Real Estate News

A rendering of the planned Midtown Delray Beach development (Credit: Hudson Holdings)

The third time’s the charm?

A proposal to redevelop and rehabiliate a historic swath of Delray Beach into a mixed-used development will go to the city commission for the third time, likely in February.

Hudson Holdings has tweaked its Midtown Delray Beach proposal six times over the last four years to appeal to detractors, who include a vocal group of preservationists concerned with the developer’s plan to demolish and relocate some historic structures there, according to the Palm Beach Post.

The city’s Historic Preservation Board rejected the project in December, but Hudson appealed on Tuesday and expects a hearing in front of the commission next month. The board rejected the proposal because of its size, although supports revitalizing the area. Midtown Delray Beach would include retail, condos and an underground parking lot.

Delray Beach has steadily grown over the last two decades with an influx of mixed-use development. The Midtown Delray Beach project site is located where what Hudson co-founder Steve Michael believes will “become a major retail corridor in Palm Beach County,” and would likely be transformative for an area that many in Delray beach, including critics of Hudson’s project, say has historically been underserved. [PBP]  — Dennis Lynch

Oceana Bal Harbour and Eduardo Costantini (Credit: Consultatio USA)

Talk about a stamp of approval.

Developer Eduardo Costantini liked the Oceana Bal Harbour development he owns so much he just closed on one of the units. Property records show Costantini, founder and president of Consultatio USA, paid nearly $9 million for unit 1901S at the 28-story, 240-unit complex at 10201 Collins Avenue.

It was among several recent moves he made to buy and sell condo units, records show. The Argentinian developer also transferred ownership of unit 1201S at Oceana Key Biscayne, back to Consultatio Key Biscayne LLC, an entity that’s tied to Consultatio USA. He paid $5.4 million for the 4,080-square-foot condo in 2016, and just sold it for $7.5 million. The building, a 142-unit development at 350 Ocean Drive, was completed in 2014.

Costantini could not be reached for comment.

Oceana Bal Harbour, which had an estimated $1.3 billion sellout, was completed in late 2016. The oceanfront condo project was designed by Arquitectonica, and features large sculptures by Jeff Koons, which Costantini purchased for $14 million. Piero Lissoni designed the interiors.

The 5.5-acre site was formerly known as the Bal Harbour Beach Club before Consultatio USA purchased it in 2012 for $220 million. A year later, the developer secured a $332 million construction loan for the project from a group of lenders led by HSBC.

President of Make Room Inc. Ali Solis; Michael Liu, Miami-Dade Public Housing Agency & Community Development; Avra Jain, Vagabond Group; Andrew Frey, Tecela Development; Matthew Rieger, Housing Trust Group (Credit: Amanda Rabines)

With all its glimmering waterfront high-rises, South Florida still has a thick cloud hovering over the issue of affordable housing. There is enormous demand from residents, but the supply is not there.

A push for more incentives and subsidies and an effort to retool existing apartment stocks are a few of the potential solutions to increasing the amount of affordable housing. Those were just some of the ideas during Thursday’s forum on the topic, hosted by Make Room Inc.

The event brought together developers, city officials, researchers and reps from nonprofit organizations to talk about the issues circling affordable housing in South Florida.

“It’s really hard to do affordable housing without any help,” said Matthew Rieger, president and CEO of affordable housing developer, Housing Trust Group. “The demand is there. I have a triple-digit waiting list at every affordable housing property that I own,” Rieger said. “Really what I see in my mind is a supply problem.”

Data released by the FIU Metropolitan Center shows 34 percent of renters in Miami-Dade County and 30 percent in Broward County spend more than half of their income on rent and utilities.

In each county, the data reveals more than half of renters are considered “cost-burdened,” meaning 30 percent of their income is being spent on rent and utilities.

When looking at existing rents and asking rents “the gaps are huge,” Ned Murray, co-director of the FIU Metropolitan Center, said. “Once people reach that 30 percent mark they begin to leave.”

On a national level, 11 million households representing about 25 million people are paying half of their income in rent, said Ali Solis, president and CEO of the housing nonprofit. That number is likely to grow to 15 million by 2020.

Real estate experts at the forum agreed, there can be ripple effects on a surrounding community if decent living conditions are not met for low-wage, service-industry workers.

Developer Avra Jain of Vagabond Group, started offering subsidized housing for her staff, after hearing one of her hospitality workers – a single mother – had to take three buses to get to work everyday. The routine often made her late to work.

“I challenge everyone to think that maybe goodwill matters enough,” Jain said. She’s known for her restoration and preservation work on such projects like Miami River Inn and the Vagabond Motel. At the event, Jain said she likes the idea of taking existing stock and renovating it so it can last another 10 to 20 years.

Foreign investment is also a key component to development in the area. The influx has increased housing prices, Murray said.

The fear of having the value of tax credits drop is also an issue. If that happens, it would derail investors from using the Low Income Housing Tax Credit program, established by Congress in 1986. Rieger said he believes it resulted in 20 percent less equity toward affordable housing, last year.

The LIHTC program allows for corporations and banks to offset tax liability by investing directly in affordable housing projects. In short, Rieger calls it a credit on an ultimate tax bill, and one of the largest tools affordable housing developers use.

“We’re capped on income and not capped on expenses,” Rieger said. “But at the end of the day, I’m happy because I get to help people.”

Francis Suarez, the recently elected mayor of Miami, said the city is trying to do its part to spur affordable housing development.

The mayor said he’s working on creative solutions to fight the affordable housing issue. He pointed to some incentives like a measure that grants density bonuses to residential projects that include units designated as workforce and affordable housing.

The mayor also mentioned a recently approved ordinance that reduces the minimum size of micro-units from 400 square feet to 275 square feet.

“[Miami] is a victim of its own success,” Suarez said. “We’re attracting capital from everywhere in the world: Israel, Russia, China, everyone wants to invest in Miami. We’re going to get a flood of people and that’s a problem.”

Aerial view of the site and Ryan Shear

Property Markets Group has closed on the site at 400 Biscayne Boulevard where it intends to build a massive two-phase, mixed-use development, as the company continues to move forward with major new construction projects in South Florida.

The New York developer paid $55 million for the 1.15-acre site and financed the deal with a $35 million loan from Greybrook Realty Partners, its partner on the development. PMG, led by Kevin Maloney and Ryan Shear, went under contract to buy the site from First United Methodist Church last summer.

The first phase will include a 690-unit apartment tower with about 20,000 square feet of commercial, retail and restaurant space and will be part of the developer’s X Social Communities apartment portfolio, according to a press release.

The 400 Biscayne site allows for 1.8 million square feet of development, about 1,150 residential units and unlimited height, pending FAA approval, under its T6-8O zoning. It has 305 feet of frontage along the boulevard.

It was not known when the next phase of construction would begin.

That stretch of Biscayne Boulevard has several projects in the planning or construction phases, including the Zaha Hadid-designed One Thousand Museum and the recently completed Phillip and Patricia Frost Museum of Science. In 2016, Kawa Capital Management bought into the Holiday Inn site nearby at 340 Biscayne Boulevard, which was previously approved for a mixed-use tower.

HFF’s Jaret Turkell and Maurice Habif represented the church and Shear, Evan Schapiro, Matt Ellish and Yechiel Ciment represented PMG.

As part of the deal, the developer will build First United Methodist a new church on the site with a separate entrance.

Amenities under PMG’s new apartment line typically include co-working spaces, fitness studios, communal kitchens, package lockers, bike storage and other millennial-oriented features, like keyless entry. In South Florida, previously announced projects under that brand include X Las Olas, which broke ground this week, and X Miami, previously known as Vice, at 300 Biscayne Boulevard.

The developer has held off on announcing plans for a separate condo development that will be built on the same property as X Miami amid the market slowdown.

Miami River project and Camilo Miguel, Jr.

A month after the Miami River Commission approved Mast Capital’s plan for its 6.3-acre apartment complex on the riverfront, the city’s Urban Development Review Board gave the project a thumbs up.

Mast Capital, which is led by CEO Camilo Miguel, Jr., has a contract to buy a redevelopment site at 1001 Northwest Seventh Street where the company wants to put four buildings that will have a total of 688 one-bedroom and two-bedroom units.

The project, known as Miami River Walk, will also have 2,900 square feet of retail on the northwest side, 1,000 parking spaces and 1,000 feet of riverfront, according to documents submitted to Miami’s planning and zoning department.

The review board approved Miami River Walk 3-0.

Architect Albert Cordoves told The Real Deal that Mast Capital is proposing a structure that is smaller than what can be permitted under Miami 21, which allows for a building with a floor lot ratio of 1.7 million square feet, 946 units and 12 stories. “It is way under the permitted height and way under the permitted number of units,” Cordoves said. “We also created a view corridor of 327 feet.”

The Urban Development Review Board also approved the developer’s request to reduce the number of required parking spaces by 20 percent because Miami River Walk is located in an urban transit zone. Cordoves said he designed the building to fit into the context of the existing neighborhood and the surrounding marine industrial uses.

“It is a very contemporary approach that incorporates marine nautical themes,” Cordoves said. “It also articulates open spaces along a promenade and the Riverwalk.”

The Miami River Commission voted 12-3 in early December to approve Mast Capital’s plan after the firm agreed to remove a “sky lounge,” widen a proposed public riverwalk and create pedestrian paths leading to the riverfront. But Mast Capital backed out of an earlier promise to turn over a slice of open space to the river commission in order to preserve the 327-foot view corridor.

According to Mast Capital, the company is looking to break ground within 10 months and will offer apartments as “market-rate” affordable.

Edie Laquer and the St. Regis Bal Harbour (Credit: The St. Regis)

Edie Laquer is not happy about a lacquer-like coating she had installed in her luxury condo.

The commercial broker-turned-investor filed a lawsuit against Glass-On Solutions and its CEO, David Langley, alleging fraud, negligence, breach of warranty and other counts. The suit alleges that the “liquid glass” protectant damaged floors, marble countertops, walls and other surfaces in her condo at the St. Regis Bal Harbour, 9703 Collins Avenue.

Laquer hired Glass-On in the fall of 2016 to install the liquid glass, relying on Langley’s representations that the products were safe and superior and that the work was under warranty, according to the lawsuit.

What instead happened, Laquer alleges, is that the company’s products and services “resulted in a dangerous and unsafe condition, with the ongoing risk of personal injury, by creating a highly slippery surface.”

Terrace floors in her two units are now peeling, marble countertops are bubbling, a fireplace screen and TV were ruined, among other surfaces in her home, according to the suit. Glass-On and Langley have “failed, refused or been unable to fix the issues and defects with their products and services,” the lawsuit claims.

Laquer and Langley could not be reached for comment. Laquer is seeking more than $25,000 in damages, not including additional interest or costs.

Property records show the former broker paid $6.75 million for units 500 and 502 in 2013.

It’s not the first time Laquer files a lawsuit. In 2015, she settled with Miami Worldcenter Associates over a stake in the mixed-use development that she claimed was promised to her.

Clockwise from top left: Miami’s Nautilus South Beach is for sale, Brown Harris Stevens lines up 30 brokerages for global network, U.S. homebuilder confidence fell slightly in January, and Amazon narrows its HQ2 search to 20 cities.

From TRD NYC: Amazon narrows HQ2 search to 20 cities
Seattle-based Amazon released a list of 20 potential cities where it may build its second headquarters. Amazon’s promised $5 billion investment in construction and 50,000 jobs have had cities across North America scrambling to win the tech giant’s favor. The list includes some of the nation’s biggest cities — New York, Miami and Los Angeles among them — as well as some smaller locales such as Columbus, Ohio and Indianapolis, Indiana. Toronto is the only finalist located outside the U.S. [TRD]

Apple picking a new campus somewhere in the US and expanding data centers
Apple, too, is in search of a new corporate campus in the U.S. The Cupertino, California-based company did not announce the size or preferred location of its new campus, but said it will initially house customer support staff at the new location. Apple also plans to make investments in expanding its domestic data centers. [Reuters]

Skanksa names new CEO of US operations and lays off thousands
Skanksa USA, the American branch of the Swedish construction giant, named Richard Kennedy as its CEO amid a worldwide restructuring that will result in layoffs of about 3,000 employees. Kennedy, who had been president of Skanksa USA’s building unit, succeeds Anders Danielsson, who was named CEO of Skanska AB in December. [TRD]

Brookfield and Onex plan $3.7B bid for coworking firm
WeWork rival IWG, formerly known as “Regus,” is attracting interest from two Canadian private equity firms. Brookfield Asset Management and Onex are planning to bid $3.7 billion for the company, which has almost 3,000 workspace locations worldwide, Reuters reported. [TRD]

Amid concerns over tax law and construction costs, US homebuilder confidence drops slightly
While still near its high point, U.S. homebuilder confidence fell slightly in January, according to the National Association of Home Builders/Wells Fargo. Confidence in the single-family home market fell 2 points from December, when the level was at its highest point since 1999. While the NAHB cited a strong economy and limited supply of available homes as strong point, Bloomberg reported that the new tax law and rising construction costs could pose challenges to homebuilders. [TRD]

CoStar expands into former rival Xceligent’s home turf
Real estate data company CoStar announced a partnership with the Kansas City Regional Association of Realtors, moving into the hometown of Xceligent, its main rival that folded amidst a costly legal battle between the two firms. CoStar will become the “exclusive data, analytics and marketing provider” for the realtors’ group. Xceligent’s bankruptcy caused hundreds to lose their jobs in the Kansas City office. [TRD]

Lawsuit against Zillow claims it conceals Zestimates for some listings
A lawsuit filed in New Jersey accuses online real estate service Zillow of giving preferential treatment to brokerages that have “contracts” with the site by withholding Zestimates for certain listings. EJ MGT LLC, the plaintiff, says Zillow is breaking antitrust laws. A statement from Zillow denies any wrongdoing and states that the company intends to “vigorously defend ourselves against this lawsuit.” [TRD]

Brown Harris Stevens lines up 30 brokerages for global network
Led by Brown Harris Stevens, 30 brokerages around the world are joining together to promote each others listings online. Formerly affiliated with the auction house Christie’s, BHS will now partner with Hilton & Hyland Real Estate in Beverly Hills, Daniel Féau in Paris and London’s Strutt & Parker, among others. “The unique part is that for each listing, the contact is the listing broker themselves,” said co-president Hall Willkie, who added that there are no dues and referral fees for those listing on the network. [TRD]

MAJOR MARKET HIGHLIGHTS

Miami’s Nautilus South Beach for sale, could fetch $180M
The 250-key Nautilus South Beach hotel is for sale, and industry sources say it could sell for as much as $180 million. Quadrum Global paid $61 million for the hotel in 2011 and launched a major renovation. It was designed by Miami Modern architect Morris Lapidus in the 1950s. CBRE has the listing. [TRD]

Chicago courts developers in hopes of revitalizing city-owned warehouses
The Chicago Community Development Commission is looking for developers to reinvigorate two massive city-owned warehouses. The six-story structures were built by the U.S. Army in 1918 and were once the largest concrete warehouses in the world, with 570,000 square feet apiece. The city is offering up the buildings as part of an international design competition sponsored by C40, a coalition of cities looking for sustainable ways to combat climate change. Developers have until May 4 to submit their qualifications to the city. [Chicago Business]

HP’s Houston campus on the market
HP Enterprise is marketing its 2-million-square-foot campus in Houston for sale, and it could fetch an estimated $55 million. Originally the home of Compaq Computers, which HP acquired in 2002, the complex has manufacturing and laboratory space, but after Hurricane Harvey flooded parts of Houston, HP announced it would move its manufacturing operations to Austin and Chippewa Falls, Wisconsin. HP sold a chunk of the campus to Lone Star College System in 2009 amidst a corporate consolidation. [Houston Chronicle]

Apple to lease four-story building in LA’s Culver City
As Apple promises to build a second campus somewhere in the U.S., it is also in talks to expand its footprint in Los Angeles. Sources tell The Real Deal that Apple will lease all of Lincoln Property Co.’s building at 8777 Washington Boulevard in Culver City. The 128,000-square-foot property includes ground floor retail with office space above. HBO was thought to become the building’s sole occupant, but that deal fell through. [TRD]

Amazon leases two more office buildings in Seattle
And as it searches for a home for a second headquarters, Amazon continues to grow in its hometown Seattle. The online retail giant leased two more office buildings in Seattle, adding nearly 350,000 square feet to the 8 million square feet it already controls in the city. Amazon will occupy all 11 floors in the new 9th and Thomas building and 186,000 square feet in the former Pemco Insurance headquarters. [Seattle Times]

Kenneth Harney

It’s a big and confusing question for many homeowners in the wake of the December tax law changes: Are new interest-deductible home equity credit lines (HELOCs) and second mortgages now totally out of reach going forward?

The new law eliminated a long-standing section of the tax code that allowed homeowners to borrow against their equity and use the proceeds for whatever purposes they chose, while deducting interest payments on their federal taxes. That provision of the new tax law took effect Jan. 1, so it’s logical to assume that popular tax-deductible HELOCs no longer will be available.

They’re dead. Right? Not quite! To borrow a phrase from Miracle Max in “The Princess Bride,” the traditional uses of HELOCs may be “mostly dead” — but not all dead.

A close reading of the final language rushed through Congress last month reveals that interest-deductible HELOCs and second mortgages should still be available to homeowners provided they qualify on two criteria: they use the proceeds of the loan to make “substantial improvements” to their home, and the combined total of their first mortgage balance and their HELOC or second mortgage does not exceed the new $750,000 limit on mortgage amounts qualified for interest deductions. (The previous ceiling was $1.1 million for the first mortgage and home-equity debt combined.)

“The key here is (how) you use the proceeds” of the HELOC or second mortgage, Ernst & Young tax partner Greg Rosica told me in an interview. You can’t buy a car anymore. You can’t spend the money on student loans, business investments, vacations or most of the things you used to be able to do. Now, to take deductions on the interest you pay, you’ve got to limit expenditures to capital improvements on your house, or — less likely — buying or building your principal residence.

The reason, said Rosica, a widely recognized expert on real estate tax law, is that although Section 11043 of the new tax law eliminated home-equity debt interest deductions, it left virtually untouched interest deductions for primary home mortgage debt (“acquisition indebtedness”) that is used to buy, improve or construct a new home. As long as you follow the rules on what constitutes a capital improvement — spelled out in IRS Publication 530 — and do not exceed the $750,000 total debt limit, “it is deductible,” said Rosica.

Banks and other lenders active in HELOCs and second-mortgage arenas agree with this interpretation and plan to continue offering home-equity products. Bob Davis, executive vice president of the American Bankers Association, told me “HELOCs will still be in the mix,” despite widespread concerns that they might disappear after the elimination of the home-equity section of the tax code.

Michael Kinane, head of TD Bank’s extensive second-lien product offerings, said in a statement for this column that HELOCs and home-equity loans remain available and popular, whether interest is tax-deductible or not, and can be “the best, lowest cost option for homeowners.” In mid-January, TD’s rates for owners with solid equity and good credit on a $100,000 HELOC were 3.99 percent APR, about half a percentage point below the prime bank rate.

A survey of HELOCs and second-lien lenders active on the LendingTree.com loan-shopping network conducted for this column found a “consensus” that not only will lenders continue to offer such financing, “but more lenders will offer them as home prices [and] values rise,” according to spokesperson Megan Grueling.

Lenders generally won’t advise you on interest deductibility, urging instead that you consult your tax adviser. Also, the final word on interest deductibility will need to come from the IRS. But the attorneys, CPAs and legislative tax experts consulted for this column were unanimous in their belief that the IRS will agree with their interpretation of the law changes.

Bottom line: Despite rampant rumors to the contrary, home-equity-based lending won’t be disappearing anytime soon. Borrowers who want to deduct interest will need to restrict their expenditures to qualified home improvements. Others who simply want to tap into their equity they’ve built up at attractive interest rates and use the money for whatever they choose will be able to obtain HELOCs or second mortgages, just as they did in the past.

And for those owners who now plan to opt for the standard deductions of $12,000 or $24,000, there’ll be no issue at all. Since they will no longer be itemizing, no big deal. They won’t be thinking about interest deductions anyway.

La Quinta (Credit: Wikimedia Commons, La Quinta)

From TRD LA: Wyndham Worldwide Corporation has agreed to pay $1.95 billion for La Quinta Holding’s hotel franchise and management business, further extending its already considerable portfolio of hotels and resorts.

The acquisition includes La Quinta’s 900 managed and franchised hotels, bringing Wyndham to more than 9,000 locations in 75 countries between 21 brands, according to a joint press release.

The deal does not include La Quinta’s real estate assets, which include 315 hotels around the country. La Quinta will spin off those assets into a publicly traded real estate investment trust called CorePoint Lodging Inc.

Wyndham already owns and operates familiar hotel brands including Days Inn, Howard Johnson’s, Super 8, and Ramada.

The company will set aside $240 million to pay taxes incurred in the spinoff. La Quinta CEO Keith Cline has been appointed president and CEO of CorePoint Lodging, which will take effect when the deal completes.

Wyndham will also pay $715 million of La Quinta debt and La Quinta stockholders will receive $8.40 per share.

Blackstone owned La Quinta Holdings prior to 2014, when it took the Texas-based company public. Blackstone previously planned to sell La Quinta.

The acquisition is expected to wrap up in the second quarter.

Richard Kennedy

From TRD NYC: Construction giant Skanska has tapped a new CEO for its U.S. operations, a move that comes as the company faces lackluster profits and undergoes a significant restructuring.

Richard Kennedy has been named CEO of Skanska USA and executive vice president of parent company, Skanska AB, the Sweden-based company announced on Wednesday. He previously served as president of Skanska’s USA Building unit and succeeds Anders Danielsson, who was tapped as president and CEO of Skanska AB in December. Paul Hewins, chief operating officer of Skanska’s building unit, will be taking over Kennedy’s role.

Skanska is shedding some of its less profitable businesses as part of its restructuring, which will result in layoffs of about 3,000 employees, the company said in a separate year-end report on Wednesday. The company reported that its operating profit in 2017 was $657 million, down from the $797 million projected by analysts, the Financial Times reported.

The company indicated on Wednesday that it plans to pull out of the power industry in the U.S. but will focus on other infrastructure projects. Skanska is working on a few major projects in New York City, including the redevelopment of LaGuardia Airport and Moynihan Station.

Development site and Lennar’s Stuart Miller (Credit: Google and Lennar Corporation)

Lennar Corp. just paid $9.65 million for a 30-acre townhome development site in Davie.

Property records show Griffin BC Land, an affiliate of a partnership between MG3 Development Group and ESJ Capital Partners, is the seller. The vacant land, which sits on the south side of Griffin Road between 58th Avenue and 61st Avenue, traded hands for about $352,200 per acre.

