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Swire Sells Brickell City Centre Office Buildings

Swire Properties sold two office buildings at Brickell City Centre for $163 million, marking the largest sale to close in South Florida during the pandemic.

Two Brickell City Centre and Three Brickell City Centre LLC, led by Swire Properties President Kieran Bowers sold the office portion of 78 Southwest Seventh Street and 98 Southeast Seventh Street in Miami to US VI 2 Brickell LLC and US VI 3 Brickell LLC, affiliates of Northwood Investors. Tenants include Akerman LLP and WeWork.

The combined $163 million purchase breaks down to $80.3 million for Two Brickell City Centre and $82.7 million for Three Brickell City Centre. Each building has about 130,000 square feet, which means they sold for roughly $630 per square foot.

In a statement, a spokesperson for Brickell City Centre said the buildings are nearly 100 percent occupied and that Swire plans to use the cash for future developments.

Northwood, a Denver, Colorado-based investment adviser, had about $8 billion of assets under management as of December. That includes Cheeca Lodge & Spa in the Florida Keys and the mixed-use project under construction at 1177 Kane Concourse in Bay Harbor Islands.

Swire’s more than $1 billion Brickell City Centre development also includes the East Miami hotel, condo towers Reach and Rise, and the open-air shopping center anchored by Saks Fifth Avenue and the luxury movie theater CMX. Two and Three Brickell City Centre were completed in 2016. Arquitectonica was the lead architect.

Swire Properties is headquartered at Brickell City Centre, but the company is a subsidiary of Hong Kong-based Swire Properties Limited.

The developer has plans for a second phase of Brickell City Centre. In early 2019, Swire and businessman Carlos Mattos scored final approval for a 100,000-square-foot-plus expansion that would have a 54-story, 588-unit residential tower, another 62-story, 384-unit residential tower, commercial space and parking.


Source:  The Real Deal

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Four Stores Closed Permanently At Brickell City Centre. Here’s Why

Four stores at Brickell City CentreAdolfo DomínguezEmporio ArmaniMusart and Stuart Weitzman — have closed permanently, a Swire spokesperson confirmed. BCC attributed some of the closures to the coronavirus pandemic.

“We have been prepared that some retailers may close or accelerate their closures as a result of COVID-19. It is an unfortunate result of this unprecedented pandemic,” said a Swire spokesperson by email.

But one tenant said problems emerged prior to the pandemic. The tenant, who asked to remain anonymous for fear of reprisal, blamed rising rents and lower-than-expected foot traffic.

“I got evicted as I couldn’t pay rent in full. Nobody can,” the tenant said. “COVID just accelerated the process. It was the icing on the cake.”

The tenant said he put down $75,000 in deposits and spent another $250,000 to build out his space. He saw increasing revenues: $328,000 in 2017, $452,000 in 2018 and $484,000 in 2019. But the number of transactions fluctuated, growing from 3,344 in 2017 to 3,886 in 2018, then dropping to 3,355 in 2019. Meanwhile, rent rose from $50,000 in 2017 to $60,000 in 2018. In 2019, rent was $110,000 plus 16% of sales in 2019, or $7,500, he said.

“I had a tremendous increase in rent while the traffic has gone down,” the tenant said.

The mall declined to comment on rents but said it had seen double-digit growth in foot traffic between its 2016 opening and the end of the year in 2019, with a 17% year-over-year increase from 2018 to 2019. Brickell City Centre uses wireless beacon technology to measure the shopping center’s foot traffic, said David Martin, vice president of Swire Properties.

Store closures are normal at a new mall, Martin said in a December interview. “Any mall as it evolves will have openings and closings.”

A mall spokesperson said via email that a roster of new retailers will be announced soon.

“Each of these new retailers remained steadfast on their opening timelines despite the delays from COVID-19, a promising sign of the resurgence and resilience of retail in mixed-use open-air shopping centres such as BCC.”

