Real Estate News

Fundrise co-founder Ben Miller. Opportunity Zones pock South Los Angeles

A crowdfunding startup is launching a $500 million investment fund to focus on developments in distressed areas that the federal government has made eligible for generous tax break.

Washington, D.C.-based Fundrise plans to start its Fundrise Opportunity Fund next week. It wants to raise its target amount by the end of 2019, according to Bloomberg. The company specializes in small investments, with the minimum investment for the fund set at $10,000.

The fund will target the government’s Opportunity Zones program, created under the most recent federal tax overhaul. It allows investors to defer capital gains tax until 2026 if they invest those gains into construction projects in economically depressed areas.

The government designated Opportunity Zones in 18 states in April, from as small as just a few blocks in New York City to entire municipalities in rural states like Kansas. Miami is also included in the zones. The projects have to be new construction or include “substantial rehabilitation” to qualify.

The Economic Innovation Group, a Washington-based nonprofit, estimates that U.S. investors have around $2 trillion in unrealized capital gains from stock and mutual funds and available to them.

Fundrise told Bloomberg it will first focus on metro areas, including Los Angeles, Seattle, Washington, Atlanta, and the San Francisco Bay area.

It’s one of first firms out of the gate to move forward with an Opportunity Zones investment fund, but many other companies and banks are drawing up their own plans to take advantage of the program.

There is some risk involved. The government hasn’t yet provided clear tax and legal guidance on the program, which could limit deferment claims.

The program could prompt major change in areas deemed Opportunity Zones, and has been criticized by some as providing fuel for gentrification. Some say that developers will use the program to skirt taxes on projects they had already planned. [Bloomberg] — Dennis Lynch 

225 West Wacker Drive in Chicago and Brett White (Credit: 225 West Wacker)

Cushman & Wakefield plans to raise $750 million through its initial public offering at a valuation of $6 billion, including debt.

The global brokerage expects to set its pricing range on Monday and start its roadshow, people familiar with the company’s plans told the Wall Street Journal.

The pricing is expected to set Cushman’s market capitalization somewhere between $3 billion and $4 billion.

Cushman last month filed the preliminary prospectus for its IPO, revealing that the company has been operating at a net loss since private equity owner TPG Capital purchased the firm in 2015. TPG also loaded Cushman up with debt, which it hopes to start paying down through a successful offering.

The brokerage, meanwhile, has seen an exodus of talent as it prepares for its public debut, and there’s skepticism about how robust demand will be from Wall Street with the global real estate market in such late stages. [WSJ] —Rich Bockmann

From left: David Fano, a WeWork space, and Jason Bauer (Credit: WeWork and Voda Bauer)

A year after launching a real estate investment fund, WeWork is getting into the brokerage business.

On Friday, the coworking company announced that it is piloting WeWork Space Services, which will represent companies and help them find office space outside of WeWork’s locations. Jason Bauer, who previously co-founded the brokerage Voda Bauer Real Estate, will head the venture. He is starting off with three agents, but hopes to grow that number to 10 to 12 in the near future.

Avi Voda, Voda Bauer’s other co-founder, also joined the new venture.

The brokerage is part of WeWork’s push to offer more services to small and mid-sized companies with ten to 250 employees, according to the company’s chief growth officer David Fano. Some of these firms come to WeWork looking for an office, but end up deciding they’d rather sign a lease with a traditional landlord. Referring these cases to an in-house brokerage allows WeWork to keep them in its universe. Any firm that signs a lease through one of WeWork’s brokers will get a free WeWork membership for 12 months, allowing it to access the online member network and book conference rooms at WeWork locations, among other perks.

“Our mission is to create a world where people make a life and not just a living — it’s not ‘sign a bunch of leases and make a bunch of buildings so we can get members in them’,” Fano said. “We’ve already got these companies approaching us. For some reason or another, they chose not to go with us. So let’s stick to our mission and help them find space, but give them some value in the network.”

The brokerage is owned by WeWork, but agents will work as independent contractors for now. Following the traditional brokerage model, agents will be paid commission by landlords for every lease they arrange. Fano said agents would receive a standard commission rate, but did not specify further. He also said he eventually hopes to move away from the commission model and turn the brokers into consultants who advise companies on all their office-related needs (including, for example, insurance) on a regular basis. Because of the other business lines the company wants to add, WeWork Space Services is technically not structured as a brokerage.

WeWork already has a broker referral program, offering commissions to any outside agent who brings a tenant to one of its spaces.

The launch of the brokerage comes as WeWork increasingly enters new business lines. Last year alone, the company launched a real estate investment fund in partnership with private equity firm Rhone Group, a gym and a grade school.

Renderings of Lionheart’s Pompano Beach project, Ophir Sternberg and Ricardo Dunin

Lionheart Capital is closer to launching its planned oceanfront luxury condominium project in Pompano Beach, after winning key approvals from the city.

The Pompano Beach Development Review Committee this week gave site plan and design approval for 1380 South Ocean Boulevard, a proposed two-tower, 239-unit project at 1380 South Ocean Boulevard.

The development still needs approvals from the city’s architectural review board and the planning and zoning board. The site plan review may require a resubmission due to a number of technical considerations, but the development could appear before the planning and zoning board as early as September, David Recor, director of development services for the city, said.

The city commission granted approval in April, but the planning and zoning board has the final say on development approvals in Pompano Beach, Recor said.

1380 South Ocean is planned for a 4.6-acre site, among the the last vacant oceanfront parcels remaining in South Florida. The property stretches from the beach to the Intracoastal Waterway. Lionheart bought the land for $22.4 million in 2013.

Ophir Sternberg, founding partner and CEO of Lionheart Capital, previously said the project will launch sales next year.

The development, which has been in the works for the last five years, has already received permission from the Federal Aviation Administration, which was necessary because of the height of the buildings, Recor said.

1380 South Ocean’s easternmost tower on the ocean will have 30 stories and 129 units, while the tower on the west side, on the Intracoastal, will have 13 stories and 110 units, according to the architect for the project, Andrew W. Burnett, a principal at Stantec.

The final mix of condo sizes, number of bedrooms, prices per unit and total cost of the project have not yet been determined, he said.

The development will feature 10-12 boat slips and two pool decks, one facing the Intracoastal and the other facing the beach. Each tower will have a parking deck and a small café, each with 1,500 square feet.

One of the reasons this project has taken so long, Recor said, is that the developers have worked with adjoining property owners and neighborhood associations, to resolve potential problems. A spokesperson for Lionheart said that since the original proposal for the complex was unveiled, “we addressed [issues related to] views, setbacks, traffic and privacy concerns.” The spa and restaurants, for example, will only be available to residents and their guests so as to limit traffic.

Also, the number of stories has been reduced to allow for higher ceilings in the units and the garages raised to be above grade because of the threat of sea level rise.

David Beckham and Miami Freedom Park (Credit: Bob Bekian via Flickr)

For David Beckham, landing a stadium site for his Miami professional franchise has proven just as elusive as winning a World Cup for England.

Since his group Miami Beckham United launched its bid to field a Major League Soccer team four years ago, the international futbol star has cycled through four possible locations with each one falling through, including Beckham’s preferred site at PortMiami that was torpedoed by the cruise line industry.

In late 2015, it appeared Beckham United had finally settled on a 9-acre site in Overtown that included the purchase of land owned by Miami-Dade County. However, the deal hasn’t been finalized due to ongoing litigation by wealthy preservation activist Bruce Matheson, who sued the county for allegedly violating state law when it agreed to sell Beckham the land without first getting competitive bids.

Enter Jorge Mas and Jose Mas, the chairman and CEO, respectively, of Mastec, a publicly-traded engineering and construction firm based in Coral Gables. In December, the brothers became Beckham’s new partners alongside Masayoshi Son, the chairman of Sprint Corp. and CEO of SoftBank as Beckham’s original majority partner Todd Boehly bowed out. Boehly, chairman and CEO of Eldridge Industries and a part owner of the Los Angeles Dodgers and the Los Angeles Sparks, couldn’t come to terms with MLS and the league’s board wanted Beckham United to recruit more local owners, according to media reports. Marcelo Claure, Sprint’s CEO and another original partner, is still part of Beckham United.

Since then, Jorge Mas — who is not enthusiastic about the Overtown site — took the lead in the stadium search. The prominent Miami businessman, with the support of Miami Mayor Francis Saurez, is championing a no-bid proposal to build a massive commercial development with the stadium as the centerpiece on a site near Miami International Airport that is currently home to Melreese Country Club and an adjoining park complex.

On Wednesday, the Miami City Commission voted 3-2 to allow a referendum on the November ballot asking Miami residents to approve or reject Beckham United’s latest stadium pitch. 

The Real Deal has broken down the important aspects of the project:

1. What is Miami Beckham United proposing to build?

A $1 billion commercial project called Miami Freedom Park that would include a 28,000-seat state-of-the-art stadium for Miami Beckham United’s soccer franchise, 380,000 square feet for retail and restaurants, 1 million square feet of technology-related office space, 120,000 square feet for entertainment uses, 20,000 square feet of conference space, about 500 hotel rooms, and a parking facility with a green roof that will be utilized for public soccer fields.

2. Where would Miami Freedom Park be located?

On about 73 acres of city-owned land at 1400 Northwest 37th Avenue that Miami currently leases to Delucca Enterprises, which operates the Melreese Country Club and the adjoining 18-hole golf course. The complex also includes tennis courts and a children’s water park. Should voters approve Miami Freedom Park and the city reaches an agreement with Miami Beckham United, the country club complex would be torn down. Beckham United would also build a public park.

3. What would be the terms of the lease between Miami Beckham United and the city of Miami?

Beckham United is offering to pay an annual rent of $3.6 million or fair market value as determined by two independent appraisals; $20 million to fund the park’s construction paid in annual installments of $666,667 for 30 years; $5 million for the city’s Miami Riverwalk and Baywalk projects; and a living minimum wage for the entire complex’s employees set at $11 an hour for the first year of operation but to grow incrementally until reaching $15 an hour in the fourth year.

4. Are there any environmental clean-up costs and who is paying for it?

There is a massive layer of toxic incinerator ash underneath the Melreese golf course that will have to be removed before any new development can take place. For decades, the city buried tons of ash contaminated with barium, lead arsenic and other deadly compounds underneath city parks. In recent years, the city and the county have undertaken efforts to remove the toxic materials. It cost the city $10 million to remove 86,000 tons of toxic soil at Grapeland Park, which is directly adjacent to Melreese. During the special city commission meeting on Wednesday, Jorge Mas said he estimates the clean-up will cost around $35 million and that Beckham United will pay for it. However, the real tab won’t be known until the group gets access to the Melreese site. Mas said if the price tag is higher than $35 million, Beckham United would seek state and federal funding, but it will not ask the city for a dime.

5. What does the opposition say about Miami Freedom Park?

Jorge Mas and Beckham have faced an onslaught of criticism in recent weeks for rushing the city commission to place their proposal on the November 4 ballot. Opponents claim that the public, as well as the commissioners, did not have enough time to vet the terms of the deal and that details were withheld from public scrutiny until the last possible moment. For instance, the proposed term sheet was released by city officials at 2 a.m. on Wednesday, eight hours before the start of the special city commission meeting. Miami lawyer Douglas Muir sued the city to stop the referendum by alleging Miami officials violated the city charter by authorizing a no-bid deal without competitive bidding.

Developer Jorge Pérez, who compared Beckham’s latest stadium play to the Miami Marlins stadium scandal, wrote a letter to city commissioners arguing Miami could fetch around $10 million a year in rent, a figure echoed by Michael Fay, managing director and principal of Avision Young’s Miami office. Fay wants to set up a competitive bidding process for the Melreese site in order to “drive the highest value and terms for the city.”

Next week there will only be two new real estate event in South Florida.

On July 23, Assured Trust & Title will be hosting the first session of its Blueprint for Real Estate Success Series – Kendall event from 10:30 a.m. to 11:30 a.m. at Total Wine & More, 11960 Mills Drive. Eric Orland of the Orland Group will be leading the event. Attend to benefit from his experience in the industry.

On July 26, Alpha Connector will be hosting its Real Estate Social Miami event from 6 p.m. to 9 p.m. at Canvas, 90 Northeast 17th Street. The networking opportunity will provide real estate professionals with a chance to meet and converse with other industry veterans.

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

South Florida’s biggest office sales in June

South Florida’s office market is cooling down after years of strong demand and low vacancy rates, but that doesn’t mean major deals have come to a halt.

1111 Brickell Avenue, also known as the Sabadell Financial Center, sold in June for $248.5 million, marking the priciest office sale of the month and year.

Two other office buildings sold for more than $20 million outside the city of Miami, and another two sold in Boca Raton’s Park at Broken Sound last month. Increasingly, tenants in South Florida, especially in Miami, are seeking Class A office space, driving down the demand for Class B offices, according to a recent report.

1111 Brickell – Kohlberg Kravis Roberts & Co. and Parkway Properties | $248.5M

PGIM Real Estate’s sale of 1111 Brickell Avenue in Miami to a partnership between Kohlberg Kravis Roberts & Co. and Parkway Properties for $248.5 million in June ended months long speculation over who would buy the iconic Brickell property.

The 30-story, 520,000-square-foot office tower sold for about $478 per square foot. Parkway and KKR financed the deal with a $217 million loan from Square Mile Capital Management. CBRE brokered the deal.

The tower was built with the adjacent JW Marriott Hotel in 2000. It was was renamed in 2010 when Spanish lender Banco Sabadell acquired Mellon United National Bank. Tenants include Telefonica USA, Hunton & Williams, Baker & McKenzie, Regus and Barclays.

Kendall Summit Office Park – Cofe Properties | $35M

Cofe Properties bought a six-building office park in Kendall for $34.75 million from TA Realty, the third-largest office sale last month.

The Miami-based commercial real estate firm paid about $200 per square foot for the 174,000-square-foot property known as the Kendall Summit Office Park at 11400 to 11440 North Kendall Drive. It secured a $26 million non-recourse loan from an unnamed lender to finance the purchase.

Cushman & Wakefield represented the seller, Boston-based TA Realty, and arranged the financing.

Kendall Summit Office Park was developed between 1984 and 1989 on 8.16 acres. Tenants include BB&T, Keller Williams, Quest Diagnostics, Wells Fargo, Claims & Risk Management Services, LLC and Greenberg Trial Lawyers.

900 Broken Sound – Investment group | $23.7M

A partnership between Mainstreet Capital Partners and an investment fund managed by the Davis Companies sold an office building at the Park of Broken Sound in Boca Raton. 

900 Broken Sound LLC, a company that lists a Greenville, South Carolina address paid $23.7 million for the nearly 116,000-square-foot building at 900 Broken Sound Parkway.

The buyer, described in a press release as a group of local investors and a national investment fund, financed the deal with an $18.4 million loan from Wells Fargo. HFF represented the buyer and seller. NAI/Merin Hunter Codman is managing and leasing the building.

The sellers paid $19.75 million for the property in 2015. It was built in 1989.

Portions of the 700-acre office and industrial park, formerly known as the Arvida Park of Commerce, are being redeveloped into retail and multifamily projects, adding more than 1,000 new apartments to the Park at Broken Sound.

TurnAround King – Northern Trust Building | $13.5M

Reality TV’s the TurnAround King paid $13.5 million for an office building in Aventura.

Property records show Grant Cardone, who produces and stars in his TV show, paid about $540 per foot for the Northern Trust Bank building at 18901 Northeast 29th Avenue.

Guarapo Aventura LLC, led by real estate investor Matthew Lvoff, sold the 25,000-square-foot building to Cardone’s 10X HQ LLC. The buyer financed the deal with a $13.5 million mortgage from City National Bank.

The 1.5-acre property, near the Intracoastal Waterway, last sold in 2015 for $14.5 million, which means it traded at a loss of $1 million.

StateTrust Group – 1750 Clint Moore Road | $13M

An entity tied to Melvin Stier sold the 51,000-square-foot office building at 1750 Clint Moore Road to the StateTrust Group for $13 million, or about $260 per square foot.

The three-story building was developed in 1996 on a 5-acre lot within the Park of Broken Sound.

The buyer, Boca 1750 LLC, is led by executives at the Miami-based investment management firm StateTrust Group, an affiliate of StateTrust Wealth Management.

The buyer was represented by Marcy Javor of Signature One.

Records show the building last sold in 2013 for $12.7 million.

1200 Brickell Avenue

Babson College inks lease at 1200 Brickell

Massachusetts-based Babson College is expanding to Brickell.

The college, which specializes in entrepreneurship education, inked a five-year, 5,500-square-foot lease at 1200 Brickell Avenue and is filling up half of its third floor.

Marcello Agostini of AG Real Estate Advisors represented the landlord, SGJ 1200, LLC. Records show the Miami-based company is led by Jorge Cury and Jose Roberto Neto. Cushman & Wakefield represented the tenant.

Agostini said Babson College is in the midst of moving in and plans to open by the upcoming fall school year. The 20-story office building, which is anchored by BB&T, has about 375 office condo units and is about 85 percent occupied, according to Agostini. He said the building’s rents are in the mid-to-high $30s per square foot.

The office tower was built in 1982 and was converted to office condos in 2008.

Babson College has been ranked No. 1 for entrepreneurship education by the U.S. News and World Report for more than 25 years. Last year, it was reportedly moving into the Cambridge Innovation Center at 1951 Northwest Seventh Avenue, according to the Miami Herald. In the U.S., the school has existing hubs in Wellesley, Boston and San Francisco.

Furniture retailer moves into Prologis Gratigny Park in Miami

Furniture and accessories retailer S&V Group just inked a 70,825-square-foot lease at a warehouse within the Prologis Gratigny Park in Miami.

The warehouse at 11400 Northwest 32nd Avenue spans 262,900 square feet. The landlord, AMB Fund III Mosaic LLC, is an affiliate of Prologis. Records show the company paid $14.5 million for the warehouse in 2006.

Easton & Associates’ Jim Armstrong and Mike Waite represented the tenant.

Miami Design District building inks Poltrona Frau as new tenant

Italian leather furniture design brand Poltrona Frau is opening a new flagship store in Miami’s Design District.

Poltrona Frau inked a lease for a 400-square-foot space at 1400 Northeast Second Avenue. The company recently relocated to Los Angeles and has opened stores in Houston, Dubai and Tokyo.

It plans to have a grand opening in September, according to a press release.

Joe & The Juice and Rosa Mexicano

Joe & The Juice | downtown Miami

The first food and beverage tenant began serving at MiamiCentral this week.

The Scandinavian juice bar, coffee shop and cafe is leasing 2,400 square feet in the lobby of Brightline’s MiamiCentral station, at 650 Northwest First Avenue, suite 100.

Joe & The Juice has more than 200 locations worldwide. At MiamiCentral’s Central Fare food hall, it will be joined by Toasted Bagelry & Deli, Miami Smokers, Blackbrick Chinese, Doggi’s and other Miami restaurants. The 50,000-square-foot dining hall is located on the first two floors of the mixed-use train station, developed by Brightline’s parent company, Florida East Coast Industries.

Rosa Mexicano | Brickell

A longtime tenant of Mary Brickell Village closed its doors this week.

Rosa Mexicano was open nearly 11 years at 900 South Miami Avenue. A spokesperson told Miami.com that the Mexican restaurant’s lease expired at the Brickell shopping site. Its 1111 Lincoln Road location, which opened in 2011, is still operating.

Rockpoint Group paid $113.5 million for Mary Brickell Village in 2015.

First Watch and Arepa 69 | Miami

First Watch and Arepa 69 both signed leases at the Palm Plaza shopping center in Miami, at 16867 Northwest 67th Avenue, near Hialeah.

First Watch, a breakfast-focused cafe, inked a 10-year deal for a 3,747-square-foot space. It’s expected to open in February.

Arepa 69 signed a five-year deal for 1,700 square feet. The arepa eatery will be open in December.

Terranova Corp. represented the landlord in the leases. Other tenants include Navarro Discount Pharmacies, Boston Market, Sketchers, MD Now and Starbucks. A spokesperson for Terranova declined to provide rents.

Guy & The Bird | North Miami Beach

A yakitori-style restaurant is headed to North Miami Beach.

Guy & The Bird, a concept from Guy & The Restaurants, is leasing 2,000 square feet at 17070 West Dixie Highway, according to a release. The space will include a nine-foot yakitori grill and event space. It’s slated to open in September.

Salumeria 104 | Coral Gables

Graspa Group opened its second Salumeria 104 location.

The 3,300-square-foot restaurant, at 117 Miracle Mile in Coral Gables, opened earlier this month in the former Angelique Euro Cafe space. Alan Howard of Great Miami Investment brokered the 10-year deal. Graspa has two five-year extensions, which would bring the lease to 20 years.

Three mixed-use projects in Coconut Grove, Little Havana and Wynwood

Three significant, yet separate, mixed-use projects proposed by Redsky Capital, Terra and the Altman Companies breezed through Miami’s Urban Development Review Board, receiving unanimous approvals this week.

Redsky is planning an eight-story building with 144,781 square feet of office space and another 36,072 square feet of commercial space on three properties totaling 1.25 acres in the heart of Wynwood.

Called Forum, the project is designed to create a friendly pedestrian environment through paseos that connect all of the proposed building’s frontages, as well as an enclosed parking garage, according to Redsky’s letter of intent. Forum will also feature multi-level open terraces, plazas, passageways and accessible retail frontages. The project architects are Stantec and Ten Arquitectos.

The development site is located at 235-257 Northwest 27th Street, 252-276 Northwest 27th Terrace and 2700 Northwest Second Avenue, all of which Redsky purchased from Goldman Properties for $30.75 million in 2016.

Redsky required approval from the Urban Development Review Board because the size of the project’s floor area exceeds 2,000 square feet.

In Coconut Grove, Terra is proposing Summerhill, an office-apartment project designed by Arquitectonica that would rise next door to the company’s Grove at Grand Bay condo building. Located at 2655 South Bayshore Drive, Summerhill would feature two 20-story residential towers with 303 units sitting atop of a seven-story pedestal that would house 32,000 square feet of office space and a shared parking garage. The project would also have some ground-floor retail and two lobbies.

Like the Forum development, Summerhill’s floor area exceeds 2,000 square feet, requiring the board’s approval. Terra would demolish an existing seven-story building with 97 apartments to make way for Summerhill.

In an emailed statement, Terra President David Martin said Summerhill would target renters who want to live in one of Miami’s “most exciting neighborhoods.”

Meanwhile, Altman is looking to jump in on Little Havana’s hot market. The firm is under contract to purchase a property at 2100 Southwest 8th Street where it would develop a building with 224 residential units and 9,500 square feet of ground-floor retail. The project would be called Altis Little Havana.

The review board approved eight waivers including a 3 percent increase in maximum lot coverage, substitution of one commercial loading berth to two residential loading berths, and a 10 percent reduction of the required parking.

Servers in a data center, one of the sectors where specialty REITs are thriving

Speciality real estate investment trusts are posting strong gains and attracting an increasing amount of investment dollars.

These nontraditional REITs home in on particular property types, like data centers and self-storage warehouses. Many have posted double-digit growth in so-called funds from operation, a general measure of cash flow into the trust. That compares to 2.5 percent to 3 percent growth in the broader REIT market, according to National Real Estate Investor.

Green Street Advisors counts 40 nontraditional REITs in that category. Those have outperformed the National Association of Real Estate Investment Trusts Index by a wide margin each year over the last five years.

Those types of specialized REITs have been around for more than 20 years, but became more popular following the recession.

Specialization opens up an investor to fluctuations in a given market and some sectors have not done as well as the wider market, like private prisons and single family rentals.

Some traditional REITs see diversification as a better path, particularly those with significant retail holdings as they try to divest from the sector and insulate themselves from recent losses.

According to Green Street, more specialty REITs will enter the market in the coming years. [NREI] — Dennis Lynch 

Will baby boomers turn into party poopers when they unload their homes in large numbers starting in the next decade? Could they create an indigestible oversupply in the market that lowers home prices and frustrates sales?

That’s a sobering scenario outlined by two new, provocative studies. One, from Fannie Mae’s Economic and Strategic Research group, warns that the “beginning of a mass exodus looms on the horizon,” where “homeownership demand from younger generations is insufficient to fill the void left by multitudes of departing older owners.” The net result: gluts in some local markets with potentially negative impacts.

A second study, from the Stephen S. Fuller Institute at George Mason University, focuses on the Washington D.C. market and sees a similar problem ahead. “The significant number of older owners in relatively large homes may portend a ‘baby boomer sell-off'” in the D.C. region and elsewhere in the U.S., it reports. Some long-time owners “may have difficulty attaining the price gains they witnessed in their neighborhoods during recent years,” according to author Jeannette Chapman, the Fuller Institute’s deputy director.

Both studies cite demographic and housing data to make their cases. Boomers — the giant generation of Americans born between 1946 and 1964 — own 32 million homes, two of every five in the country. The generations preceding them occupy another 14 million homes. Collectively their properties are valued around $13.5 trillion, according to the Fannie Mae study, co-authored by Patrick Simmons of the strategic research group and Dowell Myers, a professor at the University of Southern California.

All of these homeowners face key choices: Do we stay put, sell, downsize or move to a rental? At some point, the inevitable kicks in: health issues and death will force them to dispose of their properties.

