A train in front of Wynwood Walls

UPDATED Oct. 11, 1 p.m.: Wynwood property owners are pushing for a train station at or near 29th Street, arguing that the area is poised for nearly 65 million square feet of additional development.

To prove that, the Wynwood Business Improvement District’s board retained planner Cesar Garcia-Pons to create a study on the potential development capacity within a half-mile radius of 36th Street and 29th Street by the Florida East Coast railroad tracks. The results of that study were revealed during a Wynwood BID meeting Wednesday.

BID board member David Polinsky said the study clearly illustrates that the Wynwood area has more than enough development potential to warrant a train station.

“When you look at the absolute numbers, we have the potential of becoming Miami’s second downtown,” Polinsky said. “Not by itself, but including the southern half of Edgewater.”

In fact, according to the study, the southern parts of Edgewater and Wynwood will be able to accommodate much more development than what can possibly be built near Midtown Miami and the Miami Design District, where a train station is now being contemplated.

The Florida East Coast tracks are now being utilized by Brightline, a train service owned and operated by real estate developer Florida East Coast Industries between the downtown areas of Miami, Fort Lauderdale, and West Palm Beach. Using $1.75 billion in tax exempt bonds, FECI hopes to extend that service to the Orlando airport by 2021.

Miami-Dade, Broward, and Palm Beach counties are also negotiating with FECI to create additional stations along the train tracks as part of a commuter service run by the South Florida Regional Transportation Authority, the public agency that oversees Tri-Rail. Also, in May, the Miami-Dade Transportation Planning Organization approved the concept of a “pilot” Tri-Rail train station at 36th Street just under the I-395 overpass.

Albert Garcia, vice-chair of the Wynwood BID, said board members only heard about the Tri-Rail pilot station at 36th Street through press reports. So, this past August, the Wynwood BID commissioned a $25,000 study analyzing development patterns.

“We believe that this is the area today, and even more so moving forward, where we are going to continue to see a higher concentration of residential density,” Garcia said.

Garcia-Pons said he looked at the maximum of what was allowed to be built under the city of Miami’s zoning code as well as what was likely to be buildable when factoring in land, setbacks, and other city code requirements. What he found is that there is now 11.9 million square feet of development located within a half-mile of 36th Street. Under current zoning codes, the maximum amount that could be built within a half-mile of 36th Street is 80.8 million square feet, although Garcia-Pons estimates that the maximum that can possibly be built is actually 48.3 million square feet.

In contrast, there’s already more than 14.3 million square feet of development within a half-mile of 29th Street. That same half-mile zone can accommodate up to 72 million square feet of development, while the city’s zoning codes allows a maximum of just under 123 million square feet of development, according to the study.

The Garcia-Pons study also estimated that at the maximum possible build-out, about 69,600 people will live within a half-mile of the 36th Street station, while another 18,300 people will be working within the 4.9 million square feet of commercial space. In contrast, the maximum build-out within a half mile of 29th Street can accommodate 105,000 residents, about 7.4 million square feet of commercial space, and 27,900 employees.

“There exists significantly higher development capacity in the vicinity of NE 29th Street than NE 36th Street,” Garcia-Pons wrote in his report to the Wynwood BID. “And, for the purpose of providing the greatest economic development benefits at the lowest cost to the public sector, a higher development capacity provides a sound statistical basis for siting a Midtown Tri-Rail Station nearer to 29th Street (closer to Wynwood/Edgewater/Midtown) than to NE 36th Street (Design District/Midtown).”

Garcia-Pons admits there’s an overlap for the 29th Street and 36th Street study areas. However, the study estimates that 300 percent more people are projected to live and work in the south — in Wynwood/Edgewater — than in the north near the Miami Design District.

Garcia said the study gives an excellent argument to place the train station even further south at 27th Street. “It’s the most logical location,” Garcia said, adding that the “cluster of property owners” there are generally in favor of a train station.

At the very least, Garcia said the report shows that the Edgewater-Wynwood area has only “scratched the surface” in terms of growth and that a dependable alternative mode of transportation will be needed. “It’s important that we get this right the first time,” he said.

From left: Tim Sloan, Janet Yellen, and Jerome Powell (Credit: Getty Images and Free Icons PNG)

Former Federal Reserve chair Janet Yellen, her successor Jerome Powell, Wells Fargo CEO Tim Sloan and Goldman Sachs all agree on one thing: commercial real estate prices are too damn high.

Cap rates have been falling across the country, leaving investors with minuscule returns. Goldman Sachs claimed back in May that commercial real estate may be overvalued by 16 percent. And yet there is no sign of a price correction. The reason: real estate investors continue to have easy access to cheap debt.

Mortgage real estate investment trusts and debt funds increased their commercial real estate lending by 42 percent between 2016 and 2017, Bloomberg reported, citing data from Green Street Advisors. The rise of non-bank lenders more than makes up for cautious banks, who increased their lending by just 4 percent.

