There’s a gold rush on for retail in South Florida.
Developers and mall operators want to renovate and expand shopping centers across the region. New retail is popping up, too, especially open-air “high-street” shops with surprisingly gourmet dining — a breezy contrast to the enclosed suburban malls of old. The cost of all that investment runs into the billions.
The timing may seem odd, given the obstacles: Economic slowdowns in Latin America, Europe and China. A strong dollar slowing tourist spending and a shaky stock market here at home. More and more people shopping online. But experts say the Miami market’s fundamentals are strong and that there’s room to grow despite fears of oversaturation when the new projects open up.
To list all of South Florida’s retail activity takes heroic resolve: A 500,000-square-foot, open-air shopping center under construction at Brickell City Centre is set to open this fall. Traditional powerhouse malls such as Aventura, where the ATMs dispense $100 bills, and Dadeland have expanded or are in the process of doing so. The ultra-luxury Design District will double in size in 2017. The Bal Harbour Shops would like to grow, too. In downtown Miami, the long-planned Miami Worldcenter project recently announced a major redesign. And city governments are spending big bucks to redo Miami-Dade’s iconic retail arteries on Lincoln Road in Miami Beach, Miracle Mile in Coral Gables and Flagler Street downtown. Even industrial Doral is getting an influsion of upscale retail.
In Broward, Plantation’s Fashion Mall is set to be demolished and replaced by an open-air shopping center. Meanwhile, America’s largest outlet mall, Sawgrass Mills, is planning a new wing for full-price stores and fine dining while another developer wants to build a separate, 480,000-square-foot mall next door.
And then, of course, there’s American Dream Miami, a 200-acre complex slated for Northwest Miami-Dade. If given the green light by the county, it would be the U.S.’s largest mall.
For consumers, at least those who can afford the new shops, more and better options are a good thing in what analysts say is an underserved market. New jobs, even if mostly low-wage, will help the economy, too. But some locals worry that national chains geared toward wealthy tourists will keep squeezing out the small businesses that make South Florida unique. Either way, the growth isn’t stopping.
“It’s really unprecedented,” said Alan Esquenazi, a commercial real-estate broker at Continental Real Estate Companies. “The South Florida market is on fire. The demand from national retailers, as well as local and regional, is intense. The available space is lacking. Rents are rising quickly.”
No one is making a bigger bet on South Florida than a Maryland-based real-estate investment trust that just finished a major local shopping spree, spending $87.5 million on CocoWalk in Coconut Grove and $110 million on the Shops at Sunset Place in South Miami.
“We’ve always had a strong desire to be in South Florida,” said Chris Weilminster, executive vice president at Federal Realty Investment Trust. “This is a long-term play for us.”
Weilminster said that tourist dollars pouring into Miami, as well as strong local demographics, make retail a good buy.
Miami actually outsold higher-profile shopping destinations such as New York and Los Angeles in 2014, according to a commonly used statistic collected by the International Council of Shopping Centers.
Sales for non-anchor tenants in South Florida averaged $768 per square foot in 2014, ICSC found, well ahead of New York ($581) and Los Angeles ($566), as well as the national average ($474).
“Everything is in this market’s favor, particularly in the two areas we are investing in,” Weilminster said.
But he and Federal’s partners, local developer Michael Comras and Coconut Grove-based Grass River Properties, know they have a long road ahead, one that could cost tens of millions of dollars, and likely more, in renovations and rebranding.
During a recent visit on a rainy weekday afternoon, CocoWalk was practically deserted. Even on sunny weekends, the four-story, 198,000-square-foot mall can feel a bit like the aftermath of a zombie apocalypse, forgotten by locals and frequented instead by undiscriminating tourists and teens escaping mom and dad. The mall has had four different owners since 1998, not including the latest group. Vacancy rates hover at nearly 20 percent. Tiles are cracked, paint chipped.
“This really should be the crown jewel of Coconut Grove,” said Comras, who also recently partnered on a massive $370 million sale of an entire block on Lincoln Road. (That mega-deal, to Spanish billionaire Amancio Ortega, is another sign of how badly investors want to nab South Florida retail, brokers say.)
“When you look at the areas that surround Coconut Grove from Coral Gables to Key Biscayne to Pinecrest to South Miami, you have the best demographics year-round in South Florida,” Comras added.
