Real Estate News

Diplomat Beach Resort at at 3555 South Ocean Drive

Diplomat Beach Resort at at 3555 South Ocean Drive

Brookfield Asset Management secured a $168 million refinance loan for The Diplomat Beach Resort.

Brookfield, through its Thayer Lodging Group subsidiary, closed on the loan from Morgan Stanley, J.P. Morgan and Wells Fargo.

The 1,000-room Diplomat sits at 3555 South Ocean Drive in Hollywood is the second-largest hotel in South Florida, after the Fontainebleau Miami Beach. The property is reportedly on the market for as much as $1 billion, or $1 million per key, according to Bloomberg.

Thayer paid $460 million for the Diplomat in 2014. Shortly after the sale, the former Westin hotel was rebranded to Curio, a Hilton Worldwide Holdings brand.

In April 2017, Brookfield completed a $100 million renovation of the beachfront property, which has 96 suites, 515 king rooms, 484 double rooms, and more than 200,000 square feet of meeting and event space. It features 10 restaurants, including Monkitail by Michael Schulson.

Thayer Lodging Group is seeking to build a second hotel building with 500 rooms across the street from the property.

Many developers are looking to refinance as interest rates have fallen. Recently, TB Isle Resort LP, led by developer Jeffrey Soffer, received $91 million in financing for the JW Marriott Miami Turnberry Resort & Spa from the Bank of China, boosting its loan to $340 million.

Here are a few real estate events coming up next week:

Host: Bisnow
Date: September 25th
Time: 8 a.m. to 1 p.m.

Bisnow is hosting its South Florida State of the Market event at the Margaritaville Hollywood Beach Resort, 1111 North Ocean Drive in Hollywood, from 8 a.m. to 1 p.m. Come to this event to network and discuss the growth of mixed-use developments taking place in South Florida. Speakers include Adam Mait of Adler Group and Shahab Karmely of KAR Properties.

Host: CIASF
Date: September 26th
Time: 8 a.m. to 10 a.m.

The Commercial Industrial Association of South Florida is holding its It Ain’t What You Make, It’s What You Keep event at Akerman LLP in Miami, 98 South 7th Street, from 8 a.m. to 10 a.m. This event will feature a panel of professionals examining the most effective tax strategies in the industry.

To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to events@therealdeal.com.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

 

Landmark 1920s bank building in downtown Hollywood could be torn down and redeveloped into rentals. The building, part of the Historic Hollywood Business District, first opened in 1927. Developer Steve Berman is partnering with the Estate Companies to build an eight story, 350-unit apartment complex with retail, restaurant and bar space on the ground floor. Before they can do that, the developer will need approval from the Historic Preservation Board to demolish the building. [Sun Sentinel]

 
A rendering of the project

A rendering of the project

Miami-Dade commissioners approved a $300 million terminal development by MSC Cruises at PortMiami. The cruise line plans to build its two-terminal building on 16.7 acres, under a 62-year lease, which may mark the biggest lease deal in port history. Holland & Knight partner William R. Bloom, who represents MSC, said the company would pay rent totaling $2 billion over the 62-year term of the operating lease. [TRD]

 

Multifamily investors in New York and California are moving quickly and making offers on properties in South Florida due to new rent regulations in those states, brokers say. But they are also encountering a strong rental market and low supply, which have pushed up prices. In June, New York state passed a sweeping rent reform law, expanding its protections for millions of rent stabilized tenants. And California is now poised to implement a statewide cap on annual rent increases. [TRD]

 

Compiled by Katherine Kallergis

From left: Dr. Kris Singh and Anthony Lomangino with 490 Mariner Drive

From left: Dr. Kris Singh and Anthony Lomangino with 490 Mariner Drive

One man’s trash is another man’s treasure?

Garbage magnate Anthony Lomangino and his wife, Lynda, have offloaded their Jupiter mansion for $10.5 million, two months after buying a home in Palm Beach.

Property records show the couple sold the seven-bedroom, 10,847-square-foot house at 490 Mariner Drive to Krishna and Martha Singh. Krishna, who is known as Kris, is the founder, president and CEO of Holtec International, a designer and manufacturer of nuclear reactors, among other equipment and systems.

The waterfront Jupiter home sits on less than half an acre of land and includes marble walls, a master suite, two-bedroom guest suite, pool and patio. Rob Thompson of Waterfront Properties & Club Communities represented the buyer and seller, according to the listing.

The house hit the market in 2018 for $13.5 million. Built in 2003, it last sold in 2014 for $6.2 million.

In July, the Lomanginos paid $12.6 million for the waterfront home at 1620 South Ocean Boulevard in Palm Beach.

Lomangino ran garbage collection businesses in New York and South Florida. He founded the South Florida waste hauling company Southern Waste Systems, which was acquired by Waste Management in 2015. In 2018, Lomangino reportedly gave $150,000 to help fund the legal fees of Trump associates who had been engulfed in the Russia investigation, according to Politico and the Wall Street Journal.

Over the summer, Jamie McCourt, former co-owner of the Los Angeles Dodgers and the current ambassador to France and Monaco, bought a Jupiter estate for $8 million.

A rendering of the project

A rendering of the project

The Miami-Dade County Commission on Thursday approved a $300 million terminal development by MSC Cruises at PortMiami.

The cruise line plans to build its two-terminal building on 16.7 acres, under a 62-year lease, which may mark the biggest lease deal in port history.

Holland & Knight partner William R. Bloom, who represents MSC, said the company would pay rent totaling $2 billion over the 62-year term of the operating lease.

“I think this is the largest [lease] deal the port has ever done,” Bloom said. PortMiami has approved shorter lease deals for preferential berthing agreements “in the neighborhood of 30-year terms,” he added.

The MSC lease won’t have options to extend the term, Bloom said.

MSC plans to build a single building at PortMiami with two terminals where two cruise ships could operate simultaneously.

The MSC project was one of 11 projects at PortMiami that commissioners approved on Thursday for cruise lines, including Carnival Cruise Line, Norwegian Cruise Line and Virgin Voyages.

“These PortMiami deals constitute the most extensive transactions done by our port simultaneously,” Miami-Dade County Mayor Carlos Gimenez said. “These deals are expected to generate a total minimum revenue guarantee of approximately $4.6 billion in wharfage, dockage and capital recovery fees during the initial phase of the deals.”

MSC – which moved its South Florida operations from Port Everglades in Fort Lauderdale to PortMiami in 2013 – plans to base four cruise ships in Miami in the upcoming winter season, up from just one three years ago.

“But we have bigger ambitions,” said Roberto Fusaro, president, MSC Cruises USA.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 5:00 p.m.

 

Maurice A. Ferré, former mayor and “father of modern-day Miami,” died at the age of 84. Ferré, who was mayor from 1973 to 1985, led the transformation of high-rise development along Brickell Avenue. [Miami Herald]

 

Banks seek to revise Adam Neumann’s $500 million credit line. Following a cool reception from investors over his company’s valuation, lenders are looking to revise the terms of the WeWork CEO’s credit line — of which he’s drawn $380 million. The exact changes to the credit line were not immediately apparent. [Bloomberg]

 
Jon Paul Pérez, Jorge Pérez and the downtown Miami skyline (Credit: iStock)

Jon Paul Pérez, Jorge Pérez and the downtown Miami skyline (Credit: iStock)

Miami’s biggest condo developer is going micro. The Related Group is planning to build micro condos on a downtown Miami site it recently closed on. The Miami-based developer is planning to build a roughly 400-foot tower with about 350 units, Jon Paul Pérez, a vice president at the firm, said. [TRD]

 
Robert Matthews and Palm House Hotel

Robert Matthews and Palm House Hotel

The developer behind a Palm Beach condo-hotel project that once promised foreign investors that Celine Dion, Donald Trump and Bill Clinton would be on the advisory board has consented to federal securities charges. Robert Matthews agreed to charges brought by the Securities and Exchange Commission that he defrauded EB-5 investors of his Palm House Hotel project and used the money to pay off personal loans and to purchase a luxury home in Washington Depot, Connecticut. [TRD]

 

Airbnb’s war with NYC deepens as it heads toward an IPO. The startup’s aggressive tactics have backfired in New York as the city continues to wage a muscular crackdown on illegal operations. [Bloomberg]

 

Profits on home flips are declining. Buyers flipped 59,876 single-family homes and condos in the second quarter, down from 5 percent a year ago. Profits decreased as well, with the average return on investment hitting 39.9 percent last quarter, down from 44.4 percent. [CNBC]

 

A tax hike in Fort Lauderdale will bring in an extra $10.3 million in property taxes to the city. On Tuesday, the Fort Lauderdale commission approved next year’s tax rate and a nearly $373 million general fund, according to the Sun Sentinel. Homeowners will pay an additional $22.50 per $100,000 in assessed value for the fiscal year that begins Oct. 1. [Sun Sentinel]

 

Miami firm buys 224-unit apartment complex in Pensacola for $25.3 million. PIA Residential closed on the Crystal Lake Apartments, a 24-acre Class B community that is 98 percent occupied. The deal marks PIA Residential’s first multifamily purchase since it transitioned from single-family home rentals. Cushman & Wakefield brokered the deal.

 

JQ Group topped off construction of Quint Collection Hollywood, a luxury condo building in Hollywood. The 57-foot, five-story development will have 10 units starting at $2.9 million, and a private marina. Units, ranging from 4,650 square feet to 5,137 square feet, will include at least one boat slip, and terraces with outdoor kitchens and hot tubs.

 

A mixed-use development in Pompano Beach’s Old Town District is the first to secure financing under the city’s CRA program. Old Town Square, a 10-story, 282-apartment project being developed by Cavache Properties, was approved to receive a $7.8 million tax financing incentive. The $63 million project will be built on nearly 2 acres of land on the east side of Northeast First Avenue, between Northeast Second and Third streets. [TRD]

 

Compiled by Katherine Kallergis

Rent reform is propelling a new wave of New York and California investors to Miami (Credit: iStock)

Rent reform is propelling a new wave of New York and California investors to Miami (Credit: iStock)

First, it was tax reform that pushed CEOs, hedge fund managers and other high-net-worth individuals to South Florida. They were lured in by the favorable climate, luxury residential properties and most of all, substantial tax savings.

Now, it is the multifamily investors who are heading to South Florida, and for a different reason: rent control, something the Sunshine State lacks.

In June, New York state passed a sweeping rent reform law, expanding its protections for millions of rent stabilized tenants. The law dramatically limits how landlords can increase rents on stabilized apartments and opens the door for rent stabilization to expand outside of New York City. It stopped short of a rent cap, but that is expected to be on the table in some form in the next legislative session.

In Illinois, although rent control advocates lost a legislative battle earlier this year, they’re gearing up for a push to overturn the statewide ban on rent control in Springfield next year. And California is now poised to implement a statewide cap on annual rent increases.

Multifamily investors are moving quickly and making offers on properties in South Florida, brokers say. But they are also encountering a strong rental market and low supply, which have pushed up prices.

Eleventrust, a commercial brokerage in Miami, is working with investors from New York and Los Angeles who are looking to shift their focus to Florida because of the impact the new laws will have on their current investments.

Jose Ramos, a broker with Eleventrust, said at least 40 percent of the calls it’s getting have been from New York investors who want to close on properties in South Florida. “There’s a lot of confusion, a lot of focus on getting their money out of there and getting it into high-yield markets,” he said.

The brokerage is negotiating with two groups of investors to acquire apartment properties, via 1031 exchanges. One is for the River Lofts Apartments, a 43-unit complex at 500 to 522 Northeast 78th Street in Miami’s Upper East Side neighborhood, which hit the market with Ramos and Rafael Fermoselle, Eleventrust’s managing partner, earlier this year. It’s on the market for about $7.8 million.

Ramos and Fermoselle are showing investors properties in gentrifying markets like Little River, Little Havana and Allapattah. “The thing with Miami-Dade specifically is there’s not a lot of product that’s big enough,” Fermoselle said.

The investors they’re dealing with are looking for deals in the $5 million to $30 million range.

Deme Mekras, managing partner of MSP Group, has also received offers from New York buyers who plan to invest in South Florida multifamily properties because of the recent rent reform measures. New Yorkers especially, are more comfortable with properties in the urban cores, he said.

Rent reform is also becoming a national issue, as more than a third of Americans are considered rent-burdened. The problem is worse in South Florida, according to a report from Freddie Mac earlier this year, which found that Miami ranked as the most rent-burdened market in the U.S.

Vermont Sen. Bernie Sanders, a self-described Democratic socialist, is proposing a $2.5 trillion housing plan that would cap annual rent increases at 3 percent or one and a half times the consumer price index, whichever is higher.

Searching for yield

Multifamily investors from out of state would prefer to spend their money on one large deal but are challenged by a lack of supply, brokers said. They’re non-institutional players, looking to spend in the range of $30 million and $40 million.

But because South Florida’s rental market has remained strong, some sellers aren’t willing to part with their property. And if they are, the prices are too high. Rents have increased by 15 to 20 percent over the last eight years, according to Hernando Perez, director of multifamily investment sales for residential brokerage Franklin Street. More people are also moving to Florida, in part because of the favorable tax climate.

“There are not a lot of deals that make sense and not a lot of deals to buy,” he said.

Perez said he is seeing a number of California buyers looking to use the proceeds of 1031 exchanges to buy in South Florida. They cited the pending statewide rent control legislation, known as AB 1482, as a reason. Perez said he is working with a group that wants to spend $10 million for a multifamily building. The group, which Perez declined to identify, is looking at properties in Hallandale Beach, Fort Lauderdale and Pompano Beach.

And what if Florida was to enact similar statewide rent regulations? Simple, Perez said.

“It would crush the profitability of the real estate market.”

(Credit: iStock)

(Credit: iStock)

First Neck Self-Storage Group bought a Snapbox storage development in Pembroke Pines for $13 million, as demand for such facilities remains strong.

First Neck Self-Storage bought the 111,023-square-foot building at 8321 Pines Boulevard for $117 per square foot, records show. Storage Pros Pembroke Pines and Wagner Pembroke Pines of Farmington Hills, Michigan sold the property.

The property was last purchased for $8.9 million in 2015, and was built in 1990, records show. The overall property spans 207,000 square feet.

First Neck Self-Storage Group LLC is a joint venture between asset-management firm CSM Capital Corp. and Self-Storage Capital Partners (SSCP). Last year, the joint venture raised $50 million with the intent to acquire storage properties in primary and secondary markets, according to a press release.

Over the past few years, self storage has been one of the hottest property types in South Florida.

In June, Public Storage bought four large storage facilities in Miami-Dade County for $63 million.

Banner Real Estate sold the properties at 91 Southwest Third Street, 180 West Sixth Street, 2190 Southwest Eighth Street and 5609 Northeast Second Avenue in Miami to Glendale, California-based Public Storage, according to property records.

Nationwide, self-storage facilities have been outperforming all other major commercial property types in terms of earnings growth and company stock performance, according to a Green Street Advisors analysis.

Subscribe today to join The Real Deal’s conference call this Tuesday

Subscribe today to join The Real Deal’s conference call on Tuesday

Join The Real Deal on Tuesday, September 24 at 2 p.m. for our next subscribers-only conference call.

TRD’s senior content director Jill Noonan will talk to reporters Sylvia Varnham O’Regan and Kevin Sun about their recent coverage of foreign investment in New York amid this latest wave of global turmoil.

In TRD’s September magazine, Varnham O’Regan and Sun examined the fallout in the residential market and looked at how the commercial market is holding up.  Plus, they broke down investors by country on some of Manhattan’s biggest commercial deals

Do you have questions about foreign investors in today’s market? What would you like to know about TRD’s reporting process? Email us at subscribercalls@therealdeal.com or tweet at us.

An email with the call-in number and access code will be sent to subscribers Tuesday morning.

Not a subscriber? Don’t miss out, sign up here!

Robert Matthews and Palm House Hotel

Robert Matthews and Palm House Hotel

The developer behind a Palm Beach condo-hotel project that once promised foreign investors that Celine Dion, Donald Trump and Bill Clinton would be on the advisory board has consented to federal securities charges.

Robert Matthews agreed to charges brought by the Securities and Exchange Commission that he defrauded EB-5 investors of his Palm House Hotel project and used the money to pay off personal loans and to purchase a luxury home in Washington Depot, Connecticut.

A U.S. District judge in Miami ruled in favor of the SEC on Wednesday after Matthews previously consented to the charges. As a result of the ruling, Matthews is permanently enjoined from ever selling securities in the future. He previously denied the charges.

The Palm Beach Daily News first reported the judge’s ruling.

The move is the latest blow to Matthews, the one-time high flying, real estate developer in Palm Beach, who lived in a 12,077-square-foot waterfront mansion and once drew comparisons to the fictional Jay Gatsby. His lavish lifestyle included hosting extravagant parties and possessing an original Bill of Rights.

Today, Matthews is awaiting sentencing after pleading guilty in April to federal charges of fraud, money laundering and tax evasion. His former Palm Beach home was taken over by its mortgage lender. In July it sold for $30.2 million in a court-appointed auction.

Matthews’ wife Maria “Mia” Matthews, an actress who starred in the Nickelodeon show “Every Witch Way,” also pleaded guilty to tax evasion in federal court in Bridgeport, Connecticut in April.

Matthews began pitching the hotel project to foreign investors who were looking to get green cards through the federal EB-5 program in 2012. He said he would rehabilitate the dilapidated Palm House Hotel at 160 Royal Palm Way into a 5-star hotel that would be completed in less than a year.

Instead of injecting the $44 million he received from investors into the project, Matthews used the money to buy a 151-foot yacht named “Alibi” as well as the Washington Depot property. Seven years later, the hotel project remains unfinished and was sold in bankruptcy auction in March to a U.S. affiliate of London + Regional Properties for $39.6 million.

Jon Paul Pérez, Jorge Pérez and the downtown Miami skyline (Credit: iStock)

Jon Paul Pérez, Jorge Pérez and the downtown Miami skyline (Credit: iStock)

UPDATED, Sept. 20, 7:20 a.m.: The Magic City’s biggest condo builder is going small on its next project.

The Related Group is planning to build micro condos on a downtown Miami site it recently closed on, The Real Deal has learned. The Miami-based developer is planning to build a roughly 400-foot tower with about 350 units, Jon Paul Pérez, a vice president at the firm, said.

Related plans to develop the site as part of a joint venture with ROVR Development, led by Oscar Rodriguez and Ricardo Vadia. Both previously worked at Related.

Property records show Parcel C LLC, tied to Related, paid $8.8 million for the two lots at 225 and 233 North Miami Avenue, which total 15,000 square feet of land. The LLC also scored $3 million in seller financing.

Pérez, whose father Jorge Pérez is chairman and CEO of Related, said the project is in the planning stages. He expects to get site plan approval in about 45 days. Related has a deal with the Miami Parking Authority across the street to provide parking, Pérez said.

Units would have less than 700 square feet on average and range from about $250,000 to $500,000. The project would offer some sort of hotel or leaseback program, although Pérez said Related is still working out the details.

“The investor buying that [product] would like the ease of mind and make a decent return,” he added.

Rodriguez of ROVR said he believes the project will be successful given the price point and location.

The property is near Miami Dade College’s Wolfson campus, the C. Clyde Atkins U.S Courthouse and the Wilkie D. Ferguson Jr. U.S. Courthouse.

Related was the first major developer to hit the brakes on new development this cycle when it canceled sales of a 290-unit, 60-story tower at 1440 Biscayne Boulevard, north of downtown Miami, in early 2017.

While the luxury condo market has been in a slump since then, new projects with lower price points and rental flexibility have been more successful. YotelPad, a 31-story tower with 231 condos and 222 Yotel “cabins,” or small hotel rooms, developed by Aria Development and AQARAT, sold out in a year, Pérez said. YotelPad owners will be able to participate in a leaseback program or rent their units out elsewhere without restrictions. The development, which is under construction at 227 Northeast Second Street, is about three blocks east of Related’s site.

Related previously sought to develop a mixed-use project at 520 Biscayne Boulevard in a public-private partnership with Miami Dade College, but the college ended the bidding in the competition in 2016 after the process became entangled in litigation.

WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

When WeWork rebranded itself The We Company in January, CEO Adam Nuemann sent a clear message about his vision for the firm: it is much bigger than co-working.

But We Company’s side businesses, including co-living venture WeLive, have a patchy track record of success, according to the Wall Street Journal. Some are struggling to survive while others have fizzled out altogether.

The company spent about $164 million on side businesses in 2018 but it earned only $124 million in revenue from all its outside ventures, according to the Journal.

The news follows weeks of scrutiny over We Company’s business model, corporate governance and valuation. The faltering path to expansion has caused perception problems for the firm as it heads into its initial public offering — which has been pushed back — and seeks to convince investors it’s bigger than the co-working brand.

But even as We Company continued to diversify, four acquisitions made between 2017 and 2018 — valued at some $400 million — garnered little mention in the company’s IPO prospectus. [WSJ] — Sylvia Varnham O’Regan

From left: Jay Roberts, Keith Menin andRussell Galbut

From left: Jay Roberts, Keith Menin andRussell Galbut

Hotelier Keith Menin and Crescent Heights developer Russell Galbut have inked the first of a number of deals with Domio, a short-term rental operator, The Real Deal has learned.

Menin and his uncle, Galbut, signed a 10-year lease with Domio to take over management of the Kaskades Hotel at 300 17th Street in Miami Beach, Domio CEO and founder Jay Roberts said. The lease begins Oct. 1.

Menin is acting as an owner of the property and the deal is not affiliated with his Menin Hospitality, he said. Domio will take over management of the 26-key hotel from Urbanica The Hotels.

Roberts said he met Menin through mutual friends a couple of weeks ago and closed their first deal within days. They plan to sign leases for properties in South Florida and throughout the U.S., including in Chicago.

Domio expanded to South Florida last month when it signed a $1.45 million lease for 45 units at the beachfront Monte Carlo at 6551 Collins Avenue in Miami Beach. The company has more than 2,000 rooms in its portfolio, the bulk of which are in Chicago and New Orleans.

Roberts said that 50 percent of bookings are done directly through Domio’s website, which was attractive for Menin. “What owners are seeing, by putting it into the Domio platform, we’re really creating a network of apartment hotels,” he said.

Menin Hospitality previously operated the Kaskades as part of the nearby Gale South Beach, which it opened in 2015 after a full restoration. The building was originally designed by architect Melvin Grossman in 1953, according to the publication Hotel Business. It includes a rooftop terrace and pool, and a food and beverage component.

In August, companies tied to Menin and Galbut sold the shuttered Sanctuary Hotel at 1745 James Avenue in Miami Beach for $14.4 million to Blue Road.  A month earlier, Galbut sold the Bentley Hotel on Ocean Drive for $28 million, also previously managed by Menin Hospitality.

Galbut was also recently the lender to Urbanica Management for a 52-room hotel planned for 803 Fifth Street in Miami Beach.

Bernie Sanders (Credit: Getty Images)

Bernie Sanders (Credit: Getty Images)

Democratic socialist Bernie Sanders released his much-anticipated $2.5 trillion housing plan today.

The Vermont senator and presidential candidate would cap annual rent increases at 3 percent or one and a half times the consumer price index, whichever is higher. He would also allow states and cities to pass their own rent-control standards, even if they had stricter limits on rent increases.

Sanders also promised to enact “just cause” eviction, which limits the cases in which a landlord can evict a tenant, including for high rent increases. Versions of it are already in place in Oregon and New Jersey, and another is expected to be passed in California. A similar measure failed in New York in June.

“In the richest country in the history of the world, every American must have a safe, decent, accessible, and affordable home as a fundamental right,” Sanders said in a statement. “We need a homes guarantee.”

Read more: Inside Bernie Sanders’ $2.5T housing plan 

The plan would spend $1.48 trillion over 10 years to repair and maintain 7.4 million housing units and $400 billion for mixed-income social housing through the National Affordable Housing Trust fund. It proposes putting $32 billion over the next five years toward ending homelessness, in part by creating 25,000 units for the homeless and doubling homelessness assistance grants. The plan also includes $3 billion for the Indian Housing Block Grant Program and $500 million to expand affordable development in rural areas.

The wide-ranging plan has provisions that Sanders says would address public housing funding shortfalls, end homelessness, decarbonize public and market-rate housing by 2030 and strengthen provisions to prevent housing discrimination.

The plan not only calls for a dramatic increase in investment in affordable housing, but also outlines changes long championed by supporters of market-based solutions, notably easing restrictive zoning ordinances and the development review process. Sanders would also expand federal mechanisms for identifying and combating predatory lending and mortgage fraud.

Sanders would also create an office within the Department of Housing and Urban Development to work with cities to beef up rent control, which would include academics, local officials, homeowners and tenants. Another new body, the National Fair Housing Agency, would be modeled on the Consumer Financial Protection Bureau to enforce housing standards by conducting audits and rooting out housing discrimination.

Sanders would also invest $70 billion to repair and modernize public housing and, as part of the Green New Deal, electrify, decarbonize and retrofit housing stock. He would fully fund the Section 8 program, which reimburses landlords in return for keeping units affordable. The New York City Housing Authority provides affordable housing to at least 400,000 in New York, but has faced chronic underfunding and management scandals.

The plan would increase enforcement of non-descrimination policies, including the Fair Housing Act and income-based discrimination, and provide $2 billion for tenants’ right to counsel in eviction or foreclosure proceedings. The plan would also expand the “Small Area Fair Market Rent Rule,” which ensures Section 8 landlords are not overcompensated.

The plan would impose a 2 percent “empty homes” tax and a 25 percent “house flipping” tax. It includes provisions to end exclusionary and restrictive zoning, replacing them with zoning intended to encourage integration and affordability.

Publix plans to build and open a grocery store in Hollywood (Credit: Getty Images, Pixabay)

Publix plans to build and open a grocery store in Hollywood (Credit: Getty Images, Pixabay)

Boaters are one step closer to getting a waterfront Publix they can access via boat.

Albert Benalloun, a principal at Miami Beach-based TransAmerican Development Corp., closed on the property at 3100 Ocean Drive in Hollywood for $4.75 million, he said. Hollywood 3100 LLC, which is tied to Carlos Tarrab of North Miami Beach, sold the vacant lot.

Benalloun will lease the three-story store to Publix. He expects construction to start in the third quarter of 2020 and the project to cost about $18 million. The property will include a dock where boaters can park their boats and go grocery shopping.

