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Huge Lincoln Road Acquisition Boosts Neighboring Properties

South Beach's largest apartment portfolio hits the market, offering 240 units near Lincoln Road.
Sep. 23, 2015

 

There's nothing like a $370 million real estate sale to excite the neighbors.

“Weeks after Spanish billionaire Amancio Ortega closed the second-largest deal in Miami-Dade County's history, scooping up an entire block of retail space along Lincoln Road, holders of neighboring properties set their own sales in motion.

Across the street from Ortega's high-end retail space, a public-private partnership Friday offered up The Lincoln at 1691 Michigan Ave., noting its proximity to the landmark block in Miami Beach's South Beach submarket.

“Marketers at Colliers International Group Inc. and CBRE Inc. have no asking price for The Lincoln, a 210,000-square-foot Class A mixed-use complex in the Art Deco District, but the property last sold for $74 million in July 2006.

And in the past six months, leases for 48,648 square feet of office and retail space brought it to full occupancy with tenants like Blue Chip Wealth Management, Stewart Title Co., talent and sports managers Creative Artists Agency and real estate investment firm Deco Capital Group LLC.

Michael Comras, one of the developers who built and sold The Lincoln about 10 years ago, was also behind the nine-figure deal with Ortega.

"The sale further solidifies the Road and the dynamics that make it so great," he told the Daily Business Review on Monday. "It's a very positive statement."

"The Comras Company of Florida Inc. is now at work marketing 421 Lincoln Road, a 10,500-square-foot freestanding retail building expected to sell for about $64 million. Other brokers also are banking on top numbers for upcoming sales."

"Office and retail tenants are drawn to The Lincoln because of its prime location and plentiful parking," Colliers International's South Florida executive vice president Stephen Rutchik said. They're also drawn to the shops, trendy cafes, restaurants and public plans for a multimillion-dollar street makeover all within walking distance—a key selling point for CBRE Inc.'s Calum Weaver, who's marketing the largest apartment portfolio ever brought to market in the heart of South Beach.

"Ortega's retail deal won't likely push up multifamily prices by the time Weaver closes on the apartments, but the $370 million retail transaction points to the submarket's growing appeal across all sectors."

"It certainly speaks volumes," Weaver said. "It speaks to people wanting to invest in South Beach for all the reasons we know to be positive from a worldwide perspective."

Weaver's client, Miami-based Bar Invest Group, is offering 240 mostly garden-style apartments in 15 low-rise buildings just south of Lincoln Road, between Seventh and 15th streets. The seller is one of first operators of multifamily real estate in South Beach's Art Deco district and one of the largest since 2009.

"Office and retail tenants are drawn to The Lincoln because of its prime location and plentiful parking," Colliers International's South Florida executive vice president Stephen Rutchik said. They're also drawn to the shops, trendy cafes, restaurants and public plans for a multimillion-dollar street makeover all within walking distance—a key selling point for CBRE Inc.'s Calum Weaver, who's marketing the largest apartment portfolio ever brought to market in the heart of South Beach.

It's offering mainly two- and three-story properties along Eighth Street and Euclid, Michigan, Jefferson, Meridian, Drexel and Penn avenues—minutes from Lincoln Road's iconic pedestrian mall and high-end retailers like Armani, Guess and Swarovski.

"The only large ready-made assemblage of apartments, the 550 units in Southgate Towers on West Avenue, isn't for sale, and Bar Invest's deal is likely to bring in about $65 million.

"This is an unprecedented acquisition opportunity in one of the most glamorous urban beach communities in the world, where there's no new apartments under construction and rents are among the highest in the world," Weaver said. "Whoever acquires the portfolio will instantly become the second-largest apartment owner in all of South Beach. It's virtually impossible to buy a critical mass of apartment units in South Beach."

Multifamily rents in the submarket are among the highest in the nation, hovering north of $3 per square foot for renovated property, and occupancy—holding at about 3.6 percent—is low, according to CBRE's MarketView report for the second quarter of this year.

"Units there command the highest rates—just under $6,000 for three bedrooms, compared to an average just below $3,500 for similar units in areas like Coral Gables and South Miami, according to Reinhold P. Wolff Economic Research Inc.'s latest housing report.

"There hasn't been a significant apartment building added to the beach in 10 years," Weaver said. "With the cost of land, the numbers don't make sense and I don't see that changing anytime soon."

 

By Samantha Joseph


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