BCC reopened some stores last week with limited hours and COVID-19 protocols similar to those at other Miami malls. Its restaurants will open for dine-in service Wednesday. First weekend foot traffic met expectations, a spokesperson said.

“Several retailers reported strong foot traffic and sales, with some exceeding their sales goals. We expect traffic will ramp up further as our restaurants open for dine-in service.”

The store closures are a precursor of the challenging local retail landscape that will likely struggle for the next 12 to 18 months, said Beth Azor, founder and head of the Weston-based Azor Advisory Services.

“These luxury stores don’t see the foreign travelers coming in and buying these high-ticket items. And their customers are going to be significantly decreasing in those numbers.”

Luxury malls and shopping areas — such as Aventura Mall, Bal Harbour Shops and the Design District — will have to compete for the luxury consumer market in South Florida, she said.

“The luxury consumer is there, but I don’t know if the South Florida consumer is enough.”

Retailers elsewhere in Miami are struggling to keep their doors open, including small business owners, said Michael Comras in early May. Comras, one of South Florida’s largest commercial landlords, said he’s seeing some retailers and restaurants close their doors permanently.

“This has propelled the demise of some of our great brick-and-mortar retailers,” he said.

But some brands and retailers are seeing a rise in activity, Azor said. Pizza vendors, Target, Walmart and home supply stores such as Home Depot are performing well because they “cater to lower-priced items and are offering curbside pickup.”


Source:  Miami Herald


Miami Board Votes To Repeal Special Area Plans

Special Area Plans have enabled developers to build massive projects in the city of Miami like Brickell City Centre, River Landing Shops and Residences, Mana Wynwood, the Miami Produce Center (pictured above), and Magic City Innovation District.

SAPs have also antagonized neighborhood activists who fear that such massive developments destroy the character of low-rise neighborhoods and speed up the displacement of individuals and families who can’t afford the skyrocketing rents or property taxes.

Now, the Miami Planning, Zoning and Appeals Board is recommending that no other SAPs be approved.

By a vote of 6 to 3 on Wednesday, the board approved a resolution to repeal the Special Area Plan provision that enables property owners who assemble more than 9 acres of land to seek extensive zoning changes.

Such a repeal still needs to be approved, twice, by the Miami City Commission, which is embarking on its own review of the entire Miami 21 zoning code, including SAPs.

Planning board member Adam Gersten cast one of the dissenting votes, saying he feared that commissioners may simply ignore a recommendation to repeal, and advocated for a moratorium on SAPs instead. As part of that moratorium, the board could recommend reforms, including that the SAP causes no net loss of affordable housing in the surrounding area, Gersten suggested.

Chris Collins, another dissenting voter, agreed. “I think it would be more proactive and go a longer way if we specify what we want to change and how to change it,” Collins said.

But board member Alex Dominguez said that while the city tries to “workshop this thing to death,” more people are being displaced by legislation that encourages land speculation.

“If you do a moratorium… it’s like putting lipstick on a pig, and at the end of the day, it’s still a pig,” Dominguez said.

He also argued that many real estate developers “don’t even want to touch SAPs” because of the community opposition they tend to attract.

“It’s not a big deal to repeal SAPs from Miami 21,” Dominguez said, adding that “keeping it alive and tweaking it is affecting a hell of a lot more people negatively rather than positively.”

Neisen Kasdin, a land use attorney affiliated with Akerman, rose in defense of SAPS, arguing that the legislation has enabled “good” projects like the expansion of Ransom Everglades private school in Coconut Grove and the ongoing construction of an EmpathiCare Village for Alzheimer’s patients at Miami Jewish Health Systems in Buena Vista. SAP developers must also offer “community benefit agreements” in exchange for approval, Kasdin added.

“If you pass this legislation, you are not just throwing the baby out with the bath water, you are throwing out the baby,” Kasdin said.