The rise of non-bank lenders has been particularly pronounced in New York’s construction market. Three of the top 10 construction lenders in The Real Deal’s January ranking are debt funds.

Buoyed by cheap debt, property investment continues to rise. Consulting firm Deloitte recently said it expects deal volume to increase by 13 percent over the next 18 months. [Bloomberg] — Konrad Putzier

Rendering of Auberge Beach Residences & Spa and Michael Falk

A company tied to the head of Comvest Partners just paid $5.7 million for a unit at Auberge Beach Residences & Spa in Fort Lauderdale.

MSF Partners LLLP, led by Comvest Chairman, Managing Partner and co-founder Michael Falk, picked up unit 1202 in the north tower of the two-tower project at 2200 North Ocean Boulevard, which was developed by the Related Group, Fortune International Group and the Fort Lauderdale-based Fairwinds Group.

Falk has led the West Palm Beach-based firm to manage more than $3 billion in assets, according to the company’s website. It also has offices in Los Angeles, Chicago and New York City.

Construction of Auberge began in 2015, and the sold-out 17-story north tower is already completed. The 23-story south building will be delivered later this year. The project includes a full-service salon, a plunge pool, and indoor and outdoor cabanas. A farm-to-table restaurant is planned to open later this year.

Former Miami Dolphins quarterback Dan Marino and the Winnipeg Jets’ Jacob Trouba have purchased units at Auberge.

In September, the son of Salmar Properties founder Sal Rusi paid $9.3 million for a penthouse unit in the north building.

Tiffany & Co. at 259 Worth Avenue, Waterway Shoppes, Home Depot and 1560 West Indiantown Road, X Miami and 4600 North University Drive

Tiffany & Co. on Worth Avenue – Fortress Investment Group | $20M

After hitting the market in 2016 with an expected sale price of about $40 million, the Tiffany & Co. building at 259 Worth Avenue in Palm Beach sold for about half of that – but still marked the most expensive retail deal in September.

Fortress Investment Group paid about $1,220 per square foot for the 16,374-square-foot building, which sits on one of the most expensive retail streets in the United States.

A Madden Family Associates partnership is the seller. Tiffany has occupied the building since 1991. The company also has a flagship store in the Miami Design District.

Waterway Shoppes – Asuman G. Polat | $14.3M

Ross Realty Investments sold the Waterway Shoppes in Coral Springs as part of a larger three-building commercial portfolio sale totaling $42.95 million. The Waterway Shoppes, a 40,260-square-foot building, would come out to about $14.3 million if the deal was evenly divided between the three structures.

An LLC led by private investor Asuman G. Polat acquired the commercial portfolio. Tiktin Real Estate Investment Services’ Adam J. Tiktin and Alejandro Snyder represented the sellers.

Tiktin said Ross Realty spent about $14 million assembling the lots and developed the properties between 2006 and 2008.

Sports Authority – Home Depot | $8.1M

Home Depot made the third-largest purchase in September. The home improvement retailer paid $8.1 million for a former Sports Authority site in Jupiter. Home Depot will expand its existing 103,400-square-foot store next door at 1694 West Indiantown Road.

An entity tied to Kairos Investment Partners bought the former Sports Authority last year for $4.75 million. Sports Authority closed its doors in 2016, after the debt-strapped sporting goods retailer filed for Chapter 11 bankruptcy and put 320 store leases up for auction.

X Miami retail – Exan Capital | $6.3M

Tricera Capital’s sale of the retail space it bought from Property Markets Group netted a quick $3 million.

Miami-based Tricera entered into a preconstruction contract last year to buy the retail units at 230 Northeast Fourth Street for a little more than $3 million. Exan then sold the commercial space, which includes 6,520 square feet of retail and 1,752 square feet of patio space, to Exan Capital for $6.3 million. Tenants include GoGo Fresh, Oxxo Care Cleaners, Caffé Fiorino, Inari Sushi, and a new fast-casual pizza concept by the owner of Brickell’s Stanzione 87.

X Miami, a 32-story, 464-unit apartment tower, was completed earlier this year across from Miami Dade College’s Wolfson Campus.

4600 North University – ASA Properties | $5.9M

ASA Properties paid $5.9 million for a recently built shopping center in Coral Springs. Chipotle, Mattress One and Pielogy Pizza all signed 10-year leases at the 7,700-square-foot building at 4600 North University Drive.

It sold for $766 per square foot.

Records show the seller, Brightwork Real Estate, developed the building after paying $1.9 million for the property in 2016.

The September investment sales figures were compiled from Miami-Dade, Broward and Palm Beach counties’ property records.

On Tuesday, the Wall Street Journal reported that Masa Son’s SoftBank was in discussions to take a majority stake in WeWork. The Real Deal‘s senior reporter Konrad Putzier sat down with his colleague David Jeans on Wednesday and talked about what it would mean for WeWork CEO Adam Neumann, potential conflicts, and how a deal could lead to a $100 billion tech incubator with WeWork at the center of things. Check out the video above!

