The Real Deal

• Email this article
• print
• Comments(0)

Developers speculate on future of Las Olas Riverfront lifestyle center

Las Olas Riverfront

The purchase earlier this week of the Las Olas Riverfront, an underused lifestyle property in Fort Lauderdale, by Cerberus Capital Management affiliate Madeleine L.L.C., has ignited speculation about the site's future.

Cerberus filed an emergency motion late Monday in Broward County Circuit Court to postpone the auction so it could exercise its right to buy out the entire loan. The New York City-based firm agreed to purchase the loan for $21.8 million from ACF Riverfront, the senior lender that took over the debt on the property after foreclosing on Boca Developers.

Once upon a time, Boca Developers had ambitious plans to build an upscale condo, hotel and office tower to encourage a work-live-play lifestyle along the New River.

Since the Riverfront project flopped, Fort Lauderdale-based Stiles Development Group has expressed interest in the failing $55 million Las Olas Riverfront entertainment complex that sits on prime downtown land.

"Stiles would be the perfect developer for Las Olas Riverfront," said Walter Duke, a principal of Clobus McLemore & Duke, a commercial real estate valuation and advisory services firm in Ft. Lauderdale. "If Stiles can work out an arrangement with the lender at the right price, this is a firm that could carefully develop what is the linchpin of the Riverwalk Linear Park downtown."

Duke declined to comment on what "the right price" is. Michael Y. Cannon, executive director of Integra Realty Resources-Miami, a real estate valuation and counseling firm, didn't predict a price, either.

However, Cannon said there are still challenges ahead for any developer that takes on the project.

"With market conditions for residential condominium redevelopment far in the future, it is not certain whether or not the city would restrict redevelopment of the Las Olas Riverfront," Cannon said.

But the existing retail use, if reinvented with certain design changes and with prudent management, may be the best use for a long-term investor with patient capital, he said.

To be sure, while most agree on the need to knock down the existing structure, the market timing is not correct, Duke said. While there is room for hotels downtown and office space, there is no market for new condos and the retail market is tough.

"It's the perfect time over the next 24 to 36 months to get all the entitlements and approvals so when the market rebounds, you can come out of the ground with a combination of residential, hotel and office," Duke said.