Luma West Palm Apartments

South Florida developer Charles Scardina Jr. sold a new apartment complex to a Salt Lake City firm for nearly $67 million.

Scardina’s Luma at West Palm Beach LLC sold Luma West Palm Apartments at 7130 Okeechobee Boulevard to CC West Palm Beach LLC, which is tied to Cottonwood Residential.

The deal breaks down to about $273,000 per apartment. Luma was built on a 10.2-acre site west of the Florida Turnpike in 2018. Florida Community Bank provided the $35.6 million construction loan for the project.

Cottonwood Communities, a real estate investment trust, announced the deal was under contract in April. The development includes a heated pool with cabanas, fitness center, 5,500-square-foot clubroom, business center and dog park. The units range from one- to three-bedrooms averaging 1,122 square feet.

In August, Cottonwood launched a $750 million offering to invest in multifamily properties throughout the U.S., according to a release. As of February, it has raised $9.4 million in investor equity.

The REIT cited strong employment in West Palm Beach as part of its decision to acquire Luma. Major employers in the area include Florida Power & Light, the Scripps and Max Planck Research Institutes, and United Technologies.

Related Group’s chairman and CEO Jorge Pérez recently said he plans to use the Opportunity Zones tax break to build market-rate apartments in West Palm Beach.

From left: Scott O’Donnell, Greg Miller, Dominic Montazemi, and Miguel Alcivar with the property

SF Partners sold a West Palm Beach office building for $8.5 million.

The Miami-based company sold Commerce Pointe Gold, a 43,433-square-foot Class B office building at 1800 South Australian Avenue for $195.7 per square foot, according to a press release. The buyer was Commerce Pointe Gold LLC, a company tied to National Business Parks of Princeton, New Jersey.

SF Partners had paid $4.2 million for the four-story office building in 2011, records show. The company improved tenant occupancy from 52 percent to 99 percent, the release said.

Cushman & Wakefield’s Scott O’Donnell, Greg Miller, Dominic Montazemi and Miguel Alcivar negotiated the sale on behalf of SF Partners. Commerce Pointe Gold, LLC was represented by Jason Sundook and Neil Merin of NAI/Merin Hunter Codman.

The office building was developed in 1986 on a 2.8-acre campus, according to the release. Tenants include the law offices of Craig Goldenfarb; Sasser, Cestero & Sasser; AEG Live SE; and Scuttina Real Estate Group.

The sale could signal that even Class B office properties in West Palm Beach are trading at much higher prices due to limited inventory of Class A office space in the city.

Large development groups are planning more office projects, however. In August, the West Palm Beach City Commission approved the Okeechobee Business District, allowing Related Companies’ 25-story Class A office building to go forward.

Blackstone CEO Stephen Schwarzman (Credit: Getty Images, iStock)

UPDATED: Monday, June 3 at 10:45 a.m. Blackstone Group is betting big on ecommerce with an $18.7 billion purchase of warehouse assets across the U.S., one of the largest industrial real estate deals in history.

The properties span 179 million square feet overall, and Blackstone is buying them from the Singapore company GLP Pte, according to Bloomberg. Retailers have needed more space for warehouse property as the popularity of online shopping continues to grow.

Blackstone has made several deals to purchase logistics space in recent years. Last year, it purchased Canyon Industrial Portfolio’s last-mile assets for $1.8 billion and reached a $1.9 billion deal to buy Canada’s Pure Industrial Real Estate Trust. It also agreed to spend $950 million for more than 100 warehouse assets from Harvard University’s endowment.

There are about 1,300 properties in the GLP portfolio, and Amazon is its biggest tenant. Blackstone, the world’s largest private manager of real estate assets, won the properties in an auction that also saw bids from Prologis and Brookfield Asset Management.

“Logistics is our highest conviction global investment theme today,” Ken Caplan, the global co-head of Blackstone Real Estate said in the statement, “and we look forward to building on our existing portfolio to meet the growing e-commerce demand.”

In April, Blackstone said its assets under management reached $512 billion. It’s in the process of seeking $5 billion for its latest real estate fund.

[Bloomberg] – Eddie Small

Correction: An earlier version of this article, repeated from the Bloomberg report, said this was the biggest private equity real estate deal ever. In fact, the largest private equity real estate deal was Blackstone’s $39 billion purchase of the Equity Office portfolio.

Rendering of the project, Avra Jain and Bob Zangrillo

Developer Avra Jain and her partners, who include Bob Zangrillo, are planning a $200 million mixed-use project with a Sixty Hotel along the Miami River.

About two years ago, a partnership led by Jain and Zangrillo paid $5 million for partial ownership of the 2.3-acre property at 555 Northwest South River Drive. Zerby Interests, a developer out of Oklahoma City, is the majority owner. Jain’s partners include Joe Del Vecchio, she said.

