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Looming Tax Break Deadline Is Spurring Last-Minute South Florida Real Estate Deals

Time is running out for investors in South Florida seeking a tax break by investing in opportunity zones, which allows for investments in lower-income areas to have tax advantages.

The rush is fueling deals as the population continues to grow due to continued migration to South Florida. Developers hope to get deferred taxable gains on projects such as new hotels, branded residential properties and more.

Dec. 31 is the deadline for individual investors seeking qualified opportunity zone investments to help defer taxable gains. Tax benefits in the program include a 10% basis step-up and related gain exclusion. If investors take advantage of the opportunity, they can defer paying capital gains on their investment until Dec. 31, 2026.

Besides the temporary deferral, other advantages include the exclusion of taxable income on new gains on investments held for 10 years or more, and a 10% increase in the investment if the qualified opportunity fund is retained for five years and a 15% increase if the investment is held for seven years.

After the December 31 deadline, the investors have until June 30, 2022, to invest the funds in businesses located in an opportunity zone to comply with the regulations.  If they’re not, there’s a small penalty regarding the interest cost.

There are about 8,700 opportunity zones in the country with 123 opportunity zones in South Florida. Miami-Dade has 67, Broward has 30, and Palm Beach County has 26.

 

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Sellers Will Take Cryptocurrency For Miami Beach Properties

Developer Scott Robins and his partner, former Miami Beach Mayor Philip Levine, are accepting cryptocurrency for two properties they’re selling on South Beach’s Alton Road corridor.

Robins’ son Jared, founder of Miami Beach-based brokerage InHouse Commercial, said he’s partnering with FTX, a cryptocurrency exchange based in the Bahamas that purchased the naming rights of the former AmericanAirlines Arena in March and has an office in Brickell.

One of the properties for sale is the two-story Royal Media building and the adjacent one-story Reebok CrossFit Miami Beach studio.

The partners are seeking $25 million for the 23,810-square-foot Royal Media building, which was constructed at 960 Alton Road in 1975, and the 7,500-square-foot Reebok CrossFit studio, built at 930 Alton Road in 1948. Media Holdings Ltd. paid $1.6 million for 960 Alton Road in April 1996, and Media Holdings 930 LLC paid $1.42 million for 930 Alton Road in June 2010.

Since the Miami Beach City Commission increased the height limit to 75 feet, the property has development rights for a new 46,965-square-foot building, according to a brochure produced by InHouse Commercial.

The partners are asking $19 million for a three-story, Arquitectonica-designed retail complex built in 2014 at 1000 17th St. 17th St. Partners LLC bought the 8,000-square-foot lot the building stands on for $1.47 million in June 2007.

Jared Robins said the building is 81% leased, and the asking rent is $80 a square foot.

Cryptocurrencies, including Bitcoin, tend to swing widely in value. But Jared Robins said FTX’s ability to instantly exchange crypto into cash “really de-risks that whole aspect of it.”

 

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Miami Board Denies Wynwood Station Mixed-Use Project

A mixed-use residential project planned for the east side of the Wynwood Arts District, near Midtown and Edgewater, was denied by the City of Miami’s Urban Development Review Board.

Developer-owner Newcomb Properties #2 LLC plans to build Wynwood Station at 45 NE 27th St.

But the board voted unanimously Nov. 17 to deny the project, after voicing numerous concerns including the massing of the building, location of a trash chute, location of elevators, design of the parking levels and ramps, the width of a covered walkway, the size of a courtyard and more.
Board member Ignacio Permuy said of the project, “It’s a good start but it’s just not there yet.”

Total size of the floor area for Wynwood Station is 331,846 square feet.

The planned eight-story building would be home to 210 dwellings, 11,152 square feet of commercial-retail uses, and parking for up to 283 vehicles in an adjacent screened garage.

The development site is on Northeast 27th Street, south of Northeast 28th Street and east of North Miami Avenue. The contiguous mid-block site is in the northeast quadrant of Wynwood, near the Florida East Coast Railway line.

The applicant is FRC Realty Inc., represented by attorney Steve Wernick.

