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In a year marked by high vacancy and rising delinquencies, there were some bright spots for the South Florida commercial market. The 10 biggest commercial transactions of the year totaled just under $1 billion, according to data from the CoStar Group, a real estate research company.
Six of the 10 properties involved residential bulk transactions. The deals were also dominated by Broward and Palm Beach counties, which had eight of the top 10.
With four sales of more than $100 million (and a total of $928.16 million), the sheer size of the deals is a good sign for South Florida commercial market, according to Chris Macke, senior real estate strategist at CoStar.
“What jumps out at me is the size of the deals getting done,” he told The Real Deal. “That is a great sign. I don’t know anybody who, a couple of years ago, would have said, ‘Gee, we’re going to have a $200 million deal and a couple of $100 million deals, especially in South Florida.’”
The list is led by the Resort at Pembroke Pines, a 1,520-unit multi-family complex in Pembroke Pines at 11801 Pembroke Pines Road. The site was sold by Heitman to CB Richard Ellis Investors for a total of $193.5 million, $76 million more than the second-highest sale.
Coming in at number two was the sale of 146 units at 2700 North Ocean on Singer Island, which was recently branded as a Ritz-Carlton Residences, the first time Ritz-Carlton has entered a pre-existing residential property. The 146 units went for $117.3 million, which works out to an average of $803,483 per unit. The sale was also the largest in Palm Beach County this year.
That property was one of many on the list with several hundred units or more. According to Macke, several of these — like 2700 North Ocean and the Alexan Solero in Plantation — were high-vacancy properties, both newly-opened and existing structures.
“High-vacancy deals are a sign that the buyers are truly opportunistic,” he said. “Even if people are buying things at discounts it means they’re still willing to make that bet.”
Alexan Solero, the only new construction project on the list, was purchased by INVESCO from Trammell Crow Residential in October for $104 million.
The high number of multi-family properties came largely from opportunistic buying, Macke said.
“If you can pick up a $200 million asset like [The Resort at Pembroke Pines], you can get a lot of money out of the door at once. They’re theoretically getting good deals.”
The sixth-highest sale was the San Merano at Mirasol, a residential complex in Palm Beach Gardens, which went for $69.06 million to buyer TA Associates Realty.
Notable on the list was the sale of Related’s CityPlace South Tower in West Palm Beach, which was purchased by Gulfstream Capital Partners for $63.9 million. The sale was the eighth-highest on the list.
Two Miami-Dade properties made the list: 8801-8901 NW Seventh Avenue, which was purchased by U.S. Citizenship and Immigration, and Palmetto Distribution, an industrial site at 7939-8187 NW 84th Street.
While that number is relatively low, Macke said it was more of an indication of a small sample size.