Current reader favorites:
1. Argentinian developer submits plans for condo tower on former Epic East site
2. Movers & Shakers: Surf Club Four Seasons names sales director…and more
3. Fisher Island’s Palazzo del Sol: newest condo tower completed
4. Related’s Jorge Perez among business delegates visiting Cuba
5. Turnberry wants to build new project on Alton Road

The building at 1609 Alton Road

Sutton Equity, a family-run firm of retail investors based in New York, just paid $8.65 million for a mid-century building on Miami Beach’s Alton Road.

In an email to The Real Deal, the firm’s CEO Jesse Sutton confirmed he had purchased the 8,700-square-foot building at 1609 Alton Road. The property, located a block down the street from Russell Galbut’s 1212 Lincoln Road project, is home to both SoBe Liquors and the Nail Republic beauty salon.

It was built in 1947 and most recently renovated in 1985, according a LoopNet listing for the property, and the leases are set to expire in three years.

The building was owned by L.O.D. Enterprises, whose managing members are Luis and Maritza Dominguez, state records show. They paid a mere $265,000 for the site in 1980, or about $30 per square foot.

Now, the two have pulled in nearly 33 times that much. The new sales price breaks down to $994 a foot. Marcus & Millichap brokered the deal.

Sutton Equity is an investment firm that focuses on retail properties along the East Coast. Its listed assets are primarily located in New York, according to the company’s website.

“We bought this asset with an open mind; we can keep it as-is and bring rents to market, or we can look at development ideas down the road,” Jesse Sutton said in an email. “At this point, we’re very excited with all of the development taking place all around us. There’s a number of Class A projects that are in the pipeline, and our hope is these projects will have a further positive impact on Alton Road.”

Alton Road is becoming a development hotspot. Just this week, principals of Turnberry Associates and Elion Partners submitted plans for a new grocery-anchored project at 1698 Alton Road. Russell Galbut bought a tire shop at 1575 Alton Road for $10 million in January, and Saber Real Estate Advisors is planning a mixed-use project designed by Kobi Karp at 1824 Alton Road.

76400 Overseas Highway in Islamorada

Writer Carl Hiaasen listed his Islamorada home for $3.4 million, according to published reports. 

Carl Hiaasen (Credit: Wes Washington)

Hiaasen, a novelist and columnist, is looking to sell the two-story home at 76400 Overseas Highway in the Florida Keys. The 1.85-acre property features six bedrooms, four bathrooms, a tiki hut, pool, patio and wood docks, and faces the bay.

Hiaasen has spent the majority of his career at the Miami Herald where he is still a columnist. The writer has also published a number of award-winning novels, including “Bad Monkey” and “Hoot,” the latter of which was turned into a movie.

Patti Stanley of the Native Connection is the listing agent, according to Realtor.com.

Property records show he and his wife, Fenia Clizer, bought the Islamorada home in 2012 from George Burl for an undisclosed amount. Before that, the property last sold in 1996 for $785,000.

Hiaasen also owns a home in Vero Beach, which is in Indian River County. He paid $595,000 for that house in 2004. [Realtor.com] – Katherine Kallergis

Donald Trump (Credit: Donald Trump campaign)

From the New York website: There is a real possibility that one of the three lawsuits against Trump University may go to trial while the Donald is campaigning for the nation’s highest office.

A San Diego, Calif., judge on Tuesday said that Tarla Makaeff, who has been the lead plaintiff in the class-action lawsuit filed in 2010, may withdraw if another student agrees to be deposed again by Trump’s lawyers in the next three weeks, Bloomberg reported.

Trump’s lawyers have asked U.S. District Judge Gonzalo Curiel to postpone the trial until after the election, but this ruling means the case may go to trial during the campaign, Bloomberg reported.

Attorneys for Makaeff say she was traumatized by Trump’s litigation tactics while Trump’s lawyers say much of their case is built on her statements, according to Bloomberg.

The former students sued in 2010, alleging they were duped into paying $35,000 to attend the online school with real estate seminars promising “one-on-one mentorship, practical and fail-safe real estate techniques.”

This is one of three lawsuits filed against Trump University. In 2013, New York Attorney General Eric Schneiderman also sued Trump for $40 million over the university claiming it operated as an unlicensed educational institution that conned students into believing they would gain real estate investing expertise. There is another class-action lawsuit also pending in San Diego, Bloomberg reported.

Accusations that the university misled students has dogged the Republican frontrunner throughout the campaign. Trump counters with claims of 98 percent satisfaction among students.

A number of students say they were pressured into giving good scores and positive evaluations, the New York Times reported earlier this month. [Bloomberg] — Dusica Sue Malesevic

Downtown Miami (Credit: Marc Averette)

The king has been dethroned.

Cash sales for Miami-Dade County, once the nation’s largest hotspot for no-financing deals, continued to fall in December.

Of all the county’s home sales in December, 53.2 percent were made without financing. That’s a 5.4 percentage point drop year-over-year, according to the report from real estate research group CoreLogic.

Though Miami-Dade has regularly been the nation’s biggest haven for cash deals, Detroit took that title in December with 62.7 percent of its deals done without financing. Even Palm Beach County ranked higher than Miami, landing in second place with a 53.4 percent share.

Part of the reason Miami-Dade’s cash sales are falling is the county’s shrinking supply of distressed properties.

