On the northeast fringe of the Flagler Village area sits a desolate mid-century shopping center where an aging Sears department store closed in January, eliminating the anchor tenant and namesake of the 5.2-acre property at Sunrise Boulevard and Federal Highway. The commercial landscape at the Searstown shopping center eventually may give way to the type of high-rise residential development that has pervaded the rest of trendy Flagler Village in recent years.
A hint of what could come next for the Searstown site is Modera Flagler Village, a new 24-story apartment building that opened last year one block south of the shopping center and looms over its abandoned anchor store, where the faded blue Sears logo clung to the façade after the store’s sign came down. A pending redevelopment of Searstown and two nearby parcels would build out northeast Flagler Village with nearly 1,000 apartments in five buildings ranging in height up to 30 stories and more than 100,000 square of space for retail stores, offices, and restaurants.
‘It’s going to be almost its own neighborhood. The idea is we’re creating a sense of place, and not just one building,” says Andrew Zidar, vice president of development and acquisitions at RK Centers, the owner of Searstown. “We’ve owned this property since 1987. We’ve always known there would be a higher and better use of the property.”
RK Centers, which has an office in North Miami Beach, paid $4.3 million in early January to acquire two surface parking lots just south of Searstown. The seller was Transformco, a company that operated the Sears store before deciding to terminate its lease with RK Centers and close the store. Tramsformco’s agreement to sell the parking lots was part of its lease-termination negotiation with RK Centers, Zidar says. The parking lots at the corner of Northeast 9th Street and Northeast 5th Avenue, together with the Searstown plaza at 901 N. Federal Highway, cover a total of 8.1 acres in a central location just a short drive or walk south to downtown Fort Lauderdale.
In October 2021, RK Centers won site-plan approval from city officials for the development of two 30-story towers and one 15-story building with a total of 780 apartments on the Searstown site. The company also has plans to build two 15-story buildings with about 175 apartments and 190 hotel rooms on the parking-lot sites.
“The project, in terms of land, has grown a little bit. We’re currently just trying to understand how that additional land will affect the project and what that will look like,” Zidar says. “We’re working through that process.”
Zidar expects a groundbreaking by the fourth quarter of 2023 for what he calls “the main project,” the 30-story residential makeover of the 53-year-old Searstown shopping center. RK Centers has prepared separate redevelopment plans for the plaza and the parking lots for consideration by the city government’s Development Review Committee, or DRC. “Since the three properties were separated by public roads, we had to file three separate plans,” he says. “We did them concurrently, so we looked at it as one master-plan project. But they are technically three DRC applications.”
How many apartments will be marketed as condos or rentals is undecided, but a mix of the two is likely, Zidar says. Tenants of these high-rises may face sky-high rents. Only eight of the 350 apartments at nearby Modera Flagler Village were vacant in late February, each available for just under $4,000 a month, according to apartments.com.
Redevelopment of the Searstown site promises to be the single highest profile project happening north of downtown in the coming years. But it won’t be alone. Near Federal Highway north of downtown, people can expect to see more new developments that mark the continuing evolution of Fort Lauderdale – developments such as the large Allegro senior living complex being built just north of the tall, modern Riva Residences that opened less than a decade ago. However as other parts of the central city – namely, the area just west of Flagler Village and neighborhoods near Tarpon River south of downtown – become home to more large apartments and condos, the Federal Highway corridor’s changes will likely be more limited unless the city changes zoning that, according to real estate experts, is now unfriendly to larger multifamily developments.
Buildings Rise, Rent Rises Faster
Among the selling points of the Searstown location is its proximity to the Holiday Park area, which encompasses the recently renovated Parker Playhouse and a reimagined War Memorial Auditorium. The 55-year-old Parker reopened last year following a $30 million renovation of the 1,147-seat theater. Nearby, a $65 million practice facility for the Florida Panthers is expected to open this summer at 72-year-old War Memorial. The “iceplex” will have two regulation-size indoor ice rinks, including a dedicated public rink for amateur hockey programs, figure skating, and recreational skating.
Higher apartment vacancy rates, of course, could slow a residential redevelopment of Searstown. Brokerage firm Cushman & Wakefield reported that Fort Lauderdale had 1,711 apartments under construction and a 5 percent apartment vacancy rate in the third quarter of 2021, the highest vacancy among the nine sub-markets of in the Broward market, where the countywide average was 3.4 percent. Yet low single-digit vacancy rates and lofty rents appear likely to persist in South Florida’s seemingly bottomless market for rental housing.
“Rents have exploded across South Florida. Effective rents average $1,905 in Miami-Dade, $1,969 in Broward and $2,160 in Palm Beach,” according to the Cushman & Wakefield report. “Strong rental demand from continued population growth, a single-family housing pricing surge, a snapback in rent growth from static 2020 and government assistance programs all have contributed to exceptionally strong rental prices.”
