Donald Trump and a Greenland landscape (Credit: Getty Images and iStock)

It’s not Manhattan real estate, but President Trump sees the upside in Greenland, an autonomous Danish territory surrounded by the Atlantic and Arctic oceans.

Trump has brought up the idea of buying Greenland with his advisors on multiple occasions and directed his White House counsel to look into the matter, according to the Wall Street Journal.

Buying the entire 836,000-square-mile island of Greenland from Denmark has been considered before, albeit quite a long time ago. The last offer on record was made by President Harry Truman in 1946 for $100 million, but the Danes refused. Prior to that, the history books show that the State Department initiated an inquiry into buying Greenland and Iceland in 1867.

Government officials — now and historically — view Greenland as significant to national security and last year intervened to block China from financing three airports in the territory, but it is unclear whether security concerns are driving Trump’s idea to potentially purchase the northern island.

Sources told the Journal that the idea occurred to Trump after someone mentioned Denmark’s financial difficulties paying its annual $591 million subsidies to Greenland last spring at a roundtable dinner. Since then, the topic has come up multiple times, though it is unclear how serious Trump is about it.

Kenneth Mortensen, a real estate agent based in Greenland’s capital, says Trump’s interest in buying the island has become a running joke. He also noted that the 56,000 citizens — roughly the population of White Plains, New York — can’t own land on the island.

The Journal’s report comes as Trump prepares to travel to Denmark in early September for the first time. [WSJ] — Erin Hudson

From left: Google CEO Sundar Pichai, Facebook CEO Mark Zuckerberg, and Microsoft CEO Satya Nadella (Credit: Getty Images)

Real estate is a serious and important industry that impacts billions of people every day. But there’s also a lot of stuff happening in it that’s pretty weird and funny. Small Talk is a new column from The Real Deal’s Eddie Small that takes a humorous look at some of the big issues going on in the industry.

I, for one, was thrilled to learn that tech companies are going to solve the housing problem.

I know, I know: it’s confusing. Because for a long time, tech companies were the ones causing the housing problem, but now they’re doing the opposite. If it helps, keep in mind that we went through this type of reversal before around 2016, when we switched from thinking tech companies were solving everything to knowing they were ruining everything, so it will probably only be a few more years before we can go back to being mad at them about housing again.

But at the moment, they’re the problem solvers. Google recently pledged to spend $1 billion to create 20,000 new units of housing in California’s Bay Area, and Microsoft and Facebook have each pledged to donate $500 million to build affordable housing in Seattle and the Bay Area, respectively. Mark Zuckerberg himself will play a leading role in Facebook’s fund, saying that his goal is simply “to improve the community and make people forget about pretty much every article that has been written about Facebook over the last three years. Remember when this was just a site where you listed off a bunch of movies that you liked?”

Microsoft announced its new fund at the beginning of the year, and it is widely expected to finalize the corporation’s transition from “symbol of all that is wrong with 1990s capitalist greed” to “tech company that looks downright quaint compared to the one where all the Nazis hang out and the one with all those anti-suicide nets at its factories.”

Facebook followed suit, in a move seeming to acknowledge that even when a company has a simple and straightforward goal like completely upending how humans interact with each other, it can still come with some unintended consequences. Turning humans into hollow, like-obsessed shadows of their former selves who no longer remember how to genuinely connect with another person in real life, for instance. And also driving up housing prices.

And now Google has joined in, with company CEO Sundar Pichai saying that $750 million of their effort will be repurposing land the company already owns from commercial or office space to residential. These properties are expected to attract the ever-increasing demographic of people who are worried that Google does not know enough about them yet and would like the search giant to become their landlord as well.

So all together, the three companies will be putting $2 billion toward housing. And all together, the three companies made more than $89 billion during the second quarter of 2019 alone. So it’s probably safe to say that supporting affordable housing isn’t actually a big priority for any of them, likely ranking very far below “earning money” and slightly less farther below “seeing if we can get people really into FarmVille/Zunes/Google Wave again.”

But that’s not the biggest problem with these funds. The biggest problem is that, despite some rumors you may have heard, Seattle and the Bay Area are both completely different places from New York. This means New York will not be seeing any of that sweet affordable housing money from these tech giants and will instead have to rely on getting it from more obscure sources, such as developers with decades of experience building affordable housing and the government. You know, places without any real power.

Luckily, there is a pretty straightforward solution to this. All we need to do is convince a tech company to massively expand its presence in New York City, wait patiently for a few years as its immense wealth and high-salaried workers gradually make housing prices even more expensive than they already are, spend a few more years mounting a grassroots public relations campaign to make that company feel at least slightly embarrassed about how it’s making housing prices more expensive, and then eagerly collect our $1 billion prize, or whatever the equivalent of $1 billion will be by the time this whole process plays out. It’s as easy as that.

The only caveat here is that the tech giant obviously can’t be Amazon. If the aborted attempt by Amazon to bring its second headquarters to New York City taught us anything, it’s that everyone in New York hates Amazon, except for all the people in New York who love Amazon and all the people in New York who have conflicted feelings about Amazon but use it anyway because it really is that convenient and cheap.

So, do any other tech companies come to mind? My first choice would definitely be Friendster. Those guys are way overdue for a comeback.

Santiago Calatrava with the Constitution Bridge in Venice and the Oculus (Credit: Getty Images)

A Venice court has fined world-renowned architect Santiago Calatrava for going $5 million over budget on a bridge.

The original budget for the Constitution Bridge on Venice’s Grand Canal was $7.7 million, according to the BBC. But the structure had numerous problems after its opening in 2008, including flimsy steps and mismatched tubes.

The issues are reminiscent of the problems at another iconic Calatrava project: the Oculus, the centerpiece of the World Trade Center.

The structure’s retractable skylight began leaking after a 2018 ceremony. The Port Authority, which owns the part-transit hub and luxe-shopping center, has spent $30,000 on Flex Tape to try and seal the tear. The landlord has blamed construction work for the problems.

But there’s been other snafus at the property. In 2017, two men were mildly injured when the escalator went awry. And according to the Port Authority, the software that controls the motors for each of the 40 panes of glass malfunctioned in August, restarting several times.

Calatrava originally designed the Oculus to pivot on both sides before opening. But a decade ago, that plan was scrapped to reduce costs at the World Trade Center, when the $2 billion budget was soaring.

In Venice, the local court accused Calatrava of macroscopic negligence,” and said the allegations were taken very seriously because Calatrava is “a respected, world-famous professional, with a very high level of competence.”

The architect has denied any issues with the Venice bridge. He was fined $87,500. [BBC] — Georgia Kromrei

Domio CEO Jay Roberts and the Monte Carlo at 6551 Collins Avenue in Miami Beach

Short-term rental operator Domio is expanding to South Florida, The Real Deal has learned.

The New York-based startup paid about $1.45 million to lease 45 units at the beachfront Monte Carlo at 6551 Collins Avenue in Miami Beach, co-founder and CEO Jay Roberts said. Domio, a technology and hospitality company that aims to profit from managing and operating short-term rentals, is also inking deals at Miami Worldcenter, in Wynwood and in South Beach.

