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Miami Beach Votes Down Big Real Estate Projects

Miami Beach voters on Tuesday nixed three major real estate projects proposed by industry heavyweights Stephen RossBarry Sternlicht, and Don Peebles.

Some 53.4 percent of voters rejectedRoss bid to exceed the current building-size regulations, effectively halting his plans to redevelop the historic Deauville Beach Resort, a MiMo-style property.

The New York-based developer wanted to increase the floor-area ratio, a method of regulating a building’s size, for the Deauville lot at 6701 Collins Avenue and two adjacent parcels. Had the ballot measure passed, Related would have developed an Equinox-branded complex with two luxury towers, featuring 125 condos and 175 hotel rooms. (Related owns Equinox.)

The development seemed like a passion project for Ross, who partly grew up in town.

“As a native of Miami Beach, this project is personal to me. I know what this site means to the people of Miami Beach,” Ross said when announcing his purchase bid in May. 

The billionaire developer enlisted world-renowned architect Frank Gehry to design the new complex. In July, Ross also spoke at a Miami Beach city commission meeting, where he mapped out his plans for “a world-class project.” Yes For A Safe and Strong Future, a political action committee tied to Related Companies, spent over $1 million in favor of the referendum.

Ross’ plans for the Deauville site are unclear following the defeat. The sale was contingent on voters approving the height increase. When reached for comment, Ross and Related representatives provided a statement from Yes For A Safe and Strong Future.

“While we are disappointed with the outcome, we know North Beach deserves an economic engine, not an eyesore. We appreciate the tremendous support we received from thousands who backed a real vision for a better North Beach and still believe there’s a brighter future ahead,” the statement reads. 

Regardless of Tuesday’s vote, the Deauville property will be demolished. The resort has been closed since 2017, following an electrical fire. It fell into such disrepair that a Miami Beach official deemed the resort structurally unsafe and ordered it to be knocked down last January. A Miami-Dade circuit judge later upheld the order. The demolition is scheduled for this Sunday.

No More Offices on Lincoln Road

Ross wasn’t the only developer to lose in Miami Beach.

Ventures led by Sternlicht’s Starwood Capital and Peebles’ Peebles Corporation both sought 99-year leases to build competing office-heavy, mixed-use projects on city-owned land near Lincoln Road, a pedestrian shopping street in Miami Beach. As with Ross, voters rejected each of the proposed leases by 53 percent.

Had they been approved, the leases together would have generated $355 million for the city over 99 years, as stated on ballots. Developers saw an opportunity to build boutique offices in Miami Beach in part to serve billionaires, who relocated to the island town during the pandemic and now seek offices near their residences.

At 1688 Lenox Avenue and 1080 Lincoln Lane North, Starwood’s plans with partners Integra Investments and The Comras Company called for a 100-foot-tall structure that would feature office space, ground-floor retail (including 1,000 square feet leased to a nonprofit rent-free) and a public parking lot to replace the existing surface lot.

Just three blocks east, at 1664 Meridian Avenue, Peebles — along with two partners, local developer Scott Robins and former Miami Beach Mayor Philip Levine — wanted to develop a six-story building with Class A office space, 43 market-rate residential apartments, ground-floor retail space, and public parking to replace the existing 151 spots.

“We will consider working with the city to make some adjustments to our proposal and consider presenting it to the voters again without such a crowded and controversial group of ballot questions. That would give the voters the opportunity to focus on the many public benefits from our proposal,” Peebles said in a statement.

The Ones That Passed 

Miami Beach residents did approve some referendums related to real estate — those which weren’t directly tied to developers.

Voters agreed to boost the floor-area ratio for oceanfront hotels in the South of Fifth neighborhood that want to convert to residential buildings. Residents also greenlighted a floor-area ratio hike for certain office and residential properties east of Washington Avenue between First and Second streets if the owner agrees to prohibit hotels and short-term rentals on the property.

Residents also passed a ballot initiative that asked voters whether the municipality should seek voter approval before selling or leasing city-owned properties for over 10 years. The measure affects properties between West 43rd Street and West 40th Street, and from Pine Tree Drive on the east to Alton Road on the west.

Unlike in Miami Beach, Developers Win in Miami

Across the bay in Miami, developers had better luck Tuesday. Sixty-four percent of voters approved a 99-year lease extension for a waterfront site in Downtown Miami, paving the way for a $1.5 billion development.