Fannie’s study estimates that from 2016 to 2026, between 10.5 million and 11.9 million older owners will end their ownership status. Between 2026 and 2036, another 13.1 million to 14.6 million will do the same.

This massive and unprecedented generational unloading of houses could be “negative for the home sales market,” the Fannie study warns, because the upcoming generations of buyers may not have the financial capacity — or desire — to absorb the large numbers of homes coming to market. How much of a price hit to boomers’ and potentially other owners’ properties could occur can’t be predicted at this point, co-author Myers told me in an interview.

“It’s impossible” to forecast price impacts “10 years ahead,” he said. “We do not mean to be alarmists,” he added, but hope to spur discussion of the impending challenges and the need for public and private policies that might cushion the impacts. Among the possibilities: Create additional financing programs that encourage Millennials and others to purchase first-time homes, so that they have the equity needed to purchase boomers’ homes 10 to 20 years from now.

In the Fuller Institute study, author Chapman notes that there’s already a mismatch in many Washington D.C. area neighborhoods, where empty nest seniors own homes with far more space than they need. More than 273,000 homes are owned by individuals 50 years and older that have at least two more bedrooms than the number of people living in the house. “As these owners downsize or move elsewhere … ” Chapman says, “the potential for increased supply is large enough to moderate price gains.”

Arthur C. Nelson, a professor of planning and real estate development at the University of Arizona, says some local markets with large oversupplies of boomer homes for sale could encounter significant price declines. In an email, Nelson, who has written about the coming challenges with boomers’ homes for several years, suggested that in the worst-hit areas, price declines could be as crushing as “a quarter or a third or more” — essentially the next housing crash.

Not everybody agrees. Lawrence Yun, chief economist for the National Association of Realtors, says such dark forecasts ignore positive developments well underway — strong U.S. population growth, the rising importance of foreign born buyers who will help sop up the oversupply of large houses in metropolitan suburbs, and the “glacial” speed at which the oversupply is likely to manifest itself.

Yun is emphatic: There should be “no measurable price declines” attributable to the boomers.

What’s this all mean for you? At the very least, be aware of the issue. And think about devising a strategy for dealing with whatever scenario sounds most realistic to you, whether you’re an owner or future buyer.

Compass CEO Robert Reffkin (Credit: Compass and iStock)

UPDATED, July 19, 3:50 p.m.: By 2028, Compass CEO Robert Reffkin wants agent commissions to account for only 20 to 30 percent of their earnings.

The rest can come from title and mortgage, escrow and move-in services — and even furniture sales.

To get there, the venture-backed brokerage will spend “billions” of dollars to create a platform for agents so that buyers will go to Compass for more than just homes. “You, today, are at the center of the referral economy,” Reffkin said Thursday at Inman Connect in San Francisco, addressing agents in the audience.

Buying a home is a pathway to many other purchases and questions, he said. “You’re answering them today, you’re just not getting paid for it.”

Reffkin said his vision reinforces the standard 6 percent commission rate, plus creates a new revenue stream for agents.

But it won’t come cheap. The CEO said that “there are no shortcuts” to building a single real estate platform.

“I do expect us to raise more money over time. Who it comes from, I’m not sure,” Reffkin said, addressing rumors that Softbank — which provided Compass with $450 million in December — could double down.

Since launching in 2012, Compass has raised $800 million. Softbank’s investment brought Compass to a $2.2 billion valuation and has helped the firm accelerate a multi-year growth plan into one year: Over the past few months, it has been acquiring brokerages in new markets and on Wednesday said it would begin licensing its technology in non-core markets. It aims to have 20 percent market share in 20 U.S. cities by 2020.

Earlier this month, Compass bought San Francisco-based Paragon, which sold $2.3 billion in real estate last year.

Reffkin did not disclose how much Compass spent on recent acquisitions, but said the firm’s paid between 4 and 6.5 times EBITDA, in line with the industry norm.

Correction: The headline and story were updated to clarify Reffkin’s comment regarding the size of agent commissions.  

The Brady Bunch house in Studio City (Credit: MLS)

The home that helped make the “Brady Bunch” an iconic show is on the market for the first time.

The longtime owners of the split-level home in Studio City are asking $1.9 million, according the Los Angeles Times. The house was used for the exteriors of the Brady household during all of its original run from 1969 to 1974.

Sounds like a steal for a Los Angeles home that can fit an eight-member family and their live-in housekeeper — and dog — but in reality its much smaller than the interior shown on television, which was shot in a studio.

It’s a two-bedroom, three-bathroom home, but the interior has a lot of the mid-century charm of the Brady family’s fictitious digs. That includes a MusiCall through-home integrated radio and intercom system, a rock-wall fireplace, and wood-panel walls, according to the Times.

Violet and George McCallister bought the home in 1973 for $61,000, roughly equivalent to around $361,000 in 2018 dollars.

Listing agent Ernie Carswell of Douglas Elliman said the interiors are almost exactly as they were during that time, although the furniture in photos looks more traditional than modern.

A house made famous on television is certainly a draw for some buyers, but sometimes it’s not all it cracks up to be.

The couple that bought a house featured on the first season of “American Horror Story” said it was a nightmare, claiming they suffered “daily intrusions” from fans of the show. They claimed they were not aware of the home’s fame and sued their Coldwell Banker agents for not explicitly disclosing it in February. [LAT] —Dennis Lynch 

Sen. Charles Grassley after the Senate Policy luncheons in the Capitol on July 10, 2018 (Credit: Getty Images)

As the Treasury Department increases its efforts to crackdown on money laundering in real estate, legislation that would force shell companies to disclose their true ownership is stalling in Congress.

“All I can say is I’ve been working on this for four years,” Sen. Chuck Grassley (R-IA) told The Real Deal on Wednesday. “I need more Republicans. I think all but one Democrat would support it.”

There are two bills, one in each the House and Senate, that attempt to increase transparency in possibly illicit financial transactions — a move that directly affects many real estate purchases across the country. Federal authorities are cracking down on the millions of dollars in suspicious funds that reportedly flow through major US real markets by way of limited liability companies, whose true owners are shielded from public view.

Last month, a bill sponsored by House Republican members Steven Pearce (R-NM) and Blaine Luetkemeyer (R-MO) was modified to exclude a clause that would force LLCs to report their beneficial owners. The updated bill, first introduced last November, would also raise the threshold for financial institutions to file suspicious activity reports to $30,000 from $10,000. When contacted by The Real Deal, press officers for the two congressmen asked for written questions. They did not respond before publication.

Changes to the House bill that nixed real owner disclosure requirements prompted swift rebuke from Democrats, including New York Rep. Carolyn Maloney, who told Quartz last month the move was “an abdication of duty.”

A second bill, introduced by Grassley in the Senate last year, seeks to criminalize concealment of beneficial owners by banks. It has also stagnated amid lobbying from the financial sector.

Grassley said that the bill has especially faced strong pushback from Delaware lobbyists —

the state where many limited liability companies are incorporated — and from secretaries of states who say the requirement would be burdensome.

“[Secretaries of state] say that it’s going to be a workload that they can’t handle, which I think is a bunch of propaganda,” he said. “I don’t accept that argument.”

Democratic Sen. Dick Durbin echoed Grassley’s sentiment that there is “public value to disclosure.”

“If massive amounts of monies are being laundered through the United States through the real estate market, shame on us,” Durbin said.

Several finance, real estate and conservative advocacy groups have lobbied congress and the Treasury Department on beneficial ownership issues. They include the National Association of Realtors, the US Chamber of Commerce, the Consumer Bankers Association, and the Koch Brothers-founded FreedomWorks, the latter of which has called efforts to require LLCs to report their beneficial owners “garbage.” (NAR and CBA, however, have both expressed support for more LLC disclosure.)

Meanwhile, the Treasury’s Financial Crime Enforcement Network (FinCEN) is expanding its geographic targeting order program. The rule requires title insurance companies to identify the beneficial ownership of shell companies seeking to purchase homes with cash. It applies to deals above $3 million in Manhattan and over $1 million in Miami-Dade and ten other counties in Florida, California and Texas.

Economists at the Federal Reserve Bank of New York and the University of Miami found that since the rule was introduced in March 2016, companies spending all cash to buy homes plummeted. In Miami, it fell 95 percent.

A 2016 rule already requires banks and other financial institutions to disclose account owners, which Treasury Secretary Steve Mnuchin recently said he is willing to reform.

David Jeans and Adam Piore reported from Washington, Will Parker reported from New York.

Tere Blanca and Sharon Ellis

Sharon Ellis joined Blanca Commercial Real Estate as a vice president to focus on tenant representation.

Ellis, previously with Chariff Realty Group, will join the company’s team of four tenant advisory brokers, Blanca CEO Tere Blanca said. She will also be involved in business development to expand the firm’s tenant representation business.

Ellis, a licensed attorney, has more than 16 years of experience that includes working with a number of law firms. She helped launch Howard Ecker + Company, a Chicago-based national commercial real estate firm, in Florida, and ran her own company, Palmer Property Group, after that.

She represented Zarco Einhorn Salkowski & Brito for its $18 million, 15-year lease at One Biscayne Tower in downtown Miami in 2016.

Blanca has been expanding with the recent hires of John Guitar, managing director and vice chair, and Peter Romero, who’s leading a new property management division. The brokerage has two offices in Miami and Fort Lauderdale and plans to “ continue to grow with the right talent and right strategy,” Blanca said.

Magnolia Shoppes and Regency’s chairman and CEO Hap Stein

Regency Centers just sold a shopping center in Coral Springs for $23.2 million, according to property records.

Williams Magnolia Properties LLC, a Coral Springs company led by Jimmy Williams of Clearwater, purchased the Magnolia Shoppes at 9645 and 9549 to 9675 Westview Drive.

The 130,400-square-foot shopping center, anchored by a 73,500-square-foot Regal Cinemas, sold for about $180 per square foot. The buyer financed the deal with a $15.5 million loan from Citibank.

The strip mall was built in 1998 on a nearly 15-acre lot on the southwest corner of University Drive and the Sawgrass Expressway. Other tenants in the plaza include Dollar Tree, W Salon, Creative Child Learning Center and Moon Thai & Japanese. A neighboring Office Depot and YouFit Health Club were not included in the deal. It last sold for $11.55 million in 1999.

Regency, an owner, operator, and developer of grocery-anchored shopping centers, manages a portfolio of more than 425 properties, according to its website. In 2016, it acquired North Miami Beach-based Equity One for roughly $5 billion.

In December, Regency sold an LA Fitness-anchored shopping center in Pembroke Pines for $14.1 million.

South Florida’s largest multifamily deals in June

The nearly $150 million sale of an apartment complex near Aventura set the bar high for South Florida’s multifamily market in June.

The majority of the top five deals were in Miami-Dade County, with one $55 million sale of a Pompano Beach development and a smaller property in Davie. South Florida’s multifamily market has remained active in recent years with increased development and strong resales. Apartment rents in Miami, which are among the highest in the country, could continue falling as inventory rises across South Florida.

Gables Aventura – RREEF | $149M

Gables Residential’s sale of Gables Aventura for $149 million to RREEF marked South Florida’s largest apartment deal in June.

An RREEF affiliate paid about $372,500 per unit for the apartment and townhome community at 19920 West Dixie Highway in the Ojus neighborhood of Miami-Dade, near Aventura, according to property records. Rents at the 400-unit complex rents range from $1,799 to more than $2,808.

Atlanta-based Gables Residential completed the 16.3-acre development back in 2016. It had previously acquired the site in 2007 from Turnberry Associates for $11 million, according to Real Capital Analytics.

RREEF is a publicly traded real estate investment trust and an affiliate of Deutsche Bank.

Jefferson Lighthouse Place – Harbor Group International | $55M

Coming in at No. 2 on the list is Starwood Asset Management’s sale of a Pompano Beach apartment complex to Harbor Group International for $55 million.

Starwood affiliate JAG Star Pompano LLC sold the complex at 4411 North Federal Highway to JRM Jefferson LLC and Azure Pompano LLC, which are both tied to Harbor Group. Known as the Jefferson Lighthouse Place, the apartment building has 243 units with available units ranging in price from $1,426 to $2,074 a month.

Harbor Group, a global asset manager with more $7.3 billion in assets, paid about $226,000 per apartment for the Pompano development.

The complex was completed in 2016 on a 8.56-acre lot and features a pool, fitness center and an outdoor living room. Starwood originally paid $6 million for the development site back in 2012, according to property records.

Robert Castro – Southwood Apartments | $14.2M

A group led by Bankers Healthcare Group CEO Robert Castro paid $14.2 million for a 144-unit converted apartment complex in Cutler Bay. 

CMG Capital affiliate BMC Southwood LLC sold the property to Courtyards at Cutler Bay LLC for about $99,000 per unit. The buyer is tied to Tamarac-based Ortsac Management and led by Castro and Sophie C. Castro, records show.

Southwood Apartments, at 19800 Southwest 110th Court, was operating as a condo project until about a year ago. The complex consists of three three-story buildings with studios, one- and two-bedroom units. It was built in 1979.

MSP Group’s Deme Mekras and Elliot Shainberg represented the buyer and seller in the transaction. Mekras and Shainberg brokered the previous deal to BMS Southwood in 2014, when the company acquired about half of the project, according to a press release. Then group bought out the remaining units until it could legally convert the project from a condo development to multifamily.

Cayon Development Group – Coral Way Apartments | $12.8M

Cayon Development Group purchased a complex on Coral Way near Brickell for $12.8 million.

Dalton Properties Inc., led by Alfredo Sesana and Paul Garcia, sold the 88-unit complex at 2110 Southwest Third Avenue for about $145,700 per apartment. Cabrerizo and Cayon’s TMC Apartments LLC financed the deal with a $10.7 million loan from City National Bank, according to property records.

The two eight-story buildings were completed in 1994 on a 1-acre lot. The property last sold for $760,00 in 1988.

Tom Cabrerizo – Davie Apartments | $9.6M

Triangle Professional Building Corp. sold a 72-unit apartment complex in Davie for $9.6 million to a company tied to investor Tom Cabrerizo.

Cabrerizo’s TC MC Davie Apartment purchased the 72,090-square-foot building at 3800 to 3820 Davie Road for $133,750 per unit. The building was constructed in 2014 on a 3.3-acre lot.

The seller is led by Steven Shapiro, who purchased the land in June 2005 for $1.2 million.

Cabrerizo is a principal at CFH, which owns 6,000 multifamily units and more than 500,000 square feet of commercial property throughout the Southeastern U.S.



On the evening of Sept. 11, 2001, CBRE tri-state CEO Mary Ann Tighe had a chance encounter with landlord and developer Larry Silverstein.

“I ran into him — he was about to go into a place to have dinner, and I ran into him on the street on the Upper East Side,” Tighe told The Real Deal’s Hiten Samtani during a wide-ranging video interview. “We were standing in front of each other and I began to cry. And he put his arms around me and said, ‘Sweetheart, gonna rebuild.’ This is 6 o’clock on the night of 9/11. I like to think that so much of my positive response to it has been as a consequence of that moment.”

Since the terrorist attack, Lower Manhattan has marked its resurgence with the opening of several high-profile projects, including One World Trade Center, the Oculus and most recently, Three World Trade Center.

This transformation hasn’t been without its growing pains, however. The neighborhood faces stiff competition from new office stock in Hudson Yards and Manhattan West. The World Trade Center Mall did not get off to a smooth start, and the yet-to-be-built Two World Trade Center lost its anchor tenant when 21st Century Fox and News Corp. decided to keep their headquarters in Midtown,

“I always say that [Rupert Murdoch] has the business equivalent of perfect hand-eye coordination, and he had some sense that it just wasn’t right,” Tighe said. “Look what’s happened then — the decision he’s made to sell, not all by the way, but a significant chunk of 21st Century Fox. Whatever intuition he had … that this is what got him to where he is, and whatever his instincts are, they proved to be right.”

Beyond the Financial District’s office resurgence, Tighe also talked about coming up in an industry dominated by men, and whether real estate is ready for its #MeToo reckoning.

“No one could be clearer on this than I am, that it’s something that the industry needs to correct,” Tighe said. “I want us to be in a world where we’re conversing with one another and that we’re not on a hunt. But if someone steps over the line or you feel that they have, that you feel empowered enough to confront it, and if that’s not enough, you feel also that you’ve got a firm that has your back.””

Watch the above video to see Tighe talk more about how her experience in government helped shape her career in real estate, whether commercial brokerages need to go public in order to survive and more.

Produced by Jhila Farzaneh. Interview conducted by Hiten Samtani.

Miami Beach (Credit: Wikimedia Commons)

South Florida’s condo markets posted strong gains in the second quarter as single-family home sales continue recovering, according to the second quarter Elliman reports released on Thursday.

Fort Lauderdale’s condo market, in particular, showed significant improvement. Condo sales jumped 32.4 percent to 805 closings in the second quarter, while single-family home sales fell 10.2 percent to 531. The median sale price for a condo was $386,000, surging nearly 35 percent, and the median price of a single-family home was $395,000, an increase of about 16.5 percent.

In Miami Beach, residential sales increased 10.7 percent year-over-year to 1,025 closings, with condo sales accounting for the majority of that increase, up 12.4 percent to 915 sales. Similar to most South Florida markets, the median price rose in Miami Beach to $438,000, up 7 percent from the previous year.

Condo sales, which includes townhouses, also grew in Palm Beach, rising 26.1 percent to 116 closings. Home sales dropped to 44, down 6.4 percent year-over-year.

“What was most apparent from the study is that just in general, conditions are noticeably better than last year, but we’re still not out of the woods,” said Miller Samuel CEO Jonathan Miller, who authored the reports.

The number of days a listing was on market generally increased in South Florida, which Miller said can be attributed in part to older inventory selling or being taken off the market, including “excess supply that really isn’t on the market to be sold.”

On the Miami mainland, residential properties spent about 86 days on the market, up about 9 percent from the previous year. Residential sales were nearly flat, down less than 1 percent to 4,191. Again, the condo market outperformed the single-family home market. Condo sales in Miami increased 3.6 percent to 2,059, and home sales fell about 4 percent to 2,132.

Brokers and developers say the changes in the tax law have led to a surge in high-end buyers relocating to South Florida. The Tax Cuts and Jobs Act, passed in December, limits the ability of taxpayers to deduct state and local taxes (SALT) from their federal taxable income, potentially driving them to no-income tax states like Florida.

Jay Parker, CEO of Douglas Elliman Florida, said he’s also hearing from more companies that are looking to relocate to South Florida. In the meantime, high-priced properties are leading sales, he said. The reports define luxury as the upper 10 percent of the market.

“Luxury is across the board moving the needle,” Parker said.

In Miami Beach, luxury condo sales rose 13.4 percent to 93, for example, while luxury home sales stayed flat at 12 sales. In Fort Lauderdale, luxury condo sales increased 19.1 percent to 81, and luxury single-family home sales also remained flat at 56.

Miller said it’s “too soon to call it,” but that it seems apparent that Southeast Florida is benefitting from the tax law.

(Composite by Kerry Barger for The Real Deal)

Since landing $450 million in funding from Softbank last year, Compass has been aggressively scooping up brokerages and agents across the country. And now, the venture-backed company is employing a new line of business: licensing its technology to other firms.

On Wednesday, Compass announced its inaugural licensing deal with Leading Edge Real Estate Group, a 200-agent firm with offices in Boston and Eastern Massachusetts, which until recently was a franchise of RE/MAX.

The pivot — which some predicted years ago — represents a new revenue stream for the brokerage, which has spent the last seven months in acquisitions mode.

“More entrepreneurs can now build their business on Compass,” Ori Allon, Compass’ chairman and co-founder, said in a statement to Inman, which first reported the news. “This new venture … provides an additional revenue source beyond our core business, which is on track to double in size this year.”

“Powered by Compass” will give brokerage firms access to the firm’s search tools, marketing tools, collections (its Pinterest-like client collaboration tool) and “insights,” a custom dashboard of listings data. Financial terms were not disclosed.

However, Compass isn’t bringing the program to its core markets — such a move would conflict with its bid to attain 20 percent market share in 20 U.S. cities by 2020.

Elizabeth Ann Stribling-Kivlan, president of Stribling & Associates, said this latest venture is “another cog in the wheel” for Compass’ growth plan. “We’ve all seen this coming and were waiting for it to happen,” she said.

Still, sources said the news, while not surprising, represents a dramatic shift for a company that until now has focused on building tools to make their own agents more productive. “They are playing both ends to see which works better,” groused one brokerage chief.

Others said the two-pronged approach has been Compass’ strategy from Day 1.

“It’s always been part of the plan — very explicitly,” said Clelia Peters, president of Warburg Realty and a co-founder of MetaProp, a real estate tech accelerator.

Peters conceded that she’d been somewhat skeptical of Compass’ ability to pull off both brokerage and licensing since it would be difficult to be both a competitor and service provider to other real estate agencies. But, she said, “it’s potentially possible that you create a two-tiered system and you compete with your own brand in high-value markets and then offer tech services for a fee in other markets.”

The option to license tools from Compass would likely be valuable to smaller firms, especially those that haven’t invested in technology of their own, said Stribling-Kivlan. But, “for those of us who have those tools, we already have our own systems.”

For that reason, others questioned the viability of the business model.

“If you’re a brokerage, even a small one, but Compass is a competitor, would you want to use technology that says ‘Powered by Compass’?” said the head of a major residential firm. “It doesn’t make sense to me.” The brokerage chief also said the licensing option could undermine Compass’ ability to recruit agents by offering them access to ground-breaking tools.

But those who have criticized Compass for burning through investor capital said it provides a much-needed revenue opportunity.

“The only way Compass has a chance to substantiate their ambitious valuation is by licensing their technology to other companies,” Michael Nourmand, president of Beverly Hills-based Nourmand & Associates Realtors, said in an email. “I still have not seen anything that they are doing that is different than what’s available in the marketplace.”

Still, for small firms that don’t hold a candle to Compass — in size, funding, agent support or sales volume — the option to license the company’s tools may provide leverage in a competitive landscape.

Paul Mydelski, chairman and founder of Leading Edge, said the deal with Compass will give his 200-agent firm a leg up while allowing it to remain independent.

“We feel very strongly about being an independent,” he told Inman. “But adding this incredible technology platform with Compass just makes us complete.”

The timing of Compass’ deal with Leading Edge is notable in that it comes seven months after SoftBank’s massive capital injection, which valued the company at $2.2 billion and turbo-charged its national expansion. Meanwhile, Compass’ rapidly-growing footprint — it has north of 4,000 agents and over 90 offices nationwide — has been a testing ground for its tech tools.

“They have taken in an enormous amount of investor money,” said one VC source, who said Compass’ model hasn’t yet disrupted the status quo. In other words, the company needs to address the low margins in the brokerage business, the source said. “To justify a tech valuation they need to diversity into higher-margin businesses.”

In addition to licensing, there are other signs that Compass may broaden its revenue-generating business lines. Sources said it is weighing a move into the title and mortgage business. On Wednesday, Compass debuted a new, illuminated brokerage sign that agents can control from their smartphones. But the signs will also have beacon technology so that when prospective buyers (with the Compass app) come within 20 feet of the sign, they get pinged on their phone and will be taken to the listing page. The signs cost around $1,000 and will start shipping October 1.

5255 NW 159th St and 3510 NW 60th St

TA Realty just sold three warehouses in Miami Gardens and near Hialeah for $21.35 million to RREEF Property Trust, an arm of Deutsche Bank asset management.

The industrial portfolio spans 290,000 square feet, meaning the deal breaks down to nearly $75 per square foot. Records show TA Realty spent a total of about $17.6 million acquiring the sites in 2007 and 2008 through an affiliate company, the Realty Associates Fund VIII.

Of the warehouse portfolio, the Palmetto Lakes Distribution facility in Miami Gardens is the largest, spanning about 176,000 square feet at 5255 Northwest 159th Street. It’s currently leased to the distribution company Dependable Packaging Solutions. Records show it was built in 1974.

The other two neighboring warehouses at 3510 Northwest 60th Street and 5959 Northwest 35th Avenue span about 54,000 square feet, each. The warehouse at 3510 Northwest 60th Street is leased to an an automobile parts business, while the other is leased to a transportation logistics company called C-Air Brokers & Forwarders. The warehouses were completed in 1961 and 1962, respectively, records show.

Older warehouse portfolios in South Florida have been increasingly trading, thanks to the market’s dwindling supply of land and the increasing cost to build new warehouses.

TA Realty, a Boston-based asset manager, has been busy selling off its assets. Just this week it sold a four-story office building in Plantation for $18.5 million to the Green Companies. In January, it sold a portfolio of warehouses in Hialeah for $32.5 million.

RREEF, a publicly traded real estate investment trust, has also been active in South Florida. Earlier this month it purchased a 400-unit mixed-use apartment complex, Gables Aventura for $149 million. Last fall, it sold a Publix-anchored shopping center in northwest Miami-Dade for about $34 million. Deutsche Bank asset management had roughly $789 billion of assets under management as of the end of March.

Diana Lowenstein Gallery and Anthony Balzebre

The Omni Community Redevelopment Agency just bought the Diana Lowenstein Gallery property in Wynwood for $6 million, with plans to put it out for bid for affordable or workforce housing and retail space, The Real Deal has learned.

DLFA Inc., an entity led by the Lowenstein family and Bruce Lazar of Lionstone Development, sold the nearly half-acre site at 2035, 2037 and 2043 North Miami Avenue for about $300 per foot.

