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Busch Family Partners With Assouline Capital To Buy Red South Beach Hotel

Tom Assouline and members of the Busch beer family hope to make a splash in Miami Beach with their purchase of the Red South Beach hotel for $33 million.

A joint venture of Assouline Capital and Busch Real Estate, led by August “Gussie” Busch, paid $300,000 per key for the 110-room hotel at 3010 Collins Avenue, they said.

The buyers financed the deal with a $31 million loan from Michael Dell’s MSD Partners. Max Ralby of HKS Real Estate Advisors in New York arranged the financing.

The seller was 3010 Collins LLC, an entity led by French developer Simon Nemni, records show. The Moderne-style building, which in past lives has been called the Munroe Towers and The Villa Capri All Suites Hotel & Beach Club, among other names, was built in 1939 by Charles Rubin and designed by T. Hunter Henderson, according to the hotel’s website.

The property, which comes with a pool, restaurant and gym, last sold in 2009 for $9 million, records show. The buyers plan to renovate the property and reposition it by the end of next year, they said, though they will continue to operate it as a hotel.

Busch, a former football player at the University of Alabama, reality TV star and great-great-grandson of Anheuser-Busch co-founder Adolphus Busch, said his family’s investment marks the first of “many” to come in Miami Beach. The joint-venture partners said they’re looking at additional hotels, as well as multifamily properties.

Brigitte Lina with One Sotheby’s International Realty and Olivier Hannoun of Champagne & Parisi Real Estate co-brokered the deal.

Assouline said he’s been targeting underperforming hotels since the start of the pandemic. Last year, Assouline’s LWHT Property Management, a Coral Springs-based firm, paid $27.2 million for six boutique hotel and motel properties in Fort Lauderdale Beach. He has acquired and managed about $150 million worth of real estate in South Florida, he said.

The Busch family, among the wealthiest in the U.S., ran Anheuser-Busch until 2008, when Belgian-Brazilian conglomerate InBev completed a $52 billion hostile takeover of the company. A number of family members and heirs to the beer fortune have owned homes in South Florida.


Source:  The Real Deal

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Miami Beach Looks To Expand Perks To Lure Developers To Build Cheaper Homes

Miami Beach officials want more homes priced below market levels for local workers, and they’re willing to dangle financial incentives that could save developers hundreds of thousands of dollars to build them. However, a few area developers doubted the inducements would be a silver bullet to stimulate construction and make homes in one of the most expensive cities in Miami-Dade County much more affordable.

The Miami Beach commission voted unanimously this week to waive a slew of fees that developers wouldn’t have to pay, if they build lower priced homes for local workers. City officials are expected to give final approval by the end of the month.

“Housing affordability is key to quality of life. With the rising cost of land and construction and high interest rates, all of these driving factors are causing housing to be less and less affordable,” said Rickelle Williams, the city’s economic development director. “We’d like to encourage residents to live and work in the city of Miami Beach.”

Miami-Dade’s housing costs skyrocketed during the ongoing pandemic. Miami Beach saw one of the highest apartment rent increases in the county — a whopping 72% — over the past two years. Landlords have hiked rents to astronomical levels as scores of newcomers, many of them digital nomads earning high salaries in technology and finance, have arrived. In Miami Beach, builders typically pay fees to the city whenever they build a project. The menu of fees are meant to offset the impact their developments will have on community resources and the environment. Under the proposal that passed this week, Beach officials no longer would levy the fees on developers building housing priced for local workers.


Source:  Miami Herald

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Miami Beach OKs Apartment Building Conversion To Boutique Hotel

An investor plans to convert an Art Deco apartment building in Miami Beach back to its original use as a hotel.

Last Tuesday, the Miami Beach Historic Preservation Board approved plans for the Henry Hohauser-designed property at 1360 Collins Avenue. The owner, led by Jim Cavanaugh of Miami Beach, plans to redevelop the 25-unit building into a hotel with a new rooftop deck. The board greenlit the certificate of appropriateness for the partial demolition and renovation of the building.

