Monday, June 26, 2006

248-Unit Complex Secures $16M in Financing

MIAMI-The 248-unit Biscayne Beach Club at 10560 SW 156th Place has received $16 million in financing.

Seth Grossman, of New York-based Meridian Capital’s Florida office, negotiated the loan that has a rate of 5.875% over a seven-year term with an interest-only portion. One of the noteworthy aspects of the transaction was that Grossman and Independence Community Bank honored a quoted rate of 5.875% although the loan closed when treasuries were above 5%.
The loan was a portfolio loan with no reserves and no rate lock fees. Grossman tells that the loan was a long-term refinancing of the property. “It was an aggressive rate, the lowest rate we could find so the owner decided to go with it,” Grossman says.
Biscayne Beach Club contains a lakefront beach, jogging trails, a fitness center and several pools. The complex contains units with one bedroom and one bathroom that range in size from 564 sf to 718 sf and rent for $800 to $900, and units with two bedrooms and two bathrooms that range in size from 954 sf to 1,021 sf and rent for $1,070 to $1,100.

“Our ability to deliver a loan exactly as quoted despite the treasuries rising 40 points in the interim--without ever having the rate locked--creates a relationship between a bank, a borrower and a broker that lasts decades,” Grossman says.

Hollywood Station Kicks Off $34M Phase Two

HOLLYWOOD, FL- Coral Gables-based Cornerstone Premier Communities has begun the $34-million second phase of Hollywood Station at the corner of Hollywood Boulevard and South Dixie Highway has started. Completion is expected in March 2007.

Richard Lamondin, president of Cornerstone Premier Communities, tells that demolition has been completed and site work began this week. “We decided to build different types of housing in this phase than the first,” Lamondin says. “That decision was based on what we saw in the marketplace. People kept asking us if we had lofts.”
The second phase will consist of 43 three-story townhomes, 85 five-story residential lofts and five work/live lofts. The townhomes will have three bedrooms and range in size from 2,100 sf to 2,300 sf. The lofts will range in size from 700 sf to 1,442 sf and the work/live lofts will have 1,200 sf. Prices for the townhomes start from the mid $500,000s, the lofts from the high $200,000s to $400,000s and the work/lift lofts begin in the $400,000s.

Hollywood Station will be constructed in three phases. When complete, the community will have 602 units, including condominiums, townhomes and lofts. The first phase, which is sold out, consisted of a 10-story building with 214 units and 15,000 sf of retail space. Architects on the project are Miami-based Kobi Karp Architecture & Interior Design. The general contractor is Cornerstone Group Construction Inc.

Lamondin says the first phase is expected to be completed in December and Cornerstone is seeking approvals for the third phase. “We expect to have the approvals in place by the fall. We’ll watch the market to determine when to break ground,” he says.

Thursday, June 22, 2006

Fund Acquires Interest in 250,000-SF Office Asset

PALM BEACH GARDENS, FL-A fund advised by JPMorgan Investment Management Inc. has acquired a “substantial interest” in the 250,000-sf Golden Bear Plaza from owners Philadelphia-based BPG Properties Ltd.

The plaza consists of three class A office buildings located at 11760, 11770 and 11780 US Highway 1. New York-based law firm Stroock & Stroock & Lavan LLP represented the fund in the acquisition of an interest in the property and subsequent refinancing with ING Life Insurance Co. Stroock’s team was led by Miami office real estate partners Manuel Fernandez, Jonathan Kurry and associate Martha Rabbitt. West Palm Beach-based Merin Hunter Codman Inc. will manage the property. The sales price was not made public because only an interest was purchased.

Kurry tells that the transaction reflects two trends in the marketplace. First, the purchasing of interests in properties--rather than entire properties--is becoming more popular in areas like Palm Beach County, where the total inventory of class A office space is limited.

In addition, the county is attracting more institutional investors. In the last year, Stroock has represented clients in the acquisition and financing of nine other class A buildings in Palm Beach County, which Kurry says represents in the range of 70% of the total inventory of class A space.