In a letter to the city, he said the plan is “to redevelop this former industrial yard into a mixed-use multi-family residential project that will activate NE 27th Street and contribute to the ongoing transformation of Wynwood into a 24/7 mixed use walkable neighborhood.”

The project was designed by MSA Architects Inc.

Zoning allows up to five stories by right and eight stories with bonus height. A future land use designation permits a wide range of residential and non-residential uses up to 150 units per acre across the properties, Mr. Wernick said.

“The property is a sprawling industrial yard and currently used as a Sunbelt construction equipment rental and storage facility. The existing conditions impose a hard-edge intent on bufferingthe site from the public realm and pedestrians on the sidewalk. It is a site that is quite reminiscent of Wynwood’s former self as an industrial warehouse district, with few trees or shade from the elements,” he said.

Mr. Wernick wrote, “NE 27th Street is a unique street as the link between Wynwood & Edgewater and thus acts as an eastern gateway into the arts district planned for greater pedestrian orientation in the Wynwood Streetscape Master Plan.

“NE 28th Street in its current condition functions as an oversized industrial alley, with little to no right of way improvements and much narrower than a standard right of way in Wynwood,” he said.

Mr. Wernick said the project gives considerable attention to the public realm in the area, including introducing a cross-block paseo connection that will provide much greater mobility and accessibility.

“With the required right of way dedication contemplated with the project, the project will greatly improve and activate NE 28th Street,” he said.

The property is also steps from the intersection of Northeast 27th Street and the FEC Northeast Corridor, the anticipated location for a future commuter rail station that has not yet been approved.

Mr. Wernick said FRC Realty Inc. is an affiliate of Fifield Holdings. Founded in 1977 by Steven Fifield and headquartered in Chicago, Fifield is a national real estate developer with expertise in land acquisition, structured finance, construction management, architecture and design, and asset management.

Over the past four decades, Fifield has developed more than 13,000 residential units and 8.7 million square feet of commercial projects – in markets from Chicago to Los Angeles.

Mr. Wernick noted that the developer had already presented the plan to the Wynwood Design Review Committee and the plan they were showing the city’s review board “has changed significantly” based on comments from the Wynwood committee.

Review board members questioned why the developer’s team would go before the city board before making a planned return before the Wynwood committee.

And some board members said they preferred the look of the planned building seen in earlier renderings, before the changes.

Board Chair Willy Bermello said, “I don’t think you’ve improved this at all … It’s a big building with no statement as to its entrance.

“I’d also like to see what you did the first time. I’m not impressed with what you currently have,” he said.

Board member Anthony Tzamtzis said, “I have many issues with the building, so many I don’t know where to start from.”

Board member Neil Hall said, “I would have loved to see the first design that you did, and which caused you to rework the entire scheme. The scheme presented here today, I’m not in tune with it. I’m getting no positive vibe. I would have liked for us to have the opportunity to react to the first one.”

Mr. Wernick responded, “We feel a little like a ping-pong ball,” and that scheduling issues complicated matters.

After the board voted to recommend denial, Mr. Bermello said hopefully the board would see the developer back with a refined plan, after again meeting with the Wynwood Design Review Committee and continuing to work with city staff.

 

Source:  Miami Today

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Five Class A Office Projects In The Development Pipeline For Miami Beach

Intent on diversifying its economy beyond tourism and nightlife, officials have heavily incentivized the construction of Class A office buildings in Miami Beach. The hope is that the new projects will lure tenants from the many technology, financial and venture capital businesses flocking to the area.

Those incentives include height increases in certain corridors, an office-friendly overlay district in Sunset Harbour, and a request for proposals for developers interested in building new offices on three city-owned parking lots by Lincoln Road. (The deadline for that RFP is Dec. 17).

