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Madison Realty Capital Originates $310M Loan For Miami River Towers

Madison Realty Capital has provided a $310-million loan to The Chetrit Group for the first two phases of development of a 6.2-acre mixed-use site located along the Miami River connecting Brickell to Jose Marti Park.

The loan is also secured by land for the third, fourth and fifth phases of development, which is zoned and entitled for approximately 1,300 residential units.

The site will be developed in five phases spanning 2.5 city blocks and deliver 1,928 multifamily units with top-of-the-line amenities, including boat slips.

Madison Realty Capital’s loan will be used to finance Phase I of Miami River, which will deliver a 54-story, 632-unit mixed-use tower; and Phase II, which will consist of a two-building three-story development with 24,000 square feet of commercial space and a publicly accessible esplanade and river walk along the Miami River.

Funds from the transaction will be contributed to the Miami Dade Affordable Housing Trust Fund earmarked for the East Little Havana Area.

 

Source:  ConnectCRE

 

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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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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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New Lease On Life: Apartment Projects Popping Up At Distressed South Florida Shopping Centers

Residential redevelopment of South Florida shopping centers is becoming more common, amid solid demand for rental housing and a slack market for retail space.

This month, Houston-based developer Morgan Group won a land use change to build 356 apartments on the site of a former Macy’s store and parking lot at Pompano Citi Centre, a shopping center in Pompano Beach on the southwest corner of Copans Road and Federal Highway.

“We haven’t seen many of these residential transformations at commercial centers, but I think you’ll start to see more of them as the centers unfortunately start losing tenants on a permanent basis,” said attorney Neil Schiller, a founder and shareholder of Boca Raton-based Government Law Group who represents real estate developers.

Shopping centers in densely populated areas are among the best in-fill sites for multifamily developments because they can meet the residential, occupational, and recreational needs of residents, said Art Falcone, co-founder and chief investment officer of Boca Raton-based Encore Capital Management.

“As South Florida gets basically built out, the opportunity now is combining live, work and play,” Falcone said. “People don’t like to be in cars and stuck in traffic.”

Falcone’s company acquired the 34-acre Fashion Mall in Plantation, demolished it, and is replacing it with Plantation Walk, a mixed-use redevelopment that ultimately will include 730 apartments. Tenants have started moving into two newly opened apartment buildings with 410 units, and Falcone expects construction of a third apartment building with 320 units to start early next year.

Falcone said Encore also has received certificates of occupancy for 130,000 square feet of new retail and restaurant space. Other completed projects at Plantation Walk include a Sheraton Suites hotel and a fully leased, 180,000-square-foot office building where insurance giant Aetna occupies half the space.

Newer mixed-use developments in South Florida commonly combine commercial space and rental apartments. Miami-based Terra developed Pines City Center in Pembroke Pines from the ground up with more than 300,000 square feet of retail and restaurant space and 400 apartments.

A positive market response to the residential options at Pines City Center encouraged Terra to acquire a 38-acre shopping center in Miami called Central Shopping Plaza, renovate the existing stores, including a former Kmart store that Target will occupy, and build apartments around them.

The first phase of that redevelopment, called CentroCity, will include 460 apartments, and will be completed in 12 to 18 months, said David Martin, CEO of Terra. By 2024, he said, Terra plans to build a total of 1,100 apartments and 250,000 square feet of office space at the CentroCity property in Miami’s West Little Havana neighborhood.

At Pines City Center, “what we saw was a very strong symbiotic relationship. Residents loved living around a retail offering, and retailers liked having customers who can walk to the store,” Martin said. “It becomes a lifestyle offering for the residents and obviously increases the number of repeat customers” for the retail tenants.

Another large-scale redevelopment is expected to bring a residential component to the Boynton Beach Mall. Columbus, Ohio-based Washington Prime Group won a rezoning of the 108-acre mall in Boynton Beach for a redevelopment that would combine as many as 1,420 apartments and up to 400 hotel rooms with 629,000 square feet of retail space. Washington Prime Group recently emerged from Chapter 11 bankruptcy with a new CEO.

However, shopping center owners like Beth Azor are unlikely to redevelop their properties in the absence of low occupancy rates. Azor is founder and principal of Azor Advisory Services, a Weston-based company that owns six shopping centers in Broward County.

She has no plans for multifamily development at any of her shopping centers because they aren’t distressed – three are fully leased – and because developers are building hundreds of apartments near her centers in Davie, Plantation and Sunrise.