The properties included Granite Gardens at 3801 PGA Blvd.; buildings located at 7121, 7108 and 7111 Fairway Dr.; Centurion Towers at 1601 Forum Place; 1400 Centrepark at Interstate 95 and Belvedere Road; Northpoint Corporate Center at 701 Northpoint Parkway; and Bank of America Center at 625 Flagler Dr. “We’re seeing a trend of institutional money, such as those from pension funds, going into that market,” Kurry says.

Monday, June 19, 2006

$28M Loan Finances Privata Construction

MIAMI BEACH-Fort Lauderdale-based developer Akron Development Corp. has closed on a $28-million construction loan for Privata Town Homes, a 43-unit townhome project in Normandy Shores. Construction on the project will begin in July.

Chicago-based Broadway Bank provided the lead financing and Fort Lauderdale-based BuilderFinancial Corp., through its subsidiary BFSPE, LLC, provided additional financing for the project. The financing, along with some funds provided from the developer, will cover the just more than $30-million cost of the project, Jason Jones, of Akron Development Corp. tells.
Construction will begin after demolition of existing structures on the site, which is expected to last about a month. The demolition began earlier this month and total construction time is expected to be 12 to 15 months. Sales of the units began in October and contracts for half of the units have already been signed with additional reservations being held on select sites, Jones says.

The project is located at 25-135 North Shore Dr. Demolition of existing structures on the property began earlier in June. Privata Town Homes will be a gated community consisting of seven four-story buildings. Floor plans will range in size from 3,086 sf for a two-bedroom, two- and-a-half bath unit, to 3,642 sf for a four-bedroom, four-and-a-half bath unit with two balconies and a rooftop terrace. Preconstruction prices range from $989,000 to over $1.5 million.

“The area of Normandy Shores is a gem in the Miami Beach market. It has seen unprecedented value appreciation in the past couple of years and still remains one of the best areas to see continued appreciation as the city revitalizes the area and the South and Mid-Beach markets become overcrowded,” Jones says.

Among unit features will be two-car garages, private elevators and private balconies. Waterfront units will have private docks with water and electric hookups. Complex amenities include a pool with cabanas, tennis and basketball courts, bike paths and walking trails.

Friday, June 16, 2006

$80M Villa Complex To Rise in the Keys

MARATHON, FL-Coral Gables-based the Peebles Corp. is developing an $80-million, 72-unit complex of waterfront villas in the Florida Keys.

R. Donahue Peebles tells that the company had been looking for more than a year for property to develop in the Keys. The Marathon site was selected, in part because it is close enough to Miami for weekend getaways. Also, the site is a five-minute drive away from the Marathon Airport which can accommodate commercial planes and private jets. “There are significant barriers to entry in the Keys, but if you can secure a site, it’s a good place to develop,” Peebles says.
Plans call for construction of multi-level private villas on a five-acre property on Bonefish Bay opening to the Atlantic Ocean with views to the Gulf of Mexico. Units will average 1,500 sf in size and have two bedrooms and 2.5 bathrooms and will be priced from $1.7 million to the mid- to upper-$2 millions. Among unit features are 10- to 12-foot ceilings and rooftop terraces with ocean views of the Atlantic and Gulf.

Complex amenities will include an infinity-edge pool, spa and fitness center, onsite restaurant/bar and yacht slips. Peebles is currently in discussions with five-star resort operators who will manage services at the project. Sales of the units will begin in fall 2006, but Peebles plans to restrict pre-sales of the units to 30% of the units. Construction is expected to begin early 2007 and the project is expected to be completed late 2008.

Peebles says the development will provide a higher level of amenities than typically found in the Keys, but will maintain the laid-back atmosphere the area is known for. “We’re taking the charm and upscale nature of the Keys and upscaling it,” Peebles says.

This is the company’s first project in the Keys. Other Peebles’ projects include the 107-unit Residences at the Bath Club Miami Beach, the Royal Palm Hotel on South Beach and the Courtyard by Marriott Convention Center in Washington, DC.

