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Miami Beach Now Leads South Florida Office Rent Growth

Miami has emerged as one of the largest fintech hubs in the country, a rise that’s accelerated as the COVID-19 pandemic drove companies to the metro area en masse. That’s driving up office rents across the board in Miami-Dade County–and among the region’s competitive submarkets, Miami Beach has shown the fastest growth post-pandemic.

Asking rents for Class A office space in Miami Beach have rebounded to $56.66 per square foot, up 10.2% year-over-year, according to a new report from Colliers. The submarket is also highly constrained in terms of supply, especially when it comes to viable office space. Most investors, wary of high land prices, have gravitated instead toward luxury hotels or boutique condo projects, but those same factors have also kept demand booming.

In nearby Brickell–which Colliers calls “the Manhattan of the South”–the Class A market continued to recover during Q1, thanks largely to corporate relocations from the Northeast and Midwest. Average rents clocked in  at $66.70 per square foot in Q1, an increase of 4.9% over Q1 2020 numbers. The area is a major hub for South Florida’s fintech industry and other professional service providers: Thoma Bravo recently signed a 36,500 square foot lease at 830 Brickell, and existing tenants like Banco Sabadell and HIG Capital also renewed their leases during the quarter, signaling optimism for “a very strong 2021,” according to Colliers.

And in downtown Miami, home to a significant roster of law firms, banks, and public sector employers, rates are lowest among the metro’s submarkets at $50.35 per square foot. That’s an 8.2% increase over the first quarter of 2020.

Meanwhile, further afield, the suburb of Coconut Grove also benefited from COVID’s disruption to migration pattern with tenants like Mercy Hospital, the John S. and James L. Knight Foundation, and Weinberg Wheeler Hudgins Gunn & Dial all renewing existing office leases. Gross rental rates for Class A space in the market increased by 7.9% year-over-year to $60.34 per square foot last quarter.

Miami’s Wynwood neighborhood is also luring office-using tenants from both within Miami and out of state. Recent transplants include Spotify, Live Nation Entertainment Co., Bank OZK, venture capital and startup building firm Atomic, led by Jack Abraham, and Founders Fund, the multibillion dollar venture capital firm led by PayPal co-founder Peter Thiel.

 

Source:  GlobeSt.

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Largest Development Site Available In Downtown Miami Sells For $46 Million

As downtown Miami continues to attract investors from all over the world, Colliers’ Urban Core Division facilitated a $46 million sale of Miami Center.

Known as the ‘Burdines property,’ it is the last significant development site remaining in downtown Miami’s Central Business District (CBD). The 92,972-square-foot development site, which is located at 16 SE 2nd St in downtown Miami, is currently home to a parking lot.

Colliers’ Executive Managing Director Mika Mattingly and Cushman & Wakefield‘s South Florida Vice Chairman Robert Given  represented the seller, Wharton Equity Partners and Cross Lake Partners, in the transaction. The buyer, Enrique Manhard, was represented by Estrella Perez of EP Realty Group Inc..

“This is a pivotal site for the future of downtown Miami because it is a major location connecting downtown to Brickell,” Mattingly said. “This deal represents the voracious appetite for downtown assets. We currently have 10 land deals under contract to close by year’s end, and there is little inventory left for the first time ever. This is unbelievable given the fact the downtown market went silent in 2019 and during the pandemic. The demand is being fueled, in part, by all the transformative projects that are just beginning to take shape in this area. It could not be a better time to invest in the future of downtown Miami.” 

Based on the site’s T6-80 zoning, this is one of the largest land sales in downtown Miami. The zoning designation allows several uses, including residential, hotel, office and retail. The maximum height permitted at the site is 80 stories with unlimited height available through public benefit bonuses. Because the development site is right in the middle of Brickell and downtown, it will provide future residents the opportunity to live, work and play in a highly walkable, urban environment.

South Florida has continued to see an influx of residents from New York, California and other states seeking lower taxes, better weather, and a higher quality of life. Greater Downtown’s population was 92,235 people in 2018, a jump of 38% since 2010, according to a study from Miami’s Downtown Development Authority (DDA). Downtown and Brickell have also emerged as the top choice for the largest technology and financial firms. According to a recent report from the DDA, at least 700 new jobs are expected in the area over the next few years.

