Monthly Archives: August 2016

The Wrap: Tibor Hollo seeks FAA approval for downtown Miami supertower, Florida gives green light to solar amendment…and more

Rendering of One Bayfront Plaza

1. Tibor Hollor seeks FAA approval for downtown Miami supertower [The Next Miami]
2. Florida gives green light to solar amendment [WLRN]
3. More than 60 percent of Florida contractors experiencing worker shortage [Sun Sentinel]
4. South Florida’s 10 priciest homes sold this year went for $77M under ask [Curbed Miami]

Sean Stewart-Muniz

Source:: The Real Deal

Delays spell trouble for the Conrad Fort Lauderdale Beach

Rendering of the Conrad Fort Lauderdale Beach (Inset: Andreas Ioannou)

What was once a failed Trump-branded project on prime beachfront land appeared to be saved when a new developer swooped in three years ago with a grand plan.

But the fate of the Conrad Fort Lauderdale Beach now seems to be up in the air again, with the condo-hotel facing months of delays, a construction lien from its general contractor and an opening date that hinges on a yet-to-close refinancing deal.

Orchestra Hotels + Resorts, led by Andreas Ioannou and Jose Luis Zapata, bought out the languishing project at 551 North Fort Lauderdale Beach Boulevard for $115 million in 2013.

At the time, Orchestra’s plans were to spend $40 million on finishing and revamping the building into a modern tower with 290 units, split between 109 condos — dubbed the Ocean Resort Residences — and 181 condo-hotel units.

Hilton Worldwide’s Conrad Hotels and Resorts brand was also brought on to head the property’s leisure services and manage the condo-hotel units.

Fast forward three years, and those plans have changed. Ioannou told The Real Deal that the project’s budget is now closer to $70 million, with the extra expenditures going toward upgrading the building’s public areas to better compete with nearby upcoming luxury projects like Auberge Fort Lauderdale and the Four Seasons Hotel and Private Residences.

“We felt we had to do more to make sure we lead the market,” he said. “That has led to delays.”

Orchestra originally slated the Conrad to open in early 2015, though that date was pushed back several times and is still uncertain.

Ioannou said the opening hinges on refinancing Orchestra’s construction loan with a better interest rate — a deal he said should close within the next two weeks. Once the loan is in place, Hilton’s management team can begin the three-to-four month process of getting the hotel ready for opening.

In the meantime, the building’s units will sit untouched despite receiving a full certificate of occupancy from city officials in June. Ioannou said condo owners are allowed by law to occupy the condos, but without furnishings or a functioning hotel, there would be little point.

And according to Broward County records, the developer is now facing a $1.4 million construction lien from its general contractor, Moss & Associates. The firm declined to comment, but Ioannou said he can’t close any condo purchases until the lien is lifted. About 35 percent of the project has been sold, and Ioannou said roughly half of those deals have closed.

County records show closings began as early as 2014, meaning buyers at the project have waited years for the project to open. Meanwhile, Ioannou said, the development team has committed to covering property taxes and “share fees” for all units until the hotel opens.

Though Ioannou was optimistic that the project would move forward as intended, others familiar with the development said the warning light is blinking.

Philip Gutman, vice president of sales at Douglas Elliman’s development marketing division, said his firm and the developer parted ways after less than a year in 2014.

“I think the project was designed in an era that the condo-hotel model with smaller units worked,” Gutman told TRD. “We had some suggestions but [the developer] didn’t really work off of them, and finally Cervera took over when we left.”

Sales are now being handled by Cervera Real Estate, with prices starting in the $400,000s and ranging to more than $1 million.

It’s not unusual for projects to cycle through marketing firms during development, but Gutman said it was his firm that decided to cut the cord. Peggy Fucci’s brokerage One World Properties also headed sales at the Conrad for a brief period when the project first launched.

Over budget and delayed, Orchestra is now finding itself in a situation similar to the one that led the former owners to abandon the project. Formerly known as the Trump International Hotel & Tower, the project originally launched in 2004 with Roy Stillman’s SB Hotel Associates as the developer and a licensing agreement from Donald Trump.

But construction was halted amid a litigation firestorm between buyers looking to get their deposits back from a sinking ship and the developer, who ran out of financing before finishing.

The situation was messy: court documents reveal complaints from buyers who felt they were misled by marketing materials into thinking Trump was the developer. Trump fired off another suit at Stillman for an alleged breach of contract, stating he costed Trump millions of dollars and damaged his reputation.

