Dec 19, 2018 - 0 Comments - Top Stories -

Miami Commercial Real Estate News December 19, 2018: Fed Raises Rates; $425 Million Mixed-Use Coming to Health District; More…

Fed raises rates for fourth time in 2018 amid signs of market slowdown

The Federal Reserve raised rates on Wednesday for the fourth time this year, citing a strengthening labor market and strong economic activity. The Fed raised the benchmark federal funds rate to between 2.25 percent and 2.5 percent. Rates are now at their highest level since 2008 amid many indicators that the housing market is slowing down. In October, the U.S. Commerce Department reported that…

Major Retail Rising Near Miami Courthouse, Health District

The doctors at Jackson Memorial Hospital and the bailiffs and clerks at the Richard Gerstein Justice Building hopefully like hot dogs, because the vendor slinging wieners outside the courthouse is one of the few lunch options around in the so-called Health District, long a retail desert. Bisnow/Deirdra Funcheon Developers Andrew Hellinger and Coralee Penabad of Urban X survey the construction at River…

Saturation nation? Developers to add 68M sf of office inventory in US next year: report

The U.S. office market could turn to slosh next year, as developers plan to add 68 million square feet of space — the highest increase since 2008. The massive development could lead to downward pressure on the country’s office rent growth, the Wall Street Journal reported. Citing a Cushman & Wakefield report, the Journal reported office rents have been rising across the U.S. for the past several…

Brazilian developer sells site of canceled condo tower near downtown Miami

Brazilian developer Rodolfo Ishak sold the former site of his Krystal Tower, a canceled condo project planned for Overtown, near downtown Miami. Property records show Ishak’s Krystal Investment Solution LLC sold the half-acre property at 530 Northwest First Court for $8.55 million to BH Investments LLC, a company managed by Steve Levy and Rainer Viete of Pompano Beach. The buyer financed…

Is WeWork getting too big for its boots as a landlord?

As WeWork continues to shape the face of office leasing, its recent push into real estate investment is prompting a rebuke from landlords and other industry insiders. “A lot of people originally thought of the shared office-space providers as bringing tenants,” Tony Malkin, CEO of Empire State Realty Trust, told Bloomberg. “But I think now we’ve seen — particularly with WeWork and other providers’ expansion…

South Florida’s largest office leases in 2018: World Fuel Services in Doral; More…

Office tenants are increasingly choosing South Florida, despite the region losing out on the bid for Amazon’s second headquarters. Steven Hurwitz of Colliers International South Florida said that making it onto Amazon’s shortlist underscores a growing interest for office space in South Florida. “The biggest change down here has been the influx of tenants from…

Grading Mayor Frances Suarez’s first year in office

Miami Mayor Francis Suarez joined other mayors in Fabens, Texas, in June to call for the reunification of immigrant families. What a difference some digitizing makes. In early October, Miami’s Planning and Zoning Department finally entered the modern age. With the soft launch of Miami’s Electronic Plans Review System, developers, architects and land use lawyers no longer have to schlep over to the…

Brickell City Centre expansion to help fund public housing

It could be two to three years before work starts on the next phase of sprawling Brickell City Centre, but when it does the City of Miami will get $1 million for affordable housing. Developer Swire Properties agreed to the voluntary public benefits contribution as it seeks approvals to expand its footprint in the neighborhood south of the Miami River. The Miami City Commission on Dec. 13 granted…

Downtown Development Authority to help fund Underdeck under I-395

Directors of Miami’s Downtown Development Authority voted Friday to commit $50,000 to the development of the open space under I-395 as the Underdeck, a linear park that is meant to be a community gathering place. It’s part of the redesign of I-395 that’s will create the Signature Bridge. The money will go toward the hiring of a designer for the space, which The Florida Department of Transportation will…

Lightstone Secures Construction Loan for FL Moxy Hotel

Investor/developer Lightstone has closed $73 million in financing for the latest hotel project, the seven-story, 202-key Moxy South Beach, at 915 Washtington Avenue in Miami Beach. Canyon Partners Real Estate and CapitalSource, a division of Pacific Western Bank, provided the loan. The financing package comprises a $55 million senior loan from CapitalSource and an $18 million preferred equity investment…

