Developer details plans for Design District retail space. It comes with a wrinkle
A developer has finalized plans for a nine-story, 86,000-square-foot retail and showroom project in the Design District. It comes with a wrinkle.
The project, from Aventura and New York-based developer BH3, is being built in an Opportunity Zone.
Yes, in the Design District.
Parts of the luxurious Design District were carved into Opportunity Zones, which are intended to spur commercial development in blighted neighborhoods, because the zones were created using Census data compiled between 2011 and 2015 — before much of the Design District as it exists today was created. Zone projects are financed by investors looking to shelter capital gains from taxes.
Today, the Design District comprises more than 120 high-end stores and boutiques, including flagship showrooms for Hermès, Louis Vuitton, and Dior. The average rent per square foot in the District is $165, which is higher than Coral Gables ($53) or Brickell Avenue ($110).
“The project is poised to satisfy pent-up demand of retailers/showrooms that want to be in the Design District but can’t otherwise afford to be on street level due to high rents,” said Gregory Freedman, co-founder of BH3.
Pre-leasing at the yet-unnamed development has begun with rents at about $45-$55 per square foot. The project will be located at 3801 N. Miami Avenue, folding in two properties at the northeast corner of 38th Street and North Miami Ave. BH3 purchased the properties for a total of $15.1 million. The project is 100 percent entitled and received its final plan approval on August 19, 2019. Groundbreaking is anticipated for second quarter 2020, with delivery in third quarter 2021.
“The project will add local jobs and create added tax revenue that funnels back to the neighboring communities,” Freedman said. He said the project would also contribute $4 million to the Design District’s Parking Improvement Trust Fund, which is focused on making improvements to streets and structures in the neighborhood.
BH3 says the existing retail on the parcels will be demolished and replaced with the 86,000-square-foot building. The project will feature 25-foot ceilings on ground level and 14-foot ceilings on floors two through nine, as well as open floor plans and exposure to I-95.
BH3 is currently developing another Opportunity Zone project in Delray Beach. Previous projects include the Trump Hollywood luxury condo tower and the Fontainebleau Sorrento condo-hotel tower at the Fontainebleau Resort in Miami Beach.
This story was originally published September 25, 2019 at 4:30 AM.