The 50,095-square-foot property is situated in front of high-rise condo buildings in an area that is seeing an influx of new development, including Margaritaville Hollywood Beach Resort, a 349-room, 17-story resort at 1111 North Ocean Drive. Also nearby is Brookfield Properties’ 1,000-room Diplomat at 3555 South Ocean Drive, one of the largest hotels in South Florida.

The Publix site last traded for $2.3 million in 2012, records show.

A spokesperson for Publix did not immediately return a request for comment.

Publix-anchored shopping centers are highly valued by real estate investors because the popular grocery store chain brings consistent traffic. Over the past few years, Publix has been buying up retail centers to become its own landlord.

TransAmerican Development focuses on retail and multifamily properties in South Florida. The company paid $13.4 million to acquire a North Miami Beach property at 16375 Biscayne Boulevard where it plans to build a 2-acre mixed development project.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 6:00 p.m.

 

The Sackler family is behind a nearly $7 million sale of a downtown West Palm Beach office building purchased this summer. The Sacklers, owner of OxyContin-maker Purdue Pharma, purchased the Glidden Spina + Partners building in July, the Palm Beach Post reported, less than two months before Purdue Pharma filed Chapter 11 bankruptcy protection amid thousands of opioid lawsuits. [Palm Beach Post]

 
Dwyane Wade, Gabrielle Union and the North Bay Road home (Credit: Getty Images, Elliman.com)

Dwyane Wade, Gabrielle Union and the North Bay Road home (Credit: Getty Images, Elliman.com)

The Miami Heat’s former star player Dwyane Wade wants to complete one last sale in Miami Beach. Wade, who retired from the NBA this year, listed his home at 5980 North Bay Road for $32.5 million, according to the Wall Street Journal. Wade and his wife, actress Gabrielle Union, are now based in Los Angeles. [TRD]

 

A trillionaire, prime minister of Israel and president of the world. Those are all the things WeWork founder and CEO Adam Neumann has said he wants to be, according to a new profile of a leader who is struggling to take his company public. [WSJ]

 

Miami home sales fell 13 percent in August, adding to mounting signs that Miami’s housing market is cooling down. Closed sales fell to 3,493, compared to 4,034 sales in August 2018, according to the report by RE/MAX. [TRD]

 

From left: Compass’ Jason Post, CEO Robert Reffkin, and COO Maelle Gavet (Credit: Wharton UPenn)

Compass’ top communications executive is out. Jason Post, who joined the brokerage nine months ago, will depart as the company mulls plans for an IPO. Post previously worked for Uber and the Bloomberg administration. [TRD]

 

A Miami real estate agent is challenging the time-honored notion of agents as independent contractors with a lawsuit that seeks class action status.
Former Cervera Real Estate agent Beatriz Santamaria is suing the Miami brokerage for allegedly misclassifying salespeople as independent contractors and violating minimum wage and overtime provisions of the Fair Labor Standards Act. [TRD]

 
27 East Dilido Drive

27 East Dilido Drive

Time Warner’s general counsel wants $15 million for his Miami Beach mansion. Time Warner executive Paul Cappuccio, who was set to receive $26.7 million as a result of the merger with AT&T, listed the seven-bedroom, 7,167-square-foot home at 27 East Dilido Drive in the Venetian Islands. Julian Johnston, who recently joined the Corcoran Group, has the listing, according to the MLS.

 

A Brickell condo association will have to pony up a $300,000 settlement for overcharging residents extra fees when they applied to rent a unit. Miami couple Joshua and Allison Kobasky filed the class-action lawsuit against the The Plaza 851 Brickell Condominium Association after it required they fork over $250 more than what is legally allowed in Florida, according to the Miami Herald. Nearly 600 people were eligible to participate in the class action, and each person who did will receive $250. [Miami Herald]

 

A private company that acquired a piece of a Hollywood park wants Broward County to pay $500,000 to buy the land, or pay $6,000 a month in rent. A lack of communication between the county and its parks department is what allowed the $25,000 sale to happen, according to the Sun Sentinel. Broward County’s tax division put the land up for auction after the previous owner failed to pay their taxes. [Sun Sentinel]

 

Compiled by Katherine Kallergis

Rendering of Cavache Properties’ Old Town Square

Rendering of Cavache Properties’ Old Town Square

A mixed-use development in Pompano Beach’s Old Town District is the first to secure financing under the city’s CRA program.

Old Town Square, a 10-story, 282-apartment project being developed by Cavache Properties, was approved to receive a $7.8 million tax financing incentive, known as Real Estate Development Accelerator, according to a press release. The $63 million project will be built on nearly 2 acres of land on the east side of Northeast First Avenue, between Northeast Second and Third streets.

Cavache is expected to complete construction by 2021. The building will have market-rate studios and one- and two-bedroom apartments, ranging from 480 square feet to 1,200 square feet. It will also have about 5,400 square feet of retail space, a resort-style swimming pool and spa on the fifth floor, a gym and yoga deck, dog park, business center and outdoor bar.

The project will be in the center of the Old Town neighborhood.

The Pompano Beach Community Redevelopment Board approved the financing this week.

Pompano Beach is experiencing a wave of redevelopment. The city and the Pompano Beach CRA recently announced they are looking for bidders to redevelop a 30-acre assemblage within the city’s planned downtown innovation district.

At a commission meeting last week, commissioners granted the first approval to a land-use change that would more than triple the maximum number of residential units on the Isle Casino Racing Pompano Park, a 223-acre property.

Cavache Properties is also building 30 Thirty North Ocean, a condo project in Fort Lauderdale that’s expected to be completed later this year. San Francisco 49ers defensive end Nick Bosa is among the buyers.

In 2018, the developer won city approval to build a 12-unit townhouse community in Lighthouse Point.

WeWork CEO Adam Neumann (Credit: Getty Images)

WeWork CEO Adam Neumann (Credit: Getty Images)

The controversies surrounding the We Company’s pending public offering have been almost nonstop — and Adam Neumann has been at the center of almost all of them.

Since the WeWork parent company filed its S-1 with the U.S. Securities and Exchange Commission last month, investors have raised concerns about issues ranging from the amount of control Neumann has over the company to his leadership style to his efforts to trademark the term “We.” And now a new profile on Neumann from the Wall Street Journal has shed even more light on the enigmatic CEO. Below are some zany takeaways:

1. Can you say tequila?
The profile opens with an anecdote about Neumann smoking pot while flying across the Atlantic Ocean in a private jet last summer — a “sizable chunk” of it was stuffed into a cereal box. He also has a fondness for alcohol, particularly tequila, according to the profile.
After firing 7 percent of WeWork staffers in 2016, he treated employees to multiple rounds of tequila shots. But the report also notes that he has cut back on the partying in recent years.

2. Neumann wants to live forever.
He’s invested in Life Biosciences LLC, where the mission is “to create a future where age-related decline is not a fact of life.” Other lofty goals include becoming the world’s first trillionaire, prime minister of Israel and president of the world. As for his company, he’s apparently proposed it would “solve the problem of children without parents,” and eradicate world hunger.

3. WeWork doesn’t like bad “energy.”
Neumann has complained about the number of “B” staffers at WeWork, and has told staffers to fire 20 percent of employees per year. His wife, Rebekah Neumann, has also ordered several employees fired after spending just minutes with them because she “didn’t like their energy,” according to the Journal.

4. Neumann wasn’t ready for criticism.
After running WeWork as a private company for years, Neumann was unprepared for the market’s largely negative reaction to its pending IPO.

5. What was with that whole “no meat” thing? 
Executives were caught off guard by Neumann’s 2018 announcement that WeWork was banning meat and came up with the “sustainability” rationale on their own. Former employees say Neumann has since eaten meat. [WSJ– Eddie Small

Dwyane Wade, Gabrielle Union and the North Bay Road home (Credit: Getty Images, Lux Hunters)

Dwyane Wade, Gabrielle Union and the North Bay Road home (Credit: Getty Images, Elliman.com)

The Miami Heat’s former star player Dwyane Wade wants to complete one last sale in Miami Beach.

Wade, who retired from the NBA this year, listed his home at 5980 North Bay Road for $32.5 million, according to an eblast the listing agent sent out without disclosing the owner. The Wall Street Journal first reported the deal.

The six-bedroom, 13,800-square-foot mansion includes a wine room – likely with some bottles from his winery, D Wade Cellars – a game room, outdoor basketball court and a home theater. He paid about $10.6 million for the house in 2010 and later renovated it. It also has 165 feet of bay frontage.

Brett Harris of Douglas Elliman is the listing agent. He declined to comment.

Wade and his wife, actress Gabrielle Union, are now based in Los Angeles. Last year, they paid just under $6 million for a five-bedroom, 8,650-square-foot house in the Sherman Oaks neighborhood. Union is a judge on “America’s Got Talent” and is co-starring in “L.A.’s Finest” with Jessica Alba. Wade’s son and nephew also play high school basketball alongside the son of his former teammate, LeBron James, at the Sierra Canyon School in L.A.

In August, the spec mansion at 6360 North Bay Road and the lot next door at 6342 North Bay Road sold for a combined $35.4 million, a record sale in Miami Beach this year. [WSJ]Katherine Kallergis

Federal Reserve Chairman Jerome Powell (Credit: Getty Images)

Federal Reserve Chairman Jerome Powell (Credit: Getty Images)

The Federal Reserve’s decision on Wednesday to again cut its benchmark interest rate, this time by 25 basis points, sends a message to commercial real estate investors that the bank is proceeding cautiously, one industry pro said.

“The Fed clearly has some concerns that they’re responding to,” said Sam Chandan, associate dean at New York University’s Schack Institute.

The Fed cut rates to a range between 1.75 and 2.00 percent, a widely anticipated move. The U.S. economy has been rising moderately, with solid job gains and continued low unemployment, the Federal Open Market Committee said in a statement announcing its decision this afternoon.

For real estate investors, rate cuts typically mean it may get cheaper to borrow capital.

But Wednesday’s adjustment — which is for the shortest-term rates — has less of an impact on the longer-term interest rates that commercial real estate investors more commonly use, Chandan added.

The Fed’s decision is an attempt to bring down those longer-term interest rates, said Jim Costello. But the cut — smaller than what some may have liked — will unlikely affect cap rates, which have remained flat for the year, he added. “I don’t think cap rates are going to move at all from today,” he said. “Today’s notice is just a small move.”

On the residential side, lower rates may make it easier to refinance homes, but it may not translate to more home sales, said broker Jason Haber of Warburg Realty in Manhattan.

“Lower rates are good, but lower prices are better,” he said. “Most markets are still priced too high and that’s led to the inventory issues across the country.”

About an hour after the 2 p.m. decision, the S&P 500 had dipped 15 points and the Dow Jones had dropped 99 points. And out of the 28 real estate stocks tracked by The Real Deal, 22 had seen falling prices by that point.

The real estate industry has long been bracing for an economic slowdown. Investors have been grappling to price in the impact of tit-for-tat tariffs between the U.S. and China, job growth has slowed and yields on short-term bonds are now higher than long-term ones — a consistent predictor of a recession.

Business investment and exports have also slowed and inflation is still below 2 percent, a target the Fed works to hit.

In August, expectations for short- and medium-term inflation fell, with consumers particularly less optimistic about changes in the prices of homes, rent and medical care, according to data released this month by the Federal Reserve Bank of New York.

In July, the Fed slashed rates by 25 basis points, a shift in the bank’s policy of hiking up rates since 2015. During the financial crisis, the Fed had slashed interest rates to nearly zero in a bid to boost economic activity.

Wednesday’s decision, however, was not unanimous.

In its vote, two Fed Reserve board members wanted to keep the target range the same, and one wanted to drop it to between 1.50 to 1.75 percent. The Fed, which has faced mounting pressure from President Donald Trump to set zero and negative rates, would not say whether it might cut the federal funds rate again before the end of the year.

Miami home sales dropped 13 percent in August from the previous year (Credit: iStock)

Miami home sales dropped 13 percent in August from the previous year (Credit: iStock)

Adding to mounting signs that Miami’s housing market is cooling down, home sales in the Magic City dropped 13 percent in August, year-over-year, a newly released report shows.

Closed sales fell to 3,493, compared to 4,034 sales in August 2018, according to the report by RE/MAX.

In addition to slowing sales, home prices also dipped slightly in August, compared to July, after rising for years. The median sales price declined 1.7 percent to $295,000 in August, from $300,000 in July. The median price was up 5.2 percent, year-over-year, however.

Miami’s housing market fared far worse than the national average. Nationally, closings declined 1.6 percent in August, year-over-year, according to the report.

A number of indicators are signaling that the post-crisis housing boom in Miami and nationally is coming to an end as home prices have risen to a level beyond income levels. Rising construction costs are also making it more difficult to build affordable single-family homes.

Developer Stephen Ross of Related Companies told Yahoo Finance in August the housing market “is probably in the eighth inning.”

Supporting this, a report by the startup Knock said about 88 percent of single-family homes in Miami were purchased in the first quarter after the seller lowered the price.

In addition, nationwide, single-family housing authorizations declined for three straight quarters, according to a new report by BuildFax. This includes a 4.17 percent decline in the second quarter from the second quarter of 2018.

Colony Capital CEO and Executive Chairman Tom Barrack (Credit: Getty Images, iStock)

Colony Capital CEO and Executive Chairman Tom Barrack (Credit: Getty Images, iStock)

UPDATED, Sept. 19, 1:30 p.m. ET: Three years later, Tom Barrack has buyer’s remorse.

As his firm, Colony Capital, embarks on a $325 million venture into digital infrastructure, it first needs to offload much of its real estate portfolio from its disastrous merger with NorthStar Realty Finance Corp.

Share value of the Los Angeles-based Colony still hasn’t fully recovered from that 2016 deal. Barrack and other Colony execs have acknowledged they misstepped when they closed the $19.9 billion all-stock transaction for NorthStar, according to the Wall Street Journal.

“It’s on me,” said Barrack, the firm’s CEO and executive chairman, during an investor conference last week, the Journal reported. He accepts responsibility for the merger, which he said was mispriced and “shouldn’t have happened.”

Colony officials said they want to sell as much as 90 percent of its $20 billion portfolio of traditional real estate assets — senior living facilities, hotels, warehouses, and others — ahead of a $325 million merger with digital infrastructure investment firm Digital Bridge Holdings.
Many of those properties are former NorthStar assets with high levels of debt, according to the Journal.

Barrack stepped down as CEO in 2014 but remained executive chairman of the company when the NorthStar deal closed. He returned as CEO in November 2018.

Colony and Digital Bridge closed their merger deal in July. As part of the deal, Barrack is set to step down as CEO to be replaced by Digital Bridge CEO Marc Ganzi within 24 months. [WSJ] — Dennis Lynch

Correction: a previous version of this story stated that Colony and Digital Bridge would complete their merger in two years. They closed the transaction in July and plan to complete a leadership change within two years.

Sunshine Kia of Miami (Credit: Google Maps)

Sunshine Kia of Miami (Credit: Google Maps)

The Sunshine Kia of Miami property site sold for $6.4 million.

SAG Realty sold the 117,074-square-foot property at 17120 South Dixie Highway for $55 per square foot to a company tied to Mario J.T. Benedetti of South Dade Toyota, records show.

Benedetti secured a $4.9 million loan from Ally Bank, according to records.

SAG Realty, which is led by Rod Rifai of Performance Automotive Group, bought the property in 2008 for $5 million.

The car dealership, which is between Palmetto Bay and Cutler Bay, was built in 1987. The sales office and building on the property totals 15,798 square feet.

Benedetti is the CEO and dealer principal at South Dade Toyota at 29330 South Dixie Highway.

Car dealerships are becoming more valuable in South Florida as land becomes more scarce. In November, HGreg.com bought a former Nissan dealership in Delray Beach from AutoNation for $11 million. In January 2018, automobile titan Terry Taylor bought an auto dealership in Royal Palm Beach for $44.7 million.

Former Cervera Real Estate agent Beatriz Santamaria

Former Cervera Real Estate agent Beatriz Santamaria

A Miami real estate agent is challenging the time-honored notion of agents as independent contractors with a lawsuit that seeks class action status.

Former Cervera Real Estate agent Beatriz Santamaria is suing the Miami brokerage for allegedly misclassifying salespeople as independent contractors and violating minimum wage and overtime provisions of the Fair Labor Standards Act.

Santamaria is alleging that Cervera, led by Veronica Cervera Goeseke and Alicia Cervera Lamadrid, has a longstanding policy of misclassifying its employees as independent contractors. The Miami real estate agent worked out of the University Bridge Residences sales gallery near Florida International University, allegedly working more than 40 hours a week.

Like most agents working at new development projects, Santamaria’s only form of payment was in the form of a draw, or advance, on sales commissions that agents are required to pay back to their brokerage, according to the lawsuit. She did not receive a salary or hourly wages.

The lawsuit was filed earlier this month in Miami federal court.

Because independent contractors are exempt from the Fair Labor Standards Act, they don’t receive the same minimum wage and overtime benefits.

The timing is auspicious.

In California, agents will also not be included in a new state bill that seeks to reclassify independent contractors of the gig economy. That kind of change would force brokerages to reclassify their agents as employees, driving up costs and threatening their bottom lines.

Florida courts rely on the federal Fair Labor Standards Act, and Florida has specific provisions related to issues such as minimum wage.

Attorney Brett Schneider, who leads Weiss Serota Helfman Cole & Bierman’s labor and employment practice group, said that because most real estate agents are classified as independent contractors, a change to that practice could have a major impact on the industry. He is not involved in the Cervera lawsuit.

There are certain factors that help determine whether someone is an employee or an independent contractor, according to the U.S. Department of Labor. Those include the permanency of the relationship between the employer and the alleged contractor and the extent to which the services rendered are an integral part of the employer’s business.

“It’s not up to the employer to determine whether the employee is an independent contractor or an employee,” Schneider said. “As I tell clients frequently, ‘You can call an elephant a tiger, but it doesn’t make them a tiger.'” Government agencies, such as the Internal Revenue Service, and the courts classify workers and can issue penalties if employers misclassify them.

Raymond Dieppa, Santamaria’s attorney, said the next step for the lawsuit would be for the court to certify it as a class action lawsuit. He said he could not disclose whether he was speaking with other Cervera agents to join the suit. The class action certification could happen between three and six months, he said.

A spokesperson for Cervera said the firm does not comment on litigation.

Cervera was ranked No. 18 in Miami-Dade County, according to The Real Deal’s ranking of top brokerages, based on sales that closed between July 15, 2018 and June 15, 2019. The firm closed 301 deals totaling $184.5 million. The ranking does not include development presales.

According to the lawsuit, agents spent over 90 percent of their normal work days in the sales center, and could rarely leave the office. Being absent, the complaint alleges, could result in discipline of a salesperson. Agents were required to complete paperwork, attend events and complete other office duties.

In March 2018, the developers canceled the University Bridge condo project, at 740 Southwest 109th Avenue in Miami, and converted it to rentals, returning deposits to more than 200 buyers.

Dieppa said that while the draw system is very common in new development sales, “unfortunately what ends up happening is they work a lot more hours than what their draw is, or are given some excuse as to why they can’t get their commissions.”

In a separate but similar lawsuit filed in 2017, Dieppa represented a Fortune International Realty agent who sued the brokerage for unpaid work. That resulted in a settlement, he said.

“It’s not a good system,” Dieppa added. “It’s not a legal system.”

From left: Compass' Jason Post, CEO Robert Reffkin, and COO Maelle Gavet (Credit: Wharton UPenn)

From left: Compass’ Jason Post, CEO Robert Reffkin, and COO Maelle Gavet (Credit: Wharton UPenn)

Jason Post, Compass’ head of communications, is leaving the SoftBank-backed brokerage after nine months on the job.

The former Uber executive is taking a job at Google, he said.

“I’m proud of what I accomplished at Compass, but I’m excited to move on to a new opportunity and I wish everyone at Compass well,” said Post, who gave his notice last week but started telling people Tuesday.

Post joined the real estate firm in January as vice president of communications following the departure of Julie Binder, who had the job for a year and a half.

Prior to Compass, Post worked as Uber’s director of policy and communication for more than three years. Before that, he was a managing director of Teneo Strategy, a consulting firm, and he was a deputy press secretary under New York Mayor Michael Bloomberg.

Post said he’ll be winding down his work at Compass in the next few weeks. In June, Matt Spangler, who was Compass’ chief creative officer, was named chief brand and communications officer.

Compass did not immediately comment on Post’s departure, but it comes at a potentially-sensitive time for the firm, which is widely believed to be plotting an IPO.

Founded in 2012, Compass’ valuation reached $6.4 billion this summer following a $370 million funding round. Investors in the round included SoftBank’s Vision Fund as well as Dragoneer, a late-stage investor whose participation fueled IPO rumors.

During an appearance on CNBC’s “Squawk Alley” on Monday to announce A.I.-driven home search tools, Compass CEO Robert Reffkin said it is “likely” Compass will go public in the future. But he declined to offer a timeline.

“I don’t go to sleep at night thinking about an IPO,” he said.

But some industry sources said WeWork’s ill-fated IPO could cast a shadow on proptech companies that are losing money. The co-working giant, once valued at $47 billion, delayed its public offering on Monday amid concern about its financial metrics and corporate governance. Its valuation has been slashed to around $15 billion, according to published reports.

Since April, Compass has parted ways with several high-profile executives, including general counsel David Carp and chief people officer Madan Nagaldinne. In June, three executives in marketing and product resigned or were let go, including chief marketing officer Khurrum Malik, Eytan Seidman, head of product, and Max Henderson, a vice president of product.

At the time, sources said those departures stemmed from tension in the C-suite. Compass portrayed the departures as part of a larger reorganization. In an email to agents, Reffkin said he planned to oversee a streamlined tech team. COO Maelle Gavet would be overseeing Compass’ people and culture department, along with marketing and a new team called “New Ventures.”

The company has been embroiled in a very public legal battle with brokerage conglomerate Realogy, which has accused Compass of attempts at price fixing and “predatory” poaching. Most recently, Compass said it rejected a merger offer from Realogy — a claim Realogy has vehemently denied.

Boynton Commons and InvenTrust Properties Corp CEO Tom McGuinness (Credit: Google Maps and InvenTrust)

Boynton Commons and InvenTrust Properties Corp CEO Tom McGuinness (Credit: Google Maps and InvenTrust)

Carlyle Management paid $50 million for a retail center in Boynton Beach, signaling the continued interest in South Florida’s retail market.

InvenTrust Properties Corp, a Chicago-based real estate investment trust, sold the 22.8-acre property at 333 North Congress Avenue to Carlyle Management, which is based in Katonah, New York, according to property records.

The retail center, known as Boynton Commons, sits between West Boynton Beach Boulevard and Old Boynton Road. Tenants include PetSmart, Party City, Bed Bath & Beyond, and Barnes & Noble. Jonathan Cashion of Katz and Associates was the leasing broker.

Carlyle, which is managed by Charles Rosner, secured a $35 million loan from BB&T to purchase the property, records show.

A spokesperson for Carlyle declined a request for comment.

The property last sold in 2010 for $34.7 million, records show.

InvenTrust Properties specializes in grocery-anchored open-air shopping centers. In July, InvenTrust bought a Costco-anchored shopping center in Royal Palm Beach from Blackstone Group for nearly $97 million. It also owns and manages two shopping centers in Pembroke Pines and one in Palm Beach Gardens.

While retailers around the country are struggling, demand for the asset class still remains strong in South Florida. Boynton Beach’s retail submarket had a total vacancy rate of 4.8 percent in the second quarter of 2019, according to Colliers International South Florida.

Chad Carroll with 20 Tahiti Beach Island Road (Credit: Redfin)

Chad Carroll with 20 Tahiti Beach Island Road (Credit: Daniel Petroni Photography)

Miami cardiologist James Margolis and his wife Marja Paulina Margolis sold their Tahiti Beach Island mansion for $11.3 million, about half the original asking price of the waterfront property.

The couple sold the six-bedroom, 8,305-square-foot home at 20 Tahiti Beach Island Road, according to Realtor.com. Chad Carroll of Douglas Elliman represented the sellers, while Yvette Rivero of Rockway Realty brought the buyer. The property originally hit the market in 2016 for nearly $22 million with Judy Zeder, who was with EWM Realty International at the time.

Both Carroll and Rivero declined to comment on the buyer’s identity.

Margolis was the first cardiologist in the southeastern United States to perform an angioplasty, according to his LinkedIn page. He and his wife bought the waterfront property in 1990 for $1.11 million and developed it in 1994.

The exclusive Coral Gables island of Tahiti Beach includes three tennis courts and a private beach. The gated community is home to hedge fund manager Bruce Berkowitz, pharmaceutical executive Neil Flanzraich and Dr. Kira Flanzraich, and coffee heir Jose Souto.

Last year, former NFL linebacker and Super Bowl winner Jonathan Vilma sold his waterfront Tahiti Beach estate for $14.4 million, a 22 percent discount off the ask.

The Margolises’ home sits on nearly 1 acre of land with 121 feet of water frontage, a 90-foot dock and boat lift, a pool, Jacuzzi, floor-to-ceiling windows and skylights.

Rodrigo Niño (Credit: Prodigy Network and iStock)

Rodrigo Niño (Credit: Prodigy Network and iStock)

Prodigy Network founder Rodrigo Niño is stepping down from his position as CEO amid mounting financial and legal issues, The Real Deal has learned.

Prodigy, a real estate crowdfunding platform, has faced criticism from investors in recent months over underperforming investment properties and unpaid distributions. On Monday, an investor in one of Prodigy’s newest projects — the 13-story Standard Hotel in Chicago — filed a lawsuit alleging the firm was “insolvent” and had used investments “for purposes other than those relating to the project.”

Niño told The Real Deal he had signed a memorandum of understanding with a group of investors who would take over the company and work to turn it around. Niño informed investors of the leadership change earlier this week.

“I believe that the challenges the company is facing demand for me to make this very difficult decision,” he said. “I believe the new group is ideal to take Prodigy Network to the next step and to rebuild the trust of our investors.”

He declined to identify the new investment group.

According to the latest complaint, which was filed in New York County Supreme Court, a Florida-based investor named only as “Avemar 2318 Corp” deployed $1.5 million into the Chicago hotel development in June 2018. About a year later, the investor grew concerned about their investment after Prodigy halted distributions to investors in another crowdfunded property, a co-working building at 17 John Street in Manhattan.