David Beckham and a rendering of the Overtown stadium

Bruce Matheson lost an appeal against Miami-Dade County’s no-bid land deal in Overtown with David Beckham and his partners.

The lawsuit and Matheson’s failed appeal actually bought the Beckham group more time, according to the Miami Herald.

While Beckham and his partners are now seeking approval from city of Miami residents to allow them to build a mixed-use soccer complex on the Melreese property near Miami International Airport, they still have a pending deal with the county to purchase 2.8 acres in Overtown for $9 million. That site is part of the assemblage where the Miami soccer team’s owners previously planned to build their Major League Soccer Stadium.

In his lawsuit, Matheson alleged that the county’s no-bid deal with Beckham was illegal. But the Third District Court of Appeal ruled that Florida law allows counties to award such deals if they promote economic development, the Miami Herald reported.

The Beckham group’s deal, approved by the commission in 2017, required a $450,000 down payment, plus another $901,500 in June of this year. The June deadline was extended due to Matheson’s suit, and now legal technicalities could give Beckham until after the Melreese referendum goes to voters on Nov. 6. [Miami Herald] – Katherine Kallergis

300 Sevilla Avenue and Bob Brockway

A company tied to Robert “Bob” Brockway, chairman and CEO of Bill Ussery Motors, just paid $11 million for an office building across the street from the firm’s Mercedes-Benz of Coral Gables dealership.

Property records show Brockway Limited Partnership bought the 36,600-square-foot, three-story office building at 300 Sevilla Avenue from OOOM LLC, led by architect F. Michael Steffens and Marjorie Goldman.

Records show Brockway financed the deal with a $10.7 million loan from Mercedes-Benz Financial Services USA. Brockway also owns a dealership in Cutler Bay at 10701 Southwest 211 Street.

Brockway isn’t the only auto dealer making real estate moves in Miami-Dade County. Chevy dealer Arnaldo Bomnin is set to close on a former Toys “R” Us building on U.S. 1 near Dadeland Mall, with plans to open another dealership.

Auto titan Edward “Teddy” Morse III is also reportedly looking to expand his company.

(Credit: iStock)

Would-be homebuyers have another reason to be concerned: mortgage rates rose to nearly 5 percent, the highest in more than seven years and the biggest weekly increase in two years.

Rising mortgage rates slow the housing market, which is an indicator of the overall economy. Long-term rates are now up nearly a full percentage point from the start of 2018, the Wall Street Journal reported.

According to Freddie Mac, the average 30-year fixed-rate mortgage is 4.9 percent. Although rates have been rising for months, 5 percent isn’t that high compared to the decade before the financial crisis.

“There’s almost a generation that has been used to seeing 3 percent or 4 percent rates that’s now seeing 5 percent rates,” Vishal Garg, founder and CEO of Better Mortgage, told the Journal.

In recent months, both Wells Fargo and JP Morgan announced significant layoffs to the consumer mortgage divisions, which they attribute to rising interest rates and slowing sales.

Sellers may be forced to reduce their prices if financing continues to become more expensive for buyers, market pros said. [WSJ] — Katherine Kallergis

Three Hundred Collins and Jason Halpern

A judge has ordered Jason Halpern’s JMH Development to turn over its remaining interest in Three Hundred Collins to its silent partner, amid ongoing litigation.

The five-story, 19-unit boutique condo at 300 Collins Avenue in Miami Beach’s South of Fifth neighborhood was completed this summer, and has just one unsold unit remaining: Penthouse 2 priced at $5.3 million. JMH must turn over that unit and any cash in the bank to its partner PSB Collins LLC, led by Dhruv Piplani, according to an order signed by Miami-Dade Circuit Judge William Thomas.

Piplani’s attorney Marko Cerenko said Piplani’s entity is also entitled to the cash proceeds of the $1.6 million sale of unit 3-A, which was purchased just before the lawsuit went to trial last week. The value of the total owed to Piplani’s entity is estimated at $6 million to $7 million, said Cerenko, a partner at Miami-based Kluger, Kaplan, Silverman, Katzen & Levine.

The judge also ordered that New York-based JMH’s entity is responsible for all costs and fees tied to the ruling. A hearing on the amount has not yet been set, but Cerenko said his client will seek to recover about $1 million.

JMH said it has appealed the judge’s order, and has moved to “stay” the ruling. The company said in a statement that “despite the distraction of the litigation” the project has been completed and that the order in no way affects the current owners of the 18 sold units. “JMH respectfully believes the trial court erred and it is entitled to the liquidated damages sought in the lawsuit,” the statement said.

The judge’s order is aimed to remedy a failed attempt by Piplani’s entity to buy out JMH’s share of the partnership in January, as part of a buy/sell agreement that was triggered, Cerenko said. At that time, four units at Three Hundred Collins had not yet been sold. Cerenko said his client had the funds ready to close in a title company’s escrow account, but JMH did not agree to sign off, citing a lack of proof.

