Rendering of proposed project

North Bay Village, which bills itself as a three-island paradise, took a step back this week from approving a major new development that backers said would boost its low tax base and fraying infrastructure, but which opponents said would overwhelm the sleepy village and exacerbate already congested traffic on Harbor Island.

At a packed and contentious village commission meeting that stretched late into the night on Tuesday, commissioners deferred approving a new overlay district for Harbor Island, one of three man-made islands that straddle the 79th Street Causeway that connects Miami Beach to the city of Miami.

Under a new overlay district, building heights on Harbor Island could go from 240 to 340 feet. Currently, the tallest building on Harbor Island tops out at 170 feet.

Citing unobstructed water views of Biscayne Bay, village officials have long said North Bay Village could be the next Bal Harbour. At least eight residential buildings opened on Harbor Island over the past decade, but most were built before the recession battered South Florida. The most recent, MODA, opened in 2015 offering luxury rentals, with unobstructed views of the bay.

Enter P&O Global Technologies, a Malaysian-based company that has proposed building a 77-unit, 340-foot high luxury condominium at 7918 West Drive. 

P&O, whose main business is security systems, paid $8.3 million in January 2015, for the site containing three lots. They have a total of  33,600 square feet on 0.77 of an acre.

The project can only move forward if the village commission approves a new overlay district, which will allow an increase in height and FAR (Floor Area Ratio) and also allow P&O to use TDR’s (transfer of development rights) from Vogel Park, which is adjacent to the P&O property.  

The proposed condominium would have 33 two-bedroom units and 44 three-bedroom units that architect Juan Azulay, told the village commission would be offered at approximately $700 per square foot.

P&O would use the TDR’s to build 36 units, and self-finance the project. P&O attorney Graham Penn told commissioners the village would receive $2.24 million in compensation for the TDR’s and that P&O would provide 30 mechanical parking spaces for lease to residents of congested Harbor Island. Penn said P&O would also extend the left turn lane off of the 79th Street Causeway onto Harbor Island and re-stripe Larry Paskow Way, adding an extra exit lane to ease congestion that backs up in the morning as residents leave the island for work.   

Earlier this month a divided village planning and zoning commission approved the overlay district plans on a 3-2 vote. A similar overlay district was created on the 79th Street Causeway in 2013, but so far no developers have moved to build on the five largely vacant waterfront parcels that line the causeway.    

Many residents of North Bay Village oppose the proposed new overlay district, and Tuesday night’s commission hearing was packed with Harbor Island residents opposed to the proposal. Two Harbor Island residents, Ken De Loreto and Ritch Holben, submitted a petition with 209 signatures against the overlay district. A separate similar petition with 117 signatures was also submitted by another Harbor Island resident. Saying that the village’s own planning consultant had “concerns about the consistency and compatibility” of the proposed district, De Loreto told commissioners that “nothing in the village looks like this, and the proposal offered no public benefit,” to North Bay Village. Holben noted that even though the city has approved an overlay district for the causeway, “nothing has been built there.”   

While several commissioners said they liked the proposed design of the building, they also said they were reluctant to approve a proposal that would allow such a large building to be built on Harbor Island. As she moved to defer the proposal to an unspecified date, Mayor Connie Leon Kreps said she and her colleagues “all want progress,” but that she was not prepared to vote against recommendations from the village planner who had concerns about the proposal.   

Wealth Report 2017 (Credit: Knight Frank, click to enlarge)

From the New York website: The number of ultra-high net worth individuals — those with assets of $30 million or more who’ve got the funds to purchase the world’s most desirable properties — jumped 42 percent over the past decade to 193,000 worldwide, according to a new Wealth Report from Knight Frank.

New York City is home to more than 6,500 of these individuals, more than any other city in the world, the report shows, and the city is poised to see that number swell to over 8,500 by 2026.

On an annual basis, that’s 8,225 new UHNWIs each year across the globe since 2006. Some 60 percent of UHNWIs already own real estate overseas, Knight Frank said, a growing phenomenon that’s impacted property global values.

“This whole stateless, rootless wealth doesn’t feel tied or indebted to a single country,” said CNBC’s wealth editor Robert Frank, who moderated a panel that discussed the report’s findings.

And lest anyone fret that Chinese buyers will vanish from the market due to China’s crackdown on capital flows, the report shows that the country is still churning out heaps of millionaires, at the astounding rate of 100,000 new millionaires per year.

“This is market-moving levels of wealth,” said Liam Bailey, global head of research for London-based brokerage Knight Frank, which presented the report at the New York Public Library in partnership with Douglas Elliman.

Chinese investors alone pumped $30 billion into real estate around the world last year, a massive leap from $300 million a decade ago, according to the report. And despite the government’s new capital controls, which took effect in January, Bailey projected 80 percent more cross-border purchases over the next five years.

Andrew Hay, head of Knight Frank’s residential division, spoke of the two unexpected global events that will define the narrative for the flow of wealth in the next few years: The U.K.’s decision to leave the European Union, and the U.S. presidential election of Donald Trump.

“Brexit means Brexit’ and “America first and only America first'” will set the tone for the high-end real estate market, Hay said, influencing everything from interest rates to flight of capital to where buyers will choose to put down their funds.

Bailey addressed the drop in prices seen in London, viewed as New York’s biggest competitor for high-end home purchases. Following Brexit, London property values dropped more than 6 percent, and the number of UHNWIs there is projected to grow to 6,175 by 2026

In the U.S., Seattle’s luxury market saw the biggest upside, with prices growing 9.7 percent, while Los Angeles values rose 5.3 percent and New York values rose 3.5 percent. Miami prices fell 2.7 percent. “More moderate growth is something we’re seeing increasingly around the U.S.,” said Bailey.