Zangrillo stepped away from the $1 billion Magic City development in Little Haiti after he was among the parents indicted in the Varsity Blues college admissions scandal earlier this year.

Sixty Hotels, a luxury hotel brand with properties in New York City and Los Angeles, will operate the 175-key hotel. It will mark the only South Florida hotel for Sixty, a hotel group owned by brothers Jason, Michael and Lawrence Pomerance. It previously operated the Nautilus hotel in Miami Beach.

The 12-story Miami River development, designed by architect Carlos Zapata, will also include 39 Sixty Hotels-branded condos that owners will be able to have in a rental program. The condos, averaging 1,150 square feet, with be in the $1 million to $1.5 million range, said Jain, who is owner of the Vagabond Group. Zapata, a New York City-based architect, designed Concourse J at Miami International Airport. His international portfolio includes the Bitexco Financial Tower in Vietnam’s Ho Chi Minh City and the JW Marriott Hotel in the Convention Center Campus of Hanoi.

The Miami project will also have about 140,000 square feet of creative Class A office space for tenants that could include family offices, tech firms and other companies that are considering alternatives to submarkets like downtown Miami, Brickell and Miami Beach, according to Jain.

The developers submitted plans to the city’s planning and zoning department for review and will go before the Miami River Commission this week. The Next Miami first reported plans for the project. The entire project, including land costs, entitlements and financing, will be valued at about $200 million, Jain said.

If approved as planned, it will connect the parking garage to the office buildings. The property also includes 585 feet of riverfront, most of which will be part of the Miami Riverwalk.

Other projects along the river include Mast Capital and AEW Capital Management’s Miami River Walk rental development, which recently scored a $60 million construction loan, KAR Properties’ planned One River Point luxury condo tower, and River Landing.

Douglas C. Yearley, Jr. Chairman and Chief Executive Officer of Toll Brothers with a rendering of the Avenir Development

Count Toll Brothers as the latest homebuilder looking to develop in western Palm Beach County.

The luxury homebuilder paid $21.7 million for 217 lots in Avenir at 12200 Northlake Boulevard in Palm Beach Gardens, records show. The price equates to about $100,000 per lot.

Toll Brothers bought the property from Avenir Development, which is tied to Landstar Development Group, the primary developer of the project.

Avenir is a massive, planned 4,783-acre community west of Bee Line Highway. It was approved for about 3,000 single-family homes, 400,000 square feet of commercial space and 1.94 million square feet of office space.

The development will take 30 years to complete and will include a golf course as well as a crystal lagoon. It will be built in phases, according to the Palm Beach Post.

More homebuilders are seeking to develop new home communities in western Palm Beach County. Buyers are looking for more affordable homes and housing communities outside of major cities.

Other large-scale mixed-use communities include Westlake, Arden and Iota Carol.

SoftBank’s Masayoshi Son (Credit: Getty Images)

SoftBank is eager to raise another $100 billion Vision Fund focused on tech startups. Its investors? Not so much.

Some of the largest money managers in the world that SoftBank approached are planning to make limited or no contributions to the Japanese company’s next venture, according to the Wall Street Journal. These include Canada Pension Plan Investment Board and Saudi Arabia’s Public Investment Fund, which was the largest backer of SoftBank’s first Vision Fund with a $45 billion investment.

Some firms are wary of the new venture due to the fund’s governance and lack of transparency, while some larger companies already have startup investment programs of their own and do not want to pay fees to SoftBank.

SoftBank has hired Cantor Fitzgerald to help fundraise, and the financial services firm is working to introduce the company to large institutional investors. SoftBank hopes the networks of Cantor Fitzgerald president Anshu Jain and CEO Howard Lutnick will help it find new investors for the fund.

The second Vision Fund has already considered going public to keep pace with the investment pace of CEO Masayoshi Son.

SoftBank — which has bankrolled real estate companies like the We Company and Compass — has said it can contribute $50 billion to the fund on its own. The company raised the first fund two years ago, and it is almost fully spent.

A spokesman for SoftBank told the Journal that it was “misleading and even inaccurate” to say the next Vision Fund was having trouble attracting investors. [WSJ] – Eddie Small

Juan Porro, Managing Director of FCI Residential

FCI Residential scored a $54.1 million construction loan to build a new apartment community in Miramar.

The development arm of sugarcane giant Florida Crystals secured the construction loan from Regions Bank to build an apartment project called Catalina at Miramar. The project is approved for up to 300 apartments between Flamingo Road and Red Road just south of the Homestead Extension of the Florida Turnpike, records show.

