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Aventura MOB Under Construction Hit With Foreclosure Suit

Rendering of Aventura MOB Under Construction 1170x435

A 142K SF medical office building under construction in Aventura is the subject of a foreclosure lawsuit while its developer looks to sell it for $90M.

An affiliate of Rok Lending filed suit against Gomez Development Group alleging that the Miami-based developer has defaulted on a $15M loan for the property at 21291 NE 28th Ave., where Gomez is building a speculative medical office building.

The suit from Aventura-based Rok alleges that Gomez Development entered into the mortgage in May but stopped making monthly payments on the debt in July. Rok is seeking a $16M judgment to recover the loan’s principal, interest and fees, and asked the court to also allow the firm to recover attorneys’ fees.

Rok is suing Aventura Eco-Offices Property Owner LLC, an affiliate of Gomez Development, and the firm’s managing partner, Marlon Gomez, who personally guaranteed the debt, the lender claims. The suit was compiled by property intelligence platform Vizzda.

Gomez is negotiating with a new lender to refinance the debt and maintain control of the property, he wrote in an email.

“While our project faced hurdles securing construction financing these last few months due to challenges many lenders are facing with their current portfolios, we’ve found a new private lender to work on refinancing our current loan and enabling us to utilize CPace as an alternative financing to fully capitalize and complete our project,” Gomez told Bisnow

Gomez paid $19M for the 1.6-acre site in October 2021, property records indicate. His firm secured a $45M loan from Los Angeles-based Parkview Financial in 2021 to begin construction on the planned seven-story medical office with a four-level parking garage adjacent to Aventura Hospital and Medical Center.

The project, designed by Miami-based Caymares Martin, was originally slated to deliver by the end of 2022 but remains under construction. The Parkview loan was fully paid off last year with a final closing balance of around $10M, Karina Parada, the firm’s marketing director, told Bisnow.

Gomez said the Rok funding helped pay down the Parkview loan and also covered costs on pre-development and site utilities, infrastructure and foundation work, which is now completed. Vertical construction has commenced and the firm is aiming to deliver the building before the end of the year, Gomez said.

The unfinished project is being listed for sale by Fortune International Realty broker Cesar Sanchez. The building will seek LEED Gold Certification and will include around 100K SF of rentable medical office space and a 5K SF ground-floor retail space, according to a marketing brochure for the property.

“We are confident in our project’s value, with our land’s value doubling that of our current loan and we are communicating openly with our current lender regardless of any claims being made,” Gomez said. 


Source:  Bisnow

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One-Acre Office Building Dev Site In Aventura Trades For $10 Million

MG3 Group bought a development site in Aventura in a bet on the city’s growth as an office market.

MG3 paid $10 million for the assemblage at 21001 Biscayne Boulevard near Aventura Hospital, according to records and real estate database Vizzda. The firm plans to include medical office space in its project.

The deal breaks down to $9.5 million per acre.

Selling entity Jewish Outreach Center is tied to the Aventura Chabad based in the building immediately east of the purchased site. It had paid $781,800 for the land and other lots in 2019, records show.

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Miami Beach Mayor Announces List Of New Projects – New Cancer Center, 3-Acre Public Park And Push To Renovate Lincoln Road

Miami Beach Mayor Dan Gelber on Monday rattled off a list of new projects coming online this year — including a new cancer center, a 3-acre public park and a push to renovate Lincoln Road — during his annual State of the City speech.

Gelber, speaking from the stage at the New World Center, announced the development of the $250 million Irma and Norman Braman Cancer Center at Mount Sinai Medical Center.

With Braman, the billionaire philanthropist, and his family in attendance, Gelber showed a rendering of the sleek new building that he said will be an “ultramodern” facility overlooking Biscayne Bay. He also announced the opening of a new 3-acre public park at Sixth Street and Alton Road to be built as part of the Park on Fifth condo development. Other park projects, like the conversion of an old Mid-Beach golf course into a sprawling new park, are expected to break ground in months, he said.