When the investor asked Prodigy to return the money, Niño allegedly said the fund that held investors’ monies did not have enough on hand to meet its financial obligations, including refunding investors. Prodigy and its partners on the project — New York-based DDG and Chicago-based Marc Realty Capital — also had to delay acquiring the site for the hotel for the sixth time, the filing said. (Joe McMillan’s DDG and Marc Realty Capital did not immediately return requests for comment.)

The lawsuit is the third filed against Prodigy in five months. Earlier this year, two former Prodigy employees, Vincent Mikolay and Maria Alejandra Rincón, filed complaints alleging that Prodigy owed them hundreds of thousands of dollars through an employee-share program. (Niño declined to discuss any of the three cases while they were still ongoing.)

A native of Colombia, Niño had been at the helm of Prodigy for about 16 years. He initially founded the firm in Miami as a brokerage that specialized in selling real estate to international clients. Roughly a decade later, he transformed Prodigy into a real estate crowdfunding firm aimed at democratizing access to high-end commercial properties. He later launched “the Assemblage,” a co-working brand centered on consciousness, collectivity and wellness that now has three sites in Manhattan.

Since Prodigy’s pivot, the firm claims to have raised nearly $650 million from 6,500 retail investors for five projects in New York City. Aside from the Standard Hotel, Prodigy is also in the middle of another development in Chicago — a 254-unit multifamily building at 1400 New Orleans Street.

It is unclear when Niño’s resignation will come into effect, though he told investors this week that the transition would be orderly and he was “in no way abandoning ship.”

Join The Real Deal at 12:00 p.m. on Wednesday, Sept. 18, for a live webinar with Ira Zlotowitz, founder and president of Eastern Union Funding, as he details the process and benefits of bridge loan syndication and how anyone can participate.

Register here.


Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

 

The trade war could put a damper on the industrial real estate boom. Net industrial leasing activity for the next two years will be less than the past two years, according to a new report from trade group NAIOP. Trade and manufacturing activity have been impacted by new tariffs, but demand for last-mile logistics facilities has stayed strong thanks to the spread of e-commerce. [WSJ]

 

Hurricane Dorian never made landfall in Florida, but the near miss still had a sizable impact on Florida’s hospitality industry around Labor Day weekend. Demand for hotels in the Florida Keys fell by 50 percent and revenue per available room dropped by 59 percent during a seven-day period from Aug. 30 through Sept. 5, according to a report from the hotel data company STR. [TRD]

 

Condo sales in Miami continued recovering following the disruption caused by Hurricane Dorian in early September. A total of 99 condos sold for $45.7 million in Miami-Dade County last week, up from $27.5 million in sales volume for 69 units the previous week. Condos last week sold for an average price of about $461,000 or $324 per square foot. [TRD]

 

After a major data breach, Corcoran attempts a lockdown. But agents are talking. Less than two hours after emails with agents’ commissions and other sensitive information were sent to the Corcoran Group’s agents and staff, the firm shut down its email system while the IT department removed the leaked files from the firm’s server. Agents were warned not to share the attachments — which Corcoran has assured do not contain client information. [TRD]

 

The White House blames NYC housing regulations for increasing homelessness. A study from the Trump administration’s Council of Economic Advisers says the city’s homeless population could be 23 percent less if not for “over-regulation of local housing markets,” including things like zoning rules, rent control and energy-efficiency laws. [NYP]

 

Margaritaville Hollywood developer Lon Tabatchnick is planning a mixed-use hotel complex in downtown West Palm Beach. Tabatchnick, president of the Lojeta Group, scored approval from a city committee last week for the 22-story, 400,000-square-foot development at 145 South Dixie Highway with 204 hotel rooms, 143 apartments and a rooftop bar, according to the Palm Beach. The site was previously home to Russo’s Submarine Shop, which closed in 2016. [Palm Beach Post]

 
Adam Neumann, WeWork's co-founder and CEO (Credit: Getty Images, iStock)

Adam Neumann. WeWork’s co-founder and CEO (Credit: Getty Images, iStock)

WeWork parent company’s IPO is expected to be postponed. The company, which said it would list shares on the Nasdaq the week of Sept. 23, announced it would postpone its public offering until at least next month. [TRD]

 

Dolphin Capital Partners and Baywood Hotels closed on the site of a planned Moxy by Marriott hotel in Wynwood. The partners paid $11 million, or $670 per square foot, for the 16,400-square-foot site at 255 Northwest 25th Street, according to Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors. David Grutman’s Groot Hospitality will handle the food and beverage operations for the hotel’s 15,000 square feet of restaurant space, including a ground-floor restaurant and rooftop concept. [TRD]

 

Global Horizons Group sold a 24-unit apartment building in North Miami to a company managed by broker Michael Wiesenfeld. The property at 770 Northeast 123th Street sold for about $3 million, or $127,000 per unit and $353 per square foot, according to MSP Group brokers Deme Mekras and Elliot Shainberg. They represented the seller, while Wiesenfeld brought the buyer.

 

Compiled by Katherine Kallergis

Corcoran CEO Pam Liebman

Corcoran CEO Pam Liebman

It’s the holy grail of the residential brokerage world: an agent’s split, gross commission income and marketing budget.

And last Friday, one of New York’s biggest firms saw that privileged information leaked wholesale.

Less than two hours after emails with said information were sent to the Corcoran Group’s agents and staff, the firm shut down its email system while the IT department removed the leaked files from the firm’s server. Agents were warned not to share the highly sensitive attachments — which Corcoran has assured do not contain client information. Over the weekend, CEO Pam Liebman personally contacted the heads of several rival firms, sources said, cautioning them against using the privileged (and allegedly stolen) data.

Corcoran is now investigating what it’s called a criminal incident with the help of law enforcement and a third-party forensic investigator retained by parent company Realogy Holdings. Realogy did not immediately comment on the probe but its outside counsel has contacted several New York firms regarding the leak.

But in the hours and days since, Corcoran’s attempt at damage control has done little to stop agents from sharing what they saw in the emails (even secondhand).

“We’re real estate agents, we’re drama-driven,” said one agent, who spoke on the condition of anonymity. “We’re water cooler talkers.”

Another agent reported some bruised feelings among those who felt they deserved higher splits or marketing allowances based on their performance — even though the firm suggested the emails were doctored.

“We all know it’s accurate,” the agent said.

Regardless, the breach puts Corcoran in a vulnerable position at a time when brokerage firms are competing to attract and retain top-producing agents. In Manhattan, Corcoran is the No. 2 firm with 1,320 agents and $4.53 billion in sell-side deals last year, according to The Real Deal’s most recent firm ranking. And the documents given competitors a better idea of what kind of offer could tip the scales for an agent considering a move.

But in recent years, Corcoran and many other brokerages have lost agents to Compass. In July, Realogy filed a damaging lawsuit accusing the SoftBank-backed brokerage of “predatory” poaching. Earlier this month, Compass said Realogy attempted to sell itself to Compass — a claim Realogy vehemently denied.

Corcoran in 2015 filed a lawsuit accusing Compass of a “multi-front” assault” after 51 of its agents joined the SoftBank-backed brokerage. A Compass job offer was used as evidence in the case, giving a firsthand look at how the brokerage was luring so many agents and managers from competitors.

As of Monday, some of Corcoran’s rivals had taken steps to protect themselves by changing passwords and doubling down on their own security. One CEO said it’s not realistic for Corcoran to retract the information at this point.

“Agents have it, however they have it,” the CEO said. “You can never recover it.”

Bernie Sanders and Champlain Community Housing Land Trust's affordable housing (Credit: Getty Images and Build a Better Burb)

Bernie Sanders and Champlain Community Housing Land Trust’s affordable housing (Credit: Getty Images and Build a Better Burb)

For the first time in decades, a presidential candidate is pushing for nationwide rent control.

Democratic contender Bernie Sanders unveiled the key points of his $2.5 trillion housing plan on Saturday, calling for national rent control standards as well as the investment of billions of dollars to end homelessness, overhaul public housing, create mixed-income housing and establish community land trusts across the country.

The release of Sanders’ plan, which is expected to be rolled out in full over the next couple of weeks, could mark a shift in how housing is discussed in the lead up to the 2020 presidential election. Candidates Elizabeth Warren and Julián Castro already released their own housing plans with little fanfare, and during the last Democratic debate, no questions were asked about affordable housing.

But the prospect of establishing nationwide rent control fuels a growing trend in the U.S., which some attribute to a demographic expansion of renters in the past decade and a return of class politics. Though rent control largely fell out of favor after the 1950s, with more than 30 states explicitly banning it, the policy has experienced a recent resurgence. California is poised to implement a statewide cap on annual rent increases just a few months after Oregon approved its own statewide limit. New York just expanded its protections of rent stabilized tenants, stopping short of a rent cap, which is expected to be on the table in some form the next legislative session.

Sanders’ plan would limit rent increases to one and a half times the rate of inflation or 3 percent, whichever is higher. A representative for Sanders’ campaign declined to comment further.

Here’s what Sanders proposed to do:
— End homelessness with $32 billion invested over five years
— Spend $70 billion to repair public housing stock
— Establish community land trusts across U.S. with $50 billion in grants to states, cities and towns to allow more than 1 million households to buy affordable homes in the next 25 years
— Fully fund Section 8 housing
— Build 2 million units of mixed-income housing
— To pay for these changes, implement a wealth tax on the top one-tenth of 1 percent of American households, which is about 175,000 households, according to the New York Times.
 

Rent control, Sanders style

Sanders’ first attempts to enact rent control as mayor of Burlington, Vermont, failed. Although he was elected in 1981 on a platform of expanding tenants’ rights, measures to enact a tax on rental property speculation and apartment registration were scuttled by the city council, and rent control was voted down in a referendum in 1982. In 1989 the progressive senator’s “just cause” eviction bill was rejected by Burlington voters.

After this “failed foray into rent control,” according to John Davis, co-founder of Burlington Associates in Community Development, “[Bernie] learned from this defeat and moved on, adopting a progressive, multi-faceted housing agenda that did not rely on governmental control of rents.”

Economists and landlords argue that rent control hurts existing housing stock and cools new development. Lawrence White, an economics professor at New York University, said cities should instead focus on easing land-use restrictions to encourage the construction of housing.

“I can see the political attractiveness [of rent control]. There are a lot more tenants than there are landlords out there,” he said. “But it’s just a horrible way of trying to deal with any housing problems.”

He questioned the viability of finding rules that make sense for the whole country.

“Gee, how do you establish rules that apply to Missoula, Montana, to Center City, Philadelphia, to Tampa, Florida, let alone Queens and Brooklyn?” he said. “We have great difficulty administering a rent control program in New York City. I can’t imagine doing it on a nationwide basis. It’s just chaos.”

Lawrence Yun, chief economist with the National Association of Realtors, agreed that “rent control would be a terrible solution” to the affordable housing crisis, adding that it would deter landlords from maintaining existing housing stock.

Roosevelt Institute fellow and CUNY assistant professor of economics J. W. Mason attributes vehement opposition to rent control to an analysis that ignores the significant social and economic benefits of people remaining in their homes.

“It’s practically the first thing you see in an economics textbook: the diagram of losses due to rent control,” Mason said. But the Marxist scholar disagrees with convention. Rising market rents are not attributable to buildings getting better, Mason said, but to the surrounding neighborhood becoming more desirable.

“Rents are a payment for a monopoly due to a legal right, not because of a contribution to production,” he said. “And rent-regulated housing stock in places like New York City and San Francisco is very old.”

A bet on community land trusts

Sanders’ plan also calls for the creation of 2 million units of mixed-income housing and $50 billion in grants to fund the creation of community land trusts (CLTs), in which nonprofits acquire land in order to operate affordable housing on a permanent basis. Sanders helped secure initial funding for a community land trust in Burlington when he was mayor in 1984. That trust — the Burlington Community Land Trust — eventually merged with another to form the Champlain Housing Trust, which is now the largest of its kind in the country.

Nixon Peabody’s Erica Buckley said an infusion of capital on the national level could go a long way in sparking interest in CLTs and getting local governments more comfortable with the model. Cooper Square, New York’s first and most prominent CLT, was formed in 1991, evolving from the neighborhood’s previous efforts to protect itself from Robert Moses’ “slum-clearance” project. Even in New York, where the concept has gained traction in recent years, hurdles remain in the form of funding and local approvals.

Buckley, who previously headed the state Attorney General Office’s Real Estate Finance Bureau, said she’s worked with the Department of Housing Preservation and Development for more than two years to figure out an acceptable ground lease deal for the Interboro Community Land Trust. The AG’s office has set aside funding for CLTs in the past, most recently pledging $8 million in February toward expanding local ones. But more funding sources are necessary, she said.

“While [CLTs] are great — they remove housing from the speculative marketplace — people also think they solve all sorts of problems that they don’t,” Buckley said. “It doesn’t magically create subsidies.”

Condo sales in Miami continued recovering following the disruption caused by Hurricane Dorian in early September.

A total of 99 condos sold for $45.7 million in Miami-Dade County last week, up from $27.5 million in sales volume for 69 units the previous week. Condos last week sold for an average price of about $461,000 or $324 per square foot.

The top sale was the $6.13 million closing of St. Regis Bal Harbour unit 1201 in the south tower of the luxury condo development. After 348 days on the market, the 3,884-square-foot, three-bedroom unit sold for nearly $1,600 per square foot. Bill Hernandez and Bryan Sereny were the listing agents, while the buyer’s agent was Ryan Mendell.

Unit 1219 at 1 Hotel & Homes South Beach sold for about $3 million, or over $1,500 per square foot, marking the second most expensive condo sale of the week. Jeffrey Miller represented the seller, while Tracy Galya brought the buyer. The unit was on the market for 309 days before it closed.

Here’s a breakdown of the top 10 sales from Sept. 8 to Sept. 14. Click on the map for more information:

Most expensive
Bal Harbour North South Condo #1201S | 348 days on market | $6.13M | $1,577 psf | Listing agents: Bill Hernandez and Bryan Sereny | Buyer’s agent: Ryan Mendell

Least expensive
Grove Towers #12F | 1 day on market | $750K | $446 psf | Listing agent: Riley Smith | Buyer’s agent: Anthony Soto

Most days on market
Fontainebleau II #2702 and #2704 | 558 days on market | $2M | $1,337 psf | Listing agent: Mary Cases | Buyer’s agent: Christian Dreyfuss

Fewest days on market
Grove Towers #12F | 1 day on market | $750K | $446 psf | Listing agent: Riley Smith | Buyer’s agent: Anthony Soto

Sarah Pontius (Credit: Union College)

Sarah Pontius (Credit: Union College)

Another WeWork executive is headed for the door.

Sarah Pontius, the firm’s global head of real estate partnerships, this week reached a “mutual agreement” with the company to leave the firm, people familiar with the matter told The Real Deal. One of those people said she would remain under contract until the end of the year, but would not say in what capacity.

WeWork declined to comment, and would not make Pontius available for an interview. Pontius did not respond to requests for comment.

Her departure comes as WeWork’s parent company has flip-flopped on plans for an IPO, and it
follows a string of high-profile exits from the office-space giant. This month, WeWork’s chief communications officer, Jennifer Skyler, left after nearly four years, an exit preceded by Dominic McMullan, vice president of communications, who departed in July.

Ted Stedem, WeWork’s global head of business and financial operations, left the company in August, shortly after the departure of WeWork chief brand officer Julie Rice, who joined the company after co-founding fitness startup Soul Cycle.

Pontius was brought on in November last year to set up regional operations and establish partnerships using her New York City real estate connections. She was recruited from CBRE where she was senior vice president in New York. Before that, she worked for a decade at Brookfield Property Partners, reaching the position of vice president.

In the past month, Wall Street investors have expressed unease about the We Company’s financial metrics and corporate governance policies. On Monday, the company confirmed that the IPO had been pushed back, but said it would proceed before the end of 2019.

During an all-hands meeting Tuesday, We Company executives told employees that the company needed to refine its message for investors before a roadshow could take place, CNBC reported.

From left: President Trump and Geoff Palmer

From left: President Trump and Geoff Palmer

UPDATED, Sept. 17, 2019, 9:34 a.m.: Real estate and presidential politics will once again converge in Beverly Hills tonight.

Prolific Los Angeles apartment developer Geoff Palmer is set to host a fundraiser for President Donald Trump’s reelection campaign at his home.

The dinner, which is expected to raise $5 million for the campaign, is one of a series of fundraising events the president will attend during his two-day stop in California. The events include a lunch in the Bay Area and breakfast in L.A., and will benefit Trump Victory. Combined, they are estimated to bring in $15 million for the campaign, according to reports.

The Hollywood Reporter first detailed the fundraising event.

Palmer owns a Spanish Colonial-style home on North Arden Drive in Beverly Hills. Two years ago, he paid $10.3 million for the Paul Williams-designed home. It encompasses 6,889 square feet, has a wraparound terrace covered in roses, and a backyard that includes a pool, fireplace, cabana and dining area with a barbecue and pizza oven.

Sources also say Palmer owns a much larger estate behind the famed Beverly Hills Hotel.

Palmer has been one of Trump’s biggest backers, having donated millions of dollars to pro-Trump political action committees in the lead-up to the 2016 presidential campaign and throughout his presidency. In April, he donated $355,000 to Trump Victory, the joint entity that funds the president’s reelection campaign and the Republican National Committee, according to CNBC. He also gave $2 million to America First Action, a Trump-friendly super PAC.

Palmer’s firm, G.H. Palmer Associates, owns 11,633 residential units in Southern California. Earlier this year, the billionaire developer was accused of illegally withholding thousands of security deposits from tenants in a class-action lawsuit. More than two dozen tenants had previously sued Palmer for alleged unwarranted charges.

In 2016, Palmer donated $2 million to Super PAC Rebuilding America Now, which was co-founded by fellow real estate mogul and Trump supporter Tom Barrack of Colony Capital.

During the 2018 election cycle, Palmer is believed to have donated more than $4 million to the Republican Party.

This is not the first time that Trump has tapped a real estate connection for a fundraising event in L.A. Last year, former Tampa Bay Buccaneers owner Ed Glazer hosted an event for Trump’s reelection campaign at his 19,300-square-foot estate at Beverly Park. Glazer is president of the family-run commercial real estate firm First Allied Corp.

During that visit, Trump stayed at the InterContinental Hotel in the 73-story Wilshire Grand Center in Downtown. He is expected to return to the hotel during this visit, a source said.

Florida Keys hotels (Credit: iStock)

Florida Keys hotels (Credit: iStock)

Hurricane Dorian never made landfall in Florida, but the near miss still had a sizable impact on Florida’s hospitality industry around Labor Day weekend.

Demand for hotels in the Florida Keys fell by 50 percent and revenue per available room dropped by 59 percent during a seven-day period from Aug. 30 through Sept. 5, according to a report from the hotel data company STR.

Daytona Beach’s hotel industry took the second biggest hit. Demand for hotels fell 37.4 percent, while revenue per available room in Daytona Beach dipped by 47 percent.

In Fort Lauderdale, hotel demand dropped 26 percent and revenue per available room fell 34 percent. Similarly, hotel demand in Miami fell 28.5 percent and revenue declined 38 percent, according to the report.

The hospitality industry is critical to the Florida Keys economy, especially during the winter season when snowbirds flock to the island chain. After Hurricane Irma, room demand in the Florida Keys dropped 44 percent in September 2017 from the previous year, according to Visit Florida.

Alison Hoyt, STR’s senior director of consulting & analytics, said Hurricane Dorian should not have a significant impact on hotel revenue or occupancy in Florida in the months ahead.

“Fortunately with Dorian, reports suggest that most U.S. markets avoided large-scale destruction, especially when you consider the devastation in the Bahamas, so we don’t expect an extended impact in the U.S. data,” Hoyt said in statement.

However, the hospitality industry in the Abaco Islands and Grand Bahama will likely be decimated for years, according to industry experts. The Abaco Islands and Grand Bahama have a total of about 2,250 hotel rooms, which equates to 15 percent of the total hotel inventory in the country, according to Rick Newton of Resort Capital Partners, which tracks the hospitality industry.

6600 Northwest 14 Street (Credit: Google Maps, iStock)

6600 Northwest 14 Street (Credit: Google Maps, iStock)

UPDATED, Sept. 18, 4:15 p.m.: A Delray Beach-based industrial owner likely put a lot of thought into this deal.

A company tied to Jeffrey Pechter’s Mindful Management bought a 83,763-square-foot industrial property at 6600 Northwest 14th Street in Plantation for $8.8 million, records show. The deal equates to $104 per square foot.

A company tied to Ed and Susan Ulyate of Coconut Creek sold the property.

The property sits on 6.54 acres off West Sunrise Boulevard and close to Plantation High School. It was last sold for $2.6 million in 1993 and was constructed in 1990, records show.

One tenant is Craft on 14, a craft beer garden and restaurant that boasts that it has over 100 craft beers and a “collection of harder to find brews not often seen in the usual establishments,” according to its website.

Mindful Management is affiliated with Mindful Group, which was formed in 2003 as a spin-off from Tristar Management. The company, led by principals Pechter and Patrick Carney, largely focuses on multi-tenant industrial and owns and manages 15 industrial facilities and 600,000 square feet of property, according to Carney.

While demand for some real estate asset classes has slowed, interest in industrial properties in South Florida still remains strong. In Broward County, rental rates for industrial properties rose to $8.76 per square foot in the second quarter from $8.21 per square foot a year earlier, according to a recent report by Colliers International South Florida.

Correction: A previous version of this article had outdated information on the company from its website.

From left: Mollie Fadule, Lisa Picard and Matthew Marsh

From left: Mollie Fadule, Lisa Picard and Matthew Marsh

SoftBank-backed construction startup Katerra is bringing on a new CFO as part of a series of changes to its executive team.

Matthew Marsh, a former executive at James Hardie and General Electric, is joining as the company’s new chief financial officer. In addition, Katerra has hired former private equity exec Mollie Fadule as the new head of its affordable housing program, and it’s appointed Lisa Picard, president and CEO of EQ Office, as a new board director.

Katerra, which has raised $1 billion since its founding in 2015, markets itself as a technology company that offers a full suite of general contracting, engineering, design and other building services.

Just last year, the company was battling delays and quality control issues as it tried to expand.

According to the Information, Katerra’s flagship factory in Arizona had to be shut down because of permitting issues, and quality control issues hampered construction. A former Katerra manager told the news site that “every day is a fire drill.”

The company, which has raised more money since those reports last year, has made a series of other organizational changes in recent months, including the acquisition of UEB Builders and Fortune-Johnson General Contractors, as it looks to grow into other markets.

The latest executive appointments follow the hiring of former oil-industry executive Paal Kibsgaard as the firm’s new chief operating officer in August.

Before moving to Katerra, Marsh was the CFO and executive vice president at James Hardie, and spent 16 years at General Electric Company. Fadule co-founded private equity firm Cephas Partners in 2012 to work with affiliates of the Blackstone Group.

Jeffrey Soffer and Jim Cohen

Jeffrey Soffer and Jim Cohen

Jeffrey Soffer is on a roll. The former Turnberry Associates co-CEO has tapped Jim Cohen as president of his new company’s residential division.

Cohen was previously senior vice president of development sales for Fortune International Group, a role he had filled since the beginning of 2017. The development marketing executive spent the most time working for Turnberry Associates, where he oversaw all residential sales between 1994 and 2007, he said.

Fortune tapped Carmen Casadella to take over Cohen’s role. Edgardo Defortuna, founder and CEO of Fortune, wished Cohen well. “Prior to joining Fortune International Group, Jim Cohen spent much of his career with Turnberry Associates. When Jeff Soffer made him an offer to return to the firm, coming full-circle, it was an opportunity he couldn’t pass up,” Defortuna said in a statement.

Soffer launched Fontainebleau Development in March after splitting up interests in Turnberry Associates with his sister, Jackie Soffer. He later hired Bruce Weiner, former CEO of Turnberry Limited, as chief operating officer of residential development for the new firm, Fontainebleau Development. Weiner and Cohen worked together under the Soffer family in the past.

“It’s almost like the original group getting back together again,” Cohen said.

At Fontainebleau Development, he’ll be involved in all pre-development projects the company is working on in South Florida and out of the state. Cohen will oversee all residential sales, including at the 154-unit Turnberry Ocean Club, a luxury condo tower in Sunny Isles Beach that’s expected to be completed next year.

Projects that have yet to be announced include luxury condo buildings and mid-market condos “to attract a different type of buyer,” he said.

“We’ve been through multiple cycles. We come from a great deal of experience,” Cohen said. “We understand when it’s time to start ramping up and we feel that time is coming on now.”

Robert Castellano and 150-206 Inlet Way (Credit: Getty Images, Google Maps)

Robert Castellano and 150-206 Inlet Way (Credit: Getty Images, Google Maps)

Amid a wave of new development in Singer Island, South Florida luxury homebuilder Robert Castellano is seeking approval for a new condo project on the much quieter southern side of the island.

Robert Castellano Building and Design purchased three waterfront motels in Palm Beach Shores for $6.5 million, where he is seeking to build the new condo project.

Castellano bought 150 Inlet Way, 200 Inlet Way and 206 Inlet Way, which total 17,864 square feet, for $363 per square foot, records show.

A spokesperson for Castellano said the group is looking to develop a boutique condo project on the site, but it still needs approval from the town of Palm Beach Shores.

Castellano is a luxury homebuilder who is married to Brenda Nestor. Nestor — a former-girlfriend-turned-business-associate of corporate raider Victor Posner — was named the primary beneficiary of his $321 million estate in 2002. She has been entangled in a slew of litigation in recent years over her control of Posner’s estate.

Castellano has built and designed homes in the luxury home enclaves of Windmill Reserve and Seven Isles Las Olas in Fort Lauderdale as well as in Landmark Ranch Estates and Sunshine Ranches in Southwest Ranches.

The properties at 150 Inlet Way, 200 Inlet Way and 206 Inlet Way currently consist of older, low-rise motels built in 1950, records show. A group of New York companies tied to Staten Island Premier Properties sold the property.

Robert Castellano Building and Design secured a $5.5 million mortgage from Fryd Mortgage, records show.

Palm Beach Shores is a small town of just over 1,000 people on the southern tip of Singer Island. It borders Riviera Island. Developers have started targeting Singer Island for new luxury projects.