Purchase approval of Brickell Bank by Benhamou awaited

It seems the sun may be setting on the purchase approval of Brickell Bank this year. Chairman and CEO Frederick Reinhardt, who expected the Federal Deposit Insurance Corp.’s thumbs-up in 2018, remains hopeful about receiving purchase approval soon and expects the influx of capital to serve the company well. The FDIC is weighing Joseph Benhamou’s offer after a public hearing was held with the Office of…

Extension to State Road 836 could carry 92,000 cars a day

Some designs for the southwestern extension to State Road 836 veered too far west. Other routes flanked properties on Southwest 167th Avenue too tightly. Last week, the Miami-Dade Expressway Authority (MDX) showed residents its recommended solution for the Kendall Parkway, which it says is just right. The route, labeled “Corridor 2 Alternative 2” at a hearing MDX hosted Dec. 13 at Archbishop Coleman…

Daniel Kodsi: Developing in second-largest US ongoing urban project

Daniel Kodsi is one of the lead developers in the second-largest urban development in the nation: Miami Worldcenter. But before being a prominent Florida developer, as an 11-year-old and the son and nephew of developers he started working in construction to become accustomed to being on-site. With a passion for modern and classical architecture, Mr. Kodsi received his degree from University of…

Dinner Key Marina may go to bid for private operator

Miami has long run Dinner Key Marina in Coconut Grove, the state’s largest wet slip marine facility. In January, city commissioners will consider whether to turn over operation to the private sector, along with city-run Miamarina at Bayside. The move comes at the urging of Joe Carollo, who has been pushing fellow commissioners and administrators to find new revenue sources and beef up current revenue…

International Visitors Fuel South Florida Industrial

In addition to supporting retail real estate such as Sawgrass Mills, the second-largest tourist destination in Florida after Disney World, and American Dream Miami, the largest proposed mall in the U.S., South Florida’s international tourism and consumer buying power are fueling an industrial boom and institutional investors are taking note. The majority of industrial users are seeking space to house…

Sterling Bay pays $19 million for Wynwood site, plans mixed-use project

Sterling Bay just bought a Wynwood site for $18.9 million with plans to build an ambitious 10-story, mixed-use development. The Chicago-based investment firm purchased the 500,000-square-feet property at 537557 Northwest 26th Street and 530550 Northwest 27th Street for $37.80 per square foot. Sterling Bay received approval from the Wynwood Design Review Committee for the project…

County wins court appeal on Coconut Grove Playhouse

On December 10, 2018, a three-judge panel of the Circuit Court Appellate Division ruled in favor of Miami-Dade County in a case regarding the historic preservation approval granted to the County to rehabilitate the Coconut Grove Playhouse. In April 2017, the City of Miami’s Historic and Environmental Preservation Board had approved the County’s conceptual design for the Playhouse rehabilitation…

CRE investors see market slowdown amid shrinking borrowing costs vs. yields

Commercial real estate investors are looking at the difference between long-term interest rates and property yields and are seeing a sign the current market cycle is sputtering out. That spread between rates and yields have reached their narrowest margin in more than a decade. For some market pros, that is enough to predict the real estate market is heading for a downturn, according to the Wall Street…

South Florida’s biggest hotel sales in 2018; Hall South Beach; More…

In the most expensive hotel deal in Miami Beach since 2016, Spain-based Grup Peralada purchased the Hall South Beach hotel for $58.2 million. Rockwood Capital sold the 163-key hotel at 1500 Collins Avenue to Grup Peralada for about $357,000 per room. Grup Peralada is owned by the Suqué-Mateu family and has hotels, casino, wine and other businesses under its umbrella. Rockwood, with offices in New…

TSG proposes Cambria hotel in Miami’s Overtown

A company tied to the principals of Miami-based TSG Group is proposing a Cambria hotel in Miami’s Overtown neighborhood. Central District Miami Redevelopment Group V LLC, led by TSG’s Camilo Lopez and Jorge Escobar, is going before the Miami Urban Development Review Board on Wednesday seeking approvals for a 12-story, 192-key hotel at 1313, 1321, 1331 and 1335 Northwest Ninth Avenue

Judge dismisses lawsuit against Edgardo Defortuna tied to Jade Ocean

A Miami-Dade Circuit Court judge dismissed a lawsuit against Edgardo Defortuna that alleged the developer lied to lenders by claiming a big loss on the Jade Ocean condominium project in Sunny Isles Beach. The judge’s ruling comes on the heels of a five-year legal battle. Capital Building, Florida Beach Investment and Spartan Lending brought the case against Defortuna. The suit claimed that…