Michael Sullivan of Koniver Stern Group represented the seller. Records show the Lowenstein family assembled the properties for $1.2 million in 2005.

The art gallery has since moved to 98 Northwest 29th Street. Lowenstein and Lazar were unavailable for comment.

Anthony Balzebre, assistant director of the Omni CRA, said the agency has been looking for the past year-and-a-half for a property along the North Miami Avenue corridor that would be developed into a new building with ground-floor retail and affordable or workforce housing. Earlier this year, the CRA negotiated the deal for $6 million, the same price as the appraised value.

The plan is to put it out for bid in a request for proposals to developers for the highest and best use this fall, he said.

“This could be one of the truly affordable workforce housing [developments] in Wynwood,” Balzebre said. “It’s exciting in our end to make a little dent where we can.”

It’s not the first property the Omni CRA has purchased in recent years. Last year, it paid $4.5 million for the historic Citizens Bank Building at 1367 North Miami Ave and is rehabbing it before it issues an RFP by the end of the year to lease or sell the site, Balzebre said.

The Omni CRA also purchased the land that is now the site of the Miami Entertainment Complex (MEC), an 88,000-square-foot television production studio at 50 Northwest 14th Street. The CRA bought the property from the Miami-Dade School Board for $3.1 million in 2011.

Wynwood, known for its artsy vibe, is booming with new retail stores, restaurants and multifamily developments. Among the planned mixed-use projects are the Bradley, a 175-unit apartment building with about 32,000 square feet of retail space and an underground parking garage at 51 Northwest 26th Street, under construction by the Related Group and Block Capital Group. Also, East End Capital and Related are developing Wynwood 25, with 289 apartments, about 31,000 square feet of retail space and 340 parking spaces at 339 Northwest 24th Street.

Rendering of the space (Credit: Public Domain Pictures)

Bow West Capital is giving new meaning to “green spaces” in commercial real estate.

The Santa Monica-based developer is repositioning a seven-story office building in Downtown Los Angeles to cater to cannabis-related industries, the company announced Wednesday.

Located at 718 S. Hill Street in the Historic Core neighborhood, the 67,000-square-foot building will feature several floors of co-working space, private office, a rooftop deck, art gallery, retail and a 5,000-square-foot restaurant — all dedicated for people in the cannabis business.

M-Rad Architecture is redesigning the property, which was built in 1913.

The building, rebranded as “Green Street,” is slated to open in November. It’s already seen interest from several companies looking to grow their business.

Anchor tenant Green Street Agency, a consulting firm which helps with branding and business development, is leasing three floors at the office building. It’s also a minority investor in the project.

Vicente Sederberg, a Denver-based law firm that bills itself as “The Marijuana Law Firm,” is also leasing one floor. There are also over a dozen start-ups leasing space in the co-working areas, according to the release.

Bow West acquired the property in December for $14 million, deed records show.

There has been a growing interest among developers who are seeking to benefit from the legalization of marijuana. Earlier this year, a co-working company named Paragon announced it would be opening a location in Hollywood that would cater to small companies and freelancers in the pot industry. The property is only accessible to those that have Paragon’s blockchain, making its customer base even more niche.

MLS stadium, Francis Suarez and David Beckham

Miami voters will get to decide whether David Beckham’s latest pitch for a Major League Soccer stadium passes muster — if a legal challenge doesn’t derail it first.

On Wednesday afternoon, following another marathon meeting, city commissioners voted 3-2 to place on the Nov. 4 ballot a no-bid proposal by Beckham and his partners to redevelop Miami’s Melreese golf course and park complex into a $1 billion mixed-use project with a 25,000-seat stadium as the centerpiece.

The vote capped off a contentious two weeks for Beckham and his group of soccer franchise investors, which includes Sprint CEO Marcelo Claure and brothers Jose and Jorge Mas, who took the lead in pushing their latest stadium plan through. If the referendum passes, Miami Beckham United would then need to hammer out a final agreement with the city that would require three-fourths of the city commission to approve.

Last week, the city commission delayed its decision because commissioner Ken Russell, considered the swing vote, wanted to negotiate more concessions from the ownership group, which opponents claim presented a thinly vetted, rushed proposal to take over a large chunk of a 131-acre city property currently occupied by a popular golf course that serves underprivileged children.

Unlike last week’s meeting, this one lacked the star power of Beckham, who was not in attendance. The commission chamber was also less crowded as city officials decided not to allow the public to speak.

But tensions still ran high.

Already, Miami-based attorney Douglas Muir sued the city ahead of the commission’s vote to stop the referendum. In his lawsuit filed in Miami-Dade Circuit Court, Muir alleges commissioners and Miami Mayor Francis Suarez — who is the Melreese stadium proposal’s most prominent elected cheerleader — violated the city’s charter by negotiating a no-bid deal for city owned land.

And Michael Fay, managing director and principal of Avison Young’s Miami office, is proposing to set up a competitive bidding process for the Melreese site.

Commissioner Manolo Reyes, who along with commissioner Willy Gort voted no, cited Muir’s complaint in his impassioned pleas to convince his colleagues to fully vet Miami Beckham United’s proposal to build Miami Freedom Park, which will complement the stadium with retail shops, restaurants, offices and hotel rooms. In addition, Beckham, Mas and their partners are promising to build 23 soccer fields, a football field and a passive park, plus pay the city $20 million, roughly $3.6 million in annual rent and a share of revenues.

“We are circumventing our own statutes and our own laws,” Reyes said. “We have a lawsuit against us and many more will follow…We must have transparency. We are going against our own charter. That is why people don’t trust us.”

Yet by the time the city commission took an afternoon recess, Russell had gone from possibly voting no to being an affirmative yes. That’s because Mas agreed to the commissioner’s insistence that Miami Freedom Park institute a living wage for anyone who ends up working at the mixed-use site.

Mas said Miami Beckham United would adopt a minimum living wage of $11 an hour that would scale up to $15 an hour by the 4th year Miami Freedom Park is in operation. “You have our commitment that all onsite employees will be covered the living wage I have laid out now,” Mas said.

Russell said the reason he pushed for the living wage was because he knew he was likely the swing vote. “I am in a unique position to use the amount of leverage to get what the city needs at this moment,” he said. “I am willing to believe in the mayor’s vision and take a chance.”

The incomplete Las Olas Ocean Resort on Seabreeze Boulevard

Twenty-one Chinese EB-5 investors are suing the development group and a bank behind an unfinished hotel in Fort Lauderdale Beach, alleging fraud.

The EB-5 investors allege in a suit filed in U.S. Bankruptcy Court on Monday that Ray Parello, Ken Bernstein, Jack Kessler, Eugene Kessler and Bancorp Bank engaged in a fraudulent scheme to entice investors into putting $500,000, each, into the Las Olas Ocean Resort, a planned 12-story, 136-room hotel project at 550 Seabreeze Boulevard. The project is still not completed and is currently entangled in Chapter 11 bankruptcy. The property will go up for a bankruptcy auction on Aug. 15.

The lawsuit is seeking monetary damages and is seeking to give the creditors priority to collect funds before the bank does.

The new lawsuit highlights some of the issues facing EB-5, the federal program in which foreign investors can invest $500,000 into certain projects in exchange for residency. The program has become less heavily relied upon by South Florida developers in recent years.

According to the lawsuit, in 2012 the development group began soliciting 60 EB-5 investors to raise money for the project. Bancorp and the development group allegedly assured the EB-5 investors that their investment would be protected if the debtors defaulted on their loan. The group also told investors they would each receive one unit in the building as collateral if the project were to fail, according to the lawsuit.

“The developer group issued a letter that you would be getting this hotel unit as collateral,” said Matthew Sava of Reid & Wise LLC’s, an attorney who is representing the EB-5 creditors along with Miami-based LKLSG’s Jeffrey Schneider.

In actuality, the lawsuit alleges these provisions were never included in the loan documents and the development group never provided a unit in the hotel.

Paul Singerman of Berger Singerman, who is representing
Bernstein, Jack Kessler and Eugene Kessler, declined to comment on the case. Parello and Bancorp Bank did not immediately respond to a request for comment.

In January, Bancorp Bank filed a foreclosure suit against 550 Seabreeze Development LLC and Jawof 515 Seabreeze LLC, alleging default on a mortgage loan with an unpaid principal balance of $36.9 million. Last month, the developer filed a motion in bankruptcy court to establish procedures for the sale and auction of the property, scheduled for Aug. 15.

Last week, the hotel project secured a stalking horse bidder for $38.6 million by an affiliate of Magna Hospitality Group. The bid has since been increased to $39.1 million, according to Glenn Moses of Genevese Joblove & Battista, who represents the developer.

Following the August auction, 550 Seabreeze will ask the court to approve the sale to the highest and best bidder. The buyer would be able to close on the property free and clear of any liens and claims on the property.

Aerial view of 6500 Red Road and Sebastian the Ibis (Credit: Wikimedia Commons)

The University of Miami is going off campus.

Property records show the private university paid $8.84 million for the 1.64-acre United Methodist Church site at 6500 Red Road, about two blocks west of the Alex Rodriguez Park at Mark Light Field.

The Board of Trustees of the Florida Annual Conference of the United Methodist Church Inc. sold the property, which includes the two-story, 36,000-square-foot church. Previous sales information is not available online.

A spokesperson for the university said it is currently “evaluating its options” for the property. United Methodist could not immediately be reached for comment.

UM is in the midst of building a major residential complex on campus. The 23-building, 1,100-bed project, designed by Miami-based Arquitectonica, is expected to open by the fall of 2019. It’s being built on about 9 acres in the middle of the campus next to Lake Osceola, and will mark the first new dormitory since UM opened University Village in 2006.

The church is just south of University Village, a complex of student apartments.

Earlier this year, the university paid $8.2 million for an office building near one of its clinics at 1300 East Newport Center Drive in Deerfield Beach. 

(Credit: Hurlburt Field)

New home construction has fallen and it can’t get up.

Residential home starts nationwide fell 12.3 percent in June, to an annualized rate of 1.17 million, the government reported, according to Bloomberg.

The latest figures marked the biggest drop in home construction since November 2016. And couple that with a 2.2 percent drop in permits — a gauge of future activity — it made for the weakest activity since in nine months. That low-point coincided with hurricanes Harvey and Irma, which devastated the southern U.S. last fall.

In real numbers, the June drop in home starts is around 164,000.

That compares to May, which saw the highest level of starts at 1.35 million since July 2007. The fall reflects a 19.8 percent drop in multifamily home starts and a 9.1 percent drop in single-family home starts.

Multifamily new construction is generally up and down, however, so gauging month to month is difficult. Multifamily starts rose in March 14.4 percent from a 10.2 percent drop in February.

The reasons for the low residential construction numbers are many. On the buyer side, mortgage interest rates and prices continue to climb and outpace wage gains.

On the supplier side, President Trump’s tariffs have pushed prices of steel higher. The price of lumber is also high amid trade conflicts with Canada.

Developers are also having trouble finding qualified labor, and enough land to build, according to Bloomberg. [Bloomberg] — Dennis Lynch 

Renderings for New North Town Center

The North Miami Beach City Commission unanimously approved a 2.5-million-square-foot mixed-use project on Tuesday that will be designed as a “micro-city,” along the lines of Midtown Miami.

Called New North Town Center, the project will be constructed on an 18-acre site that North Miami Beach officials call the TECO Gas Site, a brownfield that has been undergoing environmental remediation since the late 1980s.

New North Town Center, at 15530 West Dixie Highway, will include up to 1,650 residential units, 260,000 square feet of office space, 175,000 square feet of retail space, a 175-room hotel and a 120,000-square-foot school. Height limits will range between three stories near the single-family Allen Park area to as high as 20 stories near Northeast 159th Street and West Dixie Highway.

Gabriel Boano of Bay Harbor Islands-based Art+Tec Development and Hector Mendez of Metropole Holdings Inc. in Aventura bought the property under the entity New North Equities for $21.14 million in January 2017.

Boano said the developers intend to break ground within six months and present the city with the project’s first site plan before the end of the year. Under the 30-year development agreement, each building will have to be brought before the city for approval. The first building proposed will likely be the school, Boano added.

Similar to Midtown Miami near the Wynwood area, Boano wants to build a miniature community designed by Zyscovich Architects where people can live, work, play, and even send their kids to school — all in the same location. “I think the concept of the micro-city is what we will try to create,” Boano said.

The details of the plan are still being worked out. For example, Boano said he isn’t sure if the future school will be a charter, a public, or a private facility. The residential units will include townhouses and multifamily buildings, he said. A hotel and an office complex near 159th Street will be the tallest structures, standing up to 225 feet.

The development agreement stipulates that the builders pay the city up to $1.6 million in park impact fees, $400,000 in police impact fees, $100,000 in public art pieces, and $600,000 toward an infrastructure improvement fund.

The developers are also negotiating with the city in a plan to revive Taylor Park, a 22-acre park abutting the TECO site that has been shuttered since 1998 after high levels of arsenic, ammonia, and other dangerous chemicals were found in the park’s soil and groundwater.

As for the TECO site itself, Michael Goldstein, an attorney representing Boano and Mendez, said the groundwater is currently being remediated. The soil, on the other hand, has already been taken care of. “Over 53,000 tons of contaminated soil has been removed from the site,” Goldstein told the North Miami Beach City Commission.

For the most part, elected officials were enthusiastic about New North. Commissioner Ingrid Forbes said she hopes it will revitalize a depressed area of North Miami Beach. 

“It’s a world-class project,” Forbes said. “It’ll bring some life to that area.”

From left: Mauricio Umansky, David Arditi, Jonathon Yormak, Moishe Mana, Kieran Bowers and Louis Birdman

The Real Deal’s fifth annual Real Estate Showcase + Forum in South Florida is shaping up to be our best event yet. Developers Moishe Mana, Louis Birdman, Kieran Bowers and Michael Stern have signed on for our top developers panel; Turnberry’s Jackie Soffer and East End Capital’s Jonathon Yormak will be among the experts sharing insights on our commercial panel; The Agency’s Mauricio Umansky — also of “The Real Housewives” fame — will talk about the ups and downs of brokerage; and Aria Development’s David Arditi will kick off our discussion on hospitality and the trend in hotel-branded residences.

The event will bring together 5,000 industry insiders and 100 exhibitors for a full-day of market insights, networking opportunities, exposure to the latest real estate developments and products, and food and drink from a host of local merchants.

Click here to get tickets now and stay tuned for updates on panelists and programming.

For sponsorship opportunities, please contact Forum@TheRealDeal.com.

Raul Estrada and Adrian Salgado

Engel & Völkers Miami just closed on the acquisition of DASH, a boutique brokerage in Coral Gables.

The eight-agent company, led by Raul Estrada and Adrian Salgado, known as the “Gables Mavens,” moved into the Engel & Völkers office at 300 Altara Avenue, near the Shops at Merrick Park. The group closed $130 million in sales volume over the past five years, said Alexandra Elfmont, executive vice president of Engel & Völkers Miami.

Estrada’s experience includes assembling a team of agents to manage, list and sell real estate owned (REO) properties, and Salgado spent four years working for Miami-Dade County’s department of property appraisal, according to a press release.

Elfmont declined to disclose terms of the acquisition. In recent months, ISG Realty, Compass, the Keyes Company and other brokerages have been acquiring smaller firms in South Florida due to thinning profit margins and increased competition. 

Engel & Völkers has doubled its sales volume and listing inventory over the past six months, according to a press release. About a year ago, Lourdes Alatriste returned to the brokerage as a partner and private office adviser. A few months later, Elfmont left Cervera Real Estate, where she was vice president of marketing for the brokerage’s development division, to oversee strategy, sales management, business development, recruitment and retention at Engel & Völkers Miami.

Principal and managing director of Avision Young, Michael Fay with Melreese Country Club

As David Beckham and the Mas brothers seek approval to redevelop the Melreese Country Club into a mixed-use soccer complex, Avison Young’s Michael Fay wants to level the playing field.

Fay, managing director and principal of Avison Young’s Miami office, is proposing to set up a competitive bidding process for the 131-acre site, he told The Real Deal. Fay sent a letter on Tuesday to Miami Mayor Francis Suarez and the city commissioners requesting to set up a request for proposal process for the development and master plan use of the site in order to “drive the highest value and terms for the city.”

Fay supports bringing an MLS team to Miami, but believes there should be a “transparent process” for the Melreese site.

The letter comes on the heels of the city commissioners’ scheduled vote on the $1 billion plan to redevelop the city of Miami’s Melreese golf course into a massive development anchored by a 25,000-seat stadium that will be home to the partners’ Major League Soccer franchise.

The plan has drawn opposition from many nearby residents, local politicians and even Related Group’s Jorge Pérez, who compared the deal to the Miami Marlins stadium debacle. Critics say that the process has not been transparent and the proposed $3.6 million in annual rent the group would pay is too low. On Wednesday, attorney William Muir filed a lawsuit alleging Suarez, City Manager Emilio Gonzalez and the city commission are not following city law while considering the redevelopment proposal, according to the Miami Herald.

Fay estimates the property is worth more than $200 million, with annual rent at about $10 million or more, which is similar to Perez’s valuations of the site. Fay cited his knowledge of the market, clients and his experience completing more than $10 billion in real estate transactions.

The Beckham-Mas group is seeking that a referendum be placed on the November ballot asking Miami residents to approve or deny a no-bid lease agreement for the site. Last week, the commission deferred a decision to a special commission meeting on Wednesday.

That proposal, designed by Arquitectonica, would also feature 600,000 square feet of space for retail and restaurants, 400,000 square feet of office space, thousands of parking spaces, more than 700 hotel rooms, and 23 soccer fields on roughly 23 acres of green space.

Mas said the development group would invest $20 million in park improvements, as well as $35 million in environmental remediation at the Melreese.

Marathon Boat Yard Marine Center and Paula Marshall of Bama Companies

A boatyard and marina in the Florida Keys was just scooped up by a company tied to the Tulsa, Oklahoma-based baked goods producer, Bama Companies, for $5.75 million.

Marathon Boat Yard Marine Center at 2059 Overseas Highway sold to Silent Hunter Boat Yard, LLC, which is led by Bama’s CEO Paula Marshall and her family office’s accountant Matt Alley, records show.

The family-owned and operated business opened in 1937 and is now in its fourth generation of ownership. It produces a number of baked goods, as well as frozen baked and unbaked biscuits for the food service industry in the U.S. and internationally. Records show Marshall also owns a nearby home in Marathon, which she bought in 2011 for $2.7 million.

The seller of the marina is Southern Exposure Associates Inc., led by Bruce and Sherry Popham. The Pophams operate the center and paid about $1.9 million for the 12-acre property in 1998.

Rick Roughen of KW Commercial represented the sellers. The property spans about 6 acres above seawater and consists of 3.5 acres of submerged land. An additional 3.25 acres are protected mangroves, Roughen said.

Marathon Boat Yard Marine Center is just one mile west of the Seven Mile Bridge, and offers access to large and heavily loaded vessels coming from the Atlantic Ocean and the Gulf of Mexico. The site also allows for additional commercial development on more than 60,000 square feet of space on the property, Roughen said.

The market for marinas in South Florida is hot. In March, Safe Harbor Marinas, a major international owner and operator of marinas, paid $61 million for three marinas in North Palm Beach and Riviera Beach. Marina operators and developers are also buying land in areas like Fort Lauderdale and Deerfield Beach.

Julian Johnston, Keith Menin and 815 East Dilido Drive

Menin Hospitality principal Keith Menin just paid $8.68 million for a waterfront Venetian Islands home in Miami Beach, a couple of weeks after selling another nearby property for more than $12 million.

Menin closed on 815 East Dilido Drive, according to sources. Attorneys Michael and Sheila Cesarano sold the six-bedroom, 8,243-square-foot home for more than $1,050 per square foot.

The Mediterranean-style home, on the northeast tip of Di Lido Island, was designed by architect Ramon Pacheco and features marble floors, a covered exterior dining room, a summer kitchen, a pool and a private dock with more than 100 feet of water frontage, according to the listing. Julian Johnston of Calibre International Realty and Danny Hertzberg of the Jills represented the seller, and Johnston represented the buyer.

It was on the market for $9.5 million, according to Realtor.com. The Cesaranos paid $350,000 for the waterfront property in 1987 and built the home in 2006, records show.

Earlier this month, Menin and his wife, Evelyn Menin, sold the waterfront property at 241 East San Marino Drive, also in Miami Beach. The couple paid $6.25 million for that house in February 2017, and completely renovated the home last year.

Menin Hospitality, led by Menin and his cousin and managing principal Jared Galbut, operates about 15 hotels, restaurants and bars in South Florida and Chicago, according to the company’s website.

Menin could not immediately be reached for comment.

A silhouette of someone staring at their computer screen (Credit: Pexels and iStock)

The fact that you can see all of your co-workers doesn’t necessarily mean you’re going to talk to any of them.

According to a new study by Harvard University, open-plan offices might actually deter employees from working together. Instead, workers are more likely to communicate by instant messaging and email, the New York Post reported.

But there’s a caveat: The study only looked at two Fortune 500 companies. At one company, after doing away with cubicles, employees spent an average of 1.7 hours on in-person interactions. That’s down from the average 5.8 hours they spent when walled off from each other, according to the report.

At the second company, in-person interactions decreased by 67 percent. According to one of the study’s researchers, Ethan Bernstein, people working in open-plan offices might feel more self-conscious. Feeling that they need to constantly look busy, they avoid eye contact and stare at their computer screens.

“On the one hand, it is hard to believe that people would not have a more vibrant and interactive experience when they work in an open office,” researcher Ethan Bernstein said. “On the other hand, I’ve spent enough time on the (subway) at rush hour to see that being packed together doesn’t necessarily lead to interaction.” [NYP] — Kathryn Brenzel

Not every architect would choose to express his work through a haiku about dunes.

But Oppenheim Architecture’s new book “Spirit of Place” does just that — along with 17-syllable meditations on the desert, sea, peninsulas, canyons, rivers and streams.

“I really appreciated the simplicity and elegance of reducing things down to their essence,” Chad Oppenheim, principal of his eponymous firm, told The Real Deal. “The haiku is saying more with less.”

This is a prevailing theme of the book, which is dominated by more than 500 pictures of the firm’s proposed and completed projects. The images literally speak for themselves — since text in the tome is sparse. The idea is for readers to immerse themselves in the various terrains: One section shows a private residence — dubbed the Dune House — that Oppenheim designed for his family and himself on a secluded island in the Bahamas. Another portion — focused on deserts — features a luxury resort right out of science fiction: the Wadi Rum Desert Resorts. The proposed hotel, whose construction has been delayed due to local opposition, would be built into sandstone and granite cliffs, known as Wadi Rum, in Jordan. The sea section of the book takes readers to the Zulal Destination Spa and Family Resort, a proposed, crescent-shaped getaway in Qatar.

Much of the Miami-based firm’s work focuses on design that interacts seamlessly with the environment.

“The idea was for us to blur the boundaries between them,” Oppenheim said. “We want to make these things more primitive. Architecture without architects always holds a lot of logic. It’s not looking for statements.”

His work in Miami includes Ten Museum Park, a 200-unit condo tower, and more recently, the headquarters for GLF Construction. The firm also designed director Michael Bay’s private home in Los Angeles. Oppenheim said he’s now working on a movie set design for Bay — though he wouldn’t elaborate — and on a surf park in Virginia Beach with Pharrell Williams.

As for New York City, Oppenheim has had a few false starts. Silverstein Properties scrapped a design for its tower at 520 West 41st Street, filing plans for a smaller project in August. The firm also won a design contest for a hotel located right next to the Williamsburg Savings Bank, but that project has been delayed for several years. Oppenheim said the firm is still on the hunt for opportunities to design its first high-rise in New York.

Aerial photo of the retail portfolio, Scott Robins and former Miami Beach mayor Philip Levine (Credit: RobinsCompanies, Wikimedia Commons)

Developer Scott Robins and Florida gubernatorial candidate Philip Levine sold a retail portfolio in Miami Beach’s Sunset Harbour neighborhood for $68.75 million to Asana Partners, a real estate investment firm, sources told The Real Deal.

Robins and the former Miami Beach mayor sold the seven-building, 61,400-square-foot portfolio 1787, 1919, 1928 Purdy Avenue; 1900, 1916, 1930 Bay Road; and 1935 West Avenue to AP Sunset Harbour LP, a Delaware company.

The deal, which breaks down to about $1,120 per square foot, closed on Friday.

The properties hit the market in late December with HFF. Manny de Zárraga, Luis Castillo and Daniel Finkle of HFF represented the seller. The brokerage declined to comment on the buyer.

Asana, founded by Terry Brown, Jason Tompkins and Sam Judd, is a real estate investment firm based in Charlotte, North Carolina. Brian Purcell, a managing director, could not immediately be reached for comment.

Robins, CEO of the Robins Companies, said he plans to invest the proceeds of the sale into buying more properties in downtown Miami and Wynwood.

Levine owns more than $100 million in real estate in Miami, Miami Beach, Okeechobee and New York. In the Democratic primary race for governor of Florida, Levine is running against fellow real estate developer Jeff Greene, Chris King of Winter Park, former U.S. Rep. Gwen Graham and Tallahassee Mayor Andrew Gillum.