Halpern’s and Piplani’s entities jointly developed Three Hundred Collins, and Piplani, who is based in Hong Kong, provided the vast majority of the equity, Cerenko said.

Piplani, Halpern’s silent partner on that deal as well as another previously planned on Indian Creek Drive, sued him in March 2017, alleging, among other things, that for Three Hundred Collins, Halpern “failed to fulfill his managerial and financial obligations.” The suit alleges that Halpern demanded that Piplani make payments to meet capital calls for the project in violation of the operating agreement, while refusing to make mandated distributions to Piplani, as part of “a scheme to strip away Piplani’s interests.”

Halpern has since been dismissed individually from the suit but his entity remains. Litigation also continues related to a project the partners had previously intended to develop on Indian Creek Drive in Miami Beach. JMH sold that property for $7.75 million in January 2017.

High-profile buyers at Three Hundred Collins include cosmetics executives Richard Ferretti and his husband, James Gager, who paid $5.8 million for a penthouse, and New York-based ATM clothing designer and founder Anthony Thomas Melillo, who paid about $2 million for unit 4E. Other buyers include celebrity restaurateur Myles Chefetz, who owns the nearby Prime 112 and Prime Italian.

Palm House Hotel, Related Companies Stephen Ross600

An affiliate of the Related Companies has emerged as the initial bidder for the Palm House Hotel as the failed condo-hotel project heads to a bankruptcy auction.

The stalking horse bidder, RREF II PALM HOUSE LLC, has the same address as Related Companies in New York and is led by Related Companies Managing Principal Justin Metz, according to a filing in U.S. Bankruptcy Court. The company is offering $32 million for the property, which will set the floor price for a bankruptcy auction scheduled for next month. Bids at the auction will start at $32.5 million.

The 79-unit condo-hotel project on Palm Beach Island stalled in 2014 and its former developer now faces allegations of fraud by the Securities and Exchange Commission and a group of EB-5 investors. In August, the property filed for bankruptcy under its court appointed receiver with creditors claims totaling $115 million.

Cushman & Wakefield’s Robert Given, Errol Blumer, Michael Mulkern and Robert Kaplan are the exclusive marketing advisers for the property. The auction is scheduled for 10 a.m. on November 16, 2018 in West Palm Beach.

Given said he expects the property to sell for up to $40 million and it could be the last opportunity for a developer to own a hotel in the wealthy enclave of Palm Beach. He said the next owner will likely not redevelop the property. Instead, the best option would be to continue renovating the existing project which could take more than a year to complete, Given said.

By auctioning the project through a bankruptcy sale, it will be offered free and clear from any liens. The bankruptcy also means that the new owner will not have any responsibility for the issues stemming from EB-5 investors who had invested in the property.

The 82,648-square-foot project was first developed in 1961 and expanded in 1981. The property was set to be renovated by a group led by developer Robert Matthews.

Matthews then raised $44 million from EB-5 investors, according to a complaint by the Securities and Exchange Commission. EB-5 is a federal program that allows foreign investors the chance to gain a green card if they invest at least $500,000 into certain projects that create at least 10 jobs.

The SEC’s complaint said, however, that much of this money was misallocated to pay for Matthews’ personal expenses. Some of the funds allegedly went to pay for Mathews’ Connecticut home, his 151-foot mega yacht, as well as to save his Palm Beach mansion from foreclosure, according to the complaint.

In a separate lawsuit filed by a group of EB-5 investors, the development group claimed that famous celebrities and politicians such as Bill Clinton, Donald Trump, Celine Dion and Bill Koch – would serve on the Palm House’s advisory board when, in fact, they did not.

Related Companies, led by Miami Dolphins owner Stephen Ross, developed CityPlace West Palm Beach. The company is also proposing to build a 25-story office project called One Flagler in downtown West Palm Beach. 

You’ve probably seen actor Tom Selleck suavely pitching federally insured reverse mortgages on TV and thought, hmm, that sounds interesting. He says you can turn your home equity into cash and not pay back anything — no principal, no interest, no fees — for years after your retirement.

And it’s true: Some form of a reverse mortgage could be a good choice for you, but it might not be the government-backed type Selleck is hawking. Those loans have hit tough times, and growing numbers of lenders have begun offering alternatives — proprietary, non-government reverse mortgages, including an innovative variant unveiled last month that allows owners to retain their current low-interest-rate regular mortgages while pulling out additional funds via the industry’s only “second-lien” reverse loan.

A little background: Annual volumes of the Federal Housing Administration’s reverse mortgages have tanked to their lowest level in 13 years and appear headed for further declines. The program is a financial nightmare for the FHA, performing so poorly that the FHA’s commissioner, Brian D. Montgomery, complained recently that it is “still hemorrhaging money,” despite repeated reform efforts.