Some Opportunity Zone funds — like one from Kushner brothers-backed Cadre — target gentrified areas

The Opportunity Zones program was crafted as a way to incentivize developers to invest in distressed areas. But recent funds set up by Kushner brothers-backed Cadre and other firms show that money could be heading to already gentrified neighborhoods. Cadre, the real estate crowdfunding platform partially owned by Jared and Josh Kushner, told prospective investors it will only target a small portion…

Construction worker dies after fall at Chetrit project in Miami Beach

A construction worker died after he fell at a project site in Miami Beach. A 35-year-old was killed on Monday morning after falling from the third story to the second story of the Chetrit Group’s redevelopment of the Collins Park Hotel, Miami Beach Fire Chief Jorge Linares confirmed. The worker was punctured by rebar, and transferred to Ryder Trauma Center at Jackson Memorial Hospital in critical…

Google to invest $1 billion in a new Manhattan office campus

Google plans to invest $1 billion in a new 1.7 million-square-foot Hudson Square campus. The tech giant will lease Oxford Properties Group’s St. John’s Terminal at 550 Washington Street and take space nearby at Jack Resnick and Sons’ 315 Hudson Street and Trinity Real Estate’s 345 Hudson Street, Google’s parent company Alphabet announced Monday. “With these most recent investments in…

Tenants may have paid more than $30 million in undue rent increases thanks to Trump’s tax schemes: NYT

Victims of the Trump Organization’s alleged tax-dodging scheme most likely paid tens of millions of dollars in undue rent increases over the past two decades, according to the New York Times. In the 1990s, the future president and his siblings set up sham businesses that allowed them to increase rents on rent-regulated apartments, a Times investigation found. But because those increases…

Marsha Soffer sells Chase branch near Little Havana for $7.5M

A company tied to Marsha Soffer just sold a Chase Bank branch near Little Havana for $7.5 million. Soffer’s company, Chandler Chase LH, sold the 30,928-square-foot property at 801 Southwest 27th Avenue for $242 per square foot to Parkwood Plaza Realty Holdings LLC. Marsha Soffer, who is the daughter of Aventura-based developer and Turnberry Associates founder Donald Soffer, bought the…

South Florida’s priciest industrial sales in 2018

Doral HQ, Bob Chapman and SuperValu, SuperValu and Peter Briger of Fortress Investment Group, and Countyline Corporate Park and James B. Connor Industrial properties in South Florida were in hot demand in 2018, with the top five industrial sales totaling $478 million, outperforming last year’s $401.5 million. The increase stems in part from thriving e-commerce…

AVR Realty spends $239M to buy Telemundo’s HQ

Telemundo’s new headquarters just sold for $239.1 million to AVR Realty, an investment and development firm based in Yonkers, New York. Property records show TM Miami FL Landlord LLC sold the 560,000-square-foot headquarters for the Spanish language network, which is owned by Comcast’s NBCUniversal. The seller of the two-building campus at 1 Telemundo Way is controlled by SunTrust Bank’s…

(Over)supply and demand: What Miami’s condo glut could mean for multifamily rents and development

Tour the Panorama Tower overlooking Biscayne Bay, with its “porte cochere,” poolside cafe, wine tasting rooms, pet spa and home theaters, and you might think that you’re sampling Miami’s latest glitzy condominium offering. Rising nearly 900 feet, Florida East Coast Realty’s project is the tallest building in the state. But unlike many of the other towers that dot Brickell, the Hollo family’s development…

Turnberry offices reach 100% occupancy, other news in South Florida leasing

Wells Fargo and IPD Analytics ink leases at Country Club Center in Aventura. Wells Fargo Advisors and IPD Analytics just inked new leases at the Country Club Center office building in Aventura. Wells Fargo renewed its lease and relocated to a 14,095-square-foot space on the ninth floor. The full-floor office layout includes balconies. IPD Analytics is moving into Wells Fargo’s previous space. The company…

Edgardo Defortuna defends in three lawsuits over two of his condo developments

Developer Edgardo Defortuna faces three lawsuits alleging he cheated small sources of project financing and advanced a condo development by blocking the sale of an adjacent property. Unless Defortuna settles first, a Miami-Dade Circuit Court judge will decide on Monday whether to order an immediate trial in a case brought by three plaintiffs. Capital Building, Florida Beach Investment and Spartan…

Miami church faces $7.1 million property tax bill for leasing space to a for-profit school