In December, 59.2 percent of lender-owned home sales were made with cash. Those properties have been steadily pushed out of the market as home values and homeowner equity strengthens. Resales, which made up 79 percent of all housing transactions in December, typically have the largest impact on the county’s percentage of cash sales.

Nationally, cash sales fell 3.3 percentage points to 33.4 percent in December. — Sean Stewart-Muniz

After pouring the foundation for Muse Residences in December, construction crews are working on the 10th floor of the Sunny Isles Beach condo tower.

Property Markets Group and S2 Development are developing the 50-story tower, which is slated for completion in 2018. The joint venture partners closed on a $134 million construction loan for the building in August from Canyon Partners Real Estate, a Los Angeles-based investment management firm and adviser.

When it opens, the 68-unit condominium will include a robotic parking system, infinity-edge pool and spa, poolside food and beverage services, and a fitness center. ISG World is the project’s exclusive sales and marketing firm. It’s 70 percent sold.

Muse, at 17141 Collins Avenue, is just north of Jade Ocean and Jade Beach. Other projects in Sunny Isles include Aurora, Turnberry Ocean Club, and Residences by Armani/Casa. The city is the fourth most active market east of I-95 this cycle with more than 3,165 new units announced. – Katherine Kallergis

Correction: An earlier version of this story incorrectly identified Muse as a 47-story tower. It will be 50 stories when completed, according to a spokesperson. 

The former North Ridge Medical Center in Oakland Park

Universal Health Services just closed on its $11 million purchase of Oakland Park’s former North Ridge Medical Center, which it plans to convert into a psychiatric hospital.

County records show the purchase includes the aging 184,007-square-foot medical center at 5757 Dixie Highway, which was built in 1974, along with its 189,639-square-foot parking lot.

Oakland Park city commissioners approved UHS’ planned conversion of the property in January, according to a report in the Sun Sentinel. The proposal was met with criticism from neighbors who were worried discharged patients could pose a risk to the nearby schools and communities, but most commissioners agreed the hospital wouldn’t be a threat.

The medical center was closed in 2008 following its $1.82 million acquisition by Holy Cross Hospital, according to county records.

UHS, one of the country’s largest operators of healthcare facilities, will now convert the medical center into a psychiatric hospital, starting with 60 beds.

The company also plans to eventually move its other regional operations — Atlantic Shores Hospital and Fort Lauderdale Hospital — to the new location for a total of 266 beds, according to the Sun Sentinel report.

Illustration by Dominic Bugatto for The Real Deal

TRD New YorkSpecial Report: On December 10, 2013, regulators summoned the nation’s biggest title insurance firms to 1 State Street.

Much of the hearing focused on the technicalities of title insurance fees and covenants. Representatives of firms in attendance, including Fidelity National, First American, Old Republic, and Stewart, spoke of enabling “the American dream of homeownership.” But then came a question about strip clubs.

Joseph DeSalvo, First American’s senior legal counsel, was asked why his company expensed trips with clients to Blush, a gentleman’s club just off of Route 454 on Long Island.

“Do you think that’s a proper use of premium?” Ellen Buxbaum, a state regulator, asked. “I wouldn’t comment,” DeSalvo replied. But when pressed, he acknowledged that spending millions on wining and dining clients was essential to the business.

“If it’s not entertainment, we would have to market our product in some other fashion,” he said. “So from that standpoint… this has worked out well.”

Title insurance, which in 2014 reaped an operating income of $12.2 billion and net income of over $800 million, has always been an opaque corner of real estate. Though technology has made title searches simpler and cheaper for firms, buyer premiums have continued to rise, given that the industry colludes to keep prices artificially high and uses political clout to block competition, effectively functioning as a cartel.

Title insurance rates in New York are regulated by the state, and since 1993, underwriters have worked together to propose uniform rates through a membership organization, the Title Insurance Rate Service Association (TIRSA), which is led by the industry’s dominant players — Stewart’s John Frates is currently president. While underwriters may file their own rates — deviating from the industry standard — almost none do.

Attempts to regulate the industry more closely have failed. An effort Gov. Andrew Cuomo launched last year to crack down on kickbacks and “inducements” is now dead in the water, according to several sources. And even the Treasury Department’s new requirement that title companies must disclose the identities of buyers who purchase luxury Manhattan real estate anonymously is said by many experts to lack teeth.

“People speak about title insurance seldom with the understanding of the vital role that our industry plays in ensuring that the great and good people of the State of New York have clear ownership to their homes,” Old Republic’s chief underwriting counsel Marvin Bagwell said at the 2013 hearing. But part of that lack of clarity seems to be by design; firms are able to get away with so much precisely because it’s so difficult to answer this question: How does the title insurance industry work?

The Real Deal attempted to find out.

The gang’s all here

A photo circa 1901 of the Santa Ana offices of the Orange County Title Company, predecessor to First American (Credit: First American)

Title insurance in the U.S. emerged in the 1870s as a way to protect buyers from dubious real estate deals. Entrepreneurs would head to county courthouses to copy land records by hand, in an attempt to ensure their clients’ deeds were accurate and free from any lien or fraud.

Martin Kravet, CEO of Royal Abstract, a Midtown-based title agent for developers such as SL Green Realty, Related Cos. and JDS Development Group, thinks of title insurance not as an insurance policy but as a “risk-avoidance product.”

Typically, insurance underwriters and agents such as Royal Abstract research a deed and “cure” any defects. Buyers pay a premium to ensure that in the rare event a deed is challenged, they are off the hook.

