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Akerman Attorneys Guide $370 Million Lincoln Road Deal

Manuel Fernandez, Carol Faber and Kathryn Altomonte represented Playa Retail Investments in its $370 million acquisition of a block of Miami Beach's Lincoln Road.
Oct. 13, 2015

The Deal: The Akerman attorneys were involved in one of the largest real estate deals in Miami-Dade County history when they represented Playa Retail Investments LLC in its $370 million acquisition of a block of Miami Beach's Lincoln Road.

The sellers in the deal that closed Sept. 1 are commercial real estate investors and developers Michael Comras and Jonathan Fryd, who assembled the properties at 1001-1035 Lincoln Road in 1999 for a total of about $12 million.

Details: Playa is linked through its address to Amancio Ortega, the Spanish founder of the Inditex Group, a retail empire that spans 80 countries and includes the Zara clothing and accessories chain. Ortega was ranked by Forbes this year as the fourth-richest person in the world with a net worth of $74.9 billion.

Fernandez, who led the Akerman team, and Ellen Rose, a real estate member of Katz, Barron, Squitero, Faust, Friedberg, English & Allen who represented the sellers, would not confirm or deny that Ortega was the buyer. According to Forbes, in the last decade Ortega has reinvested in real estate in cities such as Madrid, Barcelona, London, Chicago and New York.

Locally, Ponte Gadea Group, Ortega's U.S. investment arm, partnered with Ugo Colombo and Alfredo and Diego Lowenstein in 2006 to develop the Epic Residences & Hotel at 200 Biscayne Blvd. Way in Miami and bought the Bacardi office building in Coral Gables for about $120 million in 2009. Playa and Ponte Gadea share an office at the Epic, according to corporate records.

Fernandez said his firm has represented the buyer for a number of years, but this was his first transaction with the group.

"I really can't comment on the purchaser or its representatives other than to say that it is a very professional group, very sophisticated and does a good job of analyzing properties and investments," he said.

His client was among many interested in the Lincoln Road property. "It is a very, very compelling assemblage of property," Fernandez said. "If you look at the quality of the tenants and their interest in having flagship stores in one of the hottest retail areas in the entire country, it is not surprising there was a lot of interest in this property."

Tenants include Gap, Intermix, Athleta, Apple and the future location of Nike.

HFF marketed the 1.1 acres on behalf of Comras, founder of Comras Company of Florida Inc., and Fryd, president of Fryd Properties. Both companies are based in Miami Beach.

Fernandez said he had conversations with his client about a draft letter of intent early this year, but his client and the sellers were not able to come to terms. Discussions subsequently resumed, and he became involved in May when his client and the seller struck a deal.

Fernandez said his team and Rose had a fully negotiated contract setting the terms of the purchase and sale about 10 days after he received an initial draft from Rose.

While he didn't offer specifics on why closing did not take place until Sept. 1, he noted due diligence included dealing with "title issues that were associated with the ongoing work the tenants are doing in terms of their various spaces."

Strong interest in the South Beach property from other potential buyers provided the impetus to move quickly, he said.

"You have got to get to the finish line," he said. "It is not just a matter of getting into the race."

The sale is the second largest in the county and the highest value retail property deal in Florida, according to HFF. But Fernandez said the high price, which amounts to $4,900 per square foot of retail space and $7,700 per square foot of land, makes sense considering rents at top Lincoln Road locations are about $300 a foot.

"Not only do you have marquee tenants on a great piece of property now, but the opportunities you might have in 20 to 25 years in terms of future development or redevelopment potential could make the deal not just a home run but a grand slam," he said.

Rose's late father, Leo Rose Jr., represented Comras and Fryd as they assembled the Lincoln Road block, and she worked with him, she said. Since his death in 1998, she has handled lease negotiations.

"Due to my father's involvement, it was especially meaningful to me to represent these sellers in the sale of this special parcel," Rose said.

Fernandez shares the amazement of many at Lincoln Road's transformation. He recalls not seeing its potential when he worked as a clerk at a personal injury firm on Lincoln Road while attending the University of Miami School of Law—a job he got with the help of law school classmate Craig Robins, now CEO of Dacra, a real estate investment company active in South Beach and the Design District.

Comment: "Instead of looking at the Miami Beach commercial district and thinking 'what a dive' like I did when I was still in law school, I think guys like Michael Comras and Craig Robins and others looked at the beach and correctly thought 'what an opportunity,' " Fernandez said.

Background: Fernandez and Faber are partners and Altomonte is an associate in Akerman's real estate practice in Miami.


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