Robins said it was time for him and Levine to move on from the Sunset Harbour portfolio. Together, they led the major redevelopment of the neighborhood. Sunset Harbour Shops was developed in a public-private partnership with the city of Miami Beach, which owns the adjoining parking garage.

Sunset Harbour tenants include Lucali, Flywheel Sports, Barry’s Bootcamp, Panther Coffee, Icebox Café, NaiYaRa, Dirt, Stiltsville 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. It sold fully leased, with rents ranging from about $60 per square foot to $100 per square foot, Robins said.

MGM Resorts exec James Murren and Mandalay Bay

MGM Resorts International has sued more than 1,000 victims of last year’s mass shooting at a Las Vegas festival, claiming it has no liability in the injury or deaths that occurred when a gunman opened fire from inside the Mandalay Bay Resort and Casino.

In the lawsuit filed Friday in federal court in Nevada and California, the Mandalay Bay owner says a 2002 federal act limits the hotel’s liability, Bloomberg reported. The act, named the Support Anti-Terrorism by Fostering Effective Technologies, protects companies that use “anti-terrorism” technology or services to respond “to acts of mass injury and destruction.”

MGM is one of the most prominent hotel owners on the Las Vegas Strip. In addition to the Mandalay Bay — and the concert venue that held the festival — the company owns the MGM Grand, The Mirage, Bellagio, Aria, Luxor, and Excalibur, among others. Outside of the city, it also owns the MGM National Harbor near Washington, D.C., MGM Grand Detroit and the MGM Macau in China.

Over 2,500 individuals have sued or threatened to sue MGM following the Oct. 1 mass killing. From his 32nd-floor suite at the Mandalay Bay, Stephen Paddock used more than 20 automatic weapons to kill 58 individuals and wound over 500, at the Route 91 Harvest Festival. Paddock killed himself shortly after.

The hotelier is saying it hired a security company for the festival, and thus is protected in the statute. The firm, Contemporary Services Corp., had also been certified by the Department of Homeland Security “for protecting against and responding to acts of mass injury and destruction,” according to the the Las Vegas Review-Journal.

Robert Eglet, a Las Vegas-based attorney who represents some of the victims, told the local paper that MGM’s decision to file in federal court is a “blatant display” of judge shopping. Instead, he claims, the company should be filing in state court. [Bloomberg] — Natalie Hoberman

Southpointe at 7901 Southwest 6th Court

The Green Companies just paid $18.5 million for a nearly 80,000-square-foot Class A office building in Plantation.

TA Realty sold the the four-story building called Southpointe at 7901 Southwest 6th Court for $232 per square foot. The Boston-based firm put the property on the market in April, along with two other Plantation office buildings, without a price. The Southpointe building was 98 percent leased at the time, according to a press release. TA Realty originally purchased the building in 2007 for $16.25 million.

The company had also listed Pointe 1801, a 99,000-square-foot office building at 1801 Northwest 66th Avenue, and Pointe Broward, a 78,000-square-foot office building at 8211 West Broward Boulevard.

The seller of Southpointe was represented by Avison Young’s David Duckworth, John Crotty, Michael Fay, Greg Martin and Brian de la Fé.

The Green Companies is a Miami-based, family owned real estate business. Its portfolio includes the Dadeland Centre offices in Miami.

Plantation has one of the lowest vacancy rates in Broward for Class A office space, at 5.57 percent in the first quarter of this year, according to research by Avison Young. Over the past few years, the Broward office market has been strong with vacancy rates remaining low, but this year it has started to cool down.  –Keith Larsen

Sabre Centre I, 2600 Douglas, 6505 Waterford, Entertainment District Building

Gift of Life Marrow Registry moves HQ to Park at Broken Sound

Gift of Life Marrow Registry is moving its headquarters to the Park at Broken Sound in Boca Raton.

The international public bone marrow and blood stem cell registry is expanding to a 17,465-square-foot space with an in-house stem cell collection center at Sabre Centre I at 5901 Broken Sound Parkway Northwest. The nonprofit organization plans to move in by early 2019, according to a press release.

CBRE’s John Jaspert represented the tenant. The landlord, G&C Sabre Centre Investors LLC, was represented by John Criddle and Joe Freitas of Cushman & Wakefield.

The Park at Broken Sound is a 700-acre park in Northwest Boca Raton. Since it was rezoned in 2015, a number of developers have built or are building new apartment projects.

Art gallery moves out of Wynwood and into A&E District

The Ascaso Gallery in Wynwood is moving out the artsy neighborhood and into Miami’s Arts & Entertainment District.

The gallery, known for showcasing Latin American art pieces, just inked an 11,400-square-foot lease at a warehouse along Northeast First Avenue and Northeast 13th Street, near the Adrienne Arsht Center for the Performing Arts.

Records show Gypsy K LLC, controlled by the Kluger family partnership, owns the 17,400-square-foot warehouse. Cornerstone International Realty represented the landlord. The space was previously occupied by a storage company and a fitness studio that hosted spinning classes.

Ascaso is downsizing from its location at 2441 Northwest Second Avenue.

Hector Cataño of Cornerstone said the gallery moved out of Wynwood because it was looking for more parking for its customers. The gallery will also be paying less than half of its Wynwood rent. Asking rent at the new location is $25 per square foot, according to Loopnet.

Art of Shaving, Executive Data Systems ink deals at Blue Lagoon business park

MetLife Real Estate Investors just secured 53,000 square feet of leases at Waterfod Atrium, a 500,000-square-foot office campus in Miami’s Waterford at Blue Lagoon business park. The three-building portfolio is now 93 percent leased.

Executive Data Systems, The Art of Shaving, RS&H, Odebrecht Construction, Club Med Sales, Marcelo Law Group, American Prime and Banyan Health Systems all signed deals at the complex. Cushman & Wakefield’s Jeannette Mendoza, Brian Gale, Ryan Holtzman and Andrew Trench represented MetLife.

Other tenants include L’Oréal Retail Americas, Zimmer Biomet, Regus, Johnson & Johnson, Discovery Channel Latin America and Oracle.

Tampa-based Hogan Group developed the business park and manages it for TIAA-CREF and Allianz Real Estate of America. Allianz paid TIAA $375 million in 2015 for a 49 percent stake in the company’s six Class A office buildings, totaling more than 1.4 million square feet.

CE North America, counseling firm and others sign leases at 2600 Douglas

CE North America, Coral Gables Counseling Center, Worldwide Managed Care Partners, Luzar Training and three law firms are moving into 2600 Douglas in Coral Gables.

Demetree Global recently invested $15 million into renovating the office building’s lobby, elevators, common spaces and restrooms. The building’s main entrance was also redesigned with a new porte-cochere exterior and a tenant hub and conference room is currently under construction, according to a press release.

The new leases cover more than 36,000 square feet. Garcia, Espinosa, Miyares, Rodriguez, Trueba & Co.; First Legal; and PA Tinelli Fernandez Property Insurance Attorneys also secured spaces at the building.

Foundry Commercial’s Randy Olen and Sareska Batista represented Demetree Global.

Redfin’s Glenn Kelman (Credit: Redfin)

Online-centric brokerage Redfin is seeking to raise up to $239 million, deploying the funds on acquisitions and technology.

“Redfin may choose to use a portion of the net proceeds to invest in or acquire third-party businesses, products, services, technologies or other assets,” the company said in a statement Monday. The brokerage noted that it has no such “agreements or preliminary plans” at this time.

Redfin is raising money through a combined stock and debt offering. The company said it is selling 3.5 million shares of common stock and $125 million aggregate principal amount of convertible senior notes due in 2023. Neither offering is contingent on the completion of the other. Redfin is also offering the stock underwriters a 30-day option to purchase up to an additional 525,000 shares. The underwriters of the notes will have a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of notes.

Last year, the discount brokerage went public in a much-anticipated IPO. Since then, the company has poured money into hiring and advertising — leading to a $36.4 million loss during the first quarter of 2018. But the advertising push helped boost its market share to 0.73 percent, up 0.15 percentage points year-over-year, the company has said.

Still, shares of the company have slumped about 26 percent this year. Redfin has also joined the house flipping trend. Through its “Redfin Now” program, the company buys homes and flips them. The program saw $3.1 million in revenue in the first quarter.

In June, rival Zillow said it was looking to raise $650 million — also noting it may use some of the proceeds for “acquisitions of, or investments in, other businesses, products or technologies.”

Though others in the real estate tech space like Zillow have made a number of acquisitions, Redfin hasn’t followed that model. Its only known acquisition was Walk Score in 2014.

From left: Mark Rose of Avison Young and Stephane Etroy of CDPQ

Canadian pension fund manager Caisse de dépôt et placement du Québec has invested $250 million in Avison Young, which plans to use the capital injection to expand its North American presence.

Avison Young CEO Mark Rose said that the proceeds from the preferred equity investment will be used to repurchase shares in Avison held by its private equity partner, the Vancouver-based Parallel49 Equity.

The deal means that Avison will once again be 100 percent owned by the brokerage’s principals.

“Our principal-led, collaborative culture is one of our critical success factors, and this transaction maintains the alignment of interests created by a company owned and managed by its top talent,” Rose said in a statement.

Caisse de dépôt et placement du Québec is one of Canada’s largest pension fund managers and owns the real estate investment firm Ivanhoe Cambridge.

Parallel49, previously known as Tricor Pacific Capital, invested $40 million in Avison Young in 2011. That year, Avison opened its first office in New York City.

Despite the recent influx of cash, a source close to the company said Avison does not intend to go public like competitors Cushman & Wakefield and Newmark Knight Frank. Instead, the capital injection will make it more aggressive in the city.

Most recently, the brokerage poached James Nelson from Cushman to bolster its investment sales platform.

Money raining down on an abandoned shopping mall (Credit: Getty Images and iStock)

With predictions of a “retail apocalypse” growing by the day, and as more stores close and companies file for bankruptcy, some investors see now as the perfect time to buy ailing shopping centers at distressed prices.

Brian Kosoy, the CEO of the Sterling Organization, a private equity firm, started a new fund to invest in grocery-anchored shopping centers, street retail and other shopping centers across the U.S., according to the Wall Street Journal. He said that the Palm Beach-based company’s fund is near closing on $500 million from investors.

It comes at a time when vacancy rates at malls and shopping centers are rising. Nationwide, brick-and-mortar retail vacancy rates are expected to increase to 12 percent by the third quarter of 2019, up from 10 percent in the first quarter of 2018, according to Statista.

Sterling’s new fund targets average annual percentage returns in the mid-to-upper teens by buying properties that require more active management. The fund is targeting grocery-anchored shopping centers, street retail, open-air shopping centers and mixed-use properties in San Diego, Chicago, Los Angeles, Minneapolis, Dallas, Miami and Washington, D.C, according to the Wall Street Journal.

Kosoy told the Journal that pension funds, college endowments and charitable foundations have invested in the fund.

Retail sales continue to slow at many traditional retail outlets as buyers are turning to e-commerce, and large retailers such as Macy’s and JCPenney have announced store closures. In the notable case of Toys R’ Us, among many others, it has meant bankruptcy. [WSJ] — Keith Larsen

Magic City Innovation District

The first phase of the Magic City Innovation District is underway and is expected to be turned over to tenants as early as September, according to developer Tony Cho.

The first phase of the 17.7-acre development calls for gut-renovating the majority of the 21 existing commercial buildings in the Little Haiti and Little River neighborhoods of Miami. Spaces will range from 300 square feet to 14,000 square feet, and commercial rents will average about $25 per square foot, triple net, Cho, founder and CEO of Metro 1, said.

Metro 1’s Andres Nava is in talks with food and beverage operators, flex office, retail and other commercial tenants.

The mixed-use technology and culture-driven development could eventually include a Magic City Studios, an innovation center with startups, co-working space and other collaborations; an office tower; retail space; workforce housing and possibly a hotel. It’s planned for land between Northeast 60th and 64th streets and from Northeast Second Avenue to the railroad tracks.

The development group also includes Cirque de Soleil founder Guy Laliberté, venture capitalist Bob Zangrillo, and Plaza Equity Partners, led by Neil Fairman, Anthony Burns and George Helmstetter.

The next phase, which calls for ground-up construction, is expected to begin sometime next year. The development group has invested $10 million into the project so far, including land improvements for a park and renovations for its commercial buildings.

New Bleau Fontainebleau

Fontainebleau Miami Beach wants to redesign its Bleau Bar lobby and bar area, according an application approved by the city’s historic preservation board last week.

Renderings reveal that architecture and interior design firm Rockwell Group and Norberto Rosenstein will revamp the resort’s sunken bar and lobby area by adding more seats and updating its current round bar design. Additional redesigns include removing the existing blue glass flooring and replacing it with a new terrazzo-patterned floor, as well as introducing new decorative screens around its perimeter.

The 1,504-room resort at at 4441 Collins Avenue opened in 1954 and went through a $1 billion renovation a decade ago. The Fontainebleau Miami Beach is owned by Aventura-based Turnberry Associates, which also co-owns Aventura Mall and is also developing SoLe Mia, a major $4 billion project in North Miami.

Celino South Beach

Ricardo Tabet’s Optimum Development USA just released new renderings for its four-building Celino South Beach resort on Ocean Drive.

When complete, the project will feature 132 rooms, 33 suites, three restaurants and bars and two pools, including one on its roof. Highgate will manage the hotel and Toronto-based Ink Entertainment will run the food and beverage operations.

The developer paid a combined $51 million for the former Park Central Hotel in 2013, and recently secured $52 million in refinancing for its renovation and expansion. The property includes nearly 300 feet of frontage on the touristy street.

Miami-Dade condo sales kept falling, and falling, and falling last week.

The county recorded 125 closings for a total of $48.3 million, down from the previous week’s $55 million sales volume for 109 units. Condos last week sold for an average price of about $386,000 or $306 per square foot.

The top closing was the $6.6 million sale of unit 2502 at Continuum South Beach, in the south tower. The four-bedroom, 3,017-square-foot unit was listed with Bill Hernandez for 130 days before it closed for nearly $2,100 per foot. Kayce Driscoll represented the buyer.

The second most expensive closing was at Oceana in Key Biscayne. Unit #604N sold $2.5 million, or nearly $1,500 per square foot, after 480 days on the market. Maria Luisa Tinoco represented the seller, and Bruno Ricci brought the buyer.

Closing prices in the top 10 deals ranged from about $935,000 to $6.6 million.

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

Most expensive
Continuum South Beach #2502 | 130 days on market | $6.6M | $2,188 psf | Listing agent: Bill Hernandez | Buyer’s agent: Kayce Driscoll

Least expensive
The Bentley Bay #2211 | 240 days on market | $935k | $747 psf | Listing agent: Jonathan Corso | Buyer’s agent: Nicole Matos

Most days on market
Marina Palms #707 | 685 days on market | $1.05M | $507 psf | Listing agent: Mantas Kudrinas | Buyer’s agent: Lea Novgrad

Fewest days on market
Casa del Mar #12C | 96 days on market | $1.09M | $581 psf | Listing agent: Tatiana Moreira | Buyer’s agent: Lorena Morillo

Charlie Kushner (seated) and the firm’s president Laurent Morali (Photo by Sasha Maslov)

City Council member Brad Lander sat for an interview on public radio last November and ended Kushner Companies’ hopes of building a major mixed-use development in Gowanus, Brooklyn.

The firm, and its partners SL Green Realty and LIVWRK, had bought the 140,000-square-foot site for more than $70 million in 2014. But the success of the project depended on a rezoning of the neighborhood, and that depended on Lander, the local Council member expected to get the final say on a rezoning proposal.

During the radio interview, though, Lander suggested he would veto any rezoning that benefited Kushner Companies.

“Voting to take part in enriching the White House senior adviser while he’s got authority over the canal, that feels ethically tainted in a way I don’t see how I could do and how I could ask my colleagues to do,” he said.

Five months later, Kushner and its partners sold the site at 175-225 3rd Street to RFR Realty for $115 million, almost 60 percent more than they paid for it.

From company founder Charlie Kushner going to prison — and asking his fresh-faced son Jared to take the reins — to the family real estate firm setting a city record with its $1.8 billion 666 Fifth Avenue buy, Kushner Companies has been in the spotlight since the early aughts. But Donald Trump’s White House victory has turned it into one of America’s most politically connected and publicly scrutinized companies.

Now local officials in New York and New Jersey — many of them Democrats opposed to the Trump administration — are forcing the Kushners to make tough decisions on everything from development plans to lender and investor partnerships. These politicians, who play a key role in zoning approvals, tax abatements and housing regulations, increasingly see Kushner Companies as an unwelcome guest.

Meanwhile, Special Counsel Robert Mueller and a handful of federal, state and local agencies have examined the Kushners or their partners in several investigations into the family real estate business. And they have reportedly cast a wide net — looking into everything from the firm’s treatment of tenants to Jared Kushner’s meetings with potential foreign investors after the 2016 presidential election.

No law enforcement agency has brought an indictment against the Kushners, and Charlie Kushner recently said his lawyers were notified that two of the investigations have already been closed.

But sources say it would be highly unusual for the mounting number of inquiries not to take a toll on the company.

“In the normal situation, would I expect it all to magically go away? No.” said Laurie Levenson, a former assistant U.S. attorney and a law professor at Loyola Marymount University in Los Angeles. “You only need one conviction of Kushner to send a very large message.”

Local friction

In Gowanus, Kushner Companies was forced to abandon a ground-up development. In Jersey City, it may have to do the same after Mayor Steven Fulop denied tax abatements for its 1 Journal Square luxury towers and declared that the firm is in default of its development agreement with the city.

That has led some, including the firm’s partners, to say Kushner Companies will need to change its strategy and focus on different projects if it wants to continue to grow in greater New York, since political opposition and public scrutiny are unlikely to go away anytime soon.

“While the rules should be the same for all prospective developers, most New York City elected officials are not going to be bending over backwards to help Kushner Companies,” said Dan Garodnick, the former Council member who oversaw the Midtown East rezoning.

Lander described his decision to oppose the firm’s Gowanus project as a difficult one.

“This was a situation where you’re damned if you do, damned if you don’t,” he told The Real Deal in a recent phone interview. “That’s part of the problem of a conflict of interest: There’s not a clear good side to come down on.”

Lander said he supports private development in Gowanus, a key step to revitalizing the neighborhood. But he noted that building a large new property on that site can’t happen unless the federal government cleans up the Gowanus Canal through the Environmental Protection Agency’s Superfund program. And as a senior White House adviser, Jared Kushner could potentially steer federal funds toward the Gowanus cleanup, which would directly benefit his family. Alternatively, he could use his influence with the EPA as leverage for concessions from the city — a classic conflict-of-interest situation.

“You fear actions that you could take might put the cleanup at risk,” Lander said, “but you also don’t want the cleanup to be happening for private gain of the decision-makers.”

In a recent sit-down interview at the firm’s 666 Fifth office tower, Charlie Kushner dismissed Lander’s argument about conflicts of interest and accused the Council member of playing politics.

“We think it is discrimination, we think it is unfair,” he said. “But we decided in the best interest with our partner, let’s just move on.”

LIVWRK’s Asher Abehsera, a partner on the Gowanus site, said Lander’s decision and his announcement on public radio felt like the Kushners and their partners were being singled out. “There was an element of ‘don’t even think you have a shot at this anymore’,” he said.

Survival tactics

But while Kushner Companies walked away in Brooklyn, it has been less willing to do so in Jersey City. The firm plans to build two 66-story towers at 1 Journal Square in the city’s center and had initially lined up WeWork as an anchor tenant to carve out space for its WeLive co-living customers.

Then WeWork left the project last year — costing 1 Journal Square a $6.5 million annual state tax credit tied to the co-working company as part of a 2015 state economic development program. Charlie Kushner said his firm decided to ditch WeWork. He called the WeLive communal designs for the property a “bastardized plan” and said “if their concept was wrong, we would have to rebuild the building.” A representative for WeWork declined to comment.

Meanwhile, plans to raise $150 million in construction financing for the planned 744-apartment project through the EB-5 program backfired in May 2017 when a Chinese roadshow advertising the project (and seemingly implying the United States president backed it) caused an uproar and sparked a federal investigation that may still be ongoing. Charlie said the investigation has since been closed. The U.S. Attorney’s office declined to comment, which is its standard practice.

Adding fuel to the fire, Fulop has publicly spoken out against the Journal Square project, describing what he said was “a sense of entitlement” on behalf of the Kushners. In April, the city threatened to block the development, citing a missed deadline to start construction and an unpaid $40,000 municipal fee.

In response, Charlie Kushner called Fulop “another New Jersey asshole politician” and accused the mayor of appealing to “Trump-haters.” As for the unpaid fee, Charlie dismissed it as nonsense. “I’m still not clear what payment we missed,” he said. “If we missed a payment of $40,000, did we get a follow-up letter? … We asked everybody, asked our partner.”

A representative for Fulop’s office, however, shared a letter that was sent to the Kushners in March explaining that the developers had failed to pay the annual administrative fee from 2017 that was a condition of the redevelopment agreement. A follow-up letter sent to Kushner Companies and its partner KABR Group in April shows they had then paid it.

But in that letter, the Jersey City Redevelopment Agency’s acting executive director, Diana Jeffrey, said the agency doubted the developers’ ability to fully fund 1 Journal Square and their ability to “see the Project through to fruition.”’

The following month, Fulop announced that he would not support additional tax abatements for the project, saying the application, as proposed, “doesn’t work for us.”

“We are Front and Main Street,” Charlie Kushner told TRD. “So for them to not want that developed, who does that benefit? The local citizens? … If they force me to own that property for the next 100 years, and my great-grandchildren develop it, it’ll be worth a zillion dollars more.”

Adam Altman, a managing partner at KABR, was more reserved when asked about the dispute between the development partners and local Jersey City officials. “We are working it out,” he said. “We acknowledge we have a disagreement with the mayor. We don’t think it’s constructive to try to resolve our differences in the press.”

On June 27, the Kushners sued Jersey City and its mayor, citing political discrimination.

“It’s not like the Kushners have a great deal of credibility in anything they say,”  Fulop said in a statement. “Their entire lawsuit is hearsay nonsense. Bottom line — the same way they illegally use the presidency to make money is the same way here they try to use the presidency to be pretend victims. They will do anything to manipulate a situation.”

Sources close to Kushner Companies say it would make sense for the firm to stick to as-of-right properties in New York and steer clear of anything that requires public approval. Michael Fuchs of RFR Realty, a partner in the firm’s Dumbo office portfolio and the buyer of the Gowanus site, said that while he “can’t speak for Kushner Companies,” it would be wise for the firm to invest in projects that draw less public attention.

“The real estate business is difficult enough, so you don’t need the extra burden of extra scrutiny,” Fuchs said.

In New York, Kushner Companies seems to be paring down its holdings and focusing on fewer and more modest ventures. In addition to the Gowanus sale, the firm sold its minority stake in two massive development sites in Dumbo to its partner CIM Group in June. And last year, it sold its stake in a nearby vacant office building at 175 Pearl Street, as well as its stake in a Dumbo hotel previously owned by the Jehovah’s Witnesses.

Meanwhile, the company scrapped plans to tear down 666 Fifth Avenue and replace it with a massive residential and retail tower after being unable to close on enough financing for the plan. Instead, the company is now opting for an office renovation with a new partner, Brookfield Property Partners, whose investment in the building is still pending.

Two Trees Management’s head of external affairs, David Lombino, said Kushner Companies wasn’t known in the past for building complicated projects in New York that require public approval. Not building them in the future wouldn’t pose a significant change, he noted.

“Lots of companies never even touch that public sphere and still make tens of millions of dollars,” he said.

Bank reservations

Kushner Companies has also seen its access to certain lenders significantly change since Trump became president.

In late 2015, a senior executive at a major foreign bank had lunch with Jared Kushner, then the firm’s CEO, and Laurent Morali, its president. The two pitched the banker on helping them finance 666 Fifth, which they were still planning to demolish and replace with the soaring condo and retail skyscraper.

Like numerous other investors approached about the project, the banker — who talked to TRD on the condition that his name and his bank’s country not be mentioned — immediately decided it was too risky financially and rejected the overture.

The banker said he was still open to lending to Kushner Companies on other properties at the time. But since Jared Kushner joined the White House in early 2017, he said, he has made a “conscious decision” not to do business with the Kushner family’s real estate firm.

“For many banks, Kushner Companies is now a PEP — a politically exposed person,” the banker said. “That just requires a lot more explanation internally, a lot more documentation, a lot more [‘know your customer’ work]. For me, it’s not worth the headache.”

An executive at another overseas bank, who also spoke on condition of anonymity, said he too was unwilling to lend to Kushner Companies, citing the public scrutiny on a company so closely tied to the White House. “You might end up in the paper,” that executive said. “Is it worth it? I don’t know. Life’s too short. There’s plenty of deals out there.”

At the same time, Charlie Kushner said he’s nixed sovereign wealth funds and investors tied to foreign governments from the negotiating table, to reduce possible conflicts of interest as long as his son’s work involves foreign policy matters.

Doing so further narrows the pool of potential finance partners. But sources say there are plenty of alternative lenders willing to work with Kushner Companies, and for now the company seems to have no problem getting loans from major financial firms. Last June, for example, Bloomberg reported that the company was struggling to refinance its Jersey City apartment building Trump Bay Street. But in March it landed a $200 million mortgage from Citigroup.

