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With Discounted Lease, Art Basel Return Targets Safety

Art Basel Miami Beach plans to return this year after its 2020 cancellation because of the pandemic.

The art exhibition that started in Switzerland in 1970 and has spread around the world, becoming one of Miami Beach’s most important yearly events, is coming back to the city with “robust measures to create a safe fair environment,” said an outside spokesperson.

Art Basel events contribute $400 million to $500 million annually to the economy of Miami Beach, according to a memo from City Manager Alina Hudak to commissioners. This year, organizers of Art Basel will pay a discounted $100,000 fee to the Miami Beach Convention Center to use its venues. That’s $691,000 less than Art Basel’s regular yearly contract with the Convention Center, according to the memo.

This year’s dates are Monday, Nov. 29, to Wednesday, Dec. 1, for the Meridians, Vernissage and other private exhibitions, which are by invitation only. Art Basel’s public exhibition days, which will have a limited number of tickets available beginning in October, will be Thursday, Dec. 2, to Saturday, Dec. 4.
“These adjustments allow us to better control occupancy in the halls and ensure a smooth operational delivery of the show,” said Art Basel organizers in a statement to John Copeland, director of cultural tourism at the Greater Miami Convention & Visitors Bureau.

According to Mr. Copeland, the total capacity of attendees has not yet been determined by organizers.

“Directors of Art Basel remain fully committed to staging the show with the greatest number of galleries possible, based on any capacity or space restrictions imposed by the Miami Beach Convention Center or local protocols,” Mr. Copeland said. “October public ticket sales will be closely watched along with the response to VIP previews and special events to evaluate any last-minute changes.”

The Conversations Program will return this year, said Mr. Copeland, but no further information is yet available.

“The health and safety of our staff, exhibitors and visitors remains our primary concern and we are taking the situation very seriously,” the outside spokesperson for Art Basel said for the organization. “We are working closely with the relevant authorities, as well as following international public health recommendations, to ensure we deliver a safe show for our galleries, partners and visitors in December.”

Art Basel plans to continue its Online Viewing Rooms it started in 2020, with online catalogs and its podcast Intersections, bringing together artists, designers and collectors to talk about their love for art.

 

Source:  Miami Today

 

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Miami Beach Bans New Apartment Hotels In Parts Of South-Of-Fifth – For Now

After more than a dozen residents described public sex acts, defecation and the need to carry a gun when going outside, the Miami Beach Planning Board backed a proposed ordinance to ban new apartment hotels in certain areas of the city’s South-of-Fifth neighborhood.

The 5-to-0 vote last week will prevent property owners in a large chunk of residential South-of-Fifth from converting their buildings into apartment hotels, at least temporarily. The Miami Beach City Commission still has to give its final approval for the ban to be permanent.

The proposed ordinance seeks to close a loophole that allowed developers to turn apartment buildings and condos within South-of-Fifth’s residential area into hotels, a trend that has “negatively impacted existing residential apartment uses, as well as the residential character of the RPS-1 and RPS-2 districts,” Planning Director Tom Mooney wrote in a memo to planning board members. “RPS” stands for residential performance standard.

Legislation allowing apartment hotels was originally intended to encourage the preservation of historically significant buildings with structures that were both residences and hotels. Instead, Mooney stated, developers only used one unit as a full-time residential apartment and the rest of the units as short-term rentals.

Fifteen South-of-Fifth residents called in during public comments to beg board members to shut down apartment hotels in their area. Many described horrendous behavior that they blamed on guests of short-term rentals within apartment hotels.

Gerardo Gonzalez, president of 360 Meridian, told board members that he often sees people “urinating, defecating, and performing live sex acts in the street.”

“I can see it from my balcony. I never imagined five years ago that South-of-Fifth has become the zoo it has now. It’s chaos down here,” Gonzalez said. “As a matter of fact, I had to carry my gun around, and I never used to carry my gun around… Now when I go out with my daughter or my wife, I’ve got to carry my gun. And my wife is also carrying.”

