• Sat. May 25th, 2024

Office Landlord Gets Retail Rents, Neighborhood Gets a New Gym

Bynewsmagzines

Mar 31, 2023
The newly redeveloped building sits on over 1 acre in the Fort Lauderdale retail market of Broward County, north of the Coral Ridge Mall. (CoStar)

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The creative adaptive reuse and redevelopment of an aging Fort Lauderdale, Florida, office building earned a 2023 CoStar Impact Award for the effect it had on the owner’s bottom line and on the surrounding community.

After purchasing the former Bank of America building in 2020 for more than $4 million at an auction, the buyer was looking to lease the building at 3600 N. Federal Highway to traditional office tenants. But concerned about the negative effects of the pandemic on the office market, the Rotella Group advised the landlord to consider alternative uses for the property.

After reviewing several offers, the landlord ultimately chose Planet Fitness to lease the entire building under a 10-year deal. Planet Fitness offered to pay market retail rent for the entire building and required fewer tenant improvements from the landlord than an office build-out would have, according to the brokers.

The new Planet Fitness was designed with both functionality and style in mind, taking advantage of existing spacious floor plates to accommodate a variety of workout equipment. Additionally, the redeveloped facility was designed with energy-efficient lighting, HVAC systems and appliances, and utilized environmentally friendly construction materials and practices to minimize its impact.

The gym offers a fully equipped weight room, cardio equipment, yoga studio, sauna, massage room, juice bar, lounge area, bike storage, showers and changing rooms, fitness classes and free Wi-Fi. It is located in a mostly commercial area near public transit, bike lanes and ample parking.

About the project: The three-story, 20,000-square-foot office was initially built in 1969. The redevelopment of the building into a health club was completed in December 2022, and residents in the community are already signing up for gym memberships, group classes, yoga sessions, wellness events and happy hours.

What the judges said: “This project was a good re-use for low-demand office space,” said Michael Feuerman, Esq., SIOR, CCIM, senior vice president with Berger Commercial Realty Corp./CORFAC International. “The building had been on the market for lease and also sale for a long period of time. The location is not well located for traditional office, in my opinion, so finding a better use and leasing to a national credit tenant was a great, out-of-the-box idea by the leasing team and landlord.”

Repurposing underutilized office properties will likely be more common, and this project “was a good example of how that can be done,” Feuerman added. “The construction was environmentally responsible, which is always a positive.”

The creative adaptive reuse solution for the former Bank of America building also provided “huge value to the [landlord] through higher retail rents,” said Ben Landes, Florida technology adviser for JLL.

They made it happen: William Rotella, president of the Rotella Group in Fort Lauderdale, Florida; Henry Lederfeind, marketing manager with Rotella; Clinton Casey, broker associate at Rotella; Howard Dvorkin, owner of the building and president of HSD Holdings; and Brian Horowitz, asset manager at HSD Holdings.

From left to right: CoStar’s Trey Duckworth, The Rotella Group’s Clinton Casey, CoStar’s Ryan George and The Rotella Group’s President Bill Rotella. (CoStar)

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