South Florida report

Faena halts Versailles condo project

Developer Alan Faena has halted work on his two-tower Versailles condo development and is considering putting a hotel on the site instead.

With the Faena Hotel Miami Beach coming up on its first anniversary and Faena Forum, an arts and cultural venue designed by Rem Koolhaas’ OMA, set to open Nov. 27, Faena said that he was waiting to get a better view of demand.

“We’re pulling the Versailles project to see how many rooms we will need and the reaction of the market,” Faena said. He acknowledged that the current slowdown in the condo market was also a factor in his decision.

The planned condo towers are part of the massive Faena District, which runs along Collins Avenue, from 32nd Street to 35th Street in Mid-Miami Beach. Other components include the 47-unit Faena House condo tower and Faena Bazaar, a retail building nearing completion.

In April 2015, Faena announced he was adding two residential towers, Versailles Classic and Versailles Contemporary, to the portfolio. Faena Versailles Classic, a 22-unit tower designed by William Sofield, was to be located in the former Versailles Hotel. The building’s 1940 facade, grand lobby, terrazzo flooring and custom chandeliers would be preserved. Today, the gutted building is  still standing.

Faena Versailles Contemporary, a 41-unit tower designed by Brandon Haw, was slated to rise next door on land that is now being cleared.

Privé at Island Estates

Privé at Island Estates seeks financing

Privé at Island Estates, the luxury condominium project in Aventura that is embroiled in litigation, is looking for $147 million in construction financing.

An offering memorandum issued this summer by JLL [TRDataCustom], on behalf of developers BH3 Management and Gary Cohen’s Nomur Holdings, sheds light on the project’s finances. The document, which was obtained by The Real Deal, reveals the developers’ equity contribution of $48 million, total expected sellout of $487.3 million, total development costs of $341.8 million and projected profit of $145.5 million — equating to a 42.5 percent profit margin.

The project, at 5000 Island Estates Drive, is currently under construction, with delivery expected in June 2017. When completed, it will have 160 units in two towers, ranging from a $2.1 million one-bedroom to an $11.4 million penthouse with a rooftop pool.

BH3 principal Dan Lebensohn would not comment on the $147 million loan request issued by JLL, or if he is running out of money to complete construction. “As any seasoned borrower, we’re always looking for the best value in cost of capital,” he said.

Over the past two years, residents of Williams Island have sued BH3 and Cohen to stop the project, alleging that the developers only have the right to build single-family homes. In August, BH3 and Cohen sued 11 island homeowners, alleging they violated a 34-year-old settlement prohibiting them from objecting to any new projects on the island. Two previous lawsuits filed by the developer have been dismissed.

Rockpoint Group buys Aloft South Beach

Citing an overheated hotel market, Jason Halpern’s JMH Development and Mitchell Hochberg have unloaded the Aloft South Beach to Rockpoint Group for $105 million, or $446,809 per room.

The eight-story hotel, at 2360 Collins Avenue, has 235 rooms and opened in June 2015. Halpern, a boutique developer based in New York, said, “There is too much supply” in the Miami hotel market, while the costs of land and construction have gone up.

Built on the site of the historic 1954 Ankara Motel, Aloft South Beach preserved the motel’s Art Deco architecture and refurbished its signage. The hotel’s lobby features black-and-white images of 1970s beach scenes. Halpern, together with partner RCG, bought the Aloft site in 2005 for $12.85 million, with plans for a residential project. Aloft South Beach was JMH’s first project in South Florida.