The Weekly Dirt: Macklowe, Pérez move forward with waterfront megaproject

Please include the photo of 105-115 Ocean Boulevard I attached in the section NEW TO MARKET. Photo credit is Become Legendary

Jorge Pérez and Harry Macklowe are teaming up. 

The two billionaire developers managed to close on the acquisition of a waterfront, aging co-op community in North Bay Village. The deal has allegedly been rife with drama, including extended or missed deadlines, a drop in sale price and a commission battle. There isn’t enough space in this newsletter to tell you everything, but it’s worth checking out some of it here. 

An affiliate of Macklowe Properties is paying $47.7 million for the Biscayne Sea Club, which sits on the north end of Harbor Island on a 3-plus-acre site. The closings are underway, two years after Macklowe entered into contract, and months after the previous closing dates were missed, according to residents, sellers and lawsuits. 

I first uncovered the deal this summer looking through court records. Pérez’s firm, Miami-based Related Group, was rumored to be Macklowe’s partner on the deal. Related confirmed it is Macklowe’s joint venture partner last week. Though the developers won’t comment, sources say they plan hundreds of condos on the site. 

Variations of the same situation at Biscayne Sea Club are playing out at older condo communities across the state. Developers are looking at the most desirable and buildable waterfront land where older and shorter buildings currently stand. 

They may or may not disclose their identities upfront to unit sellers, and they may try to negotiate lower prices with as many sellers as possible. Developers may drag out deals because of market conditions (such as difficulty securing financing) or as they try to bring pricing down. These unit owners are now facing additional pressure to invest in their properties and bring them up to code, as new condo safety laws go into effect starting next year. 

Next door to Biscayne Sea Club, Macklowe entities are also acquiring units at Majestic Isle, a condo building that was deemed unsafe by the city earlier this year. Owners and residents haven’t been able to move back into the 63-year-old building since then. 

In a scenario where you or your tenant can’t even live in the building, I would imagine the pressure to sell to a developer who is already assembling units is even higher. And who has the real leverage there?

What we’re thinking about: WeWork said it does not plan to close any of its Miami-Dade locations. Have you heard of any downsizing? Send me a note at kk@therealdeal.com. 

CLOSING TIME 

Residential: Spec developer Pascal Nicolai sold the oceanfront mansion at 4005 South Ocean Boulevard in Highland Beach to a hidden trust for $30 million.

Commercial: A Butters Group joint venture sold a new warehouse in Plantation to an entity managed by David Rabbani, president of Hallandale Pharmacy, for $29.8 million. The sale of the Sunrise Logistics Center at 6801 West Sunrise Boulevard is tied to an ongoing commission lawsuit. 

— Research by Adam Farence

NEW TO THE MARKET 

The beachfront compound at 105 to 115 Ocean Boulevard in Golden Beach hit the market for $68 million, more than triple its 2021 sale price. The 1-acre property, with 10 bedrooms, 15 bathrooms and three half-bathrooms, includes a main house, guest house and secondary home totaling 13,300 square feet of interior space. It’s listed with Dina Goldentayer of Douglas Elliman. 

A thing we’ve learned 

Michael Shvo said he has locked in deals at his planned Rosewood-branded Raleigh Miami Beach condo development at $12,000 per square foot (!). That was among the many things we learned at The Real Deal’s South Florida Forum last week. Check out our coverage here. 

Elsewhere in Florida 

• Florida businessman Patrick Parker Walsh is serving five and a half years in prison for stealing nearly $8 million in federal pandemic relief funds. A small (if you consider $90,000 small) portion of that went to purchase an entire island off the Gulf Coast of the state. Walsh planned to use the island as a “real estate opportunity,” according to his attorneys, AP reports. Maybe someone else will. 
• In other Florida Man news, a group of Florida men hunted a 17-foot, 2-inch python snake in the Big Cypress National Preserve in South Florida. It marked the second-heaviest Burmese python to be captured in Florida on record, at nearly 200 pounds. 
• Florida Supreme Court justices heard arguments regarding the potential legalization of recreational marijuana in the state, according to Politico. The court appeared to be favoring a ballot initiative sponsored by Smart & Safe Florida, which is backed by Trulieve, the state’s largest medical marijuana producer.