Member Profile: Walter B. Duke III, Walter Duke + Partners

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A self-described Army brat, Walter B. Duke III was born on New Year’s Day at Walter Reed Army Hospital in Washington, D.C. For the first six years of his life, Walter’s Army-pilot father was stationed at various bases around the globe and so the family traveled with him wherever he was sent. When his father went to serve in the Vietnam war, Walter’s mother moved the family to Fort Lauderdale to be close to her parents who had lived in the area since 1956.

Walter grew up the South Florida way, on the water, fishing and boating with two uncles and an aunt who loved salt water fishing in the Atlantic and fresh water fishing in the Everglades and Chokoloskee. When his father returned from the war he became a commercial airline pilot and moved the family to nearby Hollywood, where they planted roots and became fixtures in the community. Mr. Duke was a major figure in little league and the youth sports scene in Hollywood, where he has a baseball field named after him at Rotary Park. Walter credits his father with teaching him the value of volunteering, teamwork, and leadership skills through his involvement in sports, and thanks his aunt and uncles for helping him to become a true steward of the marine industry.

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Five Ways Irma Will Impact Florida Commercial Real Estate Values

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In the aftermath of Hurricane Irma, the clean-up and rebuilding aren’t the only fallout that Florida must deal with. Walter Duke + Partners has survived four catastrophic hurricanes since 1975. Based on our recent and historical experience, below are five ways we see Irma impacting Florida real estate values.

Construction Budget Interrupted

The cost of labor and materials will rise dramatically post-storm putting pressure on already skinny development budgets. In the aftermath of Andrew in 1992, it was common to see construction costs rise as much 30% to 40%. The situation is compounded by the massive rebuilding efforts in Houston in the aftermath of Hurricane Harvey. Contractors may directly elect to walk away from the job rather than face huge losses leaving developers in a pinch. Residential condo developers may decide to table projects due to lack of feasibility in the face of rising costs, growing inventories and declining sales.

Sea Level Rise Gets Its Due

South Florida cities have been implementing adaptive measures to combat sea level rise. So far, the business community has been late to the game but in the wake of Irma and Harvey that will likely change. Look for both the trade and public sectors to further address sea level rise and work with the insurance industry to demand more resilient developments and communities. These storms also lent credence to tougher building codes, because guess what? They worked and saved life and property.

Opportunity Knocks

One of the early beneficiaries of Hurricane Harvey in Houston is the self-storage sector. The Wall Street Journal reports a surge in demand for self-storage space in the Houston market since the storm. Before Harvey, self-storage companies had been in aggressive price competition, with incentives such as free rent commonplace. We expect to see this in South Florida where there has been a widespread development of self-storage facilities as well, but landlords will be mindful of not being perceived as price gougers. The need for temporary office space will also tighten up an already tight South Florida office market. Values for these property types should continue to trend upward.

Bunker Mentality

Companies and developers will be more mindful of the importance of hardened buildings and backup systems as everyone seeks to minimize the down time after a major storm. Add to that the increasing likelihood of a terrorist attack, and we think you will see increased demand and value of disaster-proof structures.

Loan Size Does Matter!

Insurance costs for commercial real estate have been declining steadily since the beginning of the current economic recovery in 2012. They are currently the lowest they have been in years. If history is any indicator, that is about to change. Look for insurance costs on commercial real estate to double over the next five years. This will dramatically negatively impact loan proceeds and size due to much less net operating income. In short, values are likely to decline, especially in properties such as multi-family where the landlord bears most of the expenses.

Walter Duke + Partners is a Fort Lauderdale based full service commercial real estate advisory firm founded in 1975. For a personal consultation contact Walter B. Duke, III, MAI, CCIM.