But Marleine Bastien, executive director of Family Action Network Movement (FANM), said one of Kasdin’s clients, Magic City Innovation District, is an example of a “bad SAP” that has already indirectly led to the displacement of several residents and small businesses. That project, which was approved by the city commission last June, is being challenged in court by Warren Perry, a Little Haiti resident affiliated with FANM. One of the project’s initial investors, Robert Zangrillo, is also fighting charges from the U.S. Attorney’s Office related to the college admission fraud scandal, as well as charges from the Federal Trade Commission that he co-owned fraudulent websites.

Leonie Hermantin, a board member of Concerned Leaders of Little Haiti, said that although her organization supported the Magic City Innovation District, the group is also in favor of repealing the SAP provision.

“We know that the impact of multiple SAPs in our community will be detrimental,” Hermantin told the board. “I agree with Mr. Kasdin. There are good SAPs and there are bad SAPs. The problem is, unfortunately, that bad SAPs have been allowed to go through.”

The board has kept one controversial SAP in limbo: Eastside Ridge, a proposed 5.4 million-square-foot project that will be built less than a mile from the 8.2-million-square foot Magic City Innovation District and across the street from Miami Jewish Health. The planning board has continued the project five times, with members demanding improvements. In response, SPV Realty, Eastside Ridge’s developers, filed a lawsuit demanding that the board make a decision on the project — either recommending for or against it — so that it can be heard by the Miami City Commission.

Board member Anthony Parrish said Eastside Ridge helped make up his mind on whether or not to support repealing SAPs.

“One attorney of a major project said, ‘Just deny us. We just want to get to the commission,’” Parrish said. “That is what provided, at least for this member of the board, a need to repeal this.”


Source:  The Real Deal

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After 72 Years On Flagler Street, Kirk Jewelers Is Moving Out

After 72 years of selling diamonds, watches and rings from its historic jewelry district location, Kirk Jewelers is saying goodbye to Flagler Street and moving to Brickell.

The luxury jewelry retailer is closing its location at 142 E. Flagler St. due to a decline in foot traffic over the past 10 years. It will reopen at Brickell City Centre at 701 S. Miami Ave. by late December.

The store will occupy a smaller space, and pay ‘significantly more’ in rent, according to co-president of Kirk Jewelers Allison Newbauer Strongin.

But, Newbauer Strongin said, she expects to see more customers than on Flagler Street.

“There’s a lot of energy right now happening across the river,” she said.

The store currently spans 4,000 square feet, with a showroom of 1,500 square feet. Kirk Jewelers’ new home will cover a total of 3,000 square feet, with a 2,000-square-foot showroom.

Newbauer Strongin did not disclose rent information. But, according to the Miami-Dade County Retail Third Quarter 2019 Colliers International Report, the average direct asking rate for Downtown Miami is $46.01 per square foot and $63.44 per square foot in Brickell.

“You need to ink out the showroom to make up for the rents,” she said.

The move will draw Kirk Jewelers closer to the store’s customer base, with the majority already coming from Brickell. It will also allow the team to sell to more tourists, Newbauer Strongin said, a customer base that she’s seen decline on Flagler Street.

“Brickell City Centre has seen an increase with South Americans and Europeans,” she said. “Brickell City Centre will allow us to tap into both the locals and tourists, especially the Brazilian market.”

The hours at the mall also encouraged the move. The store on Flagler is currently open six days a week during regular business hours. It closes by 5:30 p.m., because Newbauer Strongin said “it doesn’t make sense to be open more than that on Flagler.”

But at Brickell City Centre, Kirk Jewelers will run daily from morning until 7 p.m. or 9:30 p.m., depending on the day.

“We calculated that with longer store hours we’d be open to an equivalent of three to four months more,” Newbauer Strongin said.

Kirk Jewelers was established in 1947 by Newbauer Strongin’s grandfather Julian Sr., a wholesale businessman from New York City. Four generations later, Newbauer Strongin runs the business alongside her brother Jeff Newbauer.

The Downtown Development Authority is prioritizing filling vacancies, especially in the historic jewelry district, with services catering to a growing residential population, said the Downtown Development Authority Deputy Director Christina Crespi.