The First Presbyterian Church of Miami faces a $7.1 million tax bill because the Miami-Dade County Property Appraiser claims the church forfeited its religious exemption by leasing part of its property to a for-profit school. Attorneys for First Presbyterian Church filed two lawsuits alleging the county property appraiser has challenged the church’s religious exemption from property tax because of the high…

Company behind Louis Vuitton and Christian Dior to buy luxury hotel group

Paris-based LVMH, a luxury products company that owns the Louis Vuitton and Christian Dior fashion labels, agreed to acquire London-based Belmond and its portfolio of high-end hotels. The deal reflects a belief at LVMH that “the future of luxury is in luxury goods and luxury experiences,” Jean-Jacques Guiony, the finance chief of LVMH, told stock analysts during a conference call. LVMH, which acquired…

Toll Brothers pays $19 million for site to build luxury student housing near FIU

Global City Development sold a site near Florida International University to Toll Brothers, where both companies are planning to partner on building luxury student housing. The homebuilder paid $19 million for the 1.72-acre property next to the former University Bridge Residences site. Global City CEO Brian Pearl said his firm will stay on as a co-developer. The nearly 400,000-square-foot project calls for…

Melo scores $142M refi for Square Station apartments

Melo Group just closed on a $142 million refinance for apartments in Miami’s Arts & Entertainment District. Freddie Mac is providing the 10-year, fixed-rate loan. Berkadia’s Miami acted as the seller servicer, selling the mortgage to Freddie Mac, according to a press release. Peter Mekras of Aztec Group arranged the financing, which is interest-only during the term of the loan. Melo completed Square Station…

Blue Lagoon could get six new buildings, including two hotels

A hotel and residential project that could transform the landscape at Blue Lagoon near Miami International Airport got an initial seal of approval, despite objections from a neighboring condo association. At a Miami planning and zoning hearing on Thursday, city commissioners approved on first reading a zoning change that would allow the Weiss Group to develop six buildings that would house…

Miami commission gives preliminary nod to Brickell City Centre expansion

Brickell City Centre won the initial green light to expand its footprint, creating two new mixed-use towers within a more than 100,000-square-foot annex to the $1.05 billion project. The Miami City Commission on Thursday approved on first reading an amendment to Brickell City Centre’s special area plan that adds 15 properties owned by Colombian businessman Carlos Mattos, who is partnering with…

L. Milton scores $18M construction loan for apartments near Magic City Casino

An affiliate of L. Milton Construction just scored an $18 million construction loan to build an apartment complex near Magic City Casino.
L. Milton Construction secured the financing from Wells Fargo. The eight-story, 120-unit apartment building, called the Baccarat, will be built on a 39,072-square-foot site at 3930 Northwest Seventh Street, county records show. The 194,695-square-foot development will…

Carlos Mattos buys retail building near Miracle Mile

A company tied to Colombian businessman Carlos Mattos just picked up a retail center on the northwest entrance of Miracle Mile for $16.4 million. The Gables Entrance property at 2209 and 2235-2283 Southwest 37th Avenue in Miami features about 12,400 square feet of leasable space between two, single-story retail buildings. The deal breaks down to about $1,280 per square foot. Coral Way Entrance LLC…

Citizens to increase rates by 8.2% statewide

Citizens Property Insurance is planning to increase rates, yet again. The state-backed insurance company’s board of governors approved a rate increase averaging 8.2 percent in across all of the company’s insurance lines, according to the Sun Sentinel. The rate hike would begin in September 2019. South Florida homeowners will see some of the biggest rate increases in the state. Rates for homeowners insurance…

Video: Reis Economics Barbara Denham Presents Industrial Sector Market Trends

Barbara Denham, Economist with Reis, appears on this commercial real estate show segment to discuss trends and performance in the industrial property sector. Topics include existing supply and delivery expectations, rental rates, and cap rates. She notes that deliveries keep hitting new highs each year, with a slowdown only perhaps coming in a couple of years. She notes that cap rates declined a touch…

Trump boosts federal resources to Opportunity Zones, as real estate investors keep pouring in

For months, real estate investors and developers have been setting up multimillion-dollar Opportunity Zone funds, hoping to cash in on a federal program that offers tax incentives to investors who pour money into properties in designated low-income neighborhoods. On Wednesday, President Trump signed an executive order to direct resources to state and local municipalities to improve basic conditions…

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