85,000-SF Deal Brings Industrial Asset to 100%

AVENTURA, FL-Global Furniture Terminal Corp. has leased 84,479 sf in the Aventura Industrial Center located at 555 NE 185th St. The lease was valued at more than $3 million.

With the lease, Global Furniture will triple the size of its operations, which will relocate from a smaller facility in Hollywood, FL. Global Furniture, an importer and distributor of contemporary furniture, serves Florida and the Caribbean.

Terranova Corp. senior commercial associate Gordon Messinger tells that Global Furniture chose the building because of its size and existing racking system. Another advantage to the building is that it has rail spurs behind it. “They chose this space because it’s big, has 30-foot-high ceilings and it has a significant amount of showroom space,” Messinger says. “It’s also centrally located for [Global Furniture’s] business.”

This is the second lease executed the Aventura Industrial Center in recent months. Kansas Marine Co. leased 80,000 sf, a lease valued at more than $3.3 million. Kansas Marine Co., a division of Los Angeles-based American Fish and Seafood, is a food distribution company that services the cruise line industry in Miami and Los Angeles. With the two leases, the Aventura Industrial Center is now 100% occupied. “The market here is as tight as ever. If you can find space that is close to what you’re looking for, then you take it,” Messinger says.

Tuesday, June 13, 2006

Developer Kicks Off $15M Office Condo Project

MIRAMAR, FL-Site work for Monarch Professional Centre, a $15-million, 74,000-sf mixed use project at Miramar Parkway and Flamingo Road, has started. The project will contain 60,000 sf of office condominium space and a 13,500-sf retail center.

The owner/developer of the project is Fort Lauderdale-based Front Street Development Group. The mixed-use project includes two three-story Mediterranean style condominium office buildings that will contain 30,000 sf each. There will be a total of 35 units with floor plans starting from 1,500 sf. Completion of the project is expected in the first quarter of 2007. The project is being constructed by Fort Lauderdale-based Miller Construction Co.

Front Street Development Group principal Nick Banks tells that the retail space is being marketed and developers have three letters of intent executed with two national tenants and a local tenant. Leases for all three spaces are being negotiated.
Developers are looking to capitalize on the popularity of office condominiums in Miramar’s fast-growing residential area. Eighty percent of the units have already been sold to a range of medical and professional firms. “Small business owners want to build equity in a tangible asset like real estate and help control their occupancy costs by owning instead of renting,” Banks says. “Also business owners want their office located near their residences whenever possible and our location is in proximity to several upscale residential areas.

Banks adds that the company is considering additional projects and anticipates breaking ground on at least one more office condo project in the next nine to 12 months.

BellSouth Takes 132,738 SF in Two Leases

MIRAMAR, FL-Communications company BellSouth has signed two leases totaling 132,738 sf in two buildings.

BellSouth Communications Inc. leased Building J within the Miramar Centre Business Park at 15900 SW 27th St. The building, owned by Atlanta-based Industrial Developments International Inc., consists of 82,638 sf of office/distribution space. In addition, BellSouth Advertising & Publishing Corp. leased 50,100 sf of space within the Miramar Business Center at 11600 Miramar Parkway. The building is owned by Industrial Property Fund VII, LLC. BellSouth Advertising & Publishing Corp. is a provider of print directories within the southeastern US and Latin America.
Pedro Garcia, of Miami-based Gateway Realty Services, represented BellSouth in both transactions. Garcia said both leases were for five-year terms. The company is relocating from existing spaces into the new spaces. “It’s such a central location so they can accomplish a lot from there.”

The space was recently built by IDI, which develops warehouse and distribution space. The company will house a cable splicing operation in the larger space and the smaller space will be used as a distribution center, Garcia says.

Friday, June 09, 2006

Seagis Adds to Portfolio With $18M-Plus Buy

MIAMI-West Conshohocken, PA-based Seagis Property Group LP continues its aggressive campaign to acquire industrial property with the acquisition of the 210,000-sf Kendall Park of Commerce for $18.65 million.