But that could change under President Trump and amid shifting geopolitics. Howard Lorber, chair of Elliman and a member of Trump’s economic advisory team, predicted on the panel that deregulation and tax reform under Trump would lead to “sustained growth,” or, practically speaking, “more money in people’s pockets.”

Addressing a question about the dearth of construction financing for new condos in New York, Lorber said that banking regulations were mostly to blame, and that more relaxed regulations under Trump would cause banks to loosen the purse strings.

While panelist Reaz Jafri, a partner at Withersworldwide, expressed concern about the administration’s immigration policy — including a travel ban on citizens from seven countries — Lorber dismissed those headwinds as a “short term issue.”

“There will be some suffering during this while it’s being worked out,” he said. “But, I don’t think a year from now we’ll be having this same conversation.”

Among the top 100 luxury markets, the the biggest gains in property values were seen in Shanghai, where prices jumped 27.4 percent. Other Asian cities dominated the list, including Beijing in the No. 2 spot with 26.8 percent, followed by Guangzhou (26.6 percent) and Seoul (16.6 percent).

Meanwhile, prices in Dubai were down 4 percent while Istanbul, which has been rocked by terrorist attacks, saw an 8.4 percent drop.

Rendering of 1826 West 23rd Street. Inset: owner Mathieu Massa

French restaurateur Mathieu Massa is listing a spec home he developed on Miami Beach’s Sunset Islands for $17.95 million. 

Listing agent Julian Johnston

Massa, who calls himself “Mr. Hospitality,” is about two months away from completing Villa Aman, a seven-bedroom, 7,359-square-foot home at 1826 West 23rd Street, listing agent Julian Johnston of Calibre International Realty told The Real Deal.

The waterfront home marks the first for Massa in Miami, but he has developed properties in France, Johnston said. Records show he paid $5.75 million for the 13,125-square-foot property in 2014. He owns Baoli Miami in Miami Beach, Marion in Brickell and El Tucan, a Latin-inspired supper club with live entertainment, also in Brickell.

The two-story home, designed by Cesar Molina Architects, features an open floor plan, lofted ceilings, Porsche lighting, a gourmet kitchen with SubZero and Wolf appliances, Dornbracht fixtures and sliding telescopic doors. The property also has 75 feet of waterfront, a pool and Jacuzzi. At $17.95 million, the price breaks down to $2,449 per square foot.

“Houses have been selling at $2,000 a square foot, but everything on the west end of Sunset has a 30 percent premium,” Johnston told TRD. He’s shown the home to New Yorkers, Brazilian buyers and Europeans, and most have considered it for a second home.

Workers are installing flooring, doors and fixtures before the home is completed in May.

Developer Todd Glaser is also active in the Sunset Islands. In February, he sold the non-waterfront house at 2300 Sunset Drive for $5.775 million, or $1,132 per square foot, to a New York hedge funder. A Glaser-built mansion on the water hit the market in September for $19.5 million, or nearly $2,000 a foot.

Renderings of H3 Hollywood

Months after halting construction and sales, H3 Hollywood was ordered to foreclosure auction. 

General contractor LB Construction was awarded $20.2 million in damages last week against the developer, Hollywood Station Investments, which includes a $15.8 million construction lien judgment, the South Florida Business Journal reported.

In September, The Real Deal first reported that the developer had run out of money and was stopping construction and sales of the planned 15-story, 247-unit condo development at 2165 Van Buren Street in Hollywood. The project was 60 percent sold at the time to buyers who had put down 50 percent deposits. Three buyers have so far sued the Hollywood Station Investments seeking their deposits.

And 10 companies filed lawsuits against the developer to foreclose on construction liens, in addition to LB Construction, the South Florida Business Journal reported.

Construction hit the 13th floor before the developer, which is managed by Diego Besga of Team Real Estate Management, halted construction last fall. It was slated to be completed in January. Prices for units started at $250,000.

An auction has been scheduled for April 25.

The developer could not be reached for comment, but LB Construction told the publication that the company would head to foreclosure judgment if necessary. “We are hopeful that resolution will be reached before we get that far. We are trying to work with all of the subcontractors and material suppliers to see that they are taken care of to the best of our ability,” the general contractor’s attorney Peter Berlowe said.  [SFBJ]  – Katherine Kallergis

Current reader favorites:

1. Time Out Market, a gourmet food hall, coming to Miami Beach
2. Mayi de la Vega of One Sotheby’s alleges her accountant embezzled $1.2M
3. Palm Beach investor lists Kendall apartment complex for $41M
4. Related Group’s proposed Terminal Island project faces Coast Guard objections
5. Steel mogul sells Hillsboro Beach estate to casino owner for $15M

A rendering of Dania Pointe, a $1 billion mixed-use development planned for Dania Beach

Hollywood and Dania Beach are ripe for redevelopment, with more than $1 billion in projects already in the works and the possibility of more, mayors of the Broward cities said at an event on Thursday.

Josh Levy and Tamara James, the mayors of the Hollywood and Dania Beach, respectively, told attendees at Urban Land Institute meeting in Fort Lauderdale that their aging housing stocks offer one of many opportunities for new development and redevelopment projects in residential and commercial real estate. They also pointed to the significant real estate investments they’ve already attracted to their strategically located communities, and see room for much more.

From left, Robert Shapiro, Tamara James, Andrew Maxey and Josh Levy (Credit: Peter J. Nolan)

“We have plenty of land for development and redevelopment and we’ve been able to move ahead with many important real estate projects,” including converting an old Jai Alai center into the Casino at Dania Beach, adding new hotels and implementing the Oasis projects to improve city neighborhoods and the quality of life for residents and visitors, said James, whose community is the oldest in Broward. It began 112 years ago as a tomato-growing center and became a popular site for antique shops.

“We don’t want to be just the city you go by on the way to the [Fort Lauderdale-Hollywood International] airport,” James said.

