Investors Beat Own Record for Wynwood Real Estate in Miami

Eleazar David Melendez, Daily Business Review

Property at 2621 NW 2nd Ave. in Wynwwod

A New York fund that burst into Miami's Wynwood district paying previously unheard-of sums has done it again—this time shattering its own per-square-foot record set in January.

Brooklyn-based RedSky Capital LLC dropped $29.5 million to buy the Wynwood Block, a retail complex at 2621 NW Second Ave. running the length of the neighborhood's main commercial drag between 26th and 27th streets.

The purchase follows a bevy of recent deals by RedSky and London-based JZ Capital Management, which have purchased just under $100 million worth of Miami real estate in the past 10 weeks.

Ben Mandell, an associate with the Miami office of brokerage RKF, said RedSky is not done yet. The investment venture is looking to pick up "as much as they can get" in central Miami neighborhoods, particularly Wynwood and the Design District.

"They're buying for the future of the area," he said.

Mandell, Drew Schaul and John Ellis at RKF represented RedSky in the transactions.

In the latest deal, RedSky is getting a retail asset that's fully occupied and a short walk away from a 5,485-square-foot building at 2407 NW Second Ave. that the fund purchased in January for $10.5 million. That purchase set a record $770 per square foot for the area.

While the RKF brokers declined to discuss per-square-foot pricing on the new Wynwood deal, public records show Wynwood Block contains 28,754 square feet of built-out space, which would peg the latest deal at a record-smashing $1,025 per foot. The $726 price paid for each square foot of land also sets a record.

"They're buying a strategically located asset," Mandell said.

He said RedSky, which is a large property owner in the Williamsburg and Bushwick neighborhoods of Brooklyn, is hoping to somewhat recreate the experience they had investing in New York real estate, where its investments in industrial neighborhoods on the verge of gentrification have paid off handsomely.

"In Williamsburg, Brooklyn, when they bought five years ago, everyone said they were overpaying," Mandell said. "Look at them now: They're sitting pretty."

Schaul added, "If the area gets up-zoned, which we think is a high possibility, the dollars and cents make sense."

Wynwood business leaders are working with the city to change the configuration of allowable uses in what had been a predominantly low-rise industrial enclave. Where almost no buildings exceed three stories, the future could bring eight-story mid-rises with up to 150 dwelling units per acre.

Aside from the up-zoning, making the math work on pricey Wynwood acquisitions would require bringing in a new class of tenant willing to pay higher retail rents, which at the moment are flirting with $60 a square foot. Schaul said Wynwood is being looked at by "the usual suspects, the anti-mall retailers that are catering to the millennials." Mandell cited national retailers Warby Parker, Shinola and TOMS as possibilities.

The Wynwood Block deal, which closed Feb. 27 but has yet to be recorded, follows two large RedSky deals a few blocks north in the Design District. On the same day, the company bought 1 NE 40th St., a two-story, 19,436-square-foot property, for $29.25 million.

On Sunday, RedSky closed on the building next door at 35 NE 40th St., a three-story, 17,391-square-foot retail property, for $28 million. It's occupied by Oak Tavern, a 140-seat bar and restaurant with an outdoor patio.

"That assemblage gives them a large footprint, and it could shadow-anchor Dacra's boutique hotel," Mandell said. "It's a great location for what we see to be high-end contemporary retail."

Schaul noted the Design District purchases "get back to the basics of location, location, location."