Worse yet, FHA recently discovered hanky-panky in the appraisals used for reverse mortgages. An internal study by the agency found that in a sample of 134,000 loans, a stunning 37 percent of them had inflated values — the appraisers hyped the numbers — thereby exposing the agency’s insurance fund that backs the mortgages to bigger hits down the road. Some of the bogus value estimates billowed as high as 30 percent over actual market value in 2008 and 2009, though the average has moderated more recently.

Federally insured reverse mortgages are targeted at homeowners 62 years and older. They allow borrowers to supplement their retirement incomes by converting their home equity into cash via lump sum payments, monthly payments or credit lines. No repayment of the debt is required until the homeowners sell the house, move out or die. If the amounts borrowed exceed what the house can bring in a sale, the lender can file a claim against FHA’s mortgage-insurance fund and receive compensation.

Because of continuing multibillion-dollar insurance-fund losses, FHA has tried to rein in the reverse-mortgage program by limiting the amounts seniors can borrow against their houses, raising insurance premiums, and requiring applicants to demonstrate that they are creditworthy. These restrictions and other issues such as high fees have contributed to the program’s sharp plunge in volume, from just under 115,000 new loans in 2009 to 48,385 in fiscal 2018, the lowest total since 2005.

Drastic declines in business volume like this have spurred lenders to come up with alternatives. At least four major companies now offer proprietary, non-government reverse mortgages. They include Finance of America Reverse, Reverse Mortgage Funding, Longbridge Financial and One Reverse Mortgage. All of them allow much larger maximum-loan amounts than FHA. They also charge no mortgage-insurance premiums, and may permit loans to owners of condominium units in developments that have not been approved for FHA financing.

Kristen Sieffert, president of Finance of America Reverse — which continues to offer standard FHA-insured reverse mortgages along with its four proprietary alternatives — told me “we want to create a new proprietary product market for the long haul” that offers homeowners nationwide more flexibility and innovation than FHA can. For example, at the end of September, her firm debuted the industry’s first and only “second-lien” reverse mortgage, which is designed to allow owners who have low fixed rates on a first mortgage to retain that loan while tapping their equity via a fixed-rate second mortgage requiring no immediate repayments.

Other companies’ proprietary offerings have their own special niche features designed to improve on FHA’s rules: Equity Edge’s program lowers the eligibility age for some borrowers to 60 instead of 62; One Reverse Mortgage permits loans on houses with solar panels, to cite just a couple of examples.

Proprietary reverse loans have their own downsides, however. Generally, they are not aimed at the lower- to moderate-cost housing market like FHA, so they screen out potentially large numbers of owners from coverage. They may limit the total amount of equity you can access more strictly than FHA and require better credit histories. Like all reverse mortgages, proprietary alternatives should only be considered after discussions with an experienced financial counselor to make certain you’re getting a good deal.

Bottom line: They’re an important, growing resource for senior homeowners and worth at least a look if you’re considering a reverse mortgage.

(Credit: iStock)

The growth of e-commerce has been a boon for industrial landlords and investors across the U.S., fueling demand for warehouse and logistics space that has reached an 18-year high.

The third-quarter industrial availability rate — which measures properties that are vacant or about to be — stood at 7.1 percent, according to a new CBRE tally, the Wall Street Journal reported. That marks 33 straight quarters of falling vacancy rates.

The last time the vacancy rate was lower was at the start of the new century, when it reached 6.6 percent.

Even as nearly 50 million square feet of inventory was delivered across the country from July through September, the shrinking availability rate shows distribution and e-commerce fulfillment operations are occupying space as quickly as it is being built, CBRE said.

“The underlying story is a really strong consumer economy,” Richard Barkham, global chief economist at the firm, told the Journal. “But we’ve also got this big structural shift, which is the growth of e-commerce.”

The impending holiday season has led companies to push more goods through distribution networks, adding to the need for places to store and transfer cargo. Importers rushing to beat U.S. tariffs has contributed to the surge in recent months, with the National Retail Federation reporting soaring import volumes in the past three months.

An earlier report from CBRE showed the Inland Empire area around Los Angeles and the Chicago region were among the go-to places for industrial and logistics lease signings. Southern California tallied 11.6 million square feet of deals signed, followed by Atlanta at 7 million square feet, Chicago at 6.8 million square feet, Pennsylvania’s Interstate 78/I-81 corridor at 6.8 million square feet and Dallas-Fort Worth at 5.2 million square feet.

In New York, the price per square foot for industrial properties rose as much as 81 percent in some parts of the city this year.

And in Chicago, the demand for industrial properties has approached record levels. Through September, the local industrial market saw $2.8 billion in investment sales, which is $447 million ahead of the total at the end of September 2017, according to a Newmark Knight Frank study. [WSJ] — John O’Brien

A closed Sears retail store, located at Crossroads Center mall, sits vacant. The building is stained with the Sears logo (Credit: iStock)

A possible Sears bankruptcy could mean the end for the 125-year-old retail legend and yet another headache for the nation’s shopping mall owners.

