In 2018, downtown Fort Lauderdale added just over 1,000 residential units. An additional 3,000 units have already come to market so far in 2019, with more underway. While speakers at ULI Southeast Florida’s “Fort Lauderdale Emerges” event acknowledged the risk of overbuilding, they were also confident that a blockbuster mixed-use project will attract interest for decades to come.
The Main Las Olas, a 1.5 million-square-foot (139,000 sq m) residential, retail, and office complex, was driven by Terry Stiles, the founder of Stiles Corporation, who drove the project forward while battling cancer. Though the site was purchased in 2006, the development process did not begin until 2016. A year later, Stiles passed away. Still, Robert Breslau, Stiles’s chief development officer, credits Terry Stiles’s unwavering pursuit of the project as a key factor in its development.
“Terry was convinced that this was the right property and the last full block available for development in Fort Lauderdale,” he said at a panel discussion that included Stiles Corporation president Scott MacLaren; Mark Portner, a director at project partner Shorenstein; and moderator Eric Rapkin, who leads the real estate practice group at Akerman.
The Main Las Olas is being prepared for occupancy by 2020. But the road to getting the project approved was long and involved navigation of an economic crisis and incorporation of both a public/private partnership and nontraditional financing to bring it to life.
“This project goes back some time because [Stiles] wanted to secure a Las Olas tower, and for years there was nothing happening west of Third Avenue,” said MacLaren. Though the site was purchased in 2006, building plans were neither approved that year, nor three years later, when the Great Recession struck—a fact that Breslau now recognizes as a blessing.
Finally, in 2016, it appeared that the project would have a chance to become the immense mixed-use enclave envisioned by Stiles. At that time, Broward College, which owned and operated the land adjacent to the Stiles plot, announced an interest in a possible public/private partnership (PPP) that would help fund an endowment for the college.
“[The college] set out to bid, but the benefit we had was that we controlled the piece of land next door,” said Breslau. “We demonstrated we could build efficiently because of that. The process was likewise complicated and took us a roughly a year to execute, between weekly meetings with the college, government officials, and our team.”
The PPP with Broward College also complicated the ownership of the property, which would now involve a 99-year ground lease on that portion of the land, including easements between the two structures planned at the site.
“A lender needs to get comfortable with those terms, as does the next buyer,” noted Portner. “The lease took a lot of work upfront, but works for institutional lenders and buyers.” Though the team originally thought it would seek traditional lending, it ultimately settled on a $200 million debt-fund loan with Blackstone. “Debt funds are simply more flexible in their funding schedule, and it just made more sense for us here,” he said.
Portner contends that the Fort Lauderdale market, which is seeing tremendous growth downtown, is just as enticing as that in San Francisco, where Shorenstein has a large footprint. “We’ve been following the urbanization of downtown, and we’re always following the workforce,” said Portner. “We had already worked with Stiles before, and we thought that a new construction opportunity was worth jumping on. As we talk about the features of the project, we truly think this will win every time.”
Along with a 25-story office building and 27-story residential tower, the project includes an array of amenities. “When looking at this building, we spent a long time thinking about how to set it apart. We wanted to take it into 2020, 2030, and 2040 and not appear dated but cutting edge,” said Breslau. “We wanted it to be the best building in Fort Lauderdale.”
For the office component, upgrades include hurricane-impact 12-foot (3.7 m) windows in each office, using a glass product only recently developed and available in the local market.
In addition, the building has a GreenWise organic grocer on the ground floor, conference rooms, an 10,000-square-foot (929 sq m) amenity deck that includes outdoor fireplaces and a patio, plus a fully quipped athletic center. Among the tenants already signed on at the Main Las Olas are Akerman, Berger Singerman, BBX Capital, and GreenWise.
Thirteen years in the making, the Main Las Olas is poised to debut in 2020. “I think the quality of the building will be on par with anything you see anywhere in the country,” said Portner.