And with the exception of Deutsche Bank — which Charlie Kushner said temporarily stopped issuing mortgages to the firm while the Justice Department was investigating the German financial giant — none of the Kushners’ existing lenders appear to have stopped working with the company.

New York Community Bank, which has issued more loans to the firm than any other bank, according to Real Capital Analytics, said in a statement that it “has enjoyed an excellent lending relationship with the Kushner Companies for over 15 years and we look forward to reviewing new financing opportunities with them in the years ahead.”

Charlie Kushner dismissed the notion that his firm has a harder time landing debt, claiming in May that it was on track to close $2 billion in financing in the first half of 2018.

“Not that there’s not challenges,” he said. “Jersey City is a challenge. It shouldn’t be. Gowanus was a challenge. It shouldn’t be. But generally, our business is plowing ahead like a bulldozer and we just keep moving forward.”

Inquiring minds

On Tuesday mornings at 8:30, Kushner Companies’ executives and key employees meet on the 15th floor of 666 Fifth to discuss the pressing business matters of the day.

Those who have attended the weekly assembly describe the mood as amiable and the agenda as extremely thorough, with no corner of the business left untouched. These days, Charlie Kushner’s daughter, Nicole, is there, while his wife, Seryl, sometimes attends. And family members are known to embrace each other in front of staff.

But in federal court records for Richard Stadtmauer — a convicted former company partner and Charlie Kushner’s brother-in-law — prosecutors painted a less wholesome picture of company gatherings. It was at Tuesday “cash meetings” in 2000, prosecutors alleged, that Charlie Kushner and other executives plotted out how to “lose a bill,” that is, how to deduct personal and other non-business-related expenses from real estate partnerships controlled by Kushner Companies.

Prosecutors in New Jersey alleged that those expenses included consulting fees to help revive the political career of Israeli Prime Minister Benjamin Netanyahu, private school tuition for children of company executives and the catering of a fundraiser for then-New Jersey Democratic Gov. John Corzine.

In 2004, Charlie Kushner pleaded guilty to 18 counts of tax evasion, illegal campaign contributions and witness tampering; he served 14 months in an Alabama federal penitentiary. Three associates also pleaded guilty to related offenses, with the exception of Stadtmauer, who went to trial and was sentenced to 38 months in jail in 2009.

These days, the inquiries into the Kushner family are scattered across agencies in Washington, D.C., New York, Maryland and Texas. Meanwhile, a handful of Democrats in Congress have called for even more investigations into Jared Kushner. Some have even requested information directly from Kushner Companies.

U.S. attorneys have reportedly probed the firm’s use of the EB-5 visa program and, separately, its relationship with Deutsche Bank. New York state’s Department of Financial Services is also reportedly looking into the Deutsche connection, as well as the firm’s relationship with Signature Bank and New York Community Bank. The focus of that investigation is whether Jared Kushner is personally guaranteeing any outstanding loans in the case of a default, CNN reported.

Mueller, meanwhile, is looking into the senior White House adviser’s attempts to finance 666 Fifth with foreign money during the presidential transition. The Maryland attorney general is investigating Kushner Companies’ use of civil arrest to collect overdue rent. And the list goes on.

Charlie Kushner denied any wrongdoing and said authorities are welcome to pore over his firm’s records. “We’ll give them the papers, so I do not lose one second of sleep,” he said. “You guys think about it, but I don’t.”

But white-collar legal experts who spoke to TRD said the scope of these investigations means the company needs to be taking them seriously and needs to be prepared for all scenarios.

“You have to do an internal investigation. You have to make sure you have internal controls,” said Levenson, the former assistant U.S. attorney. “Very importantly, you have to make sure people are not trying to hide or destroy evidence, because people panic, and the cover-up is often worse than the initial violation.”

Defense mode

Former deputy federal prosecutor and defense attorney Ellen Podgor said organizing legal defenses for disparate inquiries facing the Kushners would come with “enormous difficulty.”

Whether or not it’s been a challenge, Kushner Companies has certainly beefed up its legal team. In addition to its in-house counsel, Emily Wolf, the firm has tapped outside defense attorneys. According to one source, it enlisted Ben Brafman, who is known for representing Dominique Strauss-Kahn, Harvey Weinstein, Martin Shkreli, as well as celebrities and other real estate moguls.

And to handle heat from the media, the company has retained Charles Harder, the lawyer most famous for winning Hulk Hogan’s $31 million lawsuit against Gawker in 2016. In at least one case so far, Harder — who has become something of a boogeyman to publishers — sent a legal demand letter to Bloomberg when it published a story alleging the Internal Revenue Service had subpoenaed Kushner Companies’ business partners.

Meanwhile, Jared Kushner has his own legal team, headed by white-collar attorney Abbe Lowell, who also works for New Jersey Democratic Sen. Robert Menendez. In 2015, Menendez was indicted on corruption charges, which he later beat.

It’s not clear, however, who is spearheading the legal preparations for the family business.

“You do need somebody to coordinate all the defenses,” Levenson said. “It’s kind of a logistical nightmare in some ways, and it is very difficult.”

Josh Stein, a real estate attorney in New York, echoed that point. “The problem is when you get an investigation like this, you can’t just bring someone in and say, ‘respond to the investigation,’” he said.

“Before you let the investigators rummage around too much, you have to think about what it is that happened and what they’re looking for,” Stein added. “You don’t want to be blindsided. But you can’t easily delegate that to someone who wasn’t involved in the situation.”

One source close to the Kushners complained that the investigations have typically followed explosive news stories on the same topic, rather than originating from intelligence first gathered by law enforcement. The timing, at least, is true of the EB-5 and Deutsche Bank investigations, as well as an inquiry into the firm’s push to have tenants in Maryland arrested.

In New York City, it was also the case after the Associated Press published a story alleging Kushner Companies had lied to the Department of Buildings about whether there were rent-regulated tenants living in buildings where the company was doing construction work.

The DOB then announced that it would investigate the firm, and Council member Ritchie Torres launched his own inquiry — looking into claims that Kushner Companies misled the agency to allow the construction work to move forward without stricter government oversight.

Torres declined to comment on the ongoing investigation. But the subject matter quickly made its way up to the U.S. attorney’s office for the Eastern District of New York, which subpoenaed the firm for documents on how it handles rent-regulated tenants, according to the Wall Street Journal.

“Go into any building,” Charlie Kushner said. “You’re going to hear the same stuff. I’ve been in business doing the multifamily for about 40 years. There’s just a lot more tenants than there are landlords.”

The Kushner Companies founder dismissed the allegations, saying his firm simply failed to properly “check the boxes.” He said the DOB incident was not intentional and maintained that the investigations come with their own agendas.

“They could waste as much time and taxpayer money as they want, but it’s all politically motivated,” he said. “And we’re, thank God, big enough and strong enough to deal with it.”

—This story is the second part of a series that began with a sit-down interview with Charlie Kushner and Laurent Morali for TRD’s June cover story.

Stephen King and blockchain (Credit: LinkedIn and Pixabay)

Amid ongoing tension between agents and third-party portals over who controls listing data, a New York-based startup is launching what it says is the first blockchain-based multiple-listing service.

Founder Stephen King, a former commercial broker, said his company — imbrex — is a global MLS that is the first to syndicate data via the Ethereum blockchain. The decentralized, open-source system is billed as an alternative to traditional MLS networks and third-party sites like Zillow and Realtor.com, which can charge for membership or advertising.

Using blockchain technology, King said, allows brokers to cut out the intermediaries.

“Instead of giving their information to a centralized portal or MLS, the agent or firm can essentially share information and not have to store it physically where [they] are,” he said. They “can take advantage of the cloud-like environment that exists.”

Blockchain technology allows for peer-to-peer transfers between computer networks, and tracks all transactions through an encrypted electronic ledger. Though it’s been used to facilitate deals with cryptocurrencies like Bitcoin, real estate is slowing coming around to using it in property transactions.

Earlier this year, the San Francisco-based startup Propy said it completed the first blockchain real estate transaction in Vermont.

Some architecture and engineering firms are using blockchain technology to share computer-generated 3D models.

King said he didn’t set out to create a company, but wanted to fix a problem he had in 2012. That’s when he joined his family real estate firm, King Interests, in Princeton, New Jersey. When he launched a brokerage division with the company, he had little control over his listings. “I realized we were paying $10,000 a year for access to pretty much our own listing data through various MLSes,” King said.

Imbrex users are not charged any syndication or distribution fees, but they do pay an Ethereum transaction fee (which has averaged several pennies per transaction). Imbrex estimated a firm that updates its listings feed hourly will pay roughly $7 per day or $80 per year.

Imbrex is launching with 2,200 listings from Toll Brothers, the publicly traded luxury homebuilder.

“We are excited to be an early adopter and look forward to long-term benefits from such a global, open source system,” Kira Sterling, Toll Brothers’ chief marketing officer, said in a statement.

With imbrex, King said he initially floated the idea as something that could be used by various MLS networks. “There are 800 or so of them. If you’re an agent in one region, you’re not getting listing exposure outside that geographic region,” he said.

But he said he didn’t get positive feedback, which he chalked up to the networks being territorial about their data. It was a few years ago, too, and the blockchain technology was even more esoteric than it is today.

He has since created a front-end application that displays listing information. Imbrex has a back-end feature called the “imbrexer,” which hosts and disseminates listings data onto the blockchain. Using the imbrexer generates a “key” that allows them to populate the blockchain with listings.

To ensure the accuracy of the data, users are incentivized with imbrex tokens — the cryptocurrency of the platform. To date, imbrex has raised $300,000 from a private investor. Over the course of 30 days last summer, it sold 12.25 million imbrex tokens, raising $3.25 million.

“Once this technology becomes ubiquitous, the portals and MLSes will have to go to these people and say, ‘Lease me your key so I can populate the data,’” King said. “Or they’ll have to pay to get that data and come up with new business models to monetize data through the front end.”

(Credit: Hloom Templates via Flickr)

Nationwide retail sales were up in the second quarter year over year, a positive sign for the overall economy, though department store revenue continued the drop.

From April to June, retail sales in the U.S. grew by 5.9 percent compared to the same period in 2017, the U.S. Commerce Department reported Monday, , according to the Wall Street Journal. June sales rose 0.5 percent from May figures.

The news wasn’t good for everyone.

Department store sales dropped 1.8 percent, the largest decline in more than two years. Traditional retail’s dip coupled with rapid rent growth have put the squeeze on tenants and landlords in high-stakes markets like Manhattan.

Some landlords have done the otherwise unthinkable: lowered rents. In Manhattan, the average price of ground-floor retail dropped by 19.5 percent in 13 of 16 shopping districts in the first quarter of the year.

Vitamin shop landlords remain healthy though. Spending at health and personal care stores rose by the largest month-over-month margin in 14 years, according to the Journal.

Vehicle sales and higher gas prices were primary drivers of the growth in overall consumer spending, although fluctuating gas prices could muddy the Commerce Department’s retail growth figures, which are not adjusted for inflation.

Consumer spending accounts for more than two-thirds of U.S. economic output. The strong numbers prompted economic forecasting firm Macroeconomic Advisors to raise its expected second quarter GDP growth to 5.1 percent from 4.9 percent. The Commerce Department releases its GDP growth estimate for the second quarter at the end of July. First quarter GDP growth was 2 percent.

The Federal Reserve expects GDP growth to land around 2.8 percent for the year, and is planning for additional hikes to the federal benchmark interest rate in order to curb possible inflation. That typically slows growth and prompts lenders to raise mortgage and commercial loan rates.  [WSJ] — Dennis Lynch 

Clinton Hotel in South Beach (Credit: Think Hotel Group)

Think Hotel Group just received a $22 million loan from Blue Vista Finance for the recently renovated Clinton Hotel in South Beach.

The hospitality firm recently completed an 18-month, multimillion-dollar renovation of the 88-key hotel at 825 Washington Avenue, including a full restoration of the lobby’s layout using the original 1930’s Spanish tile, a fully renovated pool and courtyard, as well as full renovations to all of its guest rooms. Think Hotel Group also added a new onsite Brazilian restaurant, Falsa Limonada.

A spokesperson for the developer declined to comment on the loan.

Think Hotel Group purchased the Miami Beach property for $28.5 million in June 2015, more than four times its previous sale in 2007, records show. The company also owns and operates The Plymouth Miami Beach, Boulan South Beach and South Beach Hotel.

Nearby at 1685 Washington Avenue, the Finvarb Group is planning to build a 150-room hotel under the Thompson Hotels brand. The proposal received a recommendation for approval from the Miami Beach Planning Board last month, but still needs approval from the Miami Beach Historic Preservation Board.

In 2015, Miami Beach commissioners approved an ordinance designed to bring hotels, fine dining and new retail to Washington Avenue. David Lichtenstein’s Lightstone Group is also planning Moxy South Beach, a seven-story, 202-room boutique hotel to replace aging storefronts at 915 to 947 Washington Avenue.

The Opportunity Zones program could spur on major development in historically distressed areas such as Little Haiti (Credit: Wikimedia Commons)

A short drive from downtown Miami, colorful murals highlight the Haitian diaspora and pink and yellow island-themed buildings dot Second Avenue in Little Haiti.

Among the traditional Creole eateries, some millennial-focused restaurants have emerged, advertising craft beer and featuring organic rotisserie chicken and jalapeno jam on their menus. The slow transformation has not gone unnoticed.

As some see the area poised to become the next Wynwood, Little Haiti has piqued developers’ interests in recent years.

But with an unemployment rate hovering at more than 20 percent — the city average stands at about 5 percent — developers have yet to begin building major ground-up projects in the neighborhood.

That could change, however, thanks to a little-known provision in President Trump’s tax plan that is designed to increase private investment in low-income communities nationwide.

Known as the Opportunity Zones program, it would provide tax incentives to developers who invest in historically distressed neighborhoods like Little Haiti, Little River and the city of North Miami, setting the stage for what could be massive redevelopment in those areas.

“There is a significant and potentially huge tax advantage to a developer building a project within these opportunity zones,” said Jon Chassen, a partner with the Miami law firm Bilzin Sumberg’s real estate and distressed property group.

Opportunities abound

Tucked away in the $1.5 trillion tax overhaul, the Opportunity Zones program was the brainchild of South Carolina Republican Sen. Tim Scott, meant to increase investment in low-income areas.

It works to incentivize investors by allowing them to defer their capital gains taxes — or taxes on gains made from the sale of certain types of assets — into Opportunity Zones funds. One Washington, D.C. nonprofit, the Economic Innovation Group, projects that U.S. investors have more than $2 trillion in unrealized capital gains just from stocks and mutual funds alone

For real estate developers and other investors, there are two major tax benefits from utilizing Opportunity Zones funds. The first is that the program allows investors to defer paying capital gains taxes until 2026, if they reinvest the gains in Opportunity Zones projects. The second is that investors can permanently forgo paying capital gains taxes on the sale or exchange of their investment in Opportunity Zones Funds, provided they hold the investment for at least 10 years.

According to the Economic Innovation Group, after 10 years an investor could see an added $44 for every $100 of capital gains reinvested into an Opportunity Zones program, compared to an equivalent investment in a traditional stock portfolio. That assumes the investment has annual appreciation of 7 percent.

“The real big incentive comes after 10 years. The kind of investments that are being held for 10 years are real estate investments,” said Brett Theodos, a principal research associate at the Urban Institute’s metropolitan housing and communities policy center.

There have been numerous past government efforts to encourage private investment in economically disadvantaged areas through tax incentives. What differentiates the Opportunity Zones program is that it encourages real estate construction or “substantial rehabilitation” of an existing property, some experts said.

“As a general rule, the intent is to spur new development,” Chassen said.

But it remains unclear which type of projects would benefit most from this tax break or whether existing projects might qualify. The U.S. Treasury Department is expected to release further guidance on the Opportunity Zones program in the coming months to provide more clarity.

So far, the law prohibits certain businesses from inclusion in the initiative such as private or commercial golf courses, massage parlors, along with suntan and gambling facilities.

State governors quickly nominated Opportunity Zones for Treasury Department approval. The zones are designed to be in areas that have a poverty rate of at least 20 percent or that has a median income that does not exceed more than 80 percent of the metro area. In total, there are 8,700 Opportunity Zones in the United States, both in rural areas and large metro areas.

“The challenge will be what products work best,” said John Balboni, a partner at Sullivan & Worcester, a Boston-based law firm that specializes in real estate and corporate practice. “Multifamily, warehouses, and self-storage will all take a look at this.”

While experts suggest that retail or multifamily may best fit these guidelines, some say that luxury condominiums would not be excluded from meeting the Opportunity Zones fund’s criteria. That raises questions about whether the program will really provide economic benefit to the region or would instead just be a boon to wealthy developers.

Adding to the capital stack

Shortly after the new law was announced, Avra Jain’s phone started ringing. The Miami developer, who made a name for herself redeveloping old motels on Biscayne Boulevard in the MiMo neighborhood, focuses on value-add projects in transitional neighborhoods such as Little River, Little Haiti and MiMo.

“When the law came out, the people who actually did read about it said Avra was on the top of the list to call,” Jain said. A former bond trader on Wall Street, Jain said that one of the biggest benefits of the program is that it could potentially allow her to access a new capital source.

Many banks have dialed back on their construction lending and other capital funding — such as the EB-5 visa program — has become more difficult to access because of regulatory restrictions. Now, developers, especially those with projects in low-income areas, may turn to Opportunity Zones funding to finance gaps in their project costs.

For developers like Jain, the new law could also mean that more banks and lenders are more willing to provide financing for projects in those low-income areas. “It makes what we do faster and easier,” she said.

South Florida zones

Florida has 427 designated Opportunity Zones in total that would qualify for the federal tax incentive program.

In South Florida, the Opportunity Zones map includes some in historically distressed areas such as Liberty City, Opa-Locka and Carol City. It also includes Little Haiti, North Miami and Aventura, where major mixed-use projects have already been proposed.

(Click to enlarge)

(Click to enlarge) Source: Map data provided by the Florida Department of Economic Opportunity and OpenStreetMap contributors. Maps and research by Haru Coryne.

“There was a lot of lobbying, some from the private sector and the public sector as to which ones could get the benefit,” said Andrej Micovic, an attorney with Bilzen Sumberg’s land development and government relations group.

In Little Haiti, Dragon Global’s Magic City Innovation District sits squarely in an Opportunity Zones tract on Second Avenue. The development firm, led by Tony Cho and Bob Zangrillo, is planning to build a $1.3 billion mixed-use entertainment center in Little Haiti that will have 20 buildings, including a 15,000-square-foot innovation center that will be home to startups. The project received initial financing from Arkansas-based Bank of the Ozarks in February, but has not broken ground. The project is expect to take 10 years to build.

Another project that could possibly qualify is SVP Realty’s plan to redevelop the nearby Design Place apartments at 5045 Northeast Second Avenue. It will be turned into a major mixed-use complex, with 2,798 residential units, 418 hotel rooms and 284,000 square feet of commercial and retail space.

Just north of Little Haiti, an Opportunity Zones tract encompasses the site of the $4 billion SoLe Mia mega-project at 15045 Biscayne Boulevard in North Miami. It received construction financing last year from Wells Fargo and the first phase of development is under construction. Most of the ground-up work, which will include a 10-acre lagoon with beaches, 12 residential buildings and 4,300 units — along with more than 1 million square feet of retail — has not begun.

Micovic said the question is, “If there are existing projects, are these laws going to allow for further investment in these Opportunity Zones buckets.” That remains unclear.

Economic impact

While the program would likely provide big benefits to developers already investing in these areas, some wonder whether the added tax advantages would be enough to justify new investment.

Jain, the Miami developer, said the program won’t alter where she is looking to build.

“I am not going to go buy a property just because it’s in an Opportunity Zone,” she said. “It doesn’t change my style.”

Darryl Jacobs, an attorney with the Chicago-based firm Ginsberg Jacobs, said he’s been fielding calls from property owners about the new zones, but added that it may take more than tax sweeteners for developers to start building.

“It’s going to make money less expensive for deals that are already happening in those areas, and I certainly think there will be some social impact investors coming into neighborhoods that could turn the corner soon,” Jacobs said. “But is a 10 percent or 15 percent avoidance worth it to take that risk? I just don’t know.”

The new program does makes real estate a more attractive investment option at a time of rising interest rates, according to Josh Migdal, a partner at the Miami law firm Mark, Migdal & Hayden.

“It’s a huge opportunity for development in certain pockets of Miami,” Migdal said. “It also allows investors to get a return that they otherwise wouldn’t be able to get, which will entice them to invest in real estate when we are near the end of the cycle.”

Neisen Kasdin, a managing partner at Akerman’s Miami office, adds the new program may further incentivize people to invest in areas that developers are already considering.

“That sweetens the investment,” he said. “That would be particularly the case for a project that doesn’t have an established market,” he added, “where investing there is riskier.”

Alex Nitkin contributed reporting

David Beckham and Jorge Pérez

Related Group founder Jorge Pérez is speaking out against the proposed $1 billion plan to redevelop the city of Miami’s Melreese Golf Course into the home of Miami’s Major League Soccer team. But he isn’t interested in bidding on the property, Pérez told The Real Deal.

Miami’s condo king compared the deal to the Miami Marlins stadium debacle, citing the lack of community input and low rent that David Beckham’s group is proposing to pay, according to an email Perez sent to Miami Commissioner Ken Russell on Saturday. In the email, first reported by Channel 10 reporter Glenna Milberg, Perez asks Russell why the city doesn’t take its time and hire a professional appraiser to determine the property’s fair market value, adding that if he were developing a $1 billion deal, the land would account for about 20 percent, or $200 million.

At a 6 percent return, he wrote, rent would be $12 million – a far cry from the $3.6 million in annual rent that the Beckham group is proposing.

On Thursday evening, Beckham and the Mas brothers presented their plan to the city of Miami commission to redevelop the city-owned golf course and surrounding park complex into a massive mixed-use project anchored by a 25,000-seat stadium that will be home to the partners’ MLS franchise.

The group is seeking that a referendum be placed on the November ballot asking Miami residents to approve or deny a no-bid lease agreement for the site. It didn’t get an answer from the commission, which deferred a decision to a special commission meeting this Wednesday. Pérez, who is on vacation in Italy, confirmed his email to Russell in an email to TRD. He called Jorge Mas a friend, and said that he has not seen the proposal himself, only news of the proposal. He also wrote that he’s in favor of bringing professional soccer to Miami.

Pérez added that he has “ABSOLUTELY NO INTEREST” in bidding or participating in the deal.

The Melreese site would replace one in Overtown that the Beckham group planned to build the stadium on up until last month. But Jorge Mas, who along with his brother joined the partnership in December, said he was never sold on the Overtown site, arguing it would not benefit the residents of that neighborhood. And in the days leading up to last week’s commission meeting, a number of opponents have emerged, including parks activists, city watchdogs and Melreese users.

“I am VERY much opposed to taking open space away for private, for-profit purposes, particularly if a thorough financial analysis and community input has not taken place,” Pérez wrote in his email to TRD, later repeating that the city does not “want to repeat the Marlins debacle.”

“The huge commercial development around the proposed stadium, the necessary community input and the determination of fair market value are my concerns,” Pérez wrote.

The mega soccer complex, designed by Arquitectonica, would also feature 600,000 square feet of space for retail and restaurants, 400,000 square feet of office space, thousands of parking spaces, more than 700 hotel rooms, and 23 soccer fields on roughly 23 acres of green space.

In exchange, Mas said the project will invest $20 million in park improvements in addition to the proposed $3.6 million in annual rent.

Armando Codina Downtown Doral and 2020 Salzedo

Codina Partners just closed on a $150 million refinance deal for two of its commercial projects in Doral and Coral Gables.

The firm scored $20 million for its luxury office tower project 2020 Salzedo from Florida Community Bank, and $127 million for its office and retail portfolio at Downtown Doral from an undisclosed life insurance company, according to a spokesperson for the developer.

The two separate loans were arranged by HFF’s Paul Stasaitis and Manny de Zarraga. Steven J. Vainder from law firm White & Case represented Codina Partners. The refinancing will extend the loan period up to 15 years.

The  2020 Salzedo Street project consists of more than 200 apartments, 50,000 square feet of office space, a parking garage and ground-floor retail. In June 2015, Codina scored a $53 million loan from Regions Bank to help finance the project’s construction.

When complete, Codina Partners’ massive Downtown Doral mixed-use development will have more than 1 million square feet of commercial space, 400,000 square feet of Class A office space and 5,000 residential units. The master-planned community includes a city hall, a charter school and Publix that are already open, town homes, single-family homes and condo towers.

Codina Partners, led by developer Armando Codina, is also building a 1.5 million-square-foot industrial park in Hialeah called Beacon Logistics Park. 

151 Northwest 24th Street, Tony Arellano and Devlin Marinoff

A company tied to San Francisco investment firm RRE Investments paid $9.15 million for a retail property in Wynwood.

151 NW 24th St Partners LLC, led by general partners Dan Arev of Link Real Estate and Chaim Cahane of Forte Capital Management and equity partner Joe Serure of Jameson Realty Group, sold the redeveloped building at 151 Northwest 24th Street, according to Dwntwn Realty Advisors brokers Tony Arellano and Devlin Marinoff.