Hyatt Hotels and Miami-based developer Gencom plan to tear down the James L. Knight Center and build three skyscrapers. Called Miami Riverbridge, the development would include 1,542 rental apartments in total, along with 615 hotel rooms and 264 serviced apartments. The annual rent will jump from $250,000 to at least $2.5 million. The joint venture has also vowed to make a $25 million contribution to affordable housing initiatives, the details of which have not yet been released.

“Miami Riverbridge will improve access to and from the Hyatt Regency Miami site, activate the Miami riverfront, and meet growing demand for housing, hotel rooms and more meeting space in our downtown,” James Francque, global head of transactions for Hyatt, and Phil Keb, executive vice president of development for Gencom, said in a joint statement.


Source:  Commercial Observer

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Shvo Wants To Redevelop Aging Lincoln Clock Tower Building

Shvo is betting big on Miami Beach.

Michael Shvo’s firm is seeking to redevelop a 13-story office tower at 407 Lincoln Road, according to plans filed with the city.

The aging tower is one of the tallest office buildings in Miami Beach and is known for its clock display on the top. It sits directly in front of SoundScape Park.

The tower would mark Shvo’s third office project in the city.

But first Shvo’s firm has to acquire the property. An entity called EuroAmerican Group owns the building, which is split into 12 office condos, according to property records. Shvo’s filing with the city likely means a sale will soon be finalized. Shvo declined to comment and Michael Shvo could not be reached for comment.

Shvo tapped Foster + Partners and Kobi Karp as architects. Shvo will seek to completely renovate the exterior of the building and renovate the lobby, elevators and clock display, plans show. The renderings of the building look unrecognizable from the building’s current design.

Wealthy people have long flocked to Miami Beach, but mostly to live, not work. In recent years, developers have sought to capitalize on the wealth migration by building more office space for family offices and headquarters, as well as for the influx of tech and financial firms to the Miami area.

In addition to the Lincoln Road project, Shvo is building a six-story office building on Washington Avenue, and a 250,000-square-foot office building on Alton Road, both in Miami Beach. Shvo’s plans follow two major, controversial Miami Beach office proposals, one by Don Peebles, former Miami Beach mayor Philip Levine and Scott Robins, and another by Integra Investments, Barry Sternlicht’s Starwood and Michael Comras’ The Comras Company. The proposals, to be built on city-owned parking lots under 99-year leases, are heading to a referendum on Nov. 8.

An entity tied to Key International founder Jose Ardid bought the Lincoln Road office tower from the Financial Federal Savings & Loan Association in 1982, records show. In 2003, Key International sold the property to EuroAmerican Group, which lists Ivan Gonzalez Ruiz as president.

Shvo’s other major project in Miami Beach is the redevelopment of the oceanfront Raleigh and two other neighboring hotels. Shvo is planning to redevelop the historic Raleigh and build a 44-unit luxury condo tower. Rosewood Hotels & Resorts was tapped as the branding partner for the hotel.


Source:  The Real Deal


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Recently Renovated Miami Beach Office Building Sells For $26.5M

Integra Investments and Constellation Group turned a nice profit on a recently renovated office building in Miami Beach.

The 31,979-square-foot office at 1674 Meridian Ave. sold for $26.5 million.

The seller was 1674 Meridian Ventures LLC, a partnership between Miami-based Integra and Miami-based Constellation, and the buyer was a company led by Juan Jose Zaragoza of Miami-based Exan Capital. The price equated to $829 a square foot.

The building is 55% leased.

The developers acquired the building for $10.1 million in 2019 and performed a major renovation, creating more modern floor plates with spaces for collaboration, enhancing the façade, installing a new HVAC system, touchless elevators and face temperature camera telecoms.

The 5-story building was constructed on the 8,250-square-foot lot in 1959.


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$58M Affordable Housing Development For Seniors Underway In Trendy Allapattah

Seniors seeking affordable housing near art, barbecue and the Health District can soon look to Miami’s up-and-coming Allapattah neighborhood.

The Downtown Miami-based Interurban, a branch of Integra Investments, and the Sunrise-headquarterd property management company Elderly Housing Development & Operations Corporation, or EHDOC, are developing Mosaico, an affordable housing community for seniors.

The 13-story, 290,000-square-foot building will have 271 units, 92 studios and 179 one-bedroom, one-bath units. Amenities include a gym, computer lab, library, laundry room, and rooftop garden.

Mosaico will sit on 1.2 acres at 1396 NW 36th St., two blocks from the Allapattah Metrorail Station north of the University of Miami School of Medicine, Jackson Health and Bascom Palmer Eye Institute — and a short walk to the Rubell Museum, the soon-to-open Superblue art space and Hometown Barbecue in the emerging Allapattah neighborhood. Construction began in September and is expected for completion by late 2021.