“There are so many wiser, more experienced, richer folks doing apartments, that I like to watch their success from my vantage point,” she said, citing her career as an investor in shopping centers. “After 35 years in the business, I know how to do those, versus trying to learn how to develop multifamily properties.”

 

Source:  The Real Deal

 

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‘Enough Buildings’: Brickell Residents Oppose Church Plan For Development

Samantha Castellano sits in Mary Brickell Park watching her 5-year-old son scale the rope ladder and slip down the slide. As a Brickell resident for 15 years, she’s seen residential and office towers clog the skyline. At nine months pregnant, Castellano, 38, said she has a big problem with First Miami Presbyterian Church looking to sell some of its land to a developer.

“I think there should be more green spaces and not more buildings,” said Castellano, who would prefer a museum or community space for her growing family. “There’s enough buildings already.”

Owning what is one of the last waterfront properties in Brickell, the church is looking to sell the parking lot and the Key Point Christian Academy building at 609 Brickell Ave. to a real estate firm for the development of a soaring residential high-rise.

Many area employees and residents told the Miami Herald they are concerned about increased traffic, limited outdoor eating options, job loss and the diminution of one of the last green spaces in the city’s financial center. Valeria Gomez, a Brickell receptionist, calls the area a hidden gem. During tours with people she works with, she advertises the many food options in the food truck plaza, located in the church’s parking lot, and the Brickell Key, Biscayne Bay and ocean views.

“You can take a walk and you don’t have to go all the time to Shake Shack or Mary Brickell Village,” she said. “It’s nice. This area is a favorite, at least for my clients.”

The 26-year-old said most days from 11 a.m. to 2 p.m. the plaza is crowded with residents who want to grab a quick bite or account managers who’d like a relaxing lunch outside the office. She recalled the crowds as she got off work after 6 p.m. earlier this week.

“All the tables were filled up, there were people waiting to get help from the food trucks and everything,” Gomez said.

Several of her clients have children enrolled in the K-8 religious school and she said she cannot imagine how the parent would feel with the school closing if the land is sold.

“You’re taking away an educational environment to make room for people outside of the area,” she said. “With that being said, I feel like it’s a terrible idea.”

Traffic jams are unbearable, she added, and a driver could be sitting in gridlock for 30 minutes when the Brickell Avenue bridge raises. With the introduction of another large condo building, she imagines matters getting worse.

“It’s still a beautiful city, I think we have to do a better job at taking care of it and remembering the people instead of the business,” Gomez said.

Church members plan to vote after services Sunday on the land sale. The Brickell-based firm, 13th Floor Investments, has proposed constructing a high-rise condo with retail and restaurants on the ground floor, as well as worship space inside the tower. If the congregation votes in favor of the proposal, the church could receive about $240 million.

Isaac Rondon, World Wide Bistro food truck owner, said he sells his gourmet burgers and Philly cheese steaks from 12 p.m. to 9 p.m. every day in the plaza. The 23-year-old relies on the Brickell customer base for sales and without the plaza he could lose his job. As a historic site in Miami, the church cannot be demolished or relocated.

The church was hit with a $7.1 million tax bill in 2018 by the Miami-Dade Property Appraiser, for permitting a portion of church grounds to a for-profit school and the food trucks, violating its religious exemption status.

John Wayland, who works in banking in Brickell, said the land is an underutilized asset and by selling a portion of the property, the church can finance additional resources and services.

“I’m not sure how many more condominium buildings Brickell needs to have going up, but I would also say that I understand the desire to be able to convert an asset into a monetary asset,” Wayland, 53, said.

Chip Hoebeke, a consulting director for a business firm, said the plaza is one of the few spaces in Brickell where visitors and locals can enjoy the comfort of street food in comparison to the influx of high-end, sit-down restaurants in the area. As a fan of the vanilla milkshakes from the World Wide Bistro, he described the food truck plaza as a space for dog owners and parents to decompress.

“This is kind of a release valve for that congestion, and at some point, when you have too much congestion it’s got a negative influence on everybody,” Hoebeke, 47, said.

 

Source:  Miami Herald

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Rilea, Promanas Buy Wynwood Dev Site, Plan Short-Term Rentals

A short-term rental project with 127 units is coming to Miami’s Wynwood neighborhood.

Developers Rilea Group and Promanas Group bought the site on the southwest corner of Northeast 29th Street and the Florida East Coast Railway tracks for $12.2 million, with plans to build The Rider, according to a release from Rilea and Promanas.