8 Takeaways from the ’16 Realtors Commercial Alliance Symposium

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Walter Duke 2016 Realtors Commercial Alliance Symposium Moderator

Commercial Real Estate Heavy Hitters

Yesterday I was privileged to moderate a panel of commercial real estate heavy hitters as they discussed their views on the commercial real estate market for Broward and Palm Beach Counties to a packed room of commercial real estate brokers and lenders. The power panel consisted of Bob Shapiro of Master Development, Jeff Greene of the Greene Companies, and Malcolm Butters of Butters Construction and Development. Collectively, these three have developed, owned, or invested in billions of dollars of commercial real estate in the Florida market.

Cheaper Bricks and Sticks!

Construction costs are expected to plateau over the next 18 to 24 months which should bring some relief to skinny deals and increase feasibility. The main reason stated was the slowdown in the Miami vertical residential market where many large planned projects are being shelved.

Walter Duke 2016 Realtors Commercial Alliance SymposiumPlay Ball!

The consensus of the panel was that Broward is in the late middle innings of the current cycle, and that Palm Beach is the early middle innings. The current recovery started in Miami in 2011 and had since worked its way up the coast. Currently, Broward and Palm Beach are very active, and capital is flowing.

Leasing Scared!

Retail tenants are moving very cautiously, often in a pack mentality. Bob Shapiro, who is developing the 3 million square foot Dania Pointe, said that while retail leasing is good, the retailers are very interested and concerned what the other retailers are doing before they make a decision to pull the trigger on a lease commitment, thereby, slowing down the overall process.

Boring is Good!

Malcolm Butters, whose company has developed over 18 million square feet, reports that he is very bullish in industrial moving forward, noting that it is the only property type that requires a larger site because it can’t be developed vertically. It may not be the sexiest product type, but it has the most stable long term prospects and most barriers to entry. E-commerce was cited as a driver as well.

Give It Up for the Burbs!

Even though Jeff Greene predicts massive job losses coming down the road, all the panelists agreed that suburban office might be a good investment because it is not feasible to construct new, so there will be no new competition for years. , due to its proximity to the airport and seaport, and its position along Interstate 95.

Let the Good Times Roll!

All three panelists stated that it would take a lot to damage the currently robust South Florida commercial real estate market, but three potential headwinds include the outcome of the U.S. presidential election, an increase in interest rates, and the weight of the world recessionary conditions. Any of the three could wobble the markets and expose any weaknesses.

Penny for Your Thoughts!

All three panelists favored the passing of ballot initiatives in Broward and Palm Beach Counties concerning traffic and infrastructure but cited concerns over a lack of a plan for how the money will be spent.

If You’re Not First, You’re Last!

Jeff Greene noted that West Palm Beach CBD could probably only handle one new office tower and maybe one more hotel during this cycle, acknowledging a lack of market depth. Butters noted that Florida doesn’t enjoy the massive corporate relocations to the extent of a market like Atlanta.

About Walter Duke + Partners

Walter Duke + Partners provides commercial real estate valuation advisory, economic studies and market metrics to some of the most successful companies in the world ranging from startups to Fortune 500 companies. Entering into its 41st year in business, Florida’s Walter Duke + Partners is an acknowledged market leader in Florida. For more information contact Walter Duke at or navigate to our website at

Duke Moderates the 2016 Realtors Commercial Alliance Symposium!

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Top commercial real estate leaders together in one symposium.

Join leaders in the commercial development world as they take part in a panel discussion that will highlight opportunities and growth in the marketplace. This is a not-to-be-missed event and it’s not just for Commercial Agents — all are welcome!

Thursday, October 13
From  7:30AM – 12:00 PM

Lakeside Terrace Commerce Center
7880 Glades Road
Boca Raton, FL

Get directions


It’s Gut Check Time in the Miami Condo Market.

Walter Duke + PartnersNews, Real Estate

Walter Duke + Partners enjoys a unique perspective having been through many real estate cycles in the Florida market over the past 40 years. One question I get asked a lot from many of our clients, is about the state of the Miami Condo Market. Below are some of my most recent observations.