FCI Residential has another completed apartment project, Atlantico at Miramar, next to the Catalina at Miramar.

In July 2018, FCI Residential paid $16.1 million for the 29-acre multifamily development site for Catalina at Miramar, property records show. The company bought the property from Ansin Group LTD, led by James Goggins, Andrew Ansin and Rodney Bacher.

FCI Residential was founded in 2012 by Florida Crystals and now owns more than 4,500 apartments across Southern Florida, according to its website.

Prestige Biscayne at 12501 Northeast 13th Avenue, North Miami, with John Sasso and Shuli Stock

Former NFL star Elvis Dumervil paid $10 million for an apartment building in North Miami, adding to his multifamily portfolio, The Real Deal has learned.

Dumervil’s Prestige Estates bought the 91-unit Arlington Manor property at 12501 Northeast 13th Avenue, with plans to rename it Prestige Biscayne, said John Sasso of Charles Rutenberg Realty. Sasso and his partner Shuli Stock brokered the off-market deal that equated to $110,274 per unit.

Records show the seller is Palm NMB LLC, led by Valentina Georgescu of Hollywood.

The 113,927-square-foot building was built in 1969. It has a mix of seven studios, 14 units with one bedroom and one bath; 37 one-bedroom, one-and-a-half baths; three two-bedrooms with one-and-a-half baths and 30 two-bedrooms with two bathrooms.

Sasso said Dumervil plans to renovate the apartments. “This is one of the top five biggest properties in the area, on a main artery,” Sasso said.

Dumervil played for the Denver Broncos, Baltimore Ravens and San Francisco 49ers, and formed his property management and investment firm in 2016. By September, he had amassed a portfolio of more than 700,000 multifamily units, mostly in North Miami and North Miami Beach.

In the past year, Sasso said he and Stock have sold Prestige Estates five buildings in North Miami with a combined 264 units. Dumervil paid a total of $27.4 million, or an average price per unit of nearly $104,000.

Sasso said North Miami was an undervalued and overlooked area for many years, and Dumervil has helped change the face of the city.

Among the former defensive linebacker’s properties are Prestige Place, Prestige Boardwalk and Prestige Pointe, according to his company’s website.

100 South Pointe Drive (Credit: Realtor)

An heir to the fortune of Philadelphia businessman Lewis Katz purchased a condo at the Continuum in South Beach.

Property records show Melissa Silver, previously Melissa Katz Silver, paid $6.8 million for unit 3707 at the Continuum. Silver’s father was Lewis Katz, the previous co-owner of the Philadelphia Inquirer, who had an estimated net worth of $400 million at the time of his death in 2014. Katz was a lawyer and businessman who made his millions in parking lots, billboards, radio and sports.

A trust managed by Harold M. Anderson Jr. and Karita Mitchell sold the three-bedroom, 2,954-square-foot unit at 100 South Pointe Drive in Miami Beach.

Nancy Batchelor of EWM Realty International represented the seller, and Isaac Lustgarten of Douglas Elliman’s Alexander Team represented the buyer.

It sold for about $2,300 per square foot.

The condo features an open kitchen, marble bar, private elevator, smart home amenities and a master suite with a spa bath and master closet, according to the listing.

It last sold in 2013 for $8.25 million, property records show. That means the unit sold at a discount of nearly 18 percent from its previous sale.

Last month, fitness expert Mark Sisson, who agreed to sell his company to the Kraft Heinz Co. for about $200 million, paid $13.25 million, or $3,026 per square foot, for a unit in the same Continuum tower as Silver.

The Continuum is undergoing an exterior renovation designed by ArquitectonicaGEO. The development was built by Ian Bruce Eichner’s Continuum Co. in the early 2000s.

(Credit: iStock)

Amazon’s Alexa could soon come as a standard amenity when moving into a new home.

The everything company’s Alexa Smart Properties team is trying to partner with property managers, homebuilders and hoteliers to put its virtual assistant into homes throughout the country, according to the Wall Street Journal. It hopes to up its market share by offering custom software, discounted hardware and new ways for property managers to collect and use data.

The move would allow Amazon to add millions of new users and provide tenants with amenities they couldn’t install themselves at rental properties. However, it could also prevent tenants from switching to products from competitors and raise a host of privacy issues.

Amazon has already partnered with Zego, a subsidiary of the rent-payment service PayLease, and the firm hopes to use this partnership to make it easier for tenants to pay rent. PayLease hopes to launch its Alexa-compatible smart-home system to more than six million apartments within five years.

Lennar Corporation, one of the largest home builders in the country, also started offering Amazon’s smart speakers last year in a portion of the 35,000 new homes it built, a move it will continue to do this year.