The three-story building, constructed in 1939 as a 50-room hotel, now includes a ground-floor restaurant that replaced the former lobby. Records show 1360 Commodore LLC paid $2.8 million for the property in 2004.

The property owner plans to redevelop the building into a 46-room hotel with units ranging from 206 feet to 349 feet, add a rooftop pool, bring back the historic flagpole, and restore other historic features, including the banding and window eyebrows. The developer will also add back a lobby entrance and front lobby desk, according to the application. Miami-based Beilinson Gomez Architects designed the plans.


Source:  The Real Deal

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Another Wynwood Dev Site Hits The Market Asking Above $30M

In a span of weeks, a second Wynwood development site is hitting the market with an asking price above $30 million.

Miami-based real estate investor Joseph Cohen is listing the 1-acre assemblage with an asking price of $35 million, according to Juan Andres Nava and Andy Charry with Metro1 Commercial, the brokers marketing the site.

Across Miami, development sites are selling at record prices, with nearly $808 million in sales last year.

Cohen, owner of the nearby Wynwood Block retail building, acquired the assemblage’s three properties at 2100 Northwest North Miami Court, 2101 Northwest First Avenue and 2127 Northwest First Avenue for a combined $3.2 million between 2012 and 2014, records show.

With large development sites in Wynwood virtually gone, Cohen is following in the footsteps of New York-based Thor Equities, led by Chairman Joe Sitt. About three weeks ago, Thor placed a 0.7-acre development site on the market with an asking price of $32 million. The five-parcel assemblage at Northwest 28th Street and Northwest Second Avenue is primed for a mixed-use project.

“Joseph’s property is the largest parcel available in [Wynwood],” Nava said. “Anything else that’s an acre or more has traded. Given the scarcity of land, at this moment it presents an opportunity for the influx of developers coming from all over the world into Wynwood.”

Cohen’s assemblage has three converted warehouses totaling about 54,000 square feet that can be redeveloped into a five-story mixed-use project with 162 residential or hotel units. However, a 2020 amendment to Wynwood’s zoning code allows bonuses for three additional stories and increased density of either 244 apartments or 488 hotel rooms, Nava said. The potential for a bigger development factored into the asking price, he added.

“Very few properties have closed since that zoning [change was adopted],” Nava said. “We have an opportunity to capture that value, and that is how we arrived at that price.”

To get the bonus height and density, developers have to abide by certain requirements. Among them, building units of 600 square feet or less, and paying $20,000 per additional unit into a neighborhood trust fund, Nava said.

The evolution of the Wynwood buyer pool also factored into the asking price, Charry said.

“Before, you had a specific group of developers and investors who were willing and able to purchase these types of properties,” he said. “From an asset class standpoint, you not only have multifamily, you also have offices and hotels. That creates a little bigger buyer pool.”

Charry noted Cohen’s assemblage is surrounded by new projects that are under construction or in the pipeline such as Quadram Global’s Arlo mixed-use hotel, Clearline Real Estate’s mixed-use apartment project and Fisher Brothers’ proposed apartment building on the site of the former Miami Rescue Mission headquarters.

In the most recent of those deals, Clearline paid $19.1 million for its 1.4-acre development site in Wynwood in April.


Source:  The Real Deal


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Michael Shvo Plans Second Miami Beach Office Project

Michael Shvo is doubling down on Miami Beach’s office market.

Fresh off obtaining city approval for an office project along Alton Road, Shvo has filed plans for a six-story office building at 1665-1667 Washington Avenue, according to city records.

The Kobi Karp-designed development would have 21,000 square feet of offices on the top five floors, 58 parking spaces, a 1,000-square-foot ground-floor coffee shop and a 5,500-square-foot rooftop amenity deck. The site is just over a quarter of an acre.

The Miami Beach Planning Board is expected to vote on the proposal Sept. 20.

Shvo’s eponymous New York-based company, through an affiliate, bought the property at 1665 Washington for $4.5 million in February, property records show. It currently houses a three-story office building spanning 10,000 square feet. The vacant lot at 1667 Washington Avenue was included in Shvo’s $103 million purchase of the Raleigh Hotel in 2019.