The mayors, speaking at a forum sponsored by the law firm Becker & Poliakoff, both stressed the strategic advantages of their locations between Miami and Fort Lauderdale, including their easy access to I-95, the Florida Turnpike, Port Everglades, the Fort Lauderdale-Hollywood International Airport and freight rail lines. They also cited lower commercial leasing rates than Miami, attractive residential communities and excellent beaches.

Population growth is a key factor for real estate in Broward, which is expanding faster than any other county in the state.

Both mayors stressed that their respective administrations are open to new development and redevelopment projects that “are compatible with our vision for growth and our uniqueness,” James said. “People like the city’s quaint personality and we want to preserve that.”

Levy said Hollywood’s housing stock is “pushing 60-plus.” “We’re interested in projects that elevate the brand of our city,” said Levy, whose municipality is home to the highly successful Margaritaville Hollywood Beach Resort and other hospitality projects.

As examples of their ability to attract new investments and meet growing residential and commercial demand in Broward, the mayors pointed to two major projects, with investments totaling well over $1 billion.

Andrew Maxey, land project manager for Pulte Homes, South Florida division, described his company’s Parkview at Hillcrest redevelopment in Hollywood, which covers about 170 acres, including 70 acres of parks. “We acquired the Hillcrest Golf and Country Club in 2016 and are building 645 units, including 275 single-family homes and 370 attached town houses,” Maxey said.

Located west of I-95 and east of Florida’s Turnpike, the property is designed to absorb some of “the pent-up demand for single-family homes in Broward,” he said. Parkview at Hillcrest offers 12 residential designs in the $300,000 to $500,000 range, has a clubhouse, resort-style pool and 3.5 miles of pedestrian walkways.

Maxey said the total capital investment will be about $168 million, including $25 million for the raw land.

In Dania Beach, Dania Pointe is a massive mixed-use development whose total cost is expected to reach beyond $1 billion, said Robert Shapiro, president of Master Development Inc., a developer in a joint venture with Kimco Realty Corp.

Covering about 105 acres, Dania Pointe will have 1,000 apartments (including 600 rentals); about 900,000 square feet of retail space, 500,000 square feet of office space, 300 hotel rooms and a large entertainment center, Shapiro said. The development is located alongside I-95 near Stirling Road, and replaces the old wooden roller coaster, a familiar site on the east side  of I-95 for many years, and Boomers arcade and go-cart track.

Developers paid $70 million to purchase the Dania Pointe properties, but had to pay $80 million to recondition the site before construction began last year.

“We talk about developments where people can live, work and play,” Shapiro said. “But I like to add – eat and have fun.”

Responding to a question about traffic congestion in Hollywood and other parts of Broward, Levy said that Broward County needs to set up an effective central headquarters for synchronizing traffic lights, especially during peak traffic hours.

Master Development’s Shapiro said that the Florida Dept. of Transportation needs to upgrade entry/exit points along I-95 to accommodate new commercial and residential growth, and added that counties and cities need to boost investment in improving their roads.

Hyde Midtown Suites & Residences, the condo/hotel tower under construction in Midtown Miami, has topped off, with 80 percent of its units presold.

The Related Group and Dezer Development are partnering on the 32-story building at 3401 Northeast First Avenue. When completed in October, it will have 410 condo units and 60 hotel suites. Designed by Arquitectonica, with interior design by the Rockwell Group, the tower will feature Hyde Music Lounge & Piano Bar, food and beverage by sbe, a pool terrace, spa, fitness center, private screening theater, retail spaces and a six-story parking garage. Moss & Associates is building the tower, which broke ground in September 2015.

“The idea is you live in a condo but you have all the hotel services,” said Carlos Rosso, president of the condominium division for Related, during a recent construction tour of the building.

On the 32nd floor, 16 penthouses will have their own private rooftop terraces and summer kitchens. The seventh floor is devoted to amenities, including Midtown Miami’s only tennis court. Other features include a pool, pool bar, Jacuzzi, putting green and bocce court. “It’s the full millennial menu,” Rosso said.

The ground floor of Hyde Midtown also will have nine retail spaces, which are owned by Alex Vadia. No leases have yet been signed, Rosso said. “We’re targeting super cool restaurants,” he added. On the pool deck, Rosso said they are trying to create a Juvia-type outdoor bar concept.

A New York investor bought the hotel component of Hyde Midtown for $30 million, or $500,000 a room, Rosso said during a panel event last year, but he has declined to name the buyer. Sbe is managing the hotel, which will be located on the first six floors of the building. And in February 2016, Related and Dezer secured a $115 million construction loan for the project.

Currently 80 condos of 410, or 20 percent, are left for sale, priced from $430,000 to $2 million. Buyers to date include local Midtown renters who are ready to buy, as well as foreign purchasers from Argentina, Brazil, Colombia, Venezuela, Mexico, Italy and Turkey, he said.

Of the total, 25 percent to 30 percent are end-users, among them also many from the Northeast, said Javier Cuadros, project manager for Hyde Midtown. “New Yorkers really get the whole urban lifestyle that Midtown offers,” he said.

The late Tony Scott and his estate on Seabright Place

From the Los Angeles website: A Beverly Hills estate formerly home to the late movie director Tony Scott is back on the market for $26.9 million, $15 million less than its original asking price.

The property has been chopped up into smaller parts. The initial listing came with four additional empty lots, while the new offering comprises a 7,000-square-foot main residence as well as a separate two-story guest cottage and an additional 3,000-square-foot house on just two lots, said listing broker Suzette Abbott of Sotheby’s International Realty. [more]

Rendering of Plan Z bicycle lanes. Inset: Bernard Zyscovich

In Copenhagen, Denmark, bicycles are the preferred method of transportation, not cars. Fifty-six percent of the people use bicycles to commute to work. About 70 percent ride bikes regularly.