A Sears bankruptcy could leave malls already dealing with the loss of major tenants like Carson’s with massive amounts of additional vacant space. Even worse, the malls would be losing an anchor tenant that for decades has successfully drawn shoppers to malls, according to a report in Crain’s.

Sears is just the latest retail giant that’s struggled to adapt to the rise in e-commerce. With the company in debt more than $5 billion, Sears executives this week began preparing for a possible bankruptcy filing, leaving the future of its 900 remaining stores in doubt.

A bankruptcy could lead to liquidation, meaning Sears would join Carson’s and Toys ’R’ Us among the bix-box retailers forced to shutter thanks to changing consumer habits.

Malls are already feeling the crunch. The vacancy rate at malls nationwide hit a seven-year-high in the third quarter, and average mall rents slid for the first time since 2011. The closing of certain Sears stores was cited as one of the reasons for the high vacancy rate.

The combined loss of Carson’s and Sears is leaving gaping holes at some shopping malls, which are having to get creative in order to fill the space.

A mall in suburban Chicago, for example, is considering adding apartments, a hotel or medical offices. Some malls in markets like Chicago and Los Angeles have turned to co-working spaces and business parks to fill former anchor spaces.

Complicating the redevelopment of shuttered Sears locations is that the retailer owns many of its stores, including in malls. Sears’ real estate arm, Seritage Growth Properties, has generated billions for the company by selling off Sears real estate assets, but it’ unclear what would happen to Seritage under a bankruptcy filing, Crain’s reported. [Crain’s] — Joe Ward

Ball & Chain, Bill Fuller and Joe Carollo

Late-night stakeouts, targeting businesses, and circumventing city procedure are among the allegations Barlington Group principals Bill Fuller and Martin Pinilla are making against Miami Commissioner Joe Carollo.

Fuller and Pinilla are suing Corollo in federal court, alleging the commissioner violated their right to free speech, using code enforcement to retaliate against them for supporting his opponent, Alfie Leon, in last year’s election, according to the Miami Herald. They’re seeking $2.5 million in damages, including for shutting down “Sanguich,” a restaurant built out of a rehabbed shipping container.

Barlington owns stakes in at least 40 commercial properties in Little Havana, the majority of which can be found along Southwest Eighth Street. Fuller is also a co-owner of the popular nightclub Ball & Chain.

According to the suit, former city employees have admitted they felt pressured by Carollo to target Fuller-owned businesses. In one grievance, his former aide, Steve Miró, said Carollo wanted him to lie to ethic investigators about code complaints.

Carollo has denied telling city employees to target Barlington’s properties and tenants, but defended his late-night visits to Ball & Chain’s valet parking operation. He also denied that he’s acted in retaliation for their support of his opponent.

On Thursday, someone attempted to serve Carollo the lawsuit during a Miami commission meeting, but City Attorney Victoria Mendez told the person to leave.

“Who are you? A process server? Get out. You can’t do that here,” she said. “You can wait outside. You can’t do that here. Get out.” [Miami Herald] – Amanda Rabines

Aston Martin Residences

The developer of the Aston Martin Residences in downtown Miami is aiming to make a splash with the latest amenity offering: a butler service that takes owners from the luxury high-rise to the sand – via yacht.

G&G Business Developments is working with International Booking Services LLC to offer the amenity, which includes home management and luxury travel support. G&G, owned by the Coto family of Argentina, is also working on deals with beachfront properties that would give residents access to those beaches. A spokesperson declined to identify the sites.

The plan to offer residents their own beach – despite the building being located on the bay at the mouth to the Miami River – isn’t new for the future 66-story, 391-unit tower Aston Martin Residences. In May 2017, the Miami City Commission decided not to pursue an unsolicited and controversial bid to build a $4 million pavilion at Virginia Key Beach Park – a historic beach that was once segregated.

A report in August found that Greater Downtown Miami has about five years of excess supply of luxury units priced at least $1 million, based on the current pace of sales. Luxury condo developers in Miami are upping their amenity game amid an oversupply of new projects.

At the Estates at Acqualina in Sunny Isles Beach, developer Jules Trump is building Villa Acqualina with 50,000 square feet of amenities that include Formula One simulators, an ice-skating rink, bowling lanes and a movie theater. And at the Ritz-Carlton Residences, Miami Beach, Lionheart Capital will have an on-site house yacht that can take residents around Surprise Lake.

Prices at Aston Martin Residences, at 300 Biscayne Boulevard Way, range from about $600,000 to more than $50 million. It’s expected to be delivered in 2021, which some say could be the start of the next cycle.

Gulfstream Park, Belinda Stronach and Frank Stronach (Credit: Getty Images, 401(K) 2012 via Flickr)

A Canadian billionaire’s dispute with his daughter over his fortune involves valuable horse-racing tracks in Los Angeles and South Florida.

