Image may be NSFW. Clik here to view.
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 throughout the day. Please send any tips or deals to tips@therealdeal.com
This page was last updated at 9 a.m.
Image may be NSFW. Clik here to view.
Rendering of the Virgin Trains station in Aventura
Miami-Dade County Mayor Carlos Gimenez is pushing for a $76 million train station for Virgin Trains near Aventura Mall. The county would use the half-percent transportation tax to buy the land for the station, according to the Miami Herald. The train company, previously known as Brightline, would build the station using public money. Virgin Trains would give passengers headed to Aventura a discounted rate of $9.75 for a one-way ticket, 35 percent off today’s $15 cost. The commission could vote on the deal this week or next. [Miami Herald]
CoStar is buying STR in a deal valued at $450 million. The move gives the CoStar Group the hotel data company’s entire portfolio, including Hotel News Now, the annual Hotel Data Conference in Nashville, and STR Global Ltd., the company’s international business based in London. STR collects information on more than 66,000 hotels in 180 countries. The deal is expected to close in the fourth quarter of this year.
Image may be NSFW. Clik here to view.
Lennar’s Stuart Miller and a rendering of a Sierra Ranch home
Lennar Corp. closed on an 89-acre development site in Davie for $18.6 million where it plans to build the home community Sierra Ranch. Amzak International, led by David Schack, sold the property at 1950 South Hiatus Road to the Miami-based homebuilder, which plans to build 79 single-family homes on the site. [TRD]
Prestige Imports inked a three-month deal for a pop-up in the Miami Design District. CEO Brett David will use the 9,000-square-foot space at 3841 Northwest Second Avenue to display supercars and hypercars, Luminaire pieces, and art from David Rosen Galleries. It opens Oct. 9 and will run through Art Basel weekend in December, according to a spokesperson.
Greg Mirmelli’s vacation rental property at 2120 Bay Avenue in Miami Beach
A Wellington woman wants a $57,000 refund from Miami Beach real estate investor Greg Mirmelli because he allegedly did not disclose that the Sunset Island house that she rented from him was in a neighborhood where short-term rentals are prohibited.
Aurora Rangel de Alba is suing Mirmelli, who has tangled with the city over its short-term rental crackdown, in an attempt to get her money back. Mirmelli could not be reached for comment and his attorneys did not respond to email and phone messages.
“She was never told that short-term rentals are not permitted in [Sunset Island],” said Rangel de Alba’s lawyer Alejandro Hoyos. “Upon making that discovery, she left almost immediately. Unfortunately, Mr. Mirmelli was not inclined to return [all of] her funds and she had no choice but to initiate the lawsuit.”
Rangel de Alba relied on a realty company, Miami Beach Luxury Rentals, to assist her in finding a place to stay during the holiday season last year, according to the lawsuit. Rangel de Alba claims she selected Mirmelli’s five-bedroom house at 2120 Bay Avenue after she was shown photographs and descriptions of the property and its amenities. She signed the rental agreement on Nov. 15, 2018 for a seven-day stay between Dec. 27, 2018 to Jan. 3, 2019, the lawsuit states.
Rangel de Alba alleges that Miami Beach Luxury Rentals and Mirmelli knew the Sunset Island home was in a residential neighborhood where short-term stays are banned when they quoted her a price of $102,672, plus a security deposit of $20,000, both of which she charged to a credit card. On Dec. 28, the day after she and her family arrived, Rangel de Alba claims the house was “unclean, in disarray and unfit for her family.” So when she began looking for another place to rent, Mirmelli and the realty company advised her not to tell any of the neighbors and the security guards at the entrance gate that she was staying at his house for a one week stay, the lawsuit alleges.
The renter decided to leave with her family and demanded a full refund, including the security deposit, according to the complaint, filed in Miami-Dade Circuit Court. Over the next five months, Miami Beach Luxury Rentals and Mirmelli only returned $65,672, Rangel de Alba alleges.
In a response to Rangel de Alba’s lawsuit, Mirmelli’s attorneys blame her for not properly researching Miami Beach’s short-term rental prohibitions and neighborhoods where such rentals are not allowed. “Any alleged damages are due to her inadequate due diligence, failure to negotiate sufficient agreements, poor investment decisions, and own inaction,” the response states.
Mirmelli is no stranger to Miami Beach’s short-term rental ban. In August of last year, he sued the city, claiming that Miami Beach was not enforcing its rules against another investor who rented properties illegally, and that the short-term rental regulations are unconstitutional. His property on Sunset Island has a fair market value of $9.4 million, according to Zillow.
Rendering of Esplanade at Aventura and Industrious CEO Jamie Hodari (Credit: Seritage and Industrious)
Industrious, a co-working provider, signed a deal for its second location in South Florida.
The firm will take nearly 30,000 square feet at Esplanade at Aventura, a mixed-use project under construction next to Aventura Mall. Seritage Growth Properties is developing the retail, restaurant and entertainment project.
The lease is one of five between Industrious and Seritage, including another in La Jolla, California, according to a press release. At Esplanade at Aventura, the co-working space provider will have shared workspaces, private offices, and a cafe. It’s expected to open in the second quarter of next year.
Esplanade at Aventura, designed by SB Architects, the Rockwell Group and Wet Design, will have tenants that include The Loyal by Michelin-starred chef John Fraser; Jarana, by Peruvian chef Gaston Acurio; Joey Restaurant; and Pinstripes, an entertainment concept with bowling and bocce.
The site, at 19505 Biscayne Boulevard, was previously home to a Sears store. In 2017, Seritage purchased 235 Sears and Kmart stores from Sears Holdings Corp. Under terms of the sale, Seritage recaptured the property, which allowed the real estate investment trust to develop the site. Seritage also settled a lawsuit in 2016 that it filed against the owners of Aventura Mall to stop the nearby shopping center’s expansion plans.
Industrious has over 85 locations in more than 45 cities in the U.S. Members have included Compass, Heineken, Humana and Zillow.
In March, Industrious announced it would take 45,000 square feet at 1111 Brickell, owned by a joint venture between KKR and Parkway Properties. The lease marked the first for Industrious in South Florida.
Co-working competitors in South Florida include Büro, Pipeline, Spaces and WeWork. On Tuesday, WeWork said it was pulling its public offering amid mounting scrutiny.
Ben Carson, United States Secretary of Housing and Urban Development
Ben Carson, head of the U.S. Department of Housing and Urban Development, will be among the roster of speakers at The Real Deal‘s annual Real Estate Showcase and Forum in Miami.
This is the sixth year TRD is hosting the Miami forum, which is one of the most highly attended real estate events in the state. This year, the event will be held on Oct. 17 at Mana Wynwood, where panelists will include Grant Cardone, who operates a $1.2 billion property portfolio, and Peggy Olin, whose OneWorld Properties has done more than $3 billion in residential sales, and developer Don Peebles.
Panels will include discussions on gender- and race-diversity in the real estate industry, the long-term effects of the co-living and co-working economies and development.