Third Palm Capital recently completed VistaBlue Singer Island, a 19-story tower with 58 units at 3730 North Ocean Drive; and Kolter Group is currently building the 48-unit 5000 North Ocean.

Another condo tower, 182-unit Amrit Ocean Resort & Residences, is under construction at 3100 Ocean Drive.

Kenneth and Karen Heithoff with 4911 Fisher Island Drive

Kenneth and Karen Heithoff with 4911 Fisher Island Drive

Radiologist Kenneth Heithoff and his wife Karen sold a unit in Fisher Island’s Bayview condo development for $8.1 million.

The Heithoffs sold the 6,500-square-foot condo at 4911 Fisher Island Drive for $1,246 per square foot, records show. MB Fisher, which lists Richard Sobel of MB US Real Estate Holdings at its manager, bought the condo.

Kenneth Heithoff was formerly a radiologist and entrepreneur who started St. Louis Park, Minnesota-based Center for Diagnostic Imaging, a medical imaging center. He sold the company to Onex Corp. for $160 million in 2004, according to the Minneapolis/St. Paul Business Journal.

Jill Eber of Coldwell Banker Residential Real Estate represented the seller. The buyer was represented by Larry Rivero of Rivero Real Estate.

The home features a 2,000-square-foot wraparound terrace, according to Realtor.com.

The Heithoffs bought the condo for $3.04 million in 1997, records show. Bayview is a collection of buildings on Fisher Island’s northwestern side with units ranging from 1,950 square feet to 9,570 square feet.

Ritzy Fisher Island is consistently ranked as America’s wealthiest zip code and can only be reached by ferry, boat or helicopter.

With limited options for new development, condo units on the island command high prices. PDS Development, led by Heinrich von Hanau, recently completed the 50-unit Palazzo Della Luna on the Island. A unit at the luxury condo development sold last week for $17 million.

Adam Neumann, WeWork's co-founder and CEO (Credit: Getty Images, iStock)

Adam Neumann, WeWork’s co-founder and CEO (Credit: Getty Images, iStock)

WeWork’s parent company is reportedly planning to postpone its initial public offering following weeks of scrutiny over the co-working firm’s valuation and corporate structure.

Sources told the Wall Street Journal that the IPO roadshow would be put on hold until at least mid-October, following the Jewish High Holidays, despite earlier reports that WeWork’s IPO roadshow would kick off as early as this week.

WeWork’s co-founder and CEO Adam Neumann has been under significant pressure since the company’s IPO prospectus was filed in August. The filing revealed $47 billion in U.S. landlord commitments over 15 years and just $4 billion in committed revenue, as well as huge personal loans issued by the company to Neumann and other executives.

The company faced further criticism over revelations that its board was entirely male, and that Neumann was paid $5.9 million to sell the rights of the word “We” to WeWork. Nuemann later returned the payment and appointed a female board member.

Last week, Neumann reduced the power of his voting rights to 10 votes per share from 20. And although he still has voting control, the board can now remove him as CEO. The change in corporate governance last week also limited Neumann’s ability to sell stock in the three years that followed the IPO.

WeWork planned to raise at least $3 billion in its IPO on the Nasdaq Stock Exchange, but rumors swirled last week that limited investor appetite could see a valuation fall below $20 billion.

WeWork’s largest outside investor, SoftBank, has also urged the company to postpone the offering, pointing to the cool response from investors.

WeWork lost $1.61 billion last year, with revenue totaling about $1.82 billion.

[WSJ] — Sylvia Varnham O’Regan

From left: Boston Properties CEO Owen Thomas, Alexandria Real Estate Equities CEO Joel Marcus, and Equity International founder Sam Zell (Credit: Getty Images and iStock)

From left: Boston Properties CEO Owen Thomas, Alexandria Real Estate Equities CEO Joel Marcus, and Equity International founder Sam Zell (Credit: Getty Images and iStock)

Real estate executives at the front of the industry’s push toward sustainability will gather in New York City in a few days for Climate Week – the annual event coinciding with the U.N. General Assembly when business and government leaders join together to tackle climate change.

One topic that’s sure to be eagerly discussed is green bonds, a niche area of financing that’s seen a surge over the past 15 months among U.S.-based real estate investment trusts, which have issued more than $3 billion worth of the sustainability labeled corporate debt.

But as the green bond market picks up steam, real estate’s most active issuers are eschewing some of the industry’s best practices when it comes to transparency. And critics says the green bonds program has failed to live up to its goal of providing a cheap source of funding to promote environmental projects that otherwise wouldn’t get off the ground.

“The entire green bond market is more or less a greenwashing instrument,” said Stanislas Dupré, founder and CEO of the think tank 2 Degrees Investing Initiative, and one of green bonds’ biggest critics.

“If you take a LEED-certified commercial building in Manhattan, or a prime residential in an expensive part of Brooklyn, there’s no shortage of financing for that,” he added, explaining that very few bonds are priced at a point where they make the financing materially less expensive. “I think by design you can never reach this point.”

Yet even those who fault the green bond program praise the fact that developers tapping the market are usually on the cutting edge of developing efficient buildings to high standards like LEED certification. And those REITs say that as long as they’re developing environmentally friendly buildings, they see value in the growing climate bonds market.

Alexandria Real Estate co-president and chief financial officer Dean Shigenaga, whose company has issued $1 billion worth of green bonds since last summer, said there was an increase in investor demand for the firm’s green offerings.

“There’s no question there’s more demand from investors who wanted to increase allocations for their sustainability or green initiatives,” he said. “If we had a choice between a green bond and a regular bond, I think we would always lean toward green.”

Gang Green

Green bonds, also known as climate bonds, are debt instruments in which the proceeds are earmarked to be used for projects that benefit the environment. They’re usually financed by investors who have set quotas to allocate a certain amount of capital to tackle climate change.

And over the past decade they’ve become increasingly popular.

The global green bond market hit a milestone in 2019 when new issuance surpassed $100 billion by the mid-way point of the year for the first time in history, according to the nonprofit Climate Bonds Initiative. That’s still a ways off from the $1 trillion-a-year target advocates have set for the market to reach by the early 2020s, but still represents an exponential rate of growth.

Green bonds are part of a broader category of environmental, social and corporate governance programs known as ESG. But like other socially conscious driven investments – such as the Trump administration’s Opportunity Zones program – there are questions as to whether these programs are actually promoting social good, or merely providing the appearance of doing so.

“From a REIT perspective, it’s just marketing,” said Sandler O’Neill analyst Alex Goldfarb. “For one, there’s no real way to measure cash flows on the back end.”

Since bonds finance a company’s balance sheet as opposed to specific developments, trying to trace the path of a green bond is like trying to follow a particular drop of water poured into a drinking glass.

“Money’s fungible,” Goldfarb said.

Sam Zell’s Equity Residential, for example, issued a $400 million green bond in December – the first for an apartment REIT. The company said that pending allocation of the proceeds to finance or refinance green projects, it will use the cash to pay down its credit revolver and outstanding commercial paper.

Alexandria Real Estate Equities, likewise, said it would initially use the proceeds from its $450 million green bond last June to reduce the balance on its unsecured line of credit.

“Payment of principal of and interest on the [green notes] will be made from our general funds and will not be directly linked to the performance of any Eligible Green Projects,” the company wrote in its prospectus.

Alexandria’s Shigenaga said the company is cognizant not to allocate too much of the green bonds proceeds to pay down old debts.

“I think in our view we don’t want to get more than 50 percent historical because I think the investors want to see the prospectus spent on eligible projects,” he said.

Equity Residential and Alexandria Real Estate, along with Boston Properties and Kilroy Realty, have issued a combined $3.6 billion in green bonds since last summer, according to an analysis by The Real Deal. But according to the Climate Bond Initiative’s database, none of the companies submitted their offerings for second party opinions – an external review to certify a bond’s environmental impact that’s considered a best practice in the industry.

“It is up to the issuer whether or not they want an external review,” said Trisha Taneja, a manager at Sustainalytics, a company that rates firms on their ESG performance. “I think that more often than not it’s highly recommended because investors require it.”

Bank of America/Merrill Lynch was the book runner designated as the “green structuring agent” for Equity Residential, Kilroy Realty and Boston Properties’ bond offerings. The bank has been accused of using such environmental activities to greenwash its record of simultaneously financing the fossil fuels industry.

Measuring Impact

Green bonds got their start in 2008, when the World Bank floated a $440 bond and defined the criteria for green bond projects.

Vornado Realty Trust and the shopping centers REIT Regency Centers were among the first U.S.-based real estate companies to tap the market when they issued their own climate bonds in 2014.

As far as public reporting went, Vornado in its 2015 sustainability report made only general references to the bonds and its sustainable programs, rather than provide the kind of specific “impact reporting” that lays out the specific reductions in building emissions the bonds financed.

(Vornado’s green bond was originally set to mature in June of this year, but the company called the bond in 2017.)

“Vornado essentially reports the amount invested by type of project, rather than by project itself. And they don’t disclose/describe each project funded. Both of these would be best practice,” Miguel Almeida, a research analyst at the Climate Bonds Initiative, wrote in an email.

Vornado declined to comment.

Aleida noted that Vornado described the benefits of its green renovations and referred to specifications like LEED – disclosures that he said were pretty good as far as standards went in 2015.

“Since they don’t quantify the impacts of the projects, they can’t be said to provide impact reporting, but they do describe the benefits of the investments and refer specifically to buildings certifications such as LEED,” he said, “which is something.”


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Developer Pacific Star Capital is now looking to build a Target-anchored shopping center in North Beach, after a deal to swap land with Miami Beach fell apart. Aria Mehrabi’s Pacific Star wants to buy the Miami Beach-owned parking lot to build the shopping center, according to a memo he sent last week. The Santa Monica, California-based real estate firm has offered $4.2 million for the North Beach lot, which is located on the corner of 71st Street and Byron Avenue. The prior deal involved swapping land so that Pacific Star could build a residential and retail project at that location. [TRD]

 

Bernie Sanders is making a call for national rent control. The $2.5 trillion affordable housing plan would also focus on ending homelessness. It would expand public housing, increase the amount of affordable housing and limit annual rent increases to no more than 1.5 times the inflation rate or 3 percent. The campaign will release the full plan within the next month. [NYT]

 

The Related Group and Atlantic | Pacific Communities will go before a city of Miami board on Wednesday for mixed-use projects in the Magic City. The developments are along the Miami River, Liberty City and near downtown Miami. Related is seeking approvals from the Miami Urban Development Review Board for two projects. [TRD]

 

A home automation company backed by Blackstone Group is merging with a unit of SoftBank. Vivint Smart Home Inc. will create a company valued at $5.6 billion through the merger. The company makes a variety of smart home security products. [Reuters]

 

A company tied to the Related Group scooped up two lots near Miami Dade College’s downtown campus for $8.8 million. Parcel C LLC, which shares an address with the Related Group, bought the combined 15,000-square-foot site at 225 and 233 North Miami Avenue for $584 per square foot, records show. [TRD]

 

The Bakehouse Art Complex in Wynwood wants to build affordable housing for its artists. The nonprofit is seeking zoning and land-use changes that would allow it to build up to 250 units, and it also hopes to renovate its building, a former industrial bakery from the 1920s, according to the Miami Herald. Bakehouse’s director, Cathy Leff, said that it will enlist a developer or investors to take on the project. [Miami Herald]

 

A lottery winner plans to invest $19 million into transforming Sistrunk Boulevard in downtown Fort Lauderdale. Miguel Pilgram, who won a $52 million lottery nearly a decade ago, has a three-phase performing-arts plan for Sistrunk, a historically black section that’s west of the Florida East Coast Railroad tracks, according to the Sun Sentinel. Pilgram is now planning to renovate the building at 1448 Sistrunk Boulevard, once home to the Night Owl lounge. [Sun Sentinel]

 

The Federal Reserve is expected to slash its benchmark interest rate again this week — a move that likely will give financial markets a boost. The Dow Jones Industrial Average closed Friday up 37 points for the day and closer to its all-time high in July. Easing tension between the U.S. and China over trade and the prospect of another rate cut also gave the S&P 500 a slight bump. Real estate stock performance, on the other hand, was more of a mixed bag. [TRD]

 

Compiled by Katherine Kallergis

 Rendering of the Moxy Hotel, Pierre Charalambides and David Grutman (Credit: Kobi Karp)

Rendering of the Wynwood Moxy, David Grutman and Pierre Charalambides (Credit: Kobi Karp)

UPDATED, Sept. 17, 12 p.m.: DolphinBay Hospitality, a joint venture between Dolphin Capital Partners and Baywood Hotels, closed on the site of a planned Moxy by Marriott hotel in Wynwood, The Real Deal has learned.

The partners paid $11 million, or about $630 per square foot, for the 17,500-square-foot site at 255 Northwest 25th Street, according to Tony Arellano of Dwntwn Realty Advisors. Arellano and Devlin Marinoff brokered the deal.

David Grutman and Groot Hospitality will handle the food and beverage operations for the 120-room hotel’s 28,000 square feet of restaurant space, including a ground-floor restaurant and rooftop concept.

The property will mark the second Moxy hotel in Florida, followed by a 202-room Moxy under construction at 915 Washington Avenue in Miami Beach. The Marriott brand is targeted toward millennials in gateway cities.

The Wynwood Moxy project has site plan approval and construction is expected to begin in the first quarter of next year, said Pierre Charalambides, founding partner of Dolphin Capital Partners. Kobi Karp Architects is the architect and iCrave, a New York City-based interior design firm, is handling the interiors.

The Wynwood hotel will be built east of Second Avenue, a block north of the Related Group and East End Capital’s Wynwood 25 apartment complex.

Dolphin Capital Partners has a portfolio of 12 large-scale residential resorts under development in Greece, Cyprus, Croatia and Turkey, according to its website. In 2016, the hospitality development firm sold the Playa Grande Golf and Resort project and its Aman resort, both in the Dominican Republic, for $150.5 million to Third Point LLC, a New York-based hedge fund founded by Dan Loeb.

Baywood Hotels, which will manage the Wynwood Moxy, has been active in South Florida. The Columbia, Maryland-based hotel firm, led by Chris Desai, owns and operates more than $1 billion in assets, according to its website. Earlier this year, Baywood paid $10.5 million for land within the Waterford at Blue Lagoon office park where it’s planning a 225-room hotel.

A number of apartment and office projects are under construction or have recently been completed in Wynwood, but no new hotels have been built.

Philip Levine and Scott Robins are planning a 90-key hotel with 92 apartments at 35 Northwest 27th Street, and Alex Karakhanian and Wynwood Investment Partners are planning a 12-story, 125-room hotel with office and retail at 51 Northwest 29th Street. Last year, developers Eduardo Vargas and Andres Hogg filed plans for a five-story, 72-key hotel at 111 Northwest 26th Street, also near the Wynwood Walls.

An earlier version of this story incorrectly stated the square footage of the land and the food and beverage space. 

Julia Spillman (Photo by Guerin Blask)

Before there was Julia Spillman, the Eklund-Gomes universe was, well, a little disorganized.

Spillman joined the team in 2016 as the sales director for the 98-unit condo 1 Seaport and quickly began combing through the team’s project database. “It was really messy,” but the team was “sitting on a gold mine of data,” she recalled, noting that she wanted to use it to target former clients who might be ready to trade up.

Read the full story: The Eklund and Gomes roadshow

It worked. More than 75 percent of the tower’s units were pre-sold, she said. And in 2017 — after taking on more and more jobs for the team’s two leaders, John Gomes and Fredrik Eklund — she was named the group’s first CEO.

In the time since, the Kentucky native — who started her career in the residential lending divisions of HSBC and Merrill Lynch in Tampa before relocating with her husband to New York and joining Ariel Cohen’s team at Douglas Elliman — has been credited with getting the team’s back office into shape.

She is now a partner and oversees daily operations, budgets and hires. Oh, and she’s also the mastermind behind the team’s current national expansion plan.

“I call her a superwoman and genius,” said Fredrik Eklund. “Without her, we could never, ever have done this.”

And Spillman is clear about her role: “John and Fred have basically made me the queen of Eklund-Gomes,” she said.

When she took over, her goal was to push the team to crack $1 billion in annual sales nationally — a target that she says it exceeded.

To get the team organized, Spillman tapped her network of web developers and consultants from her banking days and outsourced the creation of a custom CRM (aka customer relationship management) system. She also streamlined the team’s database to feed leads to its resale agents.

At the time, Eklund and Gomes were separately gearing up for newborns — they each now have twin toddlers. Spillman did much of the legwork preparing to pitch their expansion plan to Elliman Chair Howard Lorber.

Like Eklund and Gomes, she is compensated based on commission splits from the team. And the three say they all must agree on major decisions.

Hunie Kwon, an agent who’s worked on the team since 2010, recalled how high the team turnover used to be.

“What Julia brought was that structure,” she said. “Now it’s essentially a business within a business. And it’s run very much like a corporation.”

Aria Mehrabi and City National Bank

Aria Mehrabi and City National Bank

Developer Pacific Star Capital is now looking to build a Target-anchored shopping center in North Beach, after a deal to swap land with Miami Beach fell through.

Aria Mehrabi’s Pacific Star wants to buy the Miami Beach-owned parking lot to build the shopping center, according to a memo he sent last week. The Santa Monica, California-based real estate firm has offered $4.2 million for the North Beach lot, which is located on the corner of 71st Street and Byron Avenue. The prior deal involved swapping land so that Pacific Star could build a residential and retail project at that location.

Mehrabi’s letter of intent said the lot would be combined with two other properties, including a former City National Bank building the firm purchased in April 2017 in order to build a 72,000-square-foot retail building with two levels. The ground level would encompass 30,000 square feet for shops and the second level would be divided into 33,000 square feet for the Target, and 9,000 square feet for a junior anchor tenant.

Mehrabi did not return messages seeking comment. The city commission recently referred Pacific Star’s proposal to the finance and citywide projects committee for evaluation. In June 2017, Pacific Star proposed a joint redevelopment agreement in the North Beach Town Center area, but that fell through in March.

“This one-block swath of land in the heart of the Town Center represents a golden opportunity to inject new investment into the area and create a vibrant activity node,” according to Mehrabi’s letter.

The proposed Target shopping center would rise near the $220 million mixed-use project along Ocean Terrace planned by partners Alex Blavatnik and Sandor Scher.

Mehrabi, whose firm built a Whole Foods-anchored shopping center at 123rd Street and Biscayne Boulevard in North Miami, wrote that he would like to attract small incubator retailers along 71st Street and include a parking garage for 237 spaces.

“North Beach needs additional retail options and is lacking national credit retailers,” he wrote.

Michael and Michelle Hagerty, and their home in Royal Palm Yacht & Country Club (Credit: Keeping the Promise, Realtor)

Michael and Michelle Hagerty, and their home in Royal Palm Yacht & Country Club (Credit: Keeping the Promise, Realtor)

Drinks are in order, most likely a martini.

Michael and Michelle Hagerty, whose family owned White Rock Distilleries, bought a waterfront estate in Boca Raton’s Royal Palm Yacht & Country Club from restaurateur Gary Rack and his wife Videl for $6.2 million.

Gary Rack, who owns Racks Fishhouse & Oyster Bar in Delray Beach, sold the 7,175-square-foot waterfront home at 324 East Coconut Palm Road for $860 per square foot, according to property records.

The Racks had purchased the property in 1998 for $1.45 million and built the home in 2001, records show.

The Hagertys earlier this year purchased the adjacent home at 312 East Coconut Palm Road for $12.5 million, so the couple can now combine the lots.

Michelle Hagerty’s family owned the parent company of Pinnacle and Three Olives Vodka. The company was eventually sold to Beam Inc., the maker of Jim Beam, in 2012 for $605 million.

The seller was represented by David W. Roberts of Royal Palm Properties and the buyer was represented by J.P. DiMisa with Douglas Elliman of Boca Raton, according to Realtor.com.

The high-end neighborhood features a country club that sits along the Intracoastal Waterway and Capone Island, along with a yacht club, a pool, a sports court, an entertainment patio and marina, fitness center and tennis courts.

Earlier this month, a group of executives tied to a West Palm Beach transportation company bought a 9,203-square-foot house at 300 East Key Palm Road for $12.1 million.

In April, Steven and Rebecca Scott sold a 8,570-square-foot house at 271 West Coconut Palm Road in the Royal Palm Yacht & Country Club for $11 million, records show.

Jorge Pérez with renderings of the projects

Jorge Pérez with renderings of the projects

The Related Group and Atlantic | Pacific Communities will go before a city of Miami board on Wednesday for mixed-use projects along the Miami River, Liberty City and near downtown Miami.

Related is seeking approvals from the Miami Urban Development Review Board for two projects.

Phase three of Liberty Square, 1201 Northwest 65th Street | Related Group
Related’s affordable housing arm is planning to build the third phase of the sprawling Liberty Square redevelopment, at 1201 Northwest 65th Street. The 192-unit, nearly 170,000-square-foot project consists of six new garden-style apartment buildings with 113,000 square feet of open space and 192 parking spaces.

Phase three will replace 100 units of public housing. It will include 71 affordable public housing units. The site takes up a full block.

The Gallery on the River, 401 Northwest North River Drive | Related Group
After securing approval from the Miami-Dade Housing, Social Services & Economic Development Committee, Related is now heading to the city of Miami to approve plans for The Gallery on the River, a 160-unit workforce and affordable housing apartment building at 401 Northwest North River Drive along the Miami River.

The 12-story, 384,000-square-foot project will total 360 units, a number that includes 200 existing apartments. It will be built on a vacant portion of the Jack Orr Plaza property owned by Miami-Dade County. The Gallery on the River will also include 831 square feet of commercial space

Block 45, 152 Northwest Eighth Street | Atlantic Pacific Communities
Atlantic | Pacific is leasing the roughly 2-acre site at 152 Northwest Eighth Street from Miami-Dade County to develop Block 45 into a 616-unit, 36-story apartment tower. It’s requesting that the Miami board approve a number of waivers, including a parking reduction and changes to its loading berths.

The 813,254-square-foot project will have 25,000 square feet of commercial space, 637 parking spaces and 32 bike racks. Just under 100 apartments will be micro units.

233 North Miami Avenue and Jorge Perez

233 North Miami Avenue and Jorge Perez

A company tied to the Related Group scooped up two lots near Miami Dade College’s downtown campus for $8.8 million.

Parcel C LLC, which shares an address with the Related Group, bought the combined 15,000-square-foot site at 225 and 233 North Miami Avenue for $584 per square foot, records show.

Henrietta and Burl Sostchin sold the 10,000-square-foot property at 233 North Miami Avenue, while attorney Jeanne Heyward sold the 5,000-square-foot property at 225 North Miami Avenue, records show.

Related secured $3 million in seller financing from Jeanne Heyward to acquire the property, according to records.

There is currently a 2,500-square-foot building on the property, which is adjacent to New World School of the Arts and one block southwest of Miami Dade College’s Wolfson campus.

The Related Group previously sought to develop a mixed-use project nearby at 520 Biscayne Boulevard in a public-private partnership with Miami Dade College. Related’s proposal included a 75-story condominium tower, a 39-story office tower, a 100-room hotel and private club.

Miami Dade College ended the bidding in the competition in 2016 after the process became entangled in litigation.

Led by Jorge Pérez, Miami-based Related Group has built and managed more than 90,000 condominiums and apartments since its founding in 1979, according to its website. It is known for its high-rise condos in Miami, including 50 Biscayne, Brickell Heights and four recently completed Paraiso towers.

Fredrik Eklund (right) and John Gomes (Photos by Guerin Blask)

About six years ago, “Million Dollar Listing New York” star and Douglas Elliman broker Fredrik Eklund had a vision.

While sitting at the rooftop pool at the SLS Hotel in Los Angeles with his business partner, John Gomes, real estate legend Barbara Corcoran and his older brother, Sigge, Eklund said that “we will be living” in L.A. at some point.

This July, that prediction came true.

Eklund sold his Tribeca condo and moved to Beverly Hills with his husband, Derek Kaplan, and their twin toddlers to oversee the expansion of the Eklund-Gomes team on the West Coast.

The move capped off nearly 24 months of explosive expansion for the team, which opened four offices in three U.S. cities and went from nine agents to more than 64 during that stretch. (It’s expecting its headcount to jump to 70 by early this month.)

While some may have initially scoffed when the celebrity brokers came on the scene in the mid-aughts, the duo has indisputably converted TV fame into brokerage dominance — at least in New York.

Last year, it was the No. 1 team in New York City, closing more than $720 million in sell-side deals in Manhattan, Brooklyn and Queens, according to The Real Deal’s latest ranking of top agents. Nationwide, it claims to have closed about $1.5 billion in sales in 2018.

But the two have their fair share of critics, including some who take more fundamental issue with the rise of giant superteams.

Several sources told TRD that they think it’s impossible for the leaders of large teams to give clients truly personal attention.

“I feel like when somebody hires me they want me, not No. 10 in my team,” said Brown Harris Stevens’ Lisa Lippman, who leads a four-person team. “When you hire Eklund-Gomes, who do you get?”

She added that Eklund and Gomes have undoubtedly created a successful team, and “I’m not going to say it’s negative or positive,” but it’s a “choice.”

Another broker — who asked not to be named but has competed against both the Eklund-Gomes team and Ryan Serhant’s 62-agent team at Nest Seekers International — took it a step further.

“Pitching against Ryan and Fred and John is the easiest thing,” the source said. “It’s like taking candy from a baby. How do they actually compete with a full-service luxury broker who’s personally involved in every level of the transaction?”

Gomes and Eklund adamantly disagree.

And they have defenders. Developer Doug Steiner said he was “pleasantly surprised” by how involved they were when he hired them to market his 82-unit condo Steiner East Village in 2016. He said he was “pretty skeptical” at first — though he noted he’s skeptical of everybody.

“They gave valuable input. They know the market. They know how to sell,” said Steiner, noting that they sold all but one unit, attended every design meeting and “didn’t waste my money.”

Their model is also clearly working at a time when the residential brokerage business is in the midst of an existential crisis.

And now, as brokerages are desperately trying to salvage shrinking profits — which have been hit by everything from venture-backed startups to iBuying firms — Eklund and Gomes are exporting their brand and actively going after resales, too.

Late last year, they launched in L.A. In March, they followed that with an office in Miami Beach. And this July, Eklund announced his L.A. move on Instagram.

But they’re the first to admit that expanding nationally will not be easy.

In L.A., the team will have to scale up in an entirely different type of market, one where there are far fewer luxury condo towers to go after.