Tapping the Brakes

The Miami market is definitely plateauing due to growing over supply. Developers are shelving plans but there are still many more units to be delivered. We are also noting many more end-buyers putting their units on the market which will compete against current pre-sales. Fortunately, this is nothing new. Rising construction costs, increased competition, and a vastly devalued dollar against struggling South American economies, have served to tap the brakes on the Miami market for over a year now.

Financial restrictions imposed by the Feds on the source of funds has hampered high-end sales. Up until that restriction was imposed, the affluent high-end projects were the market stars. This will impact Miami Beach, Miami, Surfside, Bal Harbour, Sunny Isles Beach, and Coconut Grove.

Circling the Wagons

Developers are circling the wagons to lure domestic buyers. Domestic buyers move much slower than foreign buyers. Sale paces will definitely trend slower. Many are also seeking to penetrate the Chinese buyer market which has been largely untapped.

Some underwriters have started asking for 2009 value reference points to assess downside risks.

Hold and Land Bank

We see smarter, more experienced developers pivoting to a “hold and land bank” position. One example is Terra Group in Coconut Grove. Rather than raze a 12-story Class C MF deal to build Phase II of Park Grove, they are rehabbing the building and going to operate it until the next cycle.

Developers seeking to keep their momentum have shifted to rental product. However, this market is also getting crowded and equity is increasingly on the sideline letting their early deals cycle out while they wait out the presidential election. Some developers like Greystone are rolling out niche concepts, like Dadeland Overture, which caters to Active Adults in the 70 year old category and are priced above market rate projects, but below Independent Living product. There are much more services and common space in this Active Adult product. The construction cost is also about 25% more than typical luxury multi-family product.

Less Expensive Dirt

Much of the capital has fled north to Broward and Palm Beach seeking less expensive dirt and more affordable markets. Now markets like Fort Lauderdale are starting to get heated in the multi-family space.

There has been a noticeable pullback from the big banks in the Miami condo market, except for the best developers, on the best sites, with the best product. Secondary lenders, such as Bank of the Ozarks, are now trolling the market in search of opportunities that produce greater yields along with the cycle risk. Private lenders and equity sources are now underwriting “loan to own” scenarios as developers that lack staying power struggle to hang on.

Best in Class

Those who bought land in Miami after 2013 and don’t have their projects out of the ground by now are at the greatest risk of significant financial losses. Those whose projects are under construction and/or are “best in class” are the most insulated.

I still don’t believe that we will see anything like the Great Recession, but there is growing evidence that the Miami market is entering into a hyper supply mode that will result in lower prices and financial losses. The upside is that maybe, finally, there will be more affordable opportunities for domestic buyers to afford urban residential product.

Walter Duke has been great to work with

Walter Duke + PartnersTestimonials

I am so incredibly thankful for all of the work that Walter Duke + Partners has done for Humanity for Humanity. When we have partners and community leaders who have step up with a moment’s notice and help us with projects that seem unattainable, it is important to say “thank you for caring and thank you for completing our project in record time “.  Walter Duke has been great to work with and have provided everything that we needed in record time. We value our relationship with Walter Duke + Partners are looking forward to working with them again to help those in our community who need it most.

Nancy  Daly – Executive Director
Habitat for Humanity Broward

The American Dream Interrupted: 3 Ways Government Can Help

Walter Duke + PartnersNews, Real Estate

Overreaching governmental restrictions including high fees, lengthy permitting delays, and hefty down payment requirements are three very real concerns faced by the homebuilding industry right now as it struggles to deliver affordable new housing product in response to millennial household formation, boomer move-ups, and domestic empty nesters.

1. My Permit Is Not Ready Yet!

According to the Wall Street Journal, a study by Trulia reflects that the supply of new housing in the U.S. isn’t keeping up with demand in part because of the local delays in getting building permits approved.

The average permit delays in major Florida cities were reported to be 6 months in Orlando, Tampa, and West Palm Beach and 8 months in Miami and Fort Lauderdale.  To view the study table go here

Most cities are aware that permitting is an absolute priority and have taken steps to improve the situation mainly by the addition of staff.  Time adds to the cost of a residential construction project and those costs typically get passed on to the end buyer.