“It’s like an umbrella on a sunny day,” said Boaz Gilad, co-founder of Brooklyn-based developer Brookland Capital. “But for the 1 percent of deals that do go bad, you need title.”

Today, title insurance is a multibillion-dollar industry in the U.S. that employs over 50,000 people and enjoys a loss ratio of just 7 percent — for every $100 collected in premiums, it pays out just $7 in claims, according to ratings agency A.M. Best.

It is also extraordinarily consolidated: According to the American Land Title Association (ALTA), the industry’s main trade group, nearly 90 percent of the market is held by just four underwriters: Fidelity, with 32.4 percent; First American, with 27.9 percent; Old Republic., with 14 percent and Stewart, with 12.7 percent. Together, the “four families” wrote premiums totaling $8.4 billion nationwide in the first nine months of 2015, ALTA data show.

The title insurance industry is extremely consolidated, with just 4 firms controlling nearly 90 percent of the market (Source: ALTA)

These underwriters, however, farm out most of the heavy lifting to a vast network of agencies. Title agents — often attorneys or paralegals who in New York must get licensed — sell the bulk of insurance policies on behalf of the underwriters, and keep the lion’s share of the premium fees, roughly 80 percent. There are approximately 2,800 licensed title agents in New York State, according to the New York State Land Title Association, a state trade group. NYSLTA estimates the title industry in New York employs 10,000 people (directly and indirectly), spending about $500 million annually on salaries.

In New York, residential brokerages are also dabbling in title. Manhattan-based Skyline Title Agency is owned by Realogy, parent company to the Corcoran Group and Citi Habitats. Thoroughbred Title Services is an offshoot of Westchester-based Houlihan Lawrence, and Long Island-based DE Title Services is an affiliate of Douglas Elliman.

But title remains a bit player in the brokerage business: DE Title, for example, grew its revenue nearly 55 percent during the first nine months of 2015, but the company still racked up just $3.3 million worth of title fees compared to $449.5 million worth of commission and brokerage income during the same time, according to regulatory filings by Vector Group, parent company of Elliman and DE Title.

The price is right

Steven Day, EVP at Fidelity National

New York’s title insurance rates are among the highest in the country. Buyers of a $1 million pad in Manhattan, for example, would pay $5,162 for title insurance, according to Old Republic’s online rate calculator. Compare that to $2,431 in Los Angeles, $3,650 in New Jersey, $4,900 in Pennsylvania and $5,660 in Florida.

Since rates are a function of real estate values, rising prices have kept premiums high in recent years. Manhattan’s median apartment sales price topped $1 million in 2015, up nearly 22 percent from a decade earlier, according to data from appraisal firm Miller Samuel. Deal volume is also up. Last year, the number of sales hit 11,955 — a  41 percent jump from 2005.

Insurers wrote $830 million worth of premiums in New York during the first nine months of 2015, according to ALTA, a year-over-year growth of nearly 21 percent and the fourth-highest total nationwide. But on top of these premiums are a slew of payments that can significantly boost the consumer’s overall cost.

Many agents, for example, take gratuities — ranging from less than $100 for a residential closing to hundreds of dollars for a commercial closing — as a given. Underwriters have taken a hands-off approach to the matter.

“The closers who we engage to perform the services and be our representative are independent closers,” Fidelity’s Steven Day said at the hearing, and added that gratuities were not “something that we have taken a position on.”

First American’s DeSalvo followed by comparing the practice to tipping at a restaurant.

“Why do you give a waiter a tip at the end of the meal?” he asked. “Shouldn’t he be adequately compensated by the restaurant for the services he performs and shouldn’t you have the ability to walk out without paying a 15 to 20 percent gratuity? It’s the same argument, isn’t it?”

On top of the sweeteners are the myriad of fees, some of which are unique to New York. If a closing takes longer than two hours, an attendance fee is sometimes charged, the underwriters said at the hearing. Sellers are also occasionally charged a pick-up fee, in some cases per mortgage, to retrieve the documents.

“I was a little shocked when I first found out about it,” Ted Dacey of Thoroughbred Title Services said of New York’s specific add-ons at the time. “I [had] been in the business in a number of other states. I didn’t know what a pick-up was. I certainly didn’t know what a tip was with respect to a closing, but just sort of went with the flow.”

Snapshot of mergers and acquisitions listed on ALTA’s website

Some startups sense an opening.

From left: Daniel Price and Jason Gordon

“The fact that all of our major competitors work together to set rates certainly hasn’t created downward pricing pressure,” Daniel Price, CEO of OneTitle National Guaranty Company, told TRD.

He said OneTitle nixed so-called “junk fees” and offers lower rates since it filed its own rate schedule with the state – something that’s possible, although rarely done. Since it launched in 2014, OneTitle has raised $17 million in funding from investors, including $13 million from White Mountains Insurance Group, a  publicly-traded underwriter.

Another recent entrant is AmTrust Financial Services, a $5 billion insurance giant that jumped into the title game two years ago after seeing a lack of competition among underwriters.

“Our entry to the market signals to those players that we have the capacity and the market size to compete,” said Jason Gordon, president of AmTrust’s title division. Last year, AmTrust wrote just over $4 million in premiums, but Gordon said the company plans to aggressively expand its agency network. He described the competition as “fierce.”

