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Terra Offers $500M For Oceanfront Miami Beach Condo Building

Terra has offered half a billion dollars to buy out an oceanfront condo building in Miami Beach, six months after a Related Group-led venture backed out, according to a letter obtained by Commercial Observer.

Located at 5445 Collins Avenue, the property, Castle Beach Club, sits on 4 acres along the famed Miami Beach strip, offering 576 linear feet along the ocean.

The deal — if finalized — would effectively become the most expensive land purchase in the Miami area. Terra, led by David Martin, will most likely tear down the 18-story building and construct an ultra-luxury condo complex. The site can accommodate a structure up to 200 feet tall.

The proposed buyout is part of a growing trend following the deadly collapse of Champlain Towers South, a condominium built in 1981 that was poorly maintained. Some condo associations of similar, decades-old buildings are choosing to sell to developers to avoid footing the bill for costly repairs, now mandated by Florida law.

In late 2021, the homeowners association of Castle Beach Club put the property, which dates back to the 1960s, on the market, hiring a team led by Colliers’ Ken Krasnow and Gerard Yetming to shore up the highest price.

Jorge Perez’s Related Group and 13th Floor Investments first swooped in a year ago, together bidding $500 million. But the joint venture backed out of the deal in October after their financing fell apart as interest-rate hikes rattled capital markets and a handful of unit owners held out.

Last Friday, Terra officially entered the picture, matching Related’s original offer.

A letter penned by Yetming was sent to unit owners announcing Terra’s $500 million bid, which averages out to $877,192 per unit. The property’s 570 unit owners are set to receive individual offers in the next two weeks, after which they will have about two months to decide whether to accept the offer. To complete the sale, Terra will likely need 95 percent buy-in from condo owners.

“We can confirm that Terra has the capability to complete this purchase, and has the funding in place to do so,” according to a letter.

The source of Terra’s financing remains unclear, though the developer is said to have a partner on the deal with whom it previously worked with.

Back in 2022, Terra and seven other firms had bid on Castle Beach Club, according to The Real Deal, which first reported the most recent proposal.

 

Source:  Commercial Observer

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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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New Lease On Life: Apartment Projects Popping Up At Distressed South Florida Shopping Centers

Residential redevelopment of South Florida shopping centers is becoming more common, amid solid demand for rental housing and a slack market for retail space.

This month, Houston-based developer Morgan Group won a land use change to build 356 apartments on the site of a former Macy’s store and parking lot at Pompano Citi Centre, a shopping center in Pompano Beach on the southwest corner of Copans Road and Federal Highway.

“We haven’t seen many of these residential transformations at commercial centers, but I think you’ll start to see more of them as the centers unfortunately start losing tenants on a permanent basis,” said attorney Neil Schiller, a founder and shareholder of Boca Raton-based Government Law Group who represents real estate developers.

Shopping centers in densely populated areas are among the best in-fill sites for multifamily developments because they can meet the residential, occupational, and recreational needs of residents, said Art Falcone, co-founder and chief investment officer of Boca Raton-based Encore Capital Management.

“As South Florida gets basically built out, the opportunity now is combining live, work and play,” Falcone said. “People don’t like to be in cars and stuck in traffic.”

Falcone’s company acquired the 34-acre Fashion Mall in Plantation, demolished it, and is replacing it with Plantation Walk, a mixed-use redevelopment that ultimately will include 730 apartments. Tenants have started moving into two newly opened apartment buildings with 410 units, and Falcone expects construction of a third apartment building with 320 units to start early next year.

Falcone said Encore also has received certificates of occupancy for 130,000 square feet of new retail and restaurant space. Other completed projects at Plantation Walk include a Sheraton Suites hotel and a fully leased, 180,000-square-foot office building where insurance giant Aetna occupies half the space.

Newer mixed-use developments in South Florida commonly combine commercial space and rental apartments. Miami-based Terra developed Pines City Center in Pembroke Pines from the ground up with more than 300,000 square feet of retail and restaurant space and 400 apartments.

A positive market response to the residential options at Pines City Center encouraged Terra to acquire a 38-acre shopping center in Miami called Central Shopping Plaza, renovate the existing stores, including a former Kmart store that Target will occupy, and build apartments around them.

