Terra has offered half a billion dollars to buy out an oceanfront condo building in Miami Beach, six months after a Related Group-led venture backed out, according to a letter obtained by Commercial Observer.
Located at 5445 Collins Avenue, the property, Castle Beach Club, sits on 4 acres along the famed Miami Beach strip, offering 576 linear feet along the ocean.
The deal — if finalized — would effectively become the most expensive land purchase in the Miami area. Terra, led by David Martin, will most likely tear down the 18-story building and construct an ultra-luxury condo complex. The site can accommodate a structure up to 200 feet tall.
The proposed buyout is part of a growing trend following the deadly collapse of Champlain Towers South, a condominium built in 1981 that was poorly maintained. Some condo associations of similar, decades-old buildings are choosing to sell to developers to avoid footing the bill for costly repairs, now mandated by Florida law.
In late 2021, the homeowners association of Castle Beach Club put the property, which dates back to the 1960s, on the market, hiring a team led by Colliers’ Ken Krasnow and Gerard Yetming to shore up the highest price.
Jorge Perez’s Related Group and 13th Floor Investments first swooped in a year ago, together bidding $500 million. But the joint venture backed out of the deal in October after their financing fell apart as interest-rate hikes rattled capital markets and a handful of unit owners held out.
Last Friday, Terra officially entered the picture, matching Related’s original offer.
A letter penned by Yetming was sent to unit owners announcing Terra’s $500 million bid, which averages out to $877,192 per unit. The property’s 570 unit owners are set to receive individual offers in the next two weeks, after which they will have about two months to decide whether to accept the offer. To complete the sale, Terra will likely need 95 percent buy-in from condo owners.
“We can confirm that Terra has the capability to complete this purchase, and has the funding in place to do so,” according to a letter.
The source of Terra’s financing remains unclear, though the developer is said to have a partner on the deal with whom it previously worked with.
Back in 2022, Terra and seven other firms had bid on Castle Beach Club, according to The Real Deal, which first reported the most recent proposal.
Source: Commercial Observer