End Capital affiliate EEFC 2400 NMA Owner LLC bought the property for $6.25 million in 2015.

Yormak said most of the apartments would be micro studios of 360 to 400 square feet. There would be 30 co-living units, where tenants would rent out bedrooms and share the living room and kitchen.

“We are very interested in making Wynwood as affordable as possible for as broad a portion of the community as possible,” Yormak said.

Co-living beds typically have lower rent than a standard apartment, he added. Foyer will have a host of amenities, including a gym, coworking space, a pool deck, cooking and entertainment areas, a media room, a dog run, and a recording studio.

The office building would total 140,000 square feet on the 19,813-square-foot site at 2500 N. Miami. Ave. and 33 N.W. 25th St. East End Capital affiliate EEFC 2500 NMA Owner LLC acquired the site for $4 million in 2014.

The interest Yormak has received at Wynwood Annex has made him confident another office building in the neighborhood would be successful, he said.

“Wynwood is by far and away the coolest place to work in Miami,” Yormak said. “As the neighborhood continues to evolve, people will want to work where they live.”

Foyer would have 12,000 square feet of retail, plus a juice and coffee bar, at the base of the apartment building, and another 6,000 square feet of retail on the ground floor of the office building.

The project was designed by Kobi Karp Architecture. Yormak hopes to break ground in about nine months.

East End Capital and the Related Group closed on a $136 million refinancing of two sister projects in Wynwood.

Blackstone Real Estate Debt Strategies provided the loan for the Wynwood 25 apartment complex and the Wynwood Annex office building, according to a press release. The financing will pay off the construction loans for both projects and return equity to their partners.

About $110 million is set aside for Wynwood 25, a 289-unit, nine-story rental building at 240 Northwest 25th Street, and $26 million is for Wynwood Annex, a 60,000-square-foot, Class A office building at 215 Northwest 24th Street.

Related and East End Capital were the first to open a new rental project in Wynwood, Wynwood 25. Completed in June, Wynwood 25 is nearly 90 percent leased, according to the release. Kobi Karp designed the building and Meshberg Group handled the interiors. Units range from about 400-square-foot studios to three-bedroom apartments. Amenities include a resort-style pool with a deck, fitness rooms with virtual classes, a library with a co-working space, a rooftop lounge and kitchen, pet grooming station, electric car charging stations and valet parking.

Retail tenants at Wynwood 25 include Salt & Straw, an ice cream shop, and Uchi, a Japanese restaurant out of Austin. They’re expected to open in the spring. Wynwood 25 has 25,518 square feet of retail space.

Next door, at the completed Wynwood Annex, tenants include Live Nation, which took 8,000 square feet. The office building has 4,429 square feet of ground floor retail space and a rooftop terrace with outdoor seating.

Developer David Edelstein recently sold an assemblage in Wynwood to multifamily giant AMLI Residential for $35 million. AMLI plans to develop that site into a mixed-use project with 321 residential units and 45,000 square feet of retail.

This article also ran in print.

As tens of thousands of visitors descend on Art Basel Miami Beach this week, Miami’s evolving Wynwood district will be in the spotlight.

The contemporary art fair has helped nurture Wynwood’s transformation from a gritty industrial zone to the city’s hippest neighborhood, with street art emblazoned on nearly every building.

Now, a stampede of real-estate developers is ushering in another makeover, as sleek new apartments, offices and hotels rise in the area. That is presenting the neighborhood with a crucial test: how to preserve its character amid an influx of investment.

Once a largely working-class area, Wynwood has become a draw for young creative workers and professionals, teeming with breweries, stylish shops and trendy restaurants.

“We’re going from a very horizontal neighborhood to what will become more of a vertical neighborhood,” said Jessica Goldman Srebnick, chief executive of Goldman Properties, which began buying properties in the district more than a decade ago and helped revitalize it. “That is a wonderful thing as long as it integrates art and creativity in a deeply authentic manner.”

Wynwood’s challenge echoes what other neighborhoods around the U.S.—including SoHo in New York, the Fulton Market district in Chicago and South Beach in Miami Beach, Fla.—have grappled with over the years, when their singular but broadening appeal led to gentrification.

In the 50-block Wynwood arts district, north of downtown Miami, the landscape of low-slung warehouses is now rife with new building. Nearly 1,000 residential units were completed this year or are under construction, with another 1,800 planned, according to the Wynwood Business Improvement District, a city agency that advocates for the area’s interests. More than 525,000 square feet of new office space is finished or under way, with another 550,000 square feet planned.

Six years ago, land in Wynwood was selling at roughly $100 a square foot, said Charles Penan, executive vice president at investment-banking firm Aztec Group Inc. Today, it is selling at about $600 a square foot on average, he said.

Wynwood was once a magnet for Puerto Rican migrants and home to a thriving garment district, but economic decline left it barren and neglected. In the 2000s, street artists lured by the area’s warehouse walls filled them with murals. That edginess attracted artists and galleries, then bars and nightlife.

In 2009, Tony Goldman, the now-deceased founder of Goldman Properties and father of Ms. Goldman Srebnick, unveiled Wynwood Walls, a complex of warehouse buildings his company owns that are covered in murals by well-known street artists. It was a hit, fueling further growth in the neighborhood, which sprouted boutiques and restaurants.

With interest in the area surging, local commercial property owners created the Business Improvement District in 2013 to attract and guide development. Two years later, the city approved a revitalization plan that allowed for greater density and more residential, retail and office projects.

It capped building heights at eight to 12 stories, depending on the location, and sought to promote pedestrian-friendly streets. It also required new developments to incorporate art and created a design review committee to examine building plans to ensure they conform with the neighborhood’s aesthetic.

The aim was “to develop in a way that is anchored in the artistic character of the neighborhood,” said Albert Garcia, chairman of the BID.

Wynwood 25, a 289-unit apartment building by Related Group and East End Capital that opened in September, has a facade featuring a massive mural. Wynwood Garage, a parking structure with office and retail space by Goldman Properties that opened last year, is clad in raised geometric patterns. Developer Sterling Bay commissioned sculptural pieces for a pedestrian corridor at the base of 545wyn, the 10-story office building it is constructing.

Some locals are turned off by all the development. Camila Alvarez, who produced a documentary, “Right to Wynwood,” on the gentrification of the area, said the period of authentic character in the neighborhood proved fleeting and was quickly consumed by commercial interests. Many artists and galleries left as investors bought up properties and rents escalated.

These days, Ms. Alvarez, 31 years old, avoids Wynwood as much as possible. “It’s kind of like going to a mall,” she said. “I feel claustrophobic and want to leave.”

Azeez Bakare, on the other hand, finds the area stimulating. A resident of Wynwood 25, he likes being able to walk to cafes, restaurants and bars, surrounded by art.

“The neighborhood is the amenity,” said Mr. Bakare, a 31-year-old 3-D architectural visualizer. “I’m excited to see what will come.”

Plans under way for Wynwood include novel elements for Miami. Domio Wynwood, a 175-unit apartment building opening in the next few weeks, will offer only short-term rentals. Bel Invest SRL, an Italian developer, has seven projects planned to break ground next year—two buildings with roughly 350-square-foot “micro apartments” and one a co-living building of small units with shared common areas, aimed at young tenants.

Also on the drawing board: three “woonerfs,” traffic-calming stretches of street seen in the Netherlands where vehicles must slow to a crawl and yield to pedestrians and cyclists. They will feature landscaping, benches—and art.

Residents of the Westchester town, who pay a lot to live there, dispute its reputation as “a bit snooty.” And prices have been coming down (slightly).

In a state called New York, British place names can seem a dime a dozen. But Scarsdale, on first impression, takes its Englishness to another level.

Presiding over the compact downtown that greets those arriving by train is the towering Harwood Building, with a turret and gables that recall an Elizabethan castle — an unlikely sight in suburban central Westchester.

The 6.7-square-mile town, which was settled in 1701 by English aristocrat Caleb Heathcote, has no shortage of road names that evoke his homeland, including Whig, Tory and Paddington. And large, opulent houses, set back behind deep lawns at the end of runway-long driveways, as in the ritzy Murray Hill section, are facsimiles of the manor houses that speckle the English countryside.