The buyer, RW NW 24th St LLC, is a Delaware company controlled by RRE’s Tommy Rincon, state records show. Rincon is managing partner of San Francisco-based RRE and a former Redsky Capital associate, according to his LinkedIn profile.

Arellano and Marinoff, who declined to identify the buyer, said it is the company’s first purchase in Florida. The buyer financed the deal with a $6.25 million loan from First National Bank of South Miami. Pedro Arellano of America Realty Advisors arranged the loan, according to a release.

The building hit the market for $9.85 million and sold within three months. Marinoff and Arellano, who represented both sides of the deal, said that demand for redeveloped retail sites in Wynwood is strong.

“Everyone still believes there’s upside in the neighborhood. No one really wants to sell right now,” Arellano said.

Property records show the New York investors paid $2.9 million for the site in 2015 and redeveloped the warehouse, built in 1948, into a 6,656-square-foot retail building with seven units ranging from 750 square feet to 1,200 square feet. The 14,500-square-foot property also features a small park and 8,000-square-foot outdoor patio.

Tenants include Bianco Gelato, clothing store IKID IKID and the Dirty Rabbit Wynwood Local Bar. The building sold for $1,375 per foot and the land for $631 per foot.

The site, just east of Wynwood’s main drag, Northwest Second Avenue, can be developed into up to 92,800 square feet and eight stories under its NRD T5-O zoning, according to marketing materials.

George Pagoumian and Muse Residences

A green venture capital firm just purchased a unit at the newly completed Muse Residences in Sunny Isles Beach for $6 million.

Boca Raton-based PMA Venture Capital Group, led by George Pagoumian, bought unit 3601 at the luxury tower in Sunny Isles at 17100 Collins Avenue, which began recording sales in June. Kevin Maloney’s Property Markets Group and Claudio Stivelman and Marc Schmulian’s S2 Development developed the 68-unit, 49-story tower. 

PMA Venture Capital Group is a venture capital firm “committed to funding innovations which promote a healthy mind, body, and soul,” according to its website. Green venture capital firms typically invest in companies with a positive social impact.

PMA has also purchased units in the Axis Tower in Brickell, records show. Pagoumian also founded NAPCO LLC, which became one of the largest independently owned wholesale consolidation-focused global property insurance firms in the United States, according to PMA Venture’s website.

Amenities at Muse include a gym on the third floor, sauna, children’s play room, a “farm to table” lounge for residents, outdoor pool cafe and pet services. Dr. Deepak Chopra, a New Age and alternative medicine advocate, designed the finishes for some units at Muse Residences in Sunny Isles Beach.

Since June, 23 units have closed in the luxury condo tower, according to property records. It was designed by architect Carlos Ott, along with Sieger Suarez Architects.

400 South Powerline Road

A Fort Lauderdale real estate firm just sold a Planet Fitness-anchored shopping center in Pompano Beach for $11.5 million.

Pompano Beach Plaza DK LLC and Pompano Beach Plaza ML LLC, companies managed by Miami Lakes attorney Michael Cosculluela, are the buyers. The companies financed the deal with an $8.5 million mortgage from Argentic Real Estate Finance, which is tied to New York private equity firm Silverpeak Argentic.

Diversified Realty Development sold the 46,000-square-foot retail center at 1400 South Powerline Road for about $250 per square foot. The company bought the 5-acre property in 2014 for $2.85 million.

Diversified Realty renovated the property, leased to tenants that include Little Caesar’s Pizza, Enterprise Rent-A-Car, Aroma Joe’s and a sports medicine and rehabilitation center, according to a press release.

CBRE’s David Donnellan and Patricia Friend represented the seller.

The shopping center is at the northeast corner of Powerline Road and McNab Road, just north of Fort Lauderdale’s Cypress Creek neighborhood. A new planned development, Uptown Urban Village, is slated to bring 2,560 residential units and 450 hotel rooms to a 353-acre area nearby.

In Pompano Beach, Fairfield Residential recently paid nearly $8 million for a strip mall with plans to build an apartment building. Other investors buying properties in Pompano include real estate developer Adam Adache, Fortress Investment Group and IMC Equity Group.

(Credit: Danijel Šivinjski)

Apparently more and more people are deciding to buy homes based on some photos and maybe a FaceTime tour.

A new survey by Redfin found that 20 percent of primary home buyers are willing to put an offer on a house they’ve never visited, according to the New York Times. Another survey by Realtor.com in New York City found that about half of the 45 agents contacted worked with a buyer who was signing along the dotted line for a home they’d never set foot in.

Why are an increasing number of buyers willing to take such a profound leap of faith? For some, they feel technology is a good surrogate for a visit if they’re not able to travel for whatever reason. Others attribute the trend to housing markets like New York where properties go fast, so you need to move quickly to snag a place.

The process is also stressful on agents representing their clients from a distance: Joe Muller of Julia B. Fee Sotheby’s International Realty recalled a tour with a client who’d submitted a $142,000 bid for a White Plains apartment he’d only seen via FaceTime.

“I think I was sweating because I was like, ‘Oh, my god, what if he doesn’t like it?’ He’d have lost his deposit,” Muller told the Times. It worked out.

There are cases that don’t end as picture-perfectly, however. Graham Candish put a $1.25 million offer on a house in New York while still living in Geneva. He didn’t visit his property until halfway through closing and it was only then he realized the true state of his new basement.

“They massively overexpose the photographs and turn on all the lights. You get there in person, and it’s not as bright as you’d imagine,” he told the Times. His damp and dark basement aside, Candish claims he doesn’t regret the deal, though he may not be as trusting of photos next time. [NYT]Erin Hudson

From left to right: Louis Archambault, Felipe Azenha, Cooper Copetas, John Dohm and Matthieu Merchadou

While a lot of the buzz surrounding the real estate industry’s emerging use of blockchain has centered on authenticating property transactions involving cryptocurrencies, the technology has the capability of completely streamlining development, according to a panel of Miami entrepreneurs developing applications for the building community.

For instance, architecture and engineering firms can use blockchain — a decentralized electronic record that is encrypted — to share complex computer-generated 3D models of projects known as BIM models with team members in various locations around the globe in real-time, said Cooper Copetas, co-founder of NOOS Labs, an incubator for start-ups focusing on real estate and logistics applications.

“With blockchain, you can integrate the data and not have to rely on any software,” Copetas said. “If someone is using a Mac on one side of the world, but another person on the other side of the world is using Windows, compatibility issues won’t matter. Blockchain unifies the information [being uploaded] and transcends different softwares and operating systems. It is really changing the real estate industry and transcending into architecture.”

Copetas, who is also an architect, was speaking before a small audience at the Commercial Industrial Association of South Florida’s discussion, “Artificial Intelligence, Blockchains and Real Estate,” held last week at the event space Curated in Wynwood. The other panelists were Noos Labs partner Matthieu Merchadou; Gridics co-founder Felipe Azenha; John Dohm, partner with Infinity Commercial Real Estate; and Louis Archambault, a partner with the Saul Ewing Arnstein and Lehr law firm.

Merchadou said BIM and blockchain could be combined for virtually any aspect of building construction. “During a construction project, you can predict the evolution of your budget in real time,” he said. “If you want to install a new air conditioning system, you run models that shows you how it would interact with your electrical system.”

Azenha said blockchain could also play a role in quickly disseminating information pulled with Zonar.City, the software application Gridics developed that analyzes real estate data sets, including a parcel’s zoning, in order to streamline the process of evaluating a property for development. Zonar.City can complete tasks in a few minutes that would normally take a team of planners days, sometimes weeks, to finish, he said.

Brickell neighborhood

The developers and builders of some of Miami’s tallest towers are being sued for damage allegedly caused to two neighboring Brickell condo buildings.

Everest National Insurance Company, on behalf of the 1060 Brickell Condo Association, filed a lawsuit in Miami-Dade County Circuit Court against Florida East Coast Realty, Tutor Perini Building Corp., Key International, Moss & Associates, Rilea Group Realty and Coastal Construction Group of South Florida for significant damage to 1060 and 1050 Brickell due to the construction of Panorama Tower, 1010 Brickell and the Bond.

In all, construction of FECR’s Panorama and Rilea Group’s the Bond, which both began in early 2014, and of Key International’s 1010 Brickell, which broke ground in September of that year, allegedly damaged the facade, balconies, railings and building components, a portion of the trellis near the pool deck, the roof and cooling tower of the property at 1050 and 1060 Brickell Avenue, according to the suit.

The condo association’s policy with Everest ran from March 1, 2015 to May 1, 2016, the suit said.

Everest claims that the condo association received complaints from residents about debris, and cement and paint splatter, and that residents lost the use of their balconies. The association had to replace the roof of one of the buildings due to damage from debris impact. The association also alleges that about 45 pounds of dust and cement debris collected in one of the building’s cooling towers, clogging the filter.

On April 24, Everest made an undisclosed payment to the 1060 Brickell condo association to perform remediation to the properties caused by the loss, according to the suit.

Panorama, an 85-story mixed-use tower with apartments, a hotel and commercial space, opened at 1100 Brickell Bay Drive earlier this year. Tutor Perini handled construction.

The Bond, a 44-story, 328-unit condo tower at 1080 Brickell Avenue, opened in April 2017 and was built by Coastal Construction. And Key International and 13th Floor Investments opened 1010 Brickell, a 50-story, 389-unit condo tower at 1010 Brickell Avenue, in August. Moss & Associates was the general contractor.

The lawsuit claims that the developers and general contractors “owed a duty to adjacent property owners and residents … to ensure the development and construction” of the buildings “was within the standard of care for real estate developers under the same or similar circumstances.”

In a statement provided to The Real Deal, Bruce Moldow, executive vice president and chief legal officer of Moss, said, “We believe Moss has no liability in this situation and we will defend the case vigorously.”

Coastal vice president Dan Whiteman said the company does not comment on pending litigation.

FECR, Tutor Perini, Key International and Rilea Group did not immediately respond to requests for comment.

A number of developers have been sued this cycle by neighboring condo associations alleging damage from construction, including Biscayne Beach and Porsche Design Tower. 

Lake Walden Square in Plant City (Credit: Crexi.com)

A Tampa-area shopping center with a Winn-Dixie anchor store and a 93.3 percent occupancy rate sold for about $118 per square foot.

KBL Asset Management bought the grocery-anchored shopping center in Plant City from Retail Value Inc. for $29 million.

Other tenants of 244,529-square-foot Lake Walden Square include Ros Dress for Less, Marshalls, PetSmart, Ulta Beauty, Five Below and Famous Footwear, plus Firehouse Subs and Wasabi Japanese Steakhouse.

Lake Walden Square occupies 26.8 acres where West Alexander Street intersects James L. Redman Parkway, “the dominant retail intersection serving Plant City,” according to a press release by Holliday Fenoglio Fowler, L.P., (HFF) which marketed the property on behalf of the seller.

HFF also reported that 38,967 residents whose annual incomes average $68,173 are within three miles of the shopping center.

The Tampa metropolitan area remains “high on the list for Florida retail investors,” Eric Williams, an HFF director, said in a prepared statement, citing “the thriving I-4 corridor” between Tampa and Orlando.

Williams represented Retail Value Inc. in the $29 million transaction together with Daniel Finkle, co-head of the retail practice at HFF, and managing director Luis Castillo. Retail is a publicly traded company listed on the New York Stock Exchange under ticker symbol RVI. – Mike Seemuth

The majority of the country will soon by concentrated in handful of the 50 states.

The stat comes from two sources cited by the Washington Post: the American Enterprise Institute’s Norman Ornstein as well as a data analysis of Census Bureau’s figures by the Weldon Cooper Center for Public Service at the University of Virginia.

The latter of which found that, by 2040, 70 percent of the population would be living in 16 states, with nearly 50 percent concentrated even further in eight states. Here’s the states that are expected to be drawing people. [WP]Erin Hudson

Florida

(Credit: Pixabay)

Georgia

(Credit: Wikimedia Commons)

New York

(Credit: Pexels)

Texas

(Credit: Shutterstock)

North Carolina

(Credit: James Willamor)

Illinois

(Credit: Pixabay)

Pennsylvania

(Credit: Adam Jones)

The Times-Union Center for the Performing Arts in downtown Jacksonville

Miami-based investor Ramon Llorens paid $6.83 million for a parking lot near a theater in downtown Jacksonville, the latest addition to his portfolio of properties in the city.

Through Amkin Terra LLC, Llorens bought the 1.48-acre parking lot at 317 Water Street from a company linked to New York-based Och-Ziff Real Estate.

The parking lot sold for $430,000 more than the seller paid for it in April 2015. It is next to the Omni Jacksonville Hotel and across the street from the Times-Union Center for the Performing Arts.

In December, Llorens paid $2.78 million for a 1.21-acre site at 10 North Pearl Street, formerly occupied by a Greyhound bus station.

Among other Jacksonville properties he has acquired since 2014, Llorens has purchased a 2.78 parking lot at Hogan and West Bay streets, a parking garage at 336 West Bay Street, the TIAA Bank Center, and 250 acres of land along New Berlin Road. [Jacksonville Daily Record]Mike Seemuth

Coastal Village Apartments fire pit

A joint venture paid $55,000 per bed for a 14-year-old apartment property in Fort Myers catering to college students.

Coastal Ridge Real Estate and H. Katz Capital acquired the 200-unit, 800-bed property, called Coastal Village Apartments, for $44 million.

Monthly rents for the four-bedroom, four-bathroom units range from $575 to $645 per unit.

Built in 2004, Coastal Village Apartments features a clubhouse with a media room, swimming pool, barbecue and picnic area, and sand volleyball court. Open 24 hours a day are the resident lounge, gym and computer lab.

Fully furnished units at the student housing complex have private bathrooms, a washer and dryer, high-speed Internet service and views of a lake.

Patrick McBride, managing partner of Coastal Ridge Real Estate, said in a prepared statement that Fort Myers is “a supply-constrained market where the student population is expected to grow for years to come.”

Coastal Village Apartments is a 21-acre property at 19401 Skidmore Way, near rapidly growing Gulf Coast University and several retailing and entertainment destinations including Gulf Coast Town Center and Fort Myers River District.

Berkadia brokerage agents Kevin Larimer, Greg Gonzales, Jason Stanton and Cole Whitaker represented the unidentified seller in the $44 million transaction. – Mike Seemuth

Tom Cabrerizo

An affiliate of rental housing investor CFH Group paid $3.02 million for a Miami site zoned for as many as 150 residential units near Jackson Memorial Hospital.

The 39,900-square-foot site is at 1430, 1460 and 1490 Northwest 20th Street in Miami’s Allapattah community, just west of the city’s Wynwood area. The sellers were Ramiro Chavez and Magali Chavez.

The buyer, Allapattah Investors LLC, is managed by Tom Cabrerizo, president of CFH, and Sheldon Lowe, co-developer of Grand Bay Towers in Key Biscayne.

Cabrerizo told the South Florida Business Journal that CFH has long-term plans to develop the site, which is occupied by a 6,061-square-foot automotive building. CFH owns approximately 6,000 apartments in South Florida.

Agustin Duarte of Magic City Investments brokered the sale of the site.

Duarte told the Business Journal that Allapattah property sales have increased as property values soar in Wynwood, Edgewater and other areas east of Allapattah. [South Florida Business Journal]Mike Seemuth

Lamar Odom and 9401 SW 63rd Court

Former Miami Heat basketball player Lamar Odom sold his house in Pinecrest for $375,000 less than he paid in 2003.

Odom, former husband of celebrity Khloe Kardashian, sold the six-bedroom, nine-bathroom at 9401 Southwest 63rd Court for $2.6 million.

He paid $2.975 million for the house in 2003, the year after it was built.

The sale price was half of his original $5.2 million asking price when he put the house on the market in April 2017.

Odom subsequently cut his asking price to $4.5 million, $4.1 million and $3.6 million before selling for $2.6 million, or $302 per square foot.

The 8,600-square-foot house features a two-story foyer with wrought-iron staircases, a swimming pool and spa, a covered terrace, built-in bar, theater, tennis court and basketball court.

Odom played for the Miami Heat during the 2003-2004 season and retired from the National Basketball Association in 2013 as a forward with the Los Angeles Lakers. [Daily Mail]Mike Seemuth

Mike Hughes, vice president and general manager for Downing-Frye Realty Inc. (Credit: YouTube)

The number of Naples-area houses and condos that sold in the second quarter nudged two percent higher, compared with the same period last year.

The number of second-quarter closings rose to 2,926 from 2,880 last year, according to the Naples Area Board of Realtors.

Active listings of houses and condos in the Naples area totaled 5,165 in the second quarter, down slightly from 5,189 last year.

“This tells me that homes are coming onto the market at the same rate we are selling them,” Mike Hughes, vice president and general manager for Downing-Frye Realty, Inc., said in a prepared statement.

House sales increased 3 percent to 1,395 in the second quarter from 1,349 in the second quarter of 2017.

The median house-sale price from April through June was $440,000, a 7 percent increase from $418,000 last year.

Condo sales in the second quarter totaled 1,531, unchanged from last year, and the median sale price was $270,000, down 4 percent from $282,000 last year. – Mike Seemuth

Bekir Okan and a rendering of Okan Tower

UPDATED July 16, 12 p.m.: Real estate investors have a new reason to avoid Turkey, and that could be good news for a Miami condo developer.

The Turkish developer behind a 389-unit condo development in Miami may sell more units to wealthy Turks discouraged by the June reelection of Turkey’s authoritarian president.

Veteran developer Bekir Okan expects the reelection of Recep Tayyip Erdogan to inspire capital outflow from Turkey that could boost the condo sales of his mixed-use Okan Tower development in Miami, which would rise 890 feet at 555 North Miami Avenue.

Okan opened a 3,000-square foot model of an Okan Tower condo unit in Istanbul about two months ago, and his $300 million condo project is selling ahead of construction.

Okan’s Istanbul-based company, Okan Group, has presold 45 of the 389 planned condo units during the pre-construction phase of the Okan Tower development.  One Sotheby’s International Realty is handling sales. The developer held a lavish launch party for the project in May.

Okan, 68, told the Miami Herald that he wants to start construction of Okan Tower in November and finish in 2022.

Okan also told the Wall Street Journal he has invested $25 million in the project and doesn’t plan to finance its construction with deposits on presold units.

Miami architect Robert Behar designed Okan Tower with tulip-inspired façade design, an homage to the national flower of Turkey, plus a top-floor swimming pool, a restaurant and a Turkish bath, or hammam.

Among the planned mix of uses at Okan Tower is a 294-unit hotel bearing a Hilton brand.

Pre-construction prices range from $1.9 million and up for a duplex penthouse to $318,500 for condo-hotel units, which would be operated as hotel rooms when owners are away. [Wall Street Journal] – Mike Seemuth

Alex Kupp

Brokerage firm JLL announced that Alex Kupp and Scott Peek II will join its multifamily capital markets team in the Tampa area on a full-time basis.

Kupp and Peek will continue to work with the leaders of JLL’s Florida capital markets group: Jubee Vaghefi, Denny St. Romain and Jeff Morris.

Kupp is a native of Central Florida who graduated the University of Florida with a bachelor of science degree and Duke University with a master of business administration degree. He has been involved in the sale of more than $2 billion of multifamily real estate.

Peek is a native of Tampa who graduated the University of Florida and played on the university’s 2008 national championship football team. He, too, has been involved in the sale of more than $2 billion of multifamily real estate.

Among other recent achievements in the Tampa area, JLL has marketed a 325-unit apartment complex in downtown St. Petersburg called Fusion 1560, which is under contract to be sold.

JLL also guided the $143 million sale of a new multi-tenant office building in a Tampa suburb. – Mike Seemuth

Southside Generating Station site that the Jacksonville Electric Authority sold (Credit: Jacksonville Daily Record)

A municipal electric utility got $18.6 million for selling a 30-acre riverfront site in Jacksonville, where a company based in Palm Beach Gardens would build a mixed-use complex.

Jacksonville Electric Authority (JEA) sold the former site of a power plant to Elements of Jacksonville Inc., which has arranged for Palm Beach Gardens-based Kitson & Partners to build a complex with residences, retail space, office space and a hotel.

Dallas-based Preston Hollow Capital LLC provided a loan to finance the acquisition by Elements, which has an agreement to sell part of the development site to AC Marriott Hotels.

The development would include a marina with 125 boat slips, 147 hotel rooms, 950 residences, 134,000 square feet of retail space and 200,000 square feet of office space.

The Jacksonville municipal government would establish  community development district that would enable the developers to obtain $30 million of debt financing to fund construction of infrastructure at the development site.

Property tax rebates within the district over a 22-year period would fund repayment of the debt.

The city also would spend as much as $26.4 million on improvements to public property at the development site.

Elements is expected to file a petition next week to establish the community development district. [Jacksonville Times-Union] – Mike Seemuth

The Tatum Waterway in north Miami Beach (Credit: Realtor.com)

An owner of property in a Miami Beach neighborhood prone to flooding has taken legal action to overturn the city’s designation of the area as historic.

The property owner, a company called Ytech, has petitioned a judge to undo the designation for the Tatum Waterway neighborhood, claiming it hinders efforts to respond to rising sea levels.

Ytech owns nine buildings in the Tatum Waterway neighborhood, a low-elevation area between 77th and 87th streets in North Beach.

Miami Beach designated the neighborhood as a historic area to preserve dozens of buildings with of MiMo, or “Miami Modern,” architecture.

The designation prevents owners from demolishing buildings in the neighborhood and requires them to get approval for major renovations from the Miami Beach Historic Preservation Board.

The board is required to take climate change into account when deciding whether to approve a demolition request. But the historic designation makes approval of such requests harder to get.

Ytech argued in its court petition that the historic designation of the Tatum Waterway neighborhood will make it harder to prepare properties for rising sea levels.

The company also contends the designation will diminish the value of buildings along the Tatum Waterway by complicating efforts to insure them and to sell them.

Attorney Joni Armstrong Coffey, who represents Ytech, told the Miami Herald that the historic designation applies to “buildings in excess of 50 years old sitting in water.”

The Southeast Florida Regional Climate Change Compact predicts that sea level will rise as much as two feet by 2060. [Miami Herald] – Mike Seemuth

Dania Pointe rendering (Credit: Kimco Realty Corp.)

Coral Gables-based Meyers Group will build 600 rental apartments at Dania Pointe, a mixed-use development along Interstate 95 in Dania Beach.

Alan Losada, executive vice president and chief operating officer of Meyers Group, told the Sun-Sentinel that monthly rents for the apartments will start at $1,600 and will average about $2,100.

The first phase of the rental project, designed by Miami architect Kobi Karp, will be an eight-story, 264-unit apartment building. Construction may start next month.

When the first phase is done, Meyers Group plans to build another 336 apartments in the second phase of the rental project, called Avery Dania Pointe.

Bowlmor, an operator of bowling alleys, has signed a lease for more than 30,000 square feet of space at Dania Pointe, according to Paul Puma, southern region president of Kimco Realty Corp., the developer of the Dania Beach development. .

Kimco already has announced that a Lucky’s Market grocery store, two Marriott-branded hotels and 18 restaurants will be among the commercial tenants at Dania Pointe.

The 102-acre development site is two miles south of Fort Lauderdale-Hollywood International Airport.

Some of the retail space at Dania Pointe is under construction and expected to open in fall.

TJ Maxx, Hobby Lobby and Brandsmart are among the retailers that have preleased space at the development. [Sun-Sentinel] – Mike Seemuth

This is not a drill: WeWork–and anyone eating on the company’s dime–is going vegetarian.

The co-working giant valued at about $20 billion is removing all meat options from its internal menu and telling employees to leave any meals with meat off their expense reports because they will no longer be footing the bill, according to Bloomberg.

Co-founder Miguel McKelvey informed WeWork’s 6,000 staff of their new diet by email this week and announced the policy would be in effect at the company’s upcoming internal summer retreat.

In the message, McKelvey explained the reason behind the new policy: “New research indicates that avoiding meat is one of the biggest things an individual can do to reduce their personal environmental impact, even more than switching to a hybrid car,” he wrote.

The meat-free policy extends to any company travel and expenses, any WeWork events and the company’s internal food kiosks that are installed in its 400 properties worldwide.

Anyone who protests for “medical or religious” reasons was directed to speak with WeWork’s policy team about their options.

The carnal ban comes as the company has recently launched an internal campaign to reduce the use of plastic and prevent wastage of leftover food from company events. [Bloomberg]Erin Hudson

19 Tropical Drive in Ocean Ridge (Credit: IBI Designs Photography)

For the fourth time in the last two years, mansion builder Frank McKinney cut the asking price for his unsold “micro mansion” in Ocean Ridge, this time to $2.295 million.

The new price is 41 percent below his original asking price of $3.9 million when he listed the house for sale in 2016.

McKinney expected the “micro mansion” to appeal to wealthy people who want a luxurious home but not a massive one.

The unsold 4,000-square-foot house is at 19 Tropical Drive in Ocean Ridge, an oceanfront community in southeast Palm Beach County.

The house, which is not on the ocean, is much smaller than the palatial oceanfront mansions that McKinney has built in Manalapan and Delray Beach.

The three-bedroom, four-bathroom house has unusual features including a “living reef” aquarium in a 210-gallon tank and sea-glass kitchen countertops that change colors.