“Homesharing in larger Airbnb properties is usually illegal in Miami Beach. Domio is opening the legal supply,” Roberts said.

The firm signs leases that typically range from five years to 10 years. It’s expanding to Fort Lauderdale, Palm Beach, Tampa and Orlando. Domio has about 2,000 rooms currently in its portfolio, the bulk of which are in Chicago and New Orleans, Roberts said. Last year, it acquired Chicago-based Reserve Rentals for about $1.4 million.

The North Beach deal at the Monte Carlo is for five years and includes furniture. Samuel Raccah of the Red Group arranged the deal. Mare Azur Miami sold the leases.

Built in 2014, the 20-story Monte Carlo has a total of 136 apartments. Domio will use its in-house design and creative team to update the units at the Monte Carlo, Roberts said.

The city of Miami Beach has cracked down on illegal short-term rentals with high fines, making the legal properties attractive to investors.

Roberts said Domio’s goal is to build a travel hospitality brand with a network of properties in the U.S. and around the world. It opened its first apartment-hotel in New Orleans earlier this year, and eventually plans to open more in other markets. Individual unit owners and smaller companies lack consistency, he added.

“Customers are looking for brands to take care of them and they’re tired of staying in an amateur home,” Roberts said.

Raccah, whose Red Group operates short-term rentals in Miami, expects to see more companies like Domio expand in South Florida. Competitors include Sonder, a San Francisco-based startup, which recently closed on a $210 million funding at a $1 billion valuation.

Hello Alfred, a property management startup, recently announced it was partnering with Greystar for its entire portfolio.

“Multifamily developers, real estate owners and lenders are getting more familiar with master-leasing multifamily buildings to short-term rental operators,” Raccah said. “It ensures that your building stays occupied throughout the year.”

Raccah said that if developers continue to lease out a portion of their units to companies like Domio, the supply will shrink and rents will rise.

“The four big [short-term rental operators] are looking at Miami as an opportunity, particularly because Miami will be hosting the Super Bowl. All want to have a lot of inventory ready for the 2020 Super Bowl,” he said.

Base Capital Group and Hartshorne Plunkard Architecture’s plans for a 12-story hotel at 1043 West Fulton Market

Fulton Market in recent years has been the epicenter of office development in Chicago, helping the city attract new corporate tenants, retailers and workers.

Now, the Near West Side neighborhood is ground zero for another kind of development boom: hospitality. Four hotels with a total of 581 keys have come to the Fulton Market neighborhood since 2014, with another seven hotels in various stages of development and planning.

In all, Fulton Market is projected to be home to about 1,500 hotel rooms in the next few years, raising questions about how much supply the market can absorb, and which projects might struggle, if they get off the ground at all.

“[Fulton Market] is a big draw now,” said Nate Sahn, senior vice president at CBRE Hotels. “It’s also an area that historically didn’t have a lot of hospitality there. Builders will gravitate there because of that.”

Brokers and analysts said the flurry of hotel development is needed to support the new corporate offices and retail that have popped up in Fulton Market in recent years. But the new hotels will inhabit an ulta-competitive and saturated landscape, which is experiencing something of a downturn this year.

“The Downtown market has been a bit dismal got the last six months, and some of that is because last year was so strong,” said Ted Mandigo, a hotel consultant with TR Mandigo & Company. “2018 was a very, very good year.”

The average daily rate for a hotel room in the central business district fell to $259 in June, down from $278 in June 2018, according to hotel data and analytics firm STR. Revenue per available room — a key industry metric — came in at $228 in June, down from $251 in June of last year. Occupancy in June was at 88 percent, down from 90 percent at the same time last year.

Of the four hotels already in Fulton Market, two opened this year: the 200-key Hyatt House at 105 North May Street, and the 182-key Hoxton Hotel at 200 North Green Street. Another hotel is also nearing completion, the Robert De Niro-backed 119-key Nobu Hotel that’s now slated for an early 2020 opening. Related Midwest’s plans for a 165-key Equinox Hotel has been approved by the city, but it has not yet broken ground.

Then, there’s over 630 rooms proposed between three different projects, plus two others — Base Capital Group’s proposal for the 1000 block of West Fulton, and North Park’s plan for the 800 block West Lake Street — that have not publicly announced the number of rooms they plan to develop.

Mandigo said occupancy rates for the existing Fulton Market hotels hovers in the mid-to-high 60’s, but he expects that number to climb. That’s because hotels take about 18 months to get absorbed into a new market, the industry veterans said. Fulton Market’s hotels could take on the longer end of that timeline, because most of its properties are boutique and include brands that are not household names.

“First I have to figure out what a ‘Hoxton’ is, and if I like it,” Mandigo said. “It takes as long as three years for a luxury property to grow their product.”

Some will make it, others may not

The existing hotels — and the soon-to-open Nobu — will likely find success in a rapidly changing Fulton Market, both Sahn and Mandigo said. But the likelihood of success for the four recently proposed hotels is a little trickier to determine, they said.

That’s because there’s so much office, multifamily and retail development underway in the Near West Side neighborhood that it is too early to see if those projects will be successful, let alone the newer hotel proposals. Leasing activity in Fulton Market has been strong, but it’s still too early to tell how the market will look in a few years, when even more hotels are slated to come online, Mandigo said.

“The level of activity is so substantial that it’s a little hard to get a handle on what the demand will actually be,” he said.

The good news for the hotel developers is, there is still time to change their plans if it gets too crowded, too quickly. Of the five hotels proposed for Fulton Market, all of them have been announced this year. Only one — Base Capital Group and Hartshorne Plunkard Architecture’s plans for a 12-story hotel at 1043 West Fulton Market — has been approved by the city’s Department of Planning and Development. None have received building permits.

“Chicago historically has generated a lot of demand for hotels,” Sahn said. “That part of town is just coming into its own.”

Russell Galbut and 3000 Biscayne Boulevard (Credit: Haute Living and Google Maps)

Crescent Heights added to its massive portfolio along Biscayne Boulevard in Miami.

The Miami-based company, led by Russell Galbut, paid $14 million for the Staples-leased building at 2121 Biscayne Boulevard, according to Marcus & Millichap.

Property records show BG7 LLC sold the 20,388-square-foot building, built in 2008. The company is tied to J and R Managers LLC and is managed by Richard Kohan, John O’Neil, Norma Castillo and Dora Somma.

The Staples property last sold in 2013 for $17.4 million. It’s a block away from Crescent Heights’ headquarters.

Marcus & Millichap’s Rani Hussami was the listing broker. Colin Rockson of Marcus & Millichap represented the buyer.

The property is zoned T6-36, which allows for up to 150 units per acre, according to the release. Records show the building sits on just under an acre of land. It’s just outside of an Opportunity Zone.

In an interview with The Real Deal earlier this year, Galbut said that Crescent Heights has built over 150 projects nationwide valued at about $12 billion. In addition to 500 Alton, it’s developing a massive mixed-use project farther north on Biscayne Boulevard and at least two Airbnb-branded apartment complexes.

