The Real Deal Miami

Developers speculate on future of Las Olas Riverfront lifestyle center

By Jennifer LeClaire | August 06, 2008 02:11PM

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

“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.