“Miami is one of the most significantly rent-burdened markets in the country,” said Jake Morrow, head of Integra Investments’ Interurban. “The pandemic has exacerbated the dire need for affordable housing, especially for the area’s elderly population whose income far too often consists of only Social Security income.

“To serve the community’s needs, Interurban is committed to providing high-quality housing at affordable rents,” he said. “The pandemic has heightened the need for affordable housing. I think that we can see upward pressure on market rents due to an influx of residents from northern cities.”

EHDOC did not immediately respond.

The firms are using low income housing taxing credits syndicated by Boston Capital and tax-exempt bond construction financing from the Housing Financing Authority of Miami-Dade County, which are underwritten and administered by R4 Capital, for the $58 million project.

Interurban and EHDOC hired the architect firm C.C. Hodgson Architectural Group to design the project.

The firms expect to rent the 450-square-foot studios to single seniors and 580-square-foot one-bedroom units to couples. All units are reserved for households with average incomes at or below 60% of the area median income, which is $59,100. In other words, prospective residents cannot earn more than $38,400 per year to qualify.

Residents would spend 30% of their income on rent and would need a Section 8 voucher, administered by the U.S. Department of Housing and Urban Development.

Seniors interested in living in Mosaico must first register on the Miami-Dade Public Housing and Community Development general waiting list at for affordable housing in Miami.

Integra, founded in 2009, launched Interurban in 2017. In recent years it has focused on mixed-use, market-rate projects; Mosaico and Las Brisas Trace, in Brownsville, near Liberty City, are its first affordable housing developments.

EHDOC operates 55 senior living communities nationwide, including in Florida, Illinois, California, and Ohio.

Mosaico and Las Brisas are among the growing affordable options for local seniors, often strapped by the region’s notoriously high housing costs. Earlier this year, Related Urban announced Lincoln Gardens, a Brownsville project due to open in 2022; and expansion of affordable project Brisas del Este, also in Allapattah at NW 18th Avenue and NW 29th Street, due for completion in 2022. Earlier this year, Pinnacle Housing Group opened Caribbean Village in Richmond Heights in southern Dade and Carrfour Supportive Housing opened a complex for LGBQT seniors in Wilton Manors.


Source:  Miami Herald

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What Trends Should Florida Investors Keep Tabs On?

Multifamily will continue to be a prevailing asset class in the Sunshine State due to residents’ growing desire to relocate and live here, Victor Ballestas, principal of Integra Investments, told Multi-Housing News.

Currently, locals are increasingly looking for residential options in suburbs and rural areas—and shying away from high-density metros—but this trend is likely to reverse once the crisis recedes. Despite short-term uncertainties brought on by the coronavirus outbreak, Ballestas anticipates a quick recovery for Florida’s real estate industry.

How is the Florida multifamily market navigating the pandemic?

Ballestas: Despite the uncertainty brought on by the pandemic, Florida’s real estate industry may be primed to recover with a sharp rebound. The multifamily market is weathering the pandemic better than most; vacancies remain low and collections were only a challenge for a few months. Low interest rates and the net migration to Florida contribute to the stability of the product.

The pandemic’s circumstances have created homebuyers and strengthened the suburban market, as residents look for outdoor space, especially as more people spend time working and learning from home. Thus, dense urban markets are being affected as individuals relocate away from the urban core. However, I expect a wave back to urban markets will happen again, but it will likely take a few years.

Compared to the last cycle, how is the current environment different in terms of relocation trends?

Ballestas: In the last cycle, conditions led to a movement from suburban areas into the urban core, specifically Miami’s Downtown, Brickell and Edgewater submarkets. Current trends show that individuals now prefer a less dense environment, potentially leading to deurbanization caused by the pandemic and resulting in a boom in rural and suburban areas. Understanding the market needs, municipalities must work with developers to deliver high-quality products that adjust to the changing environment.

New York and New Jersey have seen residents moving to Florida, Texas and other Sun Belt states since the onset of the pandemic. What can you tell us about this pattern?

Ballestas: With roughly 1,000 Americans flocking daily from high-tax northern cities to South Florida, new contracts for single-family homes and condominiums have doubled, and continue to rise in five south and central West Coast counties. As some companies transition to permanent remote work, buyers are reevaluating their lifestyle needs, seeking home offices, larger kitchens and green spaces. Therefore, consumers’ shifting product needs—combined with tax advantages—created the perfect storm, leading to an unprecedented uptick in sales, even in rentals of single-family homes.