MG3 principal Hernan Leonoff said via text that the site was approved in October for the construction of 180 townhomes, as part of a project called Horseshoe Lake.

This isn’t the first time developers who have owned the site passed the baton. In 2007, the property was approved to be a mixed-use project with 204 apartments, offices and retail, called Trotters Chase, according to the Sun Sentinel.

Records show MG3 Development Group and ESJ Capital Partners paid $5.7 million for the site in 2012. Trotters Chase LLC, led by Frank J. Amedia, was the seller at that time.

Last month, Lennar Corp. dropped $7.5 million for another townhouse project in Fort Lauderdale, called Reserve at Edgewood. The Miami-based developer is in the midst of merging with CalAtlantic Group, in a deal valued at $5.7 billion.

Rendering of Las Olas Walk (Credit: Zom Living)

Zom Living just paid $33 million for land along Federal Highway in downtown Fort Lauderdale, where it plans to build a 456-apartment project, property records show.

Las Olas Company, a major property owner along the boulevard, sold the 17-parcel site between Southeast First Street and Southeast Second Court, on the east side of South Federal Highway. The company, managed by developer Michael Weymouth , started investing in the properties as early as the 1970’s, records show.

On the site, Zom will build Las Olas Walk with two 8-story buildings connected by walkways, according to a press release. The project will also include 14,000 square feet of amenities on its ground floor and a 20,000-square-foot rooftop deck on the south building. Zom also plans to build a parking garage, according to a notice of commencement filed with Broward County.

In total, the land encompasses nearly 150,000 square feet or 3.4 acres. The project is scheduled to break ground in the second quarter of 2018, according to the press release.

Records show the Orlando multifamily developer scored a $91 million construction loan from PNC Bank.

Just last week another developer also invested in downtown Fort Lauderdale, with plans for an apartment project. A partnership between Silverback Development and Bizzi & Partners Development paid $12 million for the site of their planned mixed-use luxury rental tower, New River Central.

2018 CCIM Commercial Real Estate Outlook Conference (Credit: Katherine Kallergis)

Population growth, new jobs and a tight residential market are fueling Florida’s commercial sectors, and that isn’t expected to change anytime soon. That’s how economist Sean Snaith summarized the current market as he kicked off the 2018 CCIM Commercial Outlook conference.

One other major factor has contributed to the rising fortunes, he told the crowd at the Coral Gables Country Club on Wednesday.

“Deregulation is the secret sauce to this [positive] economic outlook,” Snaith said.

That last point could be directly attributed to President Trump, who despite other factors, industry experts say, has been and will likely continue to be good for commercial real estate. During Trump’s first year in office, there have been 22 deregulatory actions for every regulatory action taken. The country is in its ninth year of economic recovery, and the new GOP-led tax law, which slashes the corporate tax rate, will bolster the industry, Snaith said.

But Tere Blanca, founder and CEO of Blanca Commercial Real Estate, said two issues on the president’s agenda could negatively affect the market: foreign policy and sea level rise. Miami is a safe haven for investors from Latin America, especially Mexico and Brazil, and Trump’s foreign policy pronouncements and plans could hurt that kind of investment, experts said.

“We need to address sea level rise,” Blanca said, referring to the effect it’s already having on the insurance industry in Miami and around the country. “It will impact commercial real estate over the next 20 years if we just sit back and let it be.”

A rundown of the major takeaways from the conference follows:

Office

Blanca said South Florida’s growing population and worsening traffic has boosted Coral Gables, Doral, Aventura and Coconut Grove’s office markets. The reason, she said, is because tenants are choosing to live and work in walkable neighborhoods to avoid the congestion. Rental rates are also on the rise, and the spread between the region’s urban cores and suburban markets has grown to a difference of about $20 per square foot.

Blanca expects rents to continue rising at a slower pace than before. She cited the positive impact of Brightline, which will connect West Palm Beach, Fort Lauderdale and downtown Miami when it’s completed later this year, and new tenants like WeWork, which has leased 250,000 square feet in Miami over the last two years.

Multifamily

Peter Mekras, managing director of Aztec Group, asked the crowd if they thought the multifamiy market was about to bust – few raised their hands.

“Just because someone announced a project does not mean it’s going to get built,” he said. “We’re going to have an absorption challenge but we are not going to create a collapse.”

Rent growth is tapering in South Florida, although workforce units are outperforming the rest.

Investors are buying apartment buildings across all asset classes, but the core plus and value add space is the most crowded. “If you’re going nonrefundable at contract, you’re not buying,” Mekras said. And “if you’re not delivering interest-only financing, you’re probably going to lose the deal.”

The number of institutional investors choosing to buy multifamily properties in South Florida is also growing. At the end of last year, AvalonBay Communities made its first investment in Florida with a $138 million purchase of 850 Boca, a 370-unit development at the Park at Broken Sound in Boca Raton. The Arlington, Virginia-based real estate investment trust paid more than $370,000 per apartment.

Blackstone has also become increasingly active, buying Class A, B and C properties, which “speaks volumes to the demand in South Florida,” Mekras said.

Capital Markets

As of the third quarter of 2017, transactional volumes were down 7 percent year over year, said Danny Finkle of HFF. While sales were down in 217, debt deals increased roughly 15 percent.

Now that it’s late in the cycle, the pace of fundraising has slowed. Finkle expects more mergers and acquisitions of real estate investment trusts. He also said development will remain difficult to capitalize.

Foreign investment has also slowed. In 2015, foreign capital invested in the country’s capital markets totaled $96 billion. A year later, it was $67 billion, a decline of about 30 percent.

Retail

CBRE’s South Florida managing director Arden Karson took the stage to dispel any notion that e-commerce was hurting retail and instead focused on the need for brick and mortar stores to adapt.

Consumers are spending less on clothing, books and hobbies, and at department stores. And they’re spending more on food and beverage, home goods and health and beauty. Despite its massive rise, e-commerce still represented just 9 percent of total retail sales in 2017. But it is expected to continue to climb, and should take about 14 percent of sales by 2021, according to data from CBRE.

Industrial

South Florida’s industrial market has been on fire, thanks in part to e-commerce.

Top deals include the $40 million sale of PepsiCo’s regional headquarters and distribution center in Doral, said Mike Silver of CBRE. Terra and Terranova picked up the industrial property and will likely redevelop it into a mixed-use project. He also mentioned plans to convert the former Calder Race Course practice track into an 850,000-square-foot industrial park in Miami Gardens. EastGroup properties paid $26.5 million for the 61-acre site in 2016 and unveiled plans for the property last year.

One challenge the region is facing is a shrinking land supply. South Florida has 386 million square feet of industrial space and 56.6 million square feet of developable space remaining, data from the brokerage shows. Over the next five years, projected demand will call for about 40 million square feet.

Wynwood’s transformation into a restaurant and retail haven has also pushed industrial tenants out of that submarket, Silver said, something that could happen with other neighborhoods.

From left: IWG’s Mark Dixon, Brookfield Asset CEO Bruce Flatt and a IWG space

From TRD NYC: Brookfield Asset Management and Onex are planning to bid about $3.7 billion for IWG, a WeWork rival based in Switzerland.

IWG, formerly known as “Regus,” confirmed in December that it had received an “indicative proposal” from the two companies, but no final decisions have been made yet, according to Bloomberg. Shares of IWG were up 8.3 percent in trading early on Wednesday. When news first broke of Brookfield and Onex’s interest, shares rose 30 percent.

IWG has almost 3,000 worldwide locations compared to 283 for WeWork, but WeWork’s value is significantly higher at $20 billion.

Brookfield and Onex, both private equity firms based in Canada, have until Jan. 20 to make a final call about whether or not to make an offer for IWG under the United Kingdom’s takeover rules.

Brookfield is also said to be preparing an increased bid for retail-focused real estate investment trust General Growth Properties, after its initial $15 billion bid was rejected. [Bloomberg]Eddie Small

Miami Worldcenter, Nitin Motwani and Art Falcone

The developers of Miami Worldcenter just won a key design modification to the massive project’s retail component.

On Wednesday, the Miami Urban Development Review Board granted a request by the Nitin Motwani and Art Falcone-led development team to tweak the facades for the $2 billion mixed-use project’s retail structure, also known as Block D.

The changes will allow Miami Worldcenter Associates to install artwork by Berlin artist Franz Ackermann on the east facade of Block D facing the Metromover tracks. In addition, the south and east facades will have an integrated projected panel system, while the north and west facades will have an extended artistic metal fin system.

Ackermann’s work has been exhibited in France, Germany and Tokyo and some of his paintings have a permanent home in New York’s Museum of Modern Art.

“This is an exciting opportunity for Mr. Ackermann’s unique and cutting edge work to be displayed prominently in the city of Miami,” Bailine wrote. “His works are regarded as ‘riverting’ abstraction, and include a wide array of colors, shapes and textures.”

Block D, which is under construction and topped off last month, is a seven-story structure that will have 81,000 square feet of retail space and a 1,100-space parking garage. It is located on Northeast Second Avenue between Northeast Eighth and Ninth streets. The Urban Development Review Board initially approved the project in 2016.

Earlier this year, the developer closed on a $43 construction loan provided by Fifth Third Bank.

Also under construction is the 60-story, 512-unit Paramount Miami Worldcenter luxury condo tower with ground-floor retail. The developers are also planning a 45-story office tower, two apartment buildings with more than 800 units, another 200,000-plus square feet of street retail, and the Marriott Marquis convention center hotel in partnership with MDM Group.

South Florida Skyline (Credit: Pixabay)

Residential sales may be on the rebound in South Florida following a dismal third quarter, thanks in part to pent-up demand from Hurricane Irma, according to the Q4 Elliman Reports.

In Miami Beach and the barrier islands, closed sales jumped 14.2 percent year-over-year to 757. New contracts signed also increased 16.1 percent to 274. Properties spent 52 fewer days on the market and sold for bigger discounts. The median sale price in Miami Beach rose slightly, by 2.8 percent to $406,000.

“The general overview is the fourth quarter showed more activity, and more strength at the upper end of the market after being less active,”  said Miller Samuel CEO Jonathan Miller, author of the reports. “Essentially what’s happening in a lot of these markets is sellers have been holding out for several years and now they’re more amenable to actual market conditions.”

While the fourth quarter was the strongest for South Florida in 2017, overall residential sales were down in some markets. For the full year, sales fell 3.7 percent to 3,033 in Miami Beach and the barrier islands.

The Miami mainland experienced a slower fourth quarter. Sales fell 10.2 percent for the quarter, year-over-year, to 3,180 and fell 7.2 percent for the full year to 14,352. Homes and condos spent a whopping 40.5 percent less time on the market in the last quarter of 2017, down to 44 days from 74 days the previous year.

“The bigger discounts represent the sellers traveling farther to meet the buyer because the buyers have been holding firm,” Miller said. “In many of these markets, days on market is relatively high.”

In Fort Lauderdale, overall sales fell 6.8 percent to 851 closings in the fourth quarter. Single-family home sales were responsible for the bulk of that with a 12 percent decline in closed deals. The luxury sector, which Elliman defines as the top 10 percent of sales, reported double-digit growth in Fort Lauderdale. Luxury condo sales rose 17.1 percent to 48 closings and high-end home sales were up 18 percent to 59.

Father north in Palm Beach County, the number of sales dropped in Jupiter and Palm Beach Gardens. Weaker markets like Wellington and Palm Beach saw improvements, Miller said.

In Wellington, total residential sales were flat. While condo closings took a dive of more than 20 percent to 74 sales, home sales increased 8.6 percent year-over-year to 253. Inventory fell slightly for single-family houses and more so for condos. The average size of homes sold also grew in Wellington, which Miller said is a sign that the luxury sector is recovering.

Palm Beach saw a reversal from the previous quarter. In the fourth quarter of last year, condo sales fell nearly 31 percent year-over-year to 36 closings while single-family sales increased 31 percent to 21. The inventory of both condos and houses declined while both spent more time on the market.

A number of high-end sales boosted the median sale price of single-family homes in the tony town more than 125 percent to $6.75 million. Meanwhile, the median condo sale price dropped 31 percent to $505,000.

Downtown Miami and Jeff Bezos (Credit: Getty Images)

A surprise package arrived Thursday morning.

Amazon has announced its shortlist of 20 proposals for its $5 billion second headquarters, with New York, Miami and Los Angeles all making the cut.

There were 238 proposals from around the U.S., Canada, and Mexico for HQ2, although all 20 finalists are American, except for Toronto, Ontario.

In the Miami area, proposals were submitted for Overtown, Downtown Doral and other neighborhoods.  Overtown was the choice of Mayor Tomás Regalado, who called it “the only place” in the city for Amazon, given its urban setting in the heart of the city.

The 20 finalists include other urban hubs around the country, though most of them are located on the East Coast. They include Boston, Atlanta, Austin, and Chicago. Some less well-known locales also made the list, including Montgomery County, Maryland—a suburb of Washington, D.C.

Amazon plans to grow HQ2 “to be a full equal” to its existing headquarters in Seattle, Washington, and expects to create 50,000 jobs there.

(Click to enlarge, Credit: Amazon)

The e-commerce giant is looking for an area with low cost of living, an educated workforce, high incentives, at least one million people, and access to an international airport. Amazon announced the bids October followings its submission deadline.

Civic leaders, elected officials, developers, and seemingly everyone in between threw out ideas for Amazon’s massive headquarters in the run up to the deadline. In Miami-Dade County, leaders considered areas like downtown Miami, Overtown and Doral.

Now that the finalists have been announced, Amazon will work with the selected cities more closely. A winner is expected to be announced later in the year.  – Dennis Lynch

Sheraton Suites Plantation and EHP’s Amit Govin (Credit: Sheraton Suites Plantation and LinkedIn)

An affiliate of San Francisco-based Fillmore Capital Partners just sold the Sheraton Suites hotel in Plantation for $24.7 million, property records show.

EHP Plantation Ventures, an affiliate of Columbus, Indiana-based Everwood Hospitality Partners, paid nearly $94,000 per key for the 264-room hotel at 311 North University Drive. Records show EHP financed the deal with a $23 million loan from Benefit Street Partners Realty Operating Partnership.

The hotel was built in 1991. Fillmore Capital Partners paid $23.3 million for the property in 2005, records show.

Sheraton Suites Plantation is near Art Falcone’s Plantation Walk development site, where Falcone’s Encore Capital Management is building a $350 million mixed-use project that will include 700 apartments, plus 200,000 square feet of retail stores and restaurants.

Amit Govin founded Everwood Hospitality Partners in 2014. The company has since invested more than $300 million in hotels throughout the country, according to its website.

Other recent hotel investment sales in South Florida include Ocean Properties Hotels Resorts & Affiliates’ $49 million purchase of the Jupiter Beach Resort & Spa and Rockbridge Capital’s $29 million acquisition of the Palm Beach Gardens Marriott.

(Credit: Pexels)

(Credit: Pexels)

From TRD LA: Though homebuilder confidence dropped slightly this month, it still reached the second-highest level seen since 2005.

According to the National Association of Home Builders/Wells Fargo, confidence in the U.S. market for new single-family homes fell two points to a level of 72. December’s survey showed confidence at 74, marking the highest level seen since 1999.

“The HMI gauge of future sales expectations has remained in the 70s, a sign that housing demand should continue to grow in 2018,” NAHB chief economist Robert Dietz said in a statement. “As the overall economy strengthens, owner-occupied household formation increases and the supply of existing home inventory tightens, we can expect the single-family housing market to make further gains this year.”

Still, rising construction costs and the new tax law could present some challenges in coming months, Bloomberg reported. The tax overhaul limited deductions for mortgage interest and property taxes, which could slow sales.

In the Northeast, the three-month moving average HMI score jumped 5 points to 59. [Bloomberg]Kathryn Brenzel

Andrew Florance, Doug Curry and Kansas City

From TRD NYC: Weeks after Xceligent declared bankruptcy and folded, the data company’s main rival and chief legal antagonist CoStar Group planted a flag in its hometown of Kansas City, Missouri.

On Wednesday, CoStar announced that it had formed a partnership with the Kansas City Regional Association of Realtors. As part of the deal, CoStar will become the “exclusive data, analytics and marketing provider” for the association, it said in a news release.

In December 2016, CoStar filed a copyright infringement lawsuit against Xceligent, alleging that the company, led by Doug and Erin Curry, stole its images. A year later, Xceligent filed for Chapter 7 liquidation amid spiraling legal costs and disappointing earnings. Hundreds lost their jobs at the Kansas City office.

CoStar has a history of passive aggressive (and at times openly aggressive) PR tactics against its competitors. After it reached a settlement with data company RealMassive in a separate copyright infringement lawsuit, the company sent out a statement accusing RealMassive of being “powered by content that was stolen from those who created it through hard work and investment.”

Last year, CoStar sent a brochure to Xceligent customers with news clippings claiming that one of its contractors was tied to sex trafficking. And after the rival filed for liquidation, CoStar issued a statement claiming Xceligent “failed as a result of business missteps over two decades.”

Aerial photo of the Wynwood assemblage (Credit: Cushman & Wakefield)

A development site along Northwest Second Avenue in Wynwood just hit the market.

The William & Doris Friedopfer Trusts are selling the 1.72-acre assemblage at 2421, 2431 and 2455 Northwest Second Avenue; 146, 159, 169 and 172 Northwest 25th Street and the lot at 153 NW 25th Street. Cushman & Wakefield’s Robert Given, Robert Kaplan, Troy Ballard, Errol Blumer, James Quinn and Mark Rutherford are marketing the property.

The assemblage is being listed without a price, but recent land sales along Northwest Second Avenue have closed for about $1,000 per square foot on average. That would come out to about $75 million.

The land is home to two industrial buildings totaling about 31,000 square feet and a 4,500-square-foot retail building leased to Romero Britto’s studio and art gallery, according to a release. It can be developed into up to 259 residential units or 540,000 square feet of retail, residential, office or hotel space.

Last month, a partnership between Link Real Estate and Jameson Equities paid $5.4 million for the nearby property at 2509 North Miami Avenue where it’s planning a creative office project.

East End Capital and the Related Group are also building Wynwood 25, apartments, and the Wynwood Annex, an office building being built alongside the rentals.

(Credit: Pexels, Max Pixel)

E-commerce companies are gobbling up newly built warehouse space across the U.S. to become one of the leading industrial tenant types in the country, according to recent data released by JLL.

E-commerce tenants now account for 16 percent of industrial activity in Miami and 12 percent nationwide, which ranks second behind logistics firms.

During a presentation titled “The E-Commerce Revolution at the Four Seasons Hotel Miami, JLL retail e-commerce analyst Matt Powers said Amazon and other online retailers are driving demand for new warehouse space that is close to their customers.

At the same time, traditional retailers like Walmart are starting to experience year-to-year growth in online sales, which is also pushing leasing activity on the industrial side, Powers said.

“[This trend] is still in its infancy,” Powers said. “There is still plenty of room to grow.”

Walmart’s e-commerce business is second only to Amazon, which has given other major retail companies confidence in going up against Amazon, Powers added.

“Walmart’s year-to-year growth in e-commerce has shown they can compete with Amazon,” he said. “There is recognition among a lot of big-box retailers to get aggressive [about e- commerce.]

As a result, JLL’s big box retail clients are increasingly addressing their warehouse and logistics needs, said Rich Thompson, JLL’s supply chain and logistics solution international director. “It has never been busier for us,” he said.

According to JLL’s findings, Miami’s industrial real estate market is experiencing a return to pre- recession occupancy levels and rental rates. Year-to-year, warehouse and distribution center rents are up 6 percent to $7.24 a square foot. Since 2010, rents have leapt 41 percent, per JLL.

And with more than 2 million square feet of new industrial space set to be occupied over the next six months, it could drive absorption to new record highs in 2018.

(Credit: Wikimedia Commons)

The steady and strong growth of self-storage is softening after years of success in the sector, market indicators show.

Self-storage has for years outperformed all other major commercial property types in terms of earnings growth and company stock performance, but self-storage companies are now actually trading at a 2 percent discount to the estimated market value of the properties they own, according to Green Street Advisors analyses cited by the Wall Street Journal.

That’s still much better than the discounts on office and mall real estate investment trusts, which are trading at 9 and 13 percent discounts, respectively. Industry leaders say the sector is just coming back down to earth, but isn’t shrinking.

“When you have five or six blowout years and you get back to normal, it just looks slow,” Life Storage CEO David Rodgers told the Journal.

Development nationwide is stronger than ever though. The annualized rate of new self-storage construction was $4.6 billion on a seasonally adjusted basis, or double that of November 2016 and triple that of November 2015, according to Census Bureau figures cited by the Journal.

South Florida has seen a steady stream of development and trading since the recession. Some developers have become creative with their facilities — in December, the city of Hialeah approved plans for a mixed-use project with 413 apartments, nearly 16,000-square-feet of retail, and an 80,000-square-foot self-storage facility on a 6-acre site.

Elected officials in New York have moved to curb the proliferation of self-storage facilities in industrial areas, which critics say displaces manufacturers that employ more New Yorkers. [WSJ]  – Dennis Lynch

Nautilus South Beach and Foiz Ahmed of Quadrum Global (Credit: CBRE, Quadrum Global)

The Nautilus South Beach is being marketed for sale, and hotel industry sources say the property could trade for as much as $180 million, or about $720,000 per key.

Quadrum Global owns the beachfront 250-key hotel at 1825 Collins Avenue. The development, investment and management firm paid $61 million for the dilapidated property in 2011 and began renovations a year later. CBRE’s Paul Weimer, Christian Charre, Natalie Castillo and Jennifer Jin are the listing brokers.

The hotel was designed by Miami Modern architect Morris Lapidus in the 1950s and features a restored “stairway to nowhere” in the lobby. In 1981, it was renovated as a hotel condo, and was sold in 1985 – when it became the Riande Continental Hotel. The property now includes 51 suites and a two-bedroom penthouse, a restaurant, salt water pool, bar, cabanas and a backyard with dining.

If it sells for $180 million, the deal would mark the most expensive hotel sale in South Florida since the April 2016 sale of the Confidante Miami Beach, which traded for $229 million or about $600,000 per key.

Quadrum Global’s Foiz Ahmed, director and head of hospitality, could not be reached for comment. The New York-based private equity firm has invested more than $1 billion in U.S. real estate since 2009, according to a release.

The Nautilus is adjacent to the Shore Club hotel, where HFZ Capital Group recently canceled plans to redevelop the property into Fasano-branded condos and hotel rooms.

Teavana (Credit: Phillip Pessar/Flickr)

Shopping mall giant Simon Property Group and Starbucks Corp. have settled a lawsuit Simon filed last year, aimed at preventing Starbucks’ closure of dozens of Teavana stores in Simon-owned properties.