Such Old World airs, coupled with the distinction of being one of the country’s wealthiest towns — the average household rakes in $417,335 a year, according to Bloomberg — can make Scarsdale intimidating to some buyers.

“It had a reputation as a little bit snooty,” said David Benderson, 41, an ophthalmologist, who grew up in Pennsylvania but spent time with relatives in nearby Dobbs Ferry and Ossining as a child.

In 2014, Dr. Benderson and his wife, Mythili Murthy, an endocrinologist who is now 41, and their two young sons were unhappily living in Annapolis, Md., where they were frustrated by the sleepy pace in the winter and a lack of play dates for their children.

Deciding to “roll the dice and try something different,” Dr. Benderson and his family began hunting in Westchester, though they steered clear of Scarsdale in favor of Irvington and other river towns. They wanted to rent for a while, to get a feel for the area, but had a hard time finding a house to rent. A hot sales market at the time meant a dearth of rental inventory.

Reluctantly, Dr. Benderson went to see a three-bedroom house in the Edgewood section of Scarsdale and was pleasantly surprised. With well-kept, modestly sized homes, and socially conducive tenth-of-an-acre lots, he said, Edgewood “was not at all what we expected Scarsdale to look like.”

The test run worked out. A year later, they bought a Tudor-style house, built in 1928, with four bedrooms, three and a half bathrooms, and stone details on its facade. In 2015, the house, which needed work — the kitchen and baths were eventually redone — cost about $1.05 million.

The couple’s early assumptions have faded. “There are so many really down-to-earth and interesting people here,” Dr. Benderson said.

Scarsdale, which is 76 percent non-Hispanic white and 15 percent Asian according to census figures, has a growing population from overseas, said Harry Bellew, 47, who grew up in England and has lived in Spain, Colombia and the Netherlands.

In 2014, Mr. Bellew, who works for a cloud computing company, and his wife, Kara Bellew, a lawyer who is now 43, were living in a two-bedroom condo in Hoboken, N.J., but needed to move closer to White Plains, N.Y., where Ms. Bellew was offered a new job.

“Insular” Scarsdale made them skittish, said Mr. Bellew, who is Hispanic. But being 21 miles from Midtown Manhattan and having strong schools made the town tough to ignore. The Bellews rented a Tudor-style house there, before plunking down $1.28 million in 2017 for a colonial-style four-bedroom, built in 1925, that they share with their two daughters.

If his twice-weekly pickup soccer games are any indication, Scarsdale is quickly becoming cosmopolitan, Mr. Bellew said: “It’s much more diverse here than I thought.”

What You’ll Find

Shaped like a wrinkled bow tie, Scarsdale, population 18,000, is squeezed between White Plains and Eastchester, but with a much more homogeneous look than those places. That’s not by accident. Beginning more than a century ago, the town has kept a white-knuckle grip on its growth.

In 1915, it voted to become a village to prevent White Plains from annexing it — the state can change a town’s borders, but not a village’s — and in 1922, Scarsdale imposed townwide zoning, the rare suburb to do so. (Today, the town and village are conterminous.)

But efforts to create a virtual moat around the suburb weren’t always successful. In 1930, a justice ruled that Scarsdale had improperly rejected a developer’s plan for a rental complex by the Bronx River Parkway, noting that apartments made up less half a percent of Scarsdale’s housing stock, versus 9 percent in Pelham Manor, to the south.

That development, the red-brick Scarsdale Chateaux, an eight-building, 116-unit non-elevator complex that is now a co-op, squeaked through. But multifamily housing is still a rarity in Scarsdale, be it rentals, co-ops or condos. Christie Place, with 42 age-restricted condos, arrived in 2008. And there is the Heathcote, a 14-unit project in the Five Corners area. After struggling to sell its one- to three-bedroom units as a co-op, the complex is reincorporating as a condo for a second try, said Dawn Knief, a Compass agent there. The apartments, which start at $6,500 a month, are rented in the meantime, Ms. Knief said.

Mostly, Scarsdale offers handsome single-family homes, many from the 1920s and 1930s. Besides Tudors in various shapes and sizes, Italianate, Georgian and Mediterranean styles are represented, often on the same block, helping streets avoid a cookie-cutter look. Neighborhoods often align with school districts, like Greenacres and Quaker Ridge. Properties west of Post Road tend to have bigger yards — sometimes more than five acres — than those to the east.

What You’ll Pay

A lot. On Nov. 21, there were 99 single-family houses for sale at an average list price of $2.84 million, according to multiple listing service data prepared by Angela Retelny, an associate broker with Compass.

The priciest was a six-bedroom colonial-style house on nearly two acres in the Murray Hill section, built in 2012, with an outdoor pool and indoor basketball court, listed for $8.995 million. The least expensive was a three-bedroom Victorian from 1894 with a front porch, for $749,000.

If activity is brisk, prices are soft. Through September of this year, 206 single-family homes changed hands, Ms. Retelny said, compared with 177 in the same period in 2018. But the average sale price through September was $1.61 million, she said, versus $1.85 million a year ago — a drop of 13 percent.

Federal tax law changes enacted in 2017, which sharply limited local property-tax deductions, have battered the market, brokers said.

The Vibe

Quaint, walkable and lined with the kind of mom-and-pop shops towns crave — like the independent Bronx River Books, which opened last year — Scarsdale’s downtown doesn’t have much in the way of night life. “Too many jewelers, banks and real estate offices” is how the town’s 2010 comprehensive plan put it, and not much seems to have changed since then.

But a 2.5-acre parcel with a parking garage and lots known as the Freightway Site, whose fate has been debated since the 1920s, may finally get a major makeover, with apartments, stores and parking. As of late November, officials had narrowed down a list of private development proposals to those of two finalists: AvalonBay Communities and the team of LCOR and East End Capital. The winning plan will be announced next spring.

Platform tennis, a paddle game played in the winter, was invented in Scarsdale, and courts still dot the town, as at Brite Avenue Park. But the outdoor highlight might be the Bronx River Parkway Reservation, an 807-acre linear park whose Garth Woods section brushes Scarsdale, where an Adirondack-style footbridge takes in a waterfall.

The Schools

The Scarsdale Union Free School District, which enrolled about 4,750 students in the 2018-19 school year, has five elementary schools, which run from kindergarten to fifth grade. The smallest last year was Greenacres, with 350 students; the largest was Quaker Ridge, with 485. The single middle school, for sixth through eighth grade, enrolled 1,125.

On last year’s state exams, administered in grades three through eight, 85 percent of students met standards in English, versus 45 percent statewide. In math, 88 percent met standards, versus 47 percent statewide. On last year’s SATs, students averaged 676 in evidence-based reading and writing and 705 in math, compared with 531 and 533 statewide.

Scarsdale High School, in a distinguished red-brick building, has a 99 percent graduation rate; 97 percent of students go on to a four-year college. The Scarsdale Alternative School, an 82-student school-within-a-school, incorporates internships and a senior project.

The Commute

About 45 percent of residents commute by public transportation, according to the most recent census figures.

The Harlem Line of Metro-North Railroad stops in Scarsdale. Eleven trains leave between 6 a.m. and 9 a.m. on weekdays. The longest trip takes 51 minutes; the shortest takes 32. Monthly fares are $278. Most nearby parking spaces require a permit, which is $1,000 a year.

Several county Bee-Line bus lines also serve Scarsdale, including Nos. 63 and 66, which loop across the village to the train station. The fare, payable by MetroCard, is $2.75.

The History

In 1858, William Bailey Lang, an iron merchant, built Rowsley, a veranda-lined house modeled after one in Derbyshire, England. Since 1928 the house, on the National Register of Historic Places, has been home to the Scarsdale Woman’s Club, which grew out of the suffrage movement and today holds book readings, wine tastings and jazz concerts. The gnarled white oak on its front lawn is thought to be almost 500 years old.

The way Jessica Goldman Srebnick tells it, her father, Tony Goldman, stood on Northwest Second Avenue and 25th Street sometime circa 2007 — back when Wynwood was still primarily an industrial warehouse district, a haven for graffiti artists and small galleries, and a place where large chunks of real estate could be scooped up cheap — and he saw the future.