The property consists of three dock high warehouse/distribution buildings adjacent to the Tamiami Airport. With the acquisition, the company now owns 15 buildings totaling 1.3 million sf, all of which was acquired within the past year. Seagis selected the property because it was a good fit with its neighboring six-building Deerwood portfolio in Kendall, which it acquired in October. “We felt this acquisition complemented the Deerwood portfolio. It’s one of the fewer, larger bay class A dock high warehouse portfolios that serve the Kendall area,” Seagis principal Charles Lee Jr. tells

The Kendall Park of Commerce properties, which are fully leased, were constructed between 1994 and 1998. Seagis does not have any immediate plans for capital improvements. “They are all between six and 10 years old and in terrific shape,” Lee says.

Lee adds that Seagis will continue to acquire industrial property in South Florida with the right opportunities. “We will buy everything that we think makes sense for the market. We think the market fundamentals are solid in South Florida.”

Thursday, June 08, 2006

NY Buyer’s $60M Takes 140,000-SF Office

MIAMI-New York-based Andalex Group has acquired Lincoln Place, a 140,000-sf class A office building at 1601 Washington Ave. in South Beach. The property is the headquarters of real estate and finance company LNR Property Corp.

Lincoln Place is an eight-story office building designed by Coral Gables-based architect Nichols Brosch Sandoval which was completed in 2002. It contains 111,000 sf of office space, 29,000 sf of retail space and an attached five-story parking garage with more than 500 spaces. Financing for the transaction was provided by Wachovia Securities.

Andalex vice president and CIO Andrew Silverman tells that the building’s location is among reasons the company acquired it. “It’s a fairly new building, class A space, in a good location of South Beach,” Silverman says. “We truly believe the location will get better over time.” The stable leasing environment was another factor that drew Analex to the property. LNR has a 15-year lease for the space, but the company believes the strong location will attract tenants over an even longer time period.
This is the company’s first acquisition in Florida. “We like South Beach and we like the Miami office market. We’ve always been looking for a property in Florida and this opportunity presented itself,” Silverman says. He adds that the company is actively looking for more acquisition opportunities in the South Beach area.

The Andalex Group was founded in 1989 and specializes in the acquisition, development, construction management of all property types. The firm’s portfolio includes more than 4.5 million sf of space including the 400,000-sf 101 Avenue of the Americas in Lower Manhattan, Sylvan Corporate Center in Englewood Cliffs, NJ and Arris Lofts in Long Island City, NY.

“Lincoln Place is an extraordinary asset with a marquis tenant. This investment is a demonstration of our belief in the future of unique commodities, like South Beach, to offer unparalleled lifestyle. This market’s potential offers opportunities which extend well beyond the 15-year lease term,” Silverman says.

JV Plans New Ritz-Carlton Property

MIAMI BEACH-Construction is slated to begin in January on the Ritz-Carlton Club and Residences. The project will consist of renovating the Seville Beach Hotel at 2901 Collins Ave. and building two new 17-story and 20-story residential towers.

Miami-based developers Lionstone Development and Fortune International Realty formed a joint venture to develop the property, which is scheduled to be completed in 2009. The Ritz-Carlton Hotel Co. LLC will manage the property.

The project will consist of 86 private residences and 45 timeshare units. They will include one-, two-, three- and four-bedroom units and a few five- and six-bedroom penthouses and townhomes. Units will range in size from 941 sf to 7,459 sf and prices will begin at the $900,000s. A 1,100-sf sales gallery located on the lobby level of the Ritz-Carlton, South Beach was recently opened and sales of the private residences have started. Sales of the timeshare units will begin this summer.
A spokeswoman for the project tells that the owners will have access to the Ritz-Carlton amenities included in the project. Planned amenities include a dedicated concierge, restaurant and private dining room, fitness facility and spa, five pools, three whirlpool spas, cabanas and a pool bar and grill. “It’s hotel-branded but there’s no hotel component so buyers will be getting all the amenities of a hotel without the transient component,” she says.