Greater Downtown — which includes Brickell, the Central Business District, and Arts & Entertainment — has 92,000 residents today, Crespi said. By 2021, the DDA expects 110,000 residents to live in the area.

“Our priority is quality of life, that’s part of an evolving economy,” Crespi said. “For Flagler, our recruitment focus has been tech companies, cafes, bars and restaurants.”

The streetscape improvement plans starting in Flagler in 2020 are part of the quality-of-life enhancements. The plans, in the works since 2011, will include widened sidewalks, extra lighting and greenery.

“The city has over the last few years had a renewed interest in our historic districts,” Carlos R. Lago, a member of the Land Development practice in Greenberg Traurig’s Miami office. “In general, there’s a bit of growing pains with street improvements but everyone is happy at the end.”

The addition of pedestrian-friendly streets is likely to attract more foot traffic and more retail businesses back to Flagler in the future.


Source:  Miami Herald

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Miami May Be Closer To Banning Special Area Plans

In Miami, property owners who control more than 9 acres of land can apply for a wide array of zoning changes. They’re called Special Area Plans, or SAPs, and the legislation has allowed for massive, planned projects like Brickell City Centre, River Landing Shops & Residences, the redevelopment of the Miami Design District, and the expansion of the Miami Jewish Home. It has also allowed for future mega-projects like the Magic City Innovation District in Little Haiti, Miami Produce Center in Allapattah, and Mana Wynwood.

On Jan. 15, the city of Miami’s Planning, Zoning and Appeals Board will discuss proposed legislation that could do away with SAPs altogether.

The board voted Wednesday to discuss a rule at its Jan. 15 meeting that would recommend that the city remove SAPs from the Miami 21 zoning code. In the 8 to 1 vote, board member Chris Collins was the lone dissenter.

The ultimate decision on whether to keep SAPs rests with the Miami City Commission. But even if the resolution isn’t approved, board members hope that it will tell elected leaders that SAPs are not beneficial to Miami’s existing neighborhoods and residents.

“I don’t want to send them a weak message,” said the resolution’s proposer, board member Alex Dominguez. “Either get rid of the damn thing … or let us move on.”

Several residents and community activists said SAPs are threatening neighborhoods, clogging roads with additional traffic, and speeding up gentrification. At the very least, community activists want a moratorium on future SAPs until regulations are put in place that govern development and require that affordable housing be offered in exchange for zoning.

“When I sell my home, I will have to leave because I will not be able to afford to live here,” said Jordan Levin, who lives in a house in Buena Vista East that she bought 20 years ago. “Please put a moratorium on these things. They’re the Godzillas of development. Development should not just be for the developers. Development should be for the city.”

Sue Trone, the city’s chief of community planning, argued that SAPs can help parts of Miami move away from the “segregated” uses advocated in the city’s 1959 comprehensive plan into a more mixed-use, pedestrian-friendly environment. And while reforms are needed, Trone argued that SAPs can “do a lot of good for the city.” Land use attorney Neisen Kasdin also begged the board not to “throw the baby out with the bath water” and to instead pursue reforms.

Dominguez, though, said it was best if the city rid itself of SAPs as soon as possible.

“Time is our biggest enemy. The more time we spend kicking things down the road and having meetings, the more developers are going to develop [SAPs] and we’ll have more traffic and we’ll see more people getting displaced,” he said.

Board member Melody Torrens said stopping future SAPs is “starting to make a lot of sense.” Still, she said the commission might not accept the idea, and while reforms are being debated, developers will continue to push SAPs. “If we’re not going to stop them completely, then we definitely need a moratorium while we go through [the legislation],” Torrens said.

Board chairman Charles Garavaglia agreed with Dominguez that passing a rule ending SAPs would make a stronger impact with politicians.

“I just think we should stop SAPs and send that message,” Garavaglia said, “and, ultimately, the commission will do what they want.”


Source:  The Real Deal

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