Keith Marks, a resident of the Continuum and a board member of the South-of-Fifth Neighborhood Association, denounced apartment hotels as lawless businesses.

“To call it a hotel is a disservice to a hotel. A hotel has a front desk. They have liability. They have security. They have some rule of law, even though some hotels are bringing elements that we are not thrilled about in the South-of-Fifth area,” he said.

Marks told the board he was shocked to see in The Real Deal that a realtor was “actually promoting this as a great idea for investors, and that they should start buying up old apartment complexes and turn them into this so they can make money on Airbnb short-term rentals.”

Marks confirmed to TRD that he was referring to a July 16 article about nightlife entrepreneur Louis Puig paying $5.6 million for a 24-unit apartment building with the intent of turning it into a 20-room “boutique” apartment hotel.

The listing agent, Susan Gale of One Sotheby’s International, said that the building at 333 Jefferson Avenue was the “the type of property everyone is looking for,” adding: “There’s a tremendous amount of cash buyers coming from everywhere looking for properties like this because Airbnb has become super popular.”

In December, a 13,000-square-foot lot at 200 Collins Avenue with an apartment building and an office building sold for $6 million. A spokesman for the buyer told TRD that an apartment hotel under the Vonder brand name would be established on the property, with rooms rented out for between $200 and $450 a night.

The Miami Beach legislation will have no effect on apartment hotels that already operate in South-of-Fifth’s residential zones. Developers who have already obtained a building permit can still continue with plans to build their apartment hotels, a city planner confirmed during the meeting. The code won’t stop more apartment hotels from being established in other parts of the city, either.

No one at the meeting spoke in favor of apartment hotels.

Giselle Franco, a real estate agent affiliated with the Susan Gale Group, told TRD that apartment hotels are being unfairly blamed for bad behavior that’s occurring everywhere in Miami Beach by people taking advantage of “insanely cheap rates” during the pandemic.

“A lot of unit owners want to turn their apartments into [short-term rentals]. They make a lot more income that way than by renting it month-by-month,” Franco said.

So far in Miami Beach, the pendulum is starting to swing somewhat against hoteliers and late-night alcohol-serving properties.

Following complaints from Flamingo Park residents, the city will be holding a hearing on Sept. 28 regarding revoking an outdoor entertainment permit for the roof deck of the Goodtime Hotel. And in July, the Miami Beach City Commission failed to get enough votes to approve legislation that would have allowed Ronny Finvarb to build a hotel at 1790 Alton Road, after Sunset Harbour homeowners feared that another hotel could make the neighborhood less residential and more like Ocean Drive.

Last May, a slight majority of the commission passed legislation that would stop alcohol service on Ocean Drive and Collins Avenue within the entertainment district at 2 a.m. instead of 5 a.m., a move that was backed by real estate developers Don Peebles, Jorge Pérez, and Barry Sternlicht. The owners of the Clevelander successfully sued to overturn the early closure less than a month later, although the decision is now under appeal. On November 2nd, Miami Beach residents will also be asked, in a non-binding referendum, if last call should be rolled back from 5 a.m. to 2 a.m. citywide.

 

Source:  The Real Deal

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Brickell-Area Office Building Slated For Bankruptcy Auction

A three-story office building near Miami’s Brickell Financial District has been scheduled for bankruptcy auction.

The 8,556-square-foot building, at 232 S.W. Eighth St., is owned by Miami-based CMG Capital LLC, which filed for Chapter 11 reorganization in U.S. Bankruptcy Court in February. That stayed a $2.65 million foreclosure judgment won by Elizon DB Transfer Agent LLC regarding a $1.85 million mortgage, plus interest and fees.

On Aug. 23, U.S. Bankruptcy Judge A. Jay Cristol approved CMG Capital’s motion to auction the office building. The auction will take place Sept. 28, with a hearing before the judge to approve the results the following day. Bids are due Sept. 24 and require a $360,000 deposit.