Meanwhile, in New York, the duo added a Brooklyn outpost this spring and is coming up on a year in its Flatiron District office.

And there are more transitions underway as Gomes — who’s often publicly cast as a sidekick to Eklund’s larger-than-life TV persona — takes the reins.

“I’m in charge in New York now,” Gomes said. “It’s my base to cover. His base is Los Angeles.”

From left: Fredrik Eklund, Julia Spillman and John Gomes

“Everyone always says, ‘What about Fredrik?’ They think Eklund and Gomes should do every single solitary listing [together, but] what makes us great is the team,” he said. “We’re very transparent. None of our developers are worried.”

The seeds of expansion

In September 2017, Eklund and Gomes set up a meeting with Elliman Chair Howard Lorber. Their goal: getting permission to exceed the firm’s 10-agent team limit.

Lorber gave his blessing with a few conditions, namely that the team —  which has an annual gross commission income hovering around $20 million and has been the company’s top-producing group for four straight years —  drop out of Elliman’s internal company rankings. He also wanted the team to set up its own office so as not to overtake the firm’s Flatiron office and agreed to bankroll the office’s expenses.

Lorber, along with Eklund and Gomes, — who have a 70-30 commission split with Elliman — declined to comment on the total cost of expansion.

But the billionaire told TRD that he’d back other Elliman agents looking to expand their teams so long as it made business sense.

“It’s not just Fredrik and John and no one else,” Lorber said. “If someone else wants to do it and has the wherewithal and the talent to do it, then I’ll back them the same way that I’ve backed Fredrik and John.”

Around the time they were talking to Lorber, both Eklund and Gomes were on the verge of becoming first-time parents — both to twins.

“Everyone thought that was the end of Eklund-Gomes!” added Gomes. “Oh god, those two? Twins? Two sets of twins?”

But weeks after welcoming their newborns, they were back in Lorber’s office with a new proposal: national expansion.

Lorber gave them the green light, which kicked off a dizzying round of hiring and preparation.

From Lorber’s vantage point, agreeing to Eklund’s relocation and a national expansion makes sense.

“I thought OK, it’s either going to be zero or positive. If it didn’t work, that’s zero. If it worked, it was positive,” he said. “He could always come back to New York. So what is there to lose?”

Elliman itself launched in California in 2014 and has been trying to get a foothold in L.A.’s luxury market, but it’s yet to become a major player.

“They’ve already brought in a bunch of business for California,” Lorber said. “They’ve done probably better than we had thought for last year.”

Elliman agents can reel in developments on their own, but exclusives on new condo buildings often filter through Elliman’s Development Marketing division, which is led by Susan de França. De França and Lorber then invite select Elliman agents to interview with developers.

But some sources say that Lorber personally doles out new development assignments to Eklund and Gomes (as well as to other top Elliman brokers). The team denies that they’re getting fed the business.

“[Howard] always makes a joke with us about it,” said Eklund. “All these people call him like, ‘Ah, you’re giving everything to [Eklund and Gomes]!’ And he’s like, ‘I’m not giving them anything.’”

Gomes added: “More than 90 percent of our new development business comes from our own clients. They’re not Elliman or Howard Lorber clients.”

That said, Eklund noted that the team did get its first L.A. assignment, Townscape Partners’ 48-unit condo and townhouse development 8899 Beverly, from Elliman.

And Lorber said he had a hand in building up their new development portfolio. “Don’t forget, before they came here they weren’t really doing any new development business to speak of.”

Vertical or horizontal?

Getting more business in L.A. is not as easy as just buying a Beverly Hills house.

Prices are leveling off and the luxury market is cooling, according to Michael Nourmand, who heads up his family’s 175-agent brokerage, Nourmand & Associates, in L.A. “The number of deals are down. Period,” he said.

Eklund’s Instagram announcement noted that “LA has some of the world’s most exciting new development projects coming — vertical living is finally happening here.”

But compared to New York, the condo market is still a drop in the bucket.

In the past year, L.A. County saw only $6.8 billion in condo sales, according to TRD’s analysis of Redfin data. By comparison, last year, Manhattan alone saw $20.25 billion worth of co-ops and condos sell, according to data from appraisal firm Miller Samuel.

And Nourmand noted that single-family homes are most in demand.

“L.A. is a very horizontal city,” he said. “I think the idea that we’re going to follow NYC … I don’t agree with that.”

Eklund said later he’s also going after luxury homes, and recently landed an $18 million listing in Beverly Hills.

And working in his favor is a landscape that’s becoming more bicoastal, with developers working on projects in New York and L.A. For example, the Lightstone Group is currently building the megaproject Fig + Pico in Downtown L.A. and selling 130 William Street in Lower Manhattan.

And behind New York and Tokyo, L.A. is the third-fastest-growing city among those with net worths of $30 million-plus.

David Kramer, a top producer at the Beverly Hills-based luxury brokerage Hilton & Hyland, said Eklund’s move to L.A. is symbolic of how the residential market has changed over the last decade.

“It’s New York money coming in. Now the big players are national and international,” said Kramer, who met with Eklund and brought a client to 8899 Beverly.

Still, both Gomes and Eklund have spent much of the year working at a breakneck speed to learn the L.A. market and say they’ve spent hundreds of thousands of dollars on flights between the coasts.

Gomes has spent many L.A. days sitting shotgun in a Mercedes-Benz G-Class cruising through neighborhoods while following along on Google Maps. Eklund, meanwhile, invited a slew of top brokers out for dinners and cocktails.

And the two are heavily relying on their team CEO, Julia Spillman, the mastermind behind their national expansion (see sidebar).

Spillman — who now runs daily operations and makes decisions on everything from hiring to budgets — said the preparation has, at times, been 24-7.

And the work is not going to let up anytime soon.

To break into their two new markets, the team is offering to take over listings for both Elliman and non-Elliman agents in exchange for a 25 to 30 percent referral fee — or to co-list properties. 

“We’ll go in 50-50 [on co-listings],” said Pietro Belmonte, who runs the team’s seven-agent office in Miami. “But we’ll take the lead on the marketing.”

So far, they say, it’s working. In L.A., the team says it’s closed 40 deals since launching last fall.

Though team leaders declined to say how much they’ve closed in Miami, Belmonte claims it’s snagged $100 million in listings over the past two months. “We call it the Fredrik effect,” he said, noting the lion’s share of those listings will hit the market in November.

The making of the machine

Eklund and Gomes met in 2006 while working at CORE, the new development marketing firm headed by Shaun Osher.

As Gomes — who got his start in real estate while working as a maître d’ at Balthazar, where he met broker-turned-developer Michael Shvo — describes it, there were stacks of papers “literally falling off” Eklund’s desk.

He made Eklund a proposal: “I [will] pay you a referral if I close any of those deals,” he recalled.

Eklund — who did a brief stint in adult films and has launched several businesses, including a tech startup in his home country of Sweden — agreed, and their partnership took off from there.

But the team has had growing pains.

Hunie Kwon, who joined the team in 2010 and is still a member, said it was a revolving door of agents in the early days.

“It was not operating anything like a team,” said Kwon, who hired Eklund at the boutique firm JC De Niro in 2004 after he responded to a Craigslist ad.

Eklund acknowledged he struggles with the logistics of executing a team strategy — “like, really, I have no patience.”

He used to joke that he was “the best new development pitcher and John [was] the best show-er and salesman, but we didn’t have the organizational skills.”

Fredrik Eklund

“We just weren’t born to be managers,” said Gomes.

That’s where Spillman now comes in.

A new sweet spot 

The team’s expansion comes amid a soft luxury market, an oversupply of condo inventory and a looming recession.

But Gomes said they are pivoting in response to those realities, noting that they used to focus largely on the $8-to -$10 million range.

“It’s all about lower price points now,” he noted. “In the future, to make the kind of money we’re making today, we’re simply gonna have to do more. So the team needed more people handling both new development and resales.”

The team’s hiring strategy is also reflecting that — though it took some internal bickering to get there.

Spillman and Gomes dubbed themselves the “resale committee,” believing that expanding the team’s resale operation was crucial, while Eklund was trying to “put the kibosh” on that, explained Gomes.

“Julia and I saw this so clearly, and we really believed in it, but … Fredrik is very …” He paused to snap his fingers.

“Advanced,” said Eklund, cutting in with a smile.

Two years on, Eklund admits that their strategy has worked. Currently, their business is nearly 40 percent resales and 60-plus percent new development — versus 85 percent new development in spring 2016.

But hiring is not as easy as it sounds; many experienced agents are being wooed by other firms in New York, Miami and L.A.

In New York, the team’s sleek, 10,000-square-foot Flatiron office — which is stocked with food and has a putting green, massage table and meditation room — seems to be one of the perks it’s offering hires. But it’s also luring agents with the same kind of financial incentives that a startup might, and promising that they’ll get handed business when they walk in the door.

For example, former Compass agent Keith Copley, who joined this spring, took over $26 million in listings when he started, according to Spillman.

The team has about 10 different commission splits. “It’s like a Swedish smorgasbord,” said Eklund.

He declined to elaborate, but said the team offers splits at the high end in each market.

(Source say industry-wide, standard splits on teams vary from 10 percent to 50 percent with the team leader, depending on the agent’s role in the deal.)

While megateams in the industry are generally stacked with junior agents, Gomes said their goal is to grow an experienced bench of 100 agents.

He said that during interviews with new recruits, many agents say they want to join the team because they pitched against Eklund-Gomes and lost.

Industry veteran Horacio LeDon — the former head of new development for Elliman in Florida and California, who now runs his own firm — said their “sweet spot is finding really, really good agents who haven’t been able to create a lot of business for themselves.”

Clayton Orrigo — who worked for Eklund and Gomes before heading to Compass in 2017 — said joining teams often doesn’t work for people who “have that desire to go build something on their own.”

“I was starting to do significant deals, and I wanted to make sure people knew it was me,” Orrigo said. “I think a lot of people were like, ‘That’s weird [that you’re still with Eklund and Gomes]. You’re doing all this business, why haven’t you started your own team yet?’”

Still, he has a strong affection for the duo and said their partnership, which he called “something to look up to,” inspired him.

He said, however, that because of his experience he opted not to name his team after himself.

“Honestly, that’s why I named it the Hudson Advisory Team,” he said. “I want people that work for me to stay for a long time.”

Gomes acknowledged that the team name “bothers” him, too, because it overshadows so many of the hardworking agents churning out deals.

Compass’ Leonard Steinberg, meanwhile, said he is fundamentally opposed to teams going bigger than 20 agents because he believes large teams confuse clients (see sidebar).

In terms of Eklund and Gomes, Steinberg said: “That sounds more like a brokerage to me. Is it a brokerage or a team?”

Should they stay or should they go?

Given the size and name recognition of the Eklund-Gomes operation, many wonder whether the two plan to start their own firm.

It’s not an unfounded idea. Both are entrepreneurial, and they regularly invest in projects they’re hired to sell. Eklund has also started a new side gig in L.A. — writing screenplays with Sigge, a best-selling author in Sweden who also recently moved to Beverly Hills. Eklund declined to comment on the plot, but said at least one major studio is reviewing the script.

But both brokers insist they have no plans to leave Elliman.

“We do not have any interest whatsoever in starting our own real estate firm,” said Gomes. “We have the support of Douglas Elliman, they figure out all the infrastructure, [and] we follow them … I can tell you, we’re retiring at this firm.”

Gomes said he’s been approached by executives ranging from Corcoran Group CEO Pam Liebman to Compass founder Ori Allon. Eklund said he’s never received comparable offers.

That may largely be because many think Gomes is the workhorse running the business off-camera while Eklund gets the glory. The two, who thrive on needling each other, describe their relationship as a work marriage and a close friendship that they have no plans of ending.

They said they’ve also rejected offers for “millions” to take their team to another firm.

“We wouldn’t do that to Howard at this point,” Eklund said.

“Not everything is about money,” he said. “Especially now with kids. It’s like, you know, you wanna sell a lot and have no headache.”

These days, “we’re like, old dads,” he added.

Clockwise from left: 401 Southwest 17th Avenue, Alfonso Jaramillo, and Andros Sarduy 

Clockwise from left: 401 Southwest 17th Avenue, Alfonso Jaramillo, and Andros Sarduy

Bar Invest Group sold an apartment building it built in Little Havana for $7.1 million to Beraja Investments.

Bar Invest paid $900,000 for the development site in 2004 and completed the 30-unit building at 401 Southwest 17th Avenue in 2015. Now, it sold the property to Beraja for nearly $237,000 per unit, according to Alfonso Jaramillo of Fortune International Realty. Jaramillo represented Bar Invest, while Andros Sarduy and Giovanni Vazquez, also of Fortune, represented the buyer.

Giovanni Vazquez

Giovanni Vazquez

The 46,749-square-foot building sits on a 9,900-square-foot corner lot about four blocks away from Little Havana’s main street, Calle Ocho. Twenty-five of the 30 units are two-bedrooms, Jaramillo said.

Beraja Investments, led by Matilde, Roberto, Victor and Esther Beraja, owns and operates about 35 rental properties in the Miami area, including in Coral Gables, Little Havana and Coconut Grove, according to its website. The Beraja family also owns the Beraja Medical Institute, based in Coral Gables.

Little Havana’s multifamily market is seeing increased investment. Earlier this year, Key International sold Havana Palms II, a 79-unit multifamily complex at 931 Southwest Third Street for $10.1 million, or about $128,000 per unit. In April, a group of investors acquired a 103-unit apartment portfolio in the neighborhood, with plans to upgrade the properties and flip them.

Bar Invest Group has moved onto bigger properties. In May, it paid $59 million for a 405-unit apartment complex in Lauderhill. The Miami-based company, led by CEO Jacques Barbera, has invested in over 1,000 residential units and over 600,000 square feet of retail properties, according to its website.

The stock market was up overall last week, and so were some real estate stocks. (Credit: iStock)

The stock market was up overall last week, and so were some real estate stocks. (Credit: iStock)

The Federal Reserve is slated to slash its benchmark interest rate again this week — a move that likely will give financial markets a boost.

The Dow Jones Industrial Average closed Friday up 37 points for the day and closer to its all-time high in July. Easing tension between the U.S. and China over trade and the prospect of another rate cut also gave the S&P 500 a slight bump; it was up 0.6 percent last week.

As for real estate stocks, last week’s performance was more of a mixed bag.

An analysis of 28 real estate stocks monitored by The Real Deal found that they outperformed the S&P 500 last week, rising over 3 percent. But on Friday alone, 19 of those companies saw their share prices plunge. (The stocks are a mix of brokerage firms, real estate investment trusts and other real estate services firms.)

Data giant CoStar Group’s stock fell the most last week among the stocks TRD tracks, dropping about 7.7 percent to close Friday at $570.11. The company saw its second-quarter revenue grow 16 percent year over year in the second quarter, thanks to a growth of bookings on Apartment.com. But CEO Andrew Florence also said on the quarterly earnings call that commercial listings platform LoopNet.com has not seen the same monetization.

The top performer was real estate services firm Newmark Knight Frank, which last week expanded its capital markets investment sales division in New York City with the hiring of three new executives. The firm’s stock rose about 14.4 percent last week, closing at $10.11.

Meanwhile, the Real Estate Select Sector SPDR Fund, an index heavily weighted in the real estate sector, fell about 3 percent. And industry group Nareit’s All-REIT Index saw returns fall 0.81 percent for the week as of Thursday.

On Wednesday, the Fed is expected to cut the federal fund target rates by 25 basis points. After making steady increases since 2015, the Fed in July also cut rates by the same amount, setting the range to 2.00 to 2.25 percent.

Corcoran CEO Pam Liebman and president of sales Bill Cunningham 

Corcoran CEO Pam Liebman and president of sales Bill Cunningham

The Corcoran Group said it was hacked Friday after a stunning email containing agent splits, marketing budgets and gross commission income was sent to the entire company.

Sources said the email came from Bill Cunningham, Corcoran’s president of sales. It landed in inboxes in mid-afternoon before being quickly retracted — but not before news of the breach ricocheted through the industry.

“It’s the most privileged information at a real estate company” aside from client information, said an industry source. “Yikes,” said another.

Corcoran CEO Pam Liebman reassured agents in an email late Friday that the alleged hack appeared to be isolated to a single email account, and that no customer data was involved. The firm plans to investigate the incident as criminal activity.

“This afternoon, we determined a Corcoran employee’s email account was compromised and three emails containing inaccurate and misleading Corcoran information were distributed within Corcoran, in a deliberate attempt to distract employees and agents, disrupt business and cause damage to Corcoran,” the firm said in a statement to The Real Deal.

Although sources within the firm initially said the documents were doctored, at least one agent who spoke on the condition of anonymity told TRD their numbers were “100 percent correct.”

Some Corcoran agents speculated foul play at the hands of a rival. “I will never EVER work for a company that engages in corporate cyberwarfare,” one agent posted on Instagram, along with the hashtag “#dontbotherrecruitingme.” The agent later removed the post.

In an ultra-competitive market, splits have become ammunition for firms battling over top producers. Agents are known to shop around offers to negotiate better deals — especially as Compass has upped the ante by offering fat checks and bonuses to agents in New York and other markets. According to industry sources, it’s standard for top producing agents to split their commission 70-30 with their brokerages— that is the split that the Eklund-Gomes Team has with Douglas Elliman, for example.

Agents in markets outside New York can command higher splits; in Los Angeles, north of 80 percent is not uncommon.

But rising commission costs have put pressure on brokerages. Over the past year, New York City’s top residential firms have tightened their clawback policies, which allows them recoup marketing dollars or salaries if an agent leaves the firm. (In April, Corcoran demanded a half-dozen Brooklyn agents to pay back between $20,000 and $100,000 in commission and marketing expenses.)

Meanwhile, Corcoran’s parent company, Realogy, has been embroiled in a nasty legal battle with Compass, which it accused of “predatory” poaching and illegal business practices in a July lawsuit. Most recently, Compass accused Realogy CEO Ryan Schneider of attempting to sell the company or form a joint venture — a claim Realogy vehemently denied.

Toll Brothers CEO Douglas C. Yearley, Jr. an a rendering of Avenir Community

Toll Brothers CEO Douglas C. Yearley, Jr. an a rendering of Avenir Community

Toll Brothers is continuing to bet big on western Palm Beach County, adding another development to its portfolio at a massive housing community aimed at older adults.

The Pennsylvania-based homebuilder paid $31 million for a property it intends to develop into 469 single-family houses in an active adult community in Palm Beach Gardens. Toll Brothers bought the property from the development group Avenir Development, led by Landstar Development Group.

The age-restricted community, The Regency at Avenir, will be the third community that Toll Brothers is looking to build in the 4,783-acre master planned community west of Bee Line Highway. Avenir was approved for about 3,000 single-family homes, 400,000 square feet of commercial space and 1.94 million square feet of office space for the whole complex. The development will take 30 years to complete and will include a golf course as well as a crystal lagoon.

Homes in the Regency at Avenir will range from 1,800 to 2,800 square feet, and will have 10 different floor plans, according to a press release. Construction on the community’s sales center and model homes will begin this winter, with sales to start in the spring, according to Fred Pfister of Toll Brothers. He said homes will start in the $400,000 range.

Amenities in the complex will include a yoga studio, pool, a fitness and wellness center, outdoor amphitheater, ballroom, pickleball and tennis courts.

In June, Toll Brothers paid $21.7 million for 217 lots to build two new communities communities in the development, Windgate at Avenir and Watermark at Avenir.

Windgate at Avenir will have 119 homes ranging in size from 2,285 square feet to 2,930 square feet. Less than a mile from Windgate, Watermark at Avenir will have 98 homes ranging in size from 3,188 square feet to 3,831 square feet.

More homebuilders are seeking to develop new home communities in western Palm Beach County. Buyers are looking for more affordable homes and housing communities outside of major cities.

Other large-scale mixed-use communities include Westlake, Arden and Iota Carol.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 5:00 p.m.

 
Carl Icahn

Carl Icahn

Carl Icahn’s decision to relocate his firm from N.Y. to Miami could be SALT-related. The billionaire investor and noted corporate raider is planning to move his investment firm from New York City to Miami, and the SALT tax deduction could be the reason. [TRD]

 

Michael Shvo’s South Beach hotel plan could cost him $500 million. Between buying the Raleigh Hotel, pending deals to purchase two neighboring boutique hotels and proposing a new residential tower, Michael Shvo and his partners are already looking at a $250 million investment — and that amount could double. [TRD]

 
From left: Francis Suarez, Jorge Mas, and David Beckham, with a rendering of the Miami soccer stadium

From left: Francis Suarez, Jorge Mas, and David Beckham, with a rendering of the Miami soccer stadium

Miami officials want a contract for thee David Beckham-led group’s stadium deal by October. The Miami City Commission is seeking to vote on contract by the development group for the $1 billion stadium complex on either Oct. 24 or Oct. 31. [TRD]

 

A parcel bordering the $4 billion Miami Worldcenter megaproject just hit the market. The 24,000-square-foot development site known as World Center Link is at 33-55 Northeast 6th Street. Colliers International South Florida’s Mika Mattingly, Jack Lowell and Cecilia Estevez are the listing agents. [TRD]

 

Rating agencies have had doubts about WeWork for years. In an analysis of two dozen CMBS ratings reports for properties across the country, TRD found that those rating agencies have increasingly viewed WeWork, and co-working tenants in general, as a negative in their risk assessments. Meanwhile, landlords largely continued to focus on the company’s positives in public statements. [TRD]

 

One in four condos in New York City are sitting vacant, according to a new report. The study found that of the 16,200 units completed in New York City since 2013, around 4,100 are still on the market. It’s pushed developers to lower prices and offer concessions. And practices from previous real estate cycles are resurfacing, like the bulk sale of unsold units to investors, converting condos into rentals and more. [NYT]

 

CBRE group subsidiary Hana has opened three co-working locations in London. The locations will host 500 CBRE employees. Hana will partner with Nuveen Real Estate at one flexible working location, LGIM Real Assets at another and Oxford Properties at their third location. [Press release]

Bill Cunningham and Julian Johnston with the Miami Beach skyline (Credit: iStock)

Bill Cunningham and Julian Johnston with the Miami Beach skyline (Credit: iStock)

Top Miami Beach broker joins Corcoran Group. The Corcoran Group is officially in the Miami market, and it’s hiring a top Miami Beach broker, Julian Johnston. Johnston, who had been in talks with the brokerage for months, was previously working for himself as broker and owner of Calibre International Realty. [TRD]

 

Terranova scores first approval for 7-story hotel on Miracle Mile. The Coral Gables Planning and Zoning Department gave initial approval for Terranova Corp.’s plans to build a 120-room hotel on Coral Gables’s Miracle Mile, according to the Miami Herald. [Miami Herald]

 

We Company plans to list shares on Nasdaq. WeWork’s parent company is planning to list its shares on Nasdaq, while also announcing changes to its governance structure that would restrict We Co-founder and Chief Executive Adam Neumann’s voting power. [WSJ]

 

Compiled by Keith Larsen

Russell Galbut and the Fifth Hotel

Russell Galbut and the Fifth Hotel

Urbanica Management just scored a loan for a hotel project, but they didn’t go to a bank for the financing. Instead, they got the cash from Miami Beach’s largest developer.

Urbanica scored a $9 million construction loan from a company tied to Russell Galbut that will be used to finish constructing its third hotel in Miami Beach.

Despite being the company’s third hotel in Miami Beach, the new hotel will be named “the Fifth Hotel.” It will have 52 rooms, a restaurant, 45 parking spaces, and a rooftop pool, according to Charlie Porchetto, a principal at Urbanica. It will sit at 803 Fifth Street.

Porchetto said he could not disclose the name of the restaurant, but that it will be a partnership with a New York Italian restaurant.

Urbanica Management bought the property in 2017 for $5.97 million from Ronny Finvarb. The lot totals 9,000 square feet.

Urbanica recently bought a vacant waterfront lot at 6747 Collins Avenue in Miami Beach from China City Construction for $40 million where the company is planning to build a 20-story, 200-key hotel.

Urbanica also owns the Meridian Hotel in Miami Beach and The Euclid Hotel at 426 Euclid Ave in Miami Beach, which Porchetto said he expects to open in the next month.

Russell Galbut is one of the largest developers in Miami Beach. His company Crescent Heights is planning to build a 44-story, 519-foot-tall luxury residential building dubbed Park on Fifth at 500 Alton Road, the site of the former South Shore Hospital.

In June, Galbut’s firm said it had built over 150 projects nationwide valued at about $12 billion.

Grant Cardone Miami

The Real Deal is thrilled to announce that Grant Cardone, founder & CEO of Cardone Enterprises, will be speaking at The Real Deal’s 6th annual Real Estate Showcase and Forum on Oct. 17, at Mana Wynwood. Cardone, who operates $1.2 billion property portfolio, has spoken throughout the world on real estate, entrepreneurship, marketing, finance and sales. He is a New York Times bestselling author of seven books.

This year’s powerhouse lineup of speakers will discuss residential and hotel development, diversity in real estate, and so much more! Confirmed panelist include Michael Shvo, Chairman & CEO of SHVO; Melissa Rose, Managing Director of Ackman-Ziff; Don Peebles, Founder, Chairman & CEO Peebles Corporation; Peggy Olin, CEO of OneWorld Properties; Laurent Morali, President of Kushner Companies; Lissette Calderon, CEO & President of Neology Life Development Group; Ron Shuffield, President & CEO of Berkshire Hathaway HomeServices EWM Realty, Jerome Hollow, Executive Vice President of Florida East Coast Realty; Phil Gutman, President of Brown Harris Stevens; John Gomes, Co-Founder of The Eklund|Gomes Team at Douglas Elliman and Oren Alexander, Co-Founder of The Alexander Team at Douglas Elliman. Check our event site daily for the latest updates on our agenda and speakers.

Sponsorship opportunities are going fast and already include Douglas Elliman, Kay Properties & Investments, Citi Bank, REGUS, Banesco, Trump Group, Samsung Builder Home Appliances, Tera Group, Klaus Multiparking, Get GlobalPro, Grove Resort & Spa, Earthcam, Green Lush Artificial Walls, Elite Home Stages and many more. Get your spot while they last! Sponsorship opportunities and tickets are booking here.