At 3000 Biscayne Boulevard, it plans to build 800 residential units and more than 600,000 square feet of retail and office space. The firm assembled the site over nearly two decades, paying more than $40 million through multiple deals.

Earlier this month, companies tied to Galbut sold the shuttered Sanctuary Hotel in Miami Beach for $14.4 million to Blue Road. Marcus & Millichap also brokered that deal.

Donald Trump and Greenland

No one seems certain how to take the news that the President Trump is interested in buying Greenland. Is it a joke? Is it even possible? Would Mexico pay for it?

Though numerous Greenlandic politicians have weighed in to unequivocally rebuff Donald Trump’s reported interest in acquiring their homeland, the president himself has not yet commented publicly on the Wall Street Journal report that first publicized his private hope for the Arctic nation.

Sources have said that Trump is interested in Greenland for its natural resources, strategic location for national security purposes, and because buying the territory could represent a windfall (or should we say snowfall?) for his presidency in the annals of history, à la Alaska.

On the off-chance Trump’s request for his White House counsel to investigate acquiring the Arctic island hasn’t frozen in its tracks, here are some things you should know about Greenland and its real estate.

1. Greenland is technically part of Denmark, but is an autonomous territory with its own domestic government. Self-governance was achieved in 2009.
2. Greenland is an island which is roughly 836,000 square miles in size. For comparison, that means the territory is about nine times the size of the United Kingdom; the U.S. is about five times the size of Greenland.
3. It’s the least populated territory on the planet. Greenland’s capital, Nuuk, which shares some similarities to Manhattan, has 18,000 residents, which is roughly a third of the country’s total population. It only has a few real estate brokerages.
4. The most expensive house for sale on a local Greenland listing platform is about $800,000 and no one can buy land in the territory. Instead, “buyers” are granted the right to use the land.
5. Greenlandic is the official language (locally known as Kalaallisut), but residents are also taught Danish and English.
6. As of Friday morning, there are only six Airbnb properties available for rent in Nuuk over the coming week. They range from $142 per night to $48.
7. There are 16 major towns in Greenland and, yet, no roads connect each settlement. The only roads are in and around existing towns. Instead, residents travel via boat in the summer and snowmobile or dog sled in the winters.
8. In 2018, the U.S. officials campaigned to block China from financing three airports in the country. Denmark provided the cash instead.
9. More than 80 percent of the land in Greenland is covered by ice that is melting due to global warming, creating opportunities for resource extraction and dumping 900 million tons of land particles into surrounding oceans.
10. The territory is believed to hold about 10 percent of the world’s rare-earth metals. Offshore Greenland reportedly holds 30 percent of the world’s gas reserves and 10 percent of its remaining oil reserves.

Sources: Reuters, WSJ, New York Times, BBC, NeighborhoodX, Brookings Institution, the Government of Greenland, Airbnb, Lynges.gl, The Telegraph

From left: Brett Harris Mick Duchon, Giorgio Vecchi, Dario Stoka, Eloy Carmenate, with Continuum Miami Beach

An Italian banker paid $8.45 million for a unit at the Continuum Miami Beach, about 20 percent below the original asking price of $10.6 million.

Records show Michael D. Horvitz sold unit 3303 in the south tower of the Continuum.  The buyer’s agent, Giorgio Vecchi of Brown Harris Stevens Miami, said the buyer is an Italian banker from Milan who will use the unit with his family.

The three-bedroom, three-bathroom, 3,335-square-foot condo last sold for $3.9 million in 2007. It hit the market in 2017 with Coldwell Banker’s The Jills team for $10.6 million.

Vecchi and Dario Stoka of the Vecchi Stoka Group represented the buyer. Eloy Carmenate, Mick Duchon and Brett Harris of Douglas Elliman were the most recent listing agents. The unit was last on the market for just under $9 million. The agents declined to comment on the deal.

It sold for $2,534 per square foot.

“They waited for almost two years to buy the unit,” Vecchi said about the buyer. “The price went down as they predicted, and they thought it was a great opportunity.”

Horvitz was the director of MoreDirect.com, an information technology company based in Boca Raton, according to Bloomberg. He was also president of Twin-Star International, a contract manufacturer, designer and home furnishings importer, as well as a real estate investor.

The Continuum condo was renovated and features limestone and travertine marble floors, custom mosaic walls, Miele and SubZero appliances and a master suite with a private balcony. It also includes a smart home system and a home office.

Recently, Alberto “Beto” Pérez, the creator of Zumba, paid $5.5 million for unit 2704 in the north tower of the Continuum.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page at 9 a.m. and 4 p.m. ET. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

The North Miami location of Flywheel Sports Is among the 11 locations the fitness company is shutting down. Facing competition from home-exercise companies like Peloton Interactive, Flywheel said it’s closing its studios in Los Angeles; Alpharetta, Georgia; Austin, Texas; and those in Sunnyvale and Walnut Creek, California. [Bloomberg]

Super Bowl 54 will cost Miami-Dade’s three biggest municipal governments nearly $20 million over time. The game will be hosted at Stephen Ross’s Hard Rock Stadium in Miami Gardens next February. Ahead of the Super Bowl, city governments plan to spend more than $15 million to the host committee, security, fee waivers and parks improvements, according to the Miami Herald. To prepare for weeklong events, the Miami Downtown Development Authority, for example, plans to contribute about half of the $600,000 it will cost to install permanent LED lighting on the baywalk. [Miami Herald]

From left: Brett Harris Mick Duchon, Giorgio Vecchi, Dario Stoka, Eloy Carmenate, with Continuum Miami Beach

An Italian banker paid $8.45 million for a unit at the Continuum Miami Beach, about 20 percent below the original asking price of $10.6 million. Michael D. Horvitz sold unit 3303 in the south tower of the Continuum, which hit the market in 2017 with Coldwell Banker’s The Jills team for $10.6 million. [TRD]

Donald Trump and Greenland

On the off-chance that President Trump’s interest in acquiring Greenland moves forward, here are some things you should know about Greenland and its real estate. Greenland is technically part of Denmark, but is an autonomous territory with its own domestic government. The island, roughly 836,000 square miles in size, is the least populated territory on the planet. [TRD]

Compiled by Katherine Kallergis

There are warning signs that the U.S. economy is closer to a slowdown. What does that mean for real estate? (Credit: iStock)

The yield curve inversion and threats of an escalating trade war recently sent markets into a tizzy last week.

If those economic jolts are going to hit the real estate industry hard, it largely hasn’t happened yet. But that doesn’t mean there aren’t red flags waving in the wind and questions over long-term growth aren’t lurking in the background.

“This is the tenth inning of a nine-inning game,” Time Equities Chairman and CEO Francis Greenburger said. “You realize that one day it’s going to end.”

For the most part, there is optimism in much of the industry. Big deals are getting done — think Blackstone Group’s nearly $19 billion industrial play — and there are funds looking to park excess capital. Interest rates are also at historically low levels.

“There’s still a glut of capital looking for some sort of yield worldwide,” said Jim Costello, senior vice president at data firm Real Capital Analytics.