Since listing the house for sale in May 2016 for $3.9 million, McKinney has cut his asking price to $3.45 million, $2.95 million, $2.65 million and now $2.295 million, which would equate to $573 per square foot. [Palm Beach Post]  Mike Seemuth

Avison Young principal John Crotty

A Miami-based company plans to sell a parcel on U.S. 1 in Hallandale Beach zoned for commercial development.

The land is across Federal Highway from Gulfstream Park and zoned for an office building, a hotel or a mix of uses including retail stores.

Brokerage firm Avison Young is marketing the 0.77-acre parcel at 804 South Federal Highway.

According to Avison Young, the zoning would allow a 20-story commercial development with 202,380 square feet of interior space.

The Miami-based owner of the land is SMIR 3001 LLC.

John Crotty, a principal of Avison Young, told the Sun-Sentinel that the land in Hallandale Beach has potential as an office development site because it is just north of Aventura, which is “one of the best office markets in South Florida.”

Avison Young research shows that Hallandale Beach has a 7 percent office vacancy rate.

Multiple office developments are under way in Hallandale Beach, according to the city government’s website.

They include the Accesso office building at 100 North Federal Highway, the Beacon office building at 800 Southeast Fourth Avenue, Chateau Square at 600 East Hallandale Beach Boulevard and Peninsula Office Tower a 124 South Federal Highway. [Sun-Sentinel] – Mike Seemuth

Flamingo Center Tower at 1504 Bay Road in Miami Beach (Credit: WorldwideProperties.com)

A Miami judge refused to dismiss a suit filed against Airbnb by Aimco, a leading landlord that wants the home-sharing platform to stop listing its apartments in Miami and Miami Beach as vacation rentals.

The judge rejected Airbnb’s argument that the company is not liable for listing information that hosts put on its online platform, claiming immunity under the 1996 Communications Decency Act.

That defense worked in December, when a California federal judge dismissed a similar suit against Airbnb, ruling that Airbnb hosts are responsible for listing information, not the company.

But Miami-Dade Circuit Judge William L. Thomas ruled Wednesday that Airbnb isn’t entitled to blanket immunity from any suit involving third-party information on its website.

The judge’s ruling sustained the suit that Aimco filed against Airbnb in February 2017. Based in Denver, publicly held Aimco is one of the largest owners and operators of apartments in the nation, with 184 properties in 22 states.

Miami-Dade Circuit Judge William L. Thomas

Aimco’s case against Airbnb centers on contractual leasing terms that prohibit tenants subleasing apartments at three of its properties: the 471-unit Bay Parc Plaza Apartments at 1756 North Bayshore Drive in Miami, and in Miami Beach, the 515-unit Flamingo Center Tower and the 614-unit Flamingo North Tower, at 1504 and 1508 Bay Road, respectively.

According to its lawsuit, Aimco contacted Airbnb three times in 2016 to inform the company that tenants of the three buildings had rented their apartments multiple times, violating both their lease contracts with Aimco and an Airbnb agreement with hosts.

The suit claims Airbnb had the legal right to delete listings of Aimco’s apartments because the hosts violated a terms-of-service requirement that Airbnb listings “will not violate any agreements with third parties.”

Aimco alleges that Airbnb rentals at its Flamingo properties in Miami Beach have become such a noisy nuisance that four tenants have gone to court to break their lease contracts. [Miami Herald] – Mike Seemuth

(Credit: iStock, Luxury Retreats.com)

While homeowners in high-tax states like New York and New Jersey may be packing their bags to move to Florida and Texas, real estate professionals in California say they are not seeing an exodus spurred by changes to the federal tax code.

But the new rules could have a “chilling effect” on asking prices for homes in the state, and lead many residents to decide to rent instead of own their homes, one private wealth manager said.

For the moment, agents and real estate executives interviewed by The Real Deal say they aren’t seeing a substantial number of buyers making plans to sell their million-dollar homes and leave the state.

California’s tight housing market has fueled soaring prices in both Northern and Southern California.

“All high-end sales are up,” said Nick Segal, president for Southern California of Pacific Union International. “Our biggest problem in that market is inventory. If sellers aren’t willing to put their houses on the market then I guess they’re not looking to leave.”

The new federal tax changes bring added pain to California residents already frustrated by the state’s high cost of living and some of the highest state income taxes in the country. Those state taxes have caused many residents, especially ones on the lower-end of the earnings spectrum, to migrate in recent years to Nevada, Texas, Florida, and other states with lower taxes.

In January, home prices in Southern California posted the largest year-over-year rise in 44 months. The median price rose to $507,000, reflecting an 11.4 percent hike since the year prior.

“Sure, we have seen a lot of people over the years move from here to Las Vegas, from here to Arizona, from here to Texas, Utah and Wyoming,” said Beth Styne, chief operating officer at Coldwell Banker in Los Angeles. “That is about state taxes. But our state taxes have been exorbitant for a long time.”

Styne said over the past two years she has seen a handful of clients from Beverly Hills and Bel Air sell out and move to Florida. And entertainment friends from L.A., in particular musicians, have moved to Austin, Texas, only to find that higher property taxes in Texas eat up much of the income-tax savings.

While the flow is still a relative trickle, “it is going to lead to a tipping point,” she said.

The tax man’s plan

The Tax Cuts and Jobs Act President Trump signed in late December will affect Californians in three ways.

Property-tax deductions will be capped at $10,000. Homeowners can only deduct up to $750,000 in mortgage debt on a first or second home, a one-quarter reduction from the previous $1 million limitation (homes purchased before December 2017 will be grandfathered). And the new regulations will deduct interest on home equity loans of up to $100,000, unless the proceeds are used to substantially improve a home.

Of particular concern is the loss of part of the mortgage interest deduction, which had always been considered a subsidy for homeowners.

“The reduction in that benefit may have a chilling effect on asking price,” said Susan Rounds, the director of wealth management in Los Angeles for Deutsche Bank Trust Company Americas.

Homeowners with a mortgage of more than $750,000 may be reluctant to move and purchase a new home costing more than that because it could result in the loss of part of their mortgage interest deduction, Rounds said. They may decide that the tax benefits of owning are no longer attractive enough and decide “renting is a better way to go.”

Even wealthier homeowners will need to carefully weigh the higher cost burden.

“That person in California with a $20 million house, the property tax is about to be $265,000 a year,” said Stephen Shapiro, co-founder of Westside Estate Agency. Under the new regulations, the homeowner would only be able to write off $10,000 of their taxes, so that means they would have to pay $255,000 a year more “just in property tax.”

The new tax pressures on homeowners are already creating concern for developers, Shapiro said. “Many houses are going to come on the market in the next year, many more houses than there are buyers,” he said. “It will lead to developers taking less of a profit than they have been getting over the last years.”

Still, with a strong economy fueled by an expanding tech sector and burgeoning entertainment industry paying higher salaries than in most other states, California continues to be a magnet for high-skilled millennials. While wealthy individuals that don’t need to work can decide to live anywhere, most high-paid earners will simply have to factor in the new tax reality.

Tech workers in Silicon Valley “are not leaving to go to Florida because they’re going to save 10 percent on the state income tax,” said Shawn Elliott, a Nest Seekers broker who works in California, Florida and New York. “This is where they earn. They’re not doing it.”

300 Costanera Road and Marc Anthony

Marc Anthony is the buyer of the $19 million Coral Gables mansion recently sold by a Bacardi family member.

Property records show Vici Amigo Estates LLC, a California-based company led by Marco Muñiz, a.k.a. Marc Anthony, bought the 12-bedroom, 21,000-square-foot, three-story mansion at 300 Costanera Road. The company financed the purchase with a $15.2 million mortgage from Bank of America.

The Grammy-winning singer-songwriter will be only 2 miles away from his ex-wife, Jennifer Lopez, who is dating Coral Gables resident and former Yankees player Alex Rodriguez. Rodriguez owns a home on Ponce de Leon Road. Lopez also previously owned a home on North Bay Road in Miami Beach, which she sold to singer Phil Collins for $33 million in 2015.

Hilda Maria Bacardi, the great, great-granddaughter of Bacardi founder Facundo Bacardí Massó sold the Coral Gables property. She spent eight years overseeing its construction and first put the home up for sale before it was finished, asking $18 million in 2014. That number increased to $27 million in 2016.

Barbara Estela and Hilda Jacobson of Douglas Elliman had the listing for the 1.3-acre Cocoplum property. It includes a wine cellar, a 100-foot dock along 400 feet of water frontage, a swimming pool and living quarters for staff.

Bacardi’s main United States office is located in Coral Gables and Hilda’s brother and company chairman, Facundo, also owns a home in the city.

Renderings of Delray Beach’s Uptown Atlantic project

Delray Beach’s Community Redevelopment Agency plans to sell 6 acres of land near downtown to Irish developer John Flynn, despite higher offers from other developers.

The CRA voted to negotiate a deal with Uptown Atlantic, a company owned by Flynn, who plans to build a complex with a grocery store, pharmacy, stores, office space and affordable homes, according to the Palm Beach Post.

Uptown offered $1.2 million for the three blocks of land between Southwest Sixth and Southwest Ninth avenues. The land, however, was recently valued at $15.4 million, the Palm Beach Post reported.

The redevelopment agency will attempt to negotiate a higher price before a final proposal goes before the board on Aug. 3, according to the newspaper.

The CRA had six higher offers, but chose to negotiate with Flynn in order to develop the land more quickly, the majority of commissioners said. Two commissioners — Ryan Boylston and Bill Bathurst — rejected the deal.

Flynn and his wife own a Dublin-based development company with a portfolio of projects in Ireland and England. The couple recently sold their 7,316-square-foot house in Palm Beach for nearly $13 million after downsizing to a nearly 4,000-square-foot house on Reef Road in Palm Beach for $6 million. [Palm Beach Post]  — Keith Larsen

Jeffrey Miller and Beacon College Prep

Jeffrey Miller’s Beacon College Prep Inc. just bought a charter school it operates in Opa-locka for $8.45 million.

The deal for the school at 13400 Northwest 28th Avenue comes on the heels of the nonprofit’s application to expand to serve grades sixth through eight. In June, Miller submitted a proposal with Miami-Dade County to issue $11.9 million in revenue bonds from its Industrial Development Authority to buy and renovate the property.

Beacon College Prep currently serves students K-5 and enrolls about 400 students. The proposed improvements will increase the enrollment capacity to 760 students, according to the application.

Charter DC Opa Locka, a partnership between Aventura-based investment firm ESJ Capital Partners and MG3 Development Group, is the seller. Records show the company bought the former Florida International Academy site in 2010 for $4 million. It sits on a six-acre lot just south of State Road 916 and west of Northwest 27th Avenue.

ESJ Capital has been investing in charter schools for more than nine years and often partners with MG3. Last year the partnership sold a charter school in Tamarac for $22 million.

Miller is the managing partner of the venture capital firm Krillion Ventures. He’s also the brother of Stuart Miller, who stepped down earlier this year as CEO of Lennar Corp. and is now executive chairman of the Miami-based homebuilding company.

Jeffrey Miller is also chairman of Breakthrough Miami and board member at Ransom Everglades School and the Institute of Contemporary Art.

1340 South Ocean Boulevard in Palm Beach

A spec home on Billionaire’s Row in Palm Beach just sold for $32.5 million to a family trust, a week after billionaire Steve Wynn sold his lot next door.

Mark Timothy Inc., a South Florida luxury home builder, sold the 14,434-square-foot waterfront estate at 1340 South Ocean Boulevard to the Greene Family Trust for $2,251 per square foot. The trust lists its attorney as Oren D. Leiber in Miami, and is dated June 19. It was unclear who is behind the trust.

Florida gubernatorial candidate and real estate developer Jeff Greene, who has the same last name tied to the trust and also owns a home on South Ocean Boulevard, told The Real Deal he didn’t purchase the home.

Mark Timothy Inc. is led by Mark Pulte, son of the founder of Pulte Homes. The South Ocean Boulevard home was built in 2016 on a vacant lot purchased in 2014 for $13.4 million. The two-story estate has eight bedrooms and 11 bathrooms and pool. It was previously listed in 2016 for $42.5 million.

The seller was represented by Lawrence Moens of Lawrence A. Moens Associates, while the buyer was represented by Dana Koch and Paulette Koch of the Corcoran Group.

Dana Koch declined to comment on the buyer, citing a confidentiality agreement he signed. Moens could not immediately be reached for comment.

Last week, casino resort developer Steve Wynn sold the neighboring lot at 1350 South Ocean Boulevard for $20.27 million. The property sold for 23 percent less than original asking price. Wynn resigned this year as chairman and CEO of Las Vegas-based Wynn Resorts amid allegations that he sexually assaulted employees of the company.

Pulte’s spec homes have been sold to celebrities and CEOs such as the late former-Fox News head Roger Ailes and Tony Robbins. Some of the wealthiest people in the country have homes on Billionaires Row including hedge fund manage Ken Griffin and Paul Tudor Jones.

12300 Northeast 4 Avenue and Elvis Dumervil

NFL linebacker turned investor Elvis Dumervil just picked up a multifamily building in North Miami for $6.73 million, property records show.

The 66-unit apartment building at 12300 Northeast 4th Avenue traded hands for about $102,000 per unit. The seller, Kina Investment Inc., is a Panamanian company led by Ettore Nardi. His company is tied to a Coral Gables-based property management firm, Catalonia Management. Records show Kina Investment Inc. bought the property in 1984 for nearly $2.1 million.

Built in 1971, the four-story building sits on a 1.2-acre lot, just south of northeast 125th Street. The buyer financed the deal with a $6.25 million loan from the Uniondale, New York-based multifamily finance company Arbor Realty Trust, records show.

Dumervil’s property management and development firm Prestige Estates has been busy buying and renovating a number of multifamily properties in the area. In April, his company paid $9.5 million for an apartment complex in North Miami Beach. It also owns residential and multifamily properties in Fort Lauderdale and Oakland Park.

The professional football player, who grew up in Miami’s Liberty City neighborhood, played for the Denver Broncos, the Baltimore Ravens and the San Francisco 49ers.

Just this month, Affordable Housing Development Services bought the nearby Ocean King Apartments for $13 million.



For our July cover story, The Real Deal‘s Rich Bockmann and Mark Maurer went behind the scenes at Cushman & Wakefield, which filed a preliminary prospectus for its initial public offering last month.

The leadup to the brokerage’s IPO has caused immense internal disorder and confusion, insider​s​ told TRD. This could spell trouble for Cushman, which is banking on a successful Wall Street debut to help offload some of the $3B in debt TPG Capital dumped on the firm following ​a series of mergers and acquisitions.

TRD’s senior content director Jill Noonan sat down with Maurer and Bockmann to talk about the state of the firm, morale among its brokers ​and more in the video above.

2201 Fourth Avenue North and Benchmark Games’ Trevor Gianaris

UPDATED 2:45 p.m., July 13: Benchmark Games International just purchased its new Florida headquarters in Lake Worth for $8.25 million, only a few months after the seller paid $5.35 million for the property.

A company managed by real estate developer and aircraft industry investor Robert G. Fessler sold the 72,000-square-foot warehouse at 2201 Fourth Avenue North for about $115 per square foot.

Fessler closed on the building in April with plans to move a Boca Raton aviation business to the location. Those plans fell through, and Fessler decided to try to sell the building after listing it for lease, broker Benjamin Bruner of Nationwide-RE said. He flipped the property for a 54 percent gain. Bruner brokered both deals.

Benchmark Games manufactures and exports coin-operated gaming machines and ticket dispensers around the world. In April 2017, the Belgian skill crane manufacturer, Elaut, bought the company. Benchmark Games will be moving from its 55,680-square-foot location at 51 Hypoluxo Road.

Fessler, a spec home developer, sold a 1.5-acre estate he developed at 101 Indian Road for $49 million.

Palm Beach County’s industrial market is less active than in Miami-Dade and Broward counties, but still recording big deals in Lake Worth. Last year, the Silverman Group paid $30.7 million for two industrial buildings in the city.

An earlier version of this story incorrectly identified the Lake Worth property as the company’s new headquarters. It will be the new regional headquarters. 

The Kendall Village Center

Jeff Berkowitz’s Kendall Village Associates just closed on a $60 million loan from Ocean Bank for the refinancing of a 256,000 square-foot mixed-use shopping center in Kendall.

The Kendall Village Center at 8705 Southwest 124th Avenue, along with an adjacent parcel, totals 27.4 acres and 13 buildings. Tenants include Regal Cinema, Old Navy, GAP, Chuck E. Cheese, Jared Jewelry, Pier 1 Imports, Duffy’s Sports Grill, and a satellite Nova Southeastern University campus

A new phase of the shopping center is currently under construction, which includes a 82,311-square-foot Floor & Décor store expected to be delivered in the first quarter of 2019, according to a press release.

The shopping center is 100 percent leased, Ocean Bank’s head of lending and retail banking Ralph Gonzalez-Jacobo said in the release.

Kendall Village was developed by Jeff Berkowitz in 2000 and renovated in 2005. The retail developer’s Berkowitz Development Group also built Dadeland Station in Miami and the Fifth and Alton shopping center in Miami Beach.

Miami-based Ocean Bank is one of South Florida’s largest banks with more than $3.8 billion in assets and is an active commercial real estate lender, recently financing construction of Melo Group’s Art Plaza apartments in Miami’s Arts & Entertainment District and a nursing home expansion in Little Havana. –Keith Larsen

Clockwise from top left: REIT CEOs make much more than their employees on average (credit: REIT and Pixabay), Zillow rep fired after telling Premier Agent user who quit to ‘take up yoga,’ Compass snaps up Paragon, and Nestio gets $4.5M from investors (credit: Getty Images).

REIT CEOs make much more than their employees, a new report finds
The CEOs of the top 100 real estate investment trusts make 77 times more than a median employee on average, according to a report released by FPL Associates first published in the Wall Street Journal. And in general, REIT CEOs make 57 times more than their median employees on average, the report said. FPL senior managing director Jeremy Banoff, however, noted that the ratios “have been viewed skeptically as they don’t really tell the entire story.” Park Hotels & Resorts, for example, where the chief executive was found to make 567 times more than the company’s median workers, would actually have a much lower ratio if the report only included its full-time employees. [TRD]

Zillow rep fired after telling Premier Agent user who quit that he should ‘take up yoga’
A Zillow advertising representative who told a broker who canceled his Premiere Agent contract that he should “take up yoga, and breathe a bit” was fired for acting contrary to the real estate marketplace’s “culture [and] values,” Inman first reported. In an email, the Zillow representative, Jessica Robinson, told the agent, Tony Traynor, he was a “risk” to the company. “Didn’t want to believe you’d fall, but again, no surprise,” she wrote. “Zillow is most definitely not your platform. Disappointed. May I suggest you take up yoga and breath a bit?” Robinson later apologized for the email, noting that she had “learned a big lesson.” [TRD]

Canada’s InnVest Hotels wants to break into the US market
Canadian hotel company InnVest Hotels LP is looking for opportunities to enter U.S. market, its senior vice president of asset management Jeff Hyslop told Bloomberg. The company is setting its sights on Seattle, Boston and Chicago, Hyslop said. “We’ll be cautious in our first foray into the U.S. to make sure it’s the right market, right asset, right partner,” he told the outlet. InnVest currently owns 80 hotels in Canada, including the Toronto Trump International Hotel & Tower, which it bought last year and will rebrand as a St. Regis. [TRD]

Listings startup Nestio gets $4.5M in investments from NY-based developers
Nestio, a startup that claims to offer “the most complete marketing and leasing management solution for residential landlords and brokers,” has raised $4.5 million from investors in its latest round of funding. A bevy of New York-based developers — including Rudin Ventures, the Durst Organization and LeFrak Ventures — contributed to the round, according to the startup’s CEO and co-founder Caren Maio. The $4.5 million brings the total that Nestio has raised up to $16.35 million, Maio said. The investments come as more and more companies have begun to throw financial support behind new real estate technology. [TRD]

MAJOR MARKET HIGHLIGHTS

Compass snaps up San Francisco real estate brokerage Paragon
Compass has acquired real estate brokerage Paragon as it continues to expand nationally and in the Bay Area. Last year, Paragon, which has 225 agents and eight offices, closed $2.3 billion in sales. The two companies had a combined $4.5 billion in sales volume last year, Compass representatives said. “[Our market is] becoming more of an international and tech-centric market, so partnering with Compass and responding to the market in the proper way, together we’ll have a very dynamic company through which to do that,” Paragon CEO Bob Dadurka said. [TRD]

Chinese buyers prefer Los Angeles to any other city in the world, survey finds
Chinese buyers looking to invest in real estate prefer Los Angeles to any other city in the world, a new survey found. New York, Boston, San Francisco and Seattle rounded out the top five places where the 224 people polled said they were interested in snapping up real estate, according to Mansion Global. The report pinpointed the U.S. education system as the main draw for investors, with London taking the sixth spot on the list. [TRD]

National Association of Realtors expanding and renovating its Chicago headquarters
The National Association of Realtors plans to expand and renovate its headquarters at the Realtor Building in Chicago — a project that will cost approximately $45 million. Upgrades will include new elevators, a new lobby and updated infrastructure, Crain’s first reported. The renovation will also add a 18,000-square-foot glass-enclosed office and conference center to the top of the building. GNP Realty Partners’ design and development arm, One Development, is overseeing the project. [TRD]

Ritz-Carlton Residences Miami Beach will offer medical concierge service to residents
The Ritz-Carlton Residences Miami Beach is planning to offer buyers access to a medical concierge service. The developer of the luxury condo development, which is rising where the Miami Heart Center once stood, will offer buyers a yearlong membership to a service run by South Beach Diet founder Dr. Arthur Agatston. It’s an amenity with an estimated value of $12,000 per year. “For people coming to the Ritz, a big insecurity is health care,” Agatston said. “This is the best they can find here.” [TRD]

Founders of NYC-based Silvershore Properties going their separate ways
A New York City-based multifamily investment firm, founded in 2008, has sold dozens of its holdings and is closing its headquarters. Silvershore Properties founders Jason Silverstein and David Shorenstein are parting ways as Silverstein moves to start a new firm in Los Angeles. It’s not clear yet what Shorenstein plans to do. “We built a company together over 10 years and it’s inevitable in any partnership that, at some point, you may want a fresh outlook and to do your own thing,” Silverstein told The Real Deal, noting that it was “a matter of a different vision for the future.” [TRD]

A luxury home (Credit: Pixabay)

Home sales of $1 million or more are on the rise in the U.S.

A new report from Realtor.com found that homes selling for $1 million or more were up 25 percent in April year over year.

That represented the largest jump in four years. The study tracked 91 counties around the country, and identified the luxury segment in each market, considered the top 5 percent of home sales.

While the number of million-dollar listings that have sold is up, those properties were being purchased quicker, as well.

The amount of time that homes in those 91 markets remained on the market was on average 105 days, down seven days compared to last year. Around two-thirds of the 91 luxury markets saw inventory moving quicker than a year ago.

More than a dozen markets across the country saw the entry-level luxury price go up by double digits year over year.

Manhattan, which has among the priciest homes in the country, has seen stagnation in luxury sales. But the borough is largely responsible for the city’s average luxury sales price of $3.6 million, according to a recent report by Christie’s International Real Estate.

In neighboring Queens, where the high-end home market is far smaller, luxury segment prices have been on the rise. They were up nearly 16 percent year of over, to an average of $1.26 million.

Meanwhile, in Northern California, prices were up between 9.8 and 13.2 percent. The fastest-growing luxury market in the country was Sarasota, Florida, with a 19.7 percent price increase.

Some parts of New Jersey also saw double-digit price increases.

MLS stadium rendering, Francis Suarez and David Beckham

A whirlwind week for the Mas brothers and David Beckham – which included accusations of backroom deals with city officials and intentionally withholding details – ended with a game delay.

The Mas-Beckham group is seeking a referendum on the November ballot asking Miami residents to approve or deny a no-bid lease agreement that would allow the group to redevelop the city-owned Melreese Golf Course and surrounding park complex into a massive $1 billion mixed-use project anchored by a 25,000-seat stadium that will be home to the partners’ MLS franchise. For that to happen, Beckham and his partners need approval from the Miami City Commission.

Instead, city commissioners voted 5-0 to defer their decision until a special meeting on Wednesday, July 18 in which they hope to hammer out the proposed ballot language. A chief complaint among commissioners was the lack of time they had to digest the proposal.

“I was driven [to run for city commissioner] by a dream to bring transparency to the city of Miami,” Commissioner Manolo Reyes said. “This is not that. I have heard more from the Miami Herald than from our city manager. I agree that we should let the people decide, but we have a process. There is no transparency. We have been getting things piecemeal.”

Up until last month, Beckham, the Mas brothers and other investors, including Sprint CEO Marcelo Claure, appeared committed to building their MLS stadium on an Overtown site that includes land owned by Miami-Dade County. However, that deal has been held up in litigation after longtime Miami activist Bruce Matheson sued Miami-Dade, alleging the county violated state law when it agreed to a no-bid deal with Beckham and his partners.

But Jorge Mas, who along with his brother joined the partnership in December, said he was never sold on the Overtown site, arguing it would not benefit the residents of that neighborhood. As recently as late June, the Miami MLS partnership was working with city officials to present the Melreese proposal to the city commission to get it on the November ballot.