And Amazon is building data hubs for Marriott as well for the launch of its Alexa for Hospitality service. The hubs will let Amazon provide information about how guests engage with Alexa devices in hotel rooms, which will be able to perform services ranging from adjusting the thermostat to recommending restaurants. [WSJ] — Eddie Small

Alex Sapir (Credit: Getty Images)

Developer Alex Sapir’s Israeli real estate company Sapir Corp. reported a loss of 26 million shekels in the first quarter, the equivalent of roughly $7.2 million.

The company’s revenue in the first quarter totaled 23 million shekels, or about $6.4 million, which grew from nearly zero the previous year, Globes, an Israeli financial newspaper, reported.

Revenue was up year-over-year because Sapir Corp. bought out partner Gerard Guez’s stake in the NoMo Soho hotel at 9 Crosby Street in New York, increasing its ownership of the property, said Baruch Itzhak, CEO of Sapir Corp.

Losses exceeded revenue due to higher operating expenses at the hotel, as Sapir took over full ownership, according to Globes.

In May, the company, which is publicly traded on the Tel Aviv Stock Exchange, closed on a $32 million refinancing from the estate of Tamir Sapir to pay back Israeli bonds tied to a Surfside development that were due next year.

The financing from Tamir Sapir’s estate will be due in April 2021. The loan has a fixed interest rate of 6.94 percent, according to Sapir Corp.

Sapir’s properties include NoMo Soho and Arte by Antonio Citterio, a 16-unit, 12-story condominium building at 8955 Collins Avenue in Surfside.

The firm plans to deliver Arte this summer. Sales launched with Corcoran Sunshine during Art Basel Miami Beach in December. Alex Sapir sold at least two units — to his mother, Bella, and to his sister, Ruth Sapir-Barinstein, for a combined $20 million for the entire eighth floor of the project.

Earlier this year, the company sought shareholder approval to use the deposits to help fund construction costs tied to completing the development.

Sapir Corp. also recently refinanced NoMo Soho with a $115 million loan from Goldman Sachs, which includes a $3 million gap mortgage from the bank and $73.3 million from a Sapir-related company.

Robert M. White, Jr., founder and president of Real Capital Analytics

Real Capital Analytics, the data firm that tracks global commercial real estate sales and trends, secured $115 million in growth equity to fund expansion into overseas markets and buy out a minority stake owned by Daily Mail Group Trust. The investment included Series B equity as well as debt, and is one of the largest bets on a real estate technology company.

The New York-based firm, which launched in 2000 and is now valued at close to $220 million, received the investment from Philadelphia-based Susquehanna Growth Equity, a deal that closed after just 60 days, its founder and chief executive Bob White told The Real Deal.

Daily Mail Group Trust (DMGT), which invested heavily in the space for about a decade but has recently been winding down its bets, paid $7.5 million for a 40 percent stake in RCA in 2007. The recent funding valued that stake at $89 million.

White said that he had sought a new investor that could “move a bit quicker” on acquisition and growth opportunities and is “more aligned with RCA.”

“They [DMGT] are a big company with a lot of different businesses, and, quite frankly, I wanted to get some partner that would be more supportive of RCAs growth,” White said.

He said the remaining $26 million would be used for investments in data firms overseas, primarily in Europe and Asia, where the company has made bets on three early-stage companies. In a statement, Brian Feldman, managing director at Susquehanna, said the firm “could not be more excited to support RCA as it continues to transform the commercial real estate industry.”

The real estate data sector has seen a torrent of dealmaking over the past year. CoStar Group, the real estate data giant with a current market cap of over $18 billion, acquired Cozy and Realla last year. Earlier this year, Moody’s Analytics launched a new portal named the Reis Network, that provides tools offered by a multitude of real estate data firms, including CompStak and Rockport VAL. That platform is built around Moody’s $278 million acquisition of commercial real estate data company Reis in September last year.

VTS, a cloud-based leasing portfolio management software firm, last month claimed that it was worth $1 billion after securing a $90 million funding round led by Brookfield Asset Management and GLP.

And last month, a new operating company, Lightbox, acquired two firms valued over $200 million, bringing its total number of acquisitions to four. Lightbox is majority-owned by Silver Lake, a tech-focused private equity investor with $45 billion under management, and Battery Ventures, a Boston-based investment firm with almost $7 billion under management.

RCA has long been an acquisition target for private-equity firms and data companies. When asked if he saw potential to be acquired by one of the larger firms, including Lightbox, White said RCA “certainly could be,” but added that he had multiple partnerships with other firms in the sector.

The Susquehanna deal was attractive, he said, as it allowed him to retain majority ownership and remain in charge.

“I love it. I’ve had plenty of opportunities to sell out, but I wanted to stay involved,” he said. “And in control.”