And when the Dow plunged 800 points last week, after the yields on short-term bonds pushed higher than long-term bonds, real estate stocks held their own. A similar scenario played out when concerns over an escalating trade war between the U.S. and China intensified.

But Savills’ Chief Economist Heidi Learner wouldn’t expect that trend to last, if the U.S. reaches a full-blown recession. Real estate firms tend to derive their revenue from within the country, and with a strong dollar, that helps insulate real estate stocks more so than other sectors.

“I think the fact that we haven’t seen a more dramatic compression in cap rates more recently suggests there is more concern about growth going forward,” she said.

In the second quarter, commercial real estate prices declined in 10 out of 18 global metros that make up Real Capital Analytics’ global price index, and global price growth slowed to 4.4 percent.

And in the first half of the year, there was some hesitancy from buyers and sellers, leading to a slowdown in U.S. commercial deal volume. That has started to pick up again, thanks to cheap credit and falling interest rates, Costello said. “Some folks have gotten past the weakness we had in Q1,” he said.

But that’s not to say there aren’t other factors on the horizon to watch for. Job growth has been tepid, and if it slows further, it could signal that companies are cutting back and are concerned about the future. And those jabs between the U.S. and China over trade? They, too, could be giving some investors pause.

“The impacts of the trade war are really being felt and that is undermining corporate investments, undermining growth,” Costello said.

Some in the industry are already making adjustments ahead of a potential economic downturn.

Landlords may be looking to secure long-term leases. And sellers, who had been holding out for better deals to come along, may be more willing to sell a property at market price.

“If a seller is debating [whether] or not to sell, it’s an easier decision,” said Jimmy Hinton, senior managing director of research services at Transwestern. “They’re either going to take their profits or refinance.”

At Time Equities, Greenburger said the firm buffers against recessionary periods with extra cash and contingency credit. And as a response to New York City’s microeconomy and its oversupply of high-end condominiums, Greengburger said the firm hasn’t developed another project since The Residences at Prince were completed several years ago.

“It was a normal supply-demand imbalance — that wasn’t in anticipation of recession — but it was indicative of something,” Greenburger said.

Meanwhile, Paul Massey’s B6 Real Estate Advisors launched a financing side to its brokerage business, in part to take a bite out of the commercial real estate debt market but also to insulate during a slowdown. “We think that the debt business is likely a hedge against what would be a slow period of investment sales,” Massey said. For now, the real estate industry appears to be in a wait-and-see mode, as the uncertainties in the economy play out.

“People might keep investing in real estate,” Hinton said. “The question will be, what will be the most appropriate value in an environment where there’s a lot of conjecture about future growth?”

Zillow CEO Rich Barton (Credit: iStock)

Zillow Group is rolling out its iBuying program for homes and condos in South Florida, starting in Miami and Fort Lauderdale.

Sellers in South Florida can check if their property is eligible by typing their address into Zillow’s website, according to a press release. Zillow will have English and Spanish speaking representatives to guide sellers through the process. A Miami-based broker will represent Zillow in each transaction.

The Seattle-based company launched Zillow Offers in Phoenix last year and has since expanded to more than a dozen markets: Las Vegas, Nevada; Atlanta, Georgia; Denver, Fort Collins and Colorado Springs, Colorado; Charlotte and Raleigh, North Carolina; Houston and Dallas, Texas; Riverside, California; Minneapolis, Minnesota; Orlando, Florida; Portland, Oregon; and Nashville, Tennessee.

The program, which buys and flips homes, boosted Zillow’s revenues in the second quarter, up 84 percent to nearly $600 million. But the new product also had a cost for Zillow, which saw its losses come in at $72 million in the second quarter, versus $3 million in 2018.

Since Zillow Offers launched in April 2018, more than 170,000 homeowners have requested an offer from Zillow. If the seller accepts Zillow’s offer, they can choose their closing date and move on their schedule, between five and 90 days after acceptance. Zillow then prepares the house or condo for sale and puts it on the market.

Zillow co-founder and CEO Rich Barton said in the second quarter earnings call that Zillow Offers is on track to hit an annualized run rate of $1 billion in revenue.

Next, the listings giant plans to begin offering its home buying program in Tampa and Jacksonville, Florida; Austin and San Antonio, Texas; Oklahoma City, Oklahoma; Sacramento and San Diego, California; Cincinnati, Ohio; and Tucson, Arizona.

Other firms have taken note.

Earlier this year, Keller Williams announced it was launching its iBuyer program, Keller Offers, in Dallas this May.

Last month, Opendoor, the $3.8 billion SoftBank-backed instant home buyer, and its competitor Redfin Corp. announced they are teaming up. That followed the news that RE/MAX and Redfin joined forces in March. Redfin, which already has its own iBuying division, would be willing to expand the Opendoor partnership into markets it’s already in.

Harvey Hernandez and BrickellHouse (Credit: Miami Residence, iStock)

Miami developer Harvey Hernandez has finally reached a settlement in a long-running case over a failed robotic car garage at the BrickellHouse condo development.

Hernandez settled for $275,000, which dismissed with prejudice all claims against him, according to the Daily Business Review. The settlement pertains to a 2016 lawsuit filed by the condo association over BrickellHouse’s car garage that malfunctioned in 2014, forcing residents to park at other buildings. The car garage was supposed to automatically move cars into parking spots in the building, but it allegedly never worked properly and the company that created the technology eventually filed for bankruptcy.

Dismissing with prejudice means the association cannot file the suit again against Hernandez.

But there is still a case outstanding against Hernandez’s development company BrickellHouse Holding LLC, in which the condo association is seeking about $87 million, the cost of parking for 480 spaces over a 100-year asserted project life, according to the DBR.

Last year, BrickellHouse Condominium Association reached a $32 million settlement with the elevator’s insurer, the Hartford Steam Boiler Inspection and Insurance Co. The settlement, which appears to be one of the largest of its kind, is nearly half the $61 million policy the association took out to cover the elevator’s technology.

The 46-story BrickellHouse was one of the first post-recession condo buildings constructed in Brickell. The developer sold 98 percent of the tower’s 374 units within three months of opening, property records show.

[Daily Business Review] — Keith Larsen

Condo sales rose in Miami-Dade last week, topped by the $8.45 million sale of a unit at the Continuum.

A total of 109 condos sold for $50.4 million in Miami-Dade County last week, up from 97 closings for $36 million the previous week. Condos last week sold for an average price of about $463,000 or $328 per square foot.

Unit 3303 in the south tower of the Continuum sold for $8.45 million, after nearly 300 days on the market. Eloy Carmenate, Mick Duchon and Brett Harris represented the seller, while Giorgio Vecchi and Dario Stoka brought the buyer. It sold for more than $2,500 per square foot, a 20 percent discount off its 2017 asking price with the previous brokers, Coldwell Banker’s The Jills.

The second most expensive condo closing was the $4.2 million sale of unit 412 in the south tower at the Surf Club Four Seasons. Ileana De La Torre represented the seller, while Charlotte Maietto brought the buyer. It was on the market for 25 days.