 

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Rilea Group Closes On Development Site In Wynwood For $22 Million As Location For 225-Unit Rental Community

Rilea Group announced the closing of a 1.5 acre development site in Wynwood for $22 million as the location for their upcoming mixed-use rental community known as MOHAWK at Wynwood.

Gridline Properties’ brokers Alfredo Riascos and Yonatan Missika represented Rilea Group in the off market transaction located at 56 NE 29th Street. This is the development firm’s first venture in Wynwood and the first in the neighborhood to be largely funded by crowdfunding. Earlier this year, Rilea Group tapped the Los Angeles based crowdfunding platform, RealtyMogul to raise an initial $10 million through their robust network of investors. Rilea Group’s goal was surpassed, raising an estimated $12.5 million in record time.

The seller is 29th Street Warehouse LLC, managed by Lombardi Properties.

“In recent years, we had been approached many times by different developers to sell this significant site. We never really felt comfortable until we met the Ojedas, said David Lombardi,” Principal and Broker of Lombardi Properties. “We are confident they will execute an incredible project worthy of this site,” continued Lombardi.

Located at the crossroads of Miami’s trendy and burgeoning Wynwood and Midtown neighborhoods, the site was presented by Gridline Properties as the ideal location for Rilea Group’s first development in Wynwood. Future residents will be walking distance from neighborhood destinations such as Wynwood Walls, The Shops at Midtown Miami and a short five-minute drive to the Miami Design District and I-95. The site is also one block away to the north from the proposed Trader Joe’s Midtown location and a block away to the south of the potential Wynwood Brightline Station. The project comes at a time of a continued mass migration of California and New York residents to Miami, causing a surge in demand for housing. Gridline Properties sourced the site in the Fall of 2020 – meaning this transaction was negotiated during the height of the pandemic and put under contract early this year. Amidst the uncertainty brought on by COVID-19, Rilea Group was able to see beyond the chaos and seized a unique opportunity while taking advantage of less competition caused by the pandemic.

“We were thrilled to find the ideal location for MOHAWK at Wynwood and are excited to see this uniquely-designed development come to fruition,” says Riascos, Principal and Broker of Gridline Properties. “This transaction continues to prove that Wynwood is one of the most resilient neighborhoods in Miami and is a clear indicator that the trendy neighborhood has emerged much stronger post pandemic,” he continued.

 

“MOHAWK at Wynwood was created to meet the demand of this new wave of Miami residents and was entirely conceptualized based on the needs of consumers living in a post COVID-19 world,” says Diego Ojeda, President of Rilea Group.

The 12-story, 225-unit, multi-family apartment building will consist of 215,430 square feet of leasable property which will include 22,000 square feet of prime ground floor retail and 3,500 square feet of private, for-rent offices for the work-from-home crowd, sitting on a total 65,700 square feet (1.5 acres). The community will provide tenants with a state-of-the-art gym with peloton bikes, a private park and dog park, kid’s playroom, rooftop pool and bar, resident’s lounge as well as exquisite art and murals adorning the building.

“These newcomers are seeking design-forward living spaces that fit the needs of their current lifestyles. With the incorporation of unique amenities that cater to those needs and an exquisitely designed space, MOHAWK will provide residents with a turn-key home in this new age,” Ojeda continued.

Designed by Javier Barrera of Miami-based Deforma Studio, the building’s architecture will draw inspiration from the industrial feel of New York’s SoHo and Meatpacking districts with an added Miami flair – combining exposed brick, steel and concrete with various murals on the building’s façade in true Wynwood fashion. Stylish interiors will feature original artwork from artists such as Jean Michel Basquiat and Marco Grassi as well as fine photography encapsulating the developer’s vision.

“MOHAWK at Wynwood is a next generation residential community inspired by the strength of sophisticated architecture and the boldness of a creative culture that chooses to live on the edge. MOHAWK is the pinnacle of cool,” says Ojeda.