In his other South Beach office development, Shvo wants to build a 250,000-square-foot project that will include retail on the site of a commercial strip at 1656-1680 Alton Road — including the former home of Epicure Gourmet Market & Café — as well as an adjacent parking lot at 1677 West Avenue.

In June, the Miami Beach Planning Board approved vacating an alley to allow the project to proceed. The Alton Road building still needs design approval from the city.

Shvo’s office projects come as South Beach approaches a crossroads. Developers and some city officials are calling for office construction that would help shed the area’s party image. Yet, others are pushing back over traffic concerns and questions regarding demand to lease the space.

In November, Miami Beach voters will cast ballots on plans by two development teams — one led by Don Peebles, and the other by Integra Investments and including Barry Sternlicht as a partner — to build offices on separate sites near Lincoln Road.

Shvo, who started out as a broker before becoming a developer in New York, initially set his sights on Miami Beach’s oceanfront hotel market, with plans for redevelopment. He and his partners, Turkish investor Serdar Bilgili and Deutsche Finance, bought the Raleigh, South Seas and Richmond hotels for a total of $243 million in 2019. The partnership hit rough patches, with heated lawsuits erupting between Bilgili and Shvo. The suits were settled, with Shvo and Deutsche pursuing their plans for the hotels.

They plan to restore the properties and develop a 17-story, 44-unit condo tower on part of the Raleigh site. The high-end Rosewood Hotels & Resorts will manage the Raleigh and brand the new tower.


Source: The Real Deal

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The State Of Multifamily Investing In South Florida

South Florida’s apartment buildings have traded at record prices as rents continue to climb.

However, there will likely be fewer apartment building transactions this year compared to last year, according to a recent report from Cushman & Wakefield.

The report; authored by Calum Weaver, director of Cushman & Wakefield’s multifamily group in Florida; stated that sales volumes slowed this summer “and will likely be 20 to 30% lower than in 2021.”

That’s because higher interest rates have impacted the profitability of multifamily deals.

Despite the headwinds, multifamily sales activity remains strong as foreign and domestic buyers continue to “pour into South Florida,” Weaver said.

“Investors view it as a safe, stable, and strong asset class,” he added. “Especially compared to turbulent stock, Bitcoin, or exotic NFTs.”

South Florida’s apartment buildings traded at record highs in the first half of 2022, for an average of $345,000 a unit in Miami-Dade, $300,000 a unit in Broward, and $379,000 in Palm Beach County.

The deals add up to $4.96 billion in multifamily transactions, in “the second-highest six-month sales total in history.”

Forty-two percent of South Florida’s 367 multifamily transactions between January and July took place in Miami-Dade, while 34% were in Broward, and 24% were in Palm Beach County.

First-time investors made many of those purchases in a trend that’s expected to continue, according to the report.

Landlords’ net rental income, or effective rent, isn’t rising much as it did in 2021. But their profits continue to increase, the report stated. Over six months, rents increased 7.5% to $2,186 a month in Miami-Dade. In Broward, rent rose 5.3% to $2,326 a month during the same time.

In Palm Beach County, the rent increase was flat, with an increase of less than 1% to $2,326 a month.

It’s the first time average rents in all three counties exceeded $2,000 a month, Weaver wrote.

South Florida has led the nation in rent hikes since the pandemic as well-paid remote workers and executives moved to the region from other parts of the United States, brokers and developers have told the Business Journal.

There are signs, however, that rent increases are slowing down.

Ken H. Johnson, an economist at Florida Atlantic University, has theorized that asking rents will drop as some remote workers return to their points of origin due to employers’ demands that they spend more time in the office.

There is some anticipation that rent increases will stabilize as more apartment units are built in South Florida. A recent report from property technology company Yardi projected that 19,000 apartment units will be finished by year-end.

Weaver’s report noted that year-to-year vacancies increased in Broward to 4.4% from 3.5%. Vacancies also went up in Palm Beach County, to 6.4% from 4.5%.

However, vacancies remain “at historic lows” in Miami-Dade County, at 3%, the report stated.