(Click to expand)

Ayman Sabi and W South Beach (Credit: Linkedin, Marriott)

Ayman Sabi and W South Beach (Credit: Linkedin, Marriott)

The former CEO of Pompano Beach-based Roadhouse Grill sold his condo at the trendy W South Beach for $7.2 million, about 22 percent over what he paid for it.

Faisal LLC, which is tied to Ayman Sabi of Pompano Beach, sold the 2,642-square-foot unit at the condo-hotel at 2201 Collins Avenue, records show. The deal for unit 1628 penciled out to $2,725 per square foot.

The buyer was listed as Sletna 1628, which is tied to a Cayman Islands company.

Sabi bought the three-bedroom, three-and-a half bath condo for $5.9 million in 2011, records show.

In September, a W South Beach condo owned by the late star architect Zaha Hadid sold for $5.75 million. Hadid lived in the unit while she was designing One Thousand Museum — her first and final residential project in the western hemisphere.

The 20-story W South Beach was developed by Related Group, Starwood and TriStar Capital. It was designed by Nichols Brosch Sandoval and Costas Kondylis, and completed in 2008.

Sabi’s Roadhouse Grill was a casual dining restaurant founded in 1992, whose motto was “eat, drink and be yourself.” The company struggled financially as it expanded and was reorganized under Chapter 11 bankruptcy in 2002.

From left: Francis Suarez, Jorge Mas, and David Beckham, with a rendering of the Miami soccer stadium

From left: Francis Suarez, Jorge Mas, and David Beckham, with a rendering of the Miami soccer stadium

In spite of pleas from the mayor for more time, on Thursday the Miami City Commission approved a resolution to vote on a contract in late October that will enable a development team to construct a gigantic $1 billion stadium complex on top of a city-owned golf course.

The commission wants to vote on the contract by either Oct. 24 or Oct. 31.

Miami Freedom Park LLC, led by MasTec chairman Jorge Mas and fronted by soccer superstar David Beckham, wants to build a 25,000-seat Major League Soccer stadium complex on top of Melreese County Club, a city-owned golf course near Miami International Airport and Grapeland Water Park.

In a statement, Miami Freedom Park said it “continues to work quickly and diligently on finalizing a lease” with the city.

If the contract isn’t ready to be voted on at the Oct. 24 meeting, the commission will then schedule a special meeting on Oct. 31 to vote on the matter. If a contract isn’t supported by four commissioners, as required by a city referendum, the city may reject the soccer deal entirely or issue a request for proposals from other developers wishing to build upon the 131-acre course.

Commissioner Manolo Reyes, a critic of the deal, insisted that a contract was supposed to have been voted on at Thursday’s meeting, according to a resolution he and his colleagues passed months earlier.

“Everybody knows you’re totally partial to this,” Reyes told Mayor Francis Suarez, later adding, “I think it’s disingenuous. It’s a simple land deal.”

But Suarez countered that the pending negotiations with Miami Freedom Park LLC is anything but simple. “It’s the definition of complicated,” the mayor said. “This real estate deal is politically complicated… it is complicated on every level.”

In July 2018, the commission voted 3-2 – with commissioners Willy Gort and Reyes dissenting – to ask Miami voters if the city could negotiate a no-bid deal with Miami Freedom Park LLC.

The development would be home to the Beckham group’s MLS soccer team, Inter Miami CF, as well as 750 hotel rooms, 400,000 square feet of offices, 600,000 square feet of retail, and 3,750 parking spaces. Besides Mas and Beckham, Miami Freedom Park’s major partners include SoftBank executives Masayoshi Son and Marcelo Claure as well as producer Simon Fuller. In November, the referendum passed with just over 60 percent of the vote.

As part of the deal, Miami Freedom Park must pay for consultants hired by the commission to study a fair market value rent, analyze environmental remediation, and study the traffic impact. They’re also to pay for a team of attorneys studying the deal on behalf of the municipality that includes former Miami city commissioner Marc Sarnoff.

Suarez said the consulting team had just been assembled that day and warned it will take months to draft a deal for commission approval. And Sarnoff told the commissioners that even though the attorneys are moving “at light speed” by commercial practice standards, the contract proposal made by Miami Freedom Park back in July still needs plenty of work, including determining what rent the city will charge.

But Gort insisted that he be able to vote on a final contract before he leaves office. Melreese is located within Gort’s district.

Reyes and Commissioner Joe Carollo said Miami Freedom Park may even want the negotiations to drag on until after the upcoming elections on Nov. 5. That way, Miami Freedom Park may have an additional commissioner in place that’s more friendly to the development of a soccer stadium being built on the city’s own golf course, they said.

Gort can’t run for re-election due to term limits and there are seven candidates running for his District 1 seat.

Suarez said he’d love to get the deal finished “as soon as possible,” but he’s doubtful that it’s possible. “It’s not reasonable that a billion-dollar deal with three consultants and independent [attorneys] … that it all be wrapped up in 30 days,” the mayor said, adding that a rushed deal was “not in the best interest of the city” and “I’m not even sure if it’s constitutional.”

But Reyes believed the mayor is manipulating city actions to ensure a deal that will enable a private developer to build on a public park. Reyes was particularly miffed about the city’s sudden closure of the entire golf course in August over elevated arsenic being detected at four isolated spots. Reyes insinuated that the closure over purported environmental concerns was being used by the administration to help sell the idea of handing it over to a developer, since Miami Freedom Park pledged to pay for Melreese’s environmental remediation as well.

“My fear is we’re dealing with very sleazy, very sneaky type of policies,” Reyes said.

Host: CREW Miami
Date: September 17
Time: 11:30 a.m. to 1:30 p.m.

CREW Miami is holding a lunch program on Opportunity Zone investment at the Four Seasons Brickell in Miami, 1435 Brickell Avenue from 11:30 a.m. to 1:30 p.m. Attend to hear a panel discussion on how certain Opportunity Zone transactions showcase the complexities of this investment type.

Host: Crittenden
Date: September 18 to 20
Time: 8 a.m. to noon

Crittenden is holding its Real Estate Finance Conference at the Mandarin Oriental Miami, 500 Brickell Key Drive, from Sept. 18 to 20. Come to this event to network and discuss how to adapt to several changes in the real estate landscape. Speakers include Zach Shipps of JLL and Stephen Counts of CBRE Capital Markets.

To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to events@therealdeal.com.

Michael Shvo and The Raleigh (Credit: Getty Images)

Michael Shvo and The Raleigh (Credit: Getty Images)

Between buying the Raleigh Hotel, pending deals to purchase two neighboring boutique hotels and proposing a new residential tower, Michael Shvo and his partners are already looking at a $250 million investment – and that amount could double.

“We will invest $500 million over the next year,” Shvo said, speaking at the annual Miami Beach Chamber of Commerce real estate luncheon on Thursday. “Once there is real restoration, you will see beautiful buildings come to life that will bring in other developers.”

The New York developer participated in a panel discussion alongside Matis Cohen, principal of Kahunah Properties; Rory Greenberg, founder and managing partner of RB Green companies; and Alicia Cervera Lamadrid, managing partner of Cervera Real Estate. The event was hosted at Faena Forum in Miami Beach.

Shvo was making the case for developers and Miami Beach officials cooperating on developments that combine new construction and historic preservation in a city that has stringent regulations for its Art Deco architecture.

From left: Matis Cohen, Alicia Cervera Lamadrid, Rory Greenberg and Michael Shvo

From left: Matis Cohen, Alicia Cervera Lamadrid, Rory Greenberg and Michael Shvo

“There is always this debate about historic preservation versus development when it should go hand-in-hand,” Shvo said. “I wanted to buy a beautiful building with a lot of inherent value along with something new that supports the historic part.”

In late July, the Miami Beach City Commission endorsed a proposed ordinance that would allow property owners who control 115,000 square feet of land to build “ground level additions” up to 200 feet high in the RM-3 zoning district between 16th and 21st streets. Shvo, along with Bilgili Group and Deutsche Finance Group, bought the 83-room Raleigh at 1775 Collins Avenue for $103 million from a Tommy Hillfiger and Dogus Group.

The developer also purchased the Richmond Hotel and the South Seas Hotel, two Art Deco properties on the same block as the Raleigh.

Combined, the three properties sit on more than 125,000 square feet of land. Shvo wants to build a slender, 200-foot residential tower behind the Richmond and the South Seas.

The panel’s Greenberg also addressed another proposed new ordinance to give height bonuses and eliminate parking requirements for office and co-living projects on Washington Avenue.

“Washington Avenue is an obvious place for different uses,” Greenberg said. “Can co-living work on Washington? Probably. We need to pull back restrictions in a reasonable way.”

City commissioners on Wednesday delayed a second reading vote on the Washington Avenue ordinance because of opposition to allow co-living apartment buildings in that area of South Beach.

From left: Cecilia Estevez, Mika Mattingly, and Jack Lowell

From left: Cecilia Estevez, Mika Mattingly, and Jack Lowell

A development site bordering the $4 billion Miami Worldcenter megaproject just hit the market.

Colliers International South Florida’s Urban Core Division’s Mika Mattingly, Jack Lowell and Cecilia Estevez have been tapped to sell the 24,000-square-foot development site known as World Center Link at 33-55 Northeast 6th Street.

The developers are asking $16.5 million for the site, which allows for up to nearly 400,000 square feet of development and as many as 275 residential units.

The property sits right next to the Miami Worldcenter megaproject. In July, developer Dan Kodsi and Miami Worldcenter Associates received a temporary certificate of occupancy for the majority of the 60-story, condo building Paramount Miami Worldcenter that sits at the center of the project. Closings are expected to begin in a couple of weeks on the 569-unit tower, which cost about $500 million to build.

In addition to the condo tower, the $4 billion 27-acre Miami Worldcenter is also expected to include about 450,000 square feet of high street retail, a 1,100-space parking garage, a 1,700-room convention center hotel from MDM Development Group and an office tower being built by Hines.

Art Falcone and Nitin Motwani are leading the development. Partners in the project include CIM Group, Kodsi, citizenM and others. In January, Miami Worldcenter Associates, CIM Group and Falcone Group completed the first building, Caoba, a 444-unit rental tower at 698 Northeast First Avenue.

Carl Icahn

Carl Icahn

Carl Icahn is taking his talents to South Beach, and the SALT tax may be the reason for his fastbreak.

The billionaire investor and noted corporate raider is planning to move his investment firm from New York City to Miami, according to the New York Post.

The Trump administration’s 2017 tax overhaul capped the amount of state and local taxes that could be deducted at $10,000. Brokers and real estate professionals in Florida projected a large scale migration of hedge fund managers and investment professionals from high-tax states to South Florida. Icahn could be one of the first well-known investment managers to actually make the move.

Icahn told his staff if they won’t move to Miami he’ll let them lay them off without severance, according to a letter obtained by the Post. It said Icahn Enterprises will close offices in New York City and White Plains on March 31, and move to Miami the next day.

Icahn assured his staff that they will get paid at least their salary and bonus earned in 2019, according to the report. He also offered an additional $50,000 relocation payment if they establish residency in Florida. It is unclear how many employees would be eligible for that, and where the new offices are located.

The investment maven also has a home on Miami Beach’s ritzy Indian Creek Island. [NYP] — Keith Larsen

The We Company CEO Adam Neumann (Credit: Getty Images)

The We Company CEO Adam Neumann (Credit: Getty Images)

The We Company will push ahead with its initial public offering and list its shares on Nasdaq later this month, despite a push from its lead investor to withdraw such plans.

The office-space company said in a U.S. Securities and Exchange Commission filing Friday that it would be making changes to its corporate governance structure, which includes putting restrictions on CEO Adam Neumann’s power, “in response to market feedback.”

Among the changes, the company will no longer use a succession committee led by Rebekah Neumann to select a new CEO, and the board will be empowered to elect a new head, according to the amended S-1 filing.

It will go public on the Nasdaq exchange the week of Sept. 23, the Wall Street Journal first reported.

In addition to the appointment of the board’s first woman, Frances Frei, the company said it would also add another board member within a year, “with a commitment to increasing the board’s gender and ethnic diversity.”

Neumann also will not be allowed to make future real estate transactions, and as previously disclosed, he will repay $5.9 million made to him for the trademarked use of the word “we.”

The reports cap a tumultuous week for the company. Earlier this week, the company’s largest investor, SoftBank, was reported to have pushed for a delay in the IPO, as it was revealed the company’s valuation was expected to dip below $20 billion — more than half its previous $47 billion valuation.

But the following day, the We Company expressed that it would push ahead with plans for an imminent IPO, seen as a necessary step to securing up to $10 billion in debt and equity to fund its ambitious growth plans.

Bill Cunningham and Julian Johnston with the Miami Beach skyline (Credit: iStock)

Bill Cunningham and Julian Johnston with the Miami Beach skyline (Credit: iStock)

The Corcoran Group is officially in the Miami market, and it’s hoping top Miami Beach broker Julian Johnston will be its rainmaker.

Johnston, who had been in talks with the brokerage for months, was previously working for himself as broker and owner of Calibre International Realty. He was ranked No. 4 in The Real Deal’s most recent annual ranking of top single-family home brokers in Miami-Dade County with nearly $110 million in sales volume last year.

Patricia Prado

Patricia Prado

Corcoran’s new office, at 1688 Meridian Avenue, is expected to open by mid-October, according to Bill Cunningham, Corcoran’s president of sales. Lily Zanardi will be the managing director. The office can fit more than 30 agents, Cunningham said. He declined to say how many agents have joined, but confirmed that Patricia Prado, who was previously with Silvia Coltrane’s Real Estate Transactions International in Surfside, is with Realogy-owned Corcoran in Miami Beach.

Johnston’s top deals this year include the nearly $28 million sale of 428 Hibiscus Drive in Miami Beach. And he has two deals pending, the sale of 1771 North View Drive – asking nearly $16 million – and the sale of 5840 North Bay Road, asking $14.9 million.

He’s bringing with him 41 listings with a total listing volume of roughly $300 million. He said he met with all the top firms but decided to move to Corcoran because of its branding and reputation.

“There’s been a lot of consolidation in the industry over the last five or six years,” he said. “My competition in the past was always local firms. More firms are now national.”

In May, New York-based Corcoran, led by president and CEO Pam Liebman, opened its third South Florida office in West Palm Beach. It also has locations in Palm Beach and Delray Beach.

“We decided to move into Miami Beach because it’s a natural direction for us to go in,” Cunningham said.

The company is being approached to take on new development, but it hasn’t agreed to handle any projects yet, he added.

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Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 5:30 p.m.

 
James Harpel and The Bristol in West Palm Beach

James Harpel and The Bristol in West Palm Beach

Edgewater developer snagged a condo at The Bristol in West Palm Beach. James Harpel, who is a partner at Eastview Development, bought unit 1204 at the luxury condo development at 1100 South Flagler Street from the development group. [TRD]

 

Jeffrey Soffer taps ex-Turnberry CEO to lead resi division at his new company. In March, brother and sister duo Jeffrey and Jackie Soffer officially split up their interests in Turnberry Associates. Jeffrey left to launch Fontainebleau Development, and has hired Bruce Weiner, a man he once sued. [TRD]

 
South Florida Logistics Center

South Florida Logistics Center

JPMorgan buys an Amazon-leased warehouse next to Miami International Airport. Fueled by growth in the e-commerce sector, South Florida’s industrial market isn’t showing signs of slowing down. And when Amazon is the tenant, it’s a seller’s market for a company looking to unload that property. [TRD]

 

Brookfield, RXR are among major companies urging action on gun violence. Some of the country’s biggest landlords and developers have thrust themselves into perhaps the most contentious national debate: gun control. [TRD]

 

PMG and Greybrook land $162M loan for a downtown Miami co-living tower. Kevin Maloney’s Property Markets Group and Greybrook Realty Partners closed on a $161.5 million loan for a rental tower it’s planning in downtown Miami. [TRD]

 
Babylon Apartments and Francisco Martinez-Celeiro (Credit: Google Maps and Wikipedia)

Babylon Apartments and Francisco Martinez-Celeiro (Credit: Google Maps and Wikipedia)

Showdown in Miami? A former Spaghetti Western star has lost his final battle with the Miami City Commission. The commission did not override Mayor Francis Suarez’s veto. The veto prevents developer Francisco Martinez-Celeiro from securing the rezoning of the former Babylon Apartments to allow for a 24-story residential building. [TRD]

 

Forever 21 may be winding down, but Old Navy is only getting bigger. Fashion retailer Old Navy said it planned to open 800 new stores over an unspecified period as it prepares to split with Gap, its parent company. Old Navy has been outperforming its sister companies, Gap and Banana Republic. [WSJ]

 

Blackstone says it has closed a $20 billion fund — the largest in real estate history. The company surpassed its own record of $15.8 billion, which it set in 2015. Blackstone has earned itself a reputation for bringing in double-digit returns on its “opportunistic” funds. [WSJ]

 

President Trump wants to the Fed slash interest rates below zero. He tweeted Wednesday that the Fed should slash interest rates to zero or below, raising questions about how negative rates would work, and what they would do for the economy. [NYT]

 

Miami Beach claims over 7 percent of its stores are vacant. With about 7.4 percent of the city’s commercial spaces vacant, the city will seek to beautify buildings with empty shops. A July survey found 117 empty storefronts in Miami Beach. In the second quarter of this year, the city’s retail vacancy rate rose slightly by 1.7 percent year over year. [Miami Herald]

 
Greg Pinkalla and ORA Flagler Village Apartments (Credit: Google Maps)

Greg Pinkalla and ORA Flagler Village Apartments (Credit: Google Maps)

Fairfield Residential sells new Flagler Village apartments for $92M. Amid a growing influx of high-end apartments in Fort Lauderdale, a company tied to a former Silicon Valley executive bought a new 292-unit apartment complex in Flagler Village for $92 million, or about $315,000 per unit. [TRD]

 

Orlando Padron picks up Regency hotel near the airport. A company tied to the Miami investor has acquired a 3.8-acre hotel property near Miami International Airport and David Beckham’s planned soccer and retail complex. OPB Capital Group Fund 1 LLC paid $25.8 million for the Regency Miami Hotel at 1000 Northwest 42nd Avenue. [TRD]

 

Compiled by Keith Larsen

Babylon Apartments and Francisco Martinez-Celeiro (Credit: Google Maps and Wikipedia)

Babylon Apartments and Francisco Martinez-Celeiro (Credit: Google Maps and Wikipedia)

A former Spaghetti Western star has lost his final battle with the Miami City Commission.

The commission upheld Mayor Francis Suarez’s veto that prevents developer Francisco Martinez-Celeiro from securing the rezoning of the former Babylon Apartments on Brickell Bay Drive to allow for a 24-story residential building.

The scene at the commission meeting on Thursday played in a dramatic fashion when Commissioner Keon Hardemon, the wildcard for the vote, read a lengthy explanation for upholding the mayor’s veto. Commissioner Ken Russell, whose district includes the property, also voted in favor of the mayor’s veto. Commissioners Joe Carrollo, Willy Gort, and Manolo Reyes voted against the veto.

Upholding the veto means the zoning for the property at 240 Southeast 14th Street will remain as a T6-8, which allows the developer to build a eight-story residential project, rather than a 24-story building that nearby residents said would increase traffic and was illegal under the current zoning.

Russell and residents opposed to the upzoning were concerned that it would create a domino effect of “spot zoning”, which would give precedent for the city to upzone properties in the area on a case-by-case basis.

In July, the city commission voted 4-1 to grant Babylon International’s request to upzone the property to 24 stories. The company originally sought approval for 48 stories, arguing the property had been unfairly downzoned when the city adopted Miami 21 in the early 2000s.

Then a week later, Mayor Suarez vetoed the decision. One of the main reasons for his veto was to uphold the Miami 21 zoning code, which took effect in 2010.

“In the ten-year history of Miami 21, there has not been one case of a upzoning of a property that violated the succession of these zoning principles,” Suarez said at the meeting on Thursday.

The property is in the quiet waterfront residential neighborhood of Brickell Bay Drive. Many of the buildings are decades-old, mid-rise condo buildings that pale in comparison to the glitzy high-rises of Brickell Avenue.

Martinez-Celeiro, whose stage name is George Martin, owns the Babylon Apartments. The former building was one of Arquitectonica’s first projects in Miami and was known for its post-modern design. It was also once owned by Ray Corona, an infamous drug dealer who became part of a group known as the Cocaine Cowboys.

Renderings of 400 Biscayne and Kevin Maloney 

Renderings of 400 Biscayne and Kevin Maloney

UPDATED, Sept. 12, 2:50 p.m.: Kevin Maloney’s Property Markets Group and Greybrook Realty Partners closed on a $161.5 million loan for a rental tower they’re planning in downtown Miami.

The partners broke ground on the project, a 49-story, 646-unit building at 400 Biscayne Boulevard, in June. Centennial Bank and Square Mile Capital are the lenders, according to a press release.

400 Biscayne will be part of new apartment brand for PMG. Amenities will include co-working spaces, a gym and fitness studio, pool deck and lounge, smart package lockers and bike storage, as well as a lobby lounge and restaurant.

The tower, with co-living units, will include 51,000 square feet of commercial space and a 22,000-square-foot First United Methodist Church of Miami, which sold the 1.15-acre development site to PMG in early 2018 for $55 million.

Sieger Suarez Architects is designing the high-rise, which will have a mix of studio, one-, two- and three-bedroom apartments on floors 14 to 47. A pool deck would be built on the ninth floor, with a church sanctuary with a separate entrance beginning on the eighth floor, according to the plans.

Andrew Warman, Jonathan Blank and Lowell Plotkin helped arrange the loan. Luis Flores of Saul Ewing Arnstein & Lehr represented the developers.

The building is expected to be completed in 2021.

The Miami Herald first reported the loan.

Brookfield's Ric Clark (right) and RXR Realty's Scott Rechler (Credit: Getty Images and iStock)

Brookfield’s Ric Clark (right) and RXR Realty’s Scott Rechler (Credit: Getty Images and iStock)

Some of the country’s biggest landlords and developers have thrust themselves into perhaps the most contentious national debate: gun control.

Brookfield Property Group’s Ric Clark is among 145 CEOs urging Senate leaders to expand background checks on all guns sales and pass stronger “red flag” laws, which would limit sales to potentially dangerous people.

“Doing nothing about America’s gun violence crisis is simply unacceptable,” the CEOs wrote in the letter, which was shared with the New York Times.

Other prominent real estate figures to sign the letter include RXR Realty’s Scott Rechler and Thrive Capital’s Joshua Kushner, brother of White House advisor and President Trump’s son-in-law Jared Kushner. Brian Chesky of Airbnb, Sarah Friar of Nextdoor, Gary Beasley of Roofstock, Dan Doctoroff of Sidewalk Labs, Yashar Nejati of thisopenspace and Aaron Block of MetaProp also signed.

With $8 billion in annual revenue, Brookfield is one of New York’s biggest property owners with 17.5 million square feet, according to an analysis by The Real Deal. The company did not immediately return a call for comment.

Rechler has spoken out on gun laws before. In February, he joined the CEOs of TOMS shoes, Levi Strauss and Dick’s Sporting Goods in sending a letter calling on the U.S. House of Representatives to pass stricter background checks for gun buyers. “I find it important for CEOs to take a greater level of social responsibility,” Rechler was quoted as saying at the time.

The letter comes a week after Walmart — whose El Paso location was the site of a deadly shooting last month — said it would stop selling certain guns and ammunition, and urged lawmakers to reauthorize a ban on assault weapons. Kroger, CVS, Walgreens and Wegmans have changed their open-carry policies.

Other prominent signatories of Thursday’s letter were the leaders of Twitter, Uber and Levi Strauss. Apple, Facebook, Google, JPMorgan Chase and Wells Fargo were all absent from the list.

The last time big business weighed in on politics was over President Trump’s immigration policy and his response to protests by white supremacists in Charlottesville, Va. At the time, real estate players largely remained silent.

From left: Palazzo della Luna and Palazzo del Sol

From left: Palazzo della Luna and Palazzo del Sol

UPDATED: Sept. 14, 9:00 a.m.: Fisher Island developer Heinrich von Hanau sold two luxury condo units on the exclusive island for a combined price of just over $40 million this week.

S&M Real Estate Empire LLC, which is managed by Joy Weaver, paid $23 million for unit 6801 at Palazzo della Luna. The four bedroom-penthouse has 6,794 square feet, according to its website. The sale equates to $3,385 per square foot.

Earlier this week, Seabreeze Trust, which lists attorney Elaine M. Bucher as trustee, bought 7095 at Palazzo del Sol for $17.15 million.

Dora Puig, broker and owner of Luxe Living Realty, represented the developer in both deals.

The 10-story Palazzo Del Sol has 43 units on ritzy Fisher Island, which is consistently ranked as America’s wealthiest zip code. The island can only be reached by ferry, boat or helicopter.

Palazzo Del Sol was completed in 2016 as the first condominium project to be built on the island since 2007. The tower was designed by Kobi Karp, with landscaping by Enzo Enea. The 50-unit Palazzo Della Luna was completed this year and just started closings. It was also designed by Karp.

Other residents at Palazzo Del Sol include billionaire and former Hasbro CEO Alan Hassenfeld, Yard House founder and CEO Steele Platt, and former Formula One driver Enrique Bernoldi.

In December, PDS Development secured a $50 million bridge loan to finance its two luxury Fisher Island condominium projects.

Correction: A previous version of this story misrepresented how many units are at Palazzo Della Luna.

South Florida Logistics Center

South Florida Logistics Center

Fueled by growth in the e-commerce sector, South Florida’s industrial market isn’t showing signs of slowing down. And when Amazon is the tenant, it’s a seller’s market for a company looking to unload that property.

Florida East Coast Industries subsidiary Flagler Global Logistics sold its Amazon-leased 117,235-square-foot warehouse to JPMorgan Asset Management.

The building and parking lot at 3200 Northwest 67th Avenue in Miami sold for $33 million.

Property records show SFLC Building 9 LLC was the seller. The buying entity was SFLC Industrial Owner 9 LLC.

Amazon signed a lease with Flagler Global Logistics in 2016. The property is northwest of Miami International Airport with nearby access to the Palmetto Expressway and Dolphin Expressway.

The sale to JPMorgan isn’t the first for Flagler Global Logistics.

In 2016, it sold five buildings at the 200-acre industrial development for $209 million to the JPMorgan fund. Last November, it sold a 9.2-acre property within the same South Florida Logistics Center for $31.1 million.