Starbucks announced in July that it would close all 379 Teavana stores — including 77 at Simon properties — by this spring because of poor performance partly blamed on declining foot traffic at malls, according to the Wall Street Journal. Simon sued to stop the move, and in November an Indiana judge ruled in the mall owner’s favor.

A representative for Starbucks did not say if the settlement affected the scheduled closing of the Teavana stores, but said the company “will continue to emphasize Teavana tea in new and different ways at Starbucks,” according to the Wall Street Journal. Simon did not comment.

Simon argued the July announcement and the impending breach of the leases for the Teavana stores caused “irreparable harm” to the company. Starbucks operates nine Teavana stores at Simon-owned properties in South Florida, including at The Falls in Miami, Sawgrass Mills in Sunrise, Coral Square mall in Coral Springs, and Town Center in Boca Raton.

The suit underscored brick-and-mortar retail’s continuing decline in the face of growing online competition and shrinking foot traffic at traditional malls nationwide. In December, a judge in Washington state similarly ruled that Whole Foods had to reopen a shuttered store in a suit brought by a landlord against the grocery store operator. Whole Foods was two years into a 10-year lease that required it carry on business uninterrupted. [WSJ] — Dennis Lynch

 

Aerial view of Il Palmetto and Jim Clark (Credit: Andy Frame and Wikipedia)

Internet entrepreneur and computer scientist James Clark just took an axe to the asking price of his waterfront, Mediterranean-style Palm Beach mansion, which is still one of the priciest in the area.

Clark, a co-founder of Netscape and other Silicon Valley companies, is now selling his six-bedroom, 1930s estate at 1500 South Ocean Boulevard for $95 million – that’s about a 31 percent price cut from the $137 million he originally wanted in 2016, according to the Palm Beach Daily News.

Records show Clark paid just $11 million for the 5.14-acre property in1999 and redeveloped and restored it over the course of four years. In September, after failing to attract a buyer, the billionaire reduced the price to $115 million.

Just two months later he lowered it another $20 million, but this time with Lawrence Moens of Lawrence A. Moens Associates, who took over the listing from Sotheby’s International Realty’s Cristina Condon, according to the publication.

The billionaire’s 60,000-square-foot mansion touts some impressive features like an underground tunnel, a wine cellar with space for 20,000 bottles, and two elevators.

To date, Palm Beach’s highest sale price was set by hedge fund manager Ken Griffin, who in 2012 paid $130 million for four adjacent lots on Blossom Way. [Palm Beach Daily News] – Amanda Rabines

From TRD LA: Zillow is being sued in New Jersey for allegedly concealing its controversial Zestimate figures on residential listings at the request of brokerages that have “contracts” with the online real estate information site.

The plaintiff in the case, listed as EJ MGT LLC, claims that Zillow violates federal antitrust laws. The suit alleges Zillow hides its so-called home price Zestimates from certain brokerages, and from sellers, according to the online news site the American Genius. EJ MGT LCC appears to be the owner of at least one property for sale referenced in the suit that had its Zestimate prominently displayed beneath its actual listing price.

Zestimates are automated Zillow valuations on properties that use a “proprietary formula” along with troves of data including public records, according to the company. The listing service shows its Zestimate on a property, whether that property is for sale or not.

Critics have long said the system is wildly inaccurate, misleads buyers and slows down or even kills sales.  A buyer might question paying $100,000 more for a property over its Zestimate, and a seller might ask why sell a property for $100,000 less than it should be worth. One broker called Zestimates “the bane of my existence.”

The suit includes a screenshot of a message with a Zillow support staffer, who tells a man named Igor that “due to agreements Zillow has with certain brokerages, Zestimates may not display under the listing price on these brokers’ listings.” The employee claimed she she was “unable to edit or remove the Zestimate” on his listing as the “agreements and modifications” were outside her administrative capabilities, according to the filing.

The suit names a number of high-profile brokerages as “co-conspirator brokers.” They allegedly had contracts with Zillow to hide Zestimates on listings, including Sotheby’s International Realty, Century 21 Real Estate, and the Corcoran Group.

A screenshot of an off-market listing shows the Zestimate prominently displayed, but removed once that property hit the market with a “co-conspiring” brokerage.

In August, an Illinois judge dismissed a separate federal lawsuit filed by homeowners against Zillow, who claimed Zestimates undervalued their homes, making them harder to sell. [TAG] — Dennis Lynch

 

Macy’s Miami Beach building at 1675 Meridian Avenue (Credit: Marcus & Millichap)

The Miami Beach property leased to Macy’s is for sale, and the owners expect it to trade for more than $20 million. Macy’s still has about 32 years left on its lease, and the planned sale is another indication of the once vaunted retailer’s escalating woes.

The 50,000-square-foot lot at 1675 Meridian Avenue is zoned CD-3, meaning it can be developed into 137,000 square feet, and up to 75 feet tall, according to listing brokers Alejandro D’Alba and Scott Sandelin. A call for offers is set for the end of February.

The property, about two blocks away from the Miami Beach Convention Center and a block from Lincoln Road, could be developed into a hotel. The $600 million renovation and expansion of the convention center is expected to be completed this year.

With 98,610 square feet, the Macy’s building is the largest space available and one of the only ones suitable for a national “big box” store. When the leasehold was quietly being marketed for sale two years ago, sources said Nordstrom Rack and Old Navy had eyed the space. The leasehold was expected to fetch at least $80 million.

Earlier this month, Macy’s announced it was closing its historic downtown Miami store as part of a wave of national closures, but made no indications it would do the same with the Miami Beach location. A spokesperson for Macy’s declined to comment.

The building was built in 1953 and was the former home of Burdines. In 1956, Burdines merged with Federated Department Stores, which also owned Macy’s, Bloomingdale’s and other stores. By 2005, Federated brought all its Burdines stores under the Macy’s brand. Property records do not reveal the owner of the land, just the leasehold.

A contender for the site could be Stephen Bittel’s Terranova Corp., which owns surrounding retail properties. Bittel redeveloped the site next door into a new retail building anchored by Marshalls, and the property across the street into the new Anthropologie. He also sold the office buildings at 1674 and 1688 Meridian avenues in 2016 for $49 million.

Sandelin and D’Alba said they have met with Terranova. Bittel could not immediately be reached for comment.

Sunshine Road and north of Southern Boulevard and Penske Automotive Group’s Roger Penski (Credit: Palm Beach County Property Appraiser and LinkedIn)

Automobile titan Terry Taylor just picked up a massive auto dealership in Royal Palm Beach for $44.7 million, property records show.

The dealership at 9405, 9305 and 9205 Southern Boulevard contains three buildings that total 94,280 square feet. The deal breaks down to about $475 per square foot.

Taylor’s privately-held West Palm Beach-based Automotive Management Services Inc. is one of the nation’s largest holders of Nissan and Infiniti dealerships, according to Automotive News.

Records show TT of N. Royal Palm Inc., managed by Taylor, paid $11.7 million for the warehouse at 9405 Southern Boulevard, and TT of M. Royal Palm Inc. paid $10 million for the warehouse at 9305 Southern Boulevard. TT of T. Royal Palm Inc., also linked to Taylor, bought the third warehouse at 9205 Southern Boulevard for $23 million.

Penske Automotive Group is the seller. The Bloomfield Hills, Michigan-based auto dealership company operates automotive and commercial truck dealerships in the United States, Canada and Western Europe, according to its website. Records show Penske built the warehouses through three separate affiliates in 2008. Previous sale information was not available online.

Records show Taylor secured $38.2 million in loans from three different lenders, including $10.2 million in financing from Nissan Motor Acceptance Corp., $8.5 million from Bank of America, and $19.5 million from World Omni Financial Corp.

The dealership sits on 23 acres of land just west of Sunshine Road and north of Southern Boulevard.

Last year, Taylor paid $25 million for a penthouse at Gil Dezer’s Porsche Design Tower in Sunny Isles Beach.

40 Wall Street and Stephen Ross (Credit: Getty Images)

From TRD NYC: Related Fund Management launched a bid to buy Ladder Capital for $15 per share.

The subsidiary of Hudson Yards developer Related Companies already owns 8.2 percent of Ladder’s shares and would buy the remaining 91.8 percent under the proposed deal, taking the commercial real estate lender private.

Ladder, a publicly traded real estate investment trust, has $5.9 billion in assets, CoStar reported. The firm is famous for lending more than $250 million to President Trump’s entities over the years. It currently holds a $160 million leasehold mortgage on Trump’s 40 Wall Street and a $100 million loan backed by Trump Tower.

Related made its first investment in Ladder in February, buying $80 million in shares. If it buys the rest, the fund manager would effectively become one of the president’s key lenders.

Ladder Capital said it is reviewing the offer, CoStar reported. The lender has a current market cap of around $1.61 billion. [CoStar] — Konrad Putzier

From TRD NYC: When Chateau Louis XIV, an ostentatious 17th-century-styled French palace on the outskirts of Paris, sold for $300 million in 2015, it was widely believed to be the most expensive home sale in modern history.

The chateau had the expected immoderate touchings of Parisian royalty, with gold fountains, marble statues and elaborate gardens lining the 57-acre property. But the new development also featured the trappings of the 21st century — modern elevators, smartphone-controlled amenities, a moat and aquarium, his-and-her nightclubs, several lounges and pools.

But little has been written about the developer who built Cheateau Louis XIV or how he convinced one of the world’s most powerful — and controversial — billionaires to close the deal.

In this video, we go behind the scenes to show you how the world’s most expensive home was built and sold.

Video produced by Jhila Farzaneh and Konrad Putzier

Some of Thomas Kramer’s belongings (Credit: Moeckerauctions)

It looks like party boy Thomas Kramer is on a losing streak.

Months after lenders won Kramer’s Star Island mansions at auction, the South Beach developer’s personal items are now up for sale, too.

Kramer’s lenders, Verena von Mitschke-Collande and Claudia Miller-Otto, won the $40 million bid in August for the properties at 4 and 5 Star Island Drive. Both are the daughters of the late Siegfried Otto, who financed the purchases of the Miami Beach homes. Kramer was briefly married to Otto’s stepdaughter, court documents indicate.

Miami-Dade County Sheriff’s Office is inspecting the items at the waterfront homes on Feb. 13, and the sale will be held at the sheriff’s office the following day. Available items include high-end furniture, artwork, gym equipment, sculptures, oriental rugs, Kramer’s mask collections, life-sized collectable figures, statues and more, according to a press release. Separately, a 2011 Toyota Tacoma truck is being offered for sale.

Kramer, a former commodities trader from Germany, was known for throwing parties at the Star Island mansions and developed properties in the South-of-Fifth neighborhood. He paid $2 million for the 12,000-square-foot mansion at 5 Star Island Drive in 1992, and $3.85 million for the 8,200-square-foot home at 4 Star Island Drive in 1996. The homes were built in 1996 and 1947, respectively.

Star Island, known for its famous residents, is home to Lennar Corp.’s Stuart Miller, Phillip and Patricia Frost, and Gloria and Emilio Estefan.

Bess Freedman and Hall Willkie

From TRD NYC: After Brown Harris Stevens was unceremoniously dumped by Christie’s last year, the luxury brokerage found itself without an international partner for the first time in 30 years. So co-president Hall Willkie cracked open his Rolodex.

Six months later, he’s rounded up 30 brokerages around the globe that have agreed to promote each others’ listings online — without the fees or marketing costs associated with other affiliation agreements. The initiative went live in late December.

“The unique part is that for each listing, the contact is the listing broker themselves,” said Willkie, adding that there are no meetings, no dues and no referral fees — just exposure to buyers and sellers. “It’s a service we provide to our partners and they to us.”

So far, the group of 30 firms includes BHS, Hilton & Hyland Real Estate in Beverly Hills, Daniel Féau in Paris and London’s Strutt & Parker, among others. Willkie estimates the group will include 45 by the end of the year.

Over the past decade, nearly every residential firm in New York has buddied up with an international player — such as Leslie J. Garfield and London-based Beauchamp Estates; Stribling & Associates and Savills; Douglas Elliman and Knight Frank; and Corcoran Group and John Taylor. Town Residential has affiliated itself with South Florida’s Fortune International Group, London’s Chestertons, Chicago’s Dream Town and Toronto’s Forest Hill Real Estate.

For years, BHS embraced the auction house model and was an affiliate of Christie’s — a relationship that’s based (some say falsely) on the notion that buyers of expensive art are buy luxury real estate. But in June, Christie’s abruptly terminated the 30-year relationship to plant its own flag in New York.

It’s gained little traction since.

Willkie said the newly formed group is “much more powerful” than the auction-house model, and he described the syndicate as a kind of club for top brokers around the world to share their best listings. “We give this to each other,” he said. “It’s an incredible thing.”

Congress Park Apartments and Starwood’s Barry Sternlicht (Credit: Apartments.com and Wikipedia)

Starwood Property Trust just paid $30.7 million for an apartment complex near Lake Worth, property records show.

Congress Park Limited Partnership, an affiliate of the Orlando-based Banyan Development Group, sold the 288-unit development at 3000 Congress Park Drive for about $107,000 per apartment.

The seller is a joint venture between affordable housing development consulting firm Kiss & Company, Inc. and AGPM, which focuses on property management, according to its website.

Congress Park sits on 20 acres just south of Sixth Avenue South and west of South Congress Avenue. The rental community, built in 1995, features two- and three-bedroom apartments, a lake and a community pool.

The deal is part of the firm’s $600 million acquisition of apartments in Orlando, Lakeland, Lake Worth, Windermere, Melbourne and Palmetto. Earlier this month, Starwood paid $34.35 million for a complex in Homestead. The entire portfolio sale is expected to close by the second quarter of this year.

Rendering of the Yotel project in downtown Miami, David Arditi and Fahad Al-Shamlan (Credit: Aria Development Group)

Aria Development Group and Kuwaiti company AQARAT are going residential with their Yotel development in downtown Miami.

Four years after first launching plans for a Yotel tower on the site at 227 Northeast Second Street, the joint venture is unveiling YotelPad, a residential Yotel-branded project. The 30-story building will have 208 residential units and 250 Yotel “cabins.” The company also has airport hotels, called YotelAir, and Yotels, which are traditional micro hotels.

The Miami property will be the first YotelPad on the East Coast, according to a press release. Unit owners will be able to participate in a short-term rental project, David Arditi, principal of Aria, said. The Yotel was originally expected to open in 2017, according to published reports.

Arditi plans to break ground by the end of the year and deliver the 31-story building in 2020. He said he’s planning on financing construction with a roughly $75 million loan.

Unit prices will start at about $250,000. OneWorld Properties is handling sales of the units, which will range from 425-square-foot studios to 700-square-foot two-bedrooms, according to the project’s website. The condos will have floor-to-ceiling glass doors, terraces and high-end flooring and lighting. OneWorld Properties, led by Peggy Fucci, will handle sales. The firm is also handling sales of the nearby Paramount Miami Worldcenter.

The building will also include a sky lounge with a game area, living room with a fireplace and a chef’s kitchen and private dining area. Owners and hotel guests will have access to bike storage, a coffee bar, restaurant and bar, fitness center, co-working space, a lounge, pool deck and pet spa.

Last year, Miami’s Urban Design Review Board approved changes that will reduce parking at the development site by 30 percent and shrink setbacks around the new building. The board also signed off on the developers’ request to locate parking for the condo residents in nearby garages within 1,000 feet of the proposed hotel, and granted an 8 percent increase in the development’s lot coverage.

The site is located on a vacant lot near a Metromover station and Miami Dade College. Property records show NE 2nd Acquisition bought the site for $5.5 million in 2013.

AQARAT, one of Kuwait’s largest real estate companies, has ties to the Al-Bahar family. Both Al-Bahar Group and AQARAT are Yotel shareholders, according to hotel company’s website. Talal Jassim Al-Bahar, Yotel chairman, also chairs International Financial Advisors KSCP, one of the biggest investment companies listed on the Kuwait Stock Exchange.

Hollywood Beach Resort (Credit: Wikimedia Commons)

Two Hollywood Beach Resort associations are suing a former property management company for allegedly failing in its financial duties to the groups.

The Hollywood Beach Resort Condominium Association and the Hollywood Beach Hotels Owners Association allege that KW Property Management and Consulting failed its contractual obligations, which included managing association activities, preparing financial records, and helping budgeting money, according to the Daily Business Review.

KW Property illegally signed a lease for an off-site property to run a bar, restaurant, and hotel business on behalf of the associations, the suit claims. When that business began to fail, the board members funneled association funds to keep it open, while KW Property allegedly issued checks and cooked balance sheets to cover the expenses, according to the suit.

The associations hired KW Property in 2011, terminated the contract in 2016, then rehired it, but then the company quit later in 2016, according to the complaint. KW Property claims it was never fired, but quit in late 2016.

KW found itself in legal hot water in mid-2017 when an employee burglarized units at a Venetian Islands co-op in Miami Beach and stole tens of thousands of dollars worth of luxury goods and electronics. KW’s lawyer claimed that the company was not responsible for an employee’s actions when they only benefit the employee. [DBR] — Dennis Lynch

(Illustration by Dan Page)

From TRD NYC: On the evening of Dec. 19, roughly 30 of Douglas Elliman’s top executives gathered at Bouley Test Kitchen in the Flatiron District for the residential firm’s annual managers’ party.

All the firm’s key players were on hand: Chairman Howard Lorber, CEO Dottie Herman, plus newly minted President Scott Durkin and Susan De França, the firm’s hard-charging development chief and rumored successor to Herman.

If there were any residual hurt feelings from the management shake-up two weeks’ earlier, they were not on display that night.

But the firm has been gripped by palace intrigue in recent weeks amid major changes to the C-suite — all while it’s been on an expansion tear and grappling with a slowdown in new development, one of its core revenue streams.

On the face of things, Durkin’s promotion signals Elliman’s intent to keep growing its physical footprint. The longtime Corcoran Group manager jumped to Elliman two years ago and has been instrumental in Elliman’s acquisitions of other brokerages ever since.

In August, Elliman acquired Los Angeles-based Teles, a fast-growing firm that had $3.4 billion in revenue in 2016. It also announced plans to acquire Boston-based Otis & Ahearn.

“Our next stop is San Francisco,” Durkin said in early December. “And we have a couple more we can’t say yet.”

But while Durkin has publicly projected a harmonious atmosphere at the firm, sources say tension and uncertainty are bubbling beneath the surface.

Just two weeks before the managers’ dinner, Lorber held a brief, early-afternoon conference call to announce Durkin’s elevation to firm president.

Sources said the news stunned Steven James, Elliman’s CEO of NYC brokerage, who was humiliated after being passed over and retreated to his office, where he festered the rest of the day, angry that he hadn’t been told of the reshuffling in advance.

Over the next few days, insiders said, James considered leaving the firm, but he ultimately decided to stay after talking to Lorber, who reassured him that he wouldn’t have to report to Durkin. Instead he will continue to report directly to Lorber and Herman.

In an interview late last month, Lorber declined to define a fixed chain of command — Elliman favors “open lines” of communication — but he said James reports to the top.

“In New York, where most of the money is made, that’s Steven James,” he said. “And Steven speaks to Dottie, he speaks to me.”

Meanwhile, rumors abound about whether Herman, who until recently served as both president and CEO, is on her way out. Lorber aggressively denied it.

“She’ll have to be carried out,” he said, joking, “I’ll be the same way.”

‘One person doesn’t work’

Douglas Elliman isn’t the only New York City residential brokerage at an inflection point. Realogy — parent company of Corcoran Group and Citi Habitats — recently announced that CEO Richard Smith would be succeeded by Ryan Schneider, an executive with finance and technology chops. In New York, Brown Harris Stevens promoted Bess Freedman to co-president, alongside longtime brokerage chief Hall Willkie.

For his part, Lorber insisted that this latest round of changes made sense given how large Elliman has grown.

“Having everyone report to one person doesn’t work,” Lorber said in early December after the Durkin announcement, referring to Herman. “You need someone else in there.”

Herman, who purchased Prudential Long Island Realty in 1989, teamed up with Lorber in 2003 to buy the Manhattan brokerage for nearly $72 million. She currently owns 30 percent of the company. The other 70 percent is owned by Vector Group, in which Lorber holds a 5.6 percent stake that’s worth around $170 million based on its latest stock price.

Sources have long characterized Elliman’s balance of power as tilted in Lorber’s favor, despite Herman’s loyal following. Agents and managers have been known to line up outside her office at 575 Madison Avenue, eager to bounce ideas off her, they said.

“She was a shrink for half of them. He’s not like that,” said a former employee.

Lorber, meanwhile, has a penthouse office a few blocks away at 712 Fifth Avenue. “When something really needed to get done, they’d go to Howard,” the ex-employee said.

Lorber has also been the key dealmaker on landing new development assignments, often by putting money into projects. Vector’s New Valley, for example, is an investor in projects like 111 Murray Street and 10 Madison Square West, which Elliman is marketing.

“I just lost a deal to them because Howard became an investor,” said one marketing executive. “I don’t happen to have the luxury of that business model.”

In recent months, however, Herman — who is worth $270 million, according to Forbes — has stayed out of the spotlight, fueling rumors that she’d been sidelined. Durkin’s promotion lent credibility to those claims, even after Herman posted a cheerful photo of herself — with Durkin and De França — at Art Basel in Miami.

In mid-December, Herman flatly denied that she’s leaving.

“I own 30 percent of the company,” she said, noting that she personally recruited Durkin. “I’m not an employee. I don’t have any insecurity.”

While this latest reshuffling has ruffled feathers, Elliman has been making management changes for the past few years. For example, Stephen Kotler, the firm’s former COO, moved to L.A. in 2015 to head the firm’s West Coast expansion. (Durkin was appointed COO in his place.)

And the firm has also recently made personnel cuts.

In 2016, Elliman fired Nicole Oge, who oversaw a massive marketing expansion, and it laid off Cliff Finn, head of leasing for new rental projects. Then in 2017, the firm terminated Richard Pérez-Feria, the editor-in-chief of Elliman Media, who had been tapped by Oge to turn Elliman magazine into a 300-page lifestyle publication. Brokerage executives now acknowledge the magazine lost its way and have relaunched it with a renewed focus on real estate.

Many of Elliman’s recent initiatives have Durkin’s fingerprints all over them — from its expansion in Westchester and L.A. to its newly forged relationship with Zillow Group. In November, StreetEasy and Elliman announced that the listings portal would build a back-end listings system for the firm, replacing Limo, the brokerage’s longtime system.

“I’ve never seen the company run so well [as it has] over the last year, two years,” said Kotler, adding that Durkin is well-liked and has a reputation as a good listener who can  roll up his sleeves.