The properties at 94 and 100 Northeast 29th Street and 101 Northeast 28th Street total 0.6 acres, records show. Seller 101 NE 28 St LLC ties to Jeffrey Miller of Krillion Ventures.

Alfredo Riascos and Yonatan Missika of Gridline Properties represented the buyers. Liana Rivera of LLV Realty represented the seller.

The area still lacks hotels, which prompted the developers to build a short-term rental project, Rilea’s Diego Ojeda said in a release.

Plans call for a 12-story project with 8,500 square feet of ground-floor retail, a rooftop restaurant and a pool bar, according to the release. Construction is expected to start in 2023.

Units at The Rider, near a planned passenger commuter train station, will be rented through short-term rental sites such as Airbnb and VRBO, according to the release.

 

Source:  The Real Deal

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Car-Free Lifestyles Create Commericlal Development Niches

A car-free lifestyle and commercial real estate development opportunities are closely intertwined, a Miami Association of Realtors commercial conference panel exploring Transit Oriented Development agreed.

“The real story in Florida is population growth,” said Aaron Stolear, associate vice president of 13th Floor Investments. “We are absorbing 1,000 people a day. We will soon be absorbing 10 million people in the next 20 to 30 years. But there is not enough land or space to grow in the urban core. Without a massive transit system, we won’t be able to sustain our growth.”

Eulois Cleckley, director & CEO of Miami-Dade County Department of Transportation & Public Works, agrees and wants to maximize development of the land around transit. He is an advocate of the Smart plan that includes six rapid transit corridors throughout Miami-Dade. 

“Access is important for jobs,” Mr. Cleckley said.

Transit Oriented Development is driven by a decision to enhance or build a web of transit to maximize the space around those transit locations. The panel at the Biltmore Hotel in Coral Gables agreed that with the quick growth and packed urban core of Miami, people need the ability to live all over the county, but with access to transportation to the city. 

The conference brought together 270 realtors on Oct. 1 to discuss the future of real estate in South Florida. One of three panels, South Florida Explored: Transportation, Transit Oriented Development, examined the future of transportation in Miami. 

Moderator and principal of Infinity Commercial Real Estate John W. Dohm led the conversation with five transportation and real estate entrepreneurs and how a car-free lifestyle would excel in Miami.

Patrick Goddard, president of Brightline inter-city rail, made it clear that many people are transit averse.

“People don’t want to get on transits, they don’t understand it. There’s a lot of friction involved with getting people out of their car. We have to enable it in three ways. We need the actual infrastructure to exist. That will involve entities like Brightline and then businesses like Lyft or Uber, ebikes and scooters. So it is an ecosystem,” he said. 

Brightline is to reopen in November in South Florida and plans to offer a fleet of vehicles that are going to pick people up and take them to the transit station.

“We need to provide alternatives to the car. We cannot support any more congestion on our highways,” said Mr. Goddard, who stated that on I-95 the average speed is about 35 miles per hour and isn’t improving. “It’s one of the most dangerous in the country with about 50,000 accidents and 3,000 deaths a year. We need other ways to travel. There’s no one solution, but the community needs to support it.” 

 

“I-95 has an express bus and is very well-ridden. It is a national benchmark,” Jeremy Mullings, director of South Florida Commuter Services, said. “I represent one of those programs trying to get people to get out of their cars.”

He agreed with Mr. Goddard about transportation being an ecosystem. 

“In the late 2000s, we thought that millennials would get out of cars and ride the transit, but in 2015, when millennials became the dominant sector of the workforce, the transit started to plummet,” Mr. Mullings said. “I think the solution is going to be finding the sweet spot between government and a private sector. We don’t have it figured out yet.”

 

“When I was living in Brickell, I wouldn’t use my car for months at a time,” said Rafael Romero, senior vice president of retail advisory of Jones Lang LaSalle. “We have to find out where the consumer is comfortable for this car-free lifestyle. Where do they live, work and play? People love the ability not having to travel too far to reach their daily needs.” 

People are happy to be in walking distance of groceries, restaurants or the gym according to Mr. Romero. 

The panel agreed that the goal was to make the transit more appealing.

“Our legacy is to be a catalyst for change, living a car-free lifestyle,” Mr. Goddard said. “Are we giving you an opportunity to try it out?”

 

Source:  Miami Today

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Miami’s Tallest Tower Due In 2022

The Okan Tower is still on track to be finished in mid 2022, according to Okan CEO Kasim Badak. The $300 million project was put on hold because of the pandemic.