FECI is backed by the investment management firm Fortress Investment Group, which has more than $6 billion of equity invested in real estate, transportation and infrastructure assets and more than $39 billion assets under management, according to its website.

FECI is also the parent company of Brightline, which rebranded earlier this year as Virgin Trains.

Bruce Weiner

Bruce Weiner

Jeffrey Soffer’s Fontainebleau Development brought on former Turnberry CEO Bruce Weiner as chief operating officer of residential development.

Weiner was CEO of Turnberry Limited, the residential branch of Turnberry Associates, from 1997 to 2010, he said. In March, brother and sister Jeffrey and Jackie Soffer officially split up their interests in Turnberry Associates, and co-CEO Jeffrey left to launch Fontainebleau Development, taking with him a number of properties.

Weiner will focus on the company’s luxury condo development, which for now, only includes the 54-story, 154-unit Turnberry Ocean Club project. It’s expected to top off next week and be completed in the spring of next year.

“We probably have three other projects in design and development stage,” Weiner said. “We’re getting ready to bring those to market at the right time, all in South Florida.”

Earlier this year, One Sotheby’s International Realty, which was handling sales and marketing of Turnberry Ocean Club in Sunny Isles Beach, parted ways with Soffer on the project. Sales are at roughly 60 percent and are now handled in-house, Weiner said.

Fontainebleau Development recently secured a $460 million refinance of Turnberry Ocean Club.

After Weiner left Turnberry in 2010, Jeffrey Soffer filed a lawsuit against Weiner and other companies. He accused Weiner of taking a deal to manage the development of the St. Regis Bal Harbour and violating his fiduciary duties to Turnberry in the process, according to the South Florida Business Journal. A judge dismissed the lawsuit in 2014.

“Jeffrey and I have certainly worked out our differences,” Weiner said, adding that they have “always had a great relationship.”

Soffer said that Weiner’s “industry knowledge, strong leadership skills and connections” will enhance the company’s residential projects, according to a press release announcing the hire.

Weiner has more than 40 years of experience, and has been behind the development and sales of 19,000 luxury condos and hotel-condo units valued at more than $20 billion, according to the release. That includes a seven-year stint of working for Jules and Eddie Trump when they were developing Williams Island.

James Harpel and The Bristol in West Palm Beach

James Harpel and The Bristol in West Palm Beach

Edgewater developer James Harpel snagged a condo at The Bristol in West Palm Beach for $7.9 million.

Harpel, who is a partner at Eastview Development, bought unit 1204 at the luxury condo development at 1100 South Flagler Street from the development group.

Harpel was the managing partner of Harpel Advisory Company, a hedge fund manager, and the managing partner of Century Capital Corporation, a $2 billion registered investment adviser. He is also a partner at Palm Beach Capital, a private equity firm that partners with management teams in middle market buyouts, recapitalizations and growth equity investments.

Eastview Development was a co-developer of Biscayne Beach, a high-end condo in Miami’s Edgewater neighborhood.

Flagler Investors, led by Al Adelson and Gene Golub, developed the The Bristol, a 25-story, 69-unit luxury tower at 1100 South Flagler Drive. Units range from 3,600 square feet to 14,000 square feet.

The project is the first new luxury condo building in West Palm Beach in the past decade. The development group has sold almost all of the units and was able to attract estate owners in the town of Palm Beach who were looking to downsize, according to Adelson.

Buyers include beauty mogul Sydell Miller, who closed on a full-floor penthouse for $42.6 million in March. Her Palm Beach home is reportedly under contract to sell for more than $110 million.

This month, the development group sold unit 1404 at The Bristol for $10.7 million to Peter Geoffrey Somers of Jersey in Britain’s Channel Islands. The group also sold a unit to the owner of a New Jersey car dealership who paid $10.7

Regency Hotel Miami (Credit: Google Maps)

Regency Hotel Miami (Credit: Google Maps)

A company tied to Miami investor Orlando Padron has acquired a 3.8-acre hotel property near Miami International Airport and David Beckham’s planned soccer and retail complex.

OPB Capital Group Fund 1 LLC paid $25.8 million for the Regency Miami Hotel at 1000 Northwest 42nd Avenue. The seller was 10 Le Jeune Inc., led by Jose Vazquez.

Banesco USA provided the buyer with a $21 million loan.

The 176-room hotel sold for nearly $147,000 per key. It last sold for $10 million in 2003.

Raymond Fernandez of Florida Capital Realty brokered the off-market deal. Fernandez said the property is one of the largest parcels left in the area. Roughly 350 units could be built on the land surrounding the hotel, he said.

Fernandez said the hotel, which was built in the 1980s, will remain open.

Just south of the property, also on Le Jeune Road, Sergio Pino’s Century Homebuilders Group and Pactia USA are building 850 Le Jeune, a mixed-use project with about 230 apartments, and 200,000 square feet of office space on a 4-acre site.

It’s also near the Melreese Country Club, where David Beckham and Jorge Mas’ development group is planning to build Miami Freedom Park. That project would be anchored by a 25,000-square-foot soccer stadium for the group’s Major League Soccer team, as well as more than 1 million square feet of retail and office space and about 750 hotel rooms.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

 
Rendering of the project (Credit: Point Publications)

Rendering of the project

Cordish Companies and partner plan redevelopment of casino and horse racing track in Pompano Beach. Pompano Beach city commissioners granted the first approval to a land-use change that would more than triple the maximum number of residential units on the Isle Casino Racing Pompano Park. [TRD]

 

FPL buys 109 acres near Homestead for natural gas facility. Florida Power and Light bought 109 acres near Homestead for $9.8 million where its affiliate natural gas company plans to build a nitrogen gas plant. [TRD]

 

Turnberry Ocean Club condo tower scored a $460 million refinance. Jeffrey Soffer’s Fontainebleau Development secured a massive refinance of its Turnberry Ocean Club, a 54-story condo tower under construction in Sunny Isles Beach. JPMorgan Chase and Mack Real Estate Credit Strategies are the lenders. [TRD]

 

Forever 21 is planning to file for bankruptcy as soon as Sunday. The retail chain could close as many as 700 stores in such an event, bringing an end to months of hemorrhaging money while it struggled to secure a loan. [WSJ]

 
Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson Development scoops up Toys “R” Us property in Doral. The University Park, Florida-based real estate investment company purchased the parcel to a Toys “R” Us and Babies “R” Us in Doral for $5.3 million from Pacific Equities Capital Management. [TRD]

 

Billionaire Ken Griffin’s massive Palm Beach holdings now total $350M. Hedge funder Ken Griffin’s recent $99 million purchase of a Palm Beach estate highlighted his insatiable appetite for ultra-luxury homes, but it also added to his growing collection of properties in one of South Florida’s glitziest towns. [TRD]

 

Amid growing demand for university housing, Adam America buys a multifamily complex near FIU. Developers are increasingly seeking to build new upscale student living next to Florida International University as demand for that kind of housing grows. [TRD]

 

Adam Neumann (technically) lost $10 billion. The WeWork founder’s 22 percent stake was reportedly pegged as high as $14 billion earlier this year. But after a rocky path to the company’s IPO, its valuation has plummeted, and Neumann’s stake is now worth closer to $3 billion. [Bloomberg]

 

Low rates are increasing loan enthusiasm. Mortgage applications jumped 2 percent last week, compared with the previous week, and remained 69 percent higher than the same week last year. Interest rates are also down slightly; the average contract interest rate for a 30-year fixed rate mortgage with conforming loan balances dropped to 3.82 percent from 3.87 percent over the week. [CNBC]

 

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

A fraudulent deed complicated Anbang’s $6 billion hotel sale. Anbang has sold its U.S. hotel portfolio to the highest bidder at a price north of $5.8 billion, but a last-minute wrench was thrown into the deal when the Chinese insurance conglomerate discovered six of the properties’ deeds were fraudulently transferred to limited liability companies, the Wall Street Journal reported. [TRD]

 
The Wynwood property and David Edelstein

The Wynwood property and David Edelstein

The owner of W South Beach buys up more land for Wynwood residential project. TriStar Capital’s David Edelstein paid $6.5 million to add a chunk of land to his growing assemblage along a booming stretch of Wynwood. He plans to develop the site into a residential building with about 365,000 square feet of space and up to 370 units. [TRD]

 

SoftBank is looking to use its leverage to call off WeWork’s planned IPO. SoftBank is urging WeWork’s parent company to shelve its IPO plans as the Japanese conglomerate tries to raise $108 billion for a second Vision Fund. It could struggle to attract major investors if the firm’s initial $100 billion Vision Fund is hurt by a poor performing investment in WeWork. [TRD]

 

Palm Beach condos shut off power as Hurricane Dorian approached. Some Palm Beach condominium buildings turned off their power after an evacuation was issued from Hurricane Doraine, leaving residents to endure miserably hot conditions. [Palm Beach Daily News]

 

Compiled by Keith Larsen

Greg Pinkalla and ORA Flagler Village Apartments (Credit: Google Maps)

Greg Pinkalla and ORA Flagler Village Apartments (Credit: Google Maps)

Amid a growing influx of high-end apartments in Fort Lauderdale, a company tied to a former Silicon Valley executive bought a new 292-unit apartment complex in Flagler Village for $92 million.

Fairfield Residential sold the property at 673 Northeast Third Street to a company tied to Lumin Chang, who was previously an executive with Wyse Technology, for $315,000 per unit. The buyer secured a $55 million loan from TIAA to acquire the property, records show.

ORA Flagler Village Apartments has one-bedrooms starting at $1,725 a month, according to Apartments.com.

Amenities include a game room, social lounge, dog wash station and a heated pool with cabanas.

Fairfield Residential purchased the property in 2015.

Wyse Technology is a manufacturer of cloud computing systems that was purchased by Dell in 2011. According to the Las Vegas Sun, a company tied to Wyse purchased two apartment complexes in Las Vegas for more than $90 million in 2012.

A number of large-scale apartment developments are going up in Flagler Village. Mill Creek is building a 24-story, 350-unit luxury apartment building called Modera 555 at 812 Northeast Fifth Avenue.

According to late 2018 data from Colliers International South Florida, there are 1,889 apartments at five major Flagler Village developments set for completion in 2019 and 2020.

In May, CalSTRS acquired Fairfield Residential from Brookfield Asset Management.

In November, Fairfield Residential sold Siena Apartments, a 292-unit apartment community at 8080 Northwest 10th Court in Plantation to American Landmark for $62 million. It also sold two apartment complexes, one in Tampa and another in Sunrise, in October to Priderock Capital Partners for $98 million.

The company is currently building a six-story apartment building, the Fairfield Pompano, at 601 North Federal Highway in Pompano Beach, which will have 327 rental units along with ground-floor commercial space.

Rendering of the project (Credit: Point Publications)

Rendering of the project 

Pompano Beach city commissioners granted the first approval to a land-use change that would more than triple the maximum number of residential units on the Isle Casino Racing Pompano Park.

Reno, Nevada-based Eldorado Resorts is in a joint venture to redevelop the 223-acre Pompano Beach property with Baltimore-based Cordish Companies, the developer of the Seminole Hard Rock Hotel & Casino in Hollywood.

Eldorado, a casino entertainment company with 26 properties in 12 states, acquired the Pompano Beach property as part of its $1.7 billion purchase of Isle of Capri Casinos in 2017.

At their meeting Tuesday night, Pompano city commissioners unanimously approved the first reading of a proposed land-use plan amendment that would increase the allowable number of multifamily units on the casino property to 4,100 from 1,300. The change would also more than double the allowable office space on the property to 2 million square feet from under 1 million square feet.

But the allowable amount of commercial and commercial recreation space would be reduced to 1.3 million square feet from 2.58 million square feet.

The project would transform the casino and racing park into an urban village called Live! Resorts Pompano. Cordish has a nationwide portfolio of mixed-use developments that bear the Live! Brand.

Holland & Knight attorney Debbie Orshefsky, who represents Cordish, said the developers are aiming to attract a major corporate headquarters to the office component of their mixed-use development.

“This is probably the largest and most significant redevelopment project the city has seen in the last 10 years,” said David Recor, the city’s director of development services.

If both Broward County and the state Department of Economic Opportunity approve the land-use plan amendment, city commissioners would make their final decision by voting on a second reading of the amendment, likely early next year.

City commissioners also approved a rezoning of the Isle Casino property that Cordish and Eldorado had proposed. They switched the zoning to “planned commercial\industrial district” from a mix of three other zoning designations, including “commercial recreation.”

“This is a five-, seven- or 10-year undertaking,” Abraham Rosenthal, senior development director of Cordish, told commissioners at their meeting Tuesday night. “We don’t have a definitive site plan … The master plan will follow once we have planning and zoning in place.”

Almost no one at the sparsely attended city commission meeting spoke against the redevelopment. Pompano Beach vice mayor Barry Moss, who praised the project, said he was “absolutely flabbergasted by the lack of controversy.”

Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson CEO Randy Benderson and 1635 Northwest 107 Avenue

Benderson Development bought another former Toys “R” Us property in South Florida.

The University Park, Florida-based real estate investment company purchased the parcel to a Toys “R” Us and Babies “R” Us in Doral for $5.3 million from Pacific Equities Capital Management, The Real Deal has learned.

The 20,270-square-foot property at 1635 Northwest 107 Avenue is part of a two-parcel former Toys “R” Us and Babies “R” Us property. The deal equates to $261 per square foot, records show.

In December, Benderson paid $8.5 million for the other parcel of the Toys “R” Us in Doral. The 44,542-square-foot building at 1645 Northwest 107th Avenue sold for $191 per square foot.

Both sides of the deal were brokered by Alex Rich of One Investment Group.

Rich said that Benderson plans to lease out to the property, but he said he is unsure whether the investor will seek a single tenant or multiple tenants.

Benderson quickly started acquiring Toys “R” Us properties after the retailer declared bankruptcy last year. In December, it paid $6.5 million for a former Toys “R” Us building in Palm Beach Gardens. It also purchased a former Toys“R” Us in Plantation at 8101 West Broward Boulevard for $7.8 million.

Last July, Toys “R” Us announced it brought on New York-based Raider Hill Advisors to help sell off 284 stores, distribution centers and other properties across the country.

In August, Chevy dealer Arnaldo Bomnin paid $25 million for a Toys “R” Us property at 8325 South Dixie Highway in Miami, near Dadeland Mall.

Rendering of Turnberry Ocean Club and Jeffrey Soffer

Rendering of Turnberry Ocean Club and Jeffrey Soffer

Jeffrey Soffer’s Fontainebleau Development secured a massive refinance of its Turnberry Ocean Club, a 54-story condo tower under construction in Sunny Isles Beach.

JPMorgan Chase and Mack Real Estate Credit Strategies are the lenders on the $460 million loan, which closed Tuesday, according to Commercial Observer. It is a five-year, floating-rate loan.

In June 2017, nearly a year after breaking ground on the 154-unit tower at 18501 Collins Avenue, Soffer closed on a $259 million construction loan from Bank OZK.

The building is about 60 percent sold and expected to top off next week, according to Fontainebleau Development. It will be completed by early April.

In March, Soffer split from Turnberry Associates to form Fontainebleau Development after 25 years of working alongside his sister and company CEO Jackie Soffer. In addition to Turnberry Ocean Club, Jeffrey’s new firm is the sole owner of Fontainebleau, JW Marriott Turnberry Miami, Turnberry Isle Marina, and The Big Easy Casino in Hallandale Beach (formerly known as Mardi Gras Casino).

Once completed, Turnberry Ocean Club will have 70,000 square feet of amenities on six floors, a sky club with two swimming pools and two spas, a fitness and spa level, and a dining level.

Newmark Knight Frank’s Dustin Stolly, Jordan Roeschlaub, Nick Scribani, Chris Kramer and Brett Wilburn arranged the loan for the developer. [CO]Katherine Kallergis

Bond’s Mary Meeker, Nextdoor's Sarah Friar and the Nextdoor app (Credit: iStock)

Bond’s Mary Meeker, Nextdoor’s Sarah Friar and the Nextdoor app (Credit: iStock)

A social networking platform aimed at connecting neighborhood residents has closed a $170 million funding round with its latest cash infusion.

San Francisco-based Nextdoor secured another $47 million technology investment firm Bond, the tech investment firm founded by former Kleiner Perkins partner Mary Meeker. That closes out its $170 million growth round, the company announced Tuesday.

Meeker, who raised $1.25 billion for Bond’s growth fund in April, was then named to the board of Nextdoor. The company says it’s in over 247,000 neighborhoods in 10 countries, including the United Kingdom, Germany, France and Australia.

The latest funding comes four months after Nextdoor raised $123 million from Riverwood Capital. Benchmark, Tiger Global Management and Kleiner Perkins are among other investors.

As of May, the company had a valuation of $2.1 billion. Nextdoor, which markets itself as a “private social network for your neighborhood,” allows residents to connect with each other for safety tips, events and other neighborhood functions. The service is free to users, but real estate agents and other home service providers can buy ads on the platform.

10726 Southwest 7 Street, Dvir Cohen Hoshen and Omri Sachs (Credit: Google Maps)

10726 Southwest 7 Street, Dvir Cohen Hoshen and Omri Sachs (Credit: Google Maps)

Developers are increasingly seeking to build new upscale student living next to Florida International University as demand for that kind of housing grows.

Now, Adam America Real Estate has acquired a 36-unit multifamily development near the campus in Sweetwater for $20 million.

The New York-based real estate investment firm paid $555,555 per unit for the properties at 10726 Southwest 7 Street, records show. The seller was Steef and Rogelio Foch of Hialeah Gardens.

Bank Leumi provided a $12 million acquisition loan on the 1.7-acre property, which was last purchased in 1990 for $900,000.

The collection of multifamily properties is directly in front of Florida International University, which has an undergraduate enrollment of close to 50,000 students.

Global City Development is planning to build a 400,000-square-foot luxury student living project with Toll Brothers next to FIU, which will have 293 units and 1,086 beds.

Adam America was founded by Dvir Cohen Hoshen and Omri Sachs in 2009. The company focuses on multifamily properties in New York. Its development portfolio includes nearly 15 projects with over 1,800 apartments, according to its website.

Ken Griffin over the island of Palm Beach

Ken Griffin over his Blossom Way properties in Palm Beach

UPDATED, Sept. 12, 1:30 p.m.: Hedge funder Ken Griffin’s recent $99 million purchase of a Palm Beach estate highlighted his insatiable appetite for ultra-luxury homes, but it also added to his growing collection of properties in one of South Florida’s glitziest towns.

The deal brings the Citadel founder and CEO’s total investment in Palm Beach — an 18-mile long barrier island — to at least $350 million.

Rendering of the Griffin wing

Rendering of the Griffin wing

Citadel is headquartered in Chicago but Griffin has strong ties to South Florida. He is a Daytona Beach native, and has donated $20 million to the ongoing expansion and renovation of the Norton Museum of Art in nearby West Palm Beach. His gift, from the Kenneth C. Griffin Charitable Fund, easily made him the largest donor to the museum, which focuses on American, European and Chinese art.

In South Florida, Griffin also paid $60 million for two penthouse units at Faena House, the ultra-luxury condo building that developer Alan Faena, backed by Ukrainian-born American billionaire Len Blavatnik, built in Miami Beach. That’s besides his massive home purchases in Manhattan, Chicago and London.

Griffin’s first big play in Palm Beach was in 2012, when he spent $130 million to acquire the four residential properties at 20, 30, 40 and 50 Blossom Way. He now owns all the properties along that street — along with some of the surrounding homes. That total alone gives him 19 acres. Lawrence Moens of Lawrence A. Moens Associates Inc. brokers most of his deals on the island. He could not be reached for comment.

Most of those properties have since been demolished. While his plans are unknown, Griffin could likely build a mega mansion on the land.

After that purchase seven years ago, he acquired another house on Blossom Way for $15.2 million, and got his plans approved for a single-story house on the 11.5 acres of land. But that was just an appetizer.

For the main course, he paid $85 million a few months later for another oceanfront mansion.

The price tag for his $99 million mansion purchase, which was reported last week, is not that unusual for Palm Beach. Over the summer, an unknown buyer paid $105 million for the former estate of Broadway producer Terry Allen Kramer, marking a new record for a single-family home sales on the island. That record is expected to be broken when beauty mogul Sydell Miller sells her estate at 1415 South Ocean Boulevard.

Here’s a look at Griffin’s timeline in Palm Beach:

Late 2012. Griffin made a splash when he spent $130 million on the first Blossom Way assemblage, acquiring the four properties using a Delaware LLC, which allow buyers and sellers to conceal the true buyers. The homes totaled about 6.5 acres of land.

July 2015. Tracy Kamenstein Markin sold the house at 70 Blossom Way for $15.2 million to CPPB Holdings, tied to Griffin. The property added 1.45 acres to Griffin’s holdings at the time.

July 2016. Blossom Way Holdings LLC, a company affiliated with Griffin and his hedge fund Citadel, scored two loans for the land from JPMorgan Chase Bank totaling $114 million. 

August 2016. A month later, Griffin secured approval for a long, 11.5-acre waterfront Palm Beach estate from the town’s architectural commission. The “family-oriented” beach house would have included 33,500 square feet of space on the ground floor and a 22,300-square-foot service basement, two swimming pools, a service building, guard house, and 875 feet of beachfront. The single-story house would have had floor-to-ceiling windows and have been set back nearly 290 feet from South Ocean Boulevard. Griffin would later scrap these plans.

January 2017. The financier ramped up his spending again, dropping $85 million for the oceanfront 4.18-acre estate at 1290 South Ocean Boulevard. At the time, it was the second-highest price in a single real estate transaction in Palm Beach history, a record that has since been broken multiple times. A month later, Griffin closed on a $51.3 million mortgage for the property, also from JP Morgan.

April 2018. The hedge fund honcho shut down construction after budget projections for the house came in “substantially higher than initial estimates,” according to a town official’s email, reported by the Palm Beach Daily News. In its place, Griffin is reportedly planning to build a new property, although no plans have been filed.

May 2018. Griffin pays $20.25 million for the estate at 10 Blossom Way, adding nearly 2 acres to his holdings.

April 2019. In April, the town of Palm Beach approved the demolition of the lakefront house at 1285 South Ocean Boulevard, according to Palm Beach records.

September 2019. McCourt sold his 18,452-square-foot oceanfront estate at 60 Blossom Way to Griffin’s Providencia Partners LLC. The mansion was built in 2008, and has eight bedrooms, pools, a separate dining pavilion, and hardwood and marble finishes. It sits on 3.6 acres of land.

NextEra Energy CEO James Robo and the property off the Florida Turnpike at Southwest 261st Street (Credit: Facebook and Google Maps)

NextEra Energy CEO James Robo and the property off the Florida Turnpike at Southwest 261st Street (Credit: Facebook and Google Maps)

UPDATED, Sept. 12, 12:26 p.m.: Florida Power and Light bought 109 acres near Homestead for $9.8 million where its affiliate natural gas company plans to build a nitrogen gas plant.

FPL, a subsidiary of NextEra Energy, bought the two parcels in south Miami-Dade County for nearly $90,000 per acre from Marie Charbonneaux Trust, records show. The property sits just off the Florida Turnpike at Southwest 261st Street and is currently farmland.

The company’s affiliate, Florida City Gas, submitted plans to use the property to store liquified nitrogen gas in three storage tanks of about 90,000 gallons each, according to a petition with the county. The company said there is a chance the facility will conduct liquefaction in the future, which is the process of turning natural gas into a liquid.

Florida City Gas is a natural gas distribution company serving about 110,000 residential and commercial natural gas customers in Florida’s Miami-Dade, Brevard, St. Lucie, and Indian River counties.

In a statement, FPL said it is “always planning ahead” to meet the needs of its customers, and that it routinely buys land “that we believe would help us meet those needs.”

FPL is an active acquirer of land in South Florida. In June 2018, the company paid $10 million for a 400-acre site in the western edge of Palm Beach County that it planned to use for a solar farm.

Homebuilders like Lennar and D.R. Horton are increasingly buying land in south Miami-Dade County, as land is more affordable in the city’s urban core. Last month, D.R. Horton paid $11.5 million for 25.4 acres in Florida City.

CBRE tri-state CEO Mary Ann Tighe recalls running into Larry Silverstein on the evening of Sept. 11, 2001 and rebuilding Lower Manhattan following the terrorist attacks during a recent interview with The Real Deal‘s Hiten Samtani.

Denise Rubin with the Aventura skyline

Denise Rubin with the Aventura skyline

Denise Rubin and her Yorkie are heading to Coldwell Banker.

Rubin, of the Denise Rubin Group, will bring her penchant for brightly colored high-end fashion, as well as Mercedes, her Instagram-famous pooch with 16,000 followers, to Coldwell Banker’s Aventura office. She was most recently with Berkshire Hathaway HomeServices Florida Realty in Aventura.

The longtime South Florida realtor who claims to have completed about $50 million in sales last year decided to leave after Berkshire Hathaway HomeServices merged its Florida Realty office into Berkshire Hathaway HomeServices EWM’s office in Aventura.

Rubin, who first came to Florida in 1979 from New York, said she was recruited by other brokerages in the area, but said she was attracted by the international reach of Coldwell Banker, which has 3,000 offices in 49 countries and territories.

“I prefer to be with a brand that is all over,” said Rubin. “All my clients, they say that is a good name. We spoke to someone in Mexico [and] they said, ‘Oh, Coldwell Banker.”

Rubin focuses on the high-end luxury condo and home market in Aventura, Sunny Isles and Bal Harbour area. She adds, however, that she lists properties from South Beach to Palm Beach.

In June, Coral Gables-based EWM Realty International joined the Berkshire Hathaway HomeServices network. It was a lateral move for EWM, which was purchased in 2003 by HomeServices of America Inc., the parent company of Berkshire Hathaway HomeServices.

In The Real Deal’s most recent ranking of top brokerages in Miami-Dade County, EWM was No. 1 with $1.49 billion in closed sales volume between September 2017 and September 2018.

Earlier this year, the Zeder team, led by Judy Zeder, left EWM to join the Jills of Coldwell Banker, and they are now known as the Jills Zeder Group.

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

Anbang’s Andrew Miller with Fairmont Chicago and JW Marriott Essex House on Central Park South (Credit: Wikipedia)

It might have been one of the biggest heists of all time.

Anbang has sold its U.S. hotel portfolio to the highest bidder at a price north of $5.8 billion, but a last-minute wrench was thrown into the deal when the Chinese insurance conglomerate discovered six of the properties’ deeds were fraudulently transferred to limited liability companies, the Wall Street Journal reported.