Durkin, he said, was an “important partner” during Elliman’s acquisition of Teles, which added 500 agents and 20 offices to the firm’s ranks. But others are more skeptical of Durkin, who spent 26 years at Corcoran and is a Barbara Corcoran protégé. “I thought [his promotion] was surprising, with Scott coming in so quickly,” said one brokerage chief.

Some Elliman insiders — who declined to speak on the record — said Durkin’s appointment lays the groundwork for De França to take over as CEO.

“At some point in business — at my age, Dottie’s age — you start to think about who the new leaders are going to be,” said Lorber, 69. (Herman is 64.) “We’re not quite there yet.”

But by tasking Durkin with day-to-day operations, Elliman is taking pressure off the CEO job — a move some speculated could be part of a strategy to move De França into that spot. With Durkin now president, De França could feasibly take the CEO job while also running the ever-important Douglas Elliman Development Marketing.

“Her forte is development, and that’s an integral part of our market, yet that’s under duress,” said one insider. “So, to pull her out of that … could be a very difficult thing.”

New development shakeout

Formerly a top sales executive at Related, De França joined Elliman in 2011 to lead its struggling new development division.

By 2013, DEDM had $3 billion in contracts and sales — up from $300 million in 2012.

“I made a promise to Dottie and Howard when I joined them that I would use my best efforts to grow the largest and strongest new development division in the city,” she said in a 2013 interview, in which she vowed to unseat Corcoran Sunshine Development Group as the city’s dominant new development marketing firm.

Although De França hasn’t fully realized that goal, she has closed the gap significantly. DEDM currently has $30 billion worth of new development projects in the pipeline and the firm ranked No. 2 on TRD’s most recent roundup of the city’s top new development marketing firms, with $5.92 billion in sales between June 2014 and May 2017. Corcoran Sunshine took the No. 1 spot with $9.13 billion in sales.

But amid a slowdown in the new development market, Elliman has struggled with profitability. The low point came in May, when it announced just $100,000 in profits for 2017’s first quarter, as new development closings dried up. That was despite selling $5.6 billion worth of real estate during the quarter and having $30 billion worth of new development work in the hopper.

“If I returned results of $100,000 a quarter, I’d be calling all of you here begging for a job,” quipped Corcoran CEO Pam Liebman, taking a jab at Lorber at TRD’s new development forum that month.

In October, Elliman eliminated Roy Kim’s position. Kim joined the firm in the newly created job of chief creative officer at the market’s peak in 2015.  “The financial challenges facing new development today are not a secret,” said Kim, who was focused on the sector.

The firm has also been grappling with slow sales at Bruce Eichner’s Madison Square Park Tower and Macklowe Properties’ 200 East 59th Street.

In Miami, HFZ Capital Group recently scrapped plans for a 67-unit project at the Shore Club that Elliman was slated to market. And in L.A., it stepped away from marketing Greenland USA’s $1 billion Metropolis development after selling two-thirds of the units. (Sources said the decision was mutual.)

“In 2017, many [projects] were furloughed or late getting to the market. That’s something we can’t predict or change,” said Durkin.

On a Nov. 7 earnings call with Vector investors, Lorber addressed a year-over-year drop in profitability during the third quarter to $4.2 million from $8.7 million.

“We think our growth will continue,” he said. “[But] we want to watch our expenses, obviously, so we can try to trim down when we can.”

Of course, Elliman isn’t the only firm contending with a tough market.

Manhattan new development units sat on the market an average of 264 days during the third quarter, up 65 percent year over year, according to appraisal firm Miller Samuel. The median price of a new condo also dropped 23 percent to $2.8 million. But some former Elliman employees said the new development division isn’t a golden goose like it is at Corcoran.

“At Douglas Elliman, it’s not the same thing,” the source said. “New development exists to draw in really big-name brokers, and most of the money goes to them.”

Lorber himself has acknowledged that. “Her model is a much better way for a company to make money,” he said at TRD’s forum, referring to Liebman and Corcoran.

As an entrepreneur, he said, he’s “willing to invest that money to build.”

De França said that Elliman will continue to expand its “boots on the ground” in California and Florida over the next three to six months. DEDM currently has $17 billion worth of new development listings, including $11 billion in New York.

Lorber said the company’s next focus is on ensuring that all of its regions are profitable. “Our numbers suffer from the new territories we’re in,” he said. (California agents, for example, earn higher splits on average.)

“I don’t want to cut back if it hurts our business. I don’t like throwing away money,” he noted. “But my basic philosophy is, I’ll spent what I have to spend.”

Sawgrass Place West and Bridge Investment Group’s Jonathan Slager (Credit: Newmark Knight Frank and Bridge Investment Group)

An affiliate of Bridge Investment Group just paid $13.6 million for the Sawgrass Place West office building in Tamarac, property records show.

The Salt Lake City, Utah-based company paid about $135 per square foot for the 100,980-square-foot office building at 5601 North Hiatus Road. Piedmont Operating Partnership LP, a subsidiary of Piedmont Office Realty Trust, is the seller. Records show Piedmont paid $13.3 million for the office building in 2001.

Piedmont, a real estate investment trust based in Georgia, announced late last year it would be selling 14 office buildings across the country for $426 million. The properties are in Detroit, Nashville, South Florida and Phoenix.

Sawgrass Place West, completed in 2002, was built on a 12.6-acre lot on the northwest corner of Commercial Boulevard.

Newmark Knight Frank’s Jay Adams handled leasing of the Tamarac office building, which is 50 percent leased to management product company Convergys Corp., a source said.

Bridge Investment Group financed the multi-property deal with a $141 million loan from KeyBank.

The firm manages nearly $9 billion of multifamily, affordable housing, office, senior housing, medical properties and debt strategies, according to its website.

In December, Bridge paid $54.5 million for an office complex in Boca Raton.

Trump International Hotel in Washington, D.C. (Credit: Getty Images)

From TRD NYC: A new report shows that several foreign governments and affiliated groups have paid for events at the Trump International Hotel in Washington, D.C.

Public Citizen, a liberal-funded watchdog group, released the report, noting that Malaysian Prime Minister Najib Razak and his delegation stayed at the hotel in September 2017. A firm tied to the Kingdom of Saudi Arabia paid $270,000 last year for lodging, parking and catering at the hotel during a lobbying campaign to overturn a law that allows terrorism victims to sue foreign governments, according to the Wall Street Journal. The Kuwait embassy, the Turkey-U. S. Business Council and the American Turkish Council also stayed at the hotel, according to the report.

“The motive varies from event to event, but a number of these seem clearly for the purposes of ingratiating with the president,” Robert Weissman, president of Public Citizen, told the Journal.

The report also found that 16 trade groups spent money at Trump Organization properties. A petroleum coke and sulfur company led by William Koch, Oxbow Carbon LLC, held its holiday party in December at Mar-a-Lago.

The Trump Organization, run by the president’s sons, has indicated that it will transfer money it receives from foreign governments to the U.S. Treasury but hasn’t provided information on how that money is tracked. President Trump no longer runs his development firm, but has kept a financial interest in the company through a trust that can be drawn from at any time.

FEC records also show that Trump’s re-election campaign spent more than $630,000 last year on Trump properties, with most of the money going toward rent for its headquarter space at Trump Tower in Manhattan.  [WSJ] — Kathryn Brenzel 

Rendering of Panorama Tower, Edgardo Defortuna and Jerome Hollo

UPDATED Jan. 16, 05:25 p.m.: Renters will be able to move into Miami’s tallest tower starting in March.

Tibor Hollo’s Florida East Coast Realty just tapped Fortune Development Sales to take over leasing efforts at Panorama Tower. Rents at the luxury mixed-use building will average about $3 per square foot, ranging from roughly $1,500 for a 500-square-foot one-bedroom to $6,600 for a three-bedroom, 2,200-square-foot apartment, Fortune president and CEO Edgardo Defortuna said.

The 85-story development at 1100 Brickell Bay Drive will open in two phases, starting with the 208-room Hyatt Centric hotel in February. Residents will be able to move into the building’s 821 units the following month. Once Panorama is completed, the 868-foot tower will be the highest in Florida and the tallest residential tower south of Manhattan.

Fortune’s Lorenzo Rodriguez will handle leasing with a team of five agents. Defortuna, who has sold thousands of condo units in the neighborhood, called the leasing assignment “perfect timing in the market” since condo sales have slowed significantly.

“Even though I know there were other [firms] being considered … Tibor [Hollo] and his team were very supportive of us being the ones to handle this project,” Defortuna said.

Panorama’s apartments are geared toward young professionals and will feature a music room, three private movie theaters, a yoga/pilates studio and a pet spa. Additionally, the hotel will share its amenities with residents, including a full-service spa, fitness center and pool. The building will also have about 100,000 square feet of office space and 50,000 square feet of retail space.

While rents will be reduced for residents who don’t need a parking space or for those with electric cars, the developer is not planning on offering incentives, Defortuna said.

FECR could also eventually convert the rentals to condos, like it did with Opera Tower and others in Miami’s urban core. Once the condo market strengthens, Defortuna said he could see the developer converting the luxury units to condos in the long term.

The developer financed construction of the roughly $800 million project with a $340 million construction loan from Wells Fargo in March 2015, the second biggest loan to close that year in South Florida.

Last year, Tutor Perini Building Corp., the former contractor on the Panorama project, filed a lawsuit in Miami-Dade Circuit Court against FECR alleging it failed to turn in project designs on time and revised project plans as recently as October without giving a deadline extension — allegedly resulting in millions of dollars in unpaid work.

An earlier version of this story listed an incorrect address and unit sizes. 

Rendering of Sunnybrook Storage and Benjamin Macfarland (Credit: DeAngelis Diamond and LinkedIn)

UPDATED Jan. 16, 12:10 p.m.: A partnership between West Palm Beach-based real estate investment firm SROA Capital and the Feldman Companies just scored a $9.5 million construction loan and broke ground on its planned self-storage facility near Miami’s Overtown, property records show.

Mutual of Omaha Bank provided the financing for the company’s planned 112,500-square-foot facility at 1020, 1030 and 1040 Sunnybrook Road. SROA Sunnybrook LLC paid $1.7 million for the vacant 18,000-square-foot lot last year, records show.

Blue Projects USA will be designing the eight-story building, just south of the Dolphin Expressway and west of US 441/State Road 7. DeAngelis Diamond is the contractor, according to a notice of commencement filed with the county. Features will include 970 climate-controlled storage units and a parking garage.

Feldman founder Mitchell Feldman said the facility is set to be completed next year.

SROA Capital, formerly Elite Stor Capital Partners, is led by Benjamin Macfarland. The firm operates storage facilities under the brand name Storage Rentals of America throughout the United States, with several in Palm Beach County, according to its website.

SROA Capital also focuses on equity investments with developers and operators. Last year, it invested in a 113,000-square-foot of self-storage space in Miami, next to the Palmetto Expressway.

In September, Prudential paid $18.5 million for a 101,000-square-foot self storage building, nearby, in Little Havana.

The second week of 2018 wasn’t much better than the first for the Miami-Dade condominium market.

Nearly 90 units sold for a total of $35 million last week, up slightly from the previous week’s $34 million sales volume on 55 units. Condos last week sold for an average price of about $392,000, or nearly $280 per square foot.

The priciest sale was at Fendi Chateau Residences in Surfside. Unit 706 sold for nearly $8 million after 441 days on the market. The luxury condo was listed with Matias Alem, and Mark Block represented the buyer. The three-bedroom, 4,660-square-foot condo traded hands for about $1,710 per square foot.

The second most expensive deal was at the recently completed Biltmore Parc development in Coral Gables. Unit 502 traded hands for $1.41 million after nearly a year on the market. Daniel Guerra represented both sides.

Closing prices in the top 10 deals ranged from $745,000 to $8 million.

Here’s a breakdown of the data from Jan. 7 to Jan. 13. Click on the map for more information:

Most expensive
Fendi Chateau #706, Surfside | 441 days on market | $8M | $1,710 psf | Listing agent: Matias Alem | Buyer’s agent: Mark Block

Least expensive
Marquis #6005, Miami | 70 days on market | $745k | $452 psf | Listing agent: Priscilla Rivas | Buyer’s agent: Olivier Brion

Most days on market
Fendi Chateau #706, Surfside | 441 days on market | $8M | $1,241 psf | Listing agent: Matias Alem | Buyer’s agent: Mark Block

Fewest days on market
Isabella #3034, Coral Gables | 7 days on market | $750k | $319 psf | Listing agent: Jill Penman | Buyer’s agent: Jill Penman

(Credit: Pixabay; Wikimedia Commons)

From TRD NYC: Hong Kong’s first property launch of the year went off swimmingly for everyone but city authorities.

The launch of Sun Hung Kai Properties’ St. Barths complex sold all 118 units amid tough competition over each apartment — up to 18 bidders were entered for some properties — with final sales being about 17 percent higher than second market prices, reported the South China Morning Post. The launch sale set a new price record for the area.

The news wasn’t welcomed by city authorities who have been trying to dampen Hong Kong’s housing market with a series of regulations — the most recent of which appears to have done the opposite, as has happened before.

Passed earlier in the week, a new stamp duty bill extended the period of tax exemptions for owners who wanted to sell their homes, which Centaline Property Agency’s vice chairman said added fuel to Sun Hung Kai Properties’ explosive sale.

“Today’s sale, mainly comprising property in the mid-range of the price scale, attracted those who wanted to upgrade their flats,” said the chairman, Louis Chan Wing-kit to the Post. “So the government’s move increased the confidence among buyers, encouraging them to buy first and sell later.”

Prices in the city have been rising for over a year as developers try to keep pace with demand. last year’s transaction value on real estate deals amounting to $95 billion, an increased of about 35 percent in worth and almost 15 percent in the total number of transactions. [SCMP] — Erin Hudson

(Pixabay)

From TRD NYC: The great capital has been displaced from its title as the most unaffordable market in the U.K.

Famous for its university, Oxford has become so expensive that, as The Financial Times reports, the median house prices are almost 17 times the median person’s income. With soaring prices and a static supply in the historical town — due to a combination of local building codes and a defined city limit that prevents sprawl — the majority of students leave the area after graduating, which, according to the Centre for Cities is attributing in part to local real estate.

Further evidence of the difficulty: bedroom communities around the college town are seeing prices soar as those who do stay to work in Oxford search for a more affordable housing price. One example, the town of Woodstock, saw its average sales price last August increase about 6 percent year-on-year, though that average price tag is still 10 percent lower that those of homes in Oxford. [Financial Times] — Erin Hudson

7936 Biscayne Point Circle and Lenny Kravitz (Credit: MLS Matrix, Wikimedia Commons)

Lenny Kravitz flew away, and now one Miami Beach couple is looking to do the same.

Kravitz’s former home at 7936 Biscayne Point Circle in Miami Beach just hit the market for nearly $6 million, according to listing agent Julian Johnston of Calibre International Realty. It hit the market in 2015 asking about $8 million with another agent.

Property records show Richard and Nancy Cromwell own the four-bedroom, 5,800-square-foot house. It was built in 1954 and renovated to include high-end appliances, smart home features, marble baths and limestone flooring, according to the listing.

Kravitz sold it to the Cromwells in 2009 for $2.45 million. The house sits on a 12,000-square-foot lot on Biscayne Point, north of Normandy Shores. It includes 100 feet of waterfront, a tiled dock, pool spa and cabana.

In December, another Miami Beach home once owned by Kravitz sold for $16.5 million. Miami Beach developer Stephen Muss sold the nearly 12,000-square-foot, two-story, six-bedroom estate at 1800 West 25th Street on Sunset Island II for a big discount. That property was originally listed for $25 million, and sold for 34 percent off.

Unit 706 at Fendi Château Residences and Jeffrey S. Sloan (Credit: Condoblackbook.com and Global Payments Inc.)

Financial technology executive Jeffrey S. Sloan and his wife Victoria just dropped $8 million for a condo at Fendi Château Residences in Surfside, property records show.

Jeffrey Sloan is CEO of the publicly traded financial technology company Global Payments, and is also chairman and president of the Electronic Transactions Association. He earned $8.2 million in fiscal 2016, according to Global Payments’ 2017 proxy filed in March with the Securities and Exchange Commission.

The Sloans new three-bedroom, 4,660-square-foot condo traded hands for about $1,710 per square foot. New York attorney Christian Curtis signed on behalf of the seller, Nassau, Bahamas-based Chateau Ocean Unit 706 LLC, managed by Kim Thompson and Dillian R. Dean. Records show the company paid $6.9 million, or about $1,400 per square foot, for the unit in 2016.

Shortly after buying the condo, the Bahamian financial executives listed it for $9.58 million, or nearly $2,000 a foot. The latest trade reflects a 16 percent discount off its original asking price.

The Château Group completed the 12-story, 58-unit building at 9365 Collins Avenue in September 2016. The beachfront development was designed by Arquitectonica and includes pools, a Jacuzzi, 12 private cabanas, a restaurant and bar, a fitness center and a spa, kids’ club, private theater, private dining room, wine cellar and Shabbat elevators.

Rendering of Biscayne Harbour and Brickell Motors president Mario Murgado (Credit: Kimley-Horn and Brickell Motors)

Brickell Motors president Mario Murgado can move forward with his plans for a luxury condo building in North Miami.

The North Miami Planning Commission recommended approval of his plans, with caveats, to build Biscayne Harbour, an 11-story, 52-unit development at Broad Causeway and Northeast 123rd Street at a meeting on Thursday. Nearby residents who oppose the project packed the council chambers to voice their concerns over the project’s density.

The property is currently home to the 49-year-old White House Inn, a defunct hotel at 2305 Northeast 123rd Street that’s been vacant for years. North Miami’s planning commission voted to approve a zoning change and land use amendment with a covenant restricting development to 52 units with two parking spaces per unit. The city council will now review its recommendations Feb. 13.

Murgado’s MAR 2305 NE 123rd Street LLC paid $7.8 million for the waterfront 1-acre property in 2015. Property records show it has a market value of $4.5 million.

The Brickell Motors president’s plans for a dealership on the site were previously rejected. To build luxury condos, he needs the city council to approve a change in land use designation that would allow for up to 107 units.

Commissioner Bob Pechon was skeptical that the developer plans to build only 52 units if approved. “The only people who believe that the building will have 52 units (are on) our staff,” he said.

But the city could incorporate a strict covenant on the land dictating terms of development, commissioner Kevin Seifried suggested.

If the site is rezoned, Murgado could sell the land for a much higher price than he paid three years ago. A “teaser” listing from Avision Young quotes a higher density than is currently allowed. A footnote to the flier shows that the zoning change is pending approval.

Current zoning allows for 12 townhouses.

The property is a “buffer zone” between Keystone Point, a single-family residential neighborhood, and higher density residential buildings south of 123rd Street, said Karen deLeon, president of the Keystone Point Homeowners’ Association.

But some said the city chases developers away. “North Miami is stagnant,” Planning board commissioner Kenny Each said. In North Miami Beach’s Eastern Shores’ neighborhood, he said “there is a 30-story building going up. North Miami Beach is building beautiful buildings, while we’ll put storage development” in North Miami.

Stephen and Gerri Helfman (Credit: WSH Law, Spotlight TV News)

Nine months after plunking down $785,000 for a dilapidated, fire-damaged house in Miami Beach’s South-of-Fifth neighborhood, a prominent land use attorney and his wife want to replace it with a glassy, ultra-modern abode.

Stephen and Gerri Helfman went before the Miami Beach Historic Preservation Board last week seeking permission to demolish a three-bedroom home at 819 Second Street, which was built in 1923 and was designated as a “contributing structure” to the Ocean Beach Historic District in 1995.

The property, which is located one block north of Joe’s Stone Crab between Washington Avenue and Alton Road, has been in a state of disrepair since 2010. What’s more, the city’s building official condemned the structure in 2015 following a fire that caused extensive damage, according to city documents filed with the Helfmans’ application.

In its place, the Helfmans want to build a three-story house featuring overhanging balconies, a large terrace that runs the length of the building on the third floor and a rooftop pool. The new structure’s primary finish materials will consist of concrete, painted stucco, louvers and a lot of glass, according to a Nov. 8 letter of intent that the zoning attorney submitted to the historic preservation office.

However, during a contentious hearing that lasted more than three hours, the board demanded the Helfmans tweak the design so that it pays more homage to the historic district. “I was disappointed we didn’t get an approval on the first try,” Stephen Helfman told The Real Deal in a recent phone interview. “We are going to make adjustments and I am confident [the historic preservation board] will approve it.”

During the meeting, an exasperated Helfman pleaded with board members to give him clear cut direction about what they didn’t like about his proposal. “I spoke to each one of you and everybody had a different idea about what they want,” he said. “I have to guess as to what will make five people happy. I can’t do that. I have an application and I would like to have it voted on please.”

Board member Nancy Liebman complained about the new building’s facade color and its height. “The color doesn’t by any [stretch of the] imagination fit into that street,” Leibman said. “If that building was built somewhere in Miami Beach that wasn’t a historic district and not replacing a contributing structure, it might work.” She also said the rooftop terrace looked like a fourth floor, giving the impression the new home is taller than it is.

Her colleague Jack Finglass expressed skepticism that the existing home had to be completely demolished. “I am not assuming the building is going to go,” he said. “It has been a very heavy-handed approach that it must go.”

Finglass also criticized the design as being too vanilla. “It does look like it could be anywhere,” he said. “It doesn’t give homage to Miami Beach or anything that is around it. I also think the new building doesn’t particularly respect the design and scale of historic district in any way.”

In his follow-up interview with TRD, Helfman said he left the hearing believing he now understands the changes the board members are seeking. “At the ground level, we are going to put in more glass openings,” he said. “My sense is that they are looking for something that is more visible from the street. I am anxious to build it.”

According to a hardship statement the Helfmans submitted, they bought the 1923 house from Bank of New York on May 24, 2017 for $785,000 and they will lose in excess of $1 million if they cannot redevelop the property.

The Weekly Dish is a TRD recurring feature that showcases the latest in South Florida’s restaurant openings, leases and sales.

iLov305 | Miami Beach
Pitbull’s new South Beach restaurant is set to open this summer on Ocean Drive.

The international rap star and Miami native unveiled new renderings and plans for iLove305,  a restaurant bar and nightlife concept at the former Bon Air Hotel, at 1060 Ocean Drive. Pitbull, whose real name is Armando Christian Perez, and Sugar Factory American Brasserie signed a lease with the Nakash family.

The 9,000-square-foot restaurant will include a main dining room, three VIP rooms, a private lounge and four bars, according to a press release. The lobby bar will serve daiquiris, the main dining room will feature a Pitbull Voli bar and the bar in the back will serve mojitos. Chef Bryan Ogden is helming the kitchen.