The approved stalking-horse bidder, with a $3.5 million bid, is Icon Medical Centers LLC, managed by Vincent M. Amodio and currently a tenant in the office building. Any competing bidders must offer at least $3.6 million.

The area is zoned for up to 24 stories.

 

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New Yorkers Trade Miami Beach Portfolio In $31M Deal

Rosewood Realty Group’s National Brokerage Division announced the sale of a 12-building portfolio in Miami Beach for $31 million.

Kerem North Beach Apartments, an affiliate of another similarly named entity managed by Brooklyn-based real estate investor Yonason Greenwald, was listed as the buyer. The seller was New York investor Elliot Sohayegh.

The properties feature 141 rental units and include: 8400 Harding Ave., 8221 Harding Ave., 8215 Harding Ave., 7745 Harding Ave., 335 75th St., 630 77th St., 333 84th St.,321 84th St., 525-531 76th St., 7609 Carlyle Ave., 7617 Carlyle Ave. and 7625 Carlyle Ave.

The buildings total 84,000 square feet and sold for $220,000 per unit, with a 4% cap rate. Most of the buildings were built in the 1940’s and 1950’s.

Rosewood’s Aaron Jungreis represented the seller.  Jonathan Brody represented the buyer.

“There is great upside to this deal for the buyer who plans to add value by upgrading both the properties’ exteriors and interiors,” said Brody who serves as the President of Rosewood Realty Group’s National Investment Sales Division.

 

Source:  Real Estate Weekly

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Developers Of Society Wynwood Mixed-Use Project Score $142M Construction Loan

PMG and Greybrook Realty Partners scored a $142.3 million construction loan for their planned mixed-use rental project in Wynwood.

Pacific Western Bank and Square Mile Capital provided the loan for Society Wynwood, which broke ground earlier this year at 2431 Northwest Second Avenue, according to a release.

The 10-story building will have 318 apartments and 50,210 square feet of commercial space once completed. Amenities will include a pool deck, yoga lawn, food and beverage operations, a gym, coworking spaces and a rotating art gallery. It will offer traditional apartments, as well as co-living units with rent-by-the bedroom options.

PMG’s Andrew Warman, Lowell Plotkin and Jonathan Blank represented the developer in arranging the loan.

The project will mark the third Society-branded development for PMG in South Florida, which has Society Las Olas and Society Biscayne, the latter of which is expected to open in early 2022. The company plans more than 8,500 Society units nationally, including projects in Atlanta, Brooklyn and Nashville.

The developers assembled the Wynwood land over the past two years for more than $57 million, including the $11.5 million acquisition of land in December that previously belonged to RedSky Capital and JZ Capital Partners.

Development has continued at a fast clip in Wynwood, with office projects beginning to proliferate most recently. In August, developer David Edelstein’s TriStar Capital and partner RAL Development paid $13 million to complete an assemblage in Wynwood. The two firms are planning a $200 million Class A office project on Northwest Fifth Avenue.

 

Source:  The Real Deal

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Opportunity Zone Site In Miami’s Arts & Entertainment District Hits Market — Again — For $21M

Colliers South Florida’s Urban Core Division has been tapped to market Block E, a 37,000-square-foot development site in the Arts & Entertainment District near downtown Miami. Located at 1550 NE Miami Place, the development site is listed for $21 million.

Colliers’ Executive Managing Director Mika Mattingly, Associate Cecilia Estevez, and Associate Christina Searles are handling the listing on behalf of the Klugler Family Trust, the seller. The Kluger Family Trust had listed the site for the same asking price in March 2020 with a different brokerage.

“In a very short time, we have seen the Arts and Entertainment District radically transform from a deserted, bleak industrial area to a thriving neighborhood with a strong pulse,” said Mattingly. “The district is home to a thriving arts, cultural, and entertainment scene that is attracting an influx of new residents. Nearby residential projects in the district have leased nearly 100% percent of units within weeks of opening, which speaks to the continued demand. The neighborhood is attracting major investors and developers as this vibrant and bold neighborhood continues its evolution.”