“I could see my dad’s thought process as he stood there and said, ‘This is going to be the spine,’ “ Srebnick said. “Every neighborhood needs a town center. Growing up as the daughter of a visionary thinker, I have seen the progression of neighborhoods over my entire lifetime. And the creation of the Wynwood Walls turned out to be the heartbeat of this neighborhood.”

Goldman, who died in 2012, was a developer and preservationist who specialized in spotting bright potential in blighted neighborhoods. Through his company Goldman Properties, he transformed New York’s SoHo district and South Beach from rundown, grimy areas into red-hot residential neighborhoods with an artistic soul.

Today Srebnick, CEO of Goldman Properties, one of the largest land owners in Wynwood, continues her father’s mission. In the decade since Wynwood Walls opened its gates in December 2009 at 2520 NW Second Ave., the 70,000-square-foot outdoor gallery of gigantic murals of curated street art has become one of the most iconic public museums (and biggest Instagram magnets) in the world.

The property also houses three indoor galleries, including two operated by Goldman Global Arts, the curating arm of Goldman Properties: A 3,400 square-foot at the back of the Walls that opened during Basel 2016 and a 1,500 square-foot space that opened in 2018.

For the 10th anniversary, the Walls — which rotates roughly a dozen of its 40 murals once a year — will feature new works by established and up-and-coming artists including Martha Cooper, Kenny Scharf, Kelsey Montague and Michael Vasquez.

The occasion is also being celebrated with a coffee table book, “Walls of Change: The Story of the Wynwood Walls,” by Assouline Publishing. It documents the first decade of the gallery via photographs taken by Martha Cooper and essays written by artists who have exhibited their work there, including Shepard Fairey, Maya Hayuk and Ron English.

But aside from the high regard the museum enjoys, the Wynwood Walls has also been one of the most important catalysts for the ongoing transformation of Wynwood into a global real estate market that attracts international investment and developers.

“Art is a huge component of what Wynwood has become and what it is going to be,” said Martin Miculitzki, president of the Miami-based Block Capital Group real estate development firm, which has completed 15 projects in the neighborhood ranging from adaptive reuse of warehouses to brand-new residential and office buildings.

“When we started developing in Wynwood 10 years ago, the neighborhood was in decay,” Miculitzki said. “But Tony Goldman always championed partnerships between artists, public agencies and investors in Wynwood. Art has created an energy here that you can’t feel anywhere else. You sense it the minute you walk into the area. And you realize the potential the neighborhood has.”

Although Wynwood only spans 50 city blocks, its size belies its importance as an economic and tourism driver for the City of Miami.

According to the most recent annual report by the Wynwood Business Improvement District (BID), which is comprised of more than 400 property owners in the neighborhood, 2.9 million people visited Wynwood in 2018. Along the way, they spent $526 million in the area and accounted for 20% of all City of Miami Pay-by-Phone parking transactions (nearly 1.5 million).

A RESIDENTIAL NEIGHBORHOOD

Although the BID pegs the current number of full-time Wynwood residents at 1,654, that number is expected to swell as a number of new residential projects are finished. Already near completion or in the pipeline are:

▪ Domio Wynwood, a 175-unit residential project at 51 NW 26th St. formerly known as The Bradley. A joint venture by The Related Group and Block Capital Group, the building was leased out in its entirety on Wednesday by the New York-based apartment-hotel brand Domio, which will use the apartments as hotel rooms.

The lease runs for 10 years, with an option to renew. Reservations are open starting Dec. 30, with average rates ranging from $155-$255 per night for a one-bedroom and $214-$300 for a two-bedroom.

▪ Wynwood Square, a mixed-use project at 2201 N. Miami Ave., will span a full city block and feature 257 apartments, 60,000 square feet of office space and 27,000 square feet of ground-floor retail. The joint venture between the Los Angeles-based CIM Group and the Miami-based One Real Estate Investment is scheduled for completion in mid-2021.

▪ The 11-story Wynwood Green, the first multifamily development within City of Miami limits by the Lennar Corp., will feature 189 apartment rentals at 56 NW 29th St., the previous location of O Cinema Wynwood and The Wynwood Yard. The project is currently in the pre-construction phase.

▪ Wynwood Quarter, the first phase of a massive proposed development by Bel Invest USA, the American arm of the Italy-based global development firm Bel Invest, will add 143 rentals and 24,000 square feet of ground-floor retail space to the mixed-use project at 161 NW 28th St. That project is also in the pre-construction phase.

▪ Two co-living buildings are also in development: the 220-unit The Society at Wynwood at 2431 SW Second Ave. by Property Markets Group and the Toronto-based Greybrook Realty Partners; and the fifth U.S. location by the London-based The Collective, a 325,000-square-foot, $210 million mixed-use project at 2825 NW Second Ave. Groundbreaking is expected in 18 to 24 months.

▪ The Italian clothing retailer Diesel is also making its first foray into real estate with an eight-story, 143-unit luxury condo building on Northwest 28th Street that will officially launch on Dec. 4 during Art Basel with a virtual reality-enabled sales gallery. Construction will begin in April 2020.

The boom in Wynwood residential development wasn’t a sure thing as recently as two years ago, though.

Jon Paul Pérez, vice president of The Related Group, admits the company gambled when it broke ground in 2017 on the $100 million, 289-unit Wynwood 25, the first residential building constructed under the Neighborhood Revitalization District (NRD) plan that allowed for taller buildings with higher density and lower parking requirements.

“At that time, there was very limited residential product in Wynwood,” Pérez said. “Our bet was based on the fact that when you went to Wynwood on the weekend, there were 10 times as many people there as there were in Brickell or Midtown. We figured there had to be some pent-up demand from people wanting to live where they hung out.”

The gamble paid off. Pérez said Wynwood 25 has rented 70 percent of its 289 units since the building opened in September, with a current asking rent of $3.18 per square foot (from $1697-$6,000 for studios, one, two and three-bedrooms).

Wynwood 25, which overlooks the Wynwood Walls, also features the largest single piece of art in the entire neighborhood: a seven-story mural by the Los Angeles artist El Mac that recreates a photo he took of two boys watching him while he painted another mural in Wynwood during Art Basel 10 years earlier.

Land values in Wynwood have also soared. According to the Miami-Dade Property Appraiser, Goldman paid $3,900,000 in 2007 — or $42 per square foot — for the initial 38,000 acres from which Wynwood Walls grew.

In August, developer Property Markets Group and the Toronto-based Greybrook Realty Partners paid $46 million for a 1.6 acre parcel at 2431 NW Second Avenue — or $660 per square foot.

OFFICE HURDLES

New office space development has been a tougher sell.

Despite the 2015 NRD zoning revision, Jonathon Yormak, founder and principal of the Miami-based East End Capital development and investment firm, said he expects the current trend — refashioning existing warehouses into offices and restaurants — to prevail over new construction.

Yormak said he expects to see more adaptive reuse like the Concrete Beach Brewery, which opened in 2015 inside a converted warehouse at 325 NW 24th St. and has become a popular social hall and event space.

“That mix of old and new is what will keep Wynwood interesting,” said Yormak, whose company repurposed 25,000 square feet of warehouse space at 50 NW 24th St. into the popular two-story Wynwood Arcade, home to The Salty Donut and the cooking school In the Kitchen. “Not every site is big enough or warrants more development for best use.”

Breweries, though, aren’t a good fit for the gleaming Class-A office buildings sprouting up around Wynwood, such as the Wynwood Annex, a joint venture between Related and East End Capital that opened in September and features 60,000 square feet of space.

The Related Group’s Pérez said office rentals are a “chicken and the egg” situation because although Wynwood is a new office space, the rents are on par with Brickell (spaces in the Annex go for mid-$50s per square foot, which is the same as Class-A offices in Brickell according to Squarefoot.com).

“We’ve had some success,” Pérez said. “We released a full floor to LiveNation at a high rent. We had a deal with an ad agency that was going to take two full floors but when it came to sign they fell out. If they had stayed on, we would have had 50 percent leased at the time of opening.“

Pérez said Miami has never been a strong pre-leasing office market and he expects the Annex to be fully leased within nine months.