Rilea Group has a 40-year track record of successful developments in South Florida such as JP Morgan Tower – 1450 Brickell, One Broadway and the Sabadell Financial Center among many others. Most recently, the firm completed The Bond, a residential project in Brickell that became 100 percent sold-out during construction.

RealtyMogul has a community of over 200,000 individual investors across a $3.1 billion portfolio that includes over 17,000 multi-family units, making them the ideal crowdfunding partner for Rilea Group.

“The MOHAWK project had an incredibly strong reception with our investor base. In fact, we twice increased the amount of capital to be raised on the platform – as investors had been attracted to MOHAWK based on the strength of sponsorship, the growth and strength of the Miami market and the potential returns based off an investor-friendly waterfall,” said Jilliene Helman, CEO and Founder of RealtyMogul.

Next year, investors will have another opportunity to invest in this project for the construction phase, for which Rilea Group will need to carry out additional fundraising. Rilea group has agreed to allow RealtyMogul the opportunity to source an additional $10 million.

Construction of MOHAWK at Wynwood is expected to begin in 2023.

 

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Cardone Capital Taps Crowdfunding For $91M Office Buy In Aventura

An affiliate of Cardone Capital acquired an 11-story office building in Aventura for $91 million with help from crowdfunding.

Aventura Harbour Borrower LLC, managed by Rob B. Shults in Irving, Texas, sold the 528,954-square-foot Aventura Harbour Centre at 18851 N.E. 29th Ave.

The buyer was 10X Centre LLC, managed by Grant Cardone of Aventura-based Cardone Capital. The building has about 217,056 square feet of leasable space, plus the parking garage. Miami-based City National Bank of Florida provided a $73 million mortgage to the buyer. The difference between the mortgage and the purchase price was crowdfunded.

CBRE’s Christian Lee, José Lobón, Amy Julian, and Tom Rappa, along with Jonathan Kingsley of Colliers listed the building. Cardone worked with Square2 Capital and Highline Real Estate Capital on the purchase.

According to CBRE, the building is 85% leased. Tenants include UBS and First Horizon Bank.

 

Click here to read more about this story.

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Miami Apartment Building Evicting All 200 Tenants In 60 Days

Steven Leidner, who has lived in a one-bedroom corner unit at the Hamilton on the Bay apartment tower in Edgewater for 18 years, sensed something was up when his lease was up in November and noticed the building’s new owner had added a provision to their leases.

“I noticed an early termination clause that wasn’t there before,” said Leidner, 66. “I asked the building’s manager about it and he said ‘Oh, we would never kick you out. We’re in the business of generating revenue from renters. This is only if we need to move you into a different unit in the building while we are doing renovations.’”

Leidner said he asked the manager to include that wording in the lease but was told no. After consulting with his attorney, Leidner went ahead and signed the lease for $1,760 per month, minus a monthly discount of $264 to make up for all the noise and clamor caused by the ongoing renovations.

“I have a disability and I couldn’t expose myself to COVID,” he said. “I was not in a position to go all over town looking for a new place. But I was always waiting for the other shoe to drop.”

That shoe came in the form of a letter from Aimco/AIR, the Denver-based company that bought the 28-story bayfront building at 555 NE 34th St. in Aug. 2020 for $80.9 million. The letter, which was slipped under the door of tenants and sent via certified email, informed every resident in the building their leases were being terminated on July 16, 2021, so the company could complete renovations that had been ongoing since Hurricane Irma in 2017.

Those previous renovations, however, had been repairs to fix the water damage caused by the storm, removing mold, replacing carpeting and the installation of new windows. The new renovations being done by Aimco involve the gutting of all existing units in the aging building and the improvement of common areas to make the property more competitive with the shiny new luxury towers that have sprouted around Edgewater.

“Unfortunately, the redevelopment project has reached a phase where renovations will impact your Apartment Home and will block access to it,” the letter reads. “In accord with the Termination Option of your lease, we must terminate your lease and ask you to vacate your apartment home on or before July 16, 2021.”

