The Real Deal Miami

Russell Galbut, Saul Gross sell South Beach buildings to Lightstone Group: $29M

Deal breaks down to nearly $930 per square foot

June 28, 2016 11:20AM
By Katherine Kallergis

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Proposed rendering of the hotel at 947 Washington Avenue in Miami Beach (via The Next Miami)

Proposed rendering of the hotel at 947 Washington Avenue in Miami Beach (via The Next Miami)

David Lichtenstein’s Lightstone Group just paid $29 million for nearly an entire block on Washington Avenue that includes plans for a new hotel. 

Crescent Heights developer Russell Galbut and Saul Gross sold the properties from 915 to 955 Washington Avenue in Miami Beach, on the east side of the street.

Galbut sold two properties, 947 and 955 Washington Avenue, for $6 million each. They total 9,235 square feet of retail space and 13,000 square feet of land. Property records show 947 Washington Avenue last sold for $120,000 in 1986, while 955 last sold for $2.1 million in 2014.

Galbut received approval in March to build a seven-story, 63-room hotel on the properties. Lightstone told Boutique Hotel News last week that it would launch a Moxy by Marriott hotel in South Beach, but did not specify where.

In the micro-hotel market, Moxy Netherlands-based CitizenM focus are among the biggest players that have focused on the millennial traveler with smaller rooms and more amenities. “The micro-hotel segment is really interesting because it allows you to stay in the heart of Miami Beach at an affordable price point,” Miami Beach developer Andrew Joblon previously told The Real Deal.

Grand Trine Limited Partnership, managed by Gross, sold the 22,030-square-foot building at 915, 917, 919, 921, 923 and 925 Washington Avenue for $17 million. It last traded for $1.17 million in 1990. Gross is the founder of Streamline Properties and is a former Miami Beach commissioner.

The buildings were built between 1936 and 1942. They total 31,265 square feet of retail, which breaks down to $928 per square foot.

Investors are banking on Washington Avenue’s potential. The street’s new wave of redevelopment comes amid the city’s approval of new measures that are designed to increase hotel space and retail and dining opportunities on the street, which lags far behind Lincoln Road and Ocean Drive in attracting first tier retail, dining and hotel venues.

Developers Joblon of Washington Squared LLC and New York-based Imperial Companies are planning a seven-story hotel with 312 units at 601-685 Washington Avenue. And new restaurants announced for the area include Piola, Spring Brothers Irish Pub, and Cubiche 105.

Lightstone, a New York-based real estate investment firm, financed the deal with a $19 million loan from Mexican bank Banco Inbursa, which is backed by billionaire Carlos Slim.

Lightstone owns multifamily apartments, office buildings, hotels, shopping centers and industrial properties throughout the U.S. and Canada. One of Lightstone’’s most profitable ventures began in 2002 with the acquisition of Prime Outlets, a Puerto Rico-based outlet mall.