The deal with the buyer, South Korea’s Mirae Asset Global Investments, was due to close last month but was delayed due to fake deeds that transferred the ownership of six of the properties to unidentified limited liability companies. (One was reportedly called Andy Bang LLC.)

The fraudulent transfers were discovered as part of a routine search and sources told the Journal that Anbang had no knowledge of the transactions. The six properties found with fake deeds were all located in California.

Anbang, which has been selling off its holdings in the U.S. since its former chairman was sent to prison last year, began accepting bids for its hotel portfolio earlier this spring. Other bidders included Brookfield Asset Management, Fortress Investment Group and Blackstone Group. The Waldorf Astoria in New York, which is also owned by the insurer and is partly being converted into condos, was not included in the sale. [WSJ] — Erin Hudson

Softbank CEO Masayoshi Son and WeWork CEO Adam Neumann (Credit: iStock and Getty Images)

Softbank CEO Masayoshi Son and WeWork CEO Adam Neumann (Credit: iStock and Getty Images)

SoftBank has been WeWork’s biggest backer, pouring more than $10 billion into a ballooning startup that has attracted increasing skepticism. Now, the market’s frigid reception of WeWork’s IPO is putting the companies’ relationship to a test.

SoftBank is urging WeWork’s parent company to shelve its IPO plans as the Japanese conglomerate tries to raise $108 billion for a second Vision Fund. It could struggle to attract major investors if the firm’s initial $100 billion Vision Fund is hurt by a poor performing investment in WeWork.

Even though WeWork’s IPO could technically proceed without SoftBank’s blessing — its CEO Adam Neumann currently holds a majority vote of the board — the company’s largest investor has leverage to get its way.

In addition to holding a 29 percent stake in the company, and a member on WeWork’s board, SoftBank has yet to release a $1.5 billion commitment to WeWork. That cash infusion is due April 2020, and is dependent on WeWork not going into default. It would also provide much-needed funding for its growth plans, according We Company’s IPO filing to the U.S. Securities and Exchange Commission last month.

Another factor is WeWork’s $1.6 billion Asia business, in which SoftBank played a key role in establishing, and where it has entered into joint ventures in China, Japan and the Pacific region. SoftBank holds a 50 percent stake in the Japan entity, a 40 percent stake in the Pacific entity and a minority stake in the China entity, alongside Hony Capital and Trustbridge.

In the Japan and Pacific agreements, WeWork is barred from issuing dividends without SoftBank’s consent. In its SEC filing, WeWork acknowledged that “a significant part of our international growth strategy and international operations will be conducted through joint ventures, and disputes with our partners may adversely affect our interest in these joint ventures.”

SoftBank also funds 99.99 percent of WeWork’s venture capital firm, the Creator Fund, and has committed to issuing $180 million, but has so far deployed only $50.7 million.

WeWork and SoftBank declined to comment.

WeWork has faced increasing scrutiny as investors question whether its business model – renting office space and subleasing it at a premium — will be durable during an economic downturn. If the IPO does proceed, WeWork needs to raise at least $3 billion to unlock a $6 billion commitment from the major banks underwriting the event.

Last month, investors bristled at some of WeWork’s business practices and priorities. Those included a $5.9 million payment to buy the rights of the word “We” from CEO Adam Neumann, and the fact that the company would have an all-male board. WeWork has already shown that it is willing to make some changes. Last week, it announced that a woman had been appointed to the board, and that Neumann would return the payment for the word “We.”)

For now, it remains to be seen whether SoftBank’s outward messaging can pressure WeWork to postpone its public offering. After news broke Monday of SoftBank’s intentions, CNBC later reported that WeWork remained steadfast in its intention to push ahead with an IPO roadshow as soon as next Monday.

“Public pressure is still an important validator of the company,” said Kevin McNeil, an analyst with Fitch Ratings. He added that SoftBank’s “private influence is still a factor.”

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day. Please send any tips or deals to tips@therealdeal.com.

This page was last updated at 5:30 p.m.

 

Jorge Pérez’s Related Group plans to build a new 160-unit apartment building right along the Miami River. The project, known as The Gallery on the River, will sit at 401 Northwest North River Drive and will cost $44.5 million, according to a memo filed with the Miami-Dade County. [TRD]

 
14900 Northwest 22nd Court with Jonathan De La Rosa and Ben Silver

14900 Northwest 22nd Court with Jonathan De La Rosa and Ben Silver

Opa-Locka warehouse near Amazon distribution warehouse sells for $8 million. The owner of Ameriworld, an e-commerce fulfillment company, sold a four-building industrial warehouse in Opa-Locka amid rising demand for affordable industrial space in Miami. [TRD]

 

Jeffrey Soffer wants to expand the Fontainebleau Miami Beach. Soffer is seeking to add a new building that will house more ballrooms and a 500-space parking garage. [TRD]

 

The developer who set a spec mansion record in Palm Beach scored a big profit on his latest oceanfront flip. Maryland car dealer Jack Antwerpen and his wife paid $18.5 million for a waterfront mansion in Gulf Stream, north of Delray Beach. [TRD]

 

From left: Stewart’s Frederick Eppinger, FTC’s Joseph Simons and Fidelity’s Raymond Quirk (Credit: Getty Images and iStock)

Title insurance’s Big Three are not to be: Fidelity and Stewart call off their planned $1.2 billion merger. The massive merger between Fidelity National Financial and Stewart Information Services that would have turned the country’s “Big Four” title insurers into the “Big Three” is no longer on the table. [TRD]

 

More office landlords are trying to beat WeWork at its own game. Hines Interests is one of the latest landlords to try their hand at co-working, partnering with WeWork competitors Industrious and Convene to launch “Hines Squared” this June. Firms like Boston Properties and Tishman Speyer have taken a similar approach, presenting yet another challenge to the We Company as it prepares for an IPO. [WSJ]

 

More resi firms are getting into mortgages and title insurance. Instant-homebuying company Opendoor became the latest example of this trend in recent weeks, after both acquiring a title and escrow company and launching a mortgage-lending business. Redfin and Zillow have operated such side businesses for years, both as an extra revenue source and a solution to homebuying’s “last mile” problem. [WSJ]

 

South Florida lost almost 60,000 U.S. residents last year, data shows. About 58,000 U.S. residents left South Florida for other parts of the country between July 2017 to July 2018, according to data compiled by Bloomberg and reported on by the Miami Herald. Only New York, Chicago, and Los Angeles lost more. Bloomberg said part of the reason people are moving away from large cities is due to pricey real estate. [Miami Herald]

 

Government officials are set to testify on Fannie and Freddie. Treasury Secretary Steven Mnuchin will testify before the Senate Banking Committee on Tuesday about the agency’s plans to privatize the mortgage-finance giants Fannie Mae and Freddie Mac. The Treasury report, however, provided no deadlines for the administration to take action on a series of suggestions. [WSJ]

 

Realogy’s stock jumped after it disputed offer by Compass. Realogy’s stock got a boost on Monday, following a weekend of intrigue, rumor and conflicting statements surrounding its legal battle with Compass. [TRD]

 

Compiled by Keith Larsen

The Wynwood property and David Edelstein

The Wynwood property and David Edelstein

TriStar Capital’s David Edelstein paid $6.5 million to add a chunk of land to his growing assemblage along a booming stretch of Wynwood, The Real Deal has learned.

The New York and Miami Beach developer acquired the nearly 22,000-square-foot site at 97 and 101 Northwest 24th Street. Property records show the seller is Abby LLC, led by Larry Hellring.

Ari Dispenza of Central Commercial Real Estate brokered the deal.

The properties include a 4,700-square-foot building leased to FreeDOGm, a dog daycare center. They last sold for $610,000 in 2003.

In all, Edelstein’s assemblage now totals about 95,000 square feet of contiguous land. Property records show companies tied to Edelstein’s TriStar Capital have spent nearly $15 million for lots and buildings on 24th and 25th streets between 2013 and now.

Arquitectonica is designing plans for a residential development on the land, according to Edelstein. He said he’s about two years away from building on the site, but preliminary plans call for a 365,000-square-foot residential building with up to 370 units.

On the same block, other property owners include Redsky Capital, East End Capital and Alex Karakhanian.

TriStar renovated some of the existing buildings that are part of the assemblage. Touzet Studio, an architectural firm, is among the tenants.

“We like the [adaptive reuse] model and could always continue to do that,” Edelstein said.

Edelstein owns the W South Beach, in addition to more land in Wynwood. LeBron James’ Unknwn, a men’s fashion retailer, is expected to open at one of his properties in November.

Last year, Edelstein went under contract to spend $32 million to buy a large assemblage west of his latest purchase with plans to develop into a mixed-use project on Fifth Avenue.

Development is booming in Wynwood, where major players include the Related Group, Sterling Bay, East End Capital and others.

Property Markets Group and its partner Greybrook Realty Partners recently closed on a $46 million purchase of a 1.6-acre assemblage at 2431 Northwest Second Avenue. There, they plan to build an apartment, hotel and retail complex with co-living units.

From left: Stewart's Frederick Eppinger, FTC's Joseph Simons and Fidelity's Raymond Quirk (Credit: Getty Images and iStock)

From left: Stewart’s Frederick Eppinger, FTC’s Joseph Simons and Fidelity’s Raymond Quirk (Credit: Getty Images and iStock)

The massive merger between Fidelity National Financial and Stewart Information Services that would have turned the country’s “Big Four” title insurers into the “Big Three” is no longer on the table.

Stewart announced on Tuesday that the two companies had made the mutual decision to call off their merger after it did not receive the necessary approval from the Federal Trade Commission. Fidelity will pay Stewart a $50 million reverse termination fee.

The FTC voted 3-1-1 last week to issue a complaint about the merger and authorize staff to seek a temporary restraining order and preliminary federal court injunction to stop it from happening. It claimed that the merger would sharply reduce competition in state and local markets.

“Today’s announcement from Fidelity National Financial, Inc. and Stewart Information Services Corporation that they will abandon their proposed transaction is good news for everyone who requires title insurance when purchasing real estate in the United States,” FTC Bureau of Competition director Bruce Hoffman said in a statement. “These customers will continue to benefit from vigorous competition for title insurance underwriting and title information services.”

Thomas Apel, Stewart’s chairman of the board, said in a statement that the company was “disappointed with the FTC’s decision” but remains well-positioned for growth. Representatives for Fidelity did not respond to a request for comment.

Stewart also announced changes to its executive leadership team on Tuesday. Director Frederick Eppinger will become CEO, while current CEO Matthew Morris will become president. Current president John Killea will stay on as general counsel and chief legal officer.

Fidelity had signed an agreement to buy Stewart for $1.2 billion in March 2018, a deal that would have made it the nation’s largest title company by a wide margin.

The firm ranked second on The Real Deal’s list of most active title insurers in New York last year with $4.83 billion in total dollar volume. Stewart came in 12th place in New York with $1.21 billion.

The past few years have been a whirlwind for title insurance agencies in New York thanks to multiple conflicting court rulings over whether strict new regulations on the industry from the Department of Financial Services will remain on the books or be overturned.

Jeffrey Soffer and Fontainebleau Miami Beach

Jeffrey Soffer and Fontainebleau Miami Beach

Nearly 15 years after his family acquired and renovated the Fontainebleau Miami Beach, Jeffrey Soffer wants to expand his trophy resort.

Soffer is seeking to add a new building that will house more ballrooms and a 500-space parking garage. According to a recent memo sent to Miami Beach Mayor Dan Gelber and city commissioners, the addition would be developed on five parcels Soffer affiliate Fontainebleau Florida Hotel LLC owns about one block south of the iconic, Morris Lapidus-designed building.

The site, on Collins Avenue between 43rd and 44th streets, is currently used as a surface lot and is across from Soho Beach House and Four Points By Sheraton Miami Beach. A spokesperson for Fontainebleau Miami Beach declined comment, but City Commissioner Ricky Arriola told The Real Deal that Soffer and his team approached him about two months ago with rough schematics of the proposed structure.

“They have capacity constraints because they are always booked and need more ballroom space,” he said. “At least in concept, I am OK with it.”

On Wednesday, the city commission will discuss whether they should refer Soffer’s proposal to the Miami Beach Planning Board at Arriola’s request.

“My experience has been that getting a place that can hold 500 to 1,000 people for a wedding, a bar mitzvah or a gala is always a pain in the neck,” he said. “The Fontainebleau is one of the few hotels that has ballrooms big enough. I really don’t have an objection to it.”

Soffer’s plan also includes a bridge for pedestrians and cars that will connect the new building to the Fontainebleau property, which also includes the 37-story Tresor Tower built by the previous owner Steve Muss. According to the memo, the bridge will take all valet traffic from the resort off the street.

The Soffer family-led Turnberry Associates paid $325 million for the Fontainebleau Miami Beach in 2005. The same year, the company purchased the surface lot property for $15 million. Turnberry also spent $650 million on gutting and renovating the 1954 historic hotel.

In March, Soffer split from Turnberry to form Fontainebleau Development after 25 years of working alongside his sister and company CEO Jackie Soffer. Jeffrey’s new firm is the sole owner of Fontainebleau, JW Marriott Turnberry Miami, Turnberry Isle Marina, Turnberry Ocean Club and The Big Easy Casino in Hallandale Beach (formerly known as Mardi Gras Casino).

Turnberry and Jackie Soffer are the principal owners of Aventura Mall, the Town Center Aventura and three Aventura hotels. She also is developing an 800-key Miami Beach Convention Center hotel in partnership with Terra Group and David Martin.

At the time of the split, Soffer said Fontainebleau Development would capitalize on the brand-name recognition of the Miami Beach resort by expanding to other markets, a decade after his attempt to build the 3,900-room Fontainebleau Las Vegas went bust following the 2008 crash. After filing for bankruptcy protection, billionaire investor Carl Icahn bought the partially built structure for $156 million in 2010.

777 North Ocean Boulevard in Gulf Stream (Credit: Redfin)

777 North Ocean Boulevard in Gulf Stream (Credit: Redfin)

Maryland car dealer Jack Antwerpen and his wife paid $18.5 million for a waterfront mansion in Gulf Stream, north of Delray Beach.

It’s the most expensive sale in Gulf Stream this year, records show.

Developer Robert Fessler, who set a “spec mansion” record in 2017 with a $49 million sale in Palm Beach, sold the renovated seven-bedroom, 13-bathroom estate at 3777 North Ocean Boulevard to Jack and Dolores Antwerpen. Fessler paid $7.6 million — about $542 a foot — for the roughly 14,000-square-foot house in 2017 and later gut-renovated it. It was built in 1994.

Antwerpen owns Antwerpen Auto Group, a group of 13 dealerships in Maryland, according to its website. The company says it sells the most cars in all of Maryland, as well as the Baltimore and Washington, D.C. markets.

The couple financed the Gulf Stream deal with a $13.9 million loan from Toyota Financial Consumer Solutions.

Candace Friis of the Corcoran Group and Helene Jefferson of Treasure Coast Sotheby’s International Realty were the listing agents. Christy Larrimore of Engel & Voelkers Delray Beach represented the buyer, according to Redfin.

The mansion was on the market for $24.9 million, which means it sold for a nearly 26 percent discount.

Smith and Moore Architects designed the renovated house. It features a 2,900-bottle wine cellar, art gallery, club room, billiards room, fireplace, pool and spa. It also has a five-car garage with six additional covered parking spaces, so the Antwerpens will have plenty of space for their collection. The property features about 100 feet of waterfront.

In May, Boston hedge funder Michael Rashes and his wife Dena bought the home at 2817 North Ocean Boulevard in Gulf Stream for $10.5 million.

Miami will see a big dip in home prices during the next recession, according to reports (Credit: iStock)

Miami will see a big dip in home prices during the next recession, according to reports (Credit: iStock)

Home prices in Miami fell sharply after the financial crisis when buyers and investors took on loads of debt and could no longer meet payments. As another potential downturn approaches, Miami faces similar problems.

Nationwide, Miami has the third-highest risk of seeing a downturn in housing prices during the next recession, according to a new report by Redfin. It tracked the 50 largest U.S. cities’ risk of a housing downturn in the next recession.

The Magic City trails only Riverside, California, and Phoenix as the most likely to see a drop in home prices during a recession, according to the report.

Los Angeles was also among the most at-risk, coming in at No. 8, while New York City was near the middle of the pack at No. 23. Chicago, meanwhile, was one of the least, falling 45th on the list.

The metro area with the lowest risk of a real estate dip during a recession are two Upstate New York cities: Rochester then Buffalo. Number three on the list was Hartford, Connecticut. These areas have less investor activity and more reasonably priced homes, according to a Redfin.

The ranking shows that many of the most at-risk areas are the same ones that saw collapsing housing markets during the Great Recession. In addition to Miami and Phoenix, Las Vegas is also high on the list, at No. 7.

In these areas, buyers are more leveraged and a larger share of the market is dominated by home flippers, according to Redfin. In the past year, 7.5 percent of home sales in Miami were flips, compared to Hartford, Connecticut, which saw was 2.8 percent of all home sales as flips.

Home prices in these markets are also more likely to be artificially inflated since there is a significant amount of investor activity, which drives prices up, according to the report.

14900 Northwest 22nd Court with Jonathan De La Rosa and Ben Silver

14900 Northwest 22nd Court with Jonathan De La Rosa and Benjamin Silver

The owner of Ameriworld, an e-commerce fulfillment company, sold a four-building industrial warehouse in Opa-Locka amid rising demand for affordable industrial space in Miami.

Property records show Alermar II LC, a company owned by Ameriworld CEO Julian Rubio, sold the property for $8 million. The 2.56-acre site includes the 68,000-square-foot warehouse at 14900 Northwest 22nd Court.

The buyer is Esteban Madruga, a primarily multifamily investor.

Benjamin Silver and Sebastian Misiewicz were the listing agents, while Jonathan De La Rosa of Marcus & Millichap represented the buyer.

De La Rosa said the property is a mile from a 1 million-square-foot Amazon distribution center that was recently completed. Due to rising rents, tenants from Hialeah who moved from Doral are now looking to submarkets like Opa-Locka, according to De La Rosa. Rents exceed $12 per square foot.

The market has a 3.7 percent vacancy rate as of the second quarter, according to Marcus & Millichap. De La Rosa said the property sold for below replacement cost.

The building is 97 percent leased with most units in the 750- to 1,000-square-foot range, he said. It has a net operating income of nearly $614,000 a year, according to marketing materials for the property. Ameriworld, the seller’s company, is not a tenant.

Hialeah’s industrial market, like Doral, has seen large transactions. Both cities are also undergoing significant redevelopment into mixed-use projects with apartments, homes, retail and office.

Developer Avra Jain is planning a major adaptive re-use commercial development on about 6 acres of land in east Hialeah.

And in August, Deutsche Bank’s RREEF America paid $178 million for the three-building industrial property at 5801 and 6301 East 10th Avenue in Hialeah, marking South Florida’s largest industrial sale of the year to date.

The Gallery on the River and Jorge Perez of Related Group (Credit: Wikipedia)

The Gallery on the River and Jorge Perez of Related Group (Credit: Wikipedia)

Jorge Pérez’s Related Group plans to build a new 160-unit apartment building right along the Miami River.

The project, known as The Gallery on the River, will sit at 401 Northwest North River Drive and will cost $44.5 million, according to a memo filed with the Miami-Dade County. The resolution was pushed forward by the county commissioners at a Miami-Dade Housing, Social Services & Economic Development Committee meeting on Monday.

The Miami development group — best known for its condo projects — is seeking to pay a $400,000 one-time payment and $40,000 in annual rent with 4 percent annual increases. The project will also include 11 affordable housing units.

The property is in front of the popular Garcia’s seafood restaurant and next to the Jack Orr Plaza, a 12-story senior living public housing.

The Next Miami first reported the plans.

Related Group is the latest developer looking to build new apartment projects along the once-blighted Miami River district.

The Chetrit Group is planning to build a mixed-use development at 401 Southwest Third Avenue in Miami that would include 1,678 residential units, 330 hotel rooms, 266,000 square feet of retail and office space, and more than 2,000 parking spaces.

A development group led by Avra Jain is also planning a $200 million mixed-use project at 555 Northwest South River Drive.

Adler Group is also building four towers with a mix of residential, office and hotel uses, as well as roughly 37,000 square feet of retail and a parking garage with a minimum of 1,000 spaces.

Stephen Ross

Stephen Ross ignited a political wildfire when he hosted a ritzy Hamptons fundraiser for President Donald Trump last month that raked in millions. And the Related Companies chair is still feeling the heat — even at his Hudson Yards megadevelopment.

Critics of the Trump administration, outraged over the president’s rhetoric on immigration, quickly denounced Ross and two of his company’s most visible brands: Equinox and SoulCycle. That backlash came swiftly for the 79-year-old real estate billionaire. With members threatening to boycott both gyms, the heads of those companies (and others backed by Ross) have sought to distance themselves from the Related boss and Miami Dolphins owner.

“We believe in tolerance and equality, and will always stay true to those values,” the CEOs of Equinox and SoulCycle wrote in a public joint statement in August. “Mr. Ross is a passive investor and is not involved in the management of either business.”

In his own statement, Ross said his reason for engaging in politics was rooted in a “deep concern for creating jobs.” And he described himself as an “outspoken champion of racial equality, inclusion, diversity, public education and environmental sustainability.”

But as the Aug. 9 event attracted the likes of Trump buddies Richard LeFrak, Steve Witkoff and Steve Roth, among others inside and outside of real estate, the backlash spread to other brands, people and projects backed by Ross and Related.

The national development firm owns a diverse portfolio that includes fund management and specialty businesses ranging from high-end gyms to curtain wall manufacturing. Ross has also backed dozens of companies including Momofuku and Milk Bar through RSE Ventures, a private venture capital firm he co-founded in 2012. And through Vayner/RSE, a partnership with Gary Vaynerchuk, the developer has invested in a multitude of other brands.

Here is a rundown of Ross and Related’s business interests.

$50B

The 78

The total value of assets that Related owns or has under development, including the $25 billion, 28-acre Hudson Yards on Manhattan’s Far West Side. The company is also working on a proposed $7 billion, 62-acre megaproject along the Chicago River known as The 78.

$30+

Through RSE, Ross has backed a network of startups focused on hospitality, entertainment and sports. He bet $19.5 million on &pizza, a chain started in Washington, D.C., and made a $20 million investment in the Australian coffee chain Bluestone Lane to help it expand.

$7.7B

Ross’ net worth as of August 2019, according to Forbes. The Related boss owns several apartments within his company’s new developments, including penthouses at the Time Warner Center and 35 Hudson Yards and a fifth-floor condo at 70 Vestry in Tribeca.

$0

Time Warner Center

The amount Ross paid for his Time Warner Center penthouse, which he took as a “distribution” from Related’s partners on the glitzy mixed-use development in 2006. Ross listed the penthouse for $75 million in July — making it one of the most expensive properties for sale in the city.

1972

The year Ross founded Related with a $10,000 loan from his mother and a focus on affordable housing in New York City. Related has since grown to employ more than 3,000 people, including its CEO, Jeff Blau, with offices around the world.

$5,600

Ross’ Sandcastle

What it cost to attend the Trump fundraiser hosted at Ross’ Sandcastle estate in the Hamptons. A private meeting with the president cost $250,000, according to the Guardian. Ross’ fundraiser, and a second hosted the same weekend by developer Joe Farrell, reportedly raised about $13 million.

$378M

Stephen M. Ross School of Business

The Detroit native is among the biggest donors to the University of Michigan, where he received an accounting degree in 1962. In 2004, Ross donated $100 million to the university’s business school, now named the Stephen M. Ross School of Business.

40 years

The amount of time Ross and Trump have known each other, according to a statement in which Ross tried to defuse the PR nightmare. “While we agree on some issues, we strongly disagree on many others and I have never been bashful about expressing my opinions,” he said.

 



Condo sales dropped during the first week of September, which was interrupted by Labor Day weekend and Hurricane Dorian.

A total of 69 condos sold for $27.5 million in Miami-Dade County last week, a plunge compared to $43 million in sales volume for 123 units the previous week. Condos last week sold for an average price of about $398,000 or $324 per square foot.

The most expensive sale was for a lower penthouse unit at Portofino Tower. Dora Puig represented the seller, while Rita Herrera represented the buyer. It was on the market for 105 days, and sold for more than $1,800 per square foot. It’s the highest sale at Portofino over the last three years and the second-highest in the building, according to the brokers involved.

A unit at Biltmore Parc traded hands for $1.6 million, marking the second priciest condo sale of the week. After about a month on the Multiple Listing Service, unit 201 sold for $720 per square foot. The listing agent was Anniella Tabraue, and Monica Paredes represented the buyer.

Here’s a breakdown of the top 10 sales from Sept. 1 to Sept. 7. Click on the map for more information:

Most expensive
Portofino Tower #LPH2 | 105 days on market | $8M | $1,860 psf | Listing agent: Dora Puig | Buyer’s agent: Rita Herrera

Least expensive
SLS Lux #2103 | 153 days on market | $500K | $594 psf | Listing agent: Daniela Gutierrez | Buyer’s agent: Victoria Cooney

Most days on market
Biscayne Beach #2206 | 692 days on market | $510K | $503 psf | Listing agent: Matias Alem | Buyer’s agent: William Colas

Fewest days on market
Biltmore Parc #201 | 32 days on market | $1.6M | $710 psf | Listing agent: Anniella Tabraue | Buyer’s agent: Monica Paredes

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy CEO Ryan Schneider (Credit: iStock)

Realogy’s stock got a boost on Monday, following a weekend of intrigue, rumor and conflicting statements surrounding its legal battle with Compass.

The company’s stock price jumped more than 11 percent to $5.48. It was a strong day in the market overall, with 20 of 29 real estate stocks The Real Deal follows up on the previous week.

The uptick followed a week of conflicting statements from both firms over a July lawsuit filed by Realogy, which accused Compass of “predatory” poaching and attempts at price-fixing.

In an effort to get the case thrown out, Compass last week claimed Realogy CEO Ryan Schneider of attempting to sell Realogy to Compass — a claim that Schneider said was “simply not true.”

However, the back-and-forth might have helped Realogy’s stock performance, whether investors were responding favorably to reports that Schneider considered selling Realogy, or to the counter report that he wasn’t going to sell.

Realogy declined to comment.