Both developers have considerable experience in the Miami and Miami Beach areas. Lionstone owns the Ritz-Carlton, South Beach and was a co-developer of Epic Residences & Hotel in Downtown Miami. Fortune has developed Jade Residences at Brickell Bay, Jade Ocean, Jade Beach and Le Meridien Sunny Isles Beach.

Tuesday, June 06, 2006

Airport Submarket Activity Continues

MIAMI-Tenant demand continues in the city’s Airport West-Dade submarket with the signing of two office leases totaling more than 19,000 sf. With the new leases vacancy in the submarket, which is the city’s largest, has reached its lowest levels in five years.

Home Service USA, Inc. signed a 13,500 sf lease at 5301 Waterford. The building was represented by Stephen Smith, of Hogan Group. APC Latin America leased 5,700 sf at 703 Waterford. The building was represented by Richard Neve, of Hogan Group.

CB Richard Ellis senior associate Susan Thomas represented the tenant in each transaction. “Vacancies in the Airport West-Dade submarket have reached their lowest level in five years making it increasingly more difficult to find space in this submarket,” Thomas says. “As more tenants compete for the available space, rents will continue to rise and landlords will continue to gain more leverage in lease negotiations. By understanding these market dynamics, we were able to successfully represent both the tenants with favorable terms and conditions.”
According to a CB Richard Ellis first quarter report, there is 9.5 million sf of office space in the Airport West-Dade submarket. The vacancy rate has been on the decline for the past three years. The vacancy rate was 19.9% in the first quarter 2003 and 13.5% during the first quarter of this year. Average asking rates have been rising, from $20.20 per sf during the first quarter 2003 to $22.63 for the first quarter of this year. There has been a total of 111,757 sf of net absorption during the first quarter, according to the report.

Monday, June 05, 2006

Experts Question Impact of Rising Interest Rates

TAMPA, FL-Industry experts are questioning whether rising interest rates will result in a slowdown of commercial real estate activity later in 2006 or 2007.

At a recent 2006 Brevard County Economic and Real Estate Outlook conference in Melbourne, Florida Institute of Technology associate professor Michael Slotkin told participants that the Brevard County economy is strong but could be hampered by further interest rates.
In fact, many real estate professionals have already been witnessing a slowdown in activity due to rising interest rates. Jay Crotty, senior associate with Marcus & Millichap’s Central Florida multifamily team, says he has already seen a slowdown in condominium conversions due to rising interest rates. Crotty, who works with brokers Bob Goldfinger and Tim Johnson, works out of the company’s Tampa office. “With rising interest rates, the cost of getting a loan is increasing,” Crotty says.

To get a loan to complete a condo conversion project, lenders are requiring the loan to be underwritten over a longer time period than in past years. This increases the carrying costs of the loan and decreases the profitability of potential projects, he explains.

Crotty adds, however, that the main reason the condo conversion craze has slowed is that speculative, investment buyers are not making as many purchases as in the past. “People who are moving to Florida are still buying. But the speculative, investment buyer--such as a doctor or lawyer in Chicago--is acting more cautiously and carefully,” he says. “The owner/user market is still strong. Baby Boomers are still moving to Florida. But the investor buyers are more cautious. A year ago, they may have bought a property sight unseen. Now they’re acting much more cautiously.”
Jeffrey Sweeney, president of Grubb & Ellis Commercial Florida, calls interest rates the “Achilles heel of the Brevard economy and much of the Florida economy.” He estimates that 100 basis points may be the “tipping point” for most developers in Florida. “When the cost of money diminishes the return anticipated from a project below the double-digit threshold, developers usually find that unacceptable,” Sweeney says. “They will shelve the project until more affordable rates return.”