Renderings of Rosemary Square and 360 Rosemary

High tech and big money are continuing to bet on West Palm Beach.

An artificial intelligence company and a private investment firm signed leases for a combined 42,000 square feet at the Related Companies’ Rosemary Square in downtown West Palm Beach, according to a release.

Comvest Partners, an investment firm with $3.2 billion of assets under management, has signed the first lease for 26,000 square feet at Related Companies’ 360 Rosemary, the release said. The Class A office tower is currently under constuction. Comvest will move from another office it has in Rosemary Square at 525 Okeechobee Boulevard.

Levatas LLC, an artificial intelligence solutions and software company, is relocating its headquarters from Palm Beach Gardens to a 16,000-square-foot space in Rosemary Square. Levatas’s new office is expected to open in early 2020, and will not be in 360 Rosemary, according to the release.

360 Rosemary broke ground on May 16 and will be built within Rosemary Square, the development formerly known as CityPlace. It is expected to be completed in early 2021, the release said.

Jon Blunk of Tower Commercial Real Estate is the exclusive leasing agent for 360 Rosemary and represented Related in both transactions.

CBRE’s Kevin McCarthy and Kevin Probel represented Comvest, while JLL’s Cameron Tallon represented Levatas.

360 Rosemary is one of the few new office buildings planned for West Palm Beach. It will total 300,000 square feet and was designed by Elkus Manfredi Architects and Leo A. Daly.

Related Companies officially changed the name of CityPlace to Rosemary Square in April. The mixed-use property is currently undergoing a $550 million redevelopment. Related Companies is planning to redesign the plaza, public spaces and green areas and add outdoor dining venues, new stores and interactive art.

In November, Related Companies secured approval for a 21-story apartment building on the site of a former Macy’s building at CityPlace.

Rexford Industrial co-CEOs Howard Schwimmer and Michael S. Frankel and Rexford properties in Thousand Oaks and Industry

As one of the largest industrial landlords in Southern California, Rexford Industrial owns more than 22 million square feet of property across the region, about half of which is in Los Angeles County.

At a time when industrial real estate prices are soaring across the country — the Blackstone Group announced Sunday an $18.7 billion acquisition of warehouse assets — Rexford has closed some of the biggest purchases and sales in Southern California over the last several years.

Last year, the real estate investment trust spent $500 million on industrial properties and is keeping up its pace this year. On Monday, the company touted its $34.5 million purchase of two more industrial properties in infill markets near Los Angeles.

The Real Deal caught up with Howard Schwimmer and Michael Frankel, who co-founded Rexford in 2000 and now serve as its co-CEOs, to talk about how they pencil out deals and compete for transactions in one of the country’s hottest industrial markets.

As one of the most active investors in L.A., what’s your short- and long-term strategy?

Michael Frankel: Rexford is solely focused on infill [industrial real estate] in Southern California and [our goal is] to grow the company some multiples of what it is today and stay focused on infill Southern California. It’s a large and vast market of opportunity for us.

Rexford isn’t the only one buying up property — is it a race to hold as much industrial space as possible?

Howard Schwimmer: If we were in a race to buy for the sake of buying, we’d be five or 10 times bigger than we are right now. We make a lot offers on substantially more product than we buy.

Frankel: For us it’s a race to find the right investment opportunities, because our goal is to find deals where we can create value. Industrial is hot and you see a lot of institutional capital targeting industrial, but they’re just kind of moving the “Monopoly” pieces around, whereas we’re looking for opportunity or create more value.

Where do you see the best opportunities to create value?

Schwimmer: Our focus is on markets that don’t have much of any land to talk about, so the opportunity is really in creating value in older assets and occasionally funding an opportunity to build a new structure.

Frankel: In this market, when you think of institutional quality, a lot of people think of brand-new buildings with a lot of glass that look really pretty. But we’re looking at… institutional quality investment. Nowhere in the country can you find better tenant demand fundamentals than you can in infill Southern California, irrespective of the vintage of the building.

How do you navigate a tight market and compete with other investors?

Frankel: We have a dedicated research team and we combine that with a broker marketing and loyalty program, so we consistently bring opportunities to brokers. We bring brokers into deals all the time because they’re best suited to make the seller feel comfortable with the transaction.

Schwimmer: The typical model for most buyers, when we talk about institutional capital, is they’re buying institutional quality industrial real estate. They’re spread thin — they typically have a team that covers many markets in addition to Southern California — so they mostly see fully marketed deals that brokerages put out. When you’re competing [for those deals], it’s really a beauty contest to see who will accept one with the lowest yield. We didn’t want to be in that type of a business. That’s why we focus on off-market deals driven by our own internal research.

