Atlas Plaza — Design District’s home to Rolex, Longchamp and Michael’s Genuine Food & Drink — has sold for $65 million, about $3,300 per square foot, as investors seek to cluster in and around Miami’s newest center for luxury retail.
The buyers are TriStar Capital and RFR Holdings, two New York-based companies that have also developed the W South Beach hotel, and earlier this week, bought two properties on Lincoln Road for $18.5 million, about $6,580 per square foot .
“Miami has a lot of shopping, but it doesn’t have the equivalent of a Fifth Avenue or Rodeo Drive,” said David Edelstein, who runs TriStar. “We think the Design District has that potential.”
The parcels sold have addresses at 114 NE 40th St., 130 NE 40th St. and 135 NE 39th St., and contain about 19,700 square feet of land. Other tenants at Atlas Plaza include Scotch & Soda, Sebastien James and Roberto Coin, as well as a recently completed 5,000-square-foot building that has not yet been leased.
County records list the seller as Russell Atlas, a local property owner and real estate broker.
Developer Craig Robins, who spearheaded the creation of the Design District and owns most of its properties with partner L Real Estate, recently announced an expansion that will bring about 60 new stores and restaurants to the pedestrian-friendly neighborhood by mid-2017.
Robins said he welcomes the presence of other developers in the neighborhood.
“It’s really making the Design District a more exciting place,” he said.
Benjamin Mandell, a commercial broker at RKF who represented TriStar and RFR in the recent purchase, said that the district’s high-end tenant mix is drawing investors to the area.
“You have people coming to see Cartier, Hermes, Tom Ford and all these other stores,” Mandell said. “This parcel is made even more attractive by the brands that are around it.”
Most of the tenants at Atlas Plaza have leases between five and eight years, according to Edelstein. He said he doesn’t plan on redeveloping the properties in the short term. “The development potential is there, but that’s down the road,” Edelstein said.
The Design District is a less risky investment than other emerging neighborhoods in Miami including Wynwood, said Michael Fay, managing director at the commercial real estate firm Avison Young.
“It’s already been validated by the luxury goods companies,” Fay said. “They are already there or they’re setting up shop.”
Other developers have also been investing in the Design District and its surrounding areas as the neighborhood grows, including Richard LeFrak, the Safra family, Raymond Gindi, Michael Comras and Chicago’s General Growth Properties.
South Florida’s market for luxury retail is growing quickly, Fay added. The Bal Harbour Shops are the highest-grossing U.S. shopping center, according to the International Council of Shopping Centers. And Brickell City Centre, anchored by Saks Fifth Avenue, opens in the fall of 2016.