The Block E development site is conveniently located just 1,000 feet from the Metromover, providing connectivity to Brightline’s MiamiCentral station, downtown Miami and Brickell. Under Miami 21, the proximity to the Metromover removes the parking requirement for residential sites. The site, which is located in an opportunity zone, is zoned T6-24a which allows for up to 48 stories and 338,993 buildable square feet, with bonuses. Due to its location in the Omni density overlay, the development can include 427 residential units or 854 hotel units.

The Arts & Entertainment District, also known as the A&E District, is an emerging residential neighborhood of Miami that is located north of the Central Business District, South of Wynwood and west of Edgewater. The neighborhood has seen immense growth and beautification over the past few years, with a number of residential projects breaking ground and nightlife entertainment options.

“All roads lead to the Arts and Entertainment District, and its unmatched connectivity makes it the next logical step for development as downtown expands to the north,” said the Klugler Family. “We have assembled over 4.5 acres of land over the past forty years, and developers have expressed interest in this site so we felt it was time to list the ‘hole in the donut’ of the A&E District.”

The A&E District is home to several Miami landmarks and hot spots for tourists such as the Adrienne Arsht Center for the Performing Arts, Live Modern School of Music, the Perez Art Museum and the Phillip and Patricia Frost Museum of Science, all located within a 5-minute walk of the Block E development site. The $800 million signature bridge project, which will connect I-395, SR 836 and I-95, is just two blocks south of the site.

 

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Infrastructure Bill A Once-In-A-Lifetime Chance To Make Miami More Climate Resilient

Experts predict that sea levels will rise by at least two feet in Miami-Dade County by 2060. The consequences of that alone would be devastating. Entire neighborhoods could be uninhabitable. More frequent tidal floods and increased sea-level rise will damage coastal property and stifle maritime commerce through PortMiami. Further erosion of world-class beaches will hammer the state’s tourism industry that generates nearly $100 billion annually.

Unfortunately, Florida’s aging water infrastructure will only exacerbate the effects of climate change. In 2021, the American Society of Civil Engineers gave the state’s coastal infrastructure, which is supposed to protect beach communities from storm damage, a failing grade. After Hurricane Michael in 2018, basic utilities, such as plumbing, didn’t return to some areas for 10 months. As many in Miami have experienced, shallow water supplies get overrun with floodwaters after heavy rains, leading to boil-water notices and concerns about contaminated drinking water.

As more frequent and more intense storms bring destruction, they also present us with a chance to modernize. We can use this moment to move beyond 20th century infrastructure that lags behind other advanced nations. This is our opportunity to reimagine what the future of water in this country looks like and to make smart investments now that can help us avoid crises in the future. By modernizing the water infrastructure that every American household uses – from ports and wastewater-treatment plants to drinking water and stormwater systems – we can lower costs for communities and families, better protect public health and make neighborhoods, towns and cities more resilient in the face of climate change.

These long-overdue upgrades make economic sense, too. According to a report by the National Institute of Building Sciences, for every $1 investment in disaster resilience, $6 are saved in disaster costs. What’s more, we know that investing in this infrastructure also has the potential to create jobs and boost our economy. In fact, every additional $1 invested in our infrastructure creates $3.82 in economic growth over 20 years. In Florida, infrastructure investment can increase real disposable income for households by $1,600 per year over 20 years.

 

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Brooklyn Developer Buys Wynwood Properties For $39 Million

A developer from Brooklyn, New York made three property acquisitions in Miami’s Wynwood Arts District, potentially setting up a major development.

The deals, which totaled $38.86 million, give LivWrk Sol Wynwood LLC, managed by Asher Abehsera, the CEO of Brooklyn-based LivWrk, ownership of 2.45 acres in one of Miami’s fastest-growing neighborhoods.