Does the REIT model offer advantages in the industrial space?

Frankel: It does. We like the competitive cost of capital. We have permanent capital through the public markets. It enables us to scale in a way to outcompete non-public players. Having a public currency can be an attractive opportunity for a seller who can trade property to Rexford in exchange for ownership in Rexford for a tax-deferred basis. That’s what we call an UpREIT transaction.

You started Rexford almost 20 years ago. Why did you choose the industrial sector?

Frankel: I’ve been doing this for 36 years and I don’t think I knew what I was getting into when I started, but I’m finally in the right place at the right time. There’s tremendous benefit to being focused. It’s difficult to be as focused as we are and create the kind of competitive advantage in what we do if you’re focused across multiple asset classes or even geographies.

Schwimmer: We have owned properties on the creative office side in the past. Those are capital intensive businesses as tenants roll in and out of properties. Our focus is on what we call low-finish industrial. They’re generic buildings that are easily adaptable for tenants to move into, so the frictional cost of moving tenants in and out is extraordinarily low compared to the office side.

What sort of properties and amenities are now in demand?

Frankel: In infill markets, technology is not necessarily a driver for an e-commerce distributor. The most important thing is proximity to the customer. E-commerce is driving a dramatic increase in the movement of warehouse goods and demand for shorter delivery timeframes.

How what kind of impact will an economic downturn have on industrial demand?

Frankel: From early 2009 to late 2010, we saw about a 25-percent reduction in containerized imports through the ports of L.A. and Long Beach. You would think the industrial market must have suffered — [but] it depends on where you own. If you were in the eastern Inland Empire, vacancy doubled, tripled or worse during the Great Recession. In L.A. and Orange counties, vacancy barely moved from 2-4 percent to 3-5 percent, depending on the submarket. These are mission critical locations for most businesses. If they didn’t have to be [here] they would have left a long time ago because it’s the most expensive market to rent in.

Schwimmer: That’s why we have chosen to remain solely focused on infill Southern California.

Who gets to the office first?

Schwimmer: We get here at the exact same time, every day.

Frankel: We still feel like we’re barely out of the starting gate in terms of the company that we have a vision to build. What makes us successful as partners is we’ve always been clear [and communicate our desire] to build a great business. If you stay true to that singular goal, nothing else matters and everything else follows.

This interview has been condensed and edited for clarity.

Condo sales rose in Miami last week thanks to a $13.25 million closing at the top of the heap.

A total of 127 condos sold for more than $73 million in Miami-Dade County, compared to 134 closings for $58.6 million the previous week. Condos last week sold for an average price of about $553,000 or $343 per square foot.

The priciest condo was the sale to fitness expert Mark Sisson and his wife Carrie Sisson, who paid $13.25 million for a combined unit at Continuum in Miami Beach. The couple paid $3,027 per square foot for the five-bedroom, 4,378-square-foot unit. Hadley Fisher, the son of the late Richard L. Fisher, of the Fisher Brothers development firm, sold unit 1106/1107. Eloy Carmenate and Mick Duchon of Douglas Elliman represented Fisher, while Dora Puig of Luxe Living Realty brought the buyer.

The second-most expensive condo sale was the $9.3 million trade of Murano at Portofino unit 3501. After about three months on the market, the South Beach condo sold for $2,764 per square foot. The listing agent was Stacy Robins, and the buyer’s agent was Despina Ikonomidou.

Here’s a breakdown of the top 10 sales from May 26 to June 1. Click on the map for more information:

Most expensive
Continuum South #1106/7 | 151 days on market | $13.25M | $3,027 psf | Listing agent: Eloy Carmenate and Mick Duchon | Buyer’s agent: Dora Puig
Least expensive
Ocean Two #1701 | 304 days on market | $1M | $553 psf | Listing agent: Wendy Cohen | Buyer’s agent: Marianna Talalaevsky
Most days on market
Casa del Mar #6H | 352 days on market | $1.85M | $593 psf | Listing agent: Monica Steinmuller | Buyer’s agent: Maria De La Tejera
Fewest days on market
9 Island Avenue #1814 | 18 days on market | $1.15M | $482 psf | Listing agent: Scott Diffenderfer | Buyer’s agent: Paul Sasseville

Patrick M. Nesbitt and 120 Montecito Ranch Lane

The CEO of Embassy Suites’ parent company is selling his 43,000-square-foot oceanfront home in Montecito, where celebrities like Oprah Winfrey and Ellen DeGeneres also own homes, The Real Deal has learned.

Patrick Nesbitt, who founded and is head of Windsor Capital Group, wants $65 million for his Montecito mansion on 20 acres. It includes a helipad in Hermes colors, a horse stable and a monumental wine cellar. The move comes amid a general luxury market slowdown in the region, with properties lingering or selling at sharp discounts. In January, DeGeneres paid $27 million for her Bali-inspired Montecito mansion, which was down from the $40 million price tag it started at.

