Mostly vacant for years, a Mediterranean-style monument to inertia, Las Olas Riverfront in downtown Fort Lauderdale may finally get a date with a wrecking ball as early as March. Demolition is pending the sale of a majority of the property to Property Markets Group (PMG), a leading real estate development company with offices in New York, Chicago and Miami. The sale is scheduled to close this month.
In place of Las Olas Riverfront, PMG plans to build 1,200 smaller-than-average rental apartments geared towards Millennials and close to 40,000 square feet of retail space dominated by food and beverage service. “You’re creating a scene, and a lot of that stems from having residential support retail,” Ryan Shear says.
Shear, a native of Coconut Grove and a Miami-based principal of PMG, recalls the weekend crowds that flocked to Las Olas Riverfront in the late 1990s, when it was a popular dining, drinking and people-watching destination with such long-gone tenants as Max’s Grille and the Ugly Tuna Saloona. He says PMG’s goal is to resurrect the popular appeal of Las Olas Riverfront during its heyday. “If it’s not being talked about like ‘I have to go to Riverfront,’ like people used to say, then we will have failed,” he says.
PMG is not buying the entire property. The group has agreed to buy a 2.4-acre parcel on the west side of the property from the current owners, led by South Florida developer Dev Motwani, who will retain a parcel on the east side of the property spanning more than an acre, with frontage on the New River. “He would keep the part of the property that is by the river. It’s the easternmost piece on the river where he’s planning his own development,” Shear says.
Motwani told Fort Lauderdale Magazine in an email exchange that his group is considering the development of hotel rooms and condos on the property they’re keeping.
If PMG completes its purchase of the western portion this month as planned and obtains necessary city approvals, demolition work could start right after March 11, the date of the St. Patrick’s Day Parade and Festival in Fort Lauderdale. The parade route ends in front of Las Olas Riverfront.
“We’re probably going to hold off for the St. Patrick’s Day parade, [finish the demolition work in three to four months], and then go right to construction,” Shear says.
PMG plans to build smaller-than-average apartments with a modern package of shared amenities aimed at young adults in their 20s and 30s. A one-bedroom apartment would measure 525 square feet, for example, compared to a standard one-bedroom size of 800 square feet. “People are willing to live with a couple hundred square feet less if you give them a great social platform to play with,” Shear says. “We’re trying to make it a nightlife place.”
He declined to specify the likely range of monthly rents. “I think we’ll be cheaper than the rest of the market because the units will be smaller,” he says. PMG’s plan to build rental apartments, not condos, on the property, would fill a need in Fort Lauderdale for more rental housing.
Commercial real estate brokerage firm Marcus & Millichap reported in October that a scarcity of newly built apartments in Fort Lauderdale lowered the city’s apartment vacancy rate to 3.2 percent during the three months from July through September while increasing average monthly rent to $1,614, up 8 percent from the same period in 2015.
“I think Broward County is one of the top three markets in the country for pent-up demand [for rental housing]. I think there’s still a lot of depth there,” says Steve Patterson, CEO and president of Related Development, the market-rate multifamily division of Miami-based Related Group. Government labor data show Broward County got 36,000 more payroll jobs during the year ended in August, Patterson says, but new permits for apartment construction totaled only 3,800 units countywide during the same one-year period. “Permitting in Broward County is well below what we think is comfortable” for new rental developments, he says. “I feel really good about supply and demand in Broward.”
This, of course, is not the first residential redevelopment plan for Las Olas Riverfront. Speculation about the property’s potential for redevelopment suffocated the property after its successful 1998 opening and sale. Michael Swerdlow, the original developer of Las Olas Riverfront, sold it in 2005 to a firm called Boca Developers, which announced plans to redevelop the property with a condo component — triggering an exodus of tenants seeking a long-term address. After the housing bubble burst in the late 2000s, Boca Developers defaulted on a mortgage loan secured by the depopulated retail property. In 2008, after suing the principals of Boca Developers, Wachovia Bank transferred the defaulted mortgage to New York City-based private equity firm Cerberus Capital Management, which subsequently seized control of the Las Olas Riverfront and resold it to the current Motwani-led ownership group in 2012.
Motwani has a partnership with two Canadian investors that bought Las Olas Riverfront from Cerberus for $16.7 million. After exploring their options, the owners last year listed Las Olas Riverfront for sale, which is how PMG learned it was available. Shear got PMG involved as the successful bidder through his friendship with Motwani’s brother, Nitin Motwani, one of the developers of Miami Worldcenter, a massive mixed-use project now under construction in downtown Miami. In September, PMG presented its proposed redevelopment of Las Olas Riverfront to the City of Fort Lauderdale’s Design Review Committee, and in October, the company was responding to comments by the committee. Ultimately, the proposed project will require approval from the city commission but will not involve a request for rezoning, which is typical of the PMG process, Shear said. “In Florida, almost everything we do, there’s no rezoning,” he says.