The diversity panel will be led by Peebles, who recently launched a $500 million investment fund for minority and women developers in markets that include South Florida, New York and Los Angeles.
The event — at Mana Wynwood, 318 NW 23rd St, Miami — will run from 11 a.m. to 5 p.m.
LeBron James and California Governor Gavin Newsom (Credit: Getty Images and iStock)
California’s landmark student athlete compensation bill has now been signed into law, and while the NCAA has strong objections, one very high profile athlete is making his feelings known.
Gov. Gavin Newsom signed the “Fair Pay to Play Act” into law on Monday, and marked the occasion with an appearance on L.A. Lakers superstar LeBron James’ HBO show, “The Shop.”
The new law — which will allow college athletes to earn money from their names, likenesses and images — could also have a major impact on California’s real estate industry by creating a new pipeline of young millionaires in the home buying market. Several Los Angeles real estate agents said they support the measure, though it also presents a unique set of challenges.
The new law, which will take effect in 2023, “is going to initiate dozens of other states to introduce similar legislation,” Newsom said at a signing ceremony on James’ show. “It’s going to change college sports for the better by finally having the interests of the athletes on par with the interests of the institutions. Now we’re rebalancing that power.”
James was able to join the NBA without being required to spend a year in college, as most young athletes must now do. He has been a vocal critic of NCAA rules prohibiting student athletes from profiting off their likenesses, measures that many see as exploitative.
The Pac-12 Conference has spoken out against the bill, raising the concern that members California State University, Stanford, UCLA and USC could lose their NCAA membership as a result.
“Our universities have led important student-athlete reform over the past years,” the conference said in a statement, “but firmly believe all reforms must treat our student-athletes as students pursuing an education, and not as professional athletes.” [WaPo] — Kevin Sun
235 Southeast 1st Street, Mika Mattingly and Cecilia Estevez
Another downtown Miami office property hit the market, as owners of older buildings hope buyers will pay a premium to redevelop a property.
The office building at 235 Southeast 1st Street is unpriced, but the brokers expect the sale price to be more than $30 million, according to a spokesperson.
Colliers International South Florida’s Mika Mattingly and Cecilia Estevez are listing the property.
The four-story building is anchored by Regions Bank and has 81,000 square feet of office space. It could be redeveloped, however, into a 470-unit, 490,000-square-foot development which could reach 80 stories, according to a press release.
Mattingly said the site is attractive because it allows buyers the opportunity to capitalize on temporary cash flow from the office building while waiting for redevelopment.
Scallops USA, which is managed by Juan Wright Castro, bought the property in 1976, records show. It was built in 1954.
The property sits in the heart of downtown Miami near Bayfront Park and adjacent to the planned 92-story One Bayfront Plaza, a mixed-use project developed by Florida East Coast Realty.
The Regions Bank office building is also close to the planned Miami Worldcenter mega development. The $4 billion, 27-acre Miami Worldcenter will include about 450,000 square feet of high street retail, a 1,100-space parking garage, a 1,700-room convention center hotel from MDM Development Group and an office tower being built by Hines.
In September, Colliers International South Florida’s Mattingly, Jack Lowell and Estevez listed a 24,000-square-foot development site known as World Center Link at 33-55 Northeast 6th Street for about $16.5 million.
CoStar CEO Andrew Florance and STR president and CEO Amanda Hite (Credit: Getty Images, STR, and iStock)
CoStar Group, the $22 billion giant most known for its data on office and retail properties, is making a big push into the hotel industry by acquiring one that industry’s largest research and analytics firms.
CoStar has agreed to acquire Tennessee-based STR in a $450 million all-cash deal that is expected to close in the fourth quarter, the companies announced Tuesday. The Wall Street Journal first reported the news.
“We’re trying to get really high-quality data for a $3 trillion asset class,” CoStar CEO Andrew Florance told the Journal, referring to the company’s estimate of the total value of the world’s hotels.
Confidential STR data on metrics such as room revenue and occupancy are used by hotel owners on a daily basis to compare their performance with competitors, as well as by investors to inform business decisions. The data currently covers more than 65,000 hotels in more than 180 countries.
The headquarters of STR, founded as Smith Travel Research in 1985, will remain in the Nashville suburb of Hendersonville, and STR president Amanda Hite will stay on in that role. The company began marketing itself for sale in August “to obtain capital for expansion and other purposes,” according to company executives.
CoStar’s sales force will be able to help STR expand its geographical reach, while STR’s expertise in providing benchmarking data may allow CoStar to offer similar tools for other commercial property types.
“There are 350,000 hotels outside of the U.S. that are targets that we could be going after,” STR’s Hite said.
In September 2018, The Real Deal published a deep dive on CoStar’s approach to competition, revealing how it has used extensive litigation and aggressive public relations strategies to maintain its place as the top commercial real estate data firm.
Last year, CoStar began a major push into the European market with the acquisition of startup Realla.co, the largest online CRE marketplace in the continent, for an undisclosed sum. [WSJ] — Kevin Sun
UPDATED, Oct. 1, 4:40 p.m.: Is it a sign of the times? The owner of a vacant lot on Miami Beach’s Star Island is again slashing the price of his waterfront property, as asking prices drop in the ritzy enclave.
Shay Kostiner reduced the asking price of the 50,000-square-foot lot at 44 Star Island Drive to $16.4 million, down from the original $24 million it was listed for nearly three years ago. Brett Harris of Douglas Elliman, at least the third agent to take on the listing since 2016, is representing the seller.
Harris said Kostiner is “motivated to sell” and “getting realistic about where the market is.” After listing for $24 million in November 2016, the price was adjusted at least six times, according to Realtor.com.
Image may be NSFW. Clik here to view.
A rendering of 44 Star Island Drive
Kostiner, who paid $7.25 million for the lot in 2007, bought a home in Colorado and is now dividing his time between Miami Beach and Colorado.
Domo Architecture + Design designed plans for a nearly 17,000-square-foot home, which are included in the listing. They replace earlier plans for a 25,000-square-foot home.
“It needed a fresh look. The other house was too big,” Harris said. “The sweet spot is [between] 15,000 to 20,000 square feet.”
With the exception of the $65 million whisper listing of Stuart Miller’s spec mansion at 22 Star Island, a number of sellers on the exclusive island have reduced their asking prices in recent years.
In March, the home of late Lennar Corp. founder Leonard Miller and his wife Susan Miller, at 23 Star Island Drive, sold for $25 million, two years after hitting the market for $49 million.
Also in March, Gloria and Emilio Estefan relisted their guest home at 1 Star Island Drive for $32 million, a 20 percent reduction from when it first hit the market in 2015 for $40 million.
Rally Manufacturing founder Marco Iacovelli first listed his mansion at 46 Star Island Drive for $65 million, then announced in late 2017 that he would sell it auction without a reserve. Records show Iacovelli still owns the property.
In an off-market deal in July, Lennar Corp. Executive Chairman Stuart Miller sold 10 Star Island Drive for $17.5 million.