When asked if Orchestra would sell the development, Iannou said, “That is not part of our business plan, though you should never say no if someone comes in and wants to spend a lot of money. Our objective is to keep the hotel for years to come.”

Source:: The Real Deal

Miami Heat center Hassan Whiteside pays $7M for Miami Beach home

Hassan Whiteside and 528 Lakeview Court in Miami Beach

Miami Heat center Hassan Whiteside closed on the $7.3 million purchase of a new Miami Beach home, sources told The Real Deal.

Whiteside, who signed a four-year, $98 million contract to stay with the Heat in June, bought the six-bedroom, 5,406-square-foot home at 528 Lakeview Court.

ONE Sotheby’s International Realty agent Barbara Lamar had the contemporary-style house on and off the market since 2015. At its peak, the waterfront home was listed for $13 million in February of last year and most recently for $7.95 million in June, according to Darren Weiner, managing director of Douglas Elliman’s Sports & Entertainment Division, represented Whiteside. Both brokers declined to comment to TRD.

Records show Lewes, Delaware-based Venetian Coaster LLC sold the 17,676-square-foot property. It last traded for $5.9 million in 2012.

Built in 2014, the home features an open floor plan with a gourmet kitchen, pool, bar, summer kitchen, cabana, a guest house with a private entrance, staff quarters, and a large dock. LF Development built the house, according to its website.

Whiteside is a new neighbor to Matthew Lazenby, president and CEO of Whitman Family Development, which owns Bal Harbour Shops. Jason Rubell and Michelle Simkins also own a property a couple of doors down, records show.

Whiteside’s coach, Erik Spoelstra, paid $2.6 million for a 5,400-square-foot house in Coconut Grove in late May.

A North Carolina native, Whiteside was drafted by the Sacramento Kings in 2010, played for a number of teams abroad and then joined the Heat in 2014.

Check out more photos of Whiteside’s new house:

Source:: The Real Deal

Judge tosses attempt to dismiss Trump University fraud lawsuit

Donald Trump

From the New York website: A federal judge on Monday shot down another attempt by Donald Trump to stop a group of former students from suing his former real estate school.

Trump had argued that the fraud lawsuit shouldn’t have class action status because one of the students in the case, Sonny Low, didn’t actually care whether Trump University was accredited. But U.S. District Judge Gonzalo Curiel ruled that Trump’s attorneys were using a limited interpretation of Low’s statement that accreditation “was not even a consideration for me,” and that he “went there because it was Trump University, that he created.”

Other portions of Low’s deposition, Curiel said, showed that he believed the university was legitimate, Bloomberg reported.

Thousands of former students from Florida, New York and California claim the university falsely promised to reveal the real estate tycoon’s investment secrets in exchange for tens of thousands of dollars in tuition. In May, Curiel ruled that the jury trial for the lawsuit wouldn’t happen until after the Nov. 8 election. The trial is scheduled to begin Nov. 28.

The presidential nominee faces two other related lawsuits: another class action lawsuit in San Diego that accuses him of racketeering and a $40 million lawsuit filed by New York State Attorney General Eric Schneiderman. [Bloomberg] — Kathryn Brenzel

Source:: The Real Deal

Thoroughbred training facility at Payson Park on the market: $8M

Payson Park and Virginia Kraft Payson

Payson Park, the “Club Med” of horses, is now available for sale.

The 394-acre thoroughbred horse training facility recently hit the market for nearly $7.9 million, listing agent Don Langdon told The Real Deal.

Virginia Kraft Payson and her late husband Charles Payson bought the Indiantown property in 1980. Charles Payson, a former owner of the New York Mets and a wealthy industrialist, was one of the wealthiest people in America in 1983, according to a Forbes ranking that pegged his wealth at more than $120 million. He and Virginia Payson also operated a racing stable and breeding farm in Kentucky, according to the LA Times. He died in 1985.

Now, Virginia Kraft Payson now wants to sell the facility, but keep her grounds and home on the property, which was first developed in 1957 by top thoroughbred racing owners and breeders.

Here’s a breakdown of all it includes:

  • 21 barns
  • 499 stalls
  • 1 mile-long championship dirt track
  • 7/8th of a mile irrigated dirt track
  • 76 turnout paddocks
  • Six-horse electronic starting gate
  • Vet service
  • European-style galloping trails
  • Two bunkhouses with 62 rooms
  • Lighted soccer field
  • Cafe and game room

Langdon, managing broker of Douglas Elliman’s Palm Beach office, told TRD that there’s a “unique demand” for properties like Payson Park. He is marketing the facility as an investment opportunity to the thoroughbred worlds of Ocala, Florida; New York and Connecticut. It’s been the training ground for award-winning horses and jockeys.