The Grammy Award-winning artist will also have his own space – a “Dale!” room with a bar and bathroom – that will be available upon request.

The Nakashes purchased the hotel’s ground floor retail space for $18.3 million in 2012. They also own the Hotel Victor at 1144 Ocean Drive and The Villa Casa Casuarina at 1116 Ocean Drive.

Henry’s Sandwich Station | Fort Lauderdale

JEY Hospitality Group will open a new sandwich shop in Fort Lauderdale’s FAT Village Arts District in February.

Henry’s Sandwich Station will open at 545 Northwest First Avenue, in what appears to be the Proper Sandwich Fine Meats & Provisions space. JEY’s Marc Falsetto signed a long-term 1,700-square-foot lease at FAT Village founder Doug McCraw’s building last year.

Henry’s Sandwich Station, named after Henry Flagler, will seat more than 50, including communal seating and a large outdoor courtyard next to the train tracks, according to a release.

Mignonette Uptown | North Miami Beach

Mignonette’s second location in North Miami Beach closed at the end of last month, according to the Miami New Times.

The 2,300-square-foot restaurant, in the old Gourmet Diner at 13951 Biscayne Boulevard, was open for about a year before it shuttered. Owner Danny Serfer said the North Miami Beach location was likely too large to succeed, according to the New Times. He opened Mignonette, at 210 Northeast 18th Street in Miami, about two years ago, and Blue Collar nearly five years ago.

Brett David, owner of Prestige Imports, owns the building. He signed a 15-year deal with Mignonette in late 2016. Asking rents were $16,000 triple net per month, according to a Common Capital Partners flier posted online. Engin Yergin and Steven Brodsky of Common Capital Partners brokered the lease.

Property records show David’s Rockwell Holding Group paid $1.6 million for the building in 2012 as part of a bigger deal.

Via Emilia 9 | Miami Beach

Via Emilia 9 expanded in Miami Beach.

The restaurant, at 1120 15th Street, took over the space next door and will debut the expansion this spring, according to a release. The new space will house a walk-in cooler with glass doors displaying in-house aged meats, and additional tables for about 15 diners.

Via Emilia 9 is also opening a second location in New York later this year.

A spokesperson could not immediately be reached for more information on the Miami Beach expansion.

Doral Commons and Jamestown’s Matt Bronfman (Credit: Cushman & Wakefield and Jamestown)

Jamestown just paid $71.6 million for a Publix-anchored shopping center in Doral developed by Terra, property records show.

Jamestown’s Jamestown Doral Commons paid about $510 per square foot for the property. Cushman & Wakefield was the listing brokerage.

Terra completed Doral Commons, a 140,000-square-foot, 18.3-acre retail plaza at 7550 Northwest 104th Avenue, in 2016. Previous sales information was not available online.

Doral Commons in anchored by a 49,000-square-foot Publix and is currently 95 percent leased to tenants that include TJ Maxx, Citibank and McDonald’s. Courtelis Co. handled leasing the property.

The retail plaza is across from Terra’s 319-unit single-family residential community, Modern Doral. The Coconut Grove-based developer is also building Pines City Center, another Publix-anchored retail development in Pembroke Pines.

Jamestown, a commercial real estate investment and management firm based in Atlanta and Germany, owns several retail properties in South Florida, including the portfolio of Collins Avenue Fashion District buildings, shopping centers and multifamily complexes.

(Credit: Christopher Michel/Wikimedia Commons, back; Pixabay, illustration)

From TRD NYC: Forget what you would bring to a deserted island, where would you buy and what would you build?

For Leonardo DiCaprio, he’s building an eco-resort — slated to open this year — on his island near Belize, reports the New York Post. For serial island-buyer David Copperfield (he owns four, all in the Bahamas), he also has visions of hospitality, though perhaps less well-intentioned than Leo as a stay at Copperfield’s resort costs about $325,000 per week.

But what does it really cost to buy your own island? Here’s how much a handful of stars shelled out to make their island dreams come true.

Johnny Depp

(Anna Altheide/Wikimedia Commons)

Location: The Bahamas
Price tag: $3.6 million

Nicolas Cage

(Nicolas Genin/66ème Festival de Venise (Mostra) – Wikimedia Commons)

Location: The Bahamas
Price tag: $3 million

Mel Gibson

(Georges Biard/Wikimedia Commons)

Location: Fiji
Price tag: $15 million

Ricky Martin

(Eva Rinaldi/Wikimedia Commons)

Location: Off the coast of Rio de Janeiro
Price tag: $8 million

Shakira

(Marcello Casal Jr/Agência Brasil – Wikimedia Commons)

Location: The Bahamas
Price tag: $16 million

Eddie Murphy

(David Shankbone/Flickr)

Location: The Bahamas
Price tag: $15 million

[NYP]Erin Hudson

Bridge Point Powerline Road rendering, Armando Codina, Ed Easton and Kevin Carroll

As anyone in commercial real estate knows, industrial space is one of the strongest sectors thanks to e-commerce. But in a raw-space-starved region like South Florida, those looking to put more inventory on the market are expanding northward to Broward in addition to exploring new ideas to meet high demand, like going vertical. And with fierce competition for space, commercial brokers are urging tenants to sign long-term industrial leases.

One model for South Florida’s double-decker industrial future can be found in Shanghai, China, which, with a similar scarcity of open space, has seen a number of multistory warehouses, Devin White, principal at CBRE, said.

“Extremely densely populated urban cores will see multistory warehouses sooner than later due to rapidly increasing land values,” White said. The lack of land Miami-Dade is putting an upward pressure on rents, White said. He predicts rents will increase by 3 percent to 5 percent in the next year.

“One option would be redevelopment vertically,” White said. “If there’s only about 40 million square feet of inventory left [in Miami-Dade], and you’re absorbing 2 [million] to 3 million square feet a year, that only gives you about 10 years remaining.”

In April, industrial giant Prologis broke ground on the nation’s first multistory warehouse in Seattle. The three-story, 590,000-square-foot project is building ramps to give trucks access to second-floor loading docks.

Though South Florida has yet to see its own multistory warehouse, developer Armando Codina said it may become necessary.

“I believe it is inevitable that sometime in the future – due to the lack of available industrial land in Miami – Miami will see multistory warehouses,” Codina, of Codina Partners, said. But the current condition of the industrial market, Codina said, does not justify multistory warehouses at the moment.

“Compared to years past, we have been consistently building taller and taller warehouses to keep up with tenant demands,” Codina, said. “Not only are the tenants and racking systems becoming more sophisticated in their use of the height, but in a tight market, this extra height is seen as on-demand expansion within a user’s space.”

Projects he completed in the late ’90s, like Beacon Centre near the airport, were among the first to feature 24-foot tall heights in the Doral area, Codina said. His latest Beacon Logistics project, planned on 55 acres of land in Hialeah, will feature 32-foot clear heights.

A competitive market

There’s an increasing demand for warehouse space particularly near Miami’s airport and in Medley and Hialeah.

As of the third quarter of last year a total of 2,234,405 square feet of industrial space was absorbed in Miami-Dade County, 59 percent of which was in the Airport/Doral submarket, according to a CBRE report. The Medley submarket absorbed 27 percent of that.

All that demand has created competition among tenants, Ed Easton, of the Doral-based commercial real estate company Easton Group, said. In his experience, tenants are becoming cautious of the state of the market and rising rent costs.

Even with prices at their peak, now is the time to rent, he said. “The market is as solid as a bullet.”

Over the summer, the Easton Group closed on a 180,000-square-foot industrial building in Medley and rented it within three months to a window manufacturing company that currently fully occupies the space. In another example, Easton said he represented a logistics company that lost three buildings in Doral it had placed bids on. The bids were north of $110 per square foot, Easton said. Two logistic companies and one manufacturing company won them, according to Easton.

“We can’t get buildings anywhere near $120 per square foot right now,” Easton said about the Doral area.

In addition, he’s advising his clients to sign longer term leases because he expects demand for industrial space to outweigh supply and push rents upward.

“It’s clear the demand for industrial is about 2 to 5 million square feet a year… I just don’t see how you’re going to create that kind of supply, economically,” Easton said.

Miami-Dade County exceeds Broward and Palm Beach counties in terms of new industrial inventory being built. Colliers International estimates about 3 million square feet of new inventory is under construction in Miami-Dade County, 1.6 million square feet in Broward County and almost 250,000 square feet in Palm Beach County.

A shift to Broward

This year a spotlight was placed on Broward, where – unlike Miami-Dade County – the average vacancy rate fell from 5.5 percent to 4 percent – marking its lowest point in a 10-year period when it was at 4.9 percent, according to a third quarter Cushman and Wakefield report.

“At this point we’re surpassing 2006 tremendously, which was a busy market. Absorption was huge at that time, [and] a lot of the absorption was home-related,” Chris Metzger, an executive at brokerage firm Cushman & Wakefield, who serves as the executive director of its South Florida industrial team, said. Furniture companies have taken the bulk of the inventory.

“What was interesting in 2006, when it was hot in Broward County, at the end of the year the vacancy rate was at 3.6 percent. At the end of the third quarter of 2009 the vacancy rate was 10.2 percent,” Metzger said, pointing to a return to 2006 figures.

Several big industrial projects are being built in Pompano Beach.

One of the largest includes Bridge Point Powerline Road, a nearly 468,000-square-foot industrial park being developed by Chicago-based Bridge Development Partners. Another notable development is the Pompano Center of Commerce, a 380,000-square-foot multi-phased project, developed by Prologis.

“There is still plenty of room left in this development cycle, especially in well positioned, underserved markets such as Pompano Beach,” Kevin Carroll, a principal of Bridge Development Partners and Florida market leader, said, adding Pompano Beach’s location, near major trade hubs like Fort Lauderdale-Hollywood International Airport, Port Everglades, Miami International Airport and PortMiami, attracts distribution and manufacturing companies.

A different tenant pool

Carroll and other industry leaders agree that South Florida’s industrial market has lured larger, international distribution, logistics and manufacturing brands compared to years before.

That’s because “tenants want to be close to their customers,” Carroll said.

The makeup of the tenant pool is changing, Metzger said. “It used to be [companies] looking for 20,000 square feet to 30,000 square feet. Now its 100,000 square feet to 200,000 square feet,” Metzger said.
Last summer, Orlando-based developer Foundry Commercial signed Amazon for an 800,000-square-foot lease at the Carrie Meek International Business Park in Opa-Locka, marking the e-commerce behemoth’s largest warehouse in Miami-Dade County.

Codina, who entered the bid for Amazon’s second headquarters in September, said future industrial parks being built to accommodate larger companies like Amazon will include truck courts, taller ceiling heights and more security.

“Large industrial parks allow tenants to be situated near similar businesses,” which can lower costs, Codina said. “Miami as a city is growing and the industrial market that supplies this population growth will grow in parallel.”

Marina Bay Apartments (Credit: CBRE)

Southport Financial Services of Tampa just bought an affordable housing complex in Lantana for $15.8 million, according to a press release.

Marina Bay Apartments, a 192-unit rental community at 2400 Lantana Road, traded for about $82,000 per unit. The buyer, Southport Financial Real Estate LLC, is an affiliate of Southport, an affordable housing real estate firm led by J. David Page.

Southport buys and renovates affordable housing projects like Marina Bay. The firm has a portfolio of nearly 17,000 units across the country, according to its website.

CBRE’s Timothy Flint and Richard Tarquinio represented the seller, Marina Clinton Associates. The company is led by Chris Wohlbrandt, who is also principal at the Naples-based real estate firm Golden Realty Management. Records show the company paid $1.9 million for the property in 2000.

The 12-acre development, built in 2001, includes a clubhouse, business center, swimming pool, fitness center, on-site laundry facilities and playground, according to the release.

In 2015, Southport paid $10.9 million for another affordable housing development in Palm Beach County, Mallards Landing Apartments.

Palm Beach County has been trying to encourage more development of affordable and workforce housing amid rising home prices and rents.

In November, median single-family home prices jumped 10 percent to $330,000 in Palm Beach County. Meanwhile, rents rose 2.6 percent annually to $1,429, according to a Cushman & Wakefield report. – Amanda Rabines

(Credit: Pixabay)

From TRD New York: Despite the ups and downs of retail sales, brick-and-mortar establishments had their best overall year in awhile in 2017.

Results haven’t been this good since 2014, according to the Wall Street Journal, with sales rising for fourth month in a row in December. Of course it’s practically a given that online sales rose more than in-store sales, and some retailers saw dips instead of hills, most notably department stores, but building materials stores saw an increase of 1.2 percent.

“Definitely the consumers are in a good mood. The confidence is up. We’ve seen the labor market has been rather solid,” S&P Global economist Satyam Panday told the Journal. “These are some positives going into 2018.”

In fact, the 2017 holiday season was the most profitable in sales since 2010 according to data collected by the National Retail Federation. [WSJ] — Erin Hudson

Urban Style Flats in St. Petersburg (Credit: Apartments.com)

A 481-unit apartment building in downtown St. Petersburg sold for $46.25 million.

The sale price of the building, called Urban Style Flats, equated to more than $96,000 per unit.

It was the New York-based buyer’s first rental housing acquisition in Florida, according to real estate brokerage Marcus & Millichap.

Michael Regan and Frank Carriera, both senior managing directors of Marcus & Millichap, represented the seller in the transaction and procured the buyer.

The new owner can “decrease the gap between current rents [at Urban Style Flats] and that of surrounding ‘A’ product via strategic interior and amenity upgrades,” Regan said in a prepared statement.

Urban Style Flats, located at 300 10th Street South in downtown St. Petersburg, was built in the 1970s. Capital improvements to the property in the last decade include new air conditioning systems and updated interior décor.  — Mike Seemuth

Crush Wine Bar is one of several businesses in downtown Stuart that closed to make way for the Azul Apartments development. (Credit: TCPalm.com | Xavier Mascareñas )

A real estate development firm based in Delray Beach is preparing to break ground for construction of an apartment building in downtown Stuart.

Delray-based New Urban Communities has nearly completed demolition work on a 1.4-acre site in downtown Stuart known as the Triangle Property.

New Urban is clearing the site for a rental property development called Azul Apartments, a three-story, 49-unit building that the company expects to complete in 2020.

Led by principal Keith Rickard, New Urban is redeveloping the city-owned site under a 99-year lease agreement with the city of Stuart. The city bought the Triangle Property in 2013 for $1.5 million as part of an effort to revitalize the downtown area.

The planned apartment building will have 38 two-bedroom units, seven units with one bedroom and four with three bedrooms.

The 1.4-acre development site in downtown Stuart is bounded by Dixie Highway, Joan Jefferson Way and Southwest Albany Avenue. [TCPalm.com] — Mike Seemuth

617 Soth Beach Road in Jupiter Island (Credit: Wall Street Journal | Robert Stevens)

The chief executive officer of German software company SAP has listed the Jupiter Island house he bought from country singer Alan Jackson.

SAP CEO Bill McDermott listed the five-bedroom house for sale with an asking price of $16.75 million, 38 percent more than he paid Jackson for the waterfront property in 2012.

McDermott, 56, bought the house at 617 South Beach Road from Jackson for $10.45 million, plus an additional sum for its contents, including furniture, two cars and a guitar that Jackson signed for him.

The CEO said he would consider selling the furniture, the cars and other contents, perhaps even the autographed guitar, but they aren’t included in his $16.75 million asking price.

His house occupies a 1.2-acre site on Jupiter Island that spans the barrier island from the Atlantic Ocean to the Intracoastal Waterway.

There is a swimming pool, a putting green and a boardwalk to the beach on the ocean side of the property, and a beach, private dock and sunset-watching deck on the Intracoastal side.

The 9,600-square-foot house has an elevator, a library, a home theater and walnut flooring.

Joanne Wagner Hughes of Fenton & Lang has the listing for the property, which comes with a one-bedroom guesthouse.

If McDermott sells his Jupiter Island property, which he considers his primary residence, he may not depart South Florida. He just paid $14.11 million for a vacant parcel along the Intracoastal Waterway in Palm Beach, where may build a house. [Wall Street Journal] — Mike Seemuth

The Allegro Senior Living facility in Jupiter

The Palm Beach County Planning Commission rejected plans to build a senior housing facility in the Agricultural Reserve, a rural area with strict limits on development.

St. Louis-based Allegro Senior Living proposed construction of a 235-bed facility on a 13-acre site west of Boca Raton, which already is zoned for a school and a day care center.

But the county planning commission recommended denial of the proposed Allegro Senior Living development on Clint Moore Road near Florida’s Turnpike.

Neighbors objected, calling the proposed Allegro development too big to be compatible with its surroundings in the Agricultural Reserve, a 22,000-acre conservation area.

Allegro wants to build on Clint Moore Road because it believes more than 16,000 people who are 75 or older live within three miles of the site of the proposed development.

There are two existing Allegro Senior Living facilities in Palm Beach County, in Boynton Beach and Jupiter. [Sun-Sentinel] — Mike Seemuth

The acquired Wendy’s location are in Lake, Marion, Putnam, St. John’s and Volusia counties.

A South Florida firm bought 15 Wendy’s restaurants in Florida and financed the acquisitions with a $26.5 million bank loan.

Coral Gables-based Gold Coast Holdings Restaurants used the loan from TD Bank to acquire Wendy’s franchise units in Lake, Marion, Putnam, St. John’s and Volusia counties.

Gold Coast also bought the real estate where 12 of the 15 Wendy’s restaurants are located.

In a press release, TD Bank said Gold Coast will use a line of credit to renovate the restaurants and to finance future acquisitions.

Gold Coast owns and operates a total of 91 restaurants on the East Coast that bear the Wendy’s and TGI Fridays brands. — Mike Seemuth

Triton Center rendering

Developers planning to redevelop a former home of the U.S. Immigration and Naturalization Service (INS) in Miami borrowed $26 million to finance the project.

Three entities managed by Ye Zhang — Florida Fullview Immigration Building, Fullview Immigration Building I and Wealthy Delight — borrowed the money from an affiliate of Madison Realty Capital.

In 2013, the developers paid $12.5 million for the former INS location at 7880 Biscayne Boulevard, which the federal agency vacated in 2008.

The developers have razed the building the INS occupied and plan to turn the 1.4-acre property into a mixed-use development called Triton Center, designed by Stantec.

Triton Center would encompass a 139-room Hilton Garden Inn hotel, 324 apartments, approximately 585 parking spaces, and 25,000 square feet of commercial space. [South Florida Business Journal] — Mike Seemuth

The Cane Island complex in Kissimmee

National home builder D.R. Horton sold 72 apartments at a residential complex in Central Florida for $358,333 per unit.

The apartments were 98 percent leased at the time of the $25.8 million sale.

D.R. Horton sold 43 percent of the units at the 166-unit Cane Island complex in Kissimmee to Los Angeles-based real estate investment firm CGI Strategies. Excluded from the sale were 94 units sold as condos in 2007.

D.R. Horton built Cane Island as a condo complex in 2007 on a 16-acre site at 5241 Cane Island Loop in Kissimmee.

Cane Island has two-, three- and four-bedroom units that range in size from 1,195 square feet to 1,560 square feet. Common-area amenities include gated entry, a clubhouse with a game room, a gym, sauna and swimming pool.

CGI Strategies plans property improvements at Cane Island that include updating the clubhouse and gym and adding a dog park, cabanas and outdoor cooking stations.

Including its Cane Island units, CGI Strategies now has a 526-unit portfolio of Orlando apartments.

Brokerage firm ARA represented D.R. Horton in the off-market transaction.

“Opportunities to acquire a 2007-vintage asset in this sub-market are extremely rare, and we were able to secure an aggressive offer from a qualified buyer prior to formally marketing the property,” Scott Ramey, a director of ARA, said in a prepared statement. — Mike Seemuth

The Brightline train between West Palm Beach and Fort Lauderdale began Saturday.

Some residents of West Palm Beach want a suspension of the new Brightline passenger train service pending safety upgrades at railroad crossings to preclude the use of train horns. The service between downtown stations in West Palm Beach and Fort Lauderdale started today and will extend to Miami within a few months. During a promotional Brightline trip Friday night, the train struck and killed a 31-year-old woman who walked onto the tracks at a crossing in Boynton Beach. The cause of the incident is under investigation.

After meeting Thursday with officials of All Aboard Florida, the company that operates the Brightline service, West Palm Beach Mayor Jeri Muoio said construction work to create horn-free “quiet zones” from the city south to the county line will be completed by March 26. When that work is done, each municipality along the Brightline corridor that wants to prevent the trains from blasting their horns would have to apply to the Federal Railroad Administration to designate a quiet zone. A 21-day waiting period must expire before the federal agency designates a quiet zone. [Palm Beach Post] — Mike Seemuth

Jacksonville Beach (Source: Zillow)

A resort hotel bearing the Margaritaville brand may be coming to Jacksonville Beach. The city’s planning and development department is reviewing the proposed eight-story, 211-room hotel.

The Margaritaville hotel would have an internal parking garage and a ground-floor restaurant and would connect with an oceanfront boardwalk.

An Ormond Beach-based developer, Manoj Bhoola of MSB Hotels IVV, LLC, wants to build the hotel on a vacant lot along the ocean between 6th Avenue North and 7th Avenue North in Jacksonville Beach. No timetable for construction has been announced.

City planning director Bill Mann said the proposed Margaritaville resort would be “a great addition to our downtown area,” according WJXT-Channel 4 in Jacksonville.

Mann also said the developer would need a building permit from the city and a coastal construction permit from the Florida Department of Environmental Protection. [News4Jax.com] — Mike Seemuth

Babcock Ranch’s photovoltaic solar power-generation field

Residents this month started to move into newly built houses at Babcock Ranch, a solar-powered town unfolding northeast of Fort Myers.

Spanning 18,000 acres, Babcock Ranch is expected to  have 19,500 homes and a population of 50,000 residents within 25 years.

The town’s developer, Syd Kitson, CEO of Palm Beach Gardens-based Kitson + Partners, says Babcock Ranch has a 440-acre photovoltaic solar-power generation field, one of the world’s largest, built in partnership with Florida Power & Light. Babcock Ranch also will feature self-driving electrical buses, which are undergoing test runs in the center of the town.

Kitson bought 91,000 acres for the Babcock Ranch development in 2006, and since then, he has sold 73,000 acres to the state for preservation.

The town started to take shape since the completion of construction of several commercial buildings in the town square, plus the first wave of new homes. [Fort Myers News-Press] — Mike Seemuth

(Credit: Pixabay, PublicDomainNet)

From TRD New York: According to Bloomberg’s Billionaires Index, Yang Huiyan, vice chairman of Country Garden Holdings, is real estate — and China’s — richest woman.