Real Estate Notebook: Delray Beach plaza trades for $5.7 million

By Paul OwersSun Sentinel
A roundup of the week's real estate news.
Delray Pointe, an 18,269-square-foot plaza in Delray Beach, sold for $5.7 million.
The center at 1110-1120 S. Federal Highway is anchored by Office Depot and City National Bank.
The buyer was Delray 172 Realty LLC and the seller was Delray Pointe LLC. The CBRE firm represented both parties.
Delray Pointe was built in 2004 and is 80 percent leased. The site also includes 3,500 square feet of office space.
Two commercial agents earn awards
Robert Hamman of Sperry Van Ness won the 2014 Top Deal of the Year award from The Realtors Commercial Alliance in Palm Beach County.
Hamman was honored for his work at the site of the former Panaman Hattie's restaurant on PGA Boulevard and the Intracoastal Waterway. The property will become a mixed-use development. Hamman also earned the Land Deal of the Year award for assembling the parcels.
Scott Field of Realty Associates was honored as the 2014 Realtor of the Year.
The alliance is a division of the Realtors Association of the Palm Beaches.
Law firm to hold class for community associations
The Becker & Poliakoff law firm will hold a free class March 13 on building and protecting a brand name in community associations across South Florida.
A valuable brand can increase property values and improve the quality of life for residents and members, the firm said.
The event will be from 1 to 3 p.m. at the firm's Fort Lauderdale office, 1 E. Broward Blvd., Suite 1800. Seating is limited. Call 954-985-4119 or send an email toclasses@bplegal.com.
First lease signed at Port 95 Business Center
Premier Produce, a food service distributor based in Pembroke Pines, has signed the first lease at the Port 95 Business Center in Dania Beach.
Cushman and Wakefield, which represented landlord Saul Gilinski, announced the deal for 37,205 square feet. Premier is expected to occupy the space in June.
Port 95, at 2650 SW 36th St., offers 229,643 square feet of distribution space. In November, Bridge Development sold the complex to Gilinski for $27 million.
Coral Springs plaza trades for $26 million
A joint venture between CREC and Lubert Adler Real Estate Funds paid $26 million for Royal University Plaza in Coral Springs.
The new ownership group announced plans to renovate the 98,500-square-foot center and start an aggressive leasing compaign. The plaza is 45 percent leased.
David Moret, a principal of the group, said in a statement the property at 2556 N. University Drive was an ideal redevelopment opportunity even though the previous owner, TYE Holdings LLC., hadn't listed it for sale.
"We approached several national tenants prior to closing and have received tremendous interest on the property and are excited about its future tenant lineup," he said.
Commercial brokers jump to Colliers International
Jonathan Kingsley and Stephen Rutchik, veteran South Florida commercial real estate brokers, have left the JLL firm to join Colliers International.
The longtime business partners, who also worked at Grubb & Ellis Co., are executive vice presidents with Colliers.
At JLL, Kingsley and Rutchik helped lease roughly 2.1 million square feet of "Class A" office space for such clients as TIAA-CREF, Sunbeam Development and Stockbridge Capital Group. The two brokers also have represented Coca-Cola Co., Comcast and other tenants.
In a statement, Kingsley said he's looking forward to working again with former colleagues in "an environment that's refreshingly entrepreneurial and flexible."
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Florida SBA looking for real estate, global equity portfolio managers

BY BARRY B. BURR

Florida State Board of Administration, Tallahassee, is searching for a senior portfolio manager of externally managed real estate portfolios.

In addition, the FSBA, which oversees $181.3 billion in assets, is searching for a portfolio manager of externally managed global equity.

FSBA is seeking to replace Jeff Smith, who was moved to a newly created portfolio management position, still in externally managed real estate, as a result of an increase of the real estate allocation to 10% from 7% and a more global emphasis that the FSBA adopted in 2014, John Kuczwanski, communications manager, said in an e-mail.

The senior portfolio manager’s duties include overseeing the FSBA’s externally managed real estate. The FSBA has $11.9 billion in real estate, including $5.4 billion that is externally managed.

Qualifications the FSBA is seeking include experience working with real estate commingled funds at the supervisory level. Applications for the senior portfolio manager position are due March 18.

The portfolio manager in global equity would assist in overseeing external global equity managers and would replace Dustin Heintz, who was promoted to senior portfolio manager in global equity. Mr. Heintz replaced Alison Romano, who was promoted to senior investment officer in global equity, replacing Janice Yecco, who retired last year.

The FSBA has $87.7 billion in global equities.

Applications for the portfolio manager position are due Wednesday.

Contact Barry B. Burr at bburr@pionline.com

Real Estate Notebook: Hospitality firms combine headquarters in West Palm

KeHE Distributors has renewed its lease for 201,849 square feet at Meridian Business Campus in Weston.

A roundup of the week's news in South Florida real estate.

Chatham Lodging Trust and Island Hospitality, two separate but associated companies, have signed a 10-year lease at the Esperante building in downtown West Palm Beach.