“There’s a lot of agents and essentially that’s how they’re driving business, through transaction volumes,” he said.

Go with my guy

With set prices and a largely uniform product, how do title firms get ahead of the pack?

One of the earliest parties of the holiday season is hosted by Riverside Abstract, a prominent Brooklyn-based title company. More than 1,000 industry executives gathered for Riverside’s bash at ArtBeam to feast on sushi and lamb chops, knock back vodkas and schmooze while techno music blasted throughout the Chelsea loft space.

“All they needed was a few strippers,” one developer who attended said. And the Riverside Abstract party wasn’t an anomaly; title firms have a reputation for going all-out with their events.

Riverside co-founder Yoel Zagelbaum said the party is the company’s signature event. “We really look at it twofold,” he said. “It’s a thank-you to our clients, and a thank-you to people we work with, a way to show our appreciation and celebrate another year.” Zagelbaum noted that each year, guests tell him they landed business or closed a deal as a result of a connection made at the party. “What goes around comes around,” he said.

“You can’t compete on price,” said Douglas Forsyth, CEO of Excalibur Title Agency, which he formed in 2009 in partnership with TitleVest, a national title agency that was acquired in March 2015 by First American. “So if someone is going to want to do business with you, one of the ways to [win] business is to service the heck out of them.”

Title agents express their gratitude to clients in many ways, frequently donating to charities of their choice or paying for trips.

“No one gets a discount on title,” one prominent New York City investment sales broker said. But “people let title companies treat them well.”

At the 2013 hearing, industry executives tried to put a positive spin on the practice.

“We’ll talk about the 800-pound gorilla in the room,” said DeSalvo of First American, who earlier defended his company’s visit to a gentleman’s club (which occurred under different leadership, he pointed out).

“We participate in that fashion [in entertainment expenses] just like any other company to be competitive within our market,” he said. “It’s not a quid pro quo.”

Excalibur’s Forsyth also found himself on the defensive during the hearing, when regulators noted he spent more than half of his firm’s fees on meals and entertainment in 2011. “That was a tough year,” he said, adding that his company didn’t bring in as much revenue as it projected and therefore went over budget on entertainment.

Martin Kravet

“There is a limit,” said Royal Abstract’s Kravet. “If it sounds egregious, it probably is.” Kravet said he prefers to host cocktail parties to help his clients and friends network. “I don’t ask for a referral fee,” he said. “It’s part of the circle of life – of helping people and ultimately, it comes back to you without having your hand out all the time.”

Lawyers, mortgage brokers and real estate agents can make key referrals, and so underwriters spend millions to woo them. In 2006, a Forbes article reported that First American spent $120,000 a month courting real estate agents with season passes to sporting events and other freebies.

But for title insurers, developers can be the golden ticket.

“I get daily offers, requests for meetings, messages offering anything you want to move title to someone else,” said Brookland’s Gilad. “The premium is very high, so if you get someone like us with dozens of transactions a year, it’s a big account.”

Brookland works exclusively with a small title firm, Downtown Abstract, that proved itself by killing several deals that “didn’t smell right,” Gilad said.

“Instead of looking at it as fees – because it’s a fixed-rate business — I try to say to myself it’s the cost of a deal, like transfer tax,” said Eli Weiss of Joy Construction. Developers often use title as a tool to fully vet a site, he said. “At the end of the day, it’s really who you can get on the phone late at night when you have an issue,” he added.

With new condo buildings, developers may suggest a title company to buyers.

Boaz Gilad and a rendering of Brookland’s condo project at 550 Fourth Avenue in Park Slope (credit: RoArt via New York YIMBY)

“Sometimes they [the sponsor’s title insurer] can charge you a little less and give you a little bit of a break on some of the search,” said Peter Schwartz, head of the real estate practice at law firm Graubard Miller. “Everything about the building is the same. The only thing that changes is the individual buyer because it’s the same seller.”

In what sources said is an increasingly popular practice, commercial buyers will form a joint venture partnership with the title company on their deal, in order to receive a cut of the title fee after closing.

“There’s a gray line that no one wants to talk about,” one top broker said. “It’s something everyone knows.”

Lenders, too, often weigh in on the title process.

“There are lenders who say, ‘We have requirements, we only do business with certain underwriters,’” said Forsyth. Sometimes, they take it a step further.

Aaron Shmulewitz, an attorney at Belkin Burden Wenig & Goldman, said some lenders own “captive” title companies and may tell buyers that the interest rate on their loan is only as low as it is because they are using the bank’s title company.

“While there are all sorts of disclaimers that you are free to use the title company of your choice, there is no doubt as to the wishes of those particular lenders and brokers,” he said. “Sort of, ‘Nice little deal you’ve got there; it would be a real shame if something happened to it.’”

Catch me if you can

By 2013, widespread “inducements,” a term referring to a quid-pro-quo way of winning business, warranted attention from Benjamin Lawsky, the state’s top insurance regulator. New York title insurance accounted for just 9 percent of premiums written nationwide in 2012, but represented 21 percent of national expenses, according to data disclosed during the 2013 hearing. These excessive expenses, regulators reckoned, amounted to $65 million.

Cuomo’s effort to curb inducements and kickbacks in the title industry flopped, sources told TRD.

“The [proposed regulations] were withdrawn, mainly because they were so terribly flawed,” said Bob Treuber, executive director of trade group NYSLTA. A key “inadequacy,” he said, was the lack of distinction made between legitimate marketing and inducement. NYSLTA “is a staunch advocate for trying to drive out some of this kickback-type behavior,” Treuber said.