As demand rises for workspaces on the multibillion-dollar sandbar, these are five Class A office projects in the pipeline to know about, according to a capital market list compiled by the Miami Beach-based commercial brokerage Koniver Stern:

Starwood Global Headquarters, 2340 Collins Ave.: A limited liability company connected to Starwood Capital Group took out a $76.2 million construction loan to build a six-story, 144,430-square-foot building that will serve as the headquarters for a real estate firm led by Barry Sternlicht. The firm has $100 billion worth of assets under management, employs 4,000 people in 16 offices worldwide, and controls the publicly traded mortgage investment company Starwood Property Trust (NYSE: STWD). Around 55% of the Starwood Global Headquarters office space will be used as the base of operations for 300 Starwood employees. The rest of the office building, which was co-developed by Miami-based Integra Investments, will be leased to third parties. The building will also have 8,000 square feet of retail, a 277-space parking garage, and “an array of outdoor wood-clad ‘cabanas’ on each floor,” according to a press statement issued by Starwood. Topped off in December 2020, the Starwood Global Headquarters is due to be completed by the end of the year.

The Bancroft, 1501 Collins Ave.: This hotel circa 1939 is being converted into Class A office space by Boca Raton-based Pebb Capital, Maxwelle Real Estate Group in downtown Miami, and Crescent Heights headquartered in Miami’s Edgewater. When the project is completed, The Bancroft will have 50,000 square feet of offices, four restaurants, and a 210-space underground parking garage.

One Island Park, 120 MacArthur Causeway: The Related Group scrapped its previous plans to construct a 90-unit condo at Terminal Island. Instead, the Coconut Grove real estate development company, headed by Jorge Pérez, will build an office complex totaling around 162,000 square feet in size with a rooftop restaurant, a four-level parking garage, a guard gate, and infrastructure to fuel up and service megayachts docked at the facility.

Eighteen Sunset, 1733 Purdy Ave.: This past November, developer Bradley Colmer of Deco Capital Group broke ground on the first brand new office building to be constructed within the Sunset Harbour Overlay District. The five-story project will include 40,000 square feet of offices, 17,000 square feet of retail, and a private penthouse residence with amenities that include an outdoor pool and hot tub.

944 Fifth St.: Two New York development firms, Sumaida + Khurana and Bizzi & Partners, are teaming up to build a 56,177-square-foot, Class A office building with high interior ceilings and a white façade. As previously reported by the South Florida Business Journal, this office building will also be the first to be designed by famed Spanish architect Alberto Campo Baeza. This project has yet to be named. It also has yet to obtain the 75-foot height limit it needs to move forward. Nevertheless, the development team aims to have the project completed by the summer of 2022.

 

Source:  SFBJ

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Wynwood Just Got A Little More Vibrant

the gateway at wynwood_mural 3As the The Gateway at Wynwood building nears completion, the long-awaited exterior garage cladding, which depicts a vibrant mural, has been fully installed just in time for Art Basel next month. Additionally, the rooftop deck has been completed and signage is going up around the building.

The Class A office building, developed by R&B Realty Group and designed by renowned Miami architect Kobi Karp, has helped turn Wynwood into a mini-city.

The office building, which found inspiration in Wynwood’s innovative spirit and modern vibe, will allow Wynwood’s new residents to walk to their offices and shops without having to get in their cars. Wynwood, which used to be home to neglected warehouses, is seeing a construction boom of condos and apartments and, now, office buildings as well.

The Gateway at Wynwood offers about 195,000 square feet of leasable Class A office space and nearly 25,900 square feet of prime street-level retail space at the intersection of Wynwood and Midtown. This summer, R&B Realty Group announced the building’s first office lease signed with biotech company Veru Inc. The eight-year, 12,155-square-foot lease will serve as the company’s global headquarters and triple Veru’s current office space.

 

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Large Mixed-Use Project Makes Big Changes To Win OK In Wynwood

The development team behind one of the largest mixed-use residential and office projects to rise in Wynwood continues to work with the City of Miami Planning Department staff and is confident of final approval.

Owner-developers L&L Holding Co. and Carpe Real Estate Partners are behind The Wynwood Plaza, formerly 29N, which is to rise at 95 NW 29th St.

At its October meeting, the city’s Urban Development Review Board voted to recommend denial of the project to the planning director, citing continued concerns mainly over the massing of the project.

Undaunted by the vote, the development team says it is continuing to work closely with the city staff to address the remaining concerns.

Attorney Steve Wernick, representing the owner-developers, noted that the team already changed the plan to address concerns the board raised in August: worries about the massing along 30th Street and a cross-block passage vehicular access on Northwest 29th Street.