It isn’t because Copenhagen is a municipality of tree-hugging lefty health nuts, assured Mikael Colville-Andersen, CEO and founder of Copenhagenize. It’s simply because riding a bike is the simplest way to get around Copenhagen, a municipality that has narrowed its streets for cars in order to create three-lane cycle tracks. The reason: it’s cheaper and more efficient to create infrastructure for bicycles instead of cars. A car-dedicated street can only move 1,300 people an hour, Colville-Andersen said, but a cycle track can move 5,500 people in an hour. That’s why many crowded cities around the world are looking at making their urban environments more bicycle-friendly.

“The fact is the automobile no longer has a space in the big cities of our time,” said Colville-Andersen, paraphrasing Bertrand Delanoë, the mayor of Paris from 2001 to 2014, who implemented cycling tracks in Paris.

But can Greater Miami ever become a bike-friendly city similar to Copenhagen? That was the topic of a discussion hosted by the Knight Foundation Thursday evening, held at Miami Dade College’s Wolfson Campus. The panel, moderated by the Knight Foundation’s Matt Haggman, included Colville-Andersen, Florida Department of Transportation District Six Secretary James Wolfe, Miami-Dade Metropolitan Planning Organization Executive Director Aileen Bouclé, and Bernard Zyscovich, managing principal of Zyscovich Architects who is designing Plan Z, a proposed highway/linear park system for bicycles and pedestrians along Rickenbacker Causeway that will connect Miami’s mainland to Virginia Key and Key Biscayne.

Plan Z, which will be officially unveiled on Friday at the Coral Gables Museum, was forged in response to four bicyclists who were killed along the Rickenbacker Causeway within five years, Zyscovich said. And while Zyscovich is sure that Miami can become more of a bicycle-friendly city, he admitted there is a long road ahead. “Florida’s fatality rate is three times the national average for bicycles,” Zyscovich said.

When it comes to transportation infrastructure, Wolfe of FDOT said cars were given the highest priority. That’s because 95 percent of Miami-Dade County residents use a car to commute to work while just 3 percent use transit and 2 percent either ride or walk to their jobs.

To accommodate that demand, about 1 percent of new roads have been added every year in response to a 3 percent annual growth in the county’s population, Wolfe told The Real Deal after the panel discussion. But now traffic engineers are running out of room to build new highways or widen roads to accommodate the additional vehicular traffic that often comes with new condominiums, apartments, and houses. “We cannot continue,” Wolfe said, adding that somehow the region has to “improve” the percentage of people who use other methods of transit, besides cars, to get around.

At the same time, Wolfe added, many people resist widening bike paths or creating dedicated bus lanes if it means removing parking spaces or vehicular traffic lanes. “A lot of merchants want parking on both sides of the street,” Wolfe said.

The MPO’s Bouclé said the region must figure out a way to “share the road” with bicyclists and cars alike. “Declaring war on the car is not going to advance the conversation in any way,” she said.

Bouclé said the county is also adding bicycle facilities to buses and trains, enabling more people in the suburbs to travel in and out of the urban core safely and efficiently without cars.

Trust is also a huge factor, Bouclé argued. In Copenhagen, people are so secure that they often leave their babies in carriages unattended, said the MPO director, who recently visited the Danish city with James Wolfe. Bicyclists are also more secure in knowing that they won’t be hit by a car, she added.

That’s because there are physical barriers that prevent cars from coasting into cycling zones in Copenhagen and other bicycle-friendly cities, Colville-Andersen said. Whereas in some parts of the United States, there are only narrow bike paths situated between parked cars and vehicular traffic. If he seriously suggested such a transit method in Copenhagen, Colville-Andersen asserted, he would be fired.

Zyscovich said he forged Plan Z as a “defensive gesture” for bicyclists who risk their lives traveling along the Rickenbacker Causeway. “We in Miami don’t have the confidence to ride in our urban core….,” he said.”We need to take those who are already riding and make it safer and make it more viable to use as a catalyst.”

In Plan Z, Zyscovich strived to create a system that added 20 acres of park space in Virginia Key and secure bike path highways without removing vehicular lanes. “This isn’t a war on cars. I don’t think advocacy is necessarily a single purpose concept,” Zyscovich said.

Instead, Zyscovich advocated a system where people can drive cars, ride bikes, take buses, or simply walk without being frustrated.

“We need to kind of calm down as a community and begin to [ask] ourselves, ‘What would be the best way to move the most people in the most comfortable way possible?” Zyscovich said.  

Mortgage application

Could getting a home mortgage under today’s post-housing bust regulations and procedures be even remotely comparable to going to the dentist to get drilled? Or anything like having your annual physical, where every body part potentially is subject to inspection and prodding?

Has the process of applying and qualifying at a time of super-strict underwriting standards, record-high credit score requirements and hard-wired debt-to-income cut-offs gone a little over the top?

Many applicants and borrowers who’ve been through it apparently think so. Two new national surveys of consumer perceptions found that significant numbers of borrowers believe the current mortgage process is a major hassle.

The surveys were conducted for two consumer websites — FREEandCLEAR.com, a mortgage site, and NerdWallet.com, which offers personal finance and mortgage information. NerdWallet polled 2,241 adult borrowers, 1,341 of whom had applied for a mortgage and 1,431 of whom already owned a home. The survey was conducted online in mid-January by the Harris Poll. Of those sampled, 42 percent said they found the mortgage process “stressful,” 32 percent found it “complicated.” Forty-nine percent said they had regrets about how they handled the process. Some applicants, especially millennials and Gen X-ers, felt they hadn’t ended up with as low an interest rate as they expected.