The biggest deal was for $18.51 million, with EEFC 2400 NMA Owner LLC, managed by New York-based East End Capital Managing Principal Jonathan Yormak, selling 1.16 acres at 2400, 2412 and 2418 N. Miami Ave. plus 29 N.W. 24th St. The site currently has 11,305 square feet of commercial buildings. It last traded for $6.25 million in 2015.

In addition, EEFC 2500 NMA Owner LLC, also part of East End Capital, sold the 19,813 square feet of property at 2500 N. Miami Ave. and 33 N.W. 25th St. for $6.5 million. It has a 3,045-square-foot commercial building.

Finally, LivWrk Sol Wynwood paid $13.85 million to 3 CI Holdings, managed by Catherine DeFrancesco, for the 36,250-square-foot site at 48 N.W. 25th St.

 

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Foreign Investment Roaring Back To Miami

Foreign investment in the U.S. may have slowed down during the coronavirus pandemic, but it didn’t disappear, and it’s been growing since international travel picked up, Miami real estate experts say.

Related Group Condominium Division Managing Director Patrick Campbell said that as the coronavirus shook the world in 2020, investor demographics changed.

“There was no South or Central American buyer. It was all from the Northeast, Chicago, California,” Campbell said. “In the past three months, it’s really changed. It used to be 90-10, but now it’s switching to almost half and half.”

“There’s been a huge wave of people coming here for the vaccine,” Campbell said.

It isn’t uncommon for foreign investors to stay for a few weeks and shop the market, he said, and investors have been relying on relationships with brokers they trust, and people who have previously bought from Related have been seeking out its new products, especially in the under-development Baccarat Residences Brickell and District 225, a property that was explicitly designed for hosting on Airbnb.

“It’s their mentality,” Campbell said. “They can come when they want to use it, and it’s an investment — like a condo-hotel without being a condo-hotel. Sales have been tremendous.”

Melo Group principal Martin Melo is building Aria Reserve Miami, which at 62 stories is set to be the tallest waterfront residential twin towers in the U.S. Melo told Bisnow that his team has sold 30% of the first tower’s 391 units in the five weeks since sales launched, with about half of buyers coming from overseas.

“We’re seeing strong demand from international buyers in countries such as Mexico, Colombia, Argentina and Peru who are attracted to our waterfront location, large residences, unique amenities and unmatched price point,” he said.

The National Association of Realtors’ International Transactions in U.S. Residential Real Estate report, released in July, found that the dollar volume of U.S. existing-home purchases by foreign buyers dipped during the pandemic (from April 2020–March 2021) by 27% to $54.4B. Foreign buyer purchases accounted for 2.8% of the $5.8 trillion of existing-home sales, a decrease from 4.4% the prior period.

NAR’s 2021 Commercial Real Estate International Business Trends report found that foreign buyer purchases decreased across all commercial property types, with the biggest pullback in the office, retail and hotel sectors — those most directly affected by the pandemic and its resultant shutdowns. Of all states, Florida drew the largest share of foreign buyers for both residential and commercial property.

Rodolfo “Rudy” Lleonart is executive vice president and managing director of community banking for the Florida market at First American Bank, a family-owned bank headquartered in Illinois that is expanding to focus on Latin America and the Caribbean. Lleonart said international buyers didn’t endure many foreclosures during the pandemic. Generally, if clients were wealthy enough to be banking in the U.S., they were wealthy enough to hang on, he said.

“The loan-to-values, on average, usually with foreign buyers are under 50%,” Lleonart said. 

Banks also usually require international buyers to have escrow accounts with reserves equal to six months’ or a year’s worth of loan repayments. His bank requires an in-person meeting to open an account, and standard background checks are routine.

Both Campbell and Lleonart said they are seeing an uptick in clients from Mexico, Colombia and Peru. As long as political situations are volatile in Latin America, its wealthy citizens will continue to see the U.S. as a haven for capital, Lleonart said.