Experts forecast the supply of multifamily housing units will not outpace the underlying demand, thus requiring added product to meet ongoing needs. Integra Investments remains bullish on multifamily, particularly market-rate and workforce-targeted units in the suburban submarkets of Dade and Broward counties.

Please tell us how your company has handled the pandemic-induced volatility.

Ballestas: With ongoing construction amid the pandemic, Integra’s project timelines remain on track across its portfolio. To ensure the safety of our construction team and the community, our firm has worked in conjunction with other developers and industry leaders to implement the proper protocols.

To support the ongoing housing crisis, 390 units of entirely affordable and elderly housing in Miami-Dade will be under construction by the end of the fourth quarter by Interurban, our affordable housing development division. Additionally, Integra Marina, our in-house marina business vertical, remains bullish on value-add marina opportunities, as the increase in recreational boat sales has led to a substantial demand for coastal upland developments. Our portfolio includes Angler House Marina in the Florida Keys, Islamorada Marina in Key West, and Harbor Yacht Club and Westshore Marina in Tampa.

What trends in the multifamily industry should Florida real estate players keep an eye on going forward?

Ballestas: From now on, developers and users will place increased value on live-work-play environments, with added emphasis on suburban housing products with high walkability scores to parks and outdoor amenities. Additionally, we predict an uptick in untapped products that merge single-family home features with Class A multifamily amenities. An example of this is our Bella Vista apartment community in Lauderdale Lakes, which will be fully completed by the fourth quarter.

Considering the shift in remote work, internet speed and accessibility to different residential areas will become the most-valued amenities. With this in mind, our firm is incorporating dens and home offices in more units in our new multifamily developments.

How are your predictions for Florida’s multifamily market over the coming period?

Ballestas: The general outlook for real estate in 2020 at the start of the first quarter was positively supported by asset classes positioned for stability based on strong market fundamentals, steady rent growth and low interest rates. With a continued positive migration and increased desire to relocate to and live in South Florida, I predict multifamily will continue to be a predominant asset class.


Source:  MHN

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Will The Pandemic Kill Demand For Micro Units?

For the past five-plus years, micro-units have been an intriguing subplot in the grand saga of commercial real estate. As demand for housing has boomed, especially in rent-burdened cities like New York and San Francisco, developers gambled that tenants would tolerate tiny units — some as small as 220 SF — for the chance to access cool neighborhoods at affordable rents. Now, though, some real estate experts wonder whether the coronavirus will kill, or at least cripple, the concept.

“Prior to COVID, there was a big surge in the urban areas, urban core, everyone wanting to live in micro-units, and now it looks like everyone wants to move to the suburbs, buy homes, get out of apartments,” FM Capital Principal Aaron Kurlansky said during a Bisnow South Florida webinar last month.

Social distancing is the antithesis of the tight-knit living style that micro-units and their cousin, co-living, promote. With bars and restaurants shuttered and remote work gaining more acceptance, renters may see fewer reasons to remain in city centers, where most micro-unit properties are.

Integra Investments principal Victor Ballestas said his company was considering developing micro-unit projects in the Wynwood and North Beach areas of Miami.

“You sort of have to go towards the micro-market in order to make the numbers work, because the overall rent was pretty high,” he said. But in the wake of the coronavirus, “those are the ones that we’ve probably pulled back the quickest.”

“We always had a little heartburn over the micro-unit model,” he continued. “And then [we] started hearing through the grapevine also that people that are moving into micro-units are, you know, moving out after the year. It’s pretty much like 100% turnover rate, which obviously impacts performance significantly.”

That prompted him to focus on multifamily deals on larger parcels instead, he said. Allen Morris Co. CEO Allen Morris, who also spoke on the webinar, said he shared Ballestas’ concerns.

“People do sometimes tend to move out after a year. They say, ‘Great, look how much money I’m saving!’ and then they say, ‘I can’t stand it! Get me out!’ So, it becomes like student housing — they all move out at the end of the year.”

Kurlansky said the small apartment complexes his company owns in South Beach and Miami Beach have underperformed compared to the larger units farther from downtown in his portfolio, which he attributed to unit size.

“People are in, then they’re out,” he said. “As we’ve played in the student housing space, as someone from my office told me, it’s like convincing your wife every year that she loves you. You go from 100 to zero to back to 100, so it’s an exhaustive process, and, you know, micro-units, it seems to me, are going to follow that kind of trend where you’re just kind of [going to] be in constant lease-up.”


Source:  Bisnow

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