One of every six said their applications had been rejected for one reason or another: 52 percent because their debt-to-income ratios didn’t meet current standards; 39 percent because their credit reports or scores weren’t good enough for the loan program they sought. Thirty one percent of those turned down said they were “surprised” at the lender’s decision.

Not everybody was bowled over by the process, however. Forty-one percent of those surveyed found it “manageable.”

In the FREEandCLEAR survey, borrowers were asked to choose among a set of alternatives that would most closely describe the mortgage process. Forty one percent said it was most similar to an annual physical. Thirty four percent said it was like going to the dentist. Twenty-two percent characterized it more favorably, as akin to doing “business with a friend.”

In an analysis accompanying the survey, FREEandCLEAR said that with 75 percent of borrowers comparing the process to either a physical or a dental visit, it’s evident that most people put getting a mortgage in the “unpleasant but necessary” category.

Fifty-six percent of respondents found excessive “paperwork” to be the most overwhelming aspect. “Although all the mortgage documents are intended to serve a specific purpose, usually legal or regulatory, the sheer amount of paperwork creates significant difficulties” for many consumers, said FREEandCLEAR in its analysis of the survey results. The second most troubling issue for consumers: current strict qualification requirements for loans, which “have definitely tightened since the mortgage crisis and the tougher guidelines appear to pose a challenge for many borrowers,” according to FREEandCLEAR.

What to make of consumer sentiments like these? There’s no question that in the wake of the financial crisis, federal and state regulations, mandatory disclosures and penalties governing mortgage lending have become far more stringent — and for good reasons. Between roughly 2004 and 2006, at the height of the boom, getting a mortgage too often wasn’t much of a hassle at all. As the saying went, all you needed was to be able to fog a mirror: No down payment necessary. No minimum credit requirements. No verification of income, taxes, assets.

But no-hassle mortgage lending in the U.S. produced hundreds of billions of dollars in losses for lenders and millions of Americans lost their homes to foreclosure. Many families still have not recovered, more than a decade later.

Lenders generally agree that tougher standards and procedures are needed to avoid a repeat. I asked Steve Stamets, a loan officer with Mortgage Link, a Maryland-based lender, about the survey results.

“I get it,” he said. The process “is a pain. But is it the right thing to do? Yes. If you were lending me $300,000, wouldn’t you want to know as much as possible about me?”

David Stevens, president and CEO of the Mortgage Bankers Association, told me the biggest problem with the system today is that some of the regulations for lenders amount to an overcorrection and are far too inflexible, especially for highly qualified applicants with large down payments and stellar credit scores. “You can create rules that eliminate risk entirely,” he said, “but nobody’s going to get a loan either.”

Pollo Tropical office (Credit: Gigi Alvarez) Inset: CREC’s Carol Brooks and Glenn Rozansky, vice president of real estate for Pollo Tropical

After nearly 20 years spent in fragmented office space in Dadeland and a test kitchen in Doral, Pollo Tropical has moved into a newly built-out space near Miami International Airport. 

Pollo Tropical, a subsidiary of Fiesta Restaurant Group, is leasing a 10,000-square-foot building at 7255 Corporate Center Drive, Carol Brooks told The Real Deal. Brooks, president and co-founder of CREC, represented Pollo Tropical in the lease along with senior leasing associate Katie Fernandez-Espinosa. Diana Parker, CBRE senior vice president, represented the Landing at MIA.

The new regional headquarters for Pollo Tropical includes an open floor plan of offices and conference space surrounding a roughly 1,100-square-foot test kitchen. The company went from leasing about 17,000 square feet on noncontiguous floors in an older building in the Dadeland area, plus a test kitchen in Doral, to a smaller and centralized space.

“They had grown over decades into a space that was no longer efficient and it didn’t accommodate their culture. They wanted to consolidate offices, their training facility and test kitchen under one roof with ease of access, abundant onsite parking and onsite amenities,” Brooks told TRD. “Those requirements – the parking and test kitchen – were inherently limited and that pushed us geographically.”

The building is within the Landing at MIA office park, which recently underwent a $17 million renovation, according to a press release. Records show SPUS7 Miami ACC Land LP owns the 50-acre complex. The limited partnership, which is controlled by CBRE Global Investors principal Claudia Walraven, paid $129.25 million for the office community in 2014.

Brooks declined to provide terms of the lease, including rents, but said that in general rents are lower in the Dadeland submarket, and that it’s difficult to compare rent within the airport submarket because of the kitchen and training facilities.

The popular fast-casual chicken restaurant chain added skylights to the building as part of the extensive build-out. Gigi Alvarez of G. Alvarez Studio designed the new headquarters.

“It’s so cool. We really talked a lot about culture; food is what they do, so the kitchen now is exposed to the central work area. Everybody has a view,” she said.

Kendall Corners. Inset: MMG principal Gabriel Navarro

MMG Equity Partners paid $38.58 million for a shopping center in the Kendall neighborhood of Miami. 

Kendall Corners, a 97,189-square-foot retail strip at 12755 Southwest 88th Street, traded for nearly $400 a square foot, which is in line with the recent deals. Records show Orion Venture VIII KC LLC, an affiliate of Orion Real Estate Group, is the seller.

The 8.3-acre property is 92 percent leased to Ashley Furniture, Baptist Health South Florida, BankUnited, Mattress Firm, a salon and IHOP, according to MMG Equity Partners. The shopping center was built in 1975 and last sold for $31 million in 2013.

Miami-based Orion has worked with more than $2.5 billion of commercial real estate deals and has a portfolio of more than $500 million, according to its website. The firm is active in 17 states. About two years ago, it paid $28 million for the Shoppes at Jupiter.