This week, the Kirsner family listed 34 Star Island Drive for $15.3 million.
WeWork isn’t the only company whose value sank when the co-working giant stumbled.
Some firms it bought with a mix of cash and stock options are suddenly worth a lot less, at least on paper.
And now they are on the chopping block as the office-space startup tries to right itself after weeks of turmoil and an abandoned IPO. WeWork is also looking to cut costs and raise capital, potentially by laying off thousands of employees and severing ancillary business lines.
Among those measures is the sale of three startups — Managed by Q, Meetup and Conductor — that WeWork acquired in recent years in part with stock options that are now worth much less. The Information first reported that the startups are for sale.
“The companies will trade at a discount because WeWork is trying to shore up its finances,” said Jeff Berman, a general partner at venture capital firm Camber Creek, which targets real estate technology investments. “It stands to reason that their holding is worth less.”
The startups are among 14 acquired by WeWork since 2014, including six this year, according to VentureSource. Other acquisitions could be cut loose too.
“It’s devastating. They trusted and believed in WeWork’s promise and their valuation,” said Eric Schiffer, chief executive of investment firm Patriarch. “Many of these companies had alternative routes to go without decimating their valuation.”
WeWork declined to comment.
Managed by Q, an office-management platform, raised $97 million from investors including Google Ventures, RRE Ventures and Kapor Capital before it was acquired by WeWork in April for $220 million.
That acquisition consisted of $100 million cash and $120 million in preferred stock priced at WeWork’s $47 billion valuation. With estimates of WeWork’s value now ranging from $10 billion to $15 billion, Managed by Q’s acquisition value is now closer to $140 million — an $80 million discount on its purchase price six months ago.
A source familiar with the matter said Managed by Q is raising funding to smooth its exit from WeWork. A spokesperson for Managed by Q declined to comment. Investors Google Ventures and RRE Ventures did not respond to requests for comment. Kapor Capital declined to comment.
Another startup, Conductor, a marketing software company that provides search engine optimization, was founded in 2006 and by 2015 had raised $60 million from investors including Catalyst Investors, Investor Growth Capital Limited and Matrix Partners.
WeWork acquired it in March 2018 for $113.6 million, which included $16 million in cash and $98 million in stock priced at WeWork’s $21 billion valuation. WeWork’s recent drop in valuation discounts that acquisition price by almost $40 million.
A person familiar with the matter said that Conductor had begun discussions to break away from WeWork months ago because of a lack of “synergies” between the two companies. The source added that the company is in discussions with a potential investor to finance its split from WeWork. A spokesperson for the company declined to comment. Conductor’s investors did not respond to requests for comment.
Other startups up for sale won’t be as affected. WeWork acquired Meetup — a platform that facilitates thousands of group meetings — in December 2017 for $156 million in cash. Meetup’s CEO, Scott Heiferman, did not respond to a request for comment. WeWork declined to comment.
WeWork’s minority investment in The Wing, a female-focused co-working firm, is also said to be for sale, according to Bloomberg. It took a 25 percent stake in 2017, which in June 2019 WeWork valued at $58.8 million, according to the prospectus for the larger firm’s ill-fated IPO. (The Wing said it was valued at $400 million in December).
Investors have even bristled at Wework-owned companies not said to be on the market. SpaceIQ, a workplace management software company acquired by WeWork in July, was purchased with cash and stock that matched WeWork’s $47 billion valuation. One investor told the Wall Street Journal that the acquisition was initially protested and that “the $47 billion price is ridiculous.”
For companies purchased with stock that manage to avoid WeWork’s fire sale, there may be an upside to sticking with WeWork’s stock, said Eric Frank, founder of Lightbox, a real estate technology company that has acquired multiple firms.
“There’s nothing to say that if you hold onto it for four years, it won’t go up,” Frank said. “But at the moment it’s not looking great.”
Amazon CEO Jeff Bezos (Credit: Getty Images, iStock)
Amazon continues to gobble up the e-commerce market but is also investing more into brick-and-mortar grocery stores, starting in Los Angeles.
The Everything Store has inked over a dozen leases for grocery stores in L.A. locations, some opening by the end of 2019, according to the Wall Street Journal.
The company is also eyeing Chicago and Philadelphia as early locations. Other places include the New York City area, New Jersey and Connecticut, the Journal reported.
Most of the stores are planned outside urban centers and are targeted toward middle-income suburban consumers, according to the report. In L.A., stores are planned in the affluent Woodland Hills area, Studio City, and Irvine in Orange County.
Amazon announced the grocery store venture in March. The stores are reportedly planned to be around 35,000 square feet, smaller than the typical 60,000-square-foot footprint of most chain grocery stores.
Amazon bought upscale grocer Whole Foods for $13.7 billion in 2017, but the new grocery stores are not Whole Foods-branded. The stores will sell items that Whole Foods doesn’t, including junk food and artificially flavored soda, according to the Journal.
Amazon has been experimenting with brick-and-mortar stores for several years, and not always with success. A few days after announcing its grocery store venture, Amazon announced it was pulling the plug on several dozen retail pop-up shops it started opening in 2014.
Amazon currently operates 16 Amazon Go stores nationwide, where customers can buy ready-to-eat food without a traditional checkout. It also operates 18 Amazon Books stores. [WSJ] — Dennis Lynch
Blackstone CEO Stephen A. Schwarzman and 5120 Northwest 165 Street
Blackstone acquired two industrial properties in Miami Gardens for $13.6 million, adding to its growing South Florida portfolio.
The private equity giant bought the combined 122,078-square-foot industrial site at 5120 Northwest 165th Street from TA Realty for $111 per square foot, records show. The properties are in the Palmetto Lakes Industrial Park.
TA bought the properties in 2013 for $3.9 million, records show. The main warehouse on the property was built in 1977.
Blackstone is betting big on industrial properties on a global scale. This week, Blackstone bought Colony Capital’s national warehouse portfolio for $5.9 billion.
In March, the company paid $18.7 billion for warehouse assets across the U.S in one of the largest industrial real estate deals in history.
Blackstone also bought a huge industrial portfolio next to Miami International Airport for $56 million in August. The company bought three warehouses totaling 367,848 square feet at 3208 Northwest 72nd Avenue and 3108 Northwest 72nd Avenue for $152 per square foot.
In South Florida, the industrial market remains one of the area’s best performing asset classes.
In Miami Dade-County, vacancy rates held steady at 4 percent in the second quarter compared to the same period of 2018, even with 725,000 square feet of newly completed construction, according to a recent report by Colliers International South Florida.
Clockwise from left: Forever 21 at 1 World Trade Center NY, 6801 Hollywood Blvd in LA, 865 West North Ave in Chicago and 701 Lincoln Road in Miami (Credit: Gloria Tso for The Real Deal, Google Maps)
Forever 21 identified a trio of New York City stores on its list of 178 locations in the United States that the struggling retailer has slated for closure.