The roughly 200 existing residents at the building, who occupy around 130 of the building’s total 265 apartments, are claiming Aimco pulled a bait-and-switch when they signed new leases with the owner, who they say enticed them to renew their leases early by offering 18-month agreements instead of the usual 12.

But the new lease also included an early termination clause, something the leases by the previous management company, Bainbridge Management, did not.

 

Click here to read more about this story.

 

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Micro-Mobility Infrastructure Plan Targets Downtown Miami, Including Coconut Grove, Brickell, Midtown, Morningside, Edgewater And Part of Wynwood

A micro-mobility infrastructure project half funded by electric scooter fees could be coming to downtown Miami, adding about three miles of protected bicycle and scooter lanes and laying the groundwork for more lanes in the future.

The green-patterned pavement lanes, which would come with concrete barriers separating them from traffic, would run from South First Street to Northeast 11th Terrace along North Miami Avenue and Northeast First Avenue, and from Northeast Second Avenue to I-95 on North Fifth and Sixth streets.

Key locales along the routes would include Government Center, Brightline Station, Miami Dade College’s Wolfson Campus and several Metromover stations.

The project would also add missing pedestrian ramps to adjacent sidewalks and upgrade all pedestrian crossings and signage to “high emphasis” for greater visibility.

Miami-Dade commissioners were to decide Wednesday whether to OK an agreement with the city to fund and undertake the project, which would cost $2,064,661.

Miami would contribute $1 million to the project with fees the city has charged electric scooter companies to operate through a pilot program in downtown, Coconut Grove, Brickell, Midtown, Morningside, Edgewater and part of Wynwood.

Miami-Dade would cover the remainder with revenue from road impact fees. Julian Guevara of the county’s Department of Transportation and Public Works (DTPW) would monitor the project.

DTPW plans to test other types of protective barriers in the area. Depending on the results, the county could build similar bicycle, scooter and pedestrian provisions in other urban areas, a memo from Miami-Dade Chief Operations Officer Jimmy Morales said.

“It is the goal of the county to improve the safety of the most vulnerable modes of mobility, walking and cycling,” the memo said. “It is also the goal of the county to ensure that bicyclists have an intuitive and connected route through Miami-Dade.”

The project is in keeping with the county’s Complete Streets and Vision Zero programs, which aim to make streets safer for all users through smart, inclusive engineering and design and to ultimately eliminate all traffic fatalities and severe injuries.

It also squares with the county Transportation Planning Organization’s protected bicycle lane demonstration plan and the city’s bicycle master plan, the memo said.

City commissioners argued last July over whether to use the funds set aside for the bike paths to plug budgetary holes they expected due to the pandemic. Joe Carollo and Alex Díaz de la Portilla, who advocated for keeping the $1 million for other city issues, clashed over the issue with Keon Hardemon, Manolo Reyes and Ken Russell, who represents the district from which the electric scooter pilot revenue is drawn.

Mr. Russell noted then that the city’s bicycle master plan was “10 years delinquent.” Over that time, he said, bicycle riders had been injured and died in Miami because they lacked proper accommodations.

But by November, when the Miami City Commission voted on the issue, the city’s budgetary shortfall was estimated to be $2.7 million – about a tenth of what was expected four months before.

City commissioners unanimously approved the program, the construction for which was expected to begin early this year.

 

Source:  Miami Today

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Developers Move Fast To Meet Miami’s Growth Needs

As Miami continues to rebound from the pandemic, developers are making their mark by building new towers and infrastructure to meet the current and future needs of the city.

Rishi Kapoor, “Best of Miami: Leading Residential Comeback” nominee and founder and CEO of Location Ventures, said one leading developer worthy of recognizing is Terra Group, headed by CEO David Martin.

This past year, the group has hit a number of milestones, including breaking ground on mixed-income transit-oriented housing project Grove Central and securing a $64.8 million construction loan for the development of 27-acre multifamily development Natura Gardens. Two of the greatest achievements, Mr. Martin said, were the deliveries of condominium buildings Eighty Seven Park in North Beach and Park Grove in Coconut Grove, both of which promptly sold out.