Nesbitt’s property, dubbed the Secret Wine Garden Estate, has four different structures with 11 bedrooms and 22 bathrooms. There is a 20-horse stable, full-size polo field and a 5,000-bottle wine cellar with attached tasting room. And there’s more: Other amenities include a nightclub, “man cave” with a sports bar, a protected butterfly reserve, horse trail, Japanese garden, putting green. and a 128-foot swimming pool.

He is chairman and CEO of Santa Monica-based Windsor Capital. The company is the largest private owner and operator of Embassy Suites by Hilton hotels, and manages other hospitality assets under Marriott brand.

Listing broker Shawn Elliott of Nestseekers said Nesbitt is selling his expansive estate because he and his wife are looking to downsize. Though it’s not clear by how much. Nesbitt is building nine homes on a 45-acre spread nearby, Elliott added. He plans to hold onto one of the homes for his personal use.

To attract a wide range of buyers, Nesbitt recently spent “millions” to add a “Hermes Helicopter Hangar” to the property, according to marketing materials. Elliott said the hangar is accented with Hermes colors, and spans about 5,000 square feet.

Nesbitt built and has owned the home for the last two decades, Elliott added. It’s unclear how much he paid for the land at the time.

For years, celebrities and other ultra-wealthy individuals have been turning to Montecito. That includes DeGeneres, a serious investor of high-end homes investor. In addition to the $27 million property she bought, DeGeneres sold another home in the area to Tinder co-founder Sean Rad, who last month put it on the market for $12.7 million.

Rendering of the Plaza Coral Gables

UPDATED, June 4, 2 p.m.: Agave Holdings, a group that includes the family behind the Jose Cuervo spirits business, closed on a $100 million construction loan for The Plaza Coral Gables.

Agave Ponce secured the loan from PNC Bank, according to property records. The Plaza, a major mixed-use project under construction at 2901 Ponce de Leon Boulevard, will have a high-end hotel, Class A office space, retail, and luxury rentals.

HFF’s Manny de Zárraga, Jim Dockerty and Matthew McCormack represented Agave Holdings in securing the loan.

The developer is a commercial real estate firm that focuses on projects in the U.S. and Mexico, according to a fact sheet about the project. Construction began last year.

The Plaza, which is being designed by CallisonRTKL, is being built on 7 acres across from the Ponce Circle Park. The 2.25 million-square-foot development will have a 242-key hotel, more than 2,000 parking spaces, 174 rental apartments and 161,000 square feet of retail space.

The financing is for the first phase of the project, which includes 291,000 square feet of office space, 101,000 square feet of retail and the majority of the apartments.

The rental component will have studios, one-, two- and three-bedroom units, a rooftop pool and a fitness center. The hotel will include meeting space, a fitness center and pool.

Blanca Commercial Real Estate is handling office leasing of two Class A towers, and Koniver Stern Group is leasing the retail space. The project will surround a historic George Merrick building and include public art, an open plaza and colonnade-style sidewalks.

Coral Gables commissioners approved the development in June 2015 and reduced the size of the project two years later.

Property records show an affiliate of Agave Holdings owns the majority of the three blocks southwest of Ponce Circle Park, with the exception of one holdout property at 2915 Coconut Grove Drive. Construction has moved forward without that property.

The developer could not immediately be reached for comment.

An earlier version of this story stated the developer closed on a $65 million loan. It boosted its loan to $100 million. 

Clockwise from top left: Starwood Capital Group’s Akshay Goyal, BD Hotels’ Richard Born, HVS president and CEO Stephen Rushmore and Apollo’s Tracey Gamble and the Marriott Marquis

Hotel investors at NYU’s annual hospitality conference say they’re hungry for good deals despite a slowing economy, rising costs and uncertain politics.

Local hotelier Richard Born of BD Hotels tried to capitalize on NYU’s International Hospitality Industry Investment Conference early: After registration on Sunday, Born hosted an exclusive invite-only event at the rooftop bar in his nearby Pod Times Square Hotel, complete with tropical drinks, hula dancers and a live band. Guests included IHG’s Robert Chitty and Proskauer’s Jeffrey Horwitz.

Born’s new head of acquisitions and development, Rani Gharbie, took some of the partygoers on a tour to see the hotel’s micro rooms in a bid to drum up interest from investors as BD is seeking to grow its current portfolio of five Pod Hotels to 50 in the next decade.

HVS president and CEO Stephen Rushmore, Jr. gave attendees in search of their next deal a message of caution.

