The Real Deal Miami

Hedge fund scores $25M in loans for Miami Beach homes

Both properties are 10,000-square-foot manses under construction
The construction sites at 2128 and 2142 North Bay Road where two waterfront mansions are being built

The construction sites at 2128 and 2142 North Bay Road where two waterfront mansions are being built

Entities linked to a New York hedge fund just took out $25 million in loans for two mansions under construction on North Bay Road in Miami Beach.

The loans, issued by Goldman Sachs Bank, cover the waterfront properties at 2142 and 2128 North Bay Road. Both are owned by companies linked to the $4 billion New York hedge fund Owl Creek Asset Management, which is headed by Jeffrey Altman, records show.

Those properties once held decades-old estates that were demolished in favor of two new 10,000-square-foot mansions designed by architect Max Strang, whose firm is based in Coconut Grove.

Owl Creek founder Jeffrey Altman

Owl Creek founder Jeffrey Altman

The home at 2142 North Bay Road was first built in 1925 on a nearly half-acre bayfront lot. It was purchased by an Owl Creek affiliate for $6.75 million, or $337 per square foot of land, in August 2013, according to Miami-Dade property records.

Its now-demolished neighbor to the south at 2128 North Bay Road was first built in 1974. It was sold for only $2.93 million, or $146 per square foot of land, as part of a foreclosure proceeding in January 2011, records show.

Construction is well underway at both properties. The southernmost home appears to have topped off, and work at 2142 North Bay Road began in November 2014.

Another entity linked to Owl Creek also owns the home at 2156 North Bay Road, which is occupied by a 1920’s-era home that’s being eyed for redevelopment.

Architect Max Strang

Architect Max Strang

According to a November 2014 proposal presented at a Miami Beach Design Review Board, the home’s ownership, which is managed by Owl Creek general counsel Reuben Kopel, hoped to raze the house and build a new 5,335-square-foot residence there alongside a regulation size tennis court. The company has yet to file a construction notice with the county.

The demolition proposal brought worry by board members that the owner would try to build a megamansion on three lots, though the architect Strang and a land-use attorney refuted those claims last year. Strang said the home at 2156 North Bay Road would not become a spec-house, but instead a “weekend retreat” for a client he declined to name.

Miami Beach is in the midst of reviewing a controversial ordinance that would limit the size of newly built homes on the barrier island. At the center of the debate is North Bay Road, where a bevy of spec houses have been built in recent years. Proponents of the restrictions, many of whom are residents and preservationists, say the new houses change the character of a neighborhood. Developers, on the other hand, are opposed to the limitations on square footage that they could build. The planning board will review the ordinance on Nov. 24.