Authenticity, Mr. Martin said, is key in development, and Terra wants to build projects that make neighborhoods better and give residents pride. In 2021, he said, a big goal for the group is to focus on market research centered on post-pandemic needs and trends that will inform later development decisions and innovations.

Having grown up in Miami, Mr. Martin said, he has a lot of pride in his community and tries to stay active in multiple ways by taking an interest in cultural, children’s and health issues. Currently, he said, he serves on the boards of Nicklaus Children’s Hospital and The Bass.

“There’s a lot of organizations I’ve taken an advisory role in,” he said, “and also a lot that we support financially.” 

One issue Mr. Martin said he hopes Terra can help address is that of affordable housing in Miami-Dade. Roughly 90% of the built environment in the county, he said, is zoned for single-family housing. 

“A lot of people look to solve affordability by creating subsidies which, in our view, is not sustainable,” he said.

“My view,” he continued, “is that affordable housing should be sprinkled throughout our entire county, not only in certain pockets. And we have an idea on how to build affordable housing in a more cost-effective way without requiring subsidies.”

Jorge Pérez, chairman of The Related Group, philanthropist and champion of the arts, also said this is an issue developers and officials must consider as the county moves into the future.

“Miami should not and cannot become a city solely for the 1%,” he told Miami Today via email. “We are going through one of the most exciting times in the history of the city; however, we cannot forget there are still countless families and individuals in need of opportunity. Officials must leverage the lessons of the globe’s other major metropolitan areas to build a Miami everyone – no matter their background or socioeconomic circumstances – can feel proud of.”

Mr. Perez and The Related Group were cited by Ron Shuffield, president & CEO of Berkshire Hathaway HomeServices EWM Realty, for their accomplishments and contributions to the Miami-Dade community not just this year but over a handful of decades.

“It’s his mark that established the style of the “new Miami,” Mr. Shuffield said. “When you look at the architecture of our landscape, so much of that Jorge had a hand in. It was his vision that could see what would become a dynamic downtown area.”

“I founded Related in 1979 with the goal of building an even better Miami,” Mr. Perez said. “More than four decades later, Miami has been totally transformed and is well on its way to becoming one of the world’s great cities. Nevertheless, each one of our jobs continues to be built with that original goal in mind, no matter the price point or target demographic.”

From including museum-quality art in developments to building community green spaces, he said, Related is always trying to deliver on that mission and improve the neighborhoods it builds in. The Group has expanded since its founding decades ago, and now has over  $2 billion worth of inventory planned and under construction across the nation. 

Last fall Jon Paul Perez, son of Jorge Perez, took the reins as company president. Being able to pass the crown to a relative, Jorge Perez said, is a great achievement in itself.

“I’ve been very fortunate to have been able to achieve a great deal over the course of my life and career,” he said, “but nothing beats building a family that shares my passion for making a positive difference.”

“Driving around the city and seeing just how far neighborhoods have evolved brings me great joy,” he continued. “But knowing that the next generation of the Perez family will continue my lifelong efforts is my ultimate legacy. I truly wish I could see the new heights Miami will reach and the role Related will play.”

The group’s focus, he said, is not just on development. 

“Through The Related Group Philanthropic Foundation,” he said, “we are providing support to a variety of causes, from health and wellness to social equity. We are also proud supporters of a variety of Miami-Dade organizations, including FIU, The National YoungArts Foundation and many more.”

As Miami-Dade continues to set its sights on becoming a tech and finance hub, Mr. Perez said he would work to support that goal. 

“I am committed to supporting elected officials and the private sector as they continue to attract national and international businesses to the city,” he said. “This influx of capital and talent goes far beyond real estate sales, it is about setting the city and region up for the next stage in its growth. From day one, I knew Miami/South Florida had the potential to be a hub for business, culture and lifestyle – and that vision is becoming more and more real with every day.”

Two other developers that deserve recognition for their work this year, Mr. Martin said, are Goldman Properties, which has developed a number of properties in Wynwood, and Dacra, headed by President and CEO Craig Robins.

 

Source:  Miami Today

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