“Activity from Peru has particularly ramped up lately, while Mexican buyers have been active throughout most of the pandemic,” Astor Cos. founder and CEO Henry Torres said. “Peruvians are eager to get their money out amid the current political upheaval, as a Marxist Party candidate just became president and appointed a party member as prime minister. Peru’s currency just hit a record low and had its largest daily decline in more than seven years. Anyone in Peru with means is seeing what can be purchased quickly in the U.S. Colombians are slowly beginning to resurface as well.”

Torres said that for Merrick Manor, his condo project in Coral Gables, his team counted 27 internet leads in the first seven months of 2020 but 335 in the first seven months of 2021, most during the past two months, which lines up with the election and currency decline. Some Peruvian buyers have even been seeking to buy multiple condo units, he said. His team is working with affiliates in Latin America to help some sell their homes and move capital.

“In recent months we’ve had nearly 40 sales to international buyers, whereas in the previous year during the same time period, we had six international sales,” said Kari Fernandez, vice president of sales for OKO Group and Cain International’s luxury towers Missoni Baia and Una Residences. “While Mexico remains our strongest international market, domestic buyers still dominate at our developments.”

Buyers were also coming from Brazil, she said.

The EB-5 program has been popular with foreign buyers. It awards U.S. visas to investors and their family members if they invest certain amounts into U.S.-based projects that create at least 10 jobs.

There were two ways for international investors to take part: via “regional centers” that match investors to projects or directly into a chosen project, which can be more hands-on. In the wake of the Great Recession, when traditional lending dried up, EB-5 funds provided tens of billions of dollars for construction of commercial projects.

When investing via regional centers, investors took a mostly passive role, and when it came to tallying the number of jobs the project created, direct jobs (like workers at a newly built hotel), indirect jobs (a cleaning company contracted by the hotel) and induced jobs (at restaurants next door to the hotel) all counted. Conversely, via direct investing, only direct jobs are counted.

According to Saul Ewing Arnstein & Lehr attorney Ronald Fieldstone, EB-5 investment dropped in 2020. It was expected to because shortly before the pandemic hit, new rules were passed that raised the threshold for investing via regional centers from $500K to $900K.

On June 22 of this year, a key U.S. District Court decision vacated those new regulations, and there was a rush to once again get in for just $500K. But days later, on June 30, the whole EB-5 regional center program lapsed because Congress failed to reauthorize it.

Experts expect the regional center program to be reauthorized, possibly in September and likely by the end of the year, but in the meantime, the market has turned to the direct EB-5 program, which also requires just $500K. Because of the way job creation is counted, it is bumping up interest in labor-intensive asset classes such as restaurants, assisted living facilities and even some children’s education facilities, Fieldstone said.

“Traditionally, within the last decade, direct EB-5 has accounted for less than 5% of all EB-5 cases,” Fieldstone said. “Right now, since it is the only option, those numbers are sure to get skewed and hundreds of cases are expected to be filed in the coming months.”

 

Source:  Bisnow

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Developer Proposes 12-Story Building Near Future Brightline Station In Aventura

CapStack Partners has proposed a 12-story apartment building near the future Brightline passenger rail station in Aventura.

The developer, with offices in New York and Boca Raton, filed a pre-application with Miami-Dade County officials for the 0.39-acre site at 19218 W. Dixie Highway in the Ojus neighborhood just west of Aventura. It was acquired for $3 million in late 2020 by CSP 19218 LLC, managed by CapStack CEO David Blatt.

The site currently has an auto repair shop, which would be demolished to make way for the apartments.

The site plan shows 67 apartments, 2,800 squre feet of retail and 70 parking spaces. There would be an amenity deck on the roof with a pool, a covered terrace with a fire pit, and 2,940 square feet for the fitness center and lounge.

Units would range from 729 to 1,178 square feet. There would be 39 one-bedroom units and 28 two-bedroom units.

 

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