As more multifamily units are built, vacancies are expected to marginally increase in South Florida.

There are now 39,216 units being constructed in South Florida, including 9,192 apartments that recently broke ground in Miami’s Brickell Financial District and downtown areas, 3,657 units in Hialeah and Miami Lakes, as well as 3,611 units in West Palm Beach, Weaver wrote.

There could be a decrease in new projects as it becomes more difficult for developers to obtain construction loans, the report noted.

But demand for rentals is expected to remain high as home prices rise in tandem with rents.

The median price for a single-family home in South Florida rose to about 13% to $542,878, the report stated, adding that “average home values are increasing at a greater rate than rents, making ownership for many even tougher.”

Meanwhile, South Florida’s population grew by 47,000 people year to date.

“This was more than the 42,842 population increase for all of 2021,” the report declared, adding that the population hike was “equally split among the three counties.”

South Florida’s population is expected to continue to grow, according to Cushman & Wakefield.

“Household formations in South Florida are expected to increase to over 37,000 each year in the next five years,” the report stated.

If half of these new households are renters, “that represents over 18,500 new renters a year in South Florida.”

Rising rents may be a boon for landlords, but they could dissuade some professionals and companies from moving to South Florida, some experts have warned.

Their costs are rising, too, as insurance cost hikes “continue to be a challenge” with premiums per unit ranging from $1,000 to $1,800 a unit, the report stated.

However, Weaver’s report noted that South Florida is home to a strong job market, with unemployment at 3% or lower and salaries increasing by 6% over the last 12 months.


Source:  SFBJ


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Activists Demand Affordable Housing On Allapattah Land

Community leaders in Allapattah will call on Miami officials Thursday to incorporate affordable housing, green space and community services into a nearly 19-acre site poised for development.

Public Land for Public Good, a coalition of community groups, is holding a news conference with residents, church leaders and nonprofit Allapattah Collaborative CDC about potential changes to the city-owned site.

In 2019, the city invited developers to examine best uses for the property at Northwest 20th Street and 14th Avenue, which is sometimes referred to as the “GSA Lot.”

  • That same year, about 30 community groups formed Public Land for Public Good to raise concerns about rising costs and increasing gentrification in the working-class neighborhood.
  • They’ve asked city officials to include coalition members in the decision-making process for the land, but some say they feel their pleas are being ignored.

In July, commissioners received an unsolicited bid from South Florida real estate developer NR Investments, which proposed leasing the property for 99 years and building 2,500 apartments, a hotel, retail stores and offices in the area.

  • The city is now opening up public bidding for the land.

Coalition leaders have launched a petition asking that the city require any development to include:

  • Park and green space
  • 20% of housing units to be affordable for those earning 60-100% of the area median income, which is $68,300.
  • A community center.


Source:  Axios Miami

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South Beach Retail Property Trades For $39 Million

Three months after selling a retail strip along Alton Road to Michael Shvo for $39.3 million, Robert Shor is back to buying, scooping up a vacant retail property across the street for $10 million.

Through an affiliate, Shor bought a commercial condominium at 1665 Alton Road from an entity tied to Orlando Garcia of Coral Gables-based Secured Debt Investments, according to records. The 9,000-square-foot condo is on the ground floor of a two-story building immediately north of the 1111 Lincoln garage and retail building.

Irma Figueroa and Vicki Freeman of the Comras Company represented the seller. Seth Gadinsky of Gadinsky Real Estate represented Shor.

In June, Shor sold the 60,000-square-foot commercial strip across the street at 1656-1680 Alton Road, as well as an adjacent 0.2-acre parking lot at 1677 West Avenue, to Michael Shvo, who plans to redevelop the property into a 250,000-square-foot office and retail complex. The property includes the former Epicure Gourmet Market & Café building.

Shor said an Ace Hardware store on that strip, set to close next year, will reopen in April in the vacant retail space he bought this week.

Alton Road, a main north-south connector on the western end of Miami Beach, is poised for more development after city residents in August approved a zoning referendum that allows for bigger projects in the Alton gateway area.  The vote allows developers Russell Galbut and David Martin of Terra to build a taller mixed-use project at 710 Alton Road.