But competition for Class-A office tenants in Wynwood likely will increase over the next two years, when more projects currently under construction are completed, such as the 545Wyn mixed-use building at 545 NW 26th St. by the Chicago-based developer Sterling Bay, which will add 298,000 square feet of office space to the neighborhood.

Danet Linares, vice chairman of Blanca Commercial, said there has been steady interest in Cube Wynwd the 86,000-square-foot office building developed by New York-based RedSky Capital at 222 NW 24th St. that opened this year.

Thus far, the only signed tenant has been the co-working firm Regus Spaces, which leased a total of 24,000 square feet. The asking rate for Cube is between $38-$42 per square foot on a triple net basis (which means no operating expenses included).

“Wynwood is a new market, but we’re confident with all the additional residential units that are being built as well as the hotels, you’ll see a lot of demand from tenants,” Linares said. (Marriott has announced it will begin construction on a 120-room Moxy hotel at 255 NW 25th St. in early 2020.)

YIN AND YANG

One thing that differentiates these office buildings: Their architecture is bold and colorful and eclectic, fulfilling the Wynwood BID requirement that all new construction incorporate art into its bones.

The mandate ensures that the shiny new projects will blend in with the grittier warehouse spaces, whose exteriors have been turned into elaborate, eye-popping canvases by street artists.

“When Tony Goldman first approached me about Wynwood, one of the things he said was ‘Kid, we’re going to build the Lower East Side here,’ ” said the famed Wall Street banker-turned-artist Peter Tunney, who opened the first permanent gallery inside Wynwood Walls — the 4,000-square-foot The Peter Tunney Experience — in March 2010. (His first gallery opened in New York in 1991.)

“Tony told me ‘They’re all yin. They need some yang,’ ” Tunney said. “People think Wynwood was already a neighborhood back then, but it had not been gentrified. If you had a teenage daughter going to school, you weren’t going to live in Wynwood then, because it wasn’t safe.”

According to Dr. Paul George, resident historian at the HistoryMiami Museum, Wynwood was developed in the early 1920s as a residential neighborhood for white middle-class residents. After the exodus to the suburbs that followed World War II, the population of Wynwood shrank as the neighborhood transformed into an industrial district with a smaller population of low-income, largely Hispanic residents and a high crime rate.

“By the 1980s, Wynwood suffered from all the elements of inner-city malaise of that era,” George said. “It was a forgotten neighborhood with nondescript apartments and homes. Even though Tony had a stellar record as a developer, I thought he had gone really awry when he started investing in Wynwood. The fact that Wynwood is where it is today is astounding.”

In 2008, author Tom Wolfe was researching his novel “Back to Blood,” which was set in Miami, and asked George to join him on a tour of the city in his limo.

“He wanted someone to take him through the different neighborhoods, and when we drove through Wynwood I couldn’t believe the amount of traffic and people that Art Basel was drawing to Northwest Second Avenue,” George said. “Art was already going on there. There were galleries filled with people.”

Many of those quirky galleries are now gone, one of the many reasons not everyone is a fan of Wynwood Walls or its impact on the surrounding area.

Some mural artists have taken their work into other neighborhoods such as Overtown and Little Havana, claiming Wynwood is “oversaturated.”

And for every new restaurant and shop that opens in Wynwood, another stalwart business — such as the iconic ABC Costume Shop or the Boxelder Craft Beer Market — has shuttered due to rising rents or redevelopment.

“When an area undergoes such a drastic transformation in such a short period of time, there is always some kind of tenancy change,” said Block Capital’s Miculitzki. “The people who were there before were not ready for that kind of transformation. The original tenants couldn’t afford a higher rent. Their business plan and model was different. But you are seeing different tenants coming in and succeeding in this third or fourth reiteration of the neighborhood.”

THE COST OF PUBLIC ART

Even the Wynwood Walls are feeling the pinch. Srebnick said the company has had discussions on how to monetize the museum, including incorporating sponsorships, since the annual operating costs runs “well into the millions.”

“Most people don’t realize that the Wynwood Walls is a privately owned property,” she said. “We do not receive government or grant funding, nor do we charge for people to enjoy the massive array of artwork. Our costs include real estate taxes, mortgage payments, maintenance, security, insurance and staff. The costs are not shared by the neighborhood, yet the benefit is shared by all.”

Two restaurants located inside the Walls — the Italian eatery Joey’s, named after Srebnick’s brother, and the Wynwood Kitchen & Bar — do generate revenue. A new, 2,700-square-foot Wynwood Walls Shop has replaced the previous 500-square-foot store and offers an expanded assortment of products — water bottles, books, puzzles, stickers, magnets — made in collaboration with the artists on exhibit.

“You can buy a painting for $5,000 or $55,000, or you can buy something for $10 and come away feeling that you bought something at Wynwood Walls,” Srebnick said.

And as the Walls ramp up for their annual Art Basel showcase, Srebnick said she has been thinking about her father and his original vision.

“People ask me how I think my dad would feel 10 years later looking down on all this, and I say knowing my father, he’d probably cry, because the impact of Wynwood Walls has had so many ripple effects for so many people,” she said.

“It’s something that we’re incredibly proud of as a family. It was his idea and it was executed by a lot people. We picked up a brush and started to paint a picture with Wynwood Walls. A decade later, we have this beautiful canvas that is still being painted.”

Not once in its entire history, first as an industrial area and then as an edgy mecca for art, food, and entertainment, has Wynwood had purpose-built office space. Until now.

No fewer than four properties incorporating office space have been delivered within the year or are under construction.

Late last year, Goldman Properties debuted its Wynwood Garage, which features 30,000 square feet of offices along with 428 parking spaces. WeWork, the national co-working firm, signed a lease for the top floor in February and is now set up there.

Cube Wynwd by RedSky Capital, opened this spring, bringing 86,000 square feet of class A office and retail space to the market.

545 Wyn is set to open in mid 2020 and is being developed by Sterling Bay. It will feature 298,597 square feet of creative office and retail space. The design and architect firm, Gensler, recently signed a 10-year lease for a 13,456-square-foot space.

Wynwood Annex, built by The Related Group and East End Capital, opened recently, comprising 52,000 square feet of rentable boutique offices. The first tenant is the entertainment company Live Nation, which took 8,000 square feet.

“After seeing their space in New York’s meatpacking district, we couldn’t be happier about welcoming them to the building as our first tenant,” David Peretz, founder and managing principal of East End Capital, said of Live Nation Entertainment. “So far, we’ve seen a lot of interest from technology, advertising, marketing and innovation companies looking for class A office space in a neighborhood where employees can live, work, eat, and play. [Tenants can now find] brand-new office space with high ceilings, boutique floor plates, both private and shared outdoor space, and on-site parking,” he said via email.

“Office tenants are migrating to Wynwood because the district is such a vibrant area in the urban core of Miami and is recognized globally as a premier destination for art, innovation and creative enterprise,” he said. “Within a two-minute walk of the Annex, tenants [have multiple food and beverage options]. With more than 400 unique businesses, the surrounding neighborhood is one of the Annex’s best amenities. In today’s market, we’ve seen tenants increasingly prioritize location over other offerings. The location doesn’t get better.”

Demand is strong and rates (in the high $50s per square foot) are comparable to Brickell’s, he said. “The biggest and best names in tech have been touring lately, validating our thesis that the Wynwood neighborhood is attractive to firms focused on retaining a best-in-class workforce. Creative tenants want to cluster around other like-minded firms, so it’s exciting for us to see the expansion of the market,” Mr. Peretz said. “Tenants who are looking for office space in Wynwood are coming from other submarkets that historically catered to a creative class of tenants, including Miami Beach and Coconut Grove.”

“We’re finding that Wynwood resonates with everyone, from corporate America to local office tenants,” said Stephen Rutchik, Colliers-International executive managing director for office services. “There’s no tenant for which it’s not right.”

Wynwood leasing rates already better those of class A product in Coral Gables, he said. “Leases being done in Wynwood are only being surpassed by top-end product in the central business district.”

Innovative design, which includes more open space and natural light with floor-to-ceiling windows and fewer columns on the floor plate, appeal to everyone, but especially creative firms, he said. Many of Wynwood’s office buildings were designed along those lines.