The Cuomo administration “is in the process of reviewing the public comments” it has received, a DFS spokesperson said, but declined to comment further.

Though several of the underwriters declined to comment, a representative for Stewart said the firm welcomes the governor’s “efforts to provide clarity to the market place on business conduct.”

And the Treasury Department’s new LLC disclosure rule, which requires title insurers to identify the true buyers of Manhattan homes over $3 million acquired in-all cash deals through shell companies, is so flawed that it’s effectively useless, sources said. For one thing, it only focuses on sales completed with paper checks and dollar bills, even though wire transfers are ubiquitous in so-called “all-cash” deals.

The wire transfer loophole is “large enough you can drive a fleet of trucks through,” Shmulewitz told TRD in January shortly after the Treasury Dept. announced its initiative. A spokesperson for the department said at the time that it would “adapt in the future accordingly” if it saw a shift to all-wire transactions.

Reforming the title industry is made trickier by its political heft.

Clockwise from top left: ALTA’s Michelle Korsmo, John Boehner, Eric Cantor, Tom Suozzi and Andrew Cuomo

Between 1990 and 2014, ALTA spent at least $4 million on campaign contributions and at least $4.5 million on lobbying, according to data from OpenSecrets, a website by the Center for Responsive Politics that tracks campaign finance. In 2014, ALTA donated large sums to Republican lawmakers, including former Speaker of the House John Boehner (R-Ohio) and former Rep. Eric Cantor (R-Va.), both of whom championed legislation allowing the industry to charge higher fees.

On the state level, title companies donated nearly $261,000 since 2010 to New York’s elected officials (and candidates), according to New York State Board of Elections data. Cuomo, too, has been a beneficiary, with contributions from First Nationwide Title Agency, New York State Title Agents PAC, All New York Title Agency, Benchmark Title and Trinity Title and Abstract. Other politicians with title money in their coffers include former Suffolk County executive Tom Suozzi, who the industry backed against Eliot Spitzer for the Democratic gubernatorial nomination. As New York Attorney General, Spitzer had launched an investigation into price-fixing and corruption in the title industry.

And the industry came under scrutiny again during last year’s arrest and trial of Dean Skelos, the former Republican majority leader in the State Senate, and his son Adam, a former vice president at Long Island-based title agency East Coast Abstract Group.

In February 2011, the Skeloses met with Tishman Speyer CEO Rob Speyer at Rockefeller Center, according to a May 2015 criminal complaint. A month later, the developer retained Adam to produce a title report for its Chrysler Building.

The complaint also refers to an incident in which Glenwood Management’s Charles Dorego arranged for Adam to receive a $20,000 commission from a different title company, though Adam had done no work for the money. Neither Dorego nor Speyer were charged with wrongdoing in the complaint.

ALTA lobbying via OpenSecrets

But despite the air of scandal surrounding the industry, it has yet to face its day of reckoning. And its gatekeepers have been diligent about letting members know what is and isn’t kosher. In September 2013, for example, Phillip Schulman, an attorney with K&L Gates (now at Mayer Brown), conducted a webinar for ALTA members in which he went over the anti-kickback policies put forth in the Real Estate Settlement Procedures Act (RESPA), a consumer protection statute.

An “agreement or understanding need not be in writing or even articulated or verbalized,” one of Schulman’s slides said. It “may include a practice or course of action where the receipt of a THING OF VALUE is understood.” This was followed by a “Wink, wink.” (The wink illustrated how even an implied understanding could be a violation, Schulman told TRD.)

At the end of his presentation, he offered up a RESPA compliance pop quiz for “real estate agents, lenders, title agents and wayward souls.”

Click here to buy tickets

We’re less than one week away from The Real Deal‘s first-ever Real Estate Showcase and Forum in Toronto!

TRD is gearing up for an action-packed day in Canada’s biggest city, filled with networking, dealmaking and previewing the hottest new developments with top players in residential and commercial real estate. Over 3,000 of Canada’s top real estate professionals are expected to attend, and will have the exclusive opportunity to preview over 30 U.S. new developments.

Our three panels will dive into the hottest real estate trends and opportunities in key investment markets:

• 1 p.m.: Q&A with the Wek: Investor and entrepreneur Michael Wekerle of “Dragon’s Den” talks Canadian real estate
• 2:30 p.m.: Vacation properties: A look at the South Florida real estate market
• 4 p.m.: Where’s best to invest in the U.S.? Examining residential and commercial markets in NYC and other large U.S. cities

Panelists include Canadian finance guru Michael Wekerle of Difference Capital Financial, Michael Stern of JDS Development Group, Sharif El-Gamal of Soho Properties, Phil Soper of Canadian mega brokerage Royal LePage, Mark McLean of the Toronto Real Estate Board, Rick Rush of Hodges Ward Elliott, J.D. Parker of Marcus & Millichap, Gil Dezer of Dezer Development, Carlos Rosso of Related Group, Jay Parker of Douglas Elliman Florida, and Dev Motwani of Merrimac Ventures.

To buy tickets to the event, click here. If you’re interested in participating as a sponsor, please contact Toronto@TheRealDeal.com.

For more information on The Real Deal’s U.S. Real Estate Showcase & Forum, click here.

