The Real Deal Miami

Historic downtown Miami building to become hotel

Dream Downtown LLC bought the historic property in November

December 11, 2015 12:45PM
By Katherine Kallergis

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Dade-Commonwealth building

Dade-Commonwealth building

The new owners of a historic downtown Miami office building have plans to convert the property into a hotel. 

Dream Downtown LLC, a joint venture between a sister fund of Paris-based Beekman REIM and Immocorp Capital, paid $9.2 million for the seven-story Dade-Commonwealth building, at 139 Northeast First Street in November.

For the next 18 months to two years, the owners will keep it as is, Gilbert Benhamou of Immocorp Capital told The Real Deal. “We want to revamp this whole area,” he said.

Benhamou said the property, when it was developed in 1925, was the tallest at 17 stories. It was severely damaged in the 1926 Miami hurricane, and instead of restoring it, the owners at the time cut the building’s height to seven stories.

“We intend to bring back the building to where it was before,” he said. That would include the addition of multiple stories.

Benhamou declined to comment on whether the property would become a Dream hotel, but did say that “most of the good food and beverage from South Beach is moving downtown.” In South Florida, Dream Hotels has one property at 1111 Collins Avenue: Dream South Beach.

The LLC financed the sale with a $7.35 million bridge loan, records show. David Eyzenberg and Amanda Saltzman, of Avison Young’s joint venture and structured capital team, secured the financing.

In a statement, Eyzenberg said it was challenging to secure the loan because the property had not obtained a 40-year recertification, “which precluded obtaining a clean title and left ambiguity on the scope of renovation that may be required by the local municipality.” Yet his team was able to identify a non-recourse lender familiar with the location, he said. Miami-Dade County records show Calmwater Real Estate Credit Fund II LP as the lender.

The building is in the Flagler area of downtown, which is in the midst of a transformation. Developer Moishe Mana has spent more than $200 million in the area, with plans for retail, office and residential. Other investors, such as Danny Lavy and Daniel Pena, have also joined in. The county has also funded part of a $13 million improvement plan for Flagler Street that will include expanded sidewalks, more trees, new benches and bicycle racks.