Her tremendous wealth was inherited from her father, Yang Guoqiang, or Yeung Kwok Keung (his Cantonese name), who co-founded Country Garden, the largest developer (according to sales) in China, in 1992. He transferred his controlling stake to Yang in 2005, just two years before the company’s IPO, Bloomberg notes.

Now, at the age of 36, Yang’s total net worth is $29.4 billion, which makes her the 28th richest person in the world and the youngest billionaire in China, though the title with all its trappings is relatively recent: as of April 2017 Yang’s net worth was only $12.6 billion according to a report in the South China Morning Post.

But she’s more than doubled her worth since then, with an extra boost in the first four days of trading in 2018, according to Bloomberg. In that period of time, Yang’s personal worth increased by $2.1 billion with the developer’s share values rising by 7.4 percent making the company’s year-to-date gain 17 percent. [Bloomberg] — Erin Hudson

Jorge Pérez

Miami-based Related Group is exploring a possible condominium development in downtown St. Petersburg.

Related chairman and chief executive officer Jorge Pérez said he wants to develop an “iconic” condo building there. It would be Related’s first condo development in St. Petersburg.

Pérez said downtown St. Petersburg combines “urban livability” and “a mix of water views that is difficult to find,” according to the Tampa Bay Times.

The Related chairman and CEO made his comments about a possible condo development during the company’s groundbreaking ceremony for a 368-unit apartment development in downtown St. Petersburg called ICON Central.

Related is developing the 15-story apartment building, together with a seven-story parking garage and 35,000 square feet of retail and restaurant space, on the 800 block of Central Avenue.

Related has several apartment developments in nearby Tampa, including Manor Riverwalk on the former site of the Tampa Tribune newspaper, Town Westshore in the city’s Westshore Marina District and the recently completed ICON Harbour Island, which is about 40 percent leased. [Tampa Bay Times]— Mike Seemuth

Reid Boren

A company affiliated with condominium developer Two Roads Development bought two adjacent waterfront properties on South Flagler Drive in West Palm Beach for $10.85 million.

The two properties, which span slightly less than an acre, are just south of the Bristol condo development, 25-story building under construction at 1100 South Flagler Drive.

The new owner of the two properties is Flagler Residential, a company managed by Reid Boren, managing partner of West Palm Beach-based Two Roads Development.

Flagler Residential paid $7 million for a 0.61-acre property at 1311 South Flagler Drive and $3.85 million for a 0.34-acre property at 1309 South Flagler Drive.

The sellers of the properties were companies managed by Yoram Izhak of North Miami-based IMC Equity Group.

The South Florida Business Journal reported that Boren declined to comment on plans for the side-by-side waterfront properties. But Carlos Segrera, chief investment officer of IMC, told the newspaper that Two Roads Development plans to build a high-rise condominium on the land.

The developers of the 69-unit Bristol condominium has presold nearly 70 percent of the units when they got a $206 million loan to finance its construction in March 2017. [South Florida Business Journal] Mike Seemuth

The slots floor at Mardi Gras Casino

Jeffrey Soffer, whose family property portfolio includes Aventura Mall and the Fontainebleau Resort in Miami Beach, is negotiating to acquire the Mardi Gras Casino and Race Track in Hallandale Beach.

But Soffer dismissed the possibility of transferring the Mardi Gras property’s casino license to the Fontainebleau, even though the Soffer family has wanted to bring a casino to the Miami Beach resort.

He told the Miami Herald on Friday that such a transfer is illegal and not under consideration.

He also told the Herald that he would personally invest in the Mardis Gras property at 831 North Federal Highway without the involvement of Turnberry, the family-run real estate business that owns the Fontainebleau and Aventura Mall.

Negotiations to sell Mardi Gras come after damage from Hurricane Irma shut down the Hallandale Beach property for several months.

Soffer expects to acquire Mardi Gras within a few months after concluding negotiations with the owner, a company called Hartman & Tyner.

State law prohibits the transfer of casino licenses from one property to another despite proposals to allow such transfers. The state in 2014 blocked an attempt by Gulfstream Park, a horse track in Hallandale Beach, to transfer its pari-mutuel permit to Omni hotel complex just north of downtown Miami, owned by Malaysian casino operator Genting. [Miami Herald] Mike Seemuth

Ken Griffin and a rendering of No9 Walton (Credit: JDL Development)

Daytona Beach-born hedge fund manager Ken Griffin bought the top four floors of JDL Development’s unfinished Chicago condo tower, No. 9 Walton, for $58.5 million.

The deal, which took place in November 2017, is the most expensive home sale ever made in the Chicago area — and, according to Crain’s Chicago, the bill could climb even higher to around $80 million as the expansive unit still needs to be finished. (The previous record-holding sale was a four-acre estate in Glencoe which sold for $19.5 million in 2014.)

Griffin’s condo, one of a handful of the building’s 71 units that was purchased unfinished, has 12 to 18-foot high ceilings — an element that seems to have been customized for Griffin, reports Crain’s — with outdoor areas on each floor, panoramic views and a private pool.

The purchase in Chicago, Griffin’s primary base from which he heads Citadel, a hedge fund with upwards of $27 billion in assets under management, comes amid a spate of big buys over the past several years, most notably his under-construction Palm Beach estate — an assemblage of five contiguous oceanfront properties he bought up since 2012 — which, to date, has cost him almost $230 million. When complete, the 55,800-square-foot mansion on Blossom Way will be longer than a football field.

But buying unfinished condos seems to be trend for Griffin: in 2015, he bought two penthouses in Faena House for $60 million with the intention of combining the units, though he ended up re-listing them for $73 million months later. Also in 2015, Griffin snapped up three floors of 220 Central Park South in Manhattan for $200 million.

But who’s counting? As of this year, Forbes pegged his net worth at $8.7 billion. [Crain’s] — Erin Hudson

(Credit: Raleigh Hotel)

Real estate investor David Brillembourg categorically denied explosive allegations that former Raleigh Hotel investor Luis A. Benshimol leveled against him in both state and federal court.

A representative for Brillembourg, who runs Bri Capital, called the suits an effort “at character assassination” by a “disgruntled investor” using “demonstrably false allegations.”

Benshimol has sued Brillembourg twice – first in federal court in June 2017 (followed by an amended complaint), and then in Florida state court in early January. In the state suit, which The Real Deal reported on Tuesday, Benshimol was listed as a plaintiff in a complaint brought by a Panamanian entity called Crandal Properties. In that suit, Crandal claims an 88 percent stake in Brilla AJ RMC, the company that Brillembourg formed when he bought the Raleigh Hotel in Miami Beach in 2009 in partnership with AJ Capital Partners.

In the state suit, Crandal accuses Brillembourg of orchestrating an “elaborate shell game,” alleging that Brilliembourg took a loan backed by the Raleigh, invested it in an Anguillan property venture and then cut his partners out of the spoils.

In the amended complaint in federal suit, court, the allegations differ. Benshimol states that Brillembourg persuaded him to leave $8 million in the Anguillan venture and other investments taken from the proceeds of selling the Raleigh in 2012. In 2016, Benshimol claims he demanded the return of his investment in the Anguillan venture, but Brillembourg told him he would transfer a ground lease for a villa at the resort instead, stalled for a year, then sold the ground lease and “[stole] the proceeds from the sale for himself,” according to the suit.

Benshimol claims he lost more than $4 million in the alleged scheme. In August, Brillembourg’s attorneys motioned to dismiss the federal case on the ground the federal court did not have the jurisdiction to hear a case between the foreign entities (Anguillan entities) involved and that Benshimol did not state a claim. They moved to dismiss the amended complaint in December because it failed to remedy those issues and either way, the court still had no jurisdiction over a case between two aliens, as Brillembourg has been a resident of Mexico for 10 years, according to the motion.

Brilla AJ RMC was dissolved in 2014, records show, and Brillembourg said the company does not owe any additional money to investors. Brillembourg partnered with AJ Capital Partners through his company Brilla Group to acquire the Raleigh for $30 million, but AJ sold its position, “severed all ties with the Raleigh in 2011 and have [had] no involvement or interaction with the asset since then,” according to Chief Marketing Officer Julie Saunders.

Benshimol’s attorneys did not respond to requests for comment. Benshimol is a Venezuelan citizen who lives in Spain, according to the suit.

Jose Eugenio Silva Ritter is listed as the managing member of Crandal Properties, corporate records show, though Benshimol claims ownership over the company in both the federal and state suits.

“That is the very same Mr. Ritter who is under house arrest in Latin America while he is being investigated for numerous instances of money laundering and corruption, according to press reports,” Brillembourg’s representative said.

Ritter is reportedly listed as the director of more than 23,000 companies in the so-called “Panama Papers,” a trove of more than 11.5 million documents detailing the inner workings of thousands of offshore tax haven companies that was leaked from the Panamanian law firm Mossack Fonseca in 2015.

Janet Yellen, Goldman Sachs’ Lloyd Blankfein and Morgan Stanley’s James Gorman

From TRD NYC: The Federal Reserve settled five mortgage servicing cases by issuing $35 million in fines to banks that were cited for flawed services.

The move ends enforcement actions from the dating back to 2011 and 2012 involving five other banks have already paid similar fines, Reuters reported. The five banks issued fines on Friday are Goldman Sachs, Morgan Stanley, CIT Group, US Bancorp and PNC Financial.

Goldman Sachs will pay the largest fine at $14 million. The enforcement actions followed the 2007 and 2008 financial crisis to address “shortcomings” of banks whose homeowner borrowers struggled to keep current on mortgage payments.

The Fed also ended enforcement actions for two mortgage servicers, Lender Processing Services and MERSCORP Holdings.

In November, President Trump nominated Fed board member Jerome Powell to succeed Janet Yellen as chair of the national bank. His appointment to the position is still pending a floor vote by the Senate. [Reuters via NYP] — Will Parker

The Munilla board of directors, aerial shot of Miami (Credit: MCM, Wikimedia Commons, Max Pixel)

The six Miami-Dade County commissioners seeking reelection this year have received tens of thousands of dollars from major developers in the area, according to the Miami Herald.

At the top of the mound of donors? Aventura Mall owner Turnberry Associates, led by Jackie and Jeffrey Soffer, Triple Five, the developer behind the planned American Dream Miami mega-mall, and GL Homes.

Together, the commissioners up for reelection — Daniella Levine Cava, Jose “Pepe” Diaz, Sally Heyman, Jean Monestime, Rebeca Sosa and Javier Souto — have raised about $1.8 million over the past two years. Turnberry gave $62,000, GL Homes donated $30,000, American Dream Miami gave $26,000 and Landmark Development contributed $30,000. Munilla Construction Management also nearly $25,000, according to the Miami Herald.

Triple Five, led by the Ghermezian family, still needs the commission’s approval to change zoning designation for its American Dream Miami site. GL Homes needs county approval for a development in Kendall. And Turnberry is seeking approvals for luxury rental development SoLēMia in North Miami Beach and eventually hopes to add a casino to the Fontainebleau Miami Beach.

Munilla, which gave to all six candidates, is trying to win an $800 million contract to build the new I-395 bridge in downtown Miami. [Miami Herald] – Katherine Kallergis

National Cheat Sheet

Clockwise from top left: The revised plan for the Obama Presidential Center in Chicago, Jared Kushner, Lloyd Blankfein and Ryan Williams partner for Cadre, the proposed Expo rental building in Minneapolis, and Howard Lutnick and Barry Gosin of Newmark.

From TRD NYC: Kushner-founded real estate startup inks deal with Goldman Sachs
Cadre, the real estate startup co-founded by Jared and Joshua Kushner, has struck a deal with Goldman Sachs that will allow the bank’s clients to invest in commercial properties using Cadre’s platform, Reuters reported. The Kushners’ firm, headed by CEO and fellow co-founder Ryan Williams, buys into properties then lets its members purchase small stakes in them and claims to have already closed more than $1 billion in property deals. Goldman Sachs has reportedly committed $250 million in investment to Cadre. [TRD]

Why stock market is unimpressed by Newmark’s IPO
Commercial real estate firm Newmark Knight Frank went public in December, but it has received a decidedly rough welcome on the stock market. Owned by Howard Lutnick’s BGC Partners, Newmark intended on selling 30 million shares on the NASDAQ exchange but only sold 20 million. The expected share price was between $19 and $22, but ended up at $14 when the IPO launched on December 14. Some investors had trouble comparing Newmark to competitors such as CBRE or JLL because it didn’t use the standard GAAP measure for its earnings, the Wall Street Journal reported. [TRD]

Founders of recently shut down Xceligent rule out starting up a replacement
The founders of Xceligent, the real estate data company that filed for bankruptcy at the end of 2017, are scrapping plans to launch a successor company. Doug and Erin Curry say the threat of legal action from Xceligent is preventing them from moving forward. “We are concerned with the risk and cost of pursuing the Intrepid CRE Initiative at this time and have decided not to go forward,” Erin Curry wrote in a statement. The Currys founded Xceligent in the late 1990s but were ousted in October. The company filed for Chapter 7 liquidation as it faced a costly legal battle with rival CoStar Group. [TRD]

“Million dollar listing” doesn’t mean what it used to
There are four times as many homes worth $1 million today as there were in 2002, according to new data from real estate site Trulia. Across the top 100 U.S. metropolitan areas, roughly 4.3 percent of homes are now million dollar properties, Trulia found. But a million dollars doesn’t denote “luxury” like it had before: in many places — New York and San Francisco among them — nine figure home values are closer to the middle of the market than the high end. [CBS News]

Buying client leads online can mean relying on unethical or illegal businesses
While StreetEasy’s NYC Premier Agent program can represent the upside of finding clients online, brokers are finding many lead generator services are less than reliable and sometimes less than ethical, an in-depth report from The Real Deal found. It’s “kind of like the used car industry back in the 1970s,” said Michael Urbanksi, founder of a Annapolis, Maryland-based lead platform called Qazzoo. [TRD]

MAJOR MARKET HIGHLIGHTS

Art of the deal: When Donald Trump sold his son a NYC penthouse apartment for $350K
Eric Trump is combining three apartments atop the Trump Parc East into a valuable penthouse suite, but one of those condo units was sold to him by his father, and the building’s developer, Donald Trump, for just $350,000 in the spring of 2016. Eric Trump paid about half of the listed price for the apartment, a sale which would normally be treated as a gift by the IRS. If the apartment had been a gift, Donald Trump could have been taxed up to 40 percent of the market value. Experts guessed that the unit was sold for $350,000 so that it would look like a “fair market sale” and not a gift. [TRD & ProPublica]

Franchisees rapidly souring on New York City’s Rapid Realty
A lawsuit to be filed in New York claims that Rapid Realty founder Anthony Lolli is pushing a deceptive business model to attract franchisees. Nine Rapid Realty franchise owners are signed on to the impending lawsuit. It claims, among other charges, that Lolli is selling franchises in New York two years after Rapid Realty’s registration expired with the Attorney General’s Office. It adds that a program to provide high-interest loans to franchises was only used to enrich Lolli. A statement from Rapid acknowledged the lapsed paperwork but denied any wrongdoing. [TRD]

Revised plans for Obama Presidential Center in Chicago aim to win over critics
After initial plans for the Obama Presidential Center in Chicago met with widespread criticism, the $500 million project’s backers unveiled a revised proposal that they hope will fit better with nearby Jackson Park. The complex’s museum tower, which many thought was monolithic in the original plan, is taller and thinner in the second version. The Obama Foundation, the nonprofit behind the center, also agreed to scrap an aboveground parking structure. The plans still need approval from the Chicago Plan Commission, as well as federal regulatory reviews, but the foundation hopes to break ground by year’s end. [Chicago Tribune]

Lawsuit claims Miami Beach hotel is at the center of money laundering scheme
Miami-based investor David Brillembourg is being sued by his former partner for allegedly running an “elaborate shell game” involving the Raleigh Miami Beach hotel and a resort on the island of Anguilla. According to the suit, Brillembourg put the Miami Beach hotel, which had been owned by Brillembourg and others, up for collateral on a loan used to fund the resort in Anguilla after moving the loan through two shell companies that he owned. Brillembourg later made a profit off the Anguilla investment, but his former partners in the Raleigh say they should get the money because the hotel was used in the original loan. [TRD]

Freed from Bureau of Prisons, DC office building plans new life
As the Bureau of Prisons prepares to move out, the owners of 500 First Street NW in Washington D.C. are preparing the building for its future. Government Properties Income Trust acquired the building when it bought First Potomac Realty Trust for $1.4 billion in July 2017. Government Properties hired RMR Group to manage the building. RMR plans a major renovation of the property and has selected Avison Young as leasing agents for the 130,000-square-foot space. [Bisnow]

Plans approved for $100M rental tower in Minneapolis
The design for what will be one of Minneapolis’s biggest rental buildings have gotten the green light from planning officials. Developers hope to break ground on the 26-story tower this summer. The Expo, a joint venture between Doran Cos. and CSM Corp., will contain 372 rental units, 3,175 feet of retail space and 400 parking spaces, to be built in a historic district near the Mississippi River. At an estimated cost of more than $100 million, construction on the 2.5-acre site is expected to take two years to complete. [Minneapolis Star Tribune]

2250 North Powerline Road and Value Store It Management’s Carlos Diaz (Credit: Extra Secure Self Storage and LinkedIn)

UPDATED Jan. 16, 12:55 p.m.: Value Store It just paid $10 million to acquire a self-storage facility in Pompano Beach, property records show.

GT Development LLC, led by Thomas P. Richerson, sold the 76,236-square-foot facility at 2250 North Powerline Road for about $130 per square foot. The company paid $1.6 million for the property in 2006 and completed the building in 2010, records show.

Value Store It Powerline LLC of Fort Lauderdale bought the warehouse. Value Store It, owned by Todd Ruderman, has properties in Florida and Massachusetts, according to its website.

The Pompano Beach facility has 680 climate-controlled storage units.

Over the past year, self-storage real estate has caught the attention of investors and prominent storage operators. In November, Prudential paid $18.5 million for a new 101,000-square-foot self storage building in Little Havana.

CubeSmart, a Pennsylvania-based self-storage real estate investment trust, also recently bought properties in Delray Beach, Oakland Park and will manage a facility being built near Coral Gables.

Correction: A previous version incorrectly identified the square-footage as 110,690 square feet.

Steven Lee Cantor and Sharon Dresser (Credit: High Street Retail USA)

Miami commercial broker Sharon Dresser is suing her late husband’s business partner, alleging he cheated her out of a $2 million insurance policy.

Dresser’s husband, prominent international tax and real estate attorney Steven Lee Cantor, committed suicide in October 2016. Dresser, broker and owner of High Street Retail USA, is alleging that Hal J. Webb, Cantor’s former partner, failed to transfer ownership of a $2 million life insurance policy at the time of Webb’s resignation, according to the Miami Herald. Months later, a few days before Cantor committed suicide, Webb emailed an executive at the Cantor Group that “Cantor might not be in the right state of mind.”

According to the lawsuit, Webb pushed a grief-stricken Dresser to sign a settlement agreement in November, letting him keep $212,500 that was mistakenly distributed to him – which allegedly contributed to the firm’s financial demise. By signing the agreement, Dresser released Webb from all claims.

Webb also requested and received a copy of Cantor’s death certificate before Dresser.

“Webb knew that should Cantor die in the near future, Webb stood to financially benefit from his death. Webb purposely delayed and avoided transferring the key man policy to The Cantor Group with this morbid aspiration in mind,” according to the lawsuit.

Webb, who resigned from the firm formerly known as Cantor & Webb in June 2016, now leads Bilzin Sumberg’s private wealth services group. Bilzin acquired the Cantor Group. [Miami Herald] – Katherine Kallergis

Treasury Secretary Steve Mnuchin (Credit: Getty Images)

From TRD NYC: Treasury Secretary Steven Mnuchin isn’t having any of this claim-property-taxes-as-charitable-deductions business.

To curb the impacts of the new tax law, some states have floated the idea of allowing residents to replace their state and local taxes with deductible charitable contributions. But Mnuchin called the idea “ridiculous.”

“From a Treasury standpoint and IRS, I don’t want to speculate on what people will do, but I think it’s one of the more ridiculous comments to think you can take a real estate tax that you are required to make and dress that up as a charitable contribution,” Mnuchin told reporters on Thursday. “I hope that the states are more focused on cutting their budgets and giving tax cuts to their people in their states than they are in trying to evade the law.”

The new law caps the amount of state and local taxes, known as SALT, that homeowners can deduct from their federal tax bills. As a result, leaders of states hit hardest by the change — including New York, New Jersey and California — have looked for ways to soften the blow. For example, Gov. Andrew Cuomo signed an executive order allowing residents to prepay their 2018 property taxes as a way to avoid the new $10,000 cap on deductions. [Politico]Kathryn Brenzel

Rendering of the project and Pulte Homes’ Brent Baker (Credit: Pulte Homes)

The fate of a single-family home development planned for a golf course in Tamarac is in limbo due to contaminated soil found on the site.

The Tamarac City Commission will vote on whether to ban construction of 152 homes on the Woodmont Country Club site until the developer makes an effort to remove or decontaminate the 60,000-cubic-yard heap of dirt, according to the Sun Sentinel.

Pulte Homes paid $10.2 million for the 44-acre site at 7801 Northwest 80th Avenue last summer. The developer is building on nine of the golf club’s 18 holes.

Woodmont owner Mark Schmidt blamed Hurricane Irma for the setbacks, telling the Sun Sentinel that the removal of downed trees and debris is still underway.

Pulte and other home builders are increasingly buying golf course land for redevelopment. In 2016, Pulte launched sales of 645 homes and townhouses at the Parkview at Hillcrest community golf course in Hollywood. [Sun Sentinel] – Amanda Rabines

Caption: Mike Pappas, Jo Ann Mazzeo, Debra Simon and Steven Reibel (Credit: Keyes Company)

The Keyes Company is making its way up Florida’s Treasure Coast.

The Miami-based real estate company just closed on the acquisition of the Realty Pros, a Boynton Beach-based brokerage, according to a press release. The deal adds 43 agents and an office at 8788 West Boynton Beach Boulevard.

In 2017, the Boynton brokerage’s sales volume totaled about $75 million, according to a spokesperson.

Debra Simon, founder of the Realty Pros, started her real estate career with Keyes in 1985. She’ll stay on as a broker, the spokesperson said.

Keyes, the largest independently owned brokerage in Florida, became the top firm in Palm Beach County when it merged with Illustrated Properties Real Estate in 2016. Since then, the company bought Realty Elite The Palm Beaches in Wellington, Jupiter-based Bluffs Real Estate and Investment Properties, and two South Florida offices of Greenwood Village, Colorado-based Shorewood Real Estate. It now has 59 offices and 3,500 agents in Florida, the spokesperson said.