The new owners say they have plans to renovate CocoWalk and Sunset Place with sleeker, more contemporary finishes. They also want to relieve the heavy, fortress-like qualities that serve to cut the malls off from bustling downtowns in Coconut Grove and South Miami. That means bringing in a stronger mix of local, regional and national tenants ( “newer, cooler, hipper,” Weilminster said) and better dining options. They’ve tried things like weekly cooking classes at other properties to get people interested in reconnecting with their local malls.
“People want to be immersed when they shop,” Weilminster said. “You have to create something experiential … That’s how you get them off the couch and off the Internet.”
Federal owns more than 90 properties with 21 million square feet of retail in 12 states, including major developments in California, Massachusetts, Pennsylvania, Virginia and Washington, D.C.
For now, the company is playings its cards close to the vest on CocoWalk and Sunset Place. But it does plan to release complete details of planned renovations at both malls within the next two years.
“The raw material is great,” said Don Wood, Federal’s CEO. “The product’s not great. But we’re going to change that. We have to listen to what the community wants and what the retailers want. It takes time.”
“You can’t do what worked in San Jose and plop it down in South Miami or Coconut Grove.”
The numbers don’t lie.
As the luxury condo boom dies down, retail has become one of the strongest sectors of the local commercial real-estate market. Retail vacancies of just 3.5 percent are near record lows for Miami-Dade County and are expected to fall even lower, according to a recently released report from TD Bank. Sales are up 4.5 percent, despite a strong dollar that has slowed tourist spending from Latin America and Europe, the report found.
“South Florida’s economic growth since the recession and the number of new people moving into the state have really ramped up retail,” said Michael Dolega, a senior economist at TD Bank.
Retail space across Miami-Dade rented for an average of $33 per square foot in the fourth quarter of 2015. That’s double the national average and 17 percent above Miami’s pre-recession peak in 2007, Dolega said. The hottest sub-markets are Brickell (more than $80 per square foot) and Miami Beach (more than $70 per square foot), the bank found. Prime real estate on Lincoln Road goes for more than $300 per square foot, according to brokers who work in the area.
The fastest-growing area in Miami-Dade? The Biscayne corridor along Miami’s historic MiMo district, where retail rents have soared an average of 12 percent per year since 2011 as developers open up new restaurants, hotels and shops, including a boutique from luxury designer Trina Turk. More and more young people are moving into the urban core. In the last 10 years, downtown Miami’s population has more than doubled to 80,000, according to the Downtown Development Authority.
But there are dangers: Federal Reserve bankers have warned of a possible bubble forming in commercial real estate. Eric Rosengreen, president of the Boston Fed, said in a speech late last year that low interest rates could cause investors chasing higher returns to take on too much risk, according to MarketWatch.
TD Bank, for its part, acknowledges that some markets may be too frothy, particularly the office sectors in New York, Boston, Washington, D.C., and San Francisco.
But economist Dolega said Miami retail was not a high-risk market. “The risks do not appear to be concentrated in Florida,” he said, adding that local demand was high enough to absorb the new supply in the pipeline. “According to our projections, all the inventory is going to be absorbed through 2017.” Later in the decade, supply might start to outpace demand, but only slightly, he concluded.
“We would love to do more retail lending,” said Ernie Diaz, regional president for TD Bank.
Even single-tenant properties such as gas stations, banks, fast-food chains and pharmacies are hot, as long as the tenants belong to a well-run national chain, said commercial real-estate broker Alex Zylberglait. “Demand has been on the rise in the $1 million to $20 million range mainly due to interest from foreign investors,” Zylberglait said. “These assets are very hands-off and very safe, so they can put in the money and then sit back … And there’s a lot more demand than there is supply, meaning prices are rising.”
Even the places that are distinctly Miami are now being dominated by national chains. Mitchell Kaplan, Books & Books.
But Mitchell Kaplan, who owns local favorite Books & Books, said he worries that all of the money pouring into Miami retail will mean higher rents and the demise of many small businesses. The bookstore has locations in Coral Gables, Bal Harbour and on Lincoln Road, as well as at the Adrienne Arsht Center and Miami International Airport.
“Look at how Lincoln Road has lost its retail uniqueness,” Kaplan said. “You don’t want all of South Florida being dominated by national chain stores … locally owned, independent businesses can’t compete with the rents paid by the chains. We don’t operate on a level playing field.”