The firms are taking 27,516 square feet to consolidate operations from the town of Palm Beach. The move-in date is expected in the fourth quarter of this year.
The lease brings Esperante at 222 Lakeview Ave. to 87 percent occupancy.
Chatham is a hotel real estate investment trust with interests in 130 hotels. Island Hospitality Management operates 140 hotels.
D.R. Horton building homes in Greenacres
D.R. Horton says it has completed construction of three homes at Verona Estates in Greenacres.
One is a staged home that can be sold with the furniture. The two other homes are vacant. A fully decorated model home also is available for tours, though it's not for sale.
The 53-home Verona Estates is at 4770 Foxtail Court. The three- to five-bedroom homes start in the high-$200,000s and range from 1,588 to 3,173 square feet.
Buffalo firm signs North Palm Beach lease
A financial services firm has leased 2,555 square feet at Golden Bear Plaza in North Palm Beach.
Peak Reps/The Financial Guys of Buffalo signed a long-term deal at the plaza, 11770 U.S. 1. It's the firm's first Florida office. The Sperry Van Ness brokerage represented the tenant.
Douglas Elliman opens office on Las Olas
The Douglas Elliman real estate firm has opened an office in Fort Lauderdale, expanding its reach across South Florida.
The new location, the firm's ninth in the tri-county area, is at 450 E. Las Olas Blvd. Douglas Elliman, based in Miami Beach, opened offices in Boca Raton and Wellingtonlast year.
Frank Kirschner will lead the Fort Lauderdale office of 40 agents who specialize in high-end homes and condominiums. Like other Douglas Elliman agents, the Fort Lauderdale staff will be aligned with Knight Frank Residential, the United Kingdom brokerage, to work with clients overseas.
Fort Lauderdale apartments sell for $8.5 million
Mandalay Apartments, a 106-unit apartment complex in Fort Lauderdale, sold for $8.5 million.
A Miami-based company bought the property at 2115 W. Davie Blvd. from a Coconut Creek investor. Both parties were represented by Marcus & Millichap.
Multiple buyers bid on the property, Marcus & Millichap's Tal Frydman said in a statement.
"Higher prices and intense investor competition for apartments in Broward County are raising the probability for sellers to fulfill price objectives," he said.
Distribution company re-ups in Weston
KeHE Distributors has renewed its lease for 201,849 square feet at Meridian Business Campus in Weston.
The company will continue to occupy all of a two-story building in the complex at 3225 Meridian Parkway. The park is owned by Clarion Partners.
Avison Young represented KeHE. The firm said in a statement that the average industrial tenant in Broward occupies 29,000 square feet, and spaces for tenants needing at least 50,000 square feet are scarce.
Broward's industrial vacancy rates are at seven-year lows, so brokers are advising tenants in prime locations to renew their leases, according to Avison Young.
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The Top Places in Florida to Invest in Real Estate Property

The Market Oracle

Peter Scully submits: For those who know the real estate market in Florida they will be aware that the prices vary across the state. The prices range from $37.36 per square foot in Kenneth City to $546.77 per square foot in Key Biscayne.

However, if you plan to invest and get out quickly whilst making a profit then Hialeah Gardens, Lauderdale-by-the-Sea and Atlantis are the places to choose. For those who want a strong investment with a beachfront then Miami-Fort Lauderdale is the popular choice but if you are planning on making an investment for the long run then the majority of the Florida housing market can work well.

The following locations in Florida are some of the best places in which to make investments.

Doral

This is an area that is affordable and has a low unemployment rate along with a healthy growth in population. This city between 2010 and 2013 saw more than 6000 new residents move to the area which is an increase of 14%.

Cape Coral

This is one of the largest cities with a population of 158,415 and an average sale price of $96 per square foot. Located in Lee County the residents are thinking about developments which could influence the value of real estate in this area.

Bal Harbour

Bal Harbour is a small area with a population of just 2,569 and it is an expensive place to invest with the price sitting around an average of $340 per square foot. However, there are many buyers looking for property.

Winter Garden

Located near to Orlando, it has a lot to offer those looking to invest. The population grew by 13% which suggests that the demand for housing could be high. There are jobs available which helps to keep the housing market buoyant and growing.

Homestead

Over half of the properties here have experienced an increase in value. Despite this, the cost of housing still remains affordable in a city with almost 62,000 residents. During the last two years, the price of sales has an average of $79.42 per square foot.