“Times have been good. If you’ve been in the game, you’ve been doing quite well and congratulations,” he said. “But at some point in time the cycle is going to end. Probably, it’s going to be less than a year at this point.”

Rushmore pressed on: “As you get later in the cycle, [investors] end up really sharpening their pencils to make deals work and when they do that, they sometimes end up cannibalizing themselves.”

He pointed to nightly resort fees, which typically increase the value of assets but are paid for by leisure traveler. The practice pits investors against consumers, he said.

In a later panel, executives from Starwood Capital Group, Blackstone, Apollo and KHP Capital Partners, painted a picture of hospitality under siege.

For Apollo’s Tracey Gamble, trade wars and immigration policy are “a big concern.”

Immigration reform would likely impact “our labor supply and the types of labor,” she explained. And Apollo does a lot of renovation projects, sourcing materials from China and Mexico, she added.

Joseph Long from KHP Capital Partners echoed the sentiment. In a current project, he said his team ordered all furniture from a manufacturer in Mexico instead of China to avoid the conflict.

“We wake up one day and all of a sudden there’s a tariff on Mexico. We’ve already placed these orders so what do you do?” he asked.

“There’s kind of a long list,” said Scott Trebilco, Blackstone managing director. He pointed to the growing presence and power of unions, a tight employment market more broadly and changes in real estate taxes.

Insurance for extreme weather is also becoming a “huge problem,” according to Starwood’s Akshay Goyal. When it comes to underwriting for natural disasters, he said “that’s something we’re way off on. The one benefit… has always been resort fees. Just keep [adding] more and more resort fees,” he said, chuckling with the rest of the panel.

But the laundry list of challenges doesn’t mean those investment firms are backing off; they’re ready to do riskier deals so long as it fits into their “narrowed” definition of a good bet, according to Trebilco.

Goyal agreed: “It’s just a matter of having enough opportunities to get lucky, because there will be more than enough situations where you’ll get hurt.”

During an afternoon finance panel with top hotel brokers, Lawrence Wolfe, co-head of lodging at Newmark Knight Frank, said “equity is fickle… you need an either great re-positioning story or a significant yield” to get a deal done.

He defined the latter as an asset with cap rates ranging from 5 percent to 9 percent, or a “reasonable” cost per room and a “compelling business plan.”

“I think there’s a lot of frustrated capital out there chasing that high value-add deal that’s hard to find,” said Peter Dannemiller of Hodges Ward Elliott who was also on the panel.

Value-add could range from a renovation to collapsing a ground lease, selling off an attached asset like a parking garage or even restructuring a franchise agreement, according to Apollo’s Gamble.

“More of the return has to get generated out of the value-add component,” said KHP’s Long. “Because so little of the return is going to come from market growth.”

Correction: A previous version of this article incorrectly spelled the name of Proskauer Rose attorney Jeffrey Horwitz.

Pierre Heafey, Heafey Group CEO and the Conrad Hotel (Credit: Booking)

The ownership group behind the Conrad Fort Lauderdale scored a $62.9 million refinance from City National Bank.

A company tied to the Heafey Group said it will use the financing to replace a previous loan for the property at 551 North Fort Lauderdale Beach Boulevard, according to Carmine Zayoun, vice president of operations at Heafey Group.

The 24-story, 290 unit condo-hotel has been tied up in litigation and faced years of delays, but opened finally in December 2017. The oceanfront property has been marred by setbacks and funding issues since it was conceived in 2004 as the Trump International Hotel & Tower.

The project is co-owned by the Cabanas and the Heafey Group of Canada, according to a lawsuit filed in Miami-Dade County Circuit Court last year.

The Cabanas were part of an investment group that bought the project in 2013 for $115 million with plans to spend $40 million to finish the Conrad as a 290-unit tower with 109 condos and 181 condo-hotel units.

In December 2016, the Heafey Group became a 51 percent owner in the Conrad Fort Lauderdale Beach, the lawsuit states.

Property records show the Cabanas’ partnership sold 232 units plus commercial and common space to Heafey affiliates in four separate transactions totaling $100 million. Heafey also assumed a $236.5 million mortgage from Ladder Capital Finance.

In 2018, the two development groups then sued each other, alleging breach of contract and self dealing. The lawsuit filed by a Heafey affiliate is still open.

L+M Development Partners’ Ron Moelis and Slate Property Group’s David Schwartz discussed the ins and outs of the complicated affordable housing market at The Real Deal’s 12th annual New York Showcase in May.

They expounded on how the math works, how fat the profits should be, how to navigate thorny politics and the prospect of private developers getting a piece of NYCHA’s stock.

Check out the interview, moderated by TRD‘s Jill Noonan, in its entirety above.