“Even the traditionally edgier places in Miami are seeing the influx of the national chains,” Kaplan continued. “Look at Wynwood, look at Coconut Grove. All neighborhoods in Miami have become places where investors now prospect. They buy up real estate. They seek national chains as tenants since their ability to pay high rents makes their properties more valuable, and then they often flip their properties, making lots of money. The question to be answered is: Does that make our community better?”
The mall that started it all
Even the shopping center that launched luxury retail in South Florida is looking to keep pace with the new activity.
Bal Harbour Shops, which celebrated its 50th anniversary last year, wants to build a new wing that would double its size to about 800,000 square feet. (First, it needs to gain voter approval for a land-swap deal and end a high-profile and increasingly ugly tussle with neighbors.) The open-air shopping center boasts tenants that are the crème de la crème of luxury retail: Gucci, Prada, Valentino, Chanel, Armani. With sales at about $3,000 per square foot in 2015, it remains the most lucrative shopping center in the U.S., according to CNBC.
But in recent years a few major tenants have left leafy Bal Harbour for bigger stores in newer locations. Louis Vuitton, Hermès and Cartier have all opened in the Design District, developer Craig Robins’ new Midtown mecca for ultra-luxury retail, which is itself expanding. Vuitton also opened at Aventura Mall, owned by Turnberry Associates and Jackie Soffer, who is married to Robins.
“Vuitton had a 5,000-square-foot store here at Bal Harbour,” said Matthew Whitman Lazenby, whose family developed and owns the shops. “They opened at 18,000 square feet in Aventura.”
Lazenby said the Bal Harbour expansion, which he called “hugely important,” would allow for stores to move into bigger spaces and would also create more restaurants and cafés. “That’s how we can differentiate ourselves,” Lazenby said. “With the experience we provide.” He added that if the shops had been allowed to grow five years ago, when his family first proposed the expansion, it likely would have been able to hold onto now-departed tenants.
Current tenants agreed.
Books & Books opened in Bal Harbour 10 years ago, and owner Kaplan said he supports the expansion at the shopping center, which he praised for renting to a local business. “The more stores and eating venues that surround us in the Shops, the better we do. More stores bring us more business.”
As for the Latin American currency crisis that has taken a bite out of tourist spending in Miami, Lazenby described it as a “temporary blip.” Bal Harbour’s business is roughly 80 percent tourist, 20 percent local.
As a result, he said sales have dropped about 10 percent in 2015. Other retailers that depend on foreign money have also reported sales dropping or flattening out.
“We’ve seen these cycles before, and we know they come to an end,” he said.
While the Miami market is down overall, Design District developer Robins said his brand-new project, where a flagship Hermès store just opened, is bucking the trend.
“Eleven out of 13 of our stores that were open in 2014 actually grew in 2015, and several averaged gains of 25 to 30 percent,” Robins said. “And we’re only 30 percent open.”
About 50 stores are open in the still-under-construction district, with that total expected to grow to more than 120 plus a hotel and 10 new restaurants by the end of 2017.
One of the most obvious trends in Miami’s retail boom is a preference for open-air, high-street spaces on the model of Fifth Avenue in Manhattan and Rodeo Drive in Beverly Hills. Traditional malls around the county have struggled as consumers turn to online shopping. Developers in South Florida want to piggy-back on the region’s good weather, despite the advantages of an enclosed space.
“There are some very obvious benefits to being enclosed, air-conditioned and fully controlled,” said Steve Patterson of the Related Group, which is developing a mixed-use project called CityPlace Doral with 250,000 square feet of open-air retail. “You have a shopping experience not impeded as much by weather. For the most part, it’s predictable. That’s great for retail. The downside to it is it’s expensive. The rents for the tenants are much higher than they would be for open-air.”
The most recent example of the shift toward high-street is Miami Worldcenter, a long-planned, $1.7 billion, mixed-use development in downtown Miami that was derailed by the financial crisis in 2008. The latest twist-and-turn for the back-on-track project came last month when the developers announced they were replacing a planned enclosed mall with a smaller, open-air shopping center. That means Macy’s and Bloomingdale’s, Worldcenter’s original anchors, may drop out. They need bigger stores than the high-street retail model can provide. (Not to mention the fact that Macy’s, which owns Bloomingdale’s, has faced seriously slumping sales. Last month, the retailer announced it would lay off more than 4,000 workers and close 36 stores across both brands.)
