Equity group pays $5.4M for one-acre site in Miami
A private equity group has paid $5.4 million to Union Credit Bank for nearly an acre of land in the heart of Miami’s financial district, the site of a planned 42-story condominium tower.
The June 11 sale pegged the purchase price of the 36,000-square-foot property at $150 a square foot.
Union Credit Bank repossessed the site, at 1100 S. Miami Ave., from development company Brickell Village Partners and principal J. Kevin Reilly. Reilly planned to build Pointe at Brickell Village on the property.
At the time of the foreclosure, the bank was owed $7.6 million in principal, plus $1.2 million in interest, fees, and court costs, according to the final judgment of foreclosure signed by Miami-Dade County Circuit Court Judge Gerald D. Hubbart on Jan. 22.
Peter Zalewski, managing principal of Bal Harbour-based real estate consultancy Condo Vultures, said the deal is a sign that investors are looking beyond condo management and resales as revenue models – another sign of the local market’s recovery.
"Nearly 10 high-rise condo development sites in greater downtown Miami have been sold in the last two years, and several more are for sale," he said. "Private equity groups have been buying up deeply discounted condos in greater downtown Miami with great velocity for the last 18 months. As the oversupply of new condos is whittled down, buyers are increasingly broadening their criteria. Land is starting to become acceptable at the right price once again."
Adam Greenberg, managing director of Miami-based BayBridge Real Estate Group, which handles real estate sales and financing, agrees that the deal is another sign that the market is turning.
“Investors are buying up strategic sites so they can build on the next go around,” he said.
But, Jack McCabe, of McCabe Research & Consulting in Deerfield Beach, said there are variables on the horizon, including Amendment 4, which could create obstacles to future investment.
On the November ballot, Amendment 4 would require the public to vote on large development projects that would need changes to government master plans. He also noted that there is still significant unsold inventory, financing challenges and another wave of foreclosures that will likely tamp down demand for new construction for five to seven more years.
“Miami will come back strong. It’s only a matter of time,” he said. “But, I think some developers are overly optimistic about how fast the turnaround will be.”