The brand also slated 20 stores in the Los Angeles area, along with nine in Chicago and three more in South Florida.
In Manhattan, the fast fashion pioneer included its stores at Allied Partners’ 568 Broadway in Soho and Westfield’s World Trade Center Mall on a list of underperforming locations it plans to close as part of a Chapter 11 restructuring, according to paperwork filed in bankruptcy court in Delaware Tuesday.
In Brooklyn, the company plans to shutter stores at Crown Acquisition’s 490 Fulton Street in Downtown Brooklyn at Macerich’s King Plaza Mall in Mill Basin.
In South Florida, the stores include those on Lincoln Road in Miami Beach as well as in The Gardens in Palm Beach Gardens and in Pembrokes Lakes Mall in Pembroke Pines.
Among Forever 21’s top 50 creditors, Simon Property Group, Brookfield Property REIT, Macerich, Westfield and Vornado Realty Trust claim in court papers that Forever 21 owes them a combined $20.9 million in unpaid rent.
The brand’s filing is the latest blow to the retail market, following in the footsteps of companies like Sears, Toys R Us, Barney’s and Payless among others that have collapsed.
Forever 21 expects to start closing stores no later than Oct. 31, and finish vacating the locations by the end of the year. The company operates 549 stores across the country, and already owes millions to its largest landlords.
The list is subject to change. Forever 21 noted in court filings that unlike other retailers who have sought Chapter 11 relief, the company expects to receive support from its landlords in order to put together a “consensual solution to an industry-wide problem.”
That’s not always the case in these kinds of proceedings, according to Ballard Spahr attorney Craig Ganz, a bankruptcy specialist who is not involved in the case.
In a typical retail bankruptcy, he said, landlords won’t hear from their debtors’ attorneys until either the eve of the bankruptcy filing or there will be no communications and the debtor will simply file.
“I think one thing that is significant here is that four landlords hold 50 percent of all the leases in Forever 21’s portfolio,” he said. “That percentage is giving the landlords some leverage here and that may be a reason why Forever 21 has taken this active approach.”
Alex Rodriguez has seen both his professional and personal life covered exhaustively in newspapers across the country for decades now.
But since retiring as the Yankees’ star third baseman in 2016 — and, according to Forbes, pocketing over $480 million during his 22-year, pro-baseball career — he’s become even busier.
He’s now juggling regular media appearances with color commenting baseball games (he’s a broadcaster for Fox Sports and part of ESPN’s Sunday Night Baseball team) and growing his real estate and investment empire, which all operates under his A-Rod Corp. umbrella.
He is also co-hosting a podcast, which launched last year, called The Corp, where he’s interviewed guests ranging from Martha Stewart and Kevin Bacon to real estate tycoons like Barry Sternlicht and Barbara Corcoran. Oh, he also has two daughters, ages 11 and 14, and is engaged to superstar singer, producer and actress Jennifer Lopez — aka J.Lo.
Since he founded the Miami-based A-Rod Corp. in 2003, the firm has purchased over 15,000 apartments across the U.S., deploying hundreds of millions of dollars on real estate and investing in companies like the hospitality startup Sonder, private jet startup Wheels Up, Snapchat and NRG eSports.
Sternlicht said Rodriguez has shown that he’s willing to put in the time and energy needed to succeed in business and said he comes to an “informed decision based on reasoned information and careful diligence.”
“Alex approaches business with the same dedication and passion he did baseball,” Sternlicht told The Real Deal via email. “Alex wants to win, really crush, in his work as he did in the majors.”
In July, A-Rod Corp. closed on a $4.5 million condo at Terra’s Grove at Grand Bay, twin luxury towers in Miami designed by starchitect Bjarke Ingels. (The company is building out its unit as an office and creating a ground-floor event space).
Meanwhile, in May, the Miami-based Monument Capital Management, A-Rod Corp.’s multifamily arm, launched its fourth residential fund focused on workforce housing with the majority of the roughly $50 million it raised coming from family offices and high-net-worth individuals, including fellow professional athletes (though he declined to name any).
It’s planning to buy about $200 million worth of real estate and has already closed on properties in Illinois and Tennessee with a third under contract in North Carolina. And it’s looking to launch a fifth fund, for $100 million, in 2020.
Image may be NSFW. Clik here to view.
Workforce housing has been “one of the best places to take your money” because it has “tremendous yield and protective downside,” he said, during one of two interviews with TRD last month. The first of those conversations was at partner Stonehenge NYC’s Manhattan office, the second at his sprawling 11,000 square-foot Florida home, which has an indoor basketball court and where his art collection is on display.
In Miami, Rodriguez’s company is also investing in at least two developments, the Fairchild Coconut Grove, a boutique condo project, and a 31-story rental tower at 40 Northwest Third Street, the latter with Grand Station Partners.
On the New York front, last December, Adam Modlin, Rodriguez’s personal broker in New York, introduced him to Stonehenge CEO Ofer Yardeni and, six months later, the trio announced a partnership to buy rental buildings and condos in the Big Apple. They’re now in contract on their first deal: A 100-plus-unit rental building on East 51st Street in Manhattan.
The partners will be tapping their personal networks to raise about $500 million and then leverage that to buy $1 billion worth of value-add multifamily real estate in the city in the next 18 months, said Yardeni.
“Collaborating with [Rodriguez] will be extremely beneficial to all of us,” Yardeni said, noting that Rodriguez has a “tremendous network and an excellent reputation.”
“The vast network that he has can help Stonehenge go and raise capital from family officers, high-net-worth individuals and more institutional players because when Alex calls, everybody listens,” Yardeni added.
Modlin also gushed about Rodriguez, saying the retired Yankee has been “thinking about investing in New York City multifamily for years” and that he “brings a secret sauce.”
“Alex is a partner that anyone would dream to have,” Modlin said.
The 44-year-old Rodriguez — who just sold a home in Los Angeles (which he bought from Meryl Streep) for $4.4 million and unloaded a $17.5 million pad at 432 Park Avenue — spends about half the month in Miami. The other half is spent jet setting on his Gulfstream IV to New York, L.A. or wherever else his broadcasting responsibilities take him.
Below is an edited and condensed version of his conversations with TRD — which were more focused on real estate stats than baseball stats.
You made your first real estate purchase in your early 20s, only a few years into playing for the Seattle Mariners. Tell us about that deal. It was a duplex out of Miami. The reason I liked the investment was because it was 10 minutes from Miami Beach and 10 minutes from Coral Gables and it was near the water. I needed around $48,000 [for the] down payment. I was very nervous about it. It was near the Miami arena. My thesis for the investment was very simple — it was around fear. I felt that if I bought some real estate that over time, if I signed a 15- to 20-year note, that by the time I was 30 or 40 I would have a handful of assets with very little debt. That was my answer to not going bankrupt, owning hard assets.
So, is that why youinitiallygot into real estate? You said you didn’t want to go bankrupt. That’s all I’ve ever known. I always say, stick to what you’re passionate about and what you know. Coming from a single mother, all we knew was renting. We never bought anything. I envisioned one day as a young man that if I got an opportunity to trade places with a landlord that I would.