High-street retail means open-air, pedestrian-focused shopping like that available in the Design District and Lincoln Road
“Our original plan was actually for high-street retail,” said Nitin Motwani, a principal with the Worldcenter development team. “But the retailers at the time didn’t quite understand what was happening in our dynamic market. They wanted a mall.”
But Motwani said that as once-deserted downtown Miami filled up with new condo towers, restaurants and museums, the needs of locals changed. They were ready to walk. “Because we had not yet started construction, we were able to realize that and design something that is more long-lasting and pays attention to the new norm for retail,” he said.
The new plan calls for one- and two-story shops laid out over several blocks in downtown Miami where the mall would have gone. Outdoor cafes and pedestrian-friendly sidewalks, as well as a feature to provide shade, are all part of the plan, which hasn’t been released yet, Motwani said.
The projected opening date remains fall of 2018.
Meanwhile, in Plantation, Worldcenter partner Art Falcone is leading a redevelopment of the bankrupt Fashion Mall, built in the 1980s. Falcone plans to tear down the mall and instead build a 250,000-square-foot open-air shopping center with 700 rental units on 35 acres. “We’re targeting boutique tenants and smaller stores [for the retail],” Falcone said. “This is going to be a more Miami-type product than what you typically see in West Broward.”
Another open-air project gaining steam is Brickell City Centre, the massive mixed-use development set to open its retail component in the heart of Brickell this fall. Developer Swire Properties is partnering with Lazenby, of Bal Harbour, and retail giant Simon Property Group.
Brickell City Centre features an open-air, 500,000-square-foot shopping center cooled by an innovative climate ribbon. Swire, a Hong Kong-based developer with a long history in downtown Miami, said it learned how to make open-air projects in hot climates work from its experiences in sweltering East Asia. “You can look around and see how successful the outdoor experience is in South Florida,” said Debora Overholt, Swire’s vice president for retail. “The weather in Miami is one of the major attractions. People come here to enjoy that instead of being in an enclosed shopping mall.”
So far, Brickell City Centre has attracted high-profile tenants including Saks Fifth Avenue, which also anchors Bal Harbour; the luxury dine-in movie theater Cinemex; and, according to one source, Florida’s largest Apple store. “We really wanted to be in a premium market,” said Jaime Rionda, chief operating officer of Mexico City-based Cinemex. “The area of Brickell and the amount and quality of tourists that arrive every year and stay for days and even weeks is incredible.”
The company plans to open a 10-screen, 620-seat theater serving “sophisticated finger food” such as paninis, burgers and ceviche, Rionda said. Brickell will be its first U.S. location.
A future for old-school malls
While some traditional malls around the U.S. may be in trouble, Miami-Dade’s powerhouses are doing well.
Dadeland Mall in Kendall just completed a major redevelopment, adding a new 102,000-square-foot shopping wing and renovating and modernizing its food court. Dolphin Mall in Sweetwater also opened an expansion last year with five new restaurants and a 1,300-space parking garage.
And massive Aventura Mall, already Florida’s largest, is embarking on a redesign of its own with a three-story, 315,000-square-foot expansion expected to open in 2017. (That plan is being challenged in court by Sears, which wants to develop its own open-air shopping village.)
In addition to Vuitton, new high-end stores have opened at the 2.7-million-square-foot mall, including Pucci, Tiffany and Longines. Jackie Soffer, who co-owns Aventura Mall, said its dining options haven’t kept up with the tenant mix. New restaurants will be a major part of the expansion, as well as a VIP lounge, she said.
“We know where we have voids in our property, and one of the voids is food,” Soffer said. “We’ve now upgraded the selection from a shopping perspective. But with all the luxury sales we have in the mall, and the customers we have in the mall, we’re not catering to them as far as restaurants are concerned.”
The changes at the mall mirror the way developers have remodeled Miami as a destination for the global elite.
“Ten years ago, a person from New York used to eating at New York-quality restaurants would not have a huge selection [in Miami],” Soffer said. “Now they can come here and eat at a different restaurant every night for a month and not feel like they were sacrificing.”
Miami Beach, Florida, and Flint, Michigan, don't have a lot in common. One is arguably the country's most impoverished and suffering city. The other is billed as America's paradise. But according to a new analysis from Apartment List, both are about the same when it comes to raising a young family.
Which is to say, neither is a very good place to raise a family.
The analysis ranked America's 473 biggest cities. Four different criteria were involved:
- Safety - Using FBI crime data on number of violent crimes and property crimes per 100,000 residents.