“It’s been a pet project for [Payson] for many years and she wants to retire the responsibilities,” Langdon said.

The property is located at 9700 Southwest Kanner Highway in Indiantown, a small town northwest of Palm Beach County. “Indiantown is a little more private for the houses” compared to Wellington, Langdon said. “Trainers like it, owners like it. It’s a nice investment property.”

Source:: The Real Deal

Amazon facility in Opa-Locka would invest $51M in real estate: report

An Amazon warehouse in Spain (Credit: Álvaro Ibáñez) and Jeff Bezos, founder and CEO of Amazon

A proposed, $198 million fulfillment center in Opa-Locka would invest $51 million into real estate, expected to be built by Amazon.

A company that the South Florida Business Journal said could be applied for $1.5 million in county and state job incentives to build the high-tech facility in Opa-Locka. “Project Sol” would also invest $147 million in personal property and equipment for an 855,000-square-foot distribution warehouse that’s set to break ground during the third quarter of next year, according to the publication.

Amazon currently operates a fulfillment center near Doral and is building one in the South Florida Logistics Center near Miami International Airport.

In July, Miami-Dade County commissioners approved a land deal for the project that allows the Carrie Meek Foundation to keep control of its 120 acres near the Miami-Opalocka Executive Airport. Under the deal, Meek’s team has a 65-year lease on the land and a new development deadline that stipulates $18 million worth of progress has to be made by 2019, with the entire project completed by 2025. [SFBJ] – Katherine Kallergis

Source:: The Real Deal

Starbucks, Moon Thai site on South Dixie Highway in Coral Gables for sale: $7M

Aerial view of the Coral Gables property and listing agent Marcos Puente

A popular University of Miami hangout along South Dixie Highway in Coral Gables is now for sale after more than 50 years under the same ownership.

The building, occupied by Starbucks and a Moon Thai & Japanese restaurant, is on the market for $6.9 million, listing agent Marcos Puente told The Real Deal.

Starbucks has 1.5 years left on its lease, while Moon Thai has 7.5 years left, according to marketing materials. Together, they have a net operating income of about $307,500 for the first year.

The 5,546-square-foot building, at 1114 South Dixie Highway, was developed in 1955 and sits on a 15,000-square-foot lot. Property records show Konhauzer Inc. is the owner. Previous sales information is not available online, but Puente said it’s been with the same owner for more than 50 years. Jeffrey J. Weiss heads Boca Raton-based Konhauzer, corporate records show.

The property in Coral Gables is separated from the University of Miami by U.S. 1 and Ponce de Leon Boulevard. The U.S. 1 corridor has been heating up with increased commercial activity and new projects over the past few years.

In April of last year, a group of investors paid $16.5 million for Riviera Plaza, a two-story, mixed-use shopping center at 1541 South Dixie Highway. There, the Gadinsky Real Estate, Echion USA and 13th Floor Investments partnership has submitted plans to the city for a new Publix store. Closer to the Shops at Sunset Place, a Wendy’s on the corner of Red Road and U.S. 1 sold for $9 million, also last year. Puentes, who’s active along the corridor, brokered that sale.

Source:: The Real Deal

Compass hits $1B+ valuation with Series D round

Ori Allon and Robert Reffkin

From the New York website: Compass has leapfrogged past a $1 billion valuation after raising a $75 million Series D round, according to Bloomberg. The round, led by Wellington Management Capital, means the residential brokerage has raised $210 million from venture investors.

This is the first investment in Compass for Wellington, an operator of mutual funds that has bet on companies such as Aribnb, Redfin and WeWork, as well as Jessica Alba’s Honest company, Warby Parker and Joshua Kushner’s health insurance startup Oscar. Repeat investors in the Series D round include Institutional Venture Partners and Joshua Kushner’s Thrive Capital.

In July, The Real Deal first reported that Compass was looking to raise the funds, seeking a valuation of between $1.2 billion and $1.3 billion. The brokerage last raised a $60 million Series C financing in September, at which time it was valued at $800 million.

“This funding will provide us with additional resources to accelerate our growth into new markets and inject transformative technology to improve the experience for consumers and agents,” Ori Allon, the co-founder and chairman of Compass, said in a statement.

It’s not clear how much equity Compass’ founders gave away in this round. In prior rounds, Compass handed investors nearly 44 percent of its shares, according to data from PitchBook.

