Joseph Kavana of K Group Holdings: 5 Questions

Joseph Kavana has been working on a $1.5 billion mixed-use project in Sunrise, Fla., for 15 years, and he’s owned the project site for twice that time.

After a setback during the pandemic that required a revamp of the master plan, the development named Metropica is moving forward in earnest. The project will add more than 3,000 residential units, 650,000 square feet of office, 485,000 square feet of retail and two hotels on a 65-acre site. That includes 50 acres controlled by Metropica and an additional 15 acres owned by the City of Sunrise.

Kavana recently brought in two partners, Poag Development Group of Memphis, Tenn.,  for Metropica’s retail portion and Waypoint Residential of Boca Raton, Fla., to lead the residential part of the development. He recently spoke with Commercial Observer about how the project has evolved, the retail and office strategy, and challenges ahead.

The following conversation has been edited for length and clarity.

Commercial Observer: This project has been in the works for years. Give a quick overview.

Joseph Kavana: Where we are located, right next to the Sawgrass Mills, we are at the epicenter of four counties. We have 3.5 million people north of us, and we have 3.5 million people south of us. It’s a great location. 

We have been involved in this place since we purchased the land back in 1995, and we started developing it in 2010. We initially were planning on doing an office park, and then, around 2005, we decided to start with a vision of creating the downtown of Sunrise, because Sunrise did not have a downtown.

It was a long process that we had to go through together with the City of Sunrise. And finally, 2010 is when we started getting the proper approvals to do what we’re doing now. The City of Sunrise owns the north 15 acres. 
And then we have 50 acres left, and we will develop a project that in total will have 3,300 residential units, 650,000 square feet of office, 485,000 square feet of retail and 480 hotel rooms that are going to be probably anywhere between two and three hotels.

What are the price points for your residential units?

The condo units run anywhere between $600,000 to $800,000. And we have penthouses that are around $1.5 million to $2 million. For the rentals, we’re renting at an average of about $4,500 for three bedrooms.

Given your location next to a retail destination, why did you decide to do retail as well?

Our retail is going to be complementary to Sawgrass Mills. It’s an outlet mall, and our retail is going to be mainly restaurants and entertainment. So the concept is the retail that we’re building here is not just for our project; it’s for the community. 

We expect that we’ll bring the gastronomic center of West Broward. We’re planning to bring great restaurants and great entertainment, and there’s a need for that. 

In Metropica alone, you’re looking at about over 10,000 people. Kitty-corner with us, we have over 3 million square feet of offices. We have the headquarters of American Express within walking distance, with 3,000 people working. They need restaurants. They need good places to spend part of the day.

Sawgrass Mills had added a restaurant district with Rainforest Cafe and things like that. But it’s not the friendliest place to be, OK? They still get 26 million people a year, but Sawgrass Mills is not the place where the local population goes. They’re mostly travelers. 

There are people that may come to Sawgrass Mills to buy. They may stay in one of our hotels, and they may eat in our restaurants.

What spurred you to shift from an office park to this mixed-use concept?

Well, what happened is we realized that the site had far more potential than another office park. The communities around us, the retail, the office parks — it’s the perfect place to have a mixed use here. And to create a downtown that Sunrise doesn’t have.

What’s been your biggest challenge as you developed this project?

We have plenty. In a project of this size, you know that you are going to experience different cycles.

They say, in real estate, it’s location, location, location. But it is not really location, location, location — it’s timing. Timing is essential.

We know that we will experience different cycles. COVID was a major challenge for us. And once we’re coming out of COVID, then the interest rates started coming up. So those are serious challenges. Real estate is very sensitive to interest rates. 


Now, in addition to that, the construction costs. You have to be flexible, you have to adapt to the new conditions and go forward.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.