Docs Find Buying Offices Better Than Renting

More doctors are buying rather than renting their properties because modern technology and lowered reimbursement rates make ownership increasingly attractive.
Owning the technology to do procedures that only a few years ago would have been done in a hospital requires additional space, but can produce substantial income for dental and physician groups.
Structuring a deal can be challenging, because it must allow for physicians or dentists to join and leave the practice. But if done properly, the result can be as profitable for property owners as investing in the stock or bond market, said Steve Brown, vice president of United Properties’ health care real estate group.
Metro Urology in suburban Minneapolis is building a 60,000-square-foot facility that will give it the space to have an enhanced laboratory, a diagnostic center, and its first imaging center."We want to make this a destination for patients and a true center of excellence," said Randy Thompson, administrator of the 21-physician practice.

Altman Cos. Eyes Grove East Construction

PLANTATION, FL-Construction will begin within two months on Grove East, a 220-unit condominium complex on 12 acres at the southeast corner of Broward Boulevard and State Road 7.

The complex, which is being developed by Boca Raton-based the Altman Cos., will contain eight two- and three-story buildings with studio, one-, two- and three-bedroom units that will range in size from 605 to 1,311 sf. Prices start from the high $200,000s. The site will also contain 30,000 sf of office space and 17,650 sf of retail space. The architect on the project is Miami-based Tseng Consulting Group Inc.
The development is part of the State Road 7/US 441 Collaborative, an alliance of 17 cities in Broward County that have united to revitalize the State Road 7/US 441 corridor, which runs from Miami Dade to Palm Beach counties. The corridor, a focal point for commercial investment, thrived until the 1990s when strip malls became vacant and property values declined. The collaborative was formed in the late 1990s.

Altman Cos. president Jeff Roberts tells that Altman responded to a request for proposals issued by Plantation several years ago for the site, where a shopping center is located. Altman was named the developer for the site and purchased it for $13.5 million. “Our vision as to how to develop that corner was very similar to the city’s,” Roberts says.

Demolition of the existing shopping center is about 50% complete. There are two existing tenants on site, Bank of America and Miami Subs, which are located in space that will be renovated. Although Altman began selling the condos in January--185 have been sold--the company has not yet begun marketing the retail space. “We felt it was better to wait until the project was further along,” Roberts says.

$224M Funds Work, Loans at Downtown Dadeland

MIAMI-The joint venture partners developing Downtown Dadeland has received $224.25 million in financing from Dallas-based Goldman Sachs Commercial Mortgage Capital LP. The funding pays for construction and mezzanine loans that the mixed-use project previously received, and finances remaining construction costs.
Goldman Sachs Commercial Mortgage Capital secured the loan. The fully funded loan amount includes an initial funding of $180 million and an unfunded amount of $44.25 million to be funded over the first 24 months of the loan. The mortgage loan has a three-year term comprised of a two-year initial term and a one-year extension option. The financing was arranged by Marc Yavinsky, vice president of Capmark Financial Group’s Boca Raton office, on behalf of developers Canyon-Johnson Urban Fund and Gulfside Development.
Located across from the Dadeland Mall, Dowtown Dadeland is located on 7.5 acres and contains seven buildings with 126,448 sf of retail space, 416 condominium units and a two-story, 966-space underground parking garage. The condominiums are 90% pre-sold and the retail space is over 50% preleased to a mix of national and regional retailers and restaurants.
Downtown Dadeland is a joint venture between locally based Gulfside Development and the Los Angeles-based Canyon-Johnson Urban Fund. The fund is a joint venture between Canyon Capital Realty Advisors LLC and former basketball player Magic Johnson’s Johnson Development Corp. “After evaluating several financing options for Downtown Dadeland from various financial institutions it became clear to our team that Goldman Sachs presented the perfect match for our project,” says Gulfside Development principal Jackson Ward.
The joint venture partners are also teaming up on a retail and entertainment property in Greenville, SC, as reported. The development partnership is demolishing the Greenville Mall to make way for Magnolia Park Town Center, a 676,000-sf center. The estimated $100-million project is slated to open in spring 2008.