Image may be NSFW. Clik here to view.
Alex Rodriguez (center) with Adam Modlin (left) and Ofer Yardeni
Do you only purchase multifamily? We’re really focused. Yes, I play sports. But I play baseball. Yes, I play real estate, but I play multifamily. … I’d say [our] average is Class B properties. There’s always an added-value component to them.
You spent the majority of your baseball career on the Yankees under Joe Torre and Joe Girardi. What did you learn from them about running and managing an organization? Joe Torre and Joe Girardi were both great managers. They both held me accountable. They expected you to show up early and leave late and they did not micromanage. Joe Girardi was more hands on, and Joe Torre was more like the Godfather. I remember one time I was struggling and Joe Torre brought me into his office. He thought I was overworking. I was nervous because it was 2004 and it was my first year as a Yankee and they have this incredible history with so many championships. I thought he was going to be mad and really get upset with me and he said ‘Look, I think you’re pressing too much. If you turn around, there’s a beautiful bottle of wine, Silver Oak and next to it a cigar.’ He said, ‘I want you to go home, drink that bottle of wine.’ I said, ‘Well, I’m not much of a drinker of wine.’ He said, ‘Drink it and have a cigar, and come back, tomorrow’s game is at 7. If you show up before 6 o’clock I will fine you. So just show up and play.’ It made me so nervous to show up to the park so late. Usually, you’re there five or six hours before the game. [But] I show up around 6 o’clock. That night, I go out and hit a home run. The next night I go out and hit two home runs and off I went and finished that season very strong.
You went straight to the Mariners from high school, forgoing a scholarship to the University of Miami. Have you considered going back to school and getting any degrees? I’ve always thought about it. Joe Girardi always said that I was a teacher and a student at heart. And I think he’s right. I love to learn. I’m constantly trying to educate. I’ve been self-taught because I didn’t have any formal education. But I wouldn’t rule it out.
Does your team scout out opportunities and bring them to you? How involved are you in the whole process? I mean if you talk to Lane LaMure, Jeff Lee, Lisa Peier and Erin Knight [from my team], they’d probably tell you I’m involved too much. But I think that as we scale, we have to really count on our team. Ideas and opportunities come from all over the place.
How big is the company? It’s fluctuated. We were at one point 10,000 apartments. Today we might fluctuate by 3,000 to 6,000 depending on whether we’re buying or selling. We feel that it’s fairly late in the cycle right now. We take the philosophy that we sell 3,000 but we buy 1,000.
Are you worried about a recession? Are you preparing for that? We’re definitely in a defensive mode. We have our feet on the brakes a little bit. We made the decision about three years ago to start selling some of our portfolios and preparing for an opportunity. So, while we’re still buying, we’re cautious.
You’re investing in Chicago, New York and Miami. What other cities are you eyeing right now? We like to buy, fix [and] refinance. We’ve had a lot of success in secondary and tertiary markets, especially in the southeast. North Carolina has been great. We’ve had a lot of success in Texas. Chicago has been an incredible investment for us. … We’re very fortunate to have [Monument’s Chief Investment Officer] Stuart Zook leading the way. He’s always identifying new markets. Interesting markets where we haven’t been before are Tucson, Reno, Portland and Seattle. As we kind of move into the West Coast for the first time, it’s been a fun process. [Zook is] really good about picking what’s next. He’s got some great cities up his sleeve.
I read that you know Warren Buffet. What’s the best advice he’s given you? One of the lessons learned from Warren Buffet has been to do what you absolutely love to do with the people you love and respect. One of the interesting things I found with Warren is that he’s 89 and to this day, he’s still putting in six days of work. He’s in the office every day at 7:30. He reads five to eight hours a day.
Image may be NSFW. Clik here to view.
Who else do you look up to in the real estate industry? I look up to Stuart Zook. I feel incredibly fortunate that I met him almost 11 years ago. I thought it was the biggest break of my [business] career to find a guy that’s managed over $2 billion in assets over the course of his career and who understands the game so well. Someone who’s extremely ethical and incredibly conservative. We do this all the time [head butting motion] because I want to buy, and he says ‘No, no, no.’ That’s why he’s a much better investor than I am and why our returns have been incredible. He’s like Ted Williams. If it’s not right down the middle, center cut … he does have Buffet-esque discipline. I wish mine could be that good. But I’m a little more aggressive.
Does being a celebrity works against you in business? It’s a great question. As an athlete, there’s a gift and a curse. Sometimes, people celebrate and take the meeting. But for the most part, they’re thinking that you’re just an athlete. So I think part of what you have to do as an athlete is surround yourself with institutional-type investors with incredible background so a) they understand that your infrastructure and your team is one that can play at the big-league level and b) be one that can actually follow through and do the things they say they can.
There were reports that you are launching a business reality show in the same vein as “Shark Tank” on NBC. What can you tell us about it? We can’t talk much about the business show, but we’re very excited about and it has a little bit of a “Shark Tank” twist.
You told a crowd at a 2018 real estate convention that J.Lo loves real estate and has a “superpower to see what’s good and what’s not.” Do you guys talk about real estate and do you have plans to invest in any projects together? Jennifer loves residential real estate. I love commercial real estate. So, we make a good team there. She has impeccable taste, obviously. When you walk into her home, it’s always impeccable, smells good and is always in great neighborhood.
You two recently sold your condo at 432 Park. Why did you sell? Was it an investment decision or a personal decision? It was a trade. We love the building. We went in, we bought it. We have a big family — we didn’t fit. We needed a little bit more space.
Are you looking for a new apartment in New York City? I wouldn’t say so. We’re happy.
You announced your engagement to J.Lo in March. When’s the wedding? Now that was a nice pivot. We went from New York real estate to the wedding. Why don’t we go back to New York real estate?
How did you first meet Adam Modlin and how did you make the jump from broker-client to business partners? I met Adam over 25 years ago over at Bergdorf Goodman when he was selling suits. I knew I was going to like Adam from the get-go because the suit cost $500 and he tried to sell it to me for $5,000. I said this guy’s a pretty good salesman. Adam Modlin is a savant when it comes to New York real estate.
What about Ofer Yardeni? I met Ofer through Adam. I met him in South Florida over dinner [at Prime 112 in Miami Beach]. We quickly hit it off. Then we set a meeting together that lasted three days on the West Coast. My partner, Lane LaMure, came out. Adam came out. Over the course of two or three days we put together what we thought was a really great idea to buy real estate in New York City. Ofer has an incredible background. He served in the Israeli military. … He has a great family, great morals, great ethics and great background. He brings that intensity from his [military] background. He’s up every day at 4 a.m., he’s working out by 5, in the office by 6:30 or 7. With my background in New York, it’s always been a dream of mine to own real estate [there]. It’s the best real estate in the world. To have an operator who essentially is like Michael Jordan in his space … I thought it would be a great partnership.