Compass, which launched in New York in 2013, now has a presence in Washington, D.C., Miami, Boston, the Hamptons, Cambridge, Beverly Hills, Malibu, Pasadena, Santa Barbara, and Aspen. It’s slated to open in San Francisco later this year.

In New York, the company has recruited top brokers including Leonard Steinberg and Kyle Blackmon.

The latest round comes as the market for venture capital has tightened. Even successful startups have been raising “down rounds,” which give them lower valuations than prior rounds.

For Compass, lingering skepticism about its business plan has been a focal point for critics, particularly at rival firms.

Earlier this summer, CEO Robert Reffkin told TRD that growth, rather than profitability, was the immediate goal of Compass’ fundraising effort. “The luxury of our capital base is that we can think long-term,” he said. “[Investors] are making an investment alongside the management team.”

Reffkin didn’t rule out an IPO, but said going public is “more likely than not,” though it’s “not the goal.”

One thing TRD discovered at the time was that the firm’s performance metrics — it claimed its agents generate over $6 billion in sales volume annually, a number that’s now pegged at $7 billion — were heavily based on historical performance of those agents, in many cases from well before they joined Compass.

Source:: The Real Deal

For REITs, getting own S&P 500 category could be a boon

From left: Owen Thomas, Marc Holliday and Steven Roth

From the New York website: As of Thursday, real estate investment trusts will no longer be grouped with banks and insurers in the MSCI and S&P 500 stock indices. Instead, they will become their own category, in a move that could impact how certain funds invest in the sector.

“There is going to be more money looking at the sector,” Matthew Norris of London-based real estate firm Grosvenor Group told the Wall Street Journal. “This is going to bring real estate into focus.”

REIT returns have outperformed the S&P 500 over the past 25 years, but so-called generalist funds that invest in a basket of stocks have allocated a comparatively small portion of their money to REITs. Separating real estate stocks from banks could draw more attention to that fact and spur investment in REITs, analysts at Jefferies International said.

The separation could also make real estate stock prices less volatile. Bank stocks tend to experience great price swings, and by being grouped with them, REIT stocks often see some of that volatility spill over.

“We don’t think things will change dramatically on Sept. 1, or the second, but there will certainly be more people looking at this sector over the long term,” said Philip Charls, CEO of the European Public Real Estate Association. [WSJ] — Konrad Putzier

Source:: The Real Deal

Investment group buys Datran Center in Kendall for $150M

Datran Center and Gregg Schenker, president and co-managing partner of ABS

An investment group led by ABS Partners Real Estate and Acre Valley Real Estate Capital paid $150 million to acquire the Datran Center, a two-tower office complex in Miami’s Kendall neighborhood.

Together, the buildings have just less than 500,000 square feet of office space and are about 85 percent occupied, according to the buyers. ABS and Acre Valley bought the Dadeland buildings along with the Ardent Companies and IP Capital Partners. They financed the sale with a loan from German lender Aareal Bank.

The deal marks another sign of the strength of Miami’s office market as commercial investors shift away from cities like New York and San Francisco, according to the Wall Street Journal, which first reported the sale. Asking rents in Miami-Dade are also up as new office supply lags behind condo and mixed-use development.

The cap rate for the Datran Center is about 6 percent, higher than for office buildings in New York, experts told the newspaper. Sales volume of office properties is up in Miami, according to CBRE. Sales increased by 9 percent to $1.8 billion in 2015 from 2014.

Datran Center last sold in 2008, according to a press release. Before that, property records show the buildings, at 9100 and 9130 South Dadeland Boulevard, sold for $70.55 million in 1998. They connect to MDM Group‘s Miami Marriott Dadeland, as well as the Metrorail, and are near Dadeland Mall. Datran Center also includes a 1,452-space underground parking garage.

Gregg Schenker, president and co-managing partner of ABS, said the office complex is away from Miami’s “highly congested business district” and above the floodplain. The new owners have hired Kobi Karp Architecture to upgrade the 30,000-square-foot lobby, which connects to the Marriott.

Schenker and Jason Fein, and Andrew Hananel and Joshua Hostetter of Acre Valley represented the buyers in the transaction, while HFF represented the seller, USAA Real Estate Co. and a Canadian-based REIT.

USAA, which bought a South Miami office building in December for $40 million, has about $15 billion in assets under management, according to its website.

In Manhattan, ABS owns buildings that include 200 Park Avenue South and 915 Broadway. [WSJ] – Katherine Kallergis

Source:: The Real Deal