MMG Equity Partners, meanwhile, sold a nearby shopping center in Kendall for $19.5 million in September, or $408 per square foot. MMG sold it at only a $500,000 discount from the asking price. It completed that project, the Shoppes at Kendall on 154th Street and Kendall Drive, in 2014. – Katherine Kallergis

Continuum units 3407 and 3402. Inset: Sellers Jonathan Pollack and Tea Zagarac-Pollack

A New York hedge funder just sold two units on the 34th floor of the Continuum South Beach to the same buyer for a total of $10 million.

Myriam Bruni and Mark Zilbert

Records show Zegarac Pollock Family Foundation, linked to Jonathan Pollock, co-chief executive at Elliott Management in New York, and his wife Tea Zegarac-Pollock, sold units 3407 and 3402 at the Continuum’s South Tower at 100 South Pointe Drive.

Unit 3407 is a four-bedroom, three-and-a-half bath unit spanning 2,954 square feet. It sold for $7.125 million, or $2,420 per square foot. Unit 3402 has two bedrooms and two-and-a-half bathrooms amid 1,791 square feet. Its sale price was $2.85 million, which equates to $1,591 per square foot. The condos were sold furnished.

The buyer of both units is 3407 South Pointe Corp., whose director is Christopher Steven Smith of Las Vegas.

Mark Zilbert, president of Brown Harris Stevens | Zilbert, represented the seller and Myriam Bruni of Sterling Equity Realty represented the buyer, whom she declined to identify. Bruni said the buyer plans to use the condos for vacations with his family. “That is what attracted him, a high floor and it was two apartments, and he had the option to buy them together,” she told The Real Deal.

The units, which are not adjacent but down the hall from each other, had been listed for $7.75 million and $3.325 million. So together, the buyer bought them at a 10 percent discount.

Zilbert said the sellers simply felt “it was just time to sell.” Records show the couple paid $4 million for unit 3704 in 2007 and $1.45 million for unit 3402 in 2009.

“We sold very quickly,” Zilbert told The Real Deal. “I looked at 2016 as a tough year all around, particularly in the condo market, but what we are seeing since the election, and much more noticeably since the start of the year, is a lot of interest from buyers at the highest levels.”

The Continuum, at 50 and 100 South Pointe Drive, was developed by Ian Bruce Eichner’s Continuum Company in 2002 and 2008. Sieger Suarez Architects designed the two-tower condominium, which sits on a 12-acre property. Amenities include two lagoon pools, a spa and gym, and 1,000 feet of beach frontage.

In December, Brazilian TV star Roberto Justus, who rose to fame during his years-long stint hosting Brazil’s version of “The Apprentice,” sold his Continuum condo for $15.3 million. The six-bedroom, seven-bathroom unit sold for $2,115 per square foot. And in November, an entity controlled by Argentinian media moguls (and husband and wife) Daniel Hadad and Viviana Zocco sold their double unit at the Continuum for $10.5 million, or nearly $2,400 per square foot.

Chinatown in Manhattan (Credit: Madhu nair via Flickr)

Chinatown in North Miami?

In a neighborhood with a nearly 75 percent black population, much of it Haitian, the city wants to turn a 16-block area into a district that will rival such well-known Chinatowns as those in New York, San Francisco and Los Angeles.

A conceptual plan for the proposed project, created by Keith and Schnars, a Fort Lauderdale-based engineering consulting firm, was unveiled this week at a meeting at the Joe Celestin Community Center on the city’s west side. After the presentation, planners asked for citizen input for creating a master plan for the area, which runs along Northwest Seventh Avenue between 119th Street and 135th Street.

In February 2016, North Miami passed a resolution designating a 93-acre commercial district as a “Chinatown Cultural Arts and Innovation District.” When a master plan for the area is complete, investors will be able to apply for a variety of state and federal incentives. Plus, the city will offer local incentives. Among the incentives that may be available are tax credits and access to the EB-5 program for foreign investors at the federal level, as well as brownfield incentives and manufacturer tax exemptions at the state level, among other incentives.  

Chinatowns in many other places are organic, North Miami Vice Mayor Alix Desulme said, while some are created through the legislative process. The one in North Miami would be in the latter category, he said. In the upcoming weeks, the city will hold meetings with people who want to do business in the new Chinatown. “We are looking for investment, not just from Chinese (investors),” he told the audience at the meeting, which was also live-streamed in China. The city is prepared to invest in the area, Desulme said.

The reason the city has targeted this part of the Northwest Seventh Avenue corridor, explained Debbie Love, director of planning at Keith and Schnars, is that it is economically depressed with roughly 22 percent of the population earning less than $15,000 per year. If nothing is done to improve the area, she told the audience, it will continue to stagnate economically and only an estimated 26,000 square feet of new retail will be added in the next 20 years. But, if a Chinatown master plan is implemented, she said, there will likely be 217,000 square feet of new retail space, an increase of 600 percent in retail activity. In the office market, which hasn’t seen new space built in the last 16 years, it would be a 1,500 percent boost, creating demand for 260,000 square feet of new space, she said. Love did not explain how her firm arrived as the estimates.

Until recently, Chinese real estate investors favored gateway cities such as New York, San Francisco, Los Angeles and Vancouver. But as prices and competition in those markets have risen, investors are increasingly turning to Miami, among other markets, where prices are lower and there is a growing — although still small — Chinese population, plus increasing tourism from China, Don Pingaro, a partner with ISG-Asia in Aventura, told The Real Deal.

A report from commercial brokerage CBRE in October showed that $665 million worth of Asian cash flowed into Miami real estate during the first six months of 2016, making it the country’s fourth-most popular destination for investments from across the Pacific.

Craig Studnicky, principal at ISG, told TRD that in North Miami “land assemblage is easier than in the rest of Miami-Dade County, because the area hasn’t been redeveloped, like the Wynwood or Edgewater neighborhoods. There are a lot of older buildings with owners who are easier to deal with,” at least for now. In time, he said, “property owners in the area are going to raise their prices.”