That’s also the case for The Gateway at Wynwood, a 12-story, 420,000-square-foot class A office building at North Miami Avenue and Northwest 29th Street, for which Mr. Rutchik is to be the leasing agent. It is set to rise on a large site near the one on which a Walmart store was proposed but ultimately shelved. Ground for the office tower is to be broken soon.

Designed by Kobi Karp Architects and being developed by New York’s R&B Realty, the imposing glass tower will feature 205,000 square feet of office space, an 8,500-square-foot private rooftop deck and about 25,000 square feet of ground-floor retail.

“It will provide a grand entry into Midtown,” Mr. Rutchik said. “This cements the corner as the heart of the area. We’ve seen a lot of interest from potential tenants, and that’s significant because there’s not even a shovel in the ground yet.”

“Wynwood is poised to become Miami’s future creative technology hub as the city’s broader technology landscape continues to grow,” said Scott Sherman, co-founder and managing principal of Tricera Capital, a partner in a planned Wynwood mixed-use development that will include a significant office component.

“Wynwood can serve that type of tenancy because it can deliver the modern office product such companies are accustomed to, while more mature submarkets like Brickell and downtown Miami have older office stock,” he said.

“There are parallels to Chicago’s Fulton Market neighborhood, which is increasingly attracting technology companies like Google and creative office tenants,” he said. “For instance, Sterling Bay was one of the early movers in Fulton Market.”

“We should see a slew of companies announce plans to move into Wynwood,” Mr. Sherman said. In addition to Live Nation’s lease, “Numerous reports have indicated Spotify wants to establish a Latin American headquarters in the neighborhood.”

“We’re seeing office tenants that range from small businesses to multi-national corporations,” said Albert Garcia, chair of the Wynwood Business Improvement District and a principal of Wynwood Ventures. “They’re drawn by, and draw energy from, the dynamic neighborhood. Their employees want to be here. In this day and age, we all want to live in close proximity to where we work. And employers want to retain employees.”

Wynwood hopes to have another draw soon: negotiations are underway for a Tri-Rail station on the eastern part of Northwest 29th Street, he said. If it comes to fruition, that should increase its appeal not only to people who live nearby, but also to residents of the outlying suburbs.

A cyclical peak in South Florida office development appears remote, as demand has been growing faster than the supply of new space.

“It has been the seventh inning for five years,” said Stiles Senior Managing Director Kyle Jones, using a familiar baseball analogy to describe the timing of the market cycle.

Jones joined a slate of office market experts at Bisnow’s Office Market Update event last week at the Southeast Financial Center in Miami. He said supply of new office space in South Florida is expanding at a much slower pace during the current, post-recession growth cycle than in the years before the global financial crisis.

Stiles is building 352K SF of office space in downtown Fort Lauderdale and scouting projects in Miami, although Jones said office developers face rising construction costs and stiff competition with apartment developers for sites.

“We’ve seen about 7% supply growth this cycle, compared to 25% last cycle, and we think there’s opportunity,” Jones said.

Blanca Commercial Real Estate CEO Tere Blanca echoed Jones.

While conditions vary from submarket to submarket, overall, “Class-A product [in South Florida] is still a landlord’s market,” she said.

Through nine months of 2019, South Florida office landlords signed 5.9M SF of leases, compared with 4.4M SF over the same period in 2018, according to Newmark Knight Frank’s Q3 report, released Monday. The activity — 1.9M SF in the third quarter alone, 800K SF more than Q3 2018 — drove asking rents closer to the $40 per SF mark, NKF found.

Cain International Vice President Matthew Rosenfeld said his firm and co-developer OKO Group may lease space for as much as $70 per SF at their 830 Brickell office project, largely because it will be the first office building delivered in Miami’s Brickell Avenue corridor in about 10 years.

Coworking operators accounted for two of the biggest office lease deals in South Florida during the second quarter, according to NKF. In Miami, WeWork leased 88K SF at the Southeast Financial Center, and Spaces leased 49K SF at 801 Brickell. WeWork — now controlled by SoftBank after a failed initial public offering and the ouster of its founder and CEO — also pre-leased 25K SF at 830 Brickell, Rosenfeld said.

As far as office design, panelists said large, central open space for collaborative work sessions still prevails, with private offices on the perimeter.

Lima Facilities Manager Dan Hemme said his company shops for “very flexible workspaces” with open floor plans, dedicated conference rooms and phone booths: stand-alone enclosures that increase the privacy of on-site conversations.

“The whole open concept is the trend … I would say 90% of the projects we do are like that,” Maddox Group founder James Fox said. “That doesn’t necessarily work for our business. We’ve built those, but we don’t have that.”

Open floor plans for new offices often include compact conference rooms designed for meetings of fewer than a dozen participants, Claro Development principal Sandor Scher said. Private offices also are smaller than in years past, Scher said.

Law firms once “allocated 500 SF per partner,” he said. “Now it’s 200 SF.”

Programmed amenities for South Florida office tenants are becoming more common, Crocker Partners Senior Vice President John Osborne said. At many of Crocker’s suburban office buildings, they bring the perks of urban life to the property.

“What we’re doing to attract tenants and keep retention high is rolling out programs: food truck days, farmers markets, that sort of thing,” Osborne said.

More office landlords are “embracing the notion that a hospitality-infused workspace increases productivity,” Nuveen Real Estate Senior Director Charles Russo said.

Some developers are trying to successfully combine coworking spaces with co-living units, or rental apartments with two or more tenants, typically designed with a private bedroom and bathroom for each tenant and a shared kitchen and living room.

“We are in the midst of beta-testing a co-working concept … embedded in an apartment project,” Calm Management CEO Mukang Cho said.

WeWork was an early pioneer of that concept, with WeLive properties on Wall Street and in Crystal City, Virginia, blocks from where Amazon is building HQ2. The coworking giant had its valuation slashed from $47B earlier this year to $8B when its major investor, SoftBank, took control of the company. In the process, it broke off the agreement to build its third and final WeLive in Seattle.

Though some tenants request pricey build-outs of the offices they occupy in South Florida, “most of the office leases, at least for this market, are for 3K to 6K SF, and those tenants don’t want to rebuild space,” East End Capital Director Marc Gitto said. “They don’t want to deal with any of that. They basically want to move in and start working.”

Tenants of all sizes still value the traditional private office, Blanca said.

“It’s wonderful to think that everyone can operate in a very open environment, and there are no walls. The reality of it is, where you have no walls, it can become a very difficult place to work,” she said. “So, what we see is a trend coming back [to private offices]. All-open [office layouts] will not work for everyone. In most cases, it doesn’t.”

MIAMI — With year-round sunshine and a blossoming international art culture, Miami has become one of the street art capitals of the world.

Bright, colorful murals are turning up all over town on the walls of office buildings, warehouses, condos, corner stores, laundromats, and even public schools, sports stadiums and a police station. One section of Miami, Wynwood, is so dense with murals that it is getting hard to find an empty wall.

Often, the work carries a strong social message on subjects from environmental degradation to poverty and wealth, immigration, education, gender, and racial and ethnic diversity. Some work jabs at some of humanity’s worst tendencies. Sometimes, the messages shout. Sometimes, they are more like a whisper. Here is a selection.

Reinier Gamboa

Reinier Gamboa worries about the rising ocean, the near extinction of the Florida panther and the struggle of manatees to avoid being sliced by the propellers of pleasure boats. He mixes images of them and other creatures. “It’s a bit surreal,” he said. “You don’t normally see these animals together. The background is the ocean. It’s our main threat. It’s in the background of everything.” Mr. Gamboa, who arrived in Miami from Cuba when he was 11, collaborated with three friends on his mural to embed environmental messages that can be read with a cellphone.

Claudia La Bianca

“I’m all about empowerment of women,” Claudia La Bianca said. “I want to inspire women to stand on their own, to be strong.” In this painting, she shows three women wearing bandannas, their steady eyes staring down the world. “These are badass girls,” Ms. La Bianca said. “They have everything together: mind, body, finances and swagger.” She grew up in Sicily in a family of women. “I think that enabled me to connect with women in a deeper way,” she said.