- Housing Costs - The percentage of a median income required to rent an average two-bedroom apartment.
- School Quality - Using High School graduation ranks of the local school districts.
- Child Friendliness - Decided using census data to find out the number of kids already living in the city.
Flint came in at 464. Interestingly, Fort Lauderdale was right behind Flint at 465.
So, how did Miami Beach score so low? Well, it had a crime score of 0.3 out of a possible 100.
Housing is notably expensive (and only getting worse). The high school graduation rate of Miami-Dade County Public Schools isn't particularly good, and, well, there are not a lot of people raising kids there anyway. The "child friendliness" score was just 2.3 out of 100.
Here's how Miami Beach and the other cities analyzed in Miami-Dade stacked up:
389th - Hialeah
Combined Score: 29.1
428th - Homestead
Combined Score: 23.2
448th - Miami
Combined Score: 18.2
461st - Miami Beach
Combined Score: 14.2
Now, maybe you're thinking, Are you kidding me?
And, yes, this types of analysis relies on criteria for which easily accessible, standardized data is available. There are a whole lot of intangibles and caveats that tend to get left out. Plus, all cities in Miami-Dade got the same education score because they're all part of the same school district, even though the individual public schools in Miami Beach might be viewed better than the ones in Hialeah.
There are limits to this data, but these kind of studies are useful for underscoring how impractical it is for families to live in a supposedly "nice" city.
Sure, Miami Beach would be a perfectly nice place to raise a kid — if you have a lot of money to buy a nice place in one of the lower crime areas of the city. But that's not an option for your average working parent, especially in Miami-Dade's economy.
Marriott timeshare brand buys The Edgewater Hotel on Ocean Drive
Hotel has been an area staple since 1936
Marriott rebranding will preserve hotel history
Marriott Vacation Club announced the purchase Wednesday, noting that the purchase is instrumental to its mission of expanding vacation options for its 400,000-plus members, said Ed Kinney, a spokesman for parent company Marriott Vacations Worldwide.
“We started to see a trend of people looking to take shorter vacations, more urban destinations and sometimes not traveling with their families,” Kinney said. “South Beach is for us, with all our owner feedback, a destination that people wanted to go to for a long time now.”
The 49-room, studio- and suite- hotel at 1410 Ocean Drive has been a staple of the area since 1936. Kinney said the hotel won’t undergo infrastructure changes but rather refurbishments to match Marriott design standards — but its history will be preserved.
“The [City of Miami Beach ] Historical Preservation Board has strong guidelines to retain historical significance,” Kinney said. “We will work together with them to find out what those are.”
Guests can already book a stay at the Marriott Vacation Club, South Beach, but the hotel won’t complete full refurbishments until early 2017.
Marriott also announced it is ending a previous commitment to an undisclosed 182-room property on South Beach several blocks from the former Edgewater Hotel.
Marriott Vacation Club has several other timeshare properties in South Florida, including Marriott’s Villas at Doral and Fort Lauderdale’s Marriott’s BeachPlace Towers.
In South Beach, several Marriott brand hotels have come and gone. Marriott sold its 294-room Miami Beach Edition for a whopping $230 million in February to the Abu Dhabi Investment Authority and in June opened the 150-room AC Hotel Miami Beach on Collins Avenue.
Question: All sorts of rumors have been flying around our condominium community about the actions (or inactions) of the current board and, more specifically, the president of the association. A group of owners started a recall against the president and asked me to sign a form to show my support for the recall. I signed the form. I later learned that a board meeting was called to vote on the recall petition. I attended the board meeting. The president spoke at the meeting and explained his side of the story. I believed what he said and I wanted to change my vote. The owners who were pushing for the recall told me I couldn’t change my vote. The recall was approved by the other directors and the president was removed from the board. Was this legal? M.D. (via e-mail)
Answer: From what you have stated, probably yes. Recalls can be tricky. The required procedure to recall a director from a condominium association is specifically outlined in Florida Statutes and the Florida Administrative Code and are available on-line. Recalls can be pursued through a vote of the members at a membership meeting or through a written agreement. A majority of all the unit owners must vote to approve a recall for it to be effective against a director or multiple directors.
From your question, it appears that a recall by written agreement was used. The Florida Administrative Code states the following: “…Any rescission or revocation of a unit owner’s written recall ballot or agreement must be done in writing and must be delivered to the board prior to the board being served the written recall agreements.” In your case, since you did not revoke your vote prior to the time it was served upon the board, you were unable to change your vote.