“Real estate is not about location, location, location,” Studnicky said. “It is all about timing, timing, timing. The Chinese population [in Miami] is growing,” he said. “Asians who come now love our climate and our clean air.”

2247 Northwest 17th Avenue in Allapattah

The alligators are long gone from Allapattah, but you can still see some of the statuesque Royal Palm trees that former Cuban President Gerardo Machado planted on his small plantation after he was exiled to Miami.  

Like much of Allapattah — which means alligator in the Seminole language – Machado’s home is now for sale and it’s listed at over $1 million, a sign of the times in one of Miami’s oldest neighborhoods that’s in the middle of a real estate boom. With investors who are priced out of Wynwood, and increasingly Little River, feverishly snapping up warehouses, old bodega storefronts and single family homes, Allapattah is becoming Miami’s hottest new neighborhood.

Rendering of the Rubell Family Museum

Many of those brokers and investors got a close-up look at Allapattah on Friday on an Urban Land Institute-sponsored bus tour of the neighborhood which stretches north from the Miami River to Northwest 41st Street and West from I-95 to Northwest 27th Avenue. Leading the tour were Miami Historian Paul George, District 1 Miami Commissioner Willy Gort and Carlos Fausto Mirando of Fausto Commercial Realty, which has brokered millions of dollars of deals in the neighborhood recently.    

The ULI tour traveled up 17th Avenue, from the offices of McKenzie Construction to 36th Street, through Pequeño Santo Domingo, the home of many of Allapattah’s Dominican residents, east to “West of Wynwood,” or W.o.W., as it’s being called, to Northwest 29th Street and 7th Avenue, where “Wynwood style” eateries and retail outlets like the Allapattah Market have opened recently.   

Next was the neighborhood’s so-called “industrial core” around Northwest 12th Avenue and 22nd Street, where the future Rubell Museum will be located, and where Miami Beach investor Robert Wennett paid $16 million for the old Allapattah produce market, which takes up almost 10 acres. Tour participants also traveled west along Northwest 20th Street, home to hundreds of small retail outlets.  

The area along 20th Street was recently rezoned by the city of Miami T6-8, which allows for mixed-use buildings to be built up to eight stories with 150 units per acre. Miranda told The Real Deal that with buildings selling on 20th Street on a land base evaluation of about $110 per square foot to 110 per square foot, and retail rents at about $14 per square foot to $20 per square foot, the area is a relative bargain compared with blocks further east where he says commercial property can sell for $300 per square foot.   

Carlos Fausto Miranda

He said most warehouse space in the area ranges from 5,000 to 30,000 square feet and sales and lease prices can vary from block to block. Miranda, whose firm did $48 million of business last year with 60 percent of that in Allapattah, also told TRD relative bargains can be found along 36th Street to the north. The area is also zoned T6-8 and he says it’s not hard to find large multi-acre lots at reasonable prices.   

Gort, who has represented Allapattah for years, said many old businesses are leaving the area, and he hopes the new zoning will bring in more residents and help spur workforce housing in the largely low-income area.  “We’re trying to create affordable and workforces housing along with the private sector,” he told TRD.

George told TRD that with a new museum opening soon and good Metrorail connections more residents will be moving to Allapattah. “It’s a pretty densely populated area, and as you get closer to the Miami River you’ve got apartment houses and condos. It’s just a great market for anybody trying sell something. There are so many people in a finite area,” George said. “The neighborhood was our best kept secret until recently.”  But he said now that investors and developers have discovered Allapattah, he’s not sure what the future will be for the neighborhood’s largely Dominican residents.

McKenzie Construction, whose 25,000-square-foot state-of-the art facility opened in 2015 on Northwest 17th Avenue, is doing much of the renovation and reconstruction work in Allapattah. Chief Operating Officer Benji Power said it’s an ideal location, “better than Wynwood or Little River,” near Metrorail and all of Miami’s major highways.   

He told TRD moving to Allapattah helped his business and the neighborhood.  “We were a little part of the uptick,” he said. “I could say we had a vision, but to say that is to give ourselves too much credit. All the right pieces were just here.”

Rendering of Alta Flagler Village. Inset: developers Henry Pino and Raimundo Onetto

Miami-based Alta Developers has closed a $38.49 million construction loan for an apartment rental tower in Fort Lauderdale’s Flagler Village. 

Records show Bank of the Ozarks provided the financing for the project at 421 Northeast Sixth Street. It has not yet broken ground.

The 12-story, 208-unit building is the first phase of Alta’s Flagler Village rental development. The firm, led by principals Henry Pino and Raimundo Onetto, bought the 1.7-acre site in July for $2.77 million and knocked the former structure down in December.

Cohen Freedman Encinosa & Associates is the architect of Alta Flagler Village. The project will have 175,360 square feet of apartments and 3,250 square feet of commercial space.

It’s one of several rental buildings in the works for Flagler Village.

ArchCo Residential is moving forward with its plans for a 385-unit mixed-use apartment complex on North Andrews Avenue, Northeast First Avenue, Northeast Fifth Avenue and Sistrunk Boulevard. Also nearby is the Morgan Group’s Morgan on 3rd Avenue, a 350-unit development at 400 Northeast Third Avenue. The developer scored a $61 million construction loan for the project in December.

Proponents of Flagler Village are banking on a Wynwood-esque explosion in property values, citing the proximity of downtown Fort Lauderdale and All Aboard Florida’s Brightline station, the latter of which is under construction.

Andrea Greenberg and Jay Parker

Andrea Greenberg parted ways with Douglas Elliman this week after three months as the firm’s chief marketing officer for Florida, The Real Deal has learned. Sources told TRD it was Elliman’s decision to end her short tenure.

Greenberg joined Elliman Dec. 1 after more than 16 years as vice president of marketing for Fortune International Realty.