PixelPancho

PixelPancho, an Italian who uses only his professional name, said his painting on the front of a middle school was inspired by Grant Wood’s “American Gothic” portrait of a Midwest farm couple with a pitchfork. His three-story mural is a criticism of education in America and elsewhere, he said, and an encouragement to young people. “We don’t teach our children the whole story,” he said. “It’s criticizing all Western education. But it’s also saying, ‘Whatever they are telling you, there is more. Look for it.’”

Tomokazu Matsuyama

Tomokazu Matsuyama, born in Japan and living in Brooklyn, blends colors, patterns and styles — from Japanese traditional to Victorian to contemporary. In this painting at Wynwood Walls, it takes a moment for his characters to emerge from the weave of colors and design. And it takes some thought to see that he is commenting on race, ethnicity, gender and culture. “I’m trying to mix all these aesthetics to define who we are as global citizens,” Mr. Matsuyama said, “to find some common threads.”

Marcus Blake

Marcus Blake, born in Jamaica, said his goal was to brighten neighborhoods. He works mostly with bold, bright colors in swirls and geometric shapes. “I transform buildings,” he said. “They become more welcoming.” As buildings shed their tired, worn look, whole neighborhoods begin to change. “The work translates into social action,” he said.

Serge Toussaint

Serge Toussaint has lived most of his life in Miami and New York. But he was born in Haiti, and he strives to keep its culture and history alive for other Haitian immigrants. “When a Haitian mother or father shows their children a picture of Abraham Lincoln or John Kennedy, they know who it is,” Mr. Toussaint said. “But they don’t recognize their own Haitian heroes.” He has painted a mural of Neg Mawon, the rebel slave who symbolizes Haiti’s independence from France, and a portrait of Gen. Henri Christophe, a leader of Haiti’s revolution.

Ivan Roque

Ivan Roque’s fierce lionfish explodes off the deep red wall of a discount perfume company. “The lionfish is one of the most destructive creatures in the ocean,” Mr. Roque said. “And it’s out there because of another mistake by humans. People didn’t want to kill the lionfish in their aquariums, their pets. So they dumped them in the ocean.” Now they are threatening the extinction of some small fish and destroying coral reefs.

Ron English

Ron English started out running in the streets with graffiti artists, dodging the police in New York. He has become known for his cartoonish figures that make fun of fast food and call attention to obesity in America. In his mural here, he is mocking the selfie culture with Temper Tot, his over-muscled child character that he says represents an immature superpower. “People are so absorbed in taking snapshots of themselves,” he said, “that they’re missing what’s going on around them. They don’t see things and they don’t talk to each other.”

El Mac

Their serene faces beam out over Miami from an eight-story wall, a young woman holding a single long-stem rose, a boy with palms upward in prayer. They are regular people whom the artist, El Mac, a.k.a. Miles MacGregor, of Los Angeles, said he tried to infuse with dignity and tranquillity. He sees the work as a counterpoint to the rancorous discourse of 21st-century America and the country’s trail of social injustice. “My hope is that when anyone see this, they’ll be able to tap into the feelings; they’ll feel a kind of balance to all the anxiety.”

Tristan Eaton

The women in Tristan Eaton’s mural are striking, strong, steady in their gaze. They project power. Their silver and blue complexions, the red accents and the white stars streaming across them, shout authority. He grew up in Detroit and New York, now lives in Los Angeles. “I’m cheering the idea of women having a greater voice and an equal seat at the table,” Mr. Eaton said. “Sometimes seeing imagery like this can solidify people’s viewpoints and they realize they’re not alone.”

Shepard Fairey

Shepard Fairey celebrates mavericks, spiritual leaders and the good green earth in this quilt of portraits and symbols in marigold and rose. “The better side of human potential,” he said. Mr. Fairey spotlights Tony Goldman, a developer who liked cowboy hats and used street art to help transform downtrodden neighborhoods in Miami and New York. Mr. Goldman died in 2012. The Dalai Lama and the Rev. Dr. Martin Luther King Jr. anchor the mural. Mr. Fairey worked in David Bowie, Miles Davis, Andy Warhol and others he and Mr. Goldman admired.

Ooh Raw! Poke + Juice Bar | South Miami
Ooh Raw! Poke is expanding with a second location in South Miami. The poke and juice bar signed a lease for 2,000 square feet at 6030 South Dixie Highway. It’s expected to open in the spring of next year.

Felix Bendersky of F+B Hospitality Brokerage and Jeff Cohen of Brown Harris Stevens Miami represented the tenant, while Tony Arellano of Dwntwn Realty Advisors represented the landlord, a venture between Alex Karakhanian’s Lndmrk Development and Wynwood Retail Co.

Salty Donut is a tenant at the building, which was previously home to the former Fox’s Lounge before it was gut-renovated.

La Social | Downtown Miami
La Social is planning to open in downtown Miami. The restaurant, with its main location at 7601 Biscayne Boulevard in the MiMo District, is taking 1,200 square feet at 12 Northeast First Avenue. Felix Bendersky of F+ B Hospitality Brokerage represented La Social, which is expected to open in November. The restaurant signed a 10-year lease.

Sushisamba | Lincoln Road
After nearly 20 years, Sushisamba is closing its Lincoln Road location at the end of this year.

The restaurant opened at 600 Lincoln Road in 2001, and will close in December instead of renewing its lease, the Miami Herald reported. Skyrocketing rents along the popular street have forced restaurants to shut down or reopen elsewhere in Miami.

Salt & Straw | Wynwood, Coconut Grove
A Portland ice cream shop is making its way to Miami. Salt & Straw announced it’s opening two locations in the spring of next year: one in Wynwood and another in Coconut Grove. Tyler Malek, co-founder and head ice cream maker, will create a locally sourced menu in Miami and will feature rotating flavors from Panther Coffee, Wynwood Brewing and other concepts.

In Wynwood, Salt & Straw is opening in an 1,100-square-foot space at Wynwood 25. Other tenants at the Related Group and East End Capital development include Uchi Miami. In Coconut Grove, it’s taking 1,300 square feet at 3015 Grand Avenue, at CocoWalk.

The Gramercy | Coral Gables
Restaurateur and nightclub owner Roman Jones is planning to open The Gramercy in Coral Gables. After taking over the former Tarpon Bend restaurant space on Miracle Mile, Jones will build out the 6,378-square-foot restaurant to feature exposed brick, oak floors and French tile, as well as an outdoor courtyard. CGI Merchant Group owns the building at 55 Miracle Mile. CBRE’s Danny Patxi and Paco Diaz brokered the 10-year lease.

Aventura ParkSquare restaurants | Aventura
Aventura ParkSquare announced four new food and beverage tenants at the mixed-use development. Casa D’Angelo recently opened in a 5,600-square-foot space, and Delicious Raw took a 2,000-square-foot space.

Delicious Raw signed a 10-year lease, brokered by Robin Weiner of Koniver Stern Group. The plant-based concept launched in 2013 and has locations in Naples, Estero, Davie and Miami Beach. The Aventura ParkSquare location also seats 49, with reclaimed wood, pendant lighting and driftwood globes.

Bartaco and Graziano’s gourmet market also opened at the mixed-use project. Integra Investments led the development, which includes senior living, an Aloft Miami Aventura, wellness center, 50,000 square feet of retail space and office condos.

Michael Silverman and Andrew Rosenberg of the Comras Company represented Integra in the retail and restaurant leasing.

Balans | Brickell
Balans is redesigning its Brickell location. Saladino Design Studios is handling the design of the 2,500-square-foot, 141-seat restaurant at 901 South Miami Avenue in the Shops of Mary Brickell Village. It will be completed in early 2020. Balans closed its MiMo location last year.

Rivertail | Fort Lauderdale
Jose Mendin’s new seafood restaurant, Rivertail, is opening this month in Fort Lauderdale. The Food Comma Group and Mendin’s Breakwater Hospitality will open Rivertail in the former Briny’s Irish Pub space at 315 South Andrews Avenue. Mendin’s restaurants include The Wharf Miami and The Wharf Fort Lauderdale, the latter of which is set to open in the fall.