Ugo Colombo’s CMC Group released new renderings of Brickell Flatiron, a 549-unit condo tower under construction in the Brickell neighborhood.

Colombo broke ground on the 64-story building earlier this month with more than half of its units sold. Brickell Flatiron, at 1001 South Miami Avenue in Miami, is the last to break ground in the Brickell market, according to the Miami Downtown Development Authority. Construction will be complete by 2019.

Amenities will include a rooftop sky spa and pool deck, a billiard and cigar room, wine cellar, children’s playroom, outdoor lap pool and a children’s pool. Luis Revuelta, along with Italian designer Massimo Iosa Ghini and artist Julian Schnabel, designed the development. Schnabel will work on large-scale artwork for the building’s public spaces.

Cervera Real Estate is handling sales and marketing for the project, where units start at $465,000.

Colombo purchased the site for $21 million in 2013. In February, he ended his partnership with Vlad Doronin on Flatiron and the 830 Brickell site by way of a land swap. Colombo’s CMC Group is now the outright owner of Brickell Flatiron, while Doronin holds the title for the assemblage at 830 Southeast First Avenue. The financial details of the deal were not disclosed. – Katherine Kallergis

22 Star Island (Credit: Miami Design Preservation League)

A 1931 Star Island mansion owned by Stuart Miller that was originally planned to be knocked down has been moved and will be preserved.

22 Star Island

Photos from the Miami Design Preservation League show the 7,000-square-foot home was lifted on dollies and moved elsewhere on the property so that Miller can build a new mansion. In April of last year, the Miami Beach Design Review Board approved Miller’s application to build a modern, two-story mansion at 22 Star Island Drive and relocate the Mediterranean-style home.

Miller, CEO of the Miami-based homebuilder Lennar Corp., previously sought to knock down the house. Those plans caused an uproar among preservationists that include the design preservation league. A petition to “Save 22 Star Island from Demolition” even garnered 527 signatures online.

The home was designed by architecture firm Kiehnel and Elliott, which designed properties that include the Coconut Grove Playhouse, El Jardin and Coral Gables Congregational Church, according to the Miami Herald. The newspaper first reported the news of the home being relocated.

Twenty Two Star Island LLC, controlled by Miller, paid $7.5 million for the 1.4-acre plot in 2012, property records show. It’s the second time in two years that homes have been moved on Star Island to make way for new mansions. The “mini-Vizacaya” at 27 Star Island was rotated and attached to a separate garage in 2014. Architect Walter DeGarmo designed the house, which has been at 27 Star Island since 1925.

Meanwhile, in December, the owner of 44 Star Island received design approval for the demolition of a 1935 home that will be replaced by a two-story, trapezoid structure with floor-to-ceiling glass panels that run the length of the new home. Owner Shay Kostiner bought the property, which was developed by a marine engineer who worked with Miami Beach founder Carl Fisher, in 2010 for $7.2 million. [Miami Herald] – Katherine Kallergis

Renderings of Bentley Bay’s renovated lobbies

Miami Beach’s Bentley Bay condominium might look a little fancier in the next two months.

The two-tower complex at 520 West Avenue is closing in on its May completion date for $1.5 million worth of renovations, courtesy of a New York design firm.

Bentley Bay’s condo association first announced its renovation plans in November, when its general contractor Eclipse Building Corp. sent out a release stating the building’s common areas would be getting a serious overhaul.

The total cost at that point was estimated at $500,000. But a new release from the association, which also announced the replacement of Eclipse, has the cost at triple that.

Among the touchups underway: a complete makeover for the north and south towers’ lobbies. That means Bentley Bay, built in 2005 is getting new floors, custom furniture, LED lighting, modern chandeliers and artwork.

The elevators are being outfitted with touchscreen controls, corridors are being refurbrished and designer Scott Davidson is putting in new landscaping.

Design firm Pembrooke & Ives is behind the renovation, and general contractor LAO Construction has stepped in to take Eclipse’s place. — Sean Stewart-Muniz

A conceptual rendering of the MLS Miami stadium

David Beckham and his partners just bought the private land required for a Major League Soccer stadium in Miami’s Overtown neighborhood. 

The announcement marks the first time Beckham has closed on land for a soccer stadium in Miami, following more than two years of failed attempts to find a location. A price was not disclosed.

The soccer star and his investors had also looked at Little Havana and downtown Miami.

Now, Miami Beckham United needs approval from the county to buy government-owned land and city approval for the required zoning changes. As proposed, the nine-acre stadium site would be between Northwest Sixth and Eighth streets, north of the Miami River in Overtown. That includes the roughly six acres of privately owned land that the group just closed on at 650 Northwest Eighth Street, according to a press release.

Property records show Windsor Investment Holdings LLC, a private company managed by Roland DiGasbarro of Coral Gables, was one of the sellers.

Beckham’s current plans are light on parking and rely on public transportation, which has drawn criticism from county officials. It would have stadium-goers walk from the nearby Metrorail station about three blocks away, plus use existing parking lots and garages in the area that total about 7,000 parking spaces.

Regardless, the Overtown location has already attracted other investors. Just last week, a 47,000-square-foot plot across the street from the stadium site sold for $6.7 million, The Real Deal reported.