Steve Larkin, a spokesperson for Douglas Elliman in New York, confirmed the departure but declined comment. Sources told TRD Greenberg’s managerial style didn’t mix with Elliman’s corporate culture.

“Douglas Elliman is a great organization and I am grateful for the opportunity that was given to me,” Greenberg told TRD via text. “I want to explore some different ideas that I have had brewing and focus on some voids that I see in the marketplace.”

In February, Modern Luxury published an article about Greenberg’s new position, which included that she led all corporate marketing initiatives and was working on growing the Latin American division. “I am finding myself more inspired than ever,” she told the magazine.

When Greenberg joined Elliman late last year, Florida CEO Jay Parker said the firm created the role for Greenberg after former executive vice president of sales and marketing Susie Glass left in the summer.

“The Douglas Elliman opportunity was an amazing one, and one I had to accept,” Greenberg told TRD. “I have enjoyed it, but I have had the strong desire to do something on my own and different for quite awhile, and feel I have some good ideas worth exploring. I’m excited to become an entrepreneur.”

At Fortune, Greenberg led the Jade brand from inception, which includes Jade Residences at Brickell Bay, Jade Beach, Jade Ocean and Jade Signature towers. The development marketing expert worked on Ritz-Carlton Residences Sunny Isles Beach, SLS Brickell and other Fortune projects. Before Fortune, she led marketing at Oceania for more than a decade.

“People think marketing gets easier at the end of a project,” Greenberg told TRD in November, calling it a constant effort to be creative and innovative. “Certainly, the pressure is on.”

Janet Yellen (Credit: Getty Images)

From the New York site: The Federal Reserve is increasingly likely to raise short-term interest rates at its March meeting, comments by Fed chair Janet Yellen indicate.

“Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Yellen said Friday in Chicago, the Wall Street Journal reports.

The Federal Reserve’s decision-making body, the Federal Open Market Committee, is set to meet on March 14 and 15. The potential for more government spending under the Trump administration and an improving economy make another interest rate hike more likely. The Fed last raised rates in December.

“The economy has essentially met the employment portion of our mandate and inflation is moving closer to our 2% objective,” Yellen said in her speech at the Executives’ Club.

The real estate industry has been paying close attention to the Fed’s moves because short-term interest rates tend to lead to higher mortgage rates and put downward pressure on cap rates. [WSJ] — Konrad Putzier

The hhgregg store in Pembroke Pines (Source: Yelp.com)

Struggling retailer hhgregg Inc. will close 11 stores and a distribution center in South Florida to stem its losses.

The Indianapolis-based retailer of household appliances and electronics will close its distribution center in Miami and stores in Aventura, Boca Raton, Fort Lauderdale, Hialeah, Homestead, Kendall,  Pembroke Pines, Pinecrest, Plantation, Wellington and West Palm Beach. The company also plans to close Florida stores in Gainesville, Jensen Beach, Orlando and Pensacola.

The 15 stores in Florida are among 88 nationwide that hhgregg expects to close by mid-April, putting 1,500 employees out of work. The closures will reduce the number of hhgregg stores to 132.

“We are strategically exiting markets and stores that are not financially profitable for us,” Robert J. Riesbeck, president and CEO of hhgregg, said in a prepared statement.

Reuters News reported last week that hhgregg might file for bankruptcy. The publicly held company suffered a net loss of $83.8 million in the nine months ended Dec. 31 on top of net totaling $187.5 million in its last two fiscal years.

The Veranda condominium in Plantation

A jury approved awarded $43.9 million in damages to investors in a Plantation condominium development, including the Maroone family, former Miami Dolphins quarterback Dan Marino and a company controlled by billionaire H. Wayne Huizenga.

Wells Fargo Bank, which would pay the damages, may appeal the amount awarded Thursday by a Broward Circuit Court jury.

The case centered on an email to a potential buyer of a unit at the Veranda condominium in Plantation, a two-phase development initially funded by Marino and the other investors, who were part of a company called West City Realty Advisors.

In 2006, West City Realty Advisors had deposits and preconstruction sales contracts for about 190 of the 200 units at Veranda for a total contracted amount of $79.5 million, according to a suit filed by West City.

According to the suit, the email in question was sent by an employee of the mortgage arm of the old Wachovia Bank, which had been designated as the preferred lender for the Veranda condo project. Wells Fargo acquired Wachovia in 2008.

The Wachovia employee sent the email in October 2007 to one of the potential buyers as a reminder about the scheduled closing date.

In the “CC” or “carbon” copy of the email were the email addresses of more than 100 other people who had made deposits and signed contracts to purchase units at Veranda. According to the suit, the disclosure of the 100-plus email addresses violated a confidentiality clause in the purchase contracts.

The recipient of the email contacted the other potential buyers and united them in an effort to retrieve their deposit money from West City. At that time, the epic crash in the housing market was under way, and the value of comparable condos was dropping.

West City returned approximately $1.6 million in deposits on 80-plus units that were under contract to be sold for a total of about $32.5 million, according to the suit.

Fort Lauderdale attorney William Scherer, who represents West City, told the Sun-Sentinel that only 71 of the 100-plus depositors closed their purchases of condo units at the contracted price in 2008, when the first phase of the Veranda development was completed.

Scherer also told the Sun-Sentinel that a new set of investors, who acquired the development out of foreclosure from construction lender Regent Bank, recently completed the second phase of the Veranda condominium.

According to Scherer, the jury award of  $43.9 million represented the total investment by Marino, Huizenga Holdings, the Maroone family, Rhonda Friednamer and principal developers Ken Simigran and Steve Douglas.

In an email on Thursday, Tom Goyda, a spokesman for Wells Fargo, told the Sun-Sentinel the bank has “numerous strong grounds for an appeal” of the $43.9 million award. [Sun-Sentinel] – Mike Seemuth