“Our goal: No city anywhere should have better parks, promenades and outdoor spaces than we do,” Gelber said.

Gelber said that in April he will also advocate for $60 million in renovations for Lincoln Road using property taxes from an anti-blight Community Redevelopment Agency, or CRA. Upgrades would include more fountains, cultural event space and a children’s park.


Source:  Miami Herald

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Mixed-Use Project With High Street Retail Planned As ‘Alternative To Aventura Mall’

Developer Dan Kodsi plans a major mixed-use project with apartments, offices, and high street retail in Aventura.

Kodsi’s Miami-based Royal Palm Companies, through an affiliate, paid a reported $39.1 million for 9.6 acres on the northwest corner of Biscayne Boulevard and Northeast 213th Street.

Reuven Tako and Jacqueline Tako of North Miami sold the properties through affiliates, according to deeds and state corporate records. Greg Greer of CRR Acquisition represented the buyer and sellers.

This is just the first portion of the assemblage, as more deals are on tap for nearby parcels, with the entire site for the planned development spanning more than 10 acres, Kodsi told The Real Deal. Royal Palm Companies could enter joint venture partnerships for the development.

Kodsi declined to name potential project partners or the total purchase price for all of the lots, only saying that the total project’s value would exceed $500 million.

The overall site currently consists of land and small residential buildings that Aventura-based Rieber Developments succeeded in getting rezoned to allow for 1.3 million square feet of mixed-use development, Kodsi said.


Source:  The Real Deal

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What Secondary Asset Classes Will Be Popular With Investors In 2022?

The four major “food groups” of commercial real estate — office, multifamily, industrial and retail — occupy most of the headlines around investment and development.

Another one, life sciences, is becoming a mainstream real estate class of its own, given its dominance in markets like Boston, San Diego and the Bay Area. But the Covid-19 pandemic has also diverted investors’ attention and investment into more niche, but downturn-proof, real estate sectors.

“There’s a continued chase for yield, where investors are trying to uncover stability and trying to create and capture predictability of income streams,” said Aaron Jodka, director of U.S. capital markets research at Colliers International Group Inc. (NASDAQ: CIGI). “That has led to growth in areas such as self storage, single-family rental and medical office.”

Here are some of the non-mainstream asset classes seeing renewed interest from capital sources, in 2021 and heading into next year.

Cold storage
Although still a specialized subsector of the broader industrial market, cold storage real estate is heating up in direct response to pandemic-induced trends.

Additionally, much of the nation’s refrigerated and freezer inventory is outdated or even obsolete, propelling — for the first time in awhile — speculative cold-storage development.

Self storage
The pandemic started with the self-storage sector actually oversupplied. Developers had, in the years leading up to 2020, been developing self-storage facilities at a rapid clip, which led to double-digit vacancy in some markets.

But shortly after the onset of Covid-19 in March 2020, lease-ups of storage units started to occur.

Medical office
Another generationally-driven commercial real estate subsector: medical office. The space saw some loss of momentum in 2020 as elective medical procedures were put on hold but has started to come back this year.

In 2020, medical-office building sales fell by 12.7%, according to CBRE Group Inc. (NYSE: CBRE) research from April. But, CBRE noted, the medical office sector came back quicker than other property types during the global financial crisis.

Data centers
A recent investor survey conducted by Colliers International found investors are bullish on two alternative, or specialty, property types more than any other: life sciences and data centers.

Global capital sources are flocking to data centers as connectivity and infrastructure have become more paramount through the Covid-19 pandemic, Jodka said. In the first half of 2021, data-center absorption in the United States was 273.6 megawatts across 13 markets, according to Jones Lang Lasalle Inc. (NYSE: JLL) research.

Construction is ramping up, too, from 611.8 megawatts at the end of 2020 to 680.8 megawatts in the first half of 2021.


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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.


Click here to read more about this story.


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The Pandemic Has Made Healthcare Real Estate More Desirable

“The pandemic increased demand and made healthcare a more desirable asset class,” Rahul Chhajed, VP and senior director of healthcare at Matthews Real Estate Investment Services, tells about how the asset class fared during the pandemic.