“We have the right site, the right ownership group, and a loyal base of fans counting down the days until our first match,” Marcelo Claure, a Beckham partner and the CEO of Sprint, said in a statement. “We’re all-in on Overtown, and we couldn’t be more excited about moving forward with plans to deliver the most responsible stadium in Miami history.” — Katherine Kallergis

Miami River (Credit:Daniel Christensen)

1. City officials eye Brickell-downtown tunnel under Miami River [Miami Today News]
2. Miami Gardens considering tax district to create performing arts center [Miami Herald]
3. Palm Beach residents continue fight against overdevelopment [Palm Beach Daily News]
4. South Florida population hits 6 million for first time [Miami Herald]

— Sean Stewart-Muniz

Current reader favorites:
1. Turnberry wants to build new project on Alton Road
2. Hyatt Hotels to buy Thompson Miami Beach, rebrand property
3. Alan and Diane Lieberman sell Bal Harbour mansion for $8.5M
4. Beckham buys Overtown land for MLS stadium
5. Developer proposes micro-hotel on Washington Avenue

Christopher Brown and Kim Briesemeister

Branding a blighted downtown as an arts and entertainment district, making streets more pedestrian-friendly and luring new restaurants helped redevelop the urban cores of Delray Beach and West Palm Beach, according to two former community redevelopment leaders who have turned their experience into a book.

Christopher Brown, former Community Redevelopment Agency director in Delray Beach, and Kim Briesemeister, who held that position in West Palm Beach, have just put out a handbook on urban development, “Reinventing Your City.”

Amid the book’s launch, the duo, who now run an urban development firm, Redevelopment Management Associates, told the The Real Deal their thoughts on the key elements that led to successful development in West Palm and Delray and what challenges the cities face in the future.

In Delray Beach, when Brown started on the job in 1991, the city looked like “Death Valley” after 5 p.m., with no one on the streets, he said. Brown and his colleagues started by branding downtown as an “arts and entertainment” destination. Atlantic Avenue was narrowed, sidewalks were widened, utilities were placed underground, and streetlights were added. Then decrepit parking lots were renovated.

Brown recruited 20 to 25 restaurants. “Restaurants are the key to urban development, because people come downtown to eat and then walk around,” enabling other uses, he said. By 2000, Atlantic Avenue had 20 restaurants. The CRA subsidized loans for small businesses downtown and also subsidized the first two to three housing projects there.

These days, Brown is excited about the plan to bring an eight-theater iPic movie house along with shops, offices and a parking garage to the former location of the city’s library, south of Atlantic Avenue between Southeast Fifth Avenue and Southeast Fourth Avenue.

Yet, the city needs to come up with a vision for the next 25 years, and that vision should be created by young people, Brown said. “We need to be more receptive to adding housing downtown,” he said. “We need to stop worrying about density and traffic, because residential units don’t cause traffic. The traffic problem is visitors.” To ease traffic congestion, he advocates expanded public transportation in the form of trollies and light rail.

As for West Palm Beach, streetscaping was important in its downtown core too, Briesemeister, said. “The city made the urban grid very pedestrian friendly by narrowing roads.” CityPlace, the entertainment/retail/housing/office development that opened 16 years ago in what had been a rundown neighborhood next to downtown has played a key role in West Palm’s ascent, she said. The facility has drawn big crowds since it opened, although many businesses there have struggled.

“There wasn’t a comparable project in a U.S. city the size of West Palm,” Briesemeister said. “It changed the image of West Palm Beach from a small town to a major player in attracting businesses and retail.” In addition, the West Palm Beach government has been consistent through the last 15 years in creating an attractive environment for businesses and developers, she said. For example, the permitting process has been simplified.

Today, Briesemeister is impressed with the government’s continued focus on the waterfront, as evidenced by the encouragement of a hotel/retail/residential development on the site of the old City Hall at 200 2nd Street. She also lauds the city’s efforts to develop the Northwood and near Northwest neighborhoods.

As for West Palm’s challenges, “dealing with additional development, we have to make sure it’s smart growth,” Briesemeister said. That means taking care of traffic and utilities, she said. “You have to make sure that’s considered part of growth.” Attracting new businesses is important too, she said. “West Palm should think regionally,” cooperating with Miami, for example, in attracting financial service firms to South Florida, Briesemeister said.

David Beckham and a proposed rendering of the stadium

County records reveal David Beckham and his investors paid $18.95 million for a portion of the land needed to build their Major League Soccer Stadium in Miami’s Overtown neighborhood. 

Miami Beckham United announced the deal on Thursday, marking the first time the group had closed on land for a soccer stadium in Miami following years of failed attempts to find a site. As proposed, the nine-acre stadium site would be between Northwest Sixth and Eighth streets, north of the Miami River in Overtown and include county-owned land.

California-based 0101 Miami Properties LLC, an affiliate of Beckham’s group, purchased the 5.8 acres of private land in two purchases recorded late Thursday. The group also took out a $17.4 million loan from N&P Holdings Limited Partnership that can be boosted up to $45 million. One of the members of N&P Holdings Limited Partnership is Sprint CEO Marcelo Claure, according to the mortgage.

Miami Beckham United paid about $75 per square foot for the assemblage. Windsor Investment Holdings, a private company managed by Roland DiGasbarro of Coral Gables, sold 4.44 acres at 570, 566 and 650 Northwest Eighth Street for $12.75 million. Windsor bought the properties out of foreclosure in 2010 for $600,000, according to property records.