Frank Stronach, who built the Magna International car parts empire, is suing his daughter, Belinda Stronach, and other family members, for about $400 million, claiming they mismanaged the family’s assets and worked to limit his control over the fortune he created.

Stronach, who now lives in his native Austria, filed a 73-page suit in a Toronto court earlier this month, alleging “a complete breakdown” within the Stronach family, the Globe and Mail reported.

The Stronach Group, a Magna-related company, owns a sprawling collection of real estate, including top race tracks such as Santa Anita Park in Arcadia, Calif.; Gulfstream Racing Park and Casino in Hallandale Beach, Florida; and Pimlico in Baltimore. His daughter Belinda, the company’s president, had been taking a leading role in running the race tracks in recent years.

Under her leadership, Stronach Group had been exploring ways to better monetize the 250-acre Santa Anita park. The racing course is worth at least $500 million, the Pasadena Star-News reported. But the company is facing challenges from declining U.S. racing attendance and off-site and online wagering.

A Magna subsidiary purchased Gulfstream in 1999 for $95 million. The area near the track and casino complex has attracted new development, including Alan Waserstein’s Nine Hundred, a 23-story mixed-used tower.

In 2006, Gulfstream and Santa Anita cohosted the Sunshine Millions, a competition day with $3.6 million in stakes races between horses bred in California and Florida.

After selling his Magna shares in 2010, Stronach stepped down as chairman a year later. Lately, he has been working to put together farmland in north-central Florida and now owns about 90,000 acres devoted to raising grass-fed cattle, the Globe and Mail reported.

He is thought to be the seller of more than 1,200 acres in the Ocala area that came on the market last month after a country club on the property closed.

Back in Europe, Stronach served in the Austrian parliament as the leader of Team Stronach for Austria, a pro-business, Euro-skeptic populist party that enjoyed moderate success in the 2013 election. He famously stripped off his shirt during a media interview. “I don’t have to be ashamed of my body,” he said, then 80 years old.

Tune in next week for a good line-up of events.

On Oct. 18, Bisnow is hosting its South Florida State of Office event from 7:30 a.m. to 11 a.m. at 100 Biscayne, 100 Biscayne Boulevard. Attend and discuss the future of the South Florida office market. Jonathon Yormak of East End Capial, Mukang Cho of Morning Calm Management, Tere Blanca of Blanca Commercial Real Estate, among others, will provide speeches at the event.

Also on Oct. 18, the Kabani Hotel Group of Marcus & Millichap is hosting its 3rd Annual Hotel Investment Forum from 11 a.m. to 3 p.m. at the Pullman Miami Airport Hotel, 5800 Blue Lagoon Drive. Join influential industry leaders as they gather to discuss who is buying, who is building, the tax reform and much more. Hitesh Patel of AAHOA will provide the keynote speech.

To search for future industry events or browse past ones, click here. And to submit more industry events, please reach out to events@therealdeal.com.

From left: Carlos Curbelo, Stephen Ross, and Joe Crowley with CityPlace South Tower in Florida and 15 Hudson Yards (Credit: Getty Images and Highrises)

A stalled bill in the House of Representatives would grant luxury condominium developers the same tax benefits homebuilders already receive, saving them millions during construction.

The “Fair Accounting in Condominium Construction Act,” introduced last summer by Miami Republican Carlos Curbelo and co-sponsored by Queens Democrat Joe Crowley, would allow condo developers to defer income tax on condo unit sales until they’ve finished building.

It’s a tale of two tax accounting methods that stretches back decades.

Condo developers are supposed to use the “percentage of completion” accounting method when paying their taxes, meaning they must recognize a portion of their revenues and expenses for each tax year for the duration of the construction contract. But single-family builders get to use the “completed contract method,” under which home sales are not recognized for tax purposes until the construction contract is over.

“You’re busy paying off the bank and the tax man is adding up your theoretic profits even though they’re not real in a cash basis,” said developer Francis Greenburger, founder of Time Equities.

That includes getting taxed on in-contract sales from which the developer is yet to see any money, according to a policy paper by the Real Estate Roundtable lobbying group.

Letting condo developers file their taxes like homebuilders would allow them to not only defer income taxes owed on pre-construction apartment sales for up to five years, but in some cases, also lower their overall tax burdens, said Thomas Castelli, a tax strategist at The Real Estate CPA in New York.

“There may be tax planning scenarios that exist to save stakeholders money in taxes based on the timing around recognizing different sources of income,” Castelli said. Deferred recognition of income could put developers in lower tax brackets during the early years of a development. “But more importantly, deferring these taxes can have a positive effect on cash flow management and reduce the financing costs of a development project.”

For example, deferred taxes can reduce the need to take on as much additional debt, which is common in the late phase of condo construction, when developers sometimes take out “condo inventory loans” backed by unsold units.