For one, medical properties moved onto the list of darling asset classes, and it isn’t hard to understand why.

“It is no longer just a recession that investors are worried about. If there is another pandemic, healthcare services are something that people are always going to need. At the end of the day, everyone needs medical care,” says Chhajed.

With the exception of a temporary pause in the market at the beginning of the pandemic, when elective surgeries and other healthcare services were paused to allow healthcare providers to focus on COVID-19, healthcare properties outperformed other asset classes. Chhajed notes that many tenants didn’t need rent relief and continued to pay rent.

This year, investors have been trading out of more challenged asset classes, like retail and office, in favor of medial facilities.

“COVID really provided a proof of concept for the industry to show that this product type is here to stay. It is not only institutional, but it is an asset class that private capital should look at as well,” says Michael Moreno, VP and senior director of healthcare at Matthews Real Estate Investment Services.

Institutional capital has been the dominant player in the healthcare sector, and that is because it can be a more complicated asset class. Now, both institutional capital and private investors are competing for deals.

“More institutions have definitely entered the ring, but we are also seeing the private markets have started to buy these deals,” says Moreno.

And, there is a third player: owner-occupiers. Existing owners are looking at the demand—which has driven cap rates down significantly—and deciding to sell.

“The sale-leaseback market is really picking up, and a lot of that has to do with pricing,” says Moreno.

Over the last few years there has been significant cap rate compression, and owners would rather take the proceeds and put it back into the business and grow.

“Private buyers love those deals because they typically contain long-term leases and they are triple net,”  Moreno says.

On the lease side, retail owners are finding new users in healthcare. Many clinics and ambulatory centers are signing leases in retail facilities as part of the trend from in-patient care to out-patient care.

“Retail-centric healthcare is great for providers because the care is coming to the consumer,” says Chhajed. “A lot of these healthcare systems are looking for ways to provide ease of access, and retail centers meet those needs to make healthcare more accessible. The confluence of these trends is creating a heyday for medical assets after the pandemic. Now healthcare is looking stronger than ever.”


Source: GlobeSt.

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CRE Has Biggest-Ever Sales Quarter

Investors purchased $193 billion in commercial real estate during the third quarter, marking a reported record that surpassed pre-pandemic spending by 19%.

Apartment buildings, life-science labs, and industrial spaces to support the e-commerce boom drove the record period, according to data from Real Capital Analytics reported by the Wall Street Journal. The report notes sales of the properties surged so much, they canceled out shrinking office and retail markets and defied dire predictions of the sector’s crash.

The record period is part of a record year for the sector. The Journal reports sales in the first nine months of the year hit $462 billion, 10 percent more than the same time in 2019 and the highest of the same period from any other year.

Investors in commercial real estate previously outpaced pre-pandemic figures in the second quarter, spending $144.7 billion. This marks almost triple the purchases in 2020, but $50 billion less than the most recent purchases.

Data and analytics firm Green Street’s index for tracking property owned by REITs also showed a surge in activity. According to the Journal, the index is up almost 22 percent from its pandemic nadir and 8 percent from pre-pandemic times.

The boom is largely fueled by investors snagging a large number of single properties in a multitude of deals, rather than previous booms featuring plentiful portfolio sales, or sales of entire companies.

Green Street data show the hot commercial real estate market is being paced by industrial real estate and the multifamily market. The Journal reports that the industrial market has soared 41 percent in value since before the pandemic, while the multifamily market has seen a 19 percent increase in value.

The industrial market hit several records in the last quarter, including an all-time low in vacancy and record highs in net absorption and average asking rents.

In addition to new deals, developers in the space are setting records this year. A record 521.4 million square feet of space was under construction in the third quarter and approximately 340 million square feet is slated for delivery this year.

However, the surges in activity aren’t being felt universally across all parts of the industry. According to Green Street data, the value of shopping malls are down 13 percent during the pandemic, while the values of hotels have dropped 4.2 percent and office buildings have dropped 5.6 percent.