Here’s a breakdown of the top 10 sales from Aug. 11 to Aug. 17. Click on the map for more information:

Most expensive
Continuum South Tower #3303 | 295 days on market | $8.45M | $2,534 psf | Listing agents: Eloy Carmenate, Mick Duchon and Brett Harris | Buyer’s agents: Giorgio Vecchi and Dario Stoka

Least expensive
Nine Island #503 | 88 days on market | $743K | $516 psf | Listing agent: William Hahne | Buyer’s agent: Jordan Lederman

Most days on market
Continuum South Tower #3303 | 295 days on market | $8.45M | $2,534 psf | Listing agents: Eloy Carmenate, Mick Duchon and Brett Harris | Buyer’s agents: Giorgio Vecchi and Dario Stoka

Fewest days on market
Sunset Harbour South #1612 | 3 days on market | $1.93M | $1,013 psf | Listing agent: Paul Sasseville | Buyer’s agent: Paul Sasseville

IDI Logistics CEO Mark Saturno and 11600 Miramar Parkway (Credit: iStock)

IDI Logistics sold five warehouses in Miramar for $116.5 million amid strong demand for industrial properties in South Florida.

IDI Logistics sold the properties totaling 14 acres to the San Francisco-based private equity firm Stockbridge Capital Group for about $43,560 per acre, according to CBRE.

CBRE’s José Antonio Lobón, Chris Riley, Christian Lee, and Larry Dinner represented the seller.

The properties include warehouses at 11600 Miramar Parkway, 11650 Miramar Parkway, 11740 Miramar Parkway, 15701 Southwest 29th Street and 2501 160th Avenue. The warehouses are 100 percent leased, according to CBRE.

Toronto-based IDI Logistics has about $60 billion of assets under management and focuses on warehousing, distribution and manufacturing facilities. Ivanhoe Cambridge bought IDI Logistics earlier this year from Brookfield Asset Management for about $4.7 billion.

Stockbridge is an active buyer of South Florida real estate.

In January, Stockbridge paid $62.25 million for the Powerline Business Park in Pompano Beach. Stockbridge bought the 443,720-square-foot industrial park at 4100 Powerline Road for $140 per square foot. Last May, San Francisco-based Stockbridge bought the Quaye at Wellington, a 32-acre, 350-unit apartment and townhouse complex at 9840 Quaye Side Drive, for about $120 million.

The industrial market has remained one of the best performing asset classes in South Florida, despite concerns that rents will come down.

In Broward County, industrial rental rates rose to $8.76 per square foot in the second quarter from $8.21 per square foot a year earlier, according to a recent report from Colliers International South Florida. In the second quarter, 531,552 square feet of new industrial properties in Broward County were completed.

Due to the lack of available land, developers in Broward County are increasingly buying smaller industrial sites to develop a single distribution building of 100,000 square feet or less, according to the report.

Chicago’s top 5 general contractor firms were approved to build over 9 million square feet of new development (Credit: iStock)

Two of Chicago’s leading developers and contractors teamed up in late April to break ground on one of the city’s biggest projects.

Executives from JDL Development and Power Construction joined local officials and industry insiders at the former site of Holy Name Cathedral’s parking lot — which JDL is turning into the massive mixed-use development project One Chicago.

Prepared remarks could be faintly heard over the din of heavy machinery beginning work on the planned 77-story and 50-story towers that would rise from a 10-story podium at Chicago and State streets.

Renderings of One Chicago (Credit: Wikipedia)

The 1.5 million-square-foot development is just one of the many massive projects in the works around the city, keeping general contractors extremely busy, even at such a late-stage in what’s now a 10-year economic cycle.

One Chicago also comes late in the city’s construction boom. While the past few years have been more than fruitful for developers and contractors, a number of issues — both political and economic — threaten that success streak. Now, the real estate industry is looking at One Chicago and other major projects as a way to gauge the city’s future development landscape.

“We’re in a market where we just don’t know what to expect,” said Eudice Fogel, a luxury residential broker with Compass. “It will be interesting to see how [One Chicago] does, but it’s too early to tell.”

Development projects of massive scale have risen at a rapid rate in Chicago, which saw a record level of crane activity in the past two years, according to the city. That’s been particularly good for the contracting sector, where local mainstays compete with multinational corporations to meet construction demand.

“The tower cranes are a good indicator of how the industry is doing,” said Dan McLaughlin, outgoing executive director of the Chicagoland Association of General Contractors trade group. “The big ones are really busy right now, and they have been for a few years.”

Chicago’s top five general contracting firms were approved to build over 9 million square feet of new development between June 2018 and May 2019, according to The Real Deal’s first ranking of the city’s most active general contractors.

Terry Graber, president and CEO of Power Construction

But even heavy hitters like Power, Clark Construction and Focus — the top three firms by square footage in TRD’s ranking — are grappling with rising material costs due to President Trump’s trade war with China, uncertainty about a potential recession, and a skilled labor shortage.

In more than a dozen interviews, Chicago-based development and construction professionals repeatedly pointed to their thirst for qualified workers as the most pressing obstacle facing the industry.

“It’s been a stretch of talent, of resources, of business supply chain,” said Adam Jelen, senior vice president for the Midwest division of Gilbane Building Company, which did not make this ranking. “There’s a stretch [now], but it’s also about the future. There’s huge projects coming up, and we need to prepare for that challenge.”

David Trolian of Clark Construction

Despite those challenges, Power — Chicago’s leading contractor by a landslide — shows that having local roots still holds a lot of weight in the city’s construction market.

“They have some deep, private relationships that go back a number of years,” said David Trolian, northern division president at Maryland-based Clark, which ranked as Chicago’s No. 2 general contractor, according to TRD’s analysis.

High rises

This ranking is meant to give a snapshot of the firms actively working on construction projects in the Chicago market within a one-year time period.

The tally of the top 15 general contractors over that period is based on the square footage included in each project’s planned development proposal. Only projects developed within city limits were considered and public projects were not included.

A number of full-service development firms also handle a significant amount of general contracting projects. Those companies — including Onni Group, CAVentures and LG Construction + Development — were not considered, however, because of the amount of self-awarded construction work.

Power, the city’s top contractor in this ranking and previous rankings by other publications, landed permits for nearly 4.5 million square feet of new construction between May 2018 and June 2019 — more than twice as much as second-place Clark, which was cleared to build about 2.2 million square feet.

Chicago-based Focus (formerly known as Focus Development) came in third, with 1.2 million square feet, followed by the Australian construction giant Lendlease, which was cleared to build 895,429 square feet in the city.

Both local contractors beat out the global giant Lendlease and national behemoth Turner Construction.

“We’ve tried to find our niche, and it’s diversity,” said Focus CEO Tim Anderson. “We can do the suburban three-story wood project, or we can do 30-story high-rise in Chicago. We’re not going to do a 100-story high rise, but if you have an 18-story high-rise building with 40,000-square-foot floor plates, we’re going to be able to find what works best for the client.”