Image may be NSFW. Clik here to view.
Principal of Monument Capital Management Stuart Zook and executive vice president Erin Knight
When do you plan to make your first NYC investments? We’re close to having a letter of intent for an asset right here in Manhattan. It’s a great opportunity for us. It’s rentals and it’s in Manhattan.
Where else do you see potential in New York? Around Yankees Stadium or around Citi Field in Willets Point and Flushing? I think that there’s upside around Yankee Stadium and around the Mets [at Citi Field]. I think both have a lot of upside. Anywhere in New York City, you have the potential. … But I think for this particular venture, we’re really focused on Manhattan.
A-Rod Corp. is moving to a condo in Coconut Grove. One your execs, Erin Knight, said the firm is bullish on the area. Are you planning any other investments there? Well, Erin Knight is from Miami and she went to school right down the street at Ransom Everglades. So, we ended up buying this beautiful office space. The kids go to school nearby and right across the street we’re developing about 27 apartments in a place called the Fairchild Coconut Grove, which is right on the water. We’re very bullish when it comes to Coconut Grove. In five or seven or 10 years, you’re not going to be able to recognize Coconut Grove. It’s going to be awesome.
Where else in Miami? We’re developing about 31 stories, 300 units in downtown Miami. We love rentals and it’s just a place that’s on fire. I love Coral Gables, Coconut Grove, Miami Beach. I wish I was spending more time in Miami
I read that $20 million of the $50 million you raised for that fund came from high-net-worth individuals. Have you tapped any other athletes or celebrities? We’re very diversified. They come from the private equity world, hedge funds and entertainment. We have probably a dozen athletes that have come on board. One of the things I’m very proud of with our LPs [limited partners] is that over 95 percent of anybody who’s come in has never left us. They just keep doubling, tripling down.
What advice do you give to young athletes who want to invest in real estate or start their own business? Do you get that question? Yeah, I do. We have several dozen athletes that have invested with us, and every single one of them has come back for more. [I say] ‘I made mistakes, just like I made mistakes in baseball. I had some failures, that’s part of it. But I think never trying to be involved, that’s also a mistake.’ Even if you’re not interested, you have to be interested in protecting your future. I think you have a responsibility to yourself and a fiduciary duty to your family. … Real estate, with the right partner, is a great hedge to the W2 income you earn as an athlete. While your career earnings potential downgrades, your real estate appreciates. The No. 1 thing I would say is find a great partner. … No. 2, find yourself a great lawyer [who can] structure deals in a way that you have downside protection and you’re not putting yourself out there. No. 3, I would say, never personally guarantee. No PG for an athlete. So many people have gotten hurt like that. And then fourth, I would say, find [a deal where] everybody has skin in the game.
Have they been happy with their investments? The greatest thing for me is when I send them their returns. I’ll send them an email, and they’ll call me right away. They’re like, ‘What? Are you serious?’ It makes me happy because a) it’s interesting to them and b) they’re connected and they have some passion behind it. And athletes are really smart people. … They just need a little financial coaching, financial literacy. But once they get it and they’re confident, they’re quick learners. They just have to have people that look out for them.
Is there someone who did that for you? I’ve always had a passion for it. And then I looked up to some of my buddies like Magic Johnson, Greg Norman, Arnold Palmer, Pat Riley. All of them became friends and mentors. I really think that for athletes, picking great mentors is an incredible way to go. Almost like picking a board of advisers as diverse as you could think of — from age to gender to skill set. One thing that’s always going to be true is that you’re going to come into some challenges and choices. To be able to have a handful of people that you’ve very carefully put together, it’s so powerful. For me it’s been incredibly powerful to have people in the tech space, to have strong women, to have people in finance, to have people in sports. I can’t just have five athletes on my board.
Do you see opportunities in esports and other types of entertainment from a real estate angle? We own a big stake in NRG eSports in San Francisco. We’re building a new arena for them in SF, which we’re very excited about. We’re bullish about the space. When you think about esports in general, there’s more kids today playing esports than physical sports. While it’s great for the business of esports, it’s scary for the next generation.
How much cash do you have in your pocket? I have zero cash in my pocket. My money is in real estate. Why, do you want some of my money?
How do you manage your time? You’re extremely busy. I would say that it’s a blend between running A-Rod Corp. [and] media obligations. First and foremost is obviously being with my family and the kids.
Is this the busiest you’ve ever been? For sure. I thought I was busy when I played baseball. Even with baseball there’s a predictable schedule every day. This changes every day.
Do you still have an intense workout schedule? I try everywhere I go to get a workout in. I try every day to break a sweat, especially when I travel. I try to incorporate hot yoga. It relaxes me, it’s like meditation.
If you didn’t have baseball or real estate, what would you be doing? I think private equity. I love building things. I like curating great teams. I love to see other young people win and make a lot of money. There’s nothing that makes me happier than to see people on my team the first time they make a million dollars. It’s life changing. Coming from team sports, you just love to win with teammates. I don’t think it’s a lot of fun to win by yourself. What fun is it to get rich alone? That sucks. You want to share the pie a bit. What happens is when everyone tastes that champagne or how sweet the cake is, then everyone gets to the office at 6:30 in the morning instead of 7:30. And now you’re looking at the next deal, and the next deal. The power of alignment is everything.
What do you want people to know about you that they don’t already? I feel like they know a lot. One, that I’m a terrible cook and an even worse dancer. Other things they probably don’t know is that I enjoy business just as much as I enjoy sports … and I go at business just like the way I approach sports. You’re only as good as your team — you’re an average of the five people you surround yourself with every day.
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 throughout the day. Please send any tips or deals to tips@therealdeal.com
This page was last updated at 9 a.m.
Starwood wants to redevelop the Mall at Wellington Green, adding multifamily units, restaurants and entertainment space, and a hotel. The hotel would include a pool, deck and beach, and the project would be centered around a 3.5-acre Crystal Lagoon, according to the Palm Beach Post. Starwood Retail Partners is proposing the demolition of the former Nordstrom anchor space. [Palm Beach Post]
An island in the Florida Keys hit the market for $17 million. Owner James Terra put the 15.8-acre private island at Mile Marker 79.9 in Islamorada on the market for the first time in 25 years. The property includes a five-bedroom house, pool, cabana, tennis court, boat slip and helicopter pad, according to the Sun Sentinel. It’s listed with Patti Stanley of Coldwell Banker Schmitt. [Sun Sentinel]
Image may be NSFW. Clik here to view.
Alex Rodriguez (Photos by Guerin Blask)
A-Rod is coming for New York City and South Florida real estate. In Miami, the retired all-star Yankee is investing in the Fairchild Coconut Grove and a mixed-use apartment tower in downtown Miami. Up in New York City, he’s partnering with Stonehenge NYC and broker Adam Modlin to make condo and apartment acquisitions, and he’s investing in multifamily across the country. The multi-talented investor opened up to The Real Deal about his new ventures. [TRD]
One third of the Corcoran Group’s gross commissions last year came from just 37 of its 1,239 brokers.