It may be too late during the current cycle to make major overhauls, but governmental entities should consider making plans to revamp outdated systems during the next market downturn when things slow down.  That way staff is less overburdened and modern efficient systems can be integrated into the process with the least interruption to the public it serves.

2. A $10,000 Bat Study? Holy Impact Fee Batman!

As home builders pick up the pace after a punishing downturn, they face a load of new regulations and higher fees governing everything from environmental quality and park access to requirements for a bat study to determine whether endangered bats are on the property.  The cost? $10,000 or more according to a recent Wall Street Journal article.

Further, according to the National Association of Home Builders, the average cost for builders to comply with regulations has risen nearly 30% over the past five years.  Housing research firm Zelman & Associates calculated that local “impact fees” charged to homebuilders to pay for services such as roads, sewers and parks have climbed 45% since 2005 to an average of $21,000 per home across 37 major markets.

These higher costs are passed on to prospective purchasers and as a result most builders have eschewed moderate priced entry level housing for high end luxury product that is less impacted by burdensome government fees and costs.

Impact fees and related studies are a way of life.  Most home builders understand it and build it into their costs.   Hopefully, forward thinking governmental entities will explore more ways to trade off fees and costs or provide incentives or subsidies in return for delivery of more affordable housing to a community.

No Loan for You!

In a recent article by the South Florida Business Journal, it was reported that Fannie Mae’s mortgage terms for Florida condos are more restrictive than in any other state. According to the Miami Association of Realtors, a condo buyer in Florida has to put 25 percent down; in all other states, its only 10 percent.   That means the typical millennial couple would have to come up with $45,000 more than their counterparts in any other state.  Not easy.

It is acknowledged that some of the governmental lending and underwriting safe guards borne out of the Great Recession may have helped keep the Miami condo market from getting too overheated although that is still playing itself out.  Now may be a good time for governmental leaders of all parties to revisit some of those policies to find a balance between over regulation, providing thoughtful policy that helps the market finds its natural center and provide more moderately priced housing to those who need it most.

Walter Duke + Partners is a leading provider of valuation advisory and market metrics to the commercial real estate market in Florida.   Celebrating its 40th year in business, Walter Duke + Partners has completed over 15,000 assignments in excess of a total of $30 billion in assignments from start-ups to Fortune 500 companies.

MIASF Adds Two New Board Members

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Marine Industries Association of South Florida president Danielle Butler announced the election of two new members to the 13-member board.

Walter B. Duke III of Walter Duke + Partners and Gail Ellis of Land ‘n’ Sea Distributing, Inc., were elected by the membership to serve a two-year term.

“Walter’s public service as a former commissioner and mayor of Dania Beach and Gail’s 30-plus years in marine sales add a high level of experience to an already dynamic board of directors,” Butler said in a statement. “We are pleased to welcome them aboard and look forward to another great year promoting and protecting the marine industry and its 136,000 jobs and $11.5 billion economic impact to the South Florida region.”

Also, re-elected for another term are Bert Fowles of IGY Marinas, Dean Du Toit of National Marine Suppliers, and Larry Acheson of TowBoatUS Ft. Lauderdale.

The 2016-2017 MIASF executive officers and board of directors:

  • President, Danielle Butler of Luxury Law Group
  • Vice President, David Reed of The Triton
  • Secretary/Treasurer, Jim Naugle of Jim Naugle & Co.
  • Immediate past president, Kristy Hebert of Ward’s Marine Electric
  • Larry Acheson of TowBoatUS Ft. Lauderdale
  • James Brewer of Derecktor Shipyards
  • Dean Du Toit of National Marine Suppliers
  • Walter B. Duke III of Walter Duke + Partners
  • Gail Ellis of Land ‘n’ Sea Distributing
  • Paul Engle of Bradford Marine
  • Bert Fowles of  IGY Marinas
  • Jimmie Harrison of Frank & Jimmie’s Propeller Shop
  • John Terrill of Lauderdale Marine Center