Firms like One Sotheby’s International and Brown Harris Stevens have also been active on the acquisition front in South Florida over the past two years.

Keyes CEO Mike Pappas previously said the firm will pay between two and six times a firm’s EBITDA, or earnings before interest, tax, depreciation and amortization, for a brokerage. The higher a brokerage’s sales volume, the higher the payout for sellers. And the sellers of those firms typically receive a payment upfront, with the rest being contingent on agents staying and sales volume, among other factors that vary deal to deal.

Kenneth Harney

The practice is called “greenwashing” and home shoppers need to be on guard: It means a house is being marketed as environmentally friendly and energy-saving when it doesn’t really deserve that description.

Greenwashing is a growing issue in real estate as multiple studies demonstrate that consumers are attracted to — and will often pay premiums for — homes that are highly efficient in saving on utilities bills.

Just about everybody likes the concept of green, and builders and real estate agents increasingly use the term as a sales come-on. But experts say too often what’s marketed as green isn’t what it purports to be when you take a close look.

Sandra Adomatis, an appraiser in Punta Gorda, Florida, who is nationally known for her expertise in valuing green properties, says “look in the MLS (multiple listing service) and you’ll see lots of homes listed as having green features” but it may mean as little as “somebody put in some LED light bulbs or a couple of Energy Star appliances in the kitchen.”

In an interview, Adomatis described one listing she saw recently on a home built in 1959. It indicated that the house had a Home Energy Rating System (HERS) score of zero — as good as you can get. (The HERS index measures a home’s energy efficiency and requires testing of the home’s performance by a certified HERS rater. The lower the score, the better.)

Adomatis knew it was unlikely that an older home would come anywhere close to such an impressive rating, so she asked the listing agent why she was marketing the house with a zero HERS score. Her response: “I don’t know what HERS is or how they score, so I just put in zero.” Wow.

Allison A. Bailes III, founder and president of Energy Vanguard LLC, a home energy rating and consulting company based in Decatur, Georgia, says “absolutely, [greenwashing] happens all the time. A lot of [builders] are doing things that are just standard,” but they’re marketing them as green. He says he saw one company aggressively advertising its allegedly green homes, but most of the details didn’t amount to much. It was hype: Insulation R-values that met, but did not exceed, minimum local building code requirements; code-minimum HVAC systems; “digital thermostats,” which are commonplace; Energy Star appliances; and a long list of other unremarkable features. As to Energy Star appliances, Bailes noted in a blog, “if you’ve done any shopping lately, you may have noticed that it’s hard to find one that’s NOT Energy Star certified.”

Kari Klaus, CEO and founder of Viva Green Homes in Arlington, Virginia, a national listing portal exclusively for “eco-friendly” homes, says “greenwashing is a growing problem — clearly there’s a desire to jump on the train and use buzzwords” like “green,” “sustainable” and “high efficiency,” too often with little to back up the claims. Her website (www.vivagreenhomes.com) carries free listings for certified (HERS, LEED, Energy Star, Built Green, Net Zero and others) as well as non-certified homes that have some green features such as solar panels, geothermal, energy-efficient windows and doors, water conservation devices, etc.

When non-certified homes are listed on the site, the seller or agent must check off boxes indicating what green features the property offers. The site then produces a “Green Score” ranging from one to five stars to give potential purchasers a rough idea of how green the house really is.

The site also allows visitors to shop for specific features or high ratings area by area.

So how can buyers and shoppers recognize a bona fide green house? Adomatis says you need to look for six essential elements:

— The site planning for the house is sensitive to the immediate environment, minimizes tree destruction and is strong on managing water runoff.

— Energy efficiency throughout, from high-performance HVAC, lighting, insulation and appliances.

— Exceptional interior air quality thanks to the use of advanced air filtration and exchange systems.

— Extensive use of non-toxic building materials.

— Water conservation efficiencies, such as water-saving toilets and shower fixtures and possibly some reuse of waste water.

— Ease of long term operation and management.

The “house should work for you” thanks to the combination of green features and products, she says, “rather than you having to work for the house.”

Pent up demand for Class A industrial space in South Florida drove up the total dollar volume of sales by 12 percent in 2017 compared to the previous year, according to a First Quarter 2018 report by the Commercial Industrial Association of South Florida.

Last year, nearly 5.3 million square feet of industrial warehouse space changed hands totaling $418.7 million. The square footage was 21 percent more than the amount that sold in 2016, even though 21 fewer buildings sold in 2017 than the previous year, according to the association’s figures.

That means bigger warehouses with more amenities built in the last five years are taking the lion’s share of investor interest, said Tom Dixon, founder of Dixon Commercial Real Estate, the firm that produced the report for CIASF. He shared the findings during the association’s annual industrial market luncheon on Thursday.

“There is more Class A space in areas that in the past have not been there,” Dixon said. “You can now get it in the Airport West area, Hialeah, Hialeah Gardens, Medley and Opa-Locka. The competition from developers in these areas is really high.”

Dixon said landlords of new Class A space are taking advantage by getting tenants to sign leases that require them to pay real estate taxes, insurance and maintenance as a percentage of their rents. Yet, available space fills up quickly, Dixon noted.

According to the report, vacancy rates are expected to continue to fall in the coming year. For instance, Hialeah started off 2018 with a 2 percent vacancy rate compared to 2.5 percent last year. The vacancy rate in Miami-Dade’s north industrial submarket went from 7.2 percent at the start of 2017 to 4 percent at the beginning of 2018.

Sebastian Juncadella, an advisor with Fairchild Partners, said developers will add approximately 1.5 million square feet of industrial space in 2018. “Investors and developers realize the window of opportunity is shrinking even though there is a lot of product coming into the market,” he said. “Opportunities to grab properties are becoming harder and harder.”

Paul Williams homes (Credit: Wikimedia Commons)

From TRD LA: A starchitect’s name can add cachet to a listing, and raise the price several notches. But how can a buyer be sure that a home they’re slapping down millions for really is a Frank Lloyd Wright or Paul Williams creation?

Well-heeled buyers are increasingly enlisting architectural historians to dig up the true origins of a prospective property to ensure they aren’t duped into paying for a pedigree that isn’t there, according to the Wall Street Journal.

“In today’s competitive and sometimes frenzied marketplace, none of the parties are always as diligent as they should be in researching attribution,” Karen McNeill, a historian at wealth management firm Ascent Private Capital, told the newspaper.

Los Angeles County is dotted with the works of dozens of the world’s most famous architects. Many, like the Case Study Houses commissioned with the top architects in the world during the mid-20th century, are easy to verify as legitimate.

Others, like the works of pioneering architect and Los Angeles native Paul Revere Williams, are not. Williams, the first African-American to be admitted to the American Institute of Architects, was prolific and designed thousands of homes and buildings (like the Theme Building at Los Angeles International Airport) around Los Angeles County during the last century.

His works haven’t been exhaustively catalogued, so establishing his connection to homes can get tricky.

Hilton & Hyland’s Jeffrey Hyland told the Journal that his agents will describe a home as “in the style of Paul Williams,” if they can’t definitely prove his involvement. [WSJ]

CREFC Miami 2018 conference (Original photo credit: Katherine Kallergis)

Shifting trends in retail, blockchain technology, the effect of the Trump administration and CMBS trading were top of mind this week at the Commercial Real Estate Finance Council Miami 2018 conference in Miami Beach.

Many real estate finance industry insiders said Trump’s impact on the commercial real estate industry is positive, but warned of his dangerous rhetoric. The White House’s tax bill will push more Americans away from home ownership and into renting, boosting the country’s multifamily markets, they said.

During a panel covering the overall market cycle, panelists agreed that job creation has allowed for one of the longest commercial real estate cycles. Construction lending is difficult to secure, pricing has surged ahead of demand and transactions have slowed down, but the market fundamentals are still good. Among the concerns were low cap rates and extremely aggressive property appraisals.

Speaking to a standing-room only crowd at the opening keynote session, former Whole Foods co-CEO Walter Robb discussed Amazon’s $13.7 billion acquisition of the grocery store chain, its history and strategy when opening new stores.

The acquisition gave Amazon legitimacy in the food world, something it had been struggling with, experts said. Amazon’s quick move to slash prices of some items by more than 40 percent a day after announcing the deal also allowed the company to drive the conversation and shed its “whole paycheck” nickname. Traffic jumped 25 percent following the price cuts. Whether that remained in the long term is irrelevant because perception often becomes reality, CREFC panelists said.

About 2,000 of Whole Foods’ 365 Everyday Value brand items are now available on Amazon. The company has also brought its items into Whole Foods stores, plus added lockers for package pickups – giving it a strong foothold in the online grocery business, an area that has caused struggles for most retailers.

Overall, Amazon controls about 40 percent of all online sales.

While department stores like Bon-Ton, Sears and Stein Mart have struggled with declining foot traffic, TJ Maxx, owned by TJX Companies, has virtually no online shopping presence and is outperforming most big-box stores. In 2017, 34 retailers declared bankruptcy and more are preparing to do, according to Bloomberg.

For mall owners and lenders, losing an anchor is considerably more difficult to recover from than losing smaller tenants. Some said the closures are creating opportunities for affordable housing and other uses. At the same time, panelists cautioned against oversaturating healthy retailers by bringing in too many gyms, restaurants and fast fashion retailers like H&M and Forever 21, for example.

“Experiential real estate is code for we don’t know what to do next,” one panelist said.

Grand Wailea and Blackstone’s Jonathan Grey (Credit: GrandWailea and Wikimedia Commons)

From TRD LA: The shopping spree isn’t over yet.

Blackstone Group agreed to pay $1.1 billion to acquire the Grand Wailea resort in the Hawaiian island of Maui in what appears to be the second largest deal for a single hotel. The seller was GIC Pte, a Singapore sovereign wealth fund, Bloomberg reported.

GIC first acquired the Waldorf Astoria-branded hotel in March 2013 for $774 million, Real Capital Analytics records show.

Spanning 40 acres, the Wailea resort includes 780 rooms, three restaurants, multiple swimming pools and a spa. The four-star hotel is currently managed by the Hilton.

The deal comes on the heels of another massive billion-dollar purchase. Blackstone, America’s largest private landlord, paid Cabot Properties $1.8 billion for a 22 million-square-foot industrial portfolio just last month. Prior to that, the firm dropped $500 million to acquire a 4 million-square-foot industrial portfolio on the West Coast.  [Bloomberg] — Natalie Hoberman

(Credit: Realtor.com and Wikipedia)

Comedian, actress and activist Rosie O’Donnell just sold her West Palm Beach home for $5 million to billionaire heir H. Wayne Huizenga Jr., property records show.

Huizenga Jr., the eldest son of entrepreneur H. Wayne Huizenga, plans to knock down the nearly 7,600-square-foot house at 3100 North Flagler Drive, said Billy Nash of the Keyes Company’s Nash Group. Nash represented Huizenga Jr., who is president of Fort Lauderdale-based Huizenga Holdings and CEO of Rybovich Superyacht Marina in West Palm. Liza Pulitzer of Brown Harris Stevens of Palm Beach represented O’Donnell, a former Star Island resident.

The five-bedroom house, built in 1957, sits on an acre of land with golf course views, a deep water dock and 178 feet of waterfront. O’Donnell paid just under $5 million for the home in July 2015, according to property records. She listed it for sale in December 2016 for $6 million.

In October, Huizenga Jr. sold his 11,000-square-foot home mansion at 16191 Quiet Vista Circle for $6.7 million to Office Depot CEO Gerry Smith.

Huizenga Jr.’s father co-founded Waste Management, led Blockbuster Video in the 1990s and has owned three professional sport teams in South Florida: the Miami Marlins, the Miami Dolphins and the Florida Panthers.

Rendering of Brightline and Patrick Goddard (Credit: Brightline)

All Aboard Florida’s high-speed rail is set to finally launch to the public this weekend.

Brightline, the service that will eventually link Miami to Orlando, has been long awaited by the local development and tourism industries. Service between Fort Lauderdale and West Palm Beach will begin operating first, on Saturday, about six months behind schedule. The downtown Miami station is expected to launch service at some point over the next few months, according to a press release.

The company also promoted Patrick Goddard to president. Over the past year, two executives working on Brightline left – All Aboard Senior Vice President John Guitar joined Blanca Commercial Real Estate and Florida East Coast Industries President and CEO Vince Signorello resigned to launch his own real estate investment and development firm.

All Aboard’s $3 billion development is being privately financed through a combination of debt and equity. Brightline has said that the three South Florida rail stations are surrounded by about 4 million square feet of new development.

In downtown Miami, plans call for 1.5 million square feet of development covering six blocks around the downtown station, including 800-plus residences, 165,000 square feet of retail space and 300,000 square feet of Class A office space. In July, FECI closed on $130 million in EB-5 financing for the mixed-use MiamiCentral station.

In West Palm Beach, All Aboard is also building a 275-unit apartment complex next to the station. Developer Michael Masanoff is also planning a $300 million mixed-use Transit Village a few blocks away.

And in Fort Lauderdale, the company’s plans include a seven-story parking garage next to the Brightline station with 1,570 square feet of retail on the ground floor.

Brightline released introductory rates, starting at $10 per segment, for trips between Fort Lauderdale and West Palm Beach. A trip that can take about two hours in rush hour by car is expected to take 35 minutes via Brightline, the company said.

845 East Dilido Drive in Miami Beach (Credit: Realtor.com)

A son of Progressive Insurance Company’s co-founder just paid $5.9 million for a waterfront Venetian Islands lot in Miami Beach, property records show.

The Daniel R. Lewis Revocable Trust bought the development site at 845 East Dilido Drive from Prionntigh LLC, a company controlled by Lauren Pressman. Pressman is director of investment research and part of the real assets committee of Aspiriant, according to Bloomberg.

Lewis is a son of Progressive co-founder Joseph M. Lewis and brother of the company’s former chairman and CEO, the late Peter B. Lewis. In 2016, Dan and Jan Lewis paid $7.45 million for a unit at Grove at Grand Bay in Coconut Grove.

The 13,353-square-foot lot was last listed for $6.5 million with Jill Hertzberg of Coldwell Banker’s The Jills team. It first hit the market in 2015 for $7 million, meaning it sold for a roughly 15 percent difference. The property has more than 100 feet of water frontage, according to the listing.

The seller is also tied to WTAS LLC, which is managed by San Francisco tax firm Andersen Tax. Previous sales information for the lot was not available in property records.

From left: Howard Lutnick, Barry Gosin and Robert Futterman

From TRD NYC: On the heels of a lukewarm initial public offering, Newmark Knight Frank is close to acquiring the commercial brokerage RKF to grow its New York City retail operation, The Real Deal has learned.

Sources said Newmark is in advanced discussions to buy the Midtown-based retail leasing and investment sales brokerage for an undisclosed price.

The sale is expected to close sometime in the first quarter, sources familiar with negotiations said.

Sources said RKF, led by Robert Futterman, is in the process of signing several brokers to long-term contracts. Another source said Futterman himself is expected to stay on after the deal, at least in the near term, with an unspecified role. The parties are also still sorting out the fate of the RKF name.

Representatives for neither firm immediately responded to requests for comment.

The acquisition comes at a pivotal point for Newmark. The firm launched an IPO on Dec. 15 to disappointing results. Newmark planned to sell 30 million shares for $19 to $22, but instead sold 20 million for $14 each. The share price has since risen slightly.

The deal would seek to give Newmark its multinational commercial brokerage operation a significant boost in New York City retail, a category in which RKF is a powerhouse. Newmark and RKF are two of the most active brokerages for retail leasing in the city. In TRD’s December ranking of the top Manhattan retail brokerages, RKF was No. 1 with 1.1 million square feet across 203 deals and Newmark took third place with 424,808 square feet across 33 deals. (Cushman & Wakefield ranked second.)

RKF’s top 2017 deals included Nordstrom Rack’s 47,267-square-foot lease at the Durst Organization’s 855 Sixth Avenue and Lionsgate Entertainment recently inked a 45,000-square-foot lease for a movie studio and entertainment center at SJP Properties’ 11 Times Square.

While RKF is heavily focused on New York retail, Newmark has a team of star brokers including Jeffrey Roseman, Jason Pruger and Drew Weiss.

Futterman founded RKF, then known as Robert K. Futterman & Associates, in 1998 after working at the retail brokerage Garrick-Aug Associates.

In recent years, RKF has engaged in talks of a sale with other commercial brokerages, including CBRE in 2014 and Colliers International in 2015.  None of those deals made it to the finish line, however. At the time of those talks, industry insiders pegged the value of the company between $40 million and $80 million.

Newmark started as a family firm in 1929, and in 2005 it formed a partnership with London’s Knight Frank. Howard Lutnick’s BGC Partners had owned Newmark since 2011, when it paid $99 million in cash and shares. Now that Newmark has spun off from BGC, Lutnick’s firm owns 85 percent of Newmark’s Class A common stock.

Konrad Putzier and James Kleimann contributed reporting.

Rendering of 420 Lincoln Road and Paul Cejas

Former U.S. Ambassador Paul Cejas and his wife Gertie will have to revamp their plans for a new mixed-use project on a prominent corner of Washington Avenue in Miami Beach.

On Tuesday, the Miami Beach Historic Preservation Board delayed a vote on the proposed project by 420 Lincoln Road Development LLC — a company controlled by the power couple — so that a two-story apartment building designed by famed local architect Henry Hohauser can be saved from the wrecking ball.

420 Lincoln Road Development plans to construct a 10-story building totaling nearly 180,900 square feet. More than 111,000 square feet would house 134 residential units ranging in size from 560-square-foot one-bedrooms to 1,187-square-foot two-bedrooms. The building would also have about 12,900 square feet of ground floor retail and a rooftop pool deck. Residents and commercial tenants would have access to 237 parking spaces in an existing garage at 1601 Drexel Avenue, where Time Out Market will open.

In order to make room for the new building, the developer had proposed demolishing the Hohauser structure at 425 16th Street and a neighboring 15,430-square-foot retail building at 1600 Washington Avenue. The Cejas’ company has owned the buildings since 1990.

Several board members were adamant about preserving most, if not all, of the Hohauser. But the historic preservation board was not opposed to tearing down the retail building, which was built in 1952 and is not a protected structure.

Board member Jack Finglass said Hohauser is his favorite architect. “This is a very important building. It should not be chopped or surgically altered or harassed in any way.”

Nancy Leibman, another board member who had met with Cejas and his attorney Monika Entin prior to the meeting, also voiced opposition to anything less than a full preservation. “The historic building must remain,” she said. “I made that quite clear.”

The board also informed Entin that if her client kept the Hohauser building intact, they would be more receptive to approving several variances 420 Lincoln Road Development is requesting to reduce the setback requirements for the residential tower portion of the project.

Entin told board members her client is willing to redesign the project in an attempt to keep as much of the 1938 Hohauser building as possible. The developer could work on a design that connected the Hohauser building to the new structure, utilizing it as lobby, Entin said.

726 Hi Mount Road in Palm Beach

A Carlyle Group managing director just paid $22.3 million for a waterfront Palm Beach mansion, property records show.

Marcel van Poecke, and his wife, Irina Liner, bought the 10,400-square-foot mansion at 726 Hi Mount Road for about $2,135 per square foot. He oversees investments in the oil and gas industry outside of North America for the Carlyle Group. Poecke also founded the Belgian company AtlasInvest, which is also an investor and operator in the energy industry.

The sellers of the four-bedroom lakeside house are investor Jeffrey Lane and his wife, Nancy. Records show the couple bought the home in 1999 for $5.9 million.

Palm Beach broker Lawrence Moens had the listing. The house hit the market in December for $26.5 million, which means it sold at a 16 percent discount off the original asking price.

Features of the home, built in 1938, include a first-floor master suite, outdoor patios, a pool and a dock in the Intracoastal Waterway.

In October, Carlyle sold the Stiles Hotel in South Beach for $17.5 million. The company owns properties across South Florida, including the Overture Dadeland senior apartment complex in Miami, the Lauderdale Marine Center, and a 437-unit mobile home community in Boynton Beach.

From left: Cushman’s Kenneth McCarthy, Louis D’Avanzo and Richard Persichetti

From TRD NYC: Could the era of squeezing more and more workers into every square foot of office space be coming to an end?

“Densification” has been the word on the tips of dealmakers’ tongues in the office market in recent years as tenants switched from layouts focused on individual offices toward more open plans requiring less space.

But that trend may be reversing. Tenants that inked deals in new construction on the Far West Side last year took more space than they left behind, according to Cushman & Wakefield.

Companies leased 8.3 million square feet in Hudson Yards and Manhattan West, leaving behind about 7 million square feet, Cushman head of research Rich Persichetti said during the firm’s year-end market update Wednesday morning.

Asset manager BlackRock, for example, signed a lease last year for 850,000 square feet at the Related Companies, Oxford Properties Group and Mitsui Fudosan America’s 50 Hudson Yards. The company currently occupies 700,000 square feet in two buildings on Park Avenue and East 52nd Street in the Plaza District.

BlackRock pledged to add 700 new jobs on top of its current 2,700 employees over the next decade in exchange for $25 million in state tax credits attached to the deal.

Louis D’Avanzo, the managing principal for Cushman’s Midtown office, said that some companies have squeezed as many workers as they can into their offices, and are now finding a new normal.

“In some ways, the pendulum may have swung too far to one side of the open space, really dense [office],” he said. “I think there’s more data coming back that not all jobs and functions work well in a completely open, dense environment.”

Ken McCarthy, Cushman’s principal economist, said one reason for the switch toward more space could be the simple fact that the economy is growing and these companies are adding more jobs.

“I think it’s a little early but I think it’s a possibility that going forward we may see less [densification],” he said.

McCarthy said New York City added a net of 53,000 jobs in 2017, a year he called a “mixed bag” in terms of job growth.

From left: Jared Kushner, Lloyd Blankfein and Ryan Williams

From TRD NYC: Cadre, the real estate crowdfunding startup co-founded by Jared and Joshua Kushner, is partnering with Goldman Sachs. The bank’s private wealth management clients can now invest in real estate through Cadre’s platform and have already committed $250 million, Reuters reported.

Cadre buys into commercial properties and then puts small stakes up for sale on its members-only platform for wealthy, accredited investors. The firm markets itself as a cheaper, more transparent alternative to real estate funds managed by private equity firms and claims to have closed more than $1 billion in property deals.

Jared and Joshua, the founder of Thrive Capital, co-founded Cadre with Ryan Williams, a Blackstone Group and Goldman Sachs alum and Cadre’s current CEO. Kushner reportedly omitted his stake in disclosure forms when he joined the White House as a policy adviser last year.