The first phase of that redevelopment, called CentroCity, will include 460 apartments, and will be completed in 12 to 18 months, said David Martin, CEO of Terra. By 2024, he said, Terra plans to build a total of 1,100 apartments and 250,000 square feet of office space at the CentroCity property in Miami’s West Little Havana neighborhood.

At Pines City Center, “what we saw was a very strong symbiotic relationship. Residents loved living around a retail offering, and retailers liked having customers who can walk to the store,” Martin said. “It becomes a lifestyle offering for the residents and obviously increases the number of repeat customers” for the retail tenants.

Another large-scale redevelopment is expected to bring a residential component to the Boynton Beach Mall. Columbus, Ohio-based Washington Prime Group won a rezoning of the 108-acre mall in Boynton Beach for a redevelopment that would combine as many as 1,420 apartments and up to 400 hotel rooms with 629,000 square feet of retail space. Washington Prime Group recently emerged from Chapter 11 bankruptcy with a new CEO.

However, shopping center owners like Beth Azor are unlikely to redevelop their properties in the absence of low occupancy rates. Azor is founder and principal of Azor Advisory Services, a Weston-based company that owns six shopping centers in Broward County.

She has no plans for multifamily development at any of her shopping centers because they aren’t distressed – three are fully leased – and because developers are building hundreds of apartments near her centers in Davie, Plantation and Sunrise.

“There are so many wiser, more experienced, richer folks doing apartments, that I like to watch their success from my vantage point,” she said, citing her career as an investor in shopping centers. “After 35 years in the business, I know how to do those, versus trying to learn how to develop multifamily properties.”

 

Source:  The Real Deal

 

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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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ULI Recommends Changes To City Of Miami Zoning Code

A new Urban Land Institute report suggests city officials relax certain provisions of the Miami 21 zoning code to encourage denser developments on narrower lots and further incentivize developers who reduce or eliminate parking, among other recommendations.

Report co-author Andrew Frey presented his ULI focus group’s findings on Friday to Miami Mayor Francis Suarez, who declined to comment about how he will incorporate the report’s recommendations into a revamp of Miami 21 that is currently underway.

“We are focused that [growth] happens responsibly,” Suarez said. “That it supports things like transit; that it supports our resiliency efforts.”\

Frey, director of development for Fortis Design + Build, said the focus group was formed last year to look at aspects of Miami 21 that inhibit progress in areas of housing choice, affordability and mobility.

“We wanted to give specific textual recommendations that hopefully can shorten up the cycle between finding glitches or gaps in Miami 21 and filling them,” Frey said. “We tried to make the recommendations as concrete as possible.”

According to the report, city officials should consider deleting lot size minimums and density maximums in certain areas, such as those zoned T4, T5 and T6. The neighborhoods with T4 zoning allow a transition from single-family homes to multifamily buildings with room for small businesses and mom-and-pop retail such as Southwest Eighth Street in Little Havana. In T5 neighborhoods, developers can put up mixed-use buildings that accomodate retail, office and apartments such as Wynwood. And T6 neighborhoods allow developers to build multi-story condo, apartment and office towers such as downtown Miami, Brickell and Edgewater.

Getting rid of density maximums would allow developers to build more apartments sized smaller for mid-market renters because they would be able to build 100 or more units an acre . And by eliminating lot size minimums, Miami can encourage the development of more housing types such as townhouses, row houses and brownstones found in other major U.S. metropolitan cities, the report states.

The ULI focus group also suggested dramatic revisions to the parking standards in Miami 21, including having the Miami Parking Authority provide all on-street parking in single-family residential neighborhoods as residents-only at no cost. Other recommendations included significantly reducing parking requirements for new buildings and allowing developers to obtain parking reductions without having to pay impact fees.

Greg West, CEO of apartment builder ZOM Living and ULI Southeast Florida Caribbean District’s chairman, attended the mayor’s presentation. He noted that the report was produced with input from several heavy hitters from the real estate industry, including urban planner Elizabeth Plater-Zyberk, the original author of Miami 21. In addition to Frey, the focus group included land use attorneys Iris Escarra and Steven Wernick, developers David Martin and Kenneth Naylor and architects Reinaldo Borges and Raymond Fort.

“We had a pretty big tent on whom we sought input from, which also included the people who originally wrote and drafted Miami 21,” West said. “I think from the private side and development community, we got a good base.”

 

 

Source:  The Real Deal

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