Miami-based Related Group, expanding its ambitious development portfolio in Miami, closed on the purchase of 1400 Biscayne Boulevard for $57.3million.
Related plans to develop a mixed-use project with three towers, spanning nearly 2million square feet of “luxury residential and prime retail” space on the 2.8-acre site that sits in front of the Adrienne Arsht Center for the Performing Arts.
Matt Allen, Related’s chief operating officer, called the deal “a prime opportunity to be part of a strategic location between Brickell [and] the Design District, next to Museum Park.”
“With the Arsht Center directly across the street and Pérez Art Museum Miami and the Frost Science Museum nearby, our future residents will be in the very heart of Miami’s thriving arts and culture scene,” Allen said in a statement.
At more than $20 million per acre, the deal marks a record price for the arts and entertainment district, according to Marcus & Millichap, the commercial real estate brokerage that represented both buyer and seller.
In an interview, Related’s Allen said the price makes good business sense for Related, given the potential to build up to 2million square feet in three towers soaring 60 stories or more.
“At the end of the day, we look at the price per pound,” Allen said. The three-story office and retail building also provides a current stream of rental income, giving Related lots of flexibility in deciding when to move forward.
“We’re still defining what we’re going to build,” said Carlos Rosso, president of Related’s condominium division. “We saw great development potential.”
The Related executives said Malaysian giant Genting Group’s plans — which include a major residential, retail and hotel development on the former Miami Herald headquarters on the nearby bayfront — added to the lure of the site, as did other development under way in the vicinity.
Related purchased the 1400 Biscayne property with its own equity — “what we like to call friends and family,” Allen said — and with a loan from Deutsche Bank.
The seller is Espacio USA, the U.S. arm of Immobiliaria Espacio, a Spanish real estate firm that purchased 1400 Biscayne Center in 2010 for more than $32million. Espacio had itself been planning a major development on the site.
Maribel Goldar, marketing and sales director for Espacio USA, said the decision to sell came from the parent company in Spain. “We saw the opportunity and we’re pleased with the result,” Goldar said. She said the company expects to remain active in Miami. “We’re seeking other opportunity here,” she said. “We are very comfortable in Miami since we first arrived. Miami is a city with a future.”
Earlier this year, Espacio USA tapped Marcus & Millichap to market the property to qualified buyers. Marcus & Millichap’s first vice president, investment, Alex Zylberglait, said the location in the heart of the arts and entertainment district with access to highways made it a choice property. “It’s truly at the epicenter, whether it’s business, cultural or recreational,” Zylberglait said.
Related has led the charge in Miami’s latest condo construction boom. Its SLS Brickell project began construction this year and is set to be completed in 2016. Related expects to break ground on Hyde Midtown and SLS Lux this fall, and One Paraiso, the second of four planned towers in a cluster in Edgewater, is expected to break ground in November.
In Hollywood, Related broke ground last week at Hyde Resort & Residences Hollywood.
Related said it also closed this week on the second phase of Doral View, a 360-unit apartment project, which it is doing with a joint venture partner, Rockpoint Group.