Bert Brandt of Lendlease Chicago

Bert Brandt, general manager of Lendlease Chicago, which tackled its first project in the city 2014 as a developer-builder on the Cooper apartment building in the South Loop, said there are benefits to having a foot in both worlds.

“It allows for the ability to be very collaborative and upfront in our design approach and development thought process,” Brandt said. “The construction group can benefit from the added work and revenue.”

New York-based Turner Construction — which was embroiled in bribery and bid-rigging scandal allegations at Bloomberg LP’s Manhattan headquarters in 2018 — rounds out the top five firms in Chicago with 386,479 square feet.

Representatives for Turner did not respond to multiple requests for comment.

Local heavy hitter

For Power, the rise to the top is the culmination of deep roots in the Chicago market.

The local firm was founded in 1926 as a suburban homebuilder and then spent the 20th century carving out a specialty as a builder of schools and hospitals. Power was able to springboard its achievements through a major hiring surge in the 1990s and 2000s, working its way toward Downtown high-rises like One Chicago.

Despite its dominance in the Chicago market, Power maintains a relatively low public profile.

Sterling Bay’s Gr333n

Even excluding high-profile office projects like Sterling Bay’s Gr333n or Trammel Crow’s West End on Fulton, the firm’s multifamily division would have almost had enough projects approved to land the top spot on their own.

That’s largely thanks to the One Chicago mega-development, which Power began constructing for JDL in March. The towers will hold a combined 869 residences, while the podium will hold commercial tenants such as Whole Foods and Lifetime Fitness.

JDL did not return calls and Power’s executives declined to comment for this story.

At over 1.5 million square feet, One Chicago is the second biggest project considered for the rankings, behind Howard Hughes Corporation and Riverside Investment & Development’s office development at 110 North Wacker Drive.

Power is also the builder behind Crayton Advisors and White Oak Realty’s 273-unit Milieu on the Park complex in Fulton Market, as well as Draper & Kramer’s South Loop apartment project, which will bring 275 rentals to the neighborhood, among a handful of other projects.

Gordon Ziegenhagen of Draper & Kramer

“They’re doing so much in the multifamily market,” said Gordon Ziegenhagen, vice president of acquisitions and development for Draper & Kramer.

Some of Power’s domination over the Chicago market can be attributed to its status as a longtime local player, sources said. But among the top five general contractor firms in the city, according to TRD’s analysis, only two are headquartered in Chicago: Power and Focus.

And while many of the top firms in the city are also regional powerhouses, Power works almost exclusively in the Chicago market. Clark’s Chicago office, by comparison, manages the parent company’s work in Wisconsin, Michigan, Tennessee, New York and Colorado.

As a result, Power has held onto its institutional legacy, winning contracts last year to build a nearly 500,000-square-foot extension to Rush University Hospital and an 8-story dormitory for Loyola University.

Power is also overseeing construction of a new GEMS World Academy school in Lakeshore East, the mini-neighborhood that is home to a massive development site from Magellan Development Group and Lendlease. The contractor has “always been in the mix” for Magellan’s projects, according to the developer’s president David Carlins, who pointed to Power’s extensive track record and homegrown credibility.

“[Power] has been hanging around the hoop for a long time,” Carlins said, citing its long list of university projects. “We like their culture … they’ve always been very approachable.”

The local company also scores points for pouring concrete on its own, instead of handing that task off to subcontractors, said Kevin Farrell, chief operating officer of the Chicago-based national developer Fifield Companies.

“If you control the concrete, then you control the most critical element of the schedule, which is getting that shell up,” Farrell told TRD, noting that McHugh and W.E. O’Neill also pour concrete in-house.

Comfort zones

Unlike the vast patchwork of investment and development firms each trying to carve out a niche in the city or suburbs, most general contracts for high-profile projects tend to land among the same roughly half-dozen familiar developers.

Their exclusivity is evident on TRD’s ranking, which shows a steep drop-off in volume after Lendlease. In part, that’s because property owners prefer predictability, according to several industry sources.

Magellan Development Group has repeatedly turned to McHugh for its Lakeshore East high-rises. That includes the 101-story Vista Tower, one of more than 20 high-rises the two companies have built together.

Fifield has also tapped McHugh for multiple recent projects, including the 188-unit mixed-use complex at 740 North Aberdeen Street.

“If you work with any of these firms long enough, you build up a level of trust and familiarity, and you need that,” Farrell said. “You need to know that if you can call your construction superintendent when he’s out on a fishing trip on a Saturday morning and tell him about it.”

Clark and major Downtown developer Riverside Investment & Development make another frequent pair. The firms first connected on Riverside’s 150 North Riverside — a 54-story, 1.2 million-square-foot office tower along the Chicago River that was completed in 2017.

Now, Riverside, Clark and Dallas-based Howard Hughes are teaming up to build the Bank of America office tower at 110 North Wacker Drive, the biggest development underway in the city’s central business district. Riverside and Clark will soon team up to redevelop Union Station, including the construction of the 50-story BMO Tower.

Developers and general contractors might first link up through a competitive bidding process. But if a project goes smoothly — and if a contractor performs well — it could be the start of a lasting and lucrative relationship.

“In a busy market like this, there’s been a lot of teaming between developers and contractors,” said Trolian, Clark’s top executive in Chicago. “Given a chance to perform well for a developer, and the reward being you continue to build for them, that’s really the ideal relationship.”

Other developers prefer to spread the wealth around.

Despite being two of the longest-standing firms in their respective fields, Draper & Kramer and Power Construction are teaming up for the first time on the developer’s South Loop apartment project.

The firms have been familiar with each other for years, Ziegenhagen said. Prior to sending out requests for bids, the developer will bring in general contractor to help with budgeting a project — work that usually does not come with a fee. Power has been one of those firms in the past, he noted.

“You have to think about. Who do you want to spend the next two years of your life with?” Ziegenhagen said. “Who can you stand to be around, and who do you trust? We want the best price, and the best team.”

New on the block

The network of pre-baked relationships between developers and contractors sets a high hurdle for new firms entering the market, like when New York-based J.T. Magen expanded into Chicago in 2001.

Similar to other less established contractors in the Chicago market, J.T. Magen’s only option was to prove it could fulfill projects that others couldn’t.

Geoff Arend of J.T. Magen

At the time, businesses were still reeling from the dot-com bust of the early 2000s, and the trial by fire gave the new firm an opportunity to make a name for itself, said Geoff Arend, who heads J.T. Magen’s Chicago operation.

“At that point, everyone had been building up their staff and assuming nothing would change,” Arend said. “So when everyone got creamed, we were able to take a model to get more out of our existing resources.”

J.T. Magen took advantage of the recession by winning contracts from companies forced to consolidate offices, like when Bank One — later acquired by JPMorgan Chase — shrank to 600,000 square feet at 131 South Dearborn Street.

The firm later branched out to data centers, precisely because of how difficult they are to build, Arend said. J.T. Magen broke ground last year on a 200,000-square-foot data center for CoreSite Realty Corporation that involved relocating utility lines to make sure the facility had enough power.