The $250 million investment is the largest commitment Cadre has received to date, and the firm is in talks with Goldman’s clients to raise even more money, Williams told Bloomberg. Cadre hopes to double its inventory and volume over the next year, Williams added.

In June, Cadre raised $65 million in a venture funding round for an $800 million valuation. One of the investors was Goldman Sachs. [Reuters, Bloomberg]Konrad Putzier

Donald Trump, Eric Trump and 100 Central Park South (Credit: Getty Images and Barlavi Realty LLC)

From TRD NYC: This story was co-published with ProPublica.

President Trump’s son Eric is preparing to capitalize on a windfall he received from his father during the presidential campaign: He’s combining three luxury Manhattan high-rise apartments, one of which he purchased at a throwaway price from his father, into one potentially lucrative penthouse.

In the spring of 2016, Eric Trump got a great deal from his father. He bought two previously unsold condominium apartments at Trump Parc East for just $350,000 each, about half of the price they had recently been listed for.

Such bargain-basement sales are usually treated as gifts by the IRS. But they might not have been taxed that way, tax experts said, because of advantages available only to real estate developers.

Last month, Eric transferred ownership of one of the condos — unit 14G — and two other adjacent apartments he owns into a new entity called 100 CPS Penthouse LLC.

UNIT 14G IN THE TRUMP PARC EAST BUILDING WAS TRANSFERRED TO A NEW LLC IN DECEMBER 2017. (Click to view entire document)

He had already applied for permits to combine these three units into a 2,400-square-foot apartment on the top floor of a building that overlooks Manhattan’s Central Park. The estimated cost to combine the apartments: $410,000.

A CONSTRUCTION PERMIT FOR THE TRUMP ORGANIZATION TO RENOVATE THREE CONDOS IN THE TRUMP PARC EAST WAS APPROVED IN AUGUST 2017. (Click to view entire document)

All told, Eric paid just under $3 million for the three apartments. With the estimated renovation costs included, he will have spent more than $3.3 million to create the penthouse.

How much Eric could get on the market if he sold such a large penthouse is not clear. For comparison’s sake, a 1,700-square-foot apartment on a lower floor of the same building sold for $7.5 million in 2013. At that price per foot, the penthouse would sell for over $10 million. Higher floors tend to command steeper prices.

In 2008, a 4,400-square-foot unit in the building went on the market for $38 million but never sold.

Representatives for the Trump Organization did not respond to a request for comment.

David Herzig, a tax professor at Valparaiso University Law School, said the fact that Eric needed unit 14G in order to assemble the enlarged penthouse could make the fair market value of the gifted apartment even higher than previously thought.

The $350,000 deal he got from Trump “might not only have been a fire sale,” he said, “but if this is a key component that you would need to combine them together to make a penthouse, to get the requisite number of rooms, that actually means that this property should have been sold at a premium, not a discount.”

It’s not clear why Trump sold 14G to Eric for just $350,000, when he sold another unit, the 1,350-square-foot 14D, to Eric for $2 million in 2008. That was much closer to its likely market value.

If he had simply given the apartment to Eric for free, Trump could have incurred up to 40 percent tax on its market price. But the sale for $350,000 could have been arranged to look like a “fair market sale” and not a gift.

As the developer of the building, Trump had some leeway with how he priced unsold apartments. He could have demonstrated that the real value was very low if, for example, the apartment was still subject to city rent regulations or was in need of significant repairs. The apartment’s new function as the keystone for a penthouse, however, makes that a difficult case to argue, Herzig said.

Trump paid transfer taxes on the sale, which isn’t the norm when gifting a property. But he also did not check a box on sales documents to indicate that the sale was between two relatives.

The tax reform bill the president signed into law last month increased the amount of tax-free gifts individuals can hand down to their children from $5 million to $10 million. Without the president’s tax returns, we might never know if Trump reported the $350,000 sales to Eric as gifts.

Trump was listed as Trump Parc East’s sponsor until August of last year, eight months into his presidency, filings with the New York State Attorney General show. The president’s two oldest sons, Eric and Donald Trump Jr., are now in charge of selling the 14 remaining apartments owned by the Trump Organization.

Decca Muldowney contributed to this report.

Aerial photo of the retail portfolio, former Miami Beach mayor Philip Levine and Scott Robins (Credit: RobinsCompanies, Wikimedia Commons)

Developer Scott Robins and Florida gubernatorial candidate Philip Levine recently listed their retail portfolio in Miami Beach’s Sunset Harbour neighborhood for sale, Robins confirmed.

The seven-building portfolio, which spans 61,400 square feet of leasable space and 1.66 acres of land, includes the buildings at 1787, 1919, 1928 Purdy Avenue; 1900, 1916, 1930 Bay Road; and 1935 West Avenue, according to marketing material. Listing brokers Luis Castillo and Scott Wadler of HFF expect the property to trade for $70 million or more, Castillo said. It hit the market in late December.

Robins, CEO of the Robins Companies, said Levine wants to sell because he’s focusing on running for governor. Levine was Miami Beach mayor from 2013 until November of last year. Robins plans to invest his proceeds in a new neighborhood, which he expects will be in the city of Miami.

The partners led the major redevelopment of the Sunset Harbour neighborhood. Sunset Harbour Shops was developed in a public-private partnership with the city of Miami Beach, which owns the adjoining parking garage.

Commercial rents in the buildings range from about $70 per square foot to $100 per square foot, Robins said. Tenants include Lucali, Flywheel Sports, Barry’s Bootcamp, Panther Coffee, Icebox Café, Jugofresh, NaiYaRa, Dirt, Stilstville and Ofa. The portfolio’s net operating income is expected to grow at a compound annual growth rate of 4.7 percent over the next 10 years, according to the offering.

“They’ve done a lot to create value and they’re taking advantage of timing in the market,” Castillo said.

HFF’s Manny de Zarraga and Danny Finkle are also listing the property.

The neighborhood is also home to the condominium project Sunset Harbour Yacht Club, a Whole Foods Market, Publix and Fresh Market. Other landlords include Greenstreet Partners.

Howard Lutnick and Barry Gosin

From TRD NYC: Newmark Knight Frank’s blockbuster IPO in December is shaping up to be a disappointment. Blame bad timing and confusion over the company’s earnings.

Newmark, which was owned by Howard Lutnick’s BGC Partners, initially planned to sell 30 million shares for $19 to $22. Instead it sold 20 million for $14 each in its Dec. 15 IPO on the Nasdaq stock exchange. As of Tuesday, the share price had risen slightly, to $15.47.

“It didn’t price as well as we thought,” Newmark’s CEO Barry Gosin told the Wall Street Journal. “We reduced it.”

Observers were puzzled ty the decision to go public in mid-December, traditionally a bad time for IPOs, the Journal reported. But Lutnick had made a commitment to go public in 2017, putting him under pressure. “Generally we like to do what we say we’re going to do,” Gosin said. Going public in 2017 also meant laxer disclosure requirements, because the firm’s revenues were still low enough to qualify as a so-called emerging growth company.

Investors also had a hard time comparing Newmark’s earnings to other real estate firms like CBRE or JLL because its offering prospectus didn’t use the standard GAAP measure.

BGC bought Newmark for $99 million in cash and shares in 2011. The Real Deal broke down the potential implications of Newmark’s IPO for the industry in November. [WSJ]Konrad Putzier

Industrial portfolio in West Hialeah and IPA’s Douglas Mandel  (Credit: IPA)

Commercial real estate investment firm Cofe Properties just paid $32.5 million for a portfolio of warehouses in Hialeah.

The deal includes 41 warehouses totaling roughly 376,000 square feet in two areas: west of the Red Road and north of the Hialeah Expressway, and west of 16th Avenue and north of Okeechobee Road.

Cofe Cix West Hialeah LLC, an affiliate of Cofe Properties, paid nearly $90 per square foot for the portfolio. The seller is an affiliate of the Boston-based asset manager, TA Realty. The company purchased the portfolio in 2006 for $24.1 million.

Douglas Mandel and Benjamin Silver of Marcus & Millichap’s Institutional Property Advisors brokered both sides of the deal. Mandel said in a statement that nearly all of the tenants’ leases are expected to increase 4.5 percent annually, triple net.

The buildings range from about 4,000 square feet to 28,000 square feet, with a majority of tenants made up of mom-and-pop business, like cabinet makers, manufacturers and some auto shops, Mandel said.

The portfolio sale is another example of recent investment in South Florida’s industrial market. In December, Blackstone Group announced it will buy a 22 million-square-foot industrial portfolio for $1.8 billion, 1.1 million square feet of which will be in South Florida.

In 2016, Cofe paid $16.6 million to purchase the Webster Business Park, near Miami International Airport, from TA Realty.

Photo illustration by Lexi Pilgrim for The Real Deal

From TRD NYC: Nathan Horne was simply calling to confirm a pre-arranged meeting. The Corcoran Group agent had bought a lead online, from a company that fed him names of people looking to buy or sell a home and set him up with a day and time to visit the client.

But when Horne made the call, he learned the person on the other end wasn’t interested in doing business. He was instead a police detective, and he was pissed.

“It’s good you didn’t come to my house,” the cop told Horne, “because I’ve got a gun.”

Agents and brokers were slated to spend nearly $10.5 billion in advertising in 2017, according to an estimate by analytics firm Borrell Associates. And with more homebuyers beginning their purchases online, lead generation is becoming a more popular way of winning business. StreetEasy’s Premier Agent program thrust the topic into the New York zeitgeist last year, and other big national players since as Rupert Murdoch’s Realtor.com have sensed an opportunity.

But there’s a whole nether universe of startups that specialize in lead generation, and brokers say many struggle to provide good leads. Some, they say, even dabble in illegal activity.

“I’m reluctant with the services for a couple reasons,” said Mirador Real Estate’s Neeta Mulgaokar. “One, I don’t know their track record. I don’t want to invest in something [when] I don’t know what my return is going to be… And two, I’m not really sure where I stand on my ethical viewpoint on buying leads from someone else’s product.”

Hotline bling

Online lead generation is still viewed by many as a dubious practice.

It’s “kind of like the used car industry back in the 1970s,” said Michael Urbanksi, founder of a Annapolis, Maryland-based lead platform called Qazzoo. “Not really well respected.”

Urbanski, who has worked in the lead-gen business since the 1990s, caught wind of a new competitor a couple of years ago with a puzzling business model. A startup called Buyerhomesite was calling several of Urbanski’s long-term clients, looking to poach them away, so Urbanksi looked into it and began talking to the company’s former employees. He discovered the leads being offered weren’t leads at all, and tipped off law enforcement.

An investigation by the U.S. Attorney’s office in Maryland found that for more than a year, Buyerhomesite’s CEO, Joseph Dominici, created numerous fake leads, buying burner phones with area codes from all over the country with fake lead names and fake contact information. These leads, all controlled by his employees, were then sold to brokers through Buyerhomesite and another site called FreeHomeFind.

In September, Dominici pleaded guilty to wire fraud and identity theft charges. Sentencing is scheduled for Jan. 30, and court filings indicate he will serve at least two years for his crimes. Dominici’s attorney, Robert Bonsib, did not respond to a request for comment.

And then there are entrepreneurial types who peddle leads that may be real, but are acquired through questionable means.

There are networks of sites that are designed to look like websites for top new developments such as One57, 220 Central Park South, and many others. These copycat websites solicit contact information from potential buyers who may believe they’re on the official website of the project. That contact information, now a solid lead, is then sold to brokers.

Google has a “very slow, very spotty mechanism” to address the issue of these copycat sites, said Jared Seeger, the president of Knightsbridge Park, a digital real estate marketing agency. Seeger, who The Real Deal interviewed in 2016 about this issue, said the problem was much starker in less regulated real estate markets such as Miami.

“The New York market is generally less tolerant of that kind of behavior,” Seeger said.

A broker at Douglas Elliman insists a lead service actually tried to steal one of her own leads, a $10 million buyer. The broker, who spoke under the condition of anonymity, said she and her colleagues were asked by management several years ago to give their client contact information to a new third-party service, ostensibly so the service could help streamline the home search for their clients. Instead, this broker said, her client filled out a survey early one morning and immediately got a call from someone who seemed more interested in taking over as the buyer’s agent.

“They [the service] tried to steal the customer for themselves,” the broker, who’s been wary of lead-generation services ever since, said.

Watered down

Fraudsters like Buyerhomesite are the exception rather than the rule, Urbanksi said, and firms that can’t get their acts together don’t last. But even mainstream platforms often fail to deliver useful leads.

A big problem is lead dilution. With services like Zillow, Trulia, and Realtor, “every lead you get is being diluted four times,” Urbanski said.

Aaron Graf, CEO of LG Fairmont, a boutique brokerage that’s built its business around lead generation, said dilution is chief among broker gripes.

“They won’t say this, but they’ll sell a lead three times, five times and you don’t even know how many times they sell that lead,” he said of major lead platforms, speaking generally. LG Fairmont employs someone in-house to turn a mass of leads purchased from different sources into actionable intelligence for its agents. The company analyzes and tracks leads in order to determine how they can be best be put to work and creates agent-specific algorithms to determine what’s a good match.

StreetEasy declined to comment on the mechanics of its lead-generation product. But a source familiar with the company’s process said the accusation was unfair. While StreetEasy doesn’t explicitly sell the same customer to different brokers, if the customer fills out an interest form multiple times for multiple properties, then those have been generated as separate leads, the source said. The company rolled out a feature called Premier Agent Concierge, which prioritizes the customer’s first attempt to get information about a listing by assisting the customer in reaching an agent. However, the feature does not assist new connections for the customer if he or she later solicits info about other listings—that’s up to individual agents to sort out for themselves.

When StreetEasy first rolled out Premier Agent in March, brokers were irate that the feature would display advertising brokers’ contact information on the listing by default, confusing some consumers who may have been looking to reach the exclusive listing agent. Star broker Ryan Serhant called the practice “shocking” and “illegal,” while others likened it to stealing. StreetEasy has since made it easier to distinguish between the listing agent and the agent advertising to be there. Many, including Serhant, have since got on board.

“A successful lead generation platform needs to be an end-to-end partner that helps agents manage and scale their business,” StreetEasy general manager Susan Daimler said in a statement. “For the past 10 years, Zillow Group has been building Premier Agent to be just that and we brought it to New York City after hearing some of the challenges that local agents were facing, for example – the ease of responding to leads in a timely manner, managing lead volume and organizing and scaling their businesses.”

The chief complaint among agents, however, isn’t sketchy situations with lead services, but just that the leads are weak. Horne, the Corcoran agent who caught the cranky detective on a bad day, also recently called a lead he bought who turned out to be deceased. And another who didn’t speak English. But he’s used other lead services, and on the whole says they’ve been great.

“I’ve spent a ton of money on SmartZip,” he said. “They’re analyzing different variables for homeowners who are looking to sell… those are good leads.” Bess Freedman, co-president of Brown Harris Stevens and a vocal critic of Premier Agent, said she was impressed with a new service called RealScout and was looking forward to “doing something with them in 2018.”

Brokers’ frustrations with leads sometimes stem from misconceptions about what leads really are, sources said.

“You get 50 leads – 10 are gonna be spam, 10 are gonna be trash, it’s just the law of large numbers,” said Graf. Agents should understand that you can’t always draw a straight line to the closing table and that every lead has an expiration date, he added.

“Internet leads disappear in value really rapidly,” Graf said. “After five minutes, basically, you lost it.”

Clarification: This article was updated to clarify aspects of StreetEasy’s Premier Concierge feature.

Apogee unit 701 and Michael Caine (Credit: IMDB and CondoBlackBook)

English actor Michael Caine is saying cheerio to his luxury condo in South Beach.

Property records show Caine and his wife Shakira sold unit 701 at Apogee, at 800 South Pointe Drive, to Apogee 701 LLC, a company controlled by Heidner Law of New York. The Caines sold the 4,154-square-foot unit for $7.45 million, or nearly $1,800 per square foot.

The Oscar-winning actor, known for his roles in “Alfie,” “The Dark Knight” trilogy, “Inception” and “Interstellar,” listed the four-bedroom South-of-Fifth unit for nearly $8.7 million in June with John Lennon of South Pointe Drive Realty.

The buyer is a wealthy Brazilian businessman, Lennon said. Christiana Machado of Cervera Real Estate represented the buyer.

The actor had listed the condo for sale several times in the last two years, initially with an asking price of $12.9 million. He and his wife paid $4 million for the unit in 2008, and added a small movie theater. It also has about 2,500 square feet of terrace space.

Lennon said the Caines sold the unit because they’re spending less time in Miami.

Caine opened a restaurant on Lincoln Road in Miami Beach called South Beach Brasserie, which closed in 1999.

Homestead Colony Apartments and Starwood’s Barry Sternlicht (Credit: Apartments.com and Wikipedia)

Starwood Property Trust snapped up a rental complex in Homestead as part of a $600 million acquisition of affordable housing units in Florida, property records show.

The Greenwich, Connecticut-based investment firm paid $34.35 million for the Homestead Colony, a 312-unit development at 800 East Mowry Drive. Starwood affiliate SPT Dolphin Homestead Colony paid about $110,100 per apartment.

The seller, Homestead Colony Limited Partnership, is tied to Riverstone Residential Group, which Greystar acquired in 2015.

Homestead experienced some of the fastest-growing rent increases, according to a recent Zumper report. As of late last year, rents in Homestead rose by 15.1 percent year-over-year to $1,070 for a one-bedroom.

In addition to Homestead Colony, Starwood is buying 28 apartment complexes in Orlando, Lakeland, Lake Worth, Windermere, Melbourne and Palmetto, according to a press release. The majority of the 6,185 units were in Orlando and the entire portfolio sale is expected to close by the second quarter of this year.

Starwood financed the deals with a $116.75 million mortgage from Wells Fargo, records show.

The firm began investing in affordable housing apartments in 2015, when it bought a 31-property portfolio of low-income multifamily units for $563.5 million.

Renderings of Ocean Terrace, Sandor Scher and Alex Blavatnik (Credit: Getty Images, Ocean Terrace developers)

To make way for their ambitious redevelopment project on a 2.2-acre slice of North Beach, Alex Blavatnik and Sandor Scher want to demolish substantial portions of 12 historic buildings and make exceptions to a zoning overlay district created for Ocean Terrace last year for Miami Beach’s next emerging neighborhood.

And after more than four hours of discussion at a Miami Beach Historic Preservation Board meeting on Tuesday, the board voted to approve the redevelopment project – with several conditions.

Representatives for their company, Ocean Terrace Holdings, claim their proposal preserves and restores the historic character of the buildings, but staffers for the Miami Beach Preservation Board questioned the need for some of the demolition work, variances and waivers.

“Alex Blavatnik and Sandor Scher invested a tremendous amount of money buying up blocks along Ocean Terrace with the vision of restoring that neighborhood to its vitality and grandeur,” said Neisen Kasdin, an Akerman shareholder and former Miami Beach mayor who represents the developers.  “The hallmark of the plan is preservation and restoration.”

The properties run from Collins Avenue to Ocean Terrace between 73rd Street and 75th Street. Blavatnik and Scher want to build a new 16-story, 58-unit residential building, a 76-room hotel, a parking garage and 18,000 square feet of retail and restaurant space. For the hotel, the developers will combine the Broadmoor and Ocean Surf hotels on Ocean Terrace by connecting the two properties.

A new structure at Collins Avenue and 75th Street will feature a curvilinear corner design
reflective of many MiMo and Streamline Modern facades and the parking component’s facade will be set back from storefronts on the ground level, according to Ocean Terrace Holdings. The residential building will also have curvilinear balconies and multiple eyebrows inspired by the natural flow of an ocean wave and MiMo architecture of the surrounding buildings. To increase pedestrian access, a mid-block open breezeway will connect Collins Avenue to Ocean Terrace.

To accomplish this, Blavatnik and Scher are proposing to:

Demolish buildings at 7400, 7410 and 7430 Ocean Terrace but keep the facades and completely demolish 7420 Ocean Terrace in order to build the 16-story residential tower.

Demolish buildings at 7409, 7421, 7433, 7439 and 7441 Collins Avenue except for the facades in order to build a new structure that will have ground floor retail, two levels of parking and an amenity deck for the hotel and residential building.

Partial demolition, renovation and restoration of the Broadmoor Hotel at 7450 Ocean Terrace. The construction work would include a new central air conditioning system, larger windows, new balconies and a new canopy for the ground level terrace.

Demolishing 40 percent of the rear portion of the Ocean Surf Hotel at 7436 Ocean Terrace, as well as demolishing the rooftop penthouse and all partition walls, fixtures and finishes on the ground level.

A staff analysis recommended against granting the developers’ request for setback variances to accommodate the construction of balconies in the proposed residential building, as well as a gym terrace, pool deck and mechanical room on the rooftop of the Broadmoor Hotel.

“Such construction is contrary to the purpose of the newly created overlay district,” the analysis states. “These variances are design-related and not related to the retention of the contributing structures or the character of the historic district.”

Ocean Terrace Holdings agreed to work with city staff on reconfiguring the setbacks, which helped the company win the historic preservation board’s approval. “There is a lot of demolition here,” said board member Scott Needleman. “We are not always in favor of it, but we are going to go along with it. Overall, I like it.”

Following the meeting, Scher called the outcome an “important milestone.” He and Blavatnik’s plans have faced stiff resistance for years. In 2015, Miami Beach voters rejected a zoning change proposal that would have allowed for the project to move forward sooner.

“We can now begin to explore a partnership with a hotel flag and work on the economic details to ensure the project can successfully be completed,” he said.

Vacant mall

The bell tolls for traditional retail malls, but investors betting against debt in the sector haven’t seen the gains some thought they’d see by now.

Amid increasing competition from online retailers, shifting consumer trends, and empty malls, investors have looked to the CMBX 6, a credit default swap index that tracks bonds backed by mortgages on malls among other properties. Yet, so far only four loans tied to the index have incurred a total of $4.3 million in losses, according to the Wall Street Journal.

Nationwide, malls certainly aren’t doing well by any stretch, but they at least appear to be dying a bit of a slower death. Some landlords have refinanced debt, others have found traditional replacement tenants, and some reinvented their properties for “experiential” tenants.

Some portions of the CMBX 6 has offered some opportunities for short-sellers, though. The parts of the index rated BB and BBB- drooped 12.1 percent and 9.5 percent, respectively in 2017, according to the Journal.

There are more opportunities for those willing to wait. A report by Alder Hill Management, a New York-based investment firm, predicted that 26 out of the 40 loans tied to mall properties on the CMBX 6 would default by 2022. [WSJ] – Dennis Lynch