141 East Houston will be a new, high design, best-in-class 65,000 SF office building with three levels of retail at the base

NEW YORK, NY – (October 2^nd, 2019) – On October 2^nd, the partnership developing 141 East Houston Street (www.141easthouston.com) held the project’s official groundbreaking.  Situated on the Lower East Side, between 1^st and 2^nd Avenues, on the site of the former Sunshine Theater which is now fully demolished, site excavation commenced and construction is now well underway.

East End Capital, developers of the project, were joined by its partners Greenfield Partners and K Property Group.  Also in attendance were executives from the building’s architect, Roger Ferris + Partners, and the general contractor, CM & Associates.

When completed in early 2021, 141 East Houston will be a new, best-in-class 65,000 SF office building, including three levels of retail at the base.  Tenants can expect a spectacularly designed building from Roger Ferris, showcasing massive windows with expansive views, 14-foot ceilings, column-free efficient space, an exclusive tenant lounge, and both private and communal outdoor terraces.

“The Lower East Side has more creatives living in it than just about any neighborhood in New York, yet it currently has no class A office space.  We are thrilled to be a part of the neighborhood’s changing landscape and provide something that is really needed,” said Jonathon Yormak, Co-Founder of East End.

“The building is beautiful and incredibly efficient for tenants,” added David Peretz, East End’s other Co-Founder, “and, we suspect, employers will find it very easy to recruit the best talent to this location.”

Office leasing is being handled by Howard Hersch of JLL, and retail leasing is being handled by Richard Skulnik of RIPCO.

###

About East End Capital:

East End Capital (www.eastendcap.com) is a vertically integrated owner and developer of commercial, residential and retail real estate throughout New York and South Florida.  The company seeks out growth areas fueled by the arts and the creative class, and demographic and infrastructural improvements.  A few notable East End projects include Wynwood 25, The Plant @ 321 West 44^th Street, The Wynwood Annex, 285 Madison Avenue and 123 William Street.  For further inquiries please contact Amanda Claudio at 917.281.0342 or aclaudio@eastendcap.com.

About Greenfield Partners

Greenfield Partners (www.greenfieldpartners.com) was established by Eugene A. (“Gene”) Gorab in 1997. The firm manages capital on behalf of its principals and limited partners, and has, since inception secured capital commitments in excess of $4.0 billion across a series of discretionary investment vehicles.  Greenfield’s limited partners include leading state and corporate pension plans, university endowments, private foundations and high net worth individuals.  Greenfield is based in southwestern Connecticut.

About K Property Group:

K Property Group (www.KPropertyGroup.com) is a fully integrated real estate private equity platform.  With over 35 years combined experience based in NYC, KPG manages fully discretionary institutional vehicles targeting middle market value-add office investments.  KPG’s management team has relied on an investment philosophy and organizational structure that results in its investors uncovering special situations and getting to opportunities ahead of the market, while receiving an unmatched level of service, transparency and accountability.

About CM and Associates:

CM and Associates (www.cm-assoc.net) was founded by Christopher Mesbah in 2005.  Our initial vision is the same as it is today.  We believe that a collaborative relationship, proper planning, and appropriate oversite will always lead to a successful outcome.  With that model we have effectively completed multiple condominium, rental, hotel, and office developments in the New York City Metropolitan Area. These projects totaling over $1 billion, from 50,000 SF to 350,000 SF, have all been successfully delivered both on time and under budget.

About Roger Ferris + Partners:

Roger Ferris + Partners (www.ferrisarch.com) is a critically acclaimed architecture firm providing architectural, interior design and master planning services to private, corporate and public-sector clients. The firm’s portfolio includes commercial offices, multi-family residences and mixed-use projects such as 34 Desbrosses Street in New York, The Equinox Hotel in Chicago, Kenmore Square in Boston and Screenland Lofts in Burbank.  Through an approach to design that synthesizes creative imagination and rational logic, RF+P engages diverse and challenging projects, enhanced by the ability to cross-pollinate design skills among building typologies.  As the recipient of over 80 regional, national and international citations and awards, the firm has earned praise from numerous highly respected international design and architecture organizations. With its headquarters in Westport and offices in New York City and Bridgehampton, the firm is committed to providing noteworthy architecture that responds to its environment while still further engaging the process of design exploration.

It’s been a busy few weeks for Related Group and East End Capital, as their new 289-unit apartment building Wynwood 25 had a grand opening party last week, and the 60K SF Wynwood Annex office building will be officially unveiled Wednesday. Its first tenant, Live Nation, which is leasing 8K SF, will move in over the next month or so.

“We’re negotiating four other floors right now,” in the eight-story building, East End Capital Managing Principal Jonathan Yormak said. He declined to name potential tenants.

Wynwood Annex features 5K SF of retail, 340 parking spaces and communal outdoor areas, including a rooftop terrace.

Yormak doesn’t intend to offer coworking, as there are already options in the neighborhood. Although, he could be convinced “if someone wants to pay enough money,” he said.

Yormak said that he is “feeling pretty bullish” about the Miami office market, and Wynwood in particular. East End Capital has two more projects in planning stages in Wynwood — an apartment complex and an office building across the street from one another at 2500 North Miami Ave. East End Capital also has holdings in New York as well as downtown Miami and Miami Beach.

“Speaking broadly about the market, there’s absolutely no doubt Wynwood is becoming a 24/7/365 neighborhood,” Yormak said.

Rezoning several years ago made it possible for new developments to spring up beside single-story converted warehouses. With Wynwood 25 and the Bradley, plus other residential options in development, “there will be a few thousand apartments in the next five years to support the office,” Yormak said.

Yormak said that about 80% of the potential tenants he has spoken with are national or international firms — “blue-chip names” — who want to expand their footprint in Miami.

“Rents are not getting any meaningful pushback,” he said. They’re “in the $50s” and comparable with Brickell, where asking rents average $55.83 per SF.

With the Annex, there are now three new, Class-A office buildings open for business in Wynwood, the others being The Cube and Goldman Garage. Sterling Bay’s 545 Wyn is not far behind, with nearly 300K SF coming to 545 Northwest 26th St.

“That’s that going to be completely different than my product — much bigger floor plates, and a bit out of the center of Wynwood,” Yormak said. “I don’t know what their rent structure will be, but they’re likely to land the first large tenant, a game-changing event. I wouldn’t be surprised if they land a Google or an Apple.”

Over the past seven years, the South Florida office market has had only one quarter with negative net absorption, according to Newmark Knight Frank.

“The 185K SF absorbed in second-quarter 2019 brings year-to-date absorption to just under 327K SF,” NKF officials wrote in a recent market report. “This is a 63.3% uptick from the 200K SF recorded one year ago.”

The report noted that as rents rise, tenants may choose price over quality. Overall asking rents rose again to a record $33.73 per SF in Q2, according to NKF, and Class-A asking rents are approaching $40 a foot, rising from $39.31 to $39.90 between 2018 and 2019.

“This is the highest average recorded, pushing past the previous 2008 peak level of $35.62/SF by just over 12%,” NKF’s report states.

Yormak, who is scheduled to speak at Bisnow’s South Florida Office Market Update event Oct. 24, said Miami should examine how it can lure more Fortune 500 companies. Permitting can be a hassle here moreso than in other locales, he said, and certainly fears about climate change are a factor.

Every autumn, “I have a panic for six weeks,” he said. Hurricane Irma did $1M in damage to East End’s portfolio.

“Wynwood is 14 feet above sea level, but at the end of the day, in Miami, based on the way it’s currently developed, as the beach goes, so goes most of Miami, if not all of Miami,” Yormak said. “It’s the major driver of the economic engine.”

Miami will face the same adaptation challenges as cities like Amsterdam and Venice. Yormak said he is hopeful that green building and energy technologies will catch up and become more effective and affordable, and that government subsidies would hasten those transitions.

“The problem is, of course, if it’s 15% or 20% more expensive, people speak with their wallets,” he said. “How to pay for that, assuming they even could … You can’t build a project and lose money.”

The Related Group, one of the largest multifamily developers in the country, is doubling down on Miami’s Wynwood arts district.