“It’s about finding those niche markets where you can add value, and where there are real barriers to entry,” Arend said. “If you mess up an office, maybe you need to repaint it. If you mess up a data center, maybe the whole thing won’t work.”

Summit Design + Build also prides itself on taking on especially difficult jobs, a tendency that’s helped fuel its “aggressive expansion” during the past several years, according to vice president Ken Swartz.

JT Magen’s CoreSite data center (Credit: McShane Fleming Studios)

The firm has managed four-month turnarounds on $10 million renovation projects for WeWork, and its recent reconstruction of Thor Equities’ office building at 905 West Fulton Street saw it demolish half the building while remodeling the other half and replacing its facade.

“Our desire to do difficult jobs is part of what sets us apart,” Swartz said.

Summit Design + Build is also underway on a ground-up building, a 105-unit CityPads apartment complex in Edgewater.

Doing it all

Other construction firms, like Lendlease, have managed to stand out by branching out past the traditional role of construction companies.

The Australia-based company, which has divisions throughout the world, has overseen construction in Chicago since 1976, but only in 2014 did the firm ramp up its development business in town.

Lendlease is working on a massive Southbank development in the South Loop, where the luxury Cooper apartment building was delivered last year. The firm is also partnering with Magellan on a sprawling three-tower development in Lakeshore East, which has not yet begun work.

Just missing TRD’s top 15 ranking, Chicago-based Clayco was founded in 1984 as a traditional construction firm. CEO Bob Clark later added new branches to oversee development and architecture and last year, the company acquired Lamar Johnson Collaborative, putting more than 200 architects under its umbrella.

A rendering of West End on Fulton, 1375 West Fulton Market

The firm now identifies as a “design-build firm,” resisting any label that ties it to a specific sector of the development process, according to executive vice president Kevin McKenna. Its evolution followed a larger shift in the way businesses think about ground-up construction, McKenna said.

“It used to be that a corporation would go hire an architect who would work in a silo for eight to 10 months, and then incorporate a contractor later,” McKenna said. “Our founder [Clark] recognized very early on that that approach was flawed.”

Having one company oversee every step from blueprints to topping out means the project will “have fewer gaps, take less time, and end up with a better quality product,” he added.

Since this ranking does not factor in projects that were constructed and principally developed by the same firm, developments like Clayco’s new apartment mid-rise at 4555 North Sheridan Road were not included.

Focus, meanwhile, has moved in the opposite direction as Clayco. Before the last recession, the Chicago-based firm only oversaw construction for its own properties, according to Anderson, its CEO.

But some contracts end up planting the seeds for more partnerships down the road, he said, noting that it’s “a relationship business, after all.”

Focus has since grown its business for third-party contracting work, like the 220-unit Logan Apartments, which it began building for Fifield this year.

Bidding for independent contracts “diversifies our business model and lowers our risk profile while allowing us to grow the organization,” Anderson said. “Plus, we learn things when we work for other people.”

Rotem Rosen and Alex Sapir with 11 Madison Avenue (Credit: iStock and Google Maps)

Five years after his death, the family of real estate mogul Tamir Sapir is fighting over his fortune.

Rotem Rosen — Sapir’s former son-in-law — is seeking $103 million for his work on behalf of the family’s real estate empire, according to court documents, which cite a “falling out” between Rosen and Alex Sapir, his former business partner, brother-in-law and executor of Tamir Sapir’s estate.

Rosen, who was once CEO of the Sapir Organization, claims in court documents that he is still owed $103 million for his role in steering the family’s real estate empire through the financial crisis a decade ago. But he said he was not paid for certain deals, including the sale of 11 Madison Avenue to SL Green Realty for $2.6 billion in 2015.

Representatives for Alex Sapir and Rosen did not comment.

In court documents, Alex Sapir said Rosen is entitled to no such amount, and instead is attempting to take credit for “the work of Sapir Organization executives or personnel.” A representative for the Sapir family summed up Rosen’s claims as a “sham,” according to the New York Post.

But in a June 2019 court filing, Alex Sapir also said if Rosen prevails, his former brother-in-law would be required to share the payment with Sapir since the two were 50-50 partners in ASRR Capital, through which they conducted much of the restructuring work for the Sapir Org. In 2017, Sapir bought out Rosen’s stake in ASRR for $70 million.

Rosen and Alex Sapir formed a partnership — ultimately ASRR — to “restructure — and resurrect — Tamir’s distressed business empire,” according to Rosen’s suit. ASRR “transformed Tamir’s empire into a flourishing and successful business, resulting in more than a billion dollars of profits for Tamir and, upon his death, Tamir’s estate,” the suit states.

Until recently, Rosen was married to Alex’s sister, Zina Sapir-Rosen, who filed for divorce in April. (The two wed at a lavish ceremony at President Donald Trump’s Mar-a-Lago.)

In court documents, Alex Sapir said that Rosen’s counterclaims “represent a vexatious effort to extort a favorable outcome in an ongoing matrimonial proceeding between Rosen and Zina Sapir.”
Tamir Sapir’s assets, once worth $2 billion, shrank to around $600 million at the time of his death.

READ MORE:
Prying inside Alex Sapir’s real estate empire

Real estate magnates Rotem Rosen, Zina Sapir to divorce

Daniel Lebensohn and Seabonay Beach Resort (Credit: iStock)

A federal jury determined that the previous owners of the Seabonay Beach Resort in Pompano Beach fraudulently muscled out a former partner when they sold the 69-key hotel to affiliates of BH3 for $13.5 million in 2017.

Last week, jurors awarded Los Angeles-based real estate investor Arturo Rubenstein and his company Fab Rock Investments $3.5 million in damages stemming from his lawsuit against Yoram and Sharona Yehuda and the BH3 affiliates BNH LLC and 1159 Hillsboro Mile LLC.

However, prior to the jury verdict, U.S. District Judge Kathleen Williams ruled against Rubenstein’s request to rescind conveyance of the resort’s title to the BH3 affiliates, which means the Aventura-based development firm’s ownership of the property is no longer in dispute.

Chris Smart, a Carlton Fields shareholder representing BH3, said its affiliates negotiated a settlement with Rubenstein and the Yehudas as a waiver to the plaintiffs’ right to appeal, and that he is no longer contesting the title conveyance. “Our clients’ real estate transaction has been affirmed,” Smart said. “And that is an important victory for the real estate and development industries in Florida.”

BH3 co-founder Daniel Lebensohn said the firm is pleased the dispute over the Seabonay sale is closed. “Justice has truly been served as to our property rights,” he said.

Barry Postman, Rubenstein’s lawyer, said the $3.5 million verdict includes $2.5 million in punitive damages against the Yehudas and four other minority members of Oceanside LLC, the company that owned and operated the hotel from 2007 to 2017. “My client was disappointed the judge entered a directed verdict with regards to the buyers,” Postman said. “But he takes solace in the jury finding the Yehudas stole the hotel from him and awarded damages in his favor.”