The curb cut for the one-way vehicle entry on 29th Street has been refined with a smaller footprint, said Mr. Wernick.

“We’ve moved some functions into the garage so cars are not queuing in that space,” he said.

The midblock access will be limited to visitor vehicles managed by a valet.

As for the massing on 30th Street, Mr. Wernick said, “We’re working with staff now to introduce an additional element into the façade; it will visually break up the building.”

Designed by architectural firm Gensler, The Wynwood Plaza would bring 12- and 8-story buildings with 509 apartments to the neighborhood, 266,000 square feet of offices, 32,000 square feet of commercial-retail uses, and parking for about 668 vehicles.

“We look forward to continuing our constructive dialogue with the Miami Planning Department and hope to secure final approvals in the near future,” said Adam Metzger, principal and senior vice president of L&L Holding, in an email to Miami Today.

“Since agreeing to acquire the three-acre development site for The Wynwood Plaza just over a year ago, we have been working diligently to produce a design and program that will complement and significantly enhance the dynamic community that surrounds us.

“We greatly appreciate the feedback we have received from a number of important groups, including the Wynwood Design Review Committee, the Wynwood Community Enhancement Association and the city’s Urban Design Review Board.

“The design choices we have made as a result of our conversations have resulted in significant improvements to The Wynwood Plaza’s architecture, pedestrian realm and public outdoor spaces – all of which will benefit residents of the surrounding neighborhood for decades to come,” wrote Mr. Metzger.

He said they remain on target to start initial demolition work early next year.

Mr. Metzger added, “The project is already generating tremendous excitement. We are currently in active discussions for approximately one-third of The Wynwood Plaza’s proposed office space with a number of prospective tenants, which would bring hundreds of new jobs to Miami.”

The project would provide about 25,000 square feet for a ground floor public plaza connected by paseo to the north, south and west.

There would also be about 30,000 square feet of programmable rooftops.

In an Oct. 6 letter to the city, Mr. Wernick pointed out another change to enhance the pedestrian experience.

“The north façade has been modified in multiple ways that elevate and accentuate the paseo entrance. The ceiling height for the 30th Street paseo entrance has been increased from 12 feet to a new 22 feet datum, intentionally creating a more inviting and expansive entry point to the Project from the Wynwood Norte neighborhood into the central plaza and maintaining connectivity through to NW 29th Street.

“The portal width is being maintained at 60 [feet] in width, which is significantly wider than the 10 [feet] minimum dimension required for a cross-block paseo in the NRD-2 and wider than a standard city of Miami right of way, and is pedestrian-only, asserting the importance of the cross-block feature to the Project,” said Mr. Wernick.

“The 30th Street paseo entrance is now adorned with murals on the ceiling and exterior walls above the storefronts to create an immersive art experience … The portal entry is further strengthened by a canopy projection to orient the pedestrian towards the portal and provide additional articulation on the north façade,” he wrote.

The Wynwood Plaza is being described as a modern office tower and a highly-amenitized residential rental building, along with an array of indoor and outdoor dining and retail options.

 

Source:  Miami Today

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Deco Capital Breaks Ground On Mixed-Use Project In Miami Beach

Deco Capital broke ground on the Eighteen Sunset mixed-use project in the Sunset Harbour neighborhood of Miami Beach.

Sunset Land Associates LLC and SH Owner LLC, affiliates of Miami Beach-based Deco Capital Group, are building 40,000 square feet of offices, 17,000 square feet of commercial space and a massive 15,000-square-foot penthouse in five stories. The penthouse will also have 15,000 square feet of outdoor space.

On 0.77 acres at 1733-1759 Purdy Ave. and 1724-1752 Bay Road, Eighteen Sunset will overlook Maurice Gibb Park, giving tenants an unobstructed view of Biscayne Bay. It will be within walking distance of the popular restaurants and shops and Sunset Harbour.

 

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Real Estate Wins in Miami’s Mayoral Elections

Real estate-friendly candidates and initiatives came out victorious across Miami in Tuesday night’s election, particularly in the mayoral races in the high-profile cities of Miami and Miami beach.