The New York firm gave at least one top agent a $120,000 marketing budget.
And, besieged by well-funded rivals who’ve poached top producers, Corcoran has shelled out sums as high as $275,000 for agents to use at their discretion.
These are some of the revelations gleaned from documents leaked to every Corcoran agent last month, and analyzed by The Real Deal.
The trove of information also contains agents’ gross commission income, or GCI — the fees generated by deals before the firm takes its cut — and the commission split for each. Further details include various perks, such as marketing budgets and car service allowances. TRD is publishing an anonymized analysis of the documents for several key reasons including: to examine the health of the firm, which is touted as the most successful subsidiary of publicly traded Realogy Holdings; and to shed more light on how the residential brokerage industry manages its agents.
Image may be NSFW. Clik here to view.
Corcoran has previously stated that it’s investigating what it’s called a criminal incident with the help of law enforcement and a third-party forensic investigator retained by Realogy. No arrests have been made yet.
In a statement, a representative for Corcoran said the analysis of data was “distorted” and its publication “irresponsible.” Previously, the firm called the leaked information inaccurate.
“Publishing this information serves no purpose other than to perpetuate and magnify the wrong that has been done to Corcoran and its agents,” a spokesperson said in an emailed statement. “The person or entity who did this was trying to create maximum damage by spreading erroneous data.” (Corcoran’s full statement is appended.)
These details are rarely disclosed outside a close-knit circle of executives who use splits and perks as bargaining tools to woo agents. Any attempt by brokerages to standardize fees could be classified as price-fixing, thus running the risk of violating antitrust laws.
The data analyzed by TRD is not comprehensive. Most critically, it does not include figures for Corcoran Sunshine Marketing Group, which is one of the city’s largest new development marketing firms and is overseeing sales efforts at Hudson Yards and 220 Central Park South. And sources said a spreadsheet of earnings, dated Sept. 8, 2019, is incomplete because some top agents don’t submit pending deals until they close.
In the aftermath of the breach, brokerage leaders at rival firms expressed empathy for Corcoran and feared there could be bigger implications for the industry, which has been struggling to deal with new well-funded rivals, an incursion of Big Tech into the brokerage space, the rise of superagents and a softening high-end market. “Generally, we all have similar business practices,” Scott Durkin, Douglas Elliman’s president and COO and a Corcoran alumnus, said a week after the breach. “I don’t wish this upon any competitor.”
Heavyweights take a hit
It’s an adage of sorts in residential brokerage: 20 percent of agents do 80 percent of the deals. Based on Corcoran’s leaked finances, that rings true.
Last year, the top 5 percent of Corcoran’s 1,239 agents accounted for 44 percent of the total GCI shown in the documents.
The top-producing offices hold a few surprises. While Corcoran’s East Side flagship dominates with roughly 25 percent of the firm’s 2018 GCI, the documents show, its offices in Brooklyn Heights and Park Slope were the second- and third-highest grossing offices last year, earning 8.9 percent and 8.4 percent of the firm’s total GCI, respectively.
Florida, where Corcoran has been expanding with a new office in West Palm Beach and another in Miami Beach, accounted for 8.3 percent of the firm’s total sales shown in the documents.
This comes as South Florida’s condo market has taken a beating over the last two years. For Corcoran agents there and in New York, which is going through similar challenges, the earnings reflect the new reality.
Among Corcoran’s top 10 agents company-wide — including Carrie Chiang, Robby Browne, Deborah Rieders and Paulette Koch — GCI dropped to $37.6 million last year, down 24 percent from $49.5 million in 2017, according to a document that listed agent perks.
In an interview earlier this year, Corcoran CEO Pam Liebman didn’t shy away from the fact that the market has turned, resulting in the firm closing $4.5 billion sell-side deals in 2018, a 28 percent drop from the year prior.
“It’s nothing to be embarrassed about; $4.5 billion is a great number,” Liebman said at the time. “We’re not crying, we’re OK.”
Going Dutch
Despite a sluggish market, Corcoran’s top earners have continued to make bank.
The leaked data shows Corcoran’s splits — the sliding fee structure based on sales volume — range from 45 percent to 85 percent. The average split company-wide, based on the leaked data, was 60.3 percent, and the most common was 50 percent. In Florida, where commission splits skew higher, Corcoran agents saw average splits of 75 percent, according to TRD’s analysis.
What that means for agents’ take-home pay is complicated. According to a 2014 split schedule, Corcoran splits start at 45 percent for agents with GCI under $100,000, meaning an agent responsible for those commission dollars takes home $45,000. Agents with GCI of $395,000 can earn 70 percent or more.
TRD’s analysis of the leaked documents found that the four agents with splits of 85 percent or higher had a median GCI of $3 million last year. (All four are in Florida.) Meanwhile, agents with splits of 70 percent had a median GCI of $402,433.
But across the industry, rising commission payouts over the years have squeezed profits for firms, including Corcoran parent Realogy.
Under CEO Ryan Schneider, the company has attempted to rein in costs by standardizing commissions in select markets. But if it’s a choice between losing money and letting an agent go elsewhere, Schneider said the company will opt for the latter.
“We’re not going to lose money just to retain people,” he said during this year’s second-quarter earnings call.
Perking up
The leaked documents, however, show that Corcoran has no bones about paying to keep and attract agents.
A three-page document lists 267 agents who have riders on their independent contractor agreements showing a slew of perks — including marketing budgets, junior agents and car service allowances. Of that group, 74 agents received a “Normandy Advance Payment,” a type of bonus compensation offered to agents to help them recoup lost business from their prior firm.
The leaked documents show the highest such payment was for $500,000, followed by $350,000 and $160,000. The average Normandy payment was $57,745, according to TRD’s analysis.
The rationale for Corcoran’s Normandy agreements is that residential firms, in general, have enacted tough policies for agents who leave. Such clawback policies routinely roll back commission splits to 40 percent on pending deals, and some firms now charge agents “returnable costs” (including reimbursement of marketing dollars).
For the most part, Corcoran’s recruiting appears to have been steady over the years. But the firm got an influx of new agents last year from Town Residential — at least 50, according to a TRD analysis — including Million Dollar Listing New York star Steve Gold, along with Danny Davis, Dana Power, Nicole Hechter and Asaf Bar-Lev.
Along with Normandy agreements, Corcoran offered annual marketing allowances to 182 agents, ranging between $2,000 and $120,000. The median was $8,000, according to TRD’s analysis.
Seven agents also have access to discretionary funds, ranging from $5,000 to $275,000. The median discretionary purse was $78,000. It should be noted that because the funds are to be used as an agent sees fit, the money can go toward marketing, for a junior agent, etc. Another four agents got dedicated car service allowances ranging from $1,000 to $10,000.
According to the documents, a total of 132 agents were allotted money to hire a junior agent, receiving between $5,000 and $227,810 for that purpose. (The average was $45,257.)