According to Rubenstein’s 2017 lawsuit, the Yehudas brought him onboard in 2012 when they needed him to sign on as a personal guarantor to extend the maturity date on a $6.5 million loan from First Citizens Bank. The loan was used to purchase, renovate and operate the six-story hotel at 1159 Hillsboro Mile in 2007. In exchange for Rubenstein’s guarantor status, the Yehudas transferred 50.5 percent ownership of Oceanside to Fab Rock.

However, the complaint alleges the Yehudas never intended for Rubenstein to remain permanently as a partner and fraudulently induced him to guarantee the loan. Subsequently, First Citizens Bank refused to extend the maturity date even with Rubenstein as a guarantor, so the Oceanside partners decided to file for bankruptcy protection. During those proceedings, Fab Rock executed bankruptcy-related documents and paid $237,000 in legal fees, according to the lawsuit. At the behest of the Yehudas, Rubenstein also paid down $500,000 of the loan debt when Oceanside got another mortgage for $5.2 million in 2014.

Over the next three years, the Yehudas attempted to remove Rubenstein as a partner through fraudulent means, the lawsuit alleges. For instance, they allegedly drafted an amendment to their agreement with Rubenstein that claimed he would give them back the 50.5 percent stake in Oceanside for no consideration. He alleges his signature was forged on two documents.

As the Oceanside partnership continued to fracture, the BH3 affiliates bought the hotel in May 2017. The deed was signed by Sharon Yehuda as the sole manager of Oceanside with no mention of Fab Rock or Rubenstein, the lawsuit states.

PMG’s Ryan Shear and 2431 Northwest Second Avenue

UPDATED, Aug. 20, 11:15 a.m.: Property Markets Group and its partner Greybrook Realty Partners are betting big on Wynwood.

The two firms closed on a $46 million purchase of their first development site in the trendy neighborhood, The Real Deal has learned. The 1.6-acre assemblage at 2431 Northwest Second Avenue will be transformed into an apartment, hotel and retail complex.

The deal is the largest sale in Wynwood so far this year, according to brokerage Avison Young.

The seller was the Doris D. Friedopfer Trust, records show. The land sold for nearly $660 per square foot.

PMG is joining a number of major developers that have projects planned, underway or completed in Wynwood. Goldman Properties, Lennar Corp., Related Group, East End Capital, Block Capital Group, Kushner Companies and others are among them.

PMG and Greybrook’s mixed-use project will include more than 220 apartment units, a hotel component, a rooftop bar and restaurant, and 38,000 square feet of retail space. Tricera Capital, led by Scott Sherman and Ben Mandell, is expected to purchase the ground-floor retail component of the planned development.

The two partners will co-develop the land under a new apartment brand that’s expected to launch in the coming months, according to a release.

Avison Young’s John K. Crotty, Michael Fay, David Duckworth, Brian de la Fé and Myles Stepner brokered the deal. Peter L. Desiderio of Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., and attorney Laura Bourne Burkhalter of Laura Bourne Burkhalter, P.A. represented the sellers.

PMG hinted that the new apartment line may be similar to its X Social Communities co-living brand, which has locations at X Miami in downtown Miami and at PMG and Greybrook’s Las Olas project, expected to begin leasing in the coming months.

X Miami, a 32-story, 464-unit building at 240 Northeast Fourth Street, includes a portion of units set aside for The Guild Hotels, a tech-oriented, boutique hotel group. The building is heavy on amenities and smart home features.

PMG and Greybrook’s Wynwood assemblage partially fronts Northwest Second Avenue, near Wynwood mainstay Panther Coffee. Behind Panther, RedSky Capital is building Cube Wynwd, an office building with ground-floor retail space. Across the street is the recently completed Wynwood 25, a 285-unit rental project with retail space that Related co-developed with East End Capital at 252 Northwest 25th Street.

PMG and Greybrook plan to break ground on their mixed-use apartment building next summer. The two companies have worked together in the past, and are planning to build the Waldorf Astoria Hotel & Residences Miami in downtown Miami along with S2 Development.

Every day, The Real Deal rounds up South Florida’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page at 9 a.m. and 4 p.m. ET. Please send any tips or deals to tips@therealdeal.com

This page was last updated at 9 a.m.

Investor Philip Knoll is looking to sell a piece of land in Wynwood for $5.25 million. A company tied to Knoll is listing the 13,345-square-foot corner lot – the only piece of land not owned by the Salvation Army on the block – at 2210 Northwest Miami Court with Miguel Pinto of Apex Capital Realty. The site, which includes a renovated Class A office building, allows for up to 85,000 square feet of development, a 45-unit multifamily building or a 90-room hotel, according to Pinto. Knoll also owns the Veza Sur Brewing building about three blocks away.

Rotem Rosen wants $103 million from the estate of his former father-in-law, Tamir Sapir. Court documents cite a “falling out” between Rosen and Alex Sapir, his former business partner, brother-in-law and executor of Tamir Sapir’s estate. Rosen, who was once CEO of the Sapir Organization, alleges he is owed the money for his role in steering the family’s real estate empire through the financial crisis a decade ago. [TRD]

Property Markets Group and its partner Greybrook Realty Partners are planning their first development in Wynwood. The two firms closed on a $46 million purchase of the 1.6-acre assemblage at 2431 Northwest Second Avenue that they plan to transform into an apartment, hotel and retail complex. [TRD]

A federal jury determined that the previous owners of the Seabonay Beach Resort in Pompano Beach fraudulently muscled out a former partner. Last week, jurors awarded Los Angeles-based real estate investor Arturo Rubenstein and his company Fab Rock Investments $3.5 million in damages stemming from his lawsuit against Yoram and Sharona Yehuda and the BH3 affiliates BNH LLC and 1159 Hillsboro Mile LLC. The previous owners sold the 69-key hotel to affiliates of BH3 for $13.5 million in 2017. [TRD]

Compiled by Katherine Kallergis

Atlantic Crossing and Pearlmark’s Mark Whitt

Edwards Companies scored a $45 million investment for its Atlantic Crossing mixed-use project in Delray Beach.

The Columbus, Ohio-based real estate firm closed on the preferred equity investment from Pearlmark Real Estate Partners. The funds will go toward building the project, which will include 261 apartment units, 91,000 square feet of office and retail space, as well as 444 parking spaces. It will also include 82 condominium units.

The 9-acre site sits on Atlantic Avenue and Federal Highway.

The preferred equity portion of the deal comes after the developer secured a $110 million construction loan from Fifth Third Bank, Huntington Bank and Santander Bank in January.

Mark Witt of Pearlmark arranged the preferred equity transaction.

The entire project is expected to be completed within five years of groundbreaking, or 2023. The luxury residential units would be completed in 2020 with the parkside residential units being delivered in 2022.

The site, which spans two city blocks, was assembled by CDS Holdings, led by Carl DeSantis. Records show Edwards paid $15.8 million for the land in 2016.

Development has ramped up in Delray Beach in recent years. A joint venture led by 13th Floor Investments, Key International and CDS International recently paid $33 million for the former Office Depot headquarters with plans to redevelop the property into one of the biggest projects in Delray Beach’s history.

Edwards Companies has built more than 30,000 market-rate apartment units in the U.S. and is an active developer in downtown Columbus, Ohio, according to its website.