By Eric Glazer, Esq.
I won a pretty interesting arbitration case last week. It’s an example of how a Board’s unwillingness to listen to reason, wound up needlessly costing all of the members some money. It’s a perfect example of how it’s possible to both win and lose at the same time. Here are the facts:
On September 22nd, 2015 Oasis at Palm Aire Association, Inc. was served with 89 votes in favor of recalling board member Dianne Bessette. Since there are 167 homes, only 84 valid ballots would have been necessary. However, in this case, 21 of the ballots were stale as the signatures on the ballots were in excess of 120 days old; clearly a violation of law. Therefore, when we subtract the 21 stale votes from the 89 that were served, there were only 68 valid votes in favor of the recall, which is short of the required 84. On September 25th, 2015 even though the Board and their counsel were admittedly warned not to count these stale ballots, the Board rejected Bessette’s legal argument without any justifiable basis, and voted to certify the recall and remove Bessette from the Board anyway. Obviously, this left Bessette with no choice but to immediately file a Petition for Arbitration challenging the recall and her removal from the Board. Subsequent to Bessette filing her arbitration case, the Board suddenly realized that Bessette was right. So, they went back and corrected the 21 stale ballots by having the unit owners sign new ballots. They then held a second recall meeting and again certified the recall. The association then asked the arbitrator to consider the case closed, but to award the association prevailing party attorney’s fees and costs to be assessed against Bessette. In response, on behalf of Bessette, I argued that even though Bessette was ultimately removed from the Board, she was actually the prevailing party in the case she filed. She was forced to file her arbitration case because the Board ignored the law. In effect, the Board then admitted error by correcting the 21 stale ballots and by holding another recall meeting, which in effect negated the first one. If not for the Board ignoring the law, Bessette would never have had to file anything and would never have had to hire an attorney. Therefore, the arbitrator should assess fees and costs against the association. The Arbitrator agreed with Bessette and held “Indeed, in holding a meeting to consider the second recall agreement, the Association was admitting it committed an error in certifying the first recall because a fortiori an association cannot recall a member of the board who has already been recalled. The second meeting where the association for the second time certified the recall negated Petitioner’s earlier removal from the Board (whether acknowledged publicly or not) and Petitioner had regained her seat on the board if ever so briefly. This granted the relief requested in Petitioner’s petition. To this extent, Petitioner did indeed prevail.” “The association knew or could have known by just reviewing the first 89 ballots, that 21 were useless because they had expired. A cursory review of the ballots would have revealed this truth and saved both parties fees and costs. Instead, the association proceeded to meet concerning the certification of the first recall without questioning the facial validity of the ballots. The primary purpose of holding a meeting to consider the recall is for the board to determine the validity of the ballots cast and to fail to do so in its rush to remove Petitioner, will not support a finding by the arbitrator that the association is the prevailing party. Essentially, the association wants to be named prevailing party to be awarded fees and costs because it mishandled the service of the first recall agreement. Under the circumstances, the Association’s motion will be denied and Petitioner will be named prevailing party and be awarded her reasonable fees and costs despite the fact that she did not get the relief she sought in a final order.” The total amount at issue was $1,500.00. Of course, the association probably paid attorney’s fees in a similar amount to their counsel for these proceedings. That’s $3,000.00 that could have been spent on something beneficial for the community instead of attorney’s fees, had this particular Board simply obeyed the law and refused to count the ballots they were warned were illegal and couldn’t be counted. Often times, the Board’s anger with a particular member of the community clouds their judgment. So heed this advice board members………. because it was given to me when I was just starting out in this profession. Even if you don’t like a particular member of the community, even if you think the member is annoying, even if you think the member is a trouble maker, keep in mind that even a broken clock is right twice a day.
A Brazilian entrepreneur who formerly led Nivea Brasil and Philips Latin America has sold his Brickell Key condo to Jorge Lanata, an Argentinian journalist.
Miami-Dade County records show Lanata and his wife, Sara Elizabeth Stewart Brown, paid $2.55 million for the three-bedroom, three-bathroom unit at Asia, 900 Brickell Key Boulevard. Lanata, who founded two Argentinian newspapers, has also directed documentaries, worked in radio and is writing a new book, according to published reports. Hernan Golod of Fortune International Realty represented Lanata. He said the journalist was looking for privacy and luxury.