The revelation of agent perks comes as Corcoran and Realogy have been stung by losses to competitors — namely Compass. For years, Compass, most recently valued at $6.4 billion, has drawn criticism from competitors who accuse it of offering high splits and six-figure bonuses — though the firm denies such practices. In July, Realogy accused its rival of “predatory” poaching and illegal business practices in a new lawsuit.
Analysts that follow Realogy seem to generally view agent-recruitment perks as positive but say more is needed.
“This is a multifront battle where [Realogy] needs to invest and innovate,” read a September report from Barclays. “The capital and dollars behind the competition in many ways undermines RLGY’s efforts.”
Corcoran’s full statement: The Real Deal analysis of unverified Corcoran data is filled with inaccuracies. Many of their conclusions are simply wrong and do not at all reflect reality.
Publishing this information serves no purpose other than to perpetuate and magnify the wrong that has been done to Corcoran and its agents. The person or entity who did this was trying to create maximum damage by spreading erroneous data.
The improper disclosure of this misleading information to numerous unauthorized recipients was for the purpose of damaging Corcoran’s good will and reputation, and to interfere with employee and agent relationships. We will not comment any further on this criminal matter and firmly believe the publication of this distorted analysis is irresponsible.
Hotel developer Quadrum Global is planning to build an Arlo hotel in Wynwood, nearly a year after buying the property.
Quadrum Global tapped NBWW Architects (Nichols Brosch Wurst Wolfe & Associates) to design the mixed-use hotel at 2217 and 2233 Northwest Miami Court, according to a press release.
Image may be NSFW. Clik here to view.The project adds to the pipeline of hotels planned for Wynwood, including the Moxy hotel at 255 Northwest 25th Street.
The nine-story, 141,758-square-foot Arlo Wynwood will have 217 guest rooms, a fitness center with a yoga deck, valet parking, restaurants and bars. It will also feature a landscaped inner courtyard and public art facades.
Quadrum Global paid $8.55 million for the 30,000-square-foot development site in November 2018. It’s zoned T6-8-O, allowing for buildings of up to 12 stories and about 248,000 square feet of development with bonuses, according to the property flier.
Quadrum Global, an international real estate investment and development firm, owns the Nautilus South Beach, a 250-key hotel at 1825 Collins Avenue in Miami Beach, as well as Arlo-branded hotels in New York City, other hotels in Chicago and Orlando, and commercial properties in London, Kiev and the country of Georgia.
In July, a former Related Group project manager paid $3.2 million for the lots at 50 and 58 Northwest 26th Street in Wynwood, with plans to build a container-style hotel.
In a separate deal, developer Alex Karakhanian is partnering with Wynwood Investment Partners to build a mixed-use hotel at 51 Northwest 29th Street.
Cavalier and Henrosa hotels with Susan Gale of One Sotheby’s International Realty
The owner of two South Beach hotels is looking to sell the properties for a combined $42 million.
Companies tied to Orlando J. Valdes own the Cavalier Hotel at 1320 Ocean Drive and the Henrosa Hotel at 1435 Collins Avenue. The properties mark the last hotels that the family owns in Miami Beach, according to the listing broker, Susan Gale of One Sotheby’s International Realty.
The Valdes family owns the Shell Lumber and Hardware Company.
The properties are hitting the market independently, for $25 million and $17 million, respectively, and as a portfolio for an undisclosed discount, Gale said.
The Cavalier is asking $543,000 per key. The nearly 17,000-square-foot hotel sits on a 6,500-square-foot lot. Property records show that Ventura Capital One LLC paid $12.5 million for the hotel in 2014 and renovated it in 2016 and 2017. It was built in 1936.
The Cavalier includes a 2,200-square-foot restaurant with another 600 square feet of sidewalk seating. The restaurant, with space for 111 seats, comes with a liquor license. Gale said it could generate an additional $500,000 a year in income.
The Henrosa, a 40-room hotel, is asking $425,000 per key. Ventura Way One LLC paid $8.6 million for the 15,300-square-foot building, which was built in 1935, in 2014. It reopened less than a year ago after extension renovations, Gale said.
Gale brokered the recent $34.75 million sale of the Lord Balfour Hotel at 350 Ocean Drive to the U.S. arm of private equity firm Henley. The hotel traded hands in August for about $429,000 per room. Also in August, Blue Road paid $14.4 million for the shuttered Sanctuary Hotel at 1745 James Avenue, which breaks down to about $450,000 per key.
It plays out in the tabloids. Now, New York City’s real estate scene is set for the silver screen.
An untitled family drama set in the upper echelons of New York’s real estate scene is currently in the works. Gabriel Sherman, an acclaimed author and Vanity Fair correspondent, is behind the new show, according to the Hollywood Reporter.
Sherman’s biography on the late Fox News president Roger Ailes inspired the “The Loudest Voice,” which has become a TV sensation. His newest project will be produced by TV Studio, a collaboration between Entertainment 360 and Media Rights Capital.
Sherman declined to share further details when contacted by The Real Deal. [Hollywood Reporter] — David Jeans
Lennar Corp. reported an uptick in net income and home deliveries in its third quarter, but signs still point to a broader slowdown in the housing market.
The Miami-based homebuilder reported $513.4 million or $1.59 per share in third quarter net income, up 13.3 percent from $453.2 million or $1.37 per share in the third quarter of 2018. At the same time, revenue from home sales increased 2 percent, year-over-year, to $5.3 billion.
Lennar’s third-quarter report also showed possible indications that the housing market is slowing down. For example, sales incentives increased to $24,400 per home delivered in the third quarter, up from $22,900 per home delivered in the third quarter of 2018.
Sales incentives could be used to prop up home sales amid a cooling housing market and broader concerns about a recession. Due to such worries, homebuilders’ stocks have suffered, including Lennar’s, which is down more than 23 percent since January 2018.
Lennar Executive Chairman Stuart Miller told analysts during a conference call on Wednesday that the company is still seeing strong economic fundamentals and the housing market will grow after seeing a brief pause in 2019.
“The housing market seems solid and strong and continues to improve,” Miller said.
Lennar attributed much of its earnings growth to increased demand for lower-priced homes. The average sale price of homes delivered was $394,000 in the third quarter, compared to $415,000 in the third quarter of 2018.
In total, Lennar’s new orders increased 9 percent, year-over-year, in the third quarter, to 13,369 homes.
Lennar’s stock rose 2.6 percent to $57.16 at 1:15 pm on Wednesday.
Lennar’s third quarter performance follows a strong second quarter in which new home deliveries increased 5 percent, year-over-year, to 12,706 homes. The company’s stock dropped, however, following its second quarter conference call, after the company said tariffs on Chinese goods are costing Lennar an average of about $500 per home.
A number of indicators are signaling that home prices could soon come down after years of price appreciation.
Stephen Ross of Related Companies told Yahoo Finance in August that the housing market “is probably in the eighth inning.”
Nationwide, single-family housing authorizations declined for three straight quarters, according to a new report by BuildFax.