Source:  The Real Deal

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Evolve Acquires Wynwood Property, Housing Development Planned

Evolve Wynwood closed on a land acquisition in Miami’s Wynwood neighborhood where it plans to develop 141 units of housing.

Mery Najera Dominguez and several associated LLCs sold the 1-acre parcel at 535-585 NW 35th Street for $9.8 million to Evolve’s Mike Winstead Jr. and Joe McKinney, who have launched the design of the housing project through Kobi Karp Architecture.

They expect the project to be completed by the end of 2024.

“The location is in a good long-term growth market for multifamily in proximity to the Wynwood Arts District and Miami Design District,” Winstead said in a statement.

Fabio Faerman with Fortune International Realty brokered the deal on behalf of Evolve. The new owners plan to build eight stories of housing.

Evolve’s development sits within the northwest corner of Wynwood just off Interstate 95, near where the Design District, Model City and Allapattah meet.


Source:  Commercial Observer

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Swiss Real Estate Firm Acquires Rare Development Site West Of Brickell

As institutional capital flows into Miami from around the world, a Switzerland-based real estate investment firm acquires a rare development site west of Brickell.

Empira Group plans to develop a mid-rise multifamily project in the neighborhood called ‘The Roads’ to help meet the area’s rising demand for housing fueled by an influx of business relocations to Miami’s urban core. Due to Empira’s conviction in the continued growth of Miami, the firm is looking to own the property as part of its portfolio for the long-term after its projected completion in 2025. The transaction closed yesterday, Aug. 29. This asset will expand Empira’s real estate portfolio with assets in Europe and in the US.

Empira plans to start construction of CoralGrove Brickell in the second half of 2023.

“Empira Group is very excited to close a unique acquisition in Miami,” said Rafael Aregger, Empira’s Head of Investments US. “The city is benefitting from a strong in-migration from other states and all over the world, and we have a very positive outlook on the future of Miami and its population’s growth. Centrally located, the upscale boutique project will cater to professionals and families who want to be close to Miami’s largest employment centers, including Brickell, downtown Miami, Coral Gables and Coconut Grove. The building was designed to offer residents highly attractive living space and amenities that promote a healthy lifestyle.”

Designed by award-winning Revuelta Architecture International, CoralGrove Brickell is planned to include 85 units, consisting of one-, two-, and three-bedroom apartments. Some of its amenities include a fitness center that incorporates spaces for yoga and spinning, a rooftop resort-style pool overlooking the city, a gourmet kitchen and a game room. The ground floor will have about 900 square feet of retail space. The building’s architectural style is aligned with the Coral Way Beautification Master Plan since the project sits on the Coral Way corridor, connecting Coral Gables to the Brickell area.

Empira’s new development site sits in The Roads, a residential neighborhood with one of the highest barriers to entry. The 0.53-acre site consists of two vacant aged apartment buildings at 3025 SW 3rd Ave. and 3051 SW 3rd Ave. Demolition of the structures will take place later this year.

CoralGrove Brickell, which is a five-minute walk from the Viscaya Metrorail Station, will promote walkable urban living. Future tenants will be able to trade their cars for the Metrorail to travel around the tri-county area. That is important for Empira, whose institutional investors are committed to the highest ESG standards for their developments in Europe and the US. CoralGrove Brickell will be LEED certified which promotes not only more sustainable buildings from an environmental perspective but also a healthier living environment for the building´s users.

Since the onset of the pandemic, Miami has become the epicenter of the Great Migration and experienced a 16.8% year-over-year population growth. Miami-Dade County is projected to add approximately 175,000 new residents over the next three years.

South Florida’s booming economy and thriving job market have transformed the area into an economic powerhouse. Miami has attracted high-profile tech, private equity and finance firms from major high-paying employment hubs such as New York, Chicago, and San Francisco. Blackstone, Citadel, Google, Spotify, Thoma Bravo, Marsh Insurance and Goldman Sachs, among many others, have opened or significantly expanded their offices in Miami in recent months.


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