In the days leading up to the July 12 city commission meeting, parks activists, city watchdogs and Melreese users mounted vociferous opposition to letting Beckham and his partners commandeer the 150-acre golf course complex, which also includes a country club, tennis courts, baseball fields and a children’s water park. It is located near Miami International Airport and the Miami Intermodal Center.

On Wednesday, soccer supporters appeared outnumbered by opponents, including dozens of children wearing orange T-shirts who participate in the First Tee youth golf program at Melreese. With city hall at over capacity by 2:30 p.m., the fire marshal denied entry to more than 100 people. Police officers holding assault rifles stood guard by the entrance. To accommodate those left outside, City Commission Chairman Keon Hardemon instructed speakers to leave the chambers once they finished their comments.

Even Beckham picked up on the animosity against his latest attempt to find a stadium site.

“It’s been a long time since I walked into a room and people didn’t smile at me,” Beckham said when he addressed the commission. “It is not a nice feeling. I hope today you realize what we are trying to do for your city. I hope you realize we are good people and we are trying to do the right thing.”

Beckham and his partners are proposing to completely revamp Melreese into a soccer mecca designed by Arquitectonica. In addition to the stadium, the proposed Miami Freedom Park will feature 600,000 square feet of space for retail and restaurants, 400,000 square feet of office space, thousands of parking spaces, more than 700 hotel rooms, and 23 soccer fields on roughly 23 acres of green space.

In exchange, Jorge Mas said the project will invest $20 million in park improvements and pay the city fair market rent for the land, which the partnership group is estimating at $3.6 million annually. Mas also displayed a chart showing Miami Freedom Park would generate $5.8 million in tax revenue to the city, $11 million in tax revenues to Miami-Dade County, and $20 million in sales tax revenue to the state of Florida. He reiterated his partnership will not seek any taxpayer funds or financial assistance to build the stadium and all its accoutrements.

“This project will require zero public dollars,” Mas said. “We don’t want a subsidy. We don’t want a giveaway. We don’t want absolutely anything. … I want the voters to decide. I want every single voice in the city of Miami to make this decision.”

Neighborhood activist and opponent Grace Solaressaid the city would be subsidizing billionaires by providing them with a sweetheart deal for city-owned land. “$20 million is petty cash for this group,” Solares said. “$20 million will look quite appealing and enticing when it is actually a mockery of the electorate. We find it highly offensive.”

Another dissenter, Miami River Commission Chairman Horacio Stuart Aguirre, accused the Mas brothers and Beckham of disguising a real estate transaction as a stadium deal. “Today you are being asked to consider the ransacking of this great park and the surrounding neighborhood,” Aguirre said. “This is not about soccer at all. This is about a major real estate development.”

Left to right: Michael Cohen, Howard Lorber, and Steve Witkoff with 111 Murray Street (Credit: Getty Images)

His friends were telling reporters just last month that federal investigations were “bankrupting” him, but legal fees haven’t held Michael Cohen back from buying a $6.7 million luxury condominium in Manhattan.

The Wall Street Journal reported that Cohen in April closed on a unit at Witkoff Group, Fisher Brothers and New Valley’s 111 Murray Street skyscraper in Tribeca.

President Trump’s campaign had been covering Cohen’s legal fees regarding the Russia collusion investigation, but the former personal attorney to the president has been on his own dealing with inquiries by the U.S. Attorney for the Southern District of New York, an investigation with focuses that include payments made to a pornographic actress who alleges she had an affair with Trump. Meanwhile, Cohen’s taxi business has almost certainly taken a huge hit as medallion prices have faltered with the rise of ridesharing.

Despite this, Cohen, who sold a home at Trump World Tower for $3.3 million last year, evidently has cash to burn. To finance the new 19th-floor, 2,700-square-foot apartment, he’s relying on a mortgage from the new building’s developers, Steve Witkoff and Howard Lorber, who are both close confidants of and regular donors to Trump. The Journal reported they will provide Cohen a $3.5 million mortgage. The U.S. Attorney for the Southern District’s current investigation into Cohen is said to include possible bank fraud.

The Journal also reported that Cohen was on the clock to make the purchase happen as to avoid a “tax event” stemming from the Trump World Tower sale. The need to roll over the proceeds from the sale into a new purchase is part of the protocol for completing a 1031 exchange, a tax loophole that allows investors to defer taxes on real estate sales by quickly reinvesting the funds into a new asset. 1031 exchanges, however, are not legal for primary residences and can only be used for investment properties.
Though he’s lately been living at the Loews’ Regency Hotel in Manhattan, Cohen’s primary home is at 502 Park Avenue, which he recently put up as collateral against outstanding taxi business-related debts. [WSJ] —Will Parker 

Juan Julia and renderings of AxelBeach Miami (Credit: Iñigo Hernández Tofé)

Axel Hotels, which focuses on the LGBTQ community, is opening its first location in the U.S. in South Beach.

Axelbeach Miami will open at the former site of Hall South Beach at 1500 Collins Avenue by the end of the year, said Axel Hotels founder and president Juan Julià. It will mark the Barcelona-based company’s eighth flagged property and the only one outside Europe.

“We’ve been looking for different locations in the United States, and my preferences were Miami and New York, as I prefer the East Coast rather than the West Coast,” Julià said. “These cities are the more well known and very connected to Europe and South America, and worldwide.”

Spanish conglomerate Grup Peralada, through its affiliate Inverama USA Corp., paid $58.2 million or $357,000 per room for the 163-key, former Hall hotel in January. Barcelona-based Grup Peralada is owned by the Suqué-Mateu family, and has hotels and casinos as well as wine and other businesses under its umbrella.

Rockwood Capital sold the hotel to Grup Peralada, after paying $34.5 million for the property, including the historic 123-room Haddon Hall — built in 1940 and designed by famed architect L. Murray Dixon — and the adjacent 45-unit Camden Apartments in Miami Beach in 2013. The investment firm renovated the 1.4-acre property and re-opened it all as a hotel in 2015.

The Miami Beach Historic Preservation Board on Tuesday approved some modifications of the 1.4-acre property, which runs from Collins Avenue to Washington Avenue. Among them, the hotel can place signage on its Collins Avenue facade, add an opening in its lobby and relocate an outside bar from the south side of the property to the north side under a large ficus tree, said architect Jason Hagopian, managing principal of the TSAO Design Group, who spoke during the meeting.

Julià said the hotel plans to spend about $1 million on the modifications. The property owners will also invest an undisclosed amount for plumbing and structural improvements. Axel Hotels’ Barcelona-based architect Iñigo Hernández Tofé is overseeing the project.

Julià founded Axel Hotels 15 years ago, with a desire to launch a hotel aimed at the LGBTQ community. Today the brand operates two hotels in Barcelona, two in Berlin, and one, each, in Madrid, Ibiza and the Canary Islands. The hotel considers itself “hetero-friendly,” with about 20 percent to 30 percent of its guests heterosexual, Julià said.

Axelbeach Miami’s amenities will include a pool, gym, spa and sauna with massage rooms, restaurant and bar. The average daily rate is expected to be $200.

The incomplete Las Olas Ocean Resort on Seabreeze Boulevard in Fort Lauderdale

The owners of an unfinished hotel in Fort Lauderdale Beach secured a stalking horse bidder for $38.6 million, potentially paving the way for an auction in August.

In January, Bancorp Bank filed a foreclosure suit against 550 Seabreeze Development LLC and JAWOF 515 Seabreeze LLC, alleging default on a mortgage loan with an unpaid principal balance of $36.9 million. And last month, the developer filed a motion in bankruptcy court to establish procedures for the sale and auction of the property, scheduled for Aug. 15.

550 Seabreeze never finished building the Las Olas Ocean Resort, designed as a 12-story hotel with 136 rooms plus a four-story parking garage with 268 spaces and a restaurant measuring 12,000 square feet. It’s about 70 percent completed, attorney Glenn Moses of Genovese Joblove & Battista said. Moses and Paul Battista are representing the developer.

This week, 550 Seabreeze entered into an agreement with MHF Properties VI LLC, an affiliate of Magna Hospitality Group, to buy the unfinished Las Olas Ocean Resort, Moses said. Magna deposited $1.93 million into a trust account set up by the developer’s attorneys. A judge must approve Magna’s bid by July 18.

Following the August auction, 550 Seabreeze will ask the court to approve the sale to the highest and best bidder. As the stalking horse bidder, Magna would receive a $500,000 break-up fee if it is outbid. The buyer would close on the property free and clear of any liens and claims on the property.

Moses said the property has garnered significant interest from developers, whom he declined to name. The next bidder would have to offer at least $39.2 million to cover the break-up fee and the required $100,000 increments.

550 Seabreeze Development LLC purchased the property in 2003, a deed shows. The developers at one point sought EB-5 investors, raising at least $30 million from 60 EB-5 investors through December 2015. The foreclosure suit filed by Bancorp earlier this year alleges that the entities failed to finish the resort by the planned March 2017 completion date, failed to make its December 2017 loan payment, and made unapproved changes to its project budget in violation of the loan agreement.

Six Miami-Dade County Commissioners are recommending that a 25,000-square-foot park on Flagler Street be the sole site for a new Miami-Dade Civic Courthouse.

The unanimous vote came Tuesday morning during a chairman’s policy council meeting held in county chambers. The site item will come before the full 13-member county commission on July 24.

County officials have been attempting to find a way to partner with a private developer to construct a new 600,000-square-foot civil courthouse in Miami’s downtown area ever since Miami-Dade voters rejected a $390 million bond issue in 2014. Lawyers and judges insist that the current Miami-Dade County Courthouse at 79 West Flagler Street, built in 1928, is essentially an unsafe building with loose plaster, mold infestations, crummy plumbing, and lead-contaminated drinking water.

However, there’s been disagreement over how the county should go about selecting a development team to build the new courthouse or where it should be located. On June 5, over the objections of Miami-Dade County Mayor Carlos Gimenez, the county commission decided to throw out a P3 “two-step” bidding process and issue a brand new open bidding method that was advocated by one of the bidders, a development team lead by Florida East Coast Industries. FECI is the parent company of the Brightline train system and developer of MiamiCentral, a 3-million-square-foot, mixed-use project that will include apartments, retail, offices, and a pair of train stations.

Gimenez had also tried to throw out FECI’s unsolicited bid to construct a new courthouse in exchange for $26 million a year for the next 35 years, only to be overruled by the county commission.

Tuesday’s vote, which took less than five minutes, was yet another victory for the FECI-led team which has long advocated that the new courthouse be built on Cultural Center Plaza Park, located just west of the Flagler Courthouse and east of the Metrorail tracks and the Cultural Center Plaza. The Cultural Center Plaza is home to the HistoryMiami museum and Miami-Dade’s main library.

Previously, Gimenez advocated a 42,000-square-foot site by the new Miami Children’s Courthouse at 155 Northwest Third Street. Gimenez claimed the county would save $6.3 million building at the Children’s Courthouse site since it was essentially vacant (it’s now a surface parking lot) and already environmentally remediated.

However, Flagler business owners, the Downtown Development Authority, and lawyer groups like the Cuban American Bar Association insisted on the Flagler site.

Commissioner Sally Heyman thinks the site near the Miami Children’s Courthouse should be reserved for a future facility that can provide services for children and families. Heyman also felt that a new courthouse belongs “right here on Flagler” since it’s a “central draw for the community.”

“It further defines us as a big player in a big city in a big county,” Heyman added.

During the meeting, the mayor’s office didn’t voice any objection to Flagler being the sole site. Instead, Deputy Mayor Edward Marquiz just urged a decision. “A selection of a site is critical for us to move forward judiciously,” he told commissioners.

Eugene Stearns, FECI’s lobbyist, said the debate over where to build the new courthouse “is over” and that Gimenez has “seen the writing on the wall.”

Besides FECI, four other development teams have submitted proposals to build a new courthouse: Fengate Capital Management, the Plenary Group, Sacyr Infrastructure USA, and M-S-E Judicial Partners. A new RFP (request for proposals) will be issued in 30 days. A separate bid will be issued for developers interested in buying and redeveloping the current historically designated courthouse.

George Gleason, CEO of Bank of the Ozarks (Credit: Max Pixel)

Bank of the Ozarks stock fell Thursday morning after the Arkansas bank suggested during a conference call that its real estate lending growth could slow down, following its release of strong earnings late Wednesday.

The Little Rock-based bank’s CEO, George Gleason, said during the call that pricing is getting more competitive for real estate lending and the flow of quality deals has slowed.

The remarks are significant for the larger real estate lending landscape since Bank of the Ozarks is one of the most active construction lenders in the country. In New York, Los Angeles and Miami, the bank is ranked as one of the largest construction lenders, according to research by The Real Deal.

Despite the stock decline (down 9 percent to $41.85 as of 2:30 p.m.), the bank reported an increase in net income, deposits and overall lending. Net income increased 26.8 percent in the second quarter to $114.8 million on a year-over-year basis, in line with analysts expectations. Total loans, including purchased loans, increased to $16.8 billion at June 30, 2018, a 10.4 percent increase from $15.2 billion at June 30, 2017.

In addition, the bank’s ratio of nonperforming loans, or loans 30 days or more past due as a percent of total loans, decreased to 0.10 percent at June 30 compared to 0.11 percent at June 30, 2017.

As Bank of the Ozarks has grown its loan portfolio, some analysts have expressed concern over whether the bank’s condo lending is sustainable during a down cycle. The bank has said it is a conservative lender with low leverage and is always the sole senior secured lender.

Next week, Bank of the Ozarks will change its name to a more geographic ambiguous name Bank OZK to highlight its evolution in recent decades “from an Arkansas community bank into a much larger regional bank with nationwide lending businesses.”

Porsche Design unit 3605 and listing agent Marc Hameroff

A wealthy Polish investor is looking to sell his unit at Porsche Design Tower with an auction house after trying his hand at the flooded luxury condo market.

AD Royale, a company controlled by Dariusz Robert Wojdyga and his wife Agnieszka Gasior, owns the three-bedroom, 4,794-square-foot unit on the 36th floor of the Sunny Isles Beach condo tower, at 18555 Collins Avenue. The couple is working with their listing agent, Marc Hameroff of Engel & Völkers Miami, and Concierge Auctions is holding the auction July 27 to July 31 to sell unit 3605. There is no reserve.

Wojdyga sold his stake in the Polish beverage company Hoopa for 230 million Polish Zlotys in 2008, according to the publication Business Polska. Today that equates to more than $64 million. Wojdyga also has a stake in Opera TFI, an investment manager, Polish travel website Wakacje.pl and baby products company EcoWipes, also based in Poland, the publication said.

The Porsche Design unit hit the market in October for $8.9 million. The couple paid $6.7 million for the condo in March 2017.

“I think that to shake up the market because there’s so much inventory out there we have to do something to stand out,” Hameroff said. “In a very short period of time … You’re creating urgency.”

Hameroff said the unit has not been lived in and it was only recently completed with Interiors by Steven G. Features include a designer kitchen with Miele appliances and motorized cabinets, a master bathroom with a stone spa bath and Dornbracht fixtures, according to a press release.

Dezer Development completed the 132-unit, 60-story tower in November 2016. The building is known for its “Dezervator,” a patented car elevator that takes residents up to their units in their cars. A number of owners have tried to flip their units since closing on them less than two years ago.

The Real Deal is pleased to announce that we will be hosting this year’s golf outing at The Muttontown Club in East Norwich, New York. Muttontown is a beautiful private country club available exclusively to members and their guests and offers the perfect setting for meeting and mingling with NYC’s real estate elites.

The day will include breakfast, a shotgun start and cocktails and meals, including a semi-formal dinner.

For the first time ever, a portion of the proceeds from this year’s event will benefit Make-A-Wish, which creates life-changing wishes for children with critical illnesses.

Be sure to mark your calendars and start planning your foursomes!

For sponsorship opportunities, please contact Golf@TheRealDeal.com or call 212.260.1332.

Rendering of the Celino and Ricardo Tabet (Credit: Optimum Development USA)

UPDATED July 12, 6:40 p.m.: Ricardo Tabet’s Optimum Development USA just secured $52 million in financing for the renovation and expansion of the former Park Central Hotel on Ocean Drive in Miami Beach.

BB&T is providing the financing, which takes over a previous $40 million loan and adds a new $12 million mortgage. Optimum has been working on the redevelopment since at least 2014, when it broke ground on the project at 640 Ocean Drive.

Optimum paid a combined $51 million for the Art Deco hotel in 2013, which includes nearly 300 feet of frontage on the touristy street. At the time, the property consisted of Park Central, the Imperial Hotel, the Healthcote Apartments and vacant land. Goldman Properties was the seller.

The hotel is currently closed, but Tabet said he intends to re-open in December. The four-building resort, called the Celino South Beach, will feature 132 rooms, 33 suites, three restaurants and bars and two pools, including one on its roof. Highgate will manage the hotel and Toronto-based Ink Entertainment will run the food and beverage operations.

The developer is a subsidiary of the Luxembourg-based Optimum Asset Management Group. The company also owns property in North Beach and Brickell, as well as at 600 Collins Avenue.

The owner of the nearby Betsy Hotel recently completed a renovation and expansion of that Art Deco property at 1440 Ocean Drive. Architect Allan Shulman worked on the project, which included adding an “orb” that connects the Betsy’s buildings.

A suburban neighborhood (Credit: Pixabay)

Homeowners have more equity than ever before — but are still hesitant to borrow against it.

As home prices have appreciated, Americans have more than $5.8 trillion in equity, double the level in 2011, Bloomberg reported. But they aren’t tapping into it due in part to rising interest rates and reluctance stemming from the mortgage crisis.

“There’s a long-memory issue,” Dan Alpert, managing partner at Westwood Capital, told Bloomberg. “People got caught with home equity lines last time.”

But banks are encouraging consumers to take more risks. Lenders increased spending on direct-mail for home equity products by 30 percent in the first quarter versus a year earlier, the report said.

Borrowing against a home is cheaper, in terms of interest rates, compared with credit cards or unsecured personal loans. And, as owners stay in their homes longer, that may nudge them to borrow against the equity, the report said.

In recent years, new home equity lending has been picking up. Lenders are making roughly 98 percent more home equity loans and related lines of credit than during the recession in 2009. Still, the amount of home equity lines outstanding has fallen as borrowers pay down debt from the last decade. Bank executives it may take another year for new lending to surpass paydown of the older debt, according to Bloomberg.

The growth in home equity is being driven by increases in home values and selling prices, tight inventories of houses for sale, and paydowns of principal on existing mortgages. Affluent homeowners have various options to tap into that, including cash-out refinancing. [Bloomberg] — Meenal Vamburkar

Warehouse space (Credit: MaxPixel)

Warehouse space is at its tightest level since the first dot-com boom, and it’s driving tons of business.

The second quarter saw availability fall to 7.2 percent, the lowest level since 2000, as demand continues to outpace supply, according to CBRE data first reported by the Wall Street Journal. Availability has now dropped for a record 32 straight quarters.

Experts largely attribute the fall-off to growing demand for space as e-commerce grows. That’s prompting some owners to expand the scope of their operations, including by adding so-called last-mile delivery operations to their properties.

The demand is driving prices to record highs, particularly for distribution centers in urban areas. Los Angeles’ South Bay submarket, an industrial hub near the Ports of Los Angeles and Long Beach and Los Angeles International Airport, is seeing rental and sale prices for Class B properties rise to Class A levels as tenants and investors jostle to get a foot in the door.

The average price per square foot in New York has grown as by as much as 81 percent in some areas. Nationally, industrial sales volume by dollar amount has doubled since 2012, according to data from PwC and the Urban Land Institute.

The tight warehouse market has produced strong returns for industrial real estate investment trusts. Last year returns for REITs were 24 percent, higher than the single-digit returns in other sectors.

Blackstone has taken notice and spent more than $10 billion buying industrial REITs and properties, including a $7.6 billion purchase of Gramercy Property Trust.

But not everyone is hot on industrial. Sam Zell, the notorious doomsayer, vulgar septuagenarian, and Equity International founder, thinks that developers are building too much and that it will outpace demand.  [WSJ] — Dennis Lynch



Money comes and money goes, but who wouldn’t want a little more of it? For most of us, the grass is always greener. When it comes to the world’s wealthiest, the grass is fortunately very green.

That being said, The Real Deal took a look at the top five richest people in U.S. real estate, according to Forbes’ billionaires’ list.

Foreclosures are starting to rise (Credit: iStock)

Almost a decade after home foreclosures skyrocketed during the financial crisis, they are starting to rise again in some of the country’s hottest real estate markets. And loosening lending standards may be among the reasons, according to one expert.

Twenty two states posted increases in new foreclosure filings in the first six months of 2018, compared to the same period last year, according to a new report by Attom Data Solutions.

Overall, from January to June, foreclosure starts nationwide fell 8 percent to 191,914, compared to the first half of 2017, according to the report, released Thursday.

The total number of U.S. homes with existing foreclosure filings in the first six months of the year, 362,275, was down about 15 percent from the same period last year. That is defined as default notices, scheduled auctions or bank repossessions. At its peak, there were 1.6 million foreclosure filings nationwide in the first six months 2010.

In Los Angeles, foreclosure starts increased 9 percent on a year-over-year basis — from January to June — and 39 percent on a quarterly basis — from April to June.

South Florida, meanwhile, is also starting to show an uptick in new foreclosure filings, increasing 49 percent on a quarterly basis, but remaining steady year-over-year, according to the report.

The news was better in New York and Chicago’s metro areas, where foreclosure starts declined by 19 percent in Chicago and 18 percent in New York on a year-over-year basis.

Daren Blomquist, with Attom Data Solutions, said the data suggests that foreclosures are rising amid a gradual easing of lending standards that started in 2014.

“We are starting to see some early signs of risks in the current housing boom,” Blomquist said. “The pendulum is starting to swing back toward loose lending.”

On the other hand, he said the data also shows some positive signs. One is that the average amount of time it takes to foreclose on a property is decreasing.

Properties foreclosed in the second quarter of 2018 took an average of 720 days, down from 883 days in the second quarter of 2017. It’s the shortest average foreclosure timeline since the third quarter of 2016. Blomquist said this means that there are “not a bunch of bad loans that are in the foreclosure pipeline.”

Nationwide, 0.27 percent of all housing units, or one in every 370, had a foreclosure filing in the first six months of 2018, according to the report.

Foreclosure activity in the second quarter of 2018 was significantly below pre-recession levels in 121 of the 219 metro areas analyzed in the report. This includes Los Angeles (56 percent below); Chicago (25 percent below); Dallas-Fort Worth (75 percent below); Houston (37 percent below); and Miami (55 percent below).

7720 Abbott Avenue and Freshwater Group’s Freddy Sayegh (Credit: Freshwater Group)

UPDATED July 11, 7 p.m.: The Freshwater Group is adding a batch of Miami Beach apartment buildings to its South Florida portfolio.

Freshwater Group partner Joseph Sayegh said the firm is under contract to buy a rental complex consisting of three adjacent, two-story buildings at 7710, 7720 and 7700 Abbott Avenue for $5.6 million.

The rental project features 36 units and is currently owned by City M Abbot LLC, a company managed by Blas Zaccaro, records show. The company spent about $3.3 million acquiring the buildings in 2010 and 2011.

Two of the multifamily buildings were built in 1940 and the other was built in 1957. The buildings are made up of 24 one-bedroom apartments and 12 studio apartments with rents ranging from $950 per month to $1,050 per month. It is 100 percent occupied.

Previous ownership had renovated the buildings by replacing its windows, updating its rooms and improving its exterior facade, Sayegh said.

Tim Schneider from Brown Harris Stevens has the listing. One Sotheby’s International Realty’s Zalmy Shapiro is representing Freshwater Group.

This will be the seventh property the company has bought since launching about a year ago. The Miami Beach purchase would bring its portfolio to 400 multifamily units.

The real estate private equity firm, based in Brooklyn, is led by Alfred Sayegh and Solomon Gadeh as well as Joseph Sayegh. The principals also manage some properties purchased by the private equity investment firm Burke Leighton, where they previously worked.

Freshwater Group has also been active in North Miami Beach and Hialeah.

Scott Robins, Craig Robins and Philip Levine

Gubernatorial candidate and real estate investor Philip Levine built his fortune thanks in part to a well-known Miami real estate family.

Levine, a former mayor of Miami Beach and one of the leading Democrats running for governor of Florida, met Design District developer Craig Robins at the University of Michigan where they were roommates. In the mid-1990s, Robins’ father Jerry Robins agreed to become a silent partner of OnBoard Media, which Levine sold in 2000 to LVMH Louis Vuitton Moet Hennessy for an undisclosed amount.

Levine has invested millions of dollars in Miami neighborhoods with Scott Robins, CEO of Scott Robins Companies and brother of Craig Robins, according to the Miami Herald’s review of court and corporate filings and interviews. Those investments provided Levine with more than $1.4 million in 2017, which the newspaper said is his biggest source of income outside of his leisure companies.

Levine owns more than $100 million in real estate in Miami, Miami Beach, Okeechobee and New York. He and Scott Robins are trying to sell a retail portfolio in Sunset Harbour that is expected to fetch $70 million or more.

In the Democratic primary, Levine is running against fellow real estate developer Jeff Greene, Chris King of Winter Park, former U.S. Rep. Gwen Graham and Tallahassee Mayor Andrew Gillum.

Greene, who joined the race late in June, previously said he could spend $100 million of his own money to fund his campaign.  [Miami Herald] – Katherine Kallergis