In Miami Beach, Mayor Dan Gelber handily won reelection, capturing 62 percent of votes for this third term. The Democrat had tied his campaign to a controversial referendum to curb partying in South Beach. The referendum proposed rolling back the last-call time to serve alcohol at establishments along famed Ocean Drive, to 2 a.m. from 5 a.m.

The majority of voters agreed with Gelber, with 56 percent approving the non-binding measure.

Proponents say the initiative will help curb disorderly conduct and crime at the wee hours of the night.

“They don’t have to have a 24-hour party. Our residents cannot be held captive to a business model that creates disorder,” Gelber said last night.

Real estate is also at play. Endorsers believe the measure will help revive a historic but shabby part of town, and soften its wild-party image incongruent with the expensive condominiums that surround it.

As Miami attracts corporate giants, developers, including Jorge Perez of the Related Group, say Miami Beach has fallen behind, partially because of the perception of mayhem. Related is looking for a marquee name to fill its One Island Park office development in Miami Beach.

Last month, a tape leaked of Gelber talking with unidentified developers about creating a Political Action Committee to fund city commission candidates that support redevelopment, according to the Miami New Times, which first reported about the tape. The mayor also said he could put initiatives on the ballot favored by developers as a way of bypassing the commission approval.

“In politics, money plays a big part …” Gelber is heard saying. “Tell us what you need to reimagine the areas we know need to be reimagined.”

A Political Action Committee supporting the Ocean Drive measure earned donations from Starwood Capital Group’s Barry Sternlicht and developer Alex SapirThe Real Deal reported.

Critics, like the Citizens for All a Safe Miami Beach, say the measure will cost as much as $40 million in lost tax revenue and drive up unemployment, which will only worsen crime in the area.

Across Biscayne Bay in Miami, Mayor Francis Suarez also cruised through reelection, winning nearly 79 percent of the vote. The Republican elected official was a shoo-in, having raised millions of dollars.

Suarez’s crowning achievement has been to rebrand Miami into the “Wall Street and Silicon Valley of the South” by courting companies to relocate while embracing cryptocurrency. Many took note. Corporate heavyweights BlackstonePoint72 Management and Microsoft, just to cite a few, signed office leases in Miami this year.

Developers have reaped the benefits of the corporate migration. Office landlords have kept rates high thanks to the new-to-market demands. Residential rents and home prices have skyrocketed over the past year due to the influx of moguls and high-earning workers.

Suarez will undoubtedly continue to lobby companies — now with voters’ blessings. “Today we embark on a new chapter to finish what we started,” Suarez said last night. (Representatives for the mayor did not immediately respond to a request for comment.)

The mayoral race in Sunny Isles Beach, a town littered with new oceanfront high-rises, will go to a runoff since no candidate captured more than 50 percent of the vote. Real estate attorney and town commissioner Dana Goldman will face another commissioner, Larisa “Laura” Svechin. 

Down south, Homestead Mayor Steve Losner squeezed out a victory, winning by 68 votes.

Out west in Hialeah, Esteban “Steve” Bovo, who earned an endorsement from former President Trump, won the mayor’s race.

 

Source:  Commercial Observer

 

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New York Developers Unveil Plan For South Beach Office Project

Two New York-based development firms are teaming up to build a Class A office project in Miami Beach.

Sumaida + Khurana and Bizzi & Partners are planning a five-story building with 56,177 square feet at 944 5th Street and 411 Michigan Avenue in the city’s South of Fifth neighborhood, according to a press release. An entity managed by principals of both firms bought the two vacant lots for a combined $8.9 million in June, records show.

The joint venture tapped renowned Spanish architect Alberto Campo Baeza to design the building, and hired Miami-based Cube 3 as the project’s executive architect.

The South of Fifth office project would be Baeza’s first building in the Miami area, and his first commercial building in the U.S., according to the release. Over the last decade, developers have enlisted world-renowned architects like Renzo Piano, Bjarke Ingels, Rem Koolhaas and the late Zaha Hadid to design luxury condominiums in South Florida.

The proposed office building will be made of white concrete, glass, and marble, featuring high ceilings, open and flexible floorplans, private outdoor terraces and floor-to-ceiling windows. The building is planned to also have a fitness center, multiple food and beverage venues, a large atrium and a private rooftop with water views.