Real estate pros say a scarcity of developable land in downtown Fort Lauderdale has pushed multifamily residential developments north into Flagler Village, the popular 300-acre area that extends north from downtown Fort Lauderdale to Sunrise Boulevard, in between the Florida East Coast railroad and Federal Highway. “Ultimately, we’re going to end up in a position where everything to the south of us will be developed,” Zidar says. “To the north of us, you hit Sunrise Boulevard and head toward Lake Ridge, and that’s obviously more single-family [homes] and low-rise development stuff.”
Just south of Searstown, for example, is the site of Flagler Creative, a 30-story, 316-unit apartment development planned at 818-824 NE 4th Avenue. “You will continue to see more of that because there is such strong demand for multifamily near the urban core,” says Jaime Sturgis, founder and CEO of Fort Lauderdale-based Native Realty. “There aren’t that many spaces left downtown for vertical redevelopment. We get calls every single day – sometimes five or 10 a day – from people looking for multifamily development sites.”
Sturgis brokered a sale of the Flagler Creative site late last year. He also brokered the sale of The Hive at 900 North Flagler Drive, a mural-covered retail center on a triangular block just west of Searstown with a tenant mix that includes a café, smoke shop and tattoo parlor. “We’re working on a number of projects in and around that area,” Strugis says. One is the renovation of a commercial building at 801 North Federal Highway, near the entrance to Holiday Park. Sturgis’s firm Native Realty is looking for retailers to lease space in the building and marketing its proximity to the park. “That’s absolutely going to be an amenity for the retailers there,” he said.
Some new developments have popped up farther north on Federal Highway. They include an Allegro senior living facility under construction at Northeast 13th Street and Federal Highway, about a block north of the Riva Residences condominium, which opened in 2018. Alliance Residential Company is developing the 186-unit Allegro residence at 1290 North Federal Highway and expects to finish construction in May 2023. “We love the location as it is near the fabulous beaches of Fort Lauderdale and just north of the central business district, which has world-class arts and cultural venues,” says Robert Hall, the managing director of Boca Raton-based Alliance Residential.
But the planned high-rise redevelopment of Searstown may not to lead to a slew of residential skyscrapers along North Federal Highway from Sunrise Boulevard to Oakland Park Boulevard, a low- and mid-rise area populated by such businesses as auto dealerships, retail stores, grocery stores and restaurants. Nor is large-scale redevelopment a likely scenario on a narrow block along Federal Highway just south of Searstown with a row of one- and two-story midcentury commercial buildings, home to such occupants as Radio-Active Records and Roxanne’s Liquor Bar & Kitchen. “My guess is it probably stays the way it is for a while,” says Bradley Arendt, a director with brokerage firm Colliers in South Florida and a member of its Urban Core Investment Sales team. Unless this odd little block is somehow incorporated in the Searstown redevelopment, “it’s really too narrow to develop on its own accord.”
In general, high-rise residential development west of Flagler Village is more likely than north of Flagler Village along Federal Highway, Arendt says. Most of Federal Highway in Fort Lauderdale is zoned B1 on both sides of the road, which allows residential developments with density up to 50 dwelling units per acre. “So, if you’re going to do a residential component, that’s pretty limiting,” he says, because most apartment developers prefer projects with 200-plus units. “You can go up to 150 feet, which gives you some decent height. But you need a four-acre site to do 200 units. So, show me a four-acre site that I can do it on.” In the built-out Federal Highway corridor north of Sunrise Boulevard, “you’re going to be hard pressed to see major development, at least when it comes to a high-density residential project, unless the city wants to allow more density in the B1 zone, which to date they really haven’t done.”
Alternatively, the city government might expand the urban area covered by its Regional Activity Center (RAC) zoning, which covers downtown as well as Searstown. “In the RAC, there’s unlimited density and a 30-story height limit,” Arendt says. “I eventually see the RAC expanding. Where exactly, I don’t know. But I would say, in 10 or 15 years, most likely west and south, because I don’t see an area to expand north as much.”
The future of Searstown as a destination instead of a drive-by could prove pivotal to its midtown neighborhood. “It is the gateway to Flagler Village coming from the northwest,” he says. “Hopefully, it will be a transformational, legacy project. Obviously, it’s a defunct, derelict eyesore at this point.”
For years, the area has been well known as a gateway to slow, bumper-to-bumper driving. Traffic congestion is chronic where Sunrise Boulevard and Federal Highway merge near Searstown. So, the planned redevelopment of the shopping center would encompass some streetside alterations. In cooperation with the Florida Department of Transportation, RK Centers plans to provide 250 feet of Searstown property along Sunrise Boulevard for an additional turn lane to help alleviate traffic eastbound. Plans also call for widening U.S. 1 in front of the Searstown site.
According to the site plan to redevelop Searstown, people heading there eastbound on Sunrise Boulevard would turn south on U.S. 1 to a dedicated turning lane for the property. “The hope would be that would speed things up eastbound,” says Zidar, the RK Centers executive. “We’re hoping to do our part to make things better.”
The neighborhood itself is certainly getting better around Federal Highway and Sunrise Boulevard, “across from a city park where they’re doing a lot of great things with the Florida Panthers and the theater,” he says. “This is one of the most important intersections in the city.”