So why do Crowley and Curbelo care enough about this obscure tax accounting discrepancy to sponsor a bill? It goes back at least a decade.

After the financial crisis shook the housing market, the Internal Revenue Service proposed accounting changes with the aim of helping builders, according to an article in the Journal of Pass Through Entities. The IRS never made good on the proposed regulatory guidance, however. In 2016, 10 senators signed a letter addressed to then-Treasury Secretary Jack Lew asking for new rules to finally be instituted. Signatories mostly included senators from states with major metro areas, like Democrats Chuck Schumer of New York and Bill Nelson of Florida. Nothing happened.

“Legislation may be the most likely route, in light of all the work ongoing at Treasury, just with tax reform and everything else they’re dealing with right now,” said Ryan McCormick, the tax policy expert for Real Estate Roundtable in Washington, D.C., which has lobbied Congress on the proposed condo bill.

Related Companies, which develops condos in both New York and South Florida, has lobbied Congress on the bill as recently as this summer, federal lobbying records show. Its top executives, Steve Ross and Jeff Blau, are among the top donors to Rep. Crowley’s political action committee, the Crowley Leadership Fund. Blau and Ross each made $10,400 contributions to the fund in December. Related’s lobbyist on this issue, Jon Gans of Polaris Consulting, did not return a request for comment. The penthouse at Related’s new 15 Hudson Yards condo tower in Manhattan hit the market last year asking $32 million.

Other condo developers, including Extell Development’s Gary Barnett and Fetner Properties’ Hal Fetner, also donated to Crowley. Curbelo’s donors include South Florida condo developer Ricardo Vadia and multiple executives from luxury homebuilder Codina-Carr.

A spokesperson for Curbelo did not respond to requests for comment about the bill and a spokesperson for Crowley said they were “going to pass on the opportunity” to discuss the legislation.

Crowley, who is in the lame duck phase of his last term in Congress, recently lost in the Democratic primary to progressive challenger Alexandria Ocasio-Cortez, who criticized Crowley for his ties to developers.

In 2015, Crowley sponsored reform of the Foreign Investment in Real Property Tax Act, or FIRPTA, to encourage more money to come into U.S. real estate from overseas. The bill followed a surge in industry contributions to the congressman, The Real Deal reported at the time.

It’s now been more than a year since condo tax accounting bill was introduced, but it is not currently scheduled for any hearings or markups in the House Ways and Means Committee.

Ian Bruce Eichner and his Continuum South Beach unit (Credit: Douglas Elliman)

New York developer Ian Bruce Eichner is giving the sale of his Miami Beach penthouse another go.

After listing his Continuum South Beach unit for $50 million in 2015, the 13,000-square-foot condo is back on the market for $48 million, according to the Wall Street Journal. The seven-bedroom unit features a screening room, 6,091-square-foot terrace with its own pool, and a large open kitchen.

Eichner’s Continuum Company completed the two-tower development in 2003, and it features two pools, a gym and tennis courts. His penthouse comes with a guest unit on a lower floor and 10 parking spaces.

Eichner told the Journal that he’s looking to sell the penthouse because he uses it less than one month a year.

Douglas Elliman has the listing.

In early 2016, Eichner’s brother Stuart listed a unit he owns at the complex for $12.9 million. It sold in April for $9.3 million. [WSJ] – Katherine Kallergis

Sheridan Village, River Oaks Tower & Marina and Pinnacle Lakes

Sheridan Village – Bell Partners | $92M

The top apartment deal in September took place in Pembroke Pines.

Multifamily investment firm Bell Partners paid $91.8 million for the Sheridan Village apartment complex at 16700 Sheridan Street.

AVR Realty Company sold the 300-unit complex for roughly $306,000 per apartment.

Records show AVR bought the property in 2014 for $78 million, the same year it was completed by the Altman Companies.

River Oaks Tower & Marina – Neology Life | $61M

The second-priciest deal also marks developer Lissette Calderon’s return to real estate since leaving the Related Group in 2016.

Calderon’s firm, Neology Life paid about $61 million for the River Oaks Tower & Marina with plans to renovate the waterfront apartment building. Calderon developed Neo Lofts and Neo Vertika, also on the Miami River.

Neology Life financed the deal for the 199-unit, 20-story rental tower at 1951 Northwest South River Drive with a $45.75 million bridge loan from Voya and Berkadia.

Pinnacle Lakes – Treetop Development | $25M

Treetop Development paid $24.5 million for one of Pinnacle Housing Group’s affordable housing complexes in North Miami Beach.

The 15-acre complex features 226 subsidized apartments and was built in 1971. Pinnacle paid $5.5 million for the development in 2002, according to property records.

The trade breaks down to about $108,000 per unit for Pinnacle Lakes at 18701 Northeast Third Court. Treetop financed the deal with a $16.95 million loan from Argentic Real Estate Finance.