The two development firms are collaborating on a wide range of commercial buildings across the U.S., focusing on office projects, the release states.

Founded in 2000, Bizzi & Partners focuses on developing high-end commercial and residential properties in Europe, the U.S. and Brazil, according to the company’s websites. Bizzi developed Manhattan’s 565 Broome SoHo and co-developed Eighty Seven Park in Miami Beach.

Sumaida + Khurana, which developed condos at 152 Elizabeth Street and 611 West 56th Street in New York, and its affiliates are currently developing more than 300,000 square feet of ground-up residential projects in Manhattan, with a total projected sellout of about $700 million, according to the firm’s website.

Demand for office space is rising in Miami Beach. The city’s vacancy rate was 8.2 percent in the third quarter, compared to 10.7 percent for the overall Miami-Dade office market during the same period, according to Colliers. The average asking rent hit $51.57 a square foot compared to $44.59 for the overall Miami-Dade market in the third quarter.

Last month, Pebb Capital and Maxwelle Real Estate Group formed a joint venture with Miami Beach developer Russell Galbut to convert the shuttered Bancroft Hotel at 1501 Collins Avenue into a high-end office property. The partnership bought the site for $47 million from a Galbut-related entity. Galbut submitted plans for the conversion to the city of Miami Beach in April.

In August, an entity tied to Scarsdale, New York-based Greenacres Management bought a renovated office building at 1688 Meridian Avenue near Lincoln Road in Miami Beach for $49.5 million.

 

Source:  The Real Deal

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Miami Board Rejects Design For Massive Wynwood Mixed-Use Project

It looks like it is back to the drawing board for the developers of a massive, nearly 1 million-square-foot, mixed-use project in Miami’s Wynwood.

L&L Holding Company and Carpe Real Estate Partners were dealt a setback on Wednesday, when the Miami Urban Development Review Board voted 4 to 0 to reject its proposed design for N29, an office, retail, and apartment complex.

The ruling is technically advice for Miami Planning Director Cesar Garcia-Pons, who has the ultimate say on approving the project’s design. However, UDRB member Dean Lewis told The Real Deal that the board’s recommendations are taken very seriously by planning staff.

The New York-based developers want to construct N29 on an assemblage of land at 31-95 Northwest 29th Street, 2925 Northwest First Avenue and 40-94 Northwest 30th Street in Miami.

L&L Holding Company and Carpe Real Estate are under contract to buy all of the properties, most of which are owned by the Rubell Family Collection.

The development site also abuts the 220,000-square-foot Gateway at Wynwood project.

N29 is planned to total 960,870 square feet, and range between eight and 12 stories tall. The project is proposed to include 200,000 square feet of office space, 523 residential units, 26,372 square feet of retail, 668 parking spaces, and 670 bicycle parking slots. It will also have a 22,000-square-foot, ground-floor public plaza and about 30,000 square feet of programmable space.

David Weitz, co-founder of Carpe Real Estate Partners, said the design of N29 drew “a lot of inspiration” from Oasis Wynwood, an office and retail project Carpe developed at 2335 North Miami Avenue. Weitz said that what makes Oasis unique is its large 30,000-square-foot courtyard.

While N29 already received the backing of the Wynwood Business Improvement District’s Design Review Committee in July, the project review at the UDRB was delayed in August after board members objected to the proposed building’s massing along 30th Street.

The Gensler architecture firm, which is designing the project, attempted to solve this problem by adding a 40-foot-wide paseo entrance on 30th Street and other artistic design elements.

But in the meeting on Wednesday, Ignacio Permuy, chairman of the UDRB, said the project still resembles a wall along Northwest 30th Street. “This is a huge massing that is 100 feet high and 400 feet long, and it is not being broken up,” Permuy said.

This isn’t the case along Northwest 29th Street, Permuy said. “You did a terrific job articulating and breaking up the massing and inviting the pedestrians,” he added.

Board member Robert Behar pushed for a vote to reject the current design.

“I cannot believe that there was an attempt to do what was requested,” Behar said. “That is the bottom line.”

 

Source:  The Real Deal

 

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