Beckham and his investors paid $6.2 million for the remaining 1.37 acres of land on Northwest Seventh Street and Northwest Sixth Avenue. New Miami River View, which is managed by Democratic fundraiser and lobbyist Christopher Korge and Thomas J. Korge of law firm Korge & Korge, sold those parcels. The company also lists Barry Goldmeier, a Miami developer who builds rental apartment complexes. New Miami River View paid $1.4 million for the land in 2006.

Prices have surged in Overtown, where developers and investors have been buying up apartment buildings and vacant parcels at high premiums. Just last week, a 47,000-square-foot plot across the street from the stadium site sold for $6.7 million.

Claure, a Beckham partner and the CEO of Sprint, said on Thursday that the group has the right site and the right ownership group. “We’re all-in on Overtown, and we couldn’t be more excited about moving forward with plans to deliver the most responsible stadium in Miami history,” he said in a statement.

Rendering of the Kobi Karp-designed hotel

Miami Beach developer Robert Finvarb just closed on a $46 million loan for the Residence Inn by Marriott he’s developing in Sunny Isles Beach.

Florida Community Bank issued the loan to a corporate entity managed by Finvarb and Barry Shelomovitz, county records show. The financing covers the former Wings Beachwear site at 17700 Collins Avenue, which will be razed for the new hotel. It’s right across the street from the newly built Mansions at Acqualina condo tower.

Plans for the property include a 19-story Marriott-branded hotel designed by Kobi Karp with 194 rooms. Site work on the 31,900-square-foot lot began in January, according to county documents.

Shelomovitz had owned the tourist-oriented beach shop for 22 years. He originally paid a mere $700,000 for the building in 1992.

Two years ago, Shelomovitz transferred his ownership to the new corporate entity managed by both Finvarb and him. The two quickly sought city approvals for the new hotel after the transfer.

The home at 3060 Mallet Hill Court (Inset: Bill Gates via TNS Sofres)

What do you get for a man who has everything? A whole street of Palm Beach County’s horse country, of course.

Microsoft founder Bill Gates reportedly just closed on a $13.5 million Wellington home next to his ranch, and has plans to buy much more than that in near future.

The four-acre property at 3060 Mallet Hill Court was sold by local developer Stuart Roffman, GossipExtra reported. It has a 7,000-square-foot Spanish-style home and its own horse barn.

Gates’ current home at 3155 Mallet Hill Court

Gates already owns the neighboring 4.5-acre ranch at 3155 Mallet Hill Court, the gossip column reported, which boasts its own 12,864-square-foot mansion. He bought that home for $8.7 million three years ago via a trust managed by attorney William McCaughan, who works for law firm K&L Gates — which was merged from a law firm Bill Gates’ father co-founded.

Bill Gates’ current ranch outlined and the other properties on Mallet Hill Court

This deal brings Gates’ holdings on the tiny street up to roughly 8.6 acres. But according to sources cited by GossipExtra, the billionaire isn’t stopping there. He’s either in negotiations or in contract to buy four more parcels on the street, which would make him Mallet Hill Court’s sole property owner, for a total of nearly 20 acres.

Three of those parcels are vacant lots measuring a little over an acre, while the fourth is a palatial ranch owned by James Kelly, Stephanie Kelly and Constance Grasso, according to county records.

So why would Gates want to buy out the whole street? Privacy concerns, a source told GossipExtra. The tech magnate beefed up security on the street when he purchased the first home, but the neighbors often hold social gatherings or train with horses. [GossipExtra] — Sean Stewart-Muniz

Institute of Contemporary Art Miami: ICA Miami was designed by Madrid-based Aranguren & Gallegos Arquitectos.

A proposed modification to the Design District special area plan involving the Institute of Contemporary Art’s new home drew skepticism from homeowners in neighboring Buena Vista late Thursday. Despite the protests, Miami city commissioners on first reading unanimously approved the change, which removes two parcels where the museum is being built, from the special area plan.

The city’s Planning and Zoning Department and the Planning Advisory Board recommended approving Miami Design District Associates LLC’s request to take off the two properties located at 53 Northeast 41st Street and 61 Northeast 41st Street because the sites are no longer part of the commercial redevelopment project and are now owned by the Institute of Contemporary Art. Associates is a partnership between Craig Robins’ Dacra and L Real Estate.

Homeowner Wendy Stephan complained that Associates and their attorneys never discussed with neighbors the possibility of removing parcels from the special area plan whenever it suited them. She claimed taking off the museum site properties could allow the institute to build a taller structure.

“What is the true purpose of removing the parcels?” Stephan said. “We believe it is so they can build a larger building adjacent to our neighborhood and that is a concern.” Stephan is one of two Buena Vista homeowners who appealed the city’s decision last year to grant zoning and land-use change in order for the institute to build a 37,500-square-foot building with an accompanying 15,000-square-foot backyard sculpture garden.

While the appeal is still pending, the institute already has a building permit and has already broken ground. Miami planning and zoning director Francisco Garcia disputed Stephan’s assertions that the city and Associates were hiding the true intent of the special area plan change. “Everything has been very deliberate,” he said. “Everything has been very transparent.”

Designed by Spanish firm Aranguren & Gallegos Arquitectos and local architect Wolfberg Alvarez, the ICA’s new home will have a southern facade, where the entrance is located, that features a layer of interlocking metal triangles and lighted panels that will change color. A curtain wall system of windows to allow for natural light makes up the northern facade and the interior space will include multipurpose gallery spaces and workspaces.