Miami commercial real estate undergoes the perfect storm

It’s been a quiet hurricane season in South Florida, but a perfect storm is brewing in Miami’s commercial real estate landscape with a flood of blockbuster deals valued at close to $1 billion closing in the past 30 days. The news that a joint-venture led by Federal Realty has acquired The Shops at Sunset Place for $110 million is the latest example of this trend, which dates back a year and accounts for more than $2 billion  in deal activity.

Shops at Sunset PlaceThe commercial real estate spending spree is being fueled by low interest rates and high barriers to entry for new development and out of market investors are targeting existing properties offering immediate cash-flow as the city’s stock of empty land is depleted. Major examples of September deals include:

  • $110 million sale of The Shops at Sunset Place, a 505,000-square-foot, mixed-use center in South Miami acquired by Maryland-based Federal Realty Investment Trust (Oct. 1)
  • $370 million sale of a retail block on Lincoln Road in Miami Beach to the world’s 4th richest person, Spain’s Amancio Ortega (Sept. 2015)
  • $142 million sale of Espirito Santo Plaza, an office building in the Brickell Financial District, to Dallas-based investment firm The Gaedeke Group (Sept. 2015)
  • $140 million sale of the 777 Brickell office tower to a private investment group from South America (Sept. 2015)
  • $115 million sale of Mary Brickell Village retail complex in downtown Miami to Rockpoint Group, a Boston-based private equity firm (Sept. 2015)Coco Walk

Even more examples can be found in going back over the year, including the $112 million sale of 800 Brickell office building, the $88 million sale of CocoWalk retail center in Coconut Grove, and the $342 million sale of a six property retail portfolio on Lincoln Road.  

“High barriers to entry and rising demand have put a premium on existing buildings, especially those located in and around the urban core. These properties should continue to attract top dollar as long as these dynamics exist,” says Jim Shindell of Bilzin Sumberg who represented the seller in the sale of Espirito Santo office tower on Brickell.