The firm has completed one apartment complex in the 50-block corridor north of downtown, while another is set to open in the fall. The Miami-based developer also has three more rentals in the pipeline, which would bring its commitment to more than 1,200 units in the once-overlooked industrial area that’s now getting a major makeover.

“We’re very bullish on Wynwood,” Jon Paul Perez, a Related vice president, said in an interview. “Wynwood is an evolving neighborhood. People really do want to live there.”

Wynwood was considered Miami’s garment district from the 1950s to the 1990s, but market forces eventually moved those jobs overseas, leaving Wynwood a mostly crime-ridden area with graffiti sprayed across the abandoned warehouses.

In the early 2000s, art galleries moved into the neighborhood and street art and murals started drawing crowds. Restaurants and cafes soon followed, and now developers are moving in to build upscale residences and offices.

Nearly all of the 1.5 million square feet of office inventory in the Wynwood-Design District market is in Wynwood, according to CoStar Market Analytics. Developers are now building 340,000 square feet, with 1.7 million square feet in the pipeline. If all proposed projects are built, the area will have nearly 4 million square feet of offices, representing more than 3% of the metropolitan Miami inventory, according to CoStar data.

Perez, son of Related founder Jorge Perez, said that the firm is building apartments in Wynwood on the strong belief that people want to live near their work.

In the past month, it opened Wynwood 25, a 289-unit apartment complex at 215-339 NW 24th St. The project is adjacent to The Annex, a 52,000-square-foot office and retail project that’s expected to open in September.

The Related Group, one of the largest multifamily developers in the country, is doubling down on Miami’s Wynwood arts district.

The firm has completed one apartment complex in the 50-block corridor north of downtown, while another is set to open in the fall. The Miami-based developer also has three more rentals in the pipeline, which would bring its commitment to more than 1,200 units in the once-overlooked industrial area that’s now getting a major makeover.

“We’re very bullish on Wynwood,” Jon Paul Perez, a Related vice president, said in an interview. “Wynwood is an evolving neighborhood. People really do want to live there.”

Wynwood was considered Miami’s garment district from the 1950s to the 1990s, but market forces eventually moved those jobs overseas, leaving Wynwood a mostly crime-ridden area with graffiti sprayed across the abandoned warehouses.

In the early 2000s, art galleries moved into the neighborhood and street art and murals started drawing crowds. Restaurants and cafes soon followed, and now developers are moving in to build upscale residences and offices.

Nearly all of the 1.5 million square feet of office inventory in the Wynwood-Design District market is in Wynwood, according to CoStar Market Analytics. Developers are now building 340,000 square feet, with 1.7 million square feet in the pipeline. If all proposed projects are built, the area will have nearly 4 million square feet of offices, representing more than 3% of the metropolitan Miami inventory, according to CoStar data.

Perez, son of Related founder Jorge Perez, said that the firm is building apartments in Wynwood on the strong belief that people want to live near their work.

In the past month, it opened Wynwood 25, a 289-unit apartment complex at 215-339 NW 24th St. The project is adjacent to The Annex, a 52,000-square-foot office and retail project that’s expected to open in September.

Have you ever wondered where that mural is that your favorite influencer posted about? Well, good news, we got the exact locations for you. Instead of scrolling endlessly through Instagram feeds trying to figure out where that heart-filled wall is, explore the most Instagrammable Wynwood murals without with this cheat sheet without getting lost.

This eight hidden murals are Florida-inspired and represent the real artsy culture from the Magic City.

Wynwood 25
Location: 240 NW. 25th St. Miami, FL 33127

Why you need to go: This apartment community has one of the most creative and Miami-inspired murals. Escape the crowd in this relaxing walkable area and explore the picturesque walls that features a unicorn, a rainbow and even a sign that reads “The World is Yours.”

Astra
Location: 2121 NW Second Ave. Wynwood, Miami, FL 33127

Why you need to go: This rooftop restaurant has a beautiful pink-wall with 3D butterflies that will transport you to Alice in Wonderland.

Zak the Baker
Location: 295 NW. 26th St., Miami, FL 33127

Why you need to go: This laid-back cafe offers gourmet baked goods in a hidden street in Wynwood. The colorful bold colors outside the facade make any photo background pop.

Warby Parker
Location: 215 NW 25th St., Miami, FL 33127

Why you need to go: This instant camera-inspired mural features a sidewalk painting as well. Represent your passion for photography and Instagram at this must-visit spot.

Heart Wall
Location: 2300 NW. Second Ave., Miami, FL 33127

Why you need to go: This rainbow heart wall will bring you sunshine even in the gloomiest Miami weather.

The Wynwood Wings
Location: 2451 NW. Fifth Ave., Miami, FL 33127

Why you need to go: Spread your wings at this hidden art mural that will make you feel like an angel. This art-filled avenue is full of murals and is less crowded than the main street at Second Avenue.

Noa Cafe
Location: 2711 NE. Second Ave., Miami, FL 33137

Why you need to go: Show your love outside this casual Mediterranean restaurant with the most picturesque outdoor patio. This love wall is away from the touristy area and is a good spot to have a relaxing brunch.

Basel House
Location: 2308 NW. Fifth Ave., Miami, FL 33127

Why you need to go: The giant alligator mural represents everything about Florida: wildlife, nature and sunshine.

So what are you waiting for? Get out there and take some pics at these unreal art walls!

Applicants are flooding in to lease apartments at Wynwood’s first major apartment complex to reach completion, developers say.

Wynwood 25 opened recently, and has already leased 40% of units, just 30 days after the city issued a Temporary Certificate of Occupancy that allows residents to begin moving in.

The project is also unique in that it features micro units with apartment sizes starting at just 400 square feet.

In total, Wynwood 25 includes 289 apartments. Pricing for studios start in the the low $1,400s, with three bedroom prices reaching the low $4,000s. Around 80 percent of units are priced below $2000, and all include smart-home technology and ten foot ceiling heights.

Amenities include a fitness center and yoga studio, co-working space, a coffee lounge, a 12,000 square foot green courtyard, dog wash facilities, and a roof terrace with a pool, barbecue, and movie screen.

At the ground floor level is 31,000 square feet of retail. A garage with 340 parking spaces was also built.

East End Capital and Related Group are the developers. Kobi Karp is the architect, with Meshberg Group overseeing interior design and Naturficial the landscape designer.

The Related Group and East End Capital have completed the first large apartment building under Wynwood’s new zoning code.

Wynwood 25 is the start of a transformation for the Miami neighborhood, as thousands of people move in to enjoy its arts, culture and food. Some of the units in the nine-story building face Wynwood Walls, which is across the street.

Located at 240 N.W. 25th St., Wynwood 25 has 289 apartments and 31,000 square feet of retail. Units range from studios to three bedrooms. The building includes 400-square-foot studios. The apartments have keyless entry and smart home features.

Wynwood 25 by The Related Group, is the first mixed-use residential project to be completed in the Wynwood neighborhood.

Rents range from the low $1,400s for a studio to the low $4,000s for the larger apartments.

Karp Karp was the architect and Meshberg Group was the interior designer. The general contractor was Beauchamp Construction Co.

The building has numerous murals, although most of the exterior has a sleek black and gray look.

“Related’s goal was to deliver a project that celebrates Wynwood’s vibrant and innovative character, one that sets the tone for the neighborhood’s future residential offerings,” Related Group Executive VP Jon Paul Perez said. “We have been blown away by the strong and consistent leasing pace, and we continue to receive tremendous feedback from residents who are eager to begin living the lifestyle. The completion of the project pushes the Wynwood neighborhood into its next phase; one that we will continue to tap into.”

Amenities at Wynwood 25 include a rooftop pool deck, grilling stations, a fitness room with virtual spinning studio, a library, coworking spaces, a movie lounge, interior garden courtyard, pet grooming station, clubroom and game room. There’s artwork throughout the building.

The developers have leased 7,500 square feet at Wynwood 25, with sushi restaurant Uchi Miami and Tahini Street Food still preparing to move in.

Meanwhile, Related and East End are putting the finishing touches on the neighboring Wynwood Annex, a 60,000-square-foot office building. It should open later this summer, the developer said. Live Nation Entertainment has leased space there.