Source:  The Real Deal


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Medical Office Buildings Continue To Gain Investor Interest

Medical office properties are rapidly becoming some of the most prized assets in real estate. They have survived the global crisis caused by the spread of the coronavirus with strong rents, on average, and very little vacant space.

“A well-functioning medical office is going to trade as aggressively as the best downtown office building,” says Chris Bodnar vice chairman and co-Head of healthcare and life sciences capital markets for CBRE, working in the firm’s Denver offices.

Eager buyers spent $3.8 billion on medical office buildings in the fourth quarter of 2020. That helped make up for deals that did not close in the spring and summer because of the pandemic. It brought the amount that investors spent in 2020 to a total of $10.6 billion, according to Real Capital Analytics.

That’s just 3 percent less than investors spend in 2019—despite that chaos caused by the coronavirus. Just to compare, investors spent 41.8 percent less in 2021 to buy conventional office properties compared to 2020.

At the same time, price rose compared to the income produced by medical offices. Average cap rates for medical office have compressed about 20 basis points year-over-year and the average price per square foot increased by 5.5 percent over the same period, according to Real Capital Analytics.

“The amount of capital available for real estate—and medical office properties in particular—has just swelled,” says Mindy Berman, senior managing director and healthcare group leader for JLL, working in the firm’s Boston offices. “The pandemic has proved the investment case again for medical office properties.”

The amount of space at medical office properties that is occupied by tenants has stayed between 91.5 percent and 92.5 percent on average for more than a decade, according to JLL’s Berman.

“The occupancy rate has barely moved through the Global Financial Crisis and the pandemic,” she says. “And medical office rents are predictable. They barely budge, compared to conventional office rents in Manhattan that seesaw.”

It turns out that medical offices need space to see patients—even in a pandemic in which people with existing health needs were especially vulnerable to the disease.  Many doctor’s offices shut their doors early in the pandemic—only to reopen for business later in 2020.

“It’s about the continued need for physical space and the need for patients to continue to be seen,” says CBRE’s Bodnar. “It’s not like retail space. You can decide to stay home from a movie or going out to dinner, but it is very difficult to defer spine surgery or cardiac surgery.”

The tenants at medical offices properties have also become even more dependable as health provided have merged and acquired each other.

“There are fewer health systems and bigger health systems—which is credit positive,” says Berman.

The buyers interested in medical office buildings include a growing number of private investment funds, investment advisors and pension funds. They join the specialized healthcare REITs that have historically been the biggest aggregators of medical office properties.

Most recently, healthcare REITs have announced institutional joint ventures—several have recapitalized their holdings with pension funds, sovereign wealth funds and foreign capital.

“There is an inordinate amount of capital chasing medical office buildings,” says Berman. “We could have $20 billion in transactions in a year if we had the supply of product available for sale.”


Source:  Wealth Management

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City Gives Easy Online Access To Miami Comprehensive Neighborhood Plan

This week, the City of Miami added the Miami Comprehensive Neighborhood Plan (MCNP) onto the publicly-available Gridics Municipal Zoning Platform, CodeHUB. The MCNP is a key zoning document that creates the policy framework that guides all future public and private development decisions in the City of Miami to ensure the City meets the needs of existing and future residents, visitors and businesses, while preserving the character and quality of its communities.

The incorporation of the MCNP into CodeHUB will help to drive smarter regional planning decisions for the future by integrating future land use, environmental, and infrastructure requirements into an interactive, parcel level, 3D map. This is the first time that the MCNP has been made available to the public in such an interactive and accessible tool, allowing the public to be actively involved in understanding the direction of their community, including how the infrastructure will change to support future growth. The most updated version of the MCNP and Future Land Use Map (FLUM) will be made available 24/7 through this new platform.

This week’s online publication of the MCNP follows the successful 2018 launch of the Miami 21 Zoning Code on the Gridics platform, providing citizens an up-to-date and fully digitized version of Miami 21, plus parcel-specific lookup tools for citizens to get zoning property record data for their property or parcel.



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