“The pandemic affected us,” Mr. Badak said. “But it affected everyone around the world. We stopped any operations, but we are back in business.”

Bekir Okan, a Turkish billionaire businessman, is building what would be the tallest tower in Miami and first for Okan in the US from the ground up. The building was designed by Behar Font and Partners Miami architecture firm to represent a tulip, the flower of Turkey. It is to rise at 555 N Miami Ave. and stand 70 stories tall, with 64,000 square feet of Class A office space, 294 rooms by Hilton Hotel & Resorts, 149 condominium residences and four penthouses.

In its 890 feet of height, the Okan Tower is still planned to include three pools, one outside on the 70th floor, a spa, an outdoor lounge, a fitness center, a gastro kitchen, a children’s play center, a wine cellar, a rooftop restaurant, a movie theater and a cigar room.

“We are celebrating an extraordinary person, Mr. Okan,” Miami Mayor Francis Suarez said at the Okan Tower launch party at the Perez Art Museum on May 21, 2018. “We open our arms to you and we know your project is going to be very successful.”

They had already sold 30 condos and condo-hotel units by May 2018.

When Mayor Suarez asked Mr. Okan why he loved Miami, he answered, “I love the weather, I love the casual lifestyle, but most importantly I love the people.”

Miami’s tallest tower today is the Panorama Tower, standing 868 feet.

 

Source:  Miami Today

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Julia Apartments Break Ground In Allapattah

Neology Life, led by developer Lissette Calderon, broke ground on an apartment complex in the Allapattah neighborhood of Miami after obtaining a $78.2 million construction loan.

The Julia Apartments, named for Miami founder Julia Tuttle, will have 323 units. Construction on the 12-story building at 1625 N.W. 20th St. is expected to be completed by mid-2023.

Units in the Julia will range from 586 to 892 square feet. Amenities will include a pool with cabanas, a rooftop garden, a fitness center, a coffee bar, and a dog park.

Trez Capital provided the mortgage to TCG Allapattah, an affiliate of Neology Life, for the 1.7-acre lot.

“When we evaluate lending opportunities, we focus on the needs of a community and the track record of the developer,” said Ben Jacobson, a managing director at Trez Capital. “Partnering with Lissette and understanding her vision, we think Allapattah is perfectly positioned to attract nearby working professionals and families who desire a certain level of luxury living but are priced out of places like Brickell, downtown and Wynwood.”

 

Click here to read more about this story.

 

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First Miami Presbyterian Looks To Sell Prime Real Estate For Development In Brickell

The First Miami Presbyterian Church is looking to sell a portion of its prime real estate location for development on the Miami River and church members are set to vote on the possible deal on Sunday, the church’s head of staff and reverend said Monday. The church, the oldest congregation in Miami, wants to move forward with plans to sell the waterfront parking lot and the Key Point Christian Academy building at 609 Brickell Ave. to the Brickell-based real estate firm 13th Floor Investments, according to documents shared with the Miami Herald from a source who had access to the plans at an Oct. 3 meeting of church members.

The source said the plans are for a high-rise condominium with retail and restaurant space on the ground floor. It would also provide the church with congregation space inside the tower. The project would be built on one of the last remaining waterfront properties in Brickell. With views of Brickell Key, Biscayne Bay and the ocean beyond the residential tower would sit between the Icon Brickell and an office tower 701 Brickell.

Rev. Dr. Christopher Benek said church members will vote on a plan Sunday after services, but he declined to comment on project details.

“This is a real moment before the church. God has blessed this community with an opportunity to potentially serve the people of Miami and the world to scale,” Benek said. “No matter where we land on Sunday, God has been working for the past 125 years to work through this congregation and he will continue to work through this congregation, regardless of the vote.”

According to the proposal, the church would receive about $240 million. Benek declined to comment on any financial arrangements. The 150-member church has faced financial challenges in recent years. In 2018, the church received a $7 million tax bill for allowing some of its property to be used for profit.

Benek said, “We’re not making a decision from scarcity, but of abundance.”

Another source familiar with the plans said church members have not been given enough information ahead of the planned vote this weekend.

“It’s hard to share the opportunities or challenges, because we don’t have enough details about the plan,” the source said. “You need an elected committee of church members to evaluate that. Any plan needs to be evaluated based on the needs of the church and not based on the dollars and cents of a real estate deal.”

 

Source:  Miami Herald

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