The 2,500-square-foot residence is a corner unit with water views. Golod said Lanata collects art and that Asia has “incredible walls. Asia is the most luxurious building on the island,” Golod told The Real Deal. Unit 1804 sold for $1,020 per square foot.
Paulo and Patricia Zottolo were the sellers, according to county property records. They were the unit’s first owners, paying $1.8 million for the condominium in 2012. According to his LinkedIn page, Paulo Zottolo was CEO of Nivea Brasil and Phillips Latin America, and now heads the start-up Amazon Waters.
Swire Properties developed the 36-story building, which includes common area amenities on the fifth floor, racquetball and tennis courts, a 2,000-square-foot wet spa and wellness center, and concierge services. Asia was completed in 2008 and features 123 units. J Scott Architecture developed the condo tower.
Swire, which is developing Brickell City Centre over the bridge, has plans for more on Brickell Key. The company wants to develop the last vacant parcel into as many as 668 residential units.
New landlord plans to renovate 15 apartment buildings — and raise the rent
That means many working-class tenants could be priced out by rising rents
Gentrification is happening across South Florida
A portfolio of 15 aging, Art Deco apartment buildings in South Beach — one of the last bastions of working-class housing in a city with soaring prices — sold for $59 million on Wednesday.
The new owner, Boardwalk Properties FL, plans extensive renovations and improvements to the 240 units included in the deal — and also says it will raise rents by as much as 50 percent.
That means many tenants in the low-rise buildings, where a one-bedroom apartment can go for about $1,100 per month, could be forced out by rising prices.
These are people who drive Porsches and are drawn to Miami Beach but don’t want to live in high rises. Adam Walker, Boardwalk Properties FL Walker said the deal made Boardwalk the largest landlord of apartments in South Beach.
The company paid about $245,000 per unit. The sellers are a family that scooped up the buildings during the recession in 2009. A representative for the company that manages the units, Bar Invest Group, previously declined to reveal their identity to the Miami Herald.
The buildings are scattered between Seventh Street and 15th Street on the following avenues: Euclid, Michigan, Jefferson, Drexel, Meridian and Pennsylvania. It’s an area that hasn’t been transformed by the glitz and glamor of the trendy South of Fifth neighborhood or the gleaming oceanfront high-rises on Collins Avenue.
Jack McCabe, an analyst who studies South Florida’s real estate market, said the deal was “emblematic” of the region’s gentrification.
“Builders and renovators are focused on delivering the most profitable product, seemingly without concern about whether longtime South Floridians are going to be forced out of the area by higher rents,” McCabe said. “We’re seeing it up and down the coast but especially in Miami Beach . . . It’s really tough for people on a fixed income and for working-class people who are trying to save up for a down payment to buy a house.”
A study late last year found that Miami Beach has the most unequal housing market in the United States. The entire $59 million deal falls shy of the $60 million that hedge-fund mogul Kenneth Griffin spent on a penthouse duplex at an ultra-luxury condo in mid-Beach. (Griffin later relisted the units for $73 million.)
Boardwalk plans to renovate the buildings, which date mainly to the 1920s, '30s and '40s, over the next three years. “We’ll aim to renovate five buildings per year,” Walker said.
The company will preserve the building’s Art Deco facades, many of which are protected by the city of Miami Beach. But it will redo roofs where necessary, repaint exteriors and redo apartment interiors with stainless-steel appliances, central-air conditioning, granite counter-tops and tile floors in the bathrooms.
Rents will likely rise between 35 and 50 percent. They currently stand at about $2.25 per foot, compared to $3 for the rest of South Beach.
“The rents aren’t at the right level for this area,” Walker said.
As for the current tenants, he added, “we’re the largest owner of multi-family in North Beach so hopefully they can move to North Beach [where rents are also cheap]. . . You don’t lose much by being up there in terms of location.”
It’s really tough for people on a fixed income and for working-class people who are trying to save up for a down payment to buy a house. Jack McCabe, housing market analyst
The overall $59 million sales price was a record for a multi-housing deal in South Beach, according to broker Calum Weaver of CBRE, who handled the sale. The properties had originally been marketed at $65 million. They make up the largest portfolio of apartments to ever hit the market in South Beach.
“We had 15 different offers in total, ” Weaver said.
The bids came from interested parties in the U.S., Canada, Latin America and Europe.
Said Weaver: “People from all over the world know the South Beach brand.”