Miami Lakes

In this area, 57% of the housing has increased in value over the last ten years whilst vacancies have decreased by 3.6%. This is something that investors should be encouraged by as this suburban location could see investors paying a premium for being located just north of Miami. The average price per square foot here sits at $152.

Hialeah Gardens

The population here is 22,136 and where buyers are looking for a quick return on their investment which is why there are many options to choose from to simple flip housing.

Aventura

This community is one that is diverse and also growing and since 2010 the population has risen by 7.51%. The average sale price is $227 per square foot and there is the possibility to find properties that have views of the Atlantic Ocean.

Marianna

Marianna is one of those areas that harbour some excellent bargains and here the price per foot is $61. It is however attracting new residents and has shown a 28% increase in the population during the three years from 2010 to 2013.

Pinecrest

This is the second most expensive place in Miami-Dade County thanks to its price of $269 per square foot. There has been a small increase in the population recently of 1.54% and the leaders of the village are considering expanding the area.

Publix buying up property across Florida

Publix Super Markets is buying Southwest Florida shopping centers, and it's not done yet.

The state's largest grocery-store chain has been purchasing more in recent years. It has ramped up its buys over the past year, and is looking to do more — setting aside $1.3 billion this year to buy more centers, build new stores and remodel others, according to a report that appeared Monday in the Sarasota Herald-Tribune.

The cash-rich company has become a major player in shopping center acquisitions, betting on revival of the commercial real estate market here and across Florida.

"Publix is buying all the centers that it wants to buy because their cost of capital is cheaper than the landlord's cost of capital, which makes their cost of occupancy less than market rent," Gary Tasman of Cushman & Wakefield Commercial Property Southwest Florida said last month.

Publix recently bought The Shops at Verandah on Palm Beach Boulevard in Fort Myers for $14.4 million.

Publix's acquisitions in recent years, according to Lee County Clerk of the Court records, include centers at 3015 SW Pine Island Road for $10,150,000 in December, and $13 million for The Shoppes at Fiddlesticks off Daniels Parkway in November 2012.

The recent purchases are a sign Publix is making a bet on the future strength of the real estate market here, Tasman said.

In the past year, the Lakeland-based grocer also acquired centers where it operates stores in Port Charlotte, Sarasota, Englewood, Parrish and Lakewood Ranch.

Publix now operates 1,098 stores, and about 20 percent sit in company-owned real estate, spokesman Brian West said.

"We're very fortunate to be in good financial health — no long-term debt and significant cash reserves, enough to allow us to invest in real estate when the situation makes sense," West said.

The company has owned centers where it operates stores for years, but it became a more aggressive buyer the past two years.

The privately owned company is coming off a great financial performance in 2014, one analysts said was especially impressive in light of competition from expanding rivals such as Trader Joe's, Whole Foods and Wal-Mart.

Publix had $30.6 billion in sales last year, a 5.7 percent increase from 2013.

The Sarasota Herald-Tribune and The Associated Press contributed to this report.

South Florida again near top in home price increases

By Paul OwersSun Sentinel

South Florida home price increases remain among the best in the nation, according to a report Tuesday.

The Standard & Poor's/Case-Shiller home price index for Palm Beach, Broward and Miami-Dade counties rose 8.4 percent in December from a year ago. Among 20 metro areas nationwide, only San Francisco had a larger increase, at 9.3 percent.

This is the second consecutive month that South Florida ranked second in the report. From August through October, the tri-county region led all areas in price gains.

Some housing analysts consider Case-Shiller the best barometer of home prices because it tracks the price of the same house over time. Local Realtor boards measure home values by releasing a median price for homes sold in a given month.

But the index, released on the last Tuesday of each month, lags Realtor board numbers and does not include condominium prices.

Despite solid gains in South Florida and in western states, the housing rebound nationwide is "faltering" as home starts remain sluggish, David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.

"The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence," he said.

Rising rents in South Florida and across the country are pushing people into homeownership. Still, many renters can't afford to buy, hurting the housing recovery, analysts say.

"Widespread and rapid growth in rents, combined with stagnant wages, are keeping many would-be buyers stuck in rental housing, writing ever-larger checks to their landlords instead of saving for a down payment," Stan Humphries, chief economist for real estate website Zillow.com, said in a statement. "Today's renters are tomorrow's buyers, and the longer these would-be buyers stay on the sidelines, the longer full recovery will take."

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