Rockpoint Group has purchased 312 Lincoln Road for $30 million, in a deal that includes a 99-year ground lease, as properties along the Miami Beach retail corridor continue to draw investor interest.
Deborah Schluger and Harris Realty & Associates sold the 24,610-square-foot building and ground lease to Boston-based Rockpoint, a real estate private equity firm that also has offices in Dallas and San Francisco, according to public records.
CVS Pharmacy occupies the building, built in 1951. The property sits on a 32,730 square-foot lot, on the block between Washington Avenue and Collins Avenue, on the east side of Lincoln Road. The price translates to $1,219 per square foot of building and $916 per square foot of land.
The Harris family had acquired the property for $555,000 in 1989, Miami-Dade property records show.
“It shows what you can do when you have some patience,” Michael Denberg, managing partner of Arnstein & Lehr’s Fort Lauderdale office, told The Real Deal.
Denberg, who represented the sellers, said he had been working on the deal since July, and that the two sides had been in negotiations prior to that. The ground floor has a 99-year lease to Cathy-David Properties Ltd., dating back to 1951. The entity, in turn subleases the space to CVS, said Denberg, who worked alongside Arnstein & Lehr attorneys Phil Hudson and Lori Hartglass on the sale.
Property records show that in 2011 Cathy-David Properties and the owners had a dispute regarding lease terms, and the property owners filed suit against Cathy-David Properties. They settled on terms, and Cathy-David agreed to pay annual rents of $415,000 a year beginning in April of 2011 through April 2016, and $425,000 a year through April 2021.
Rockpoint executives declined to comment on the purchase, and Denberg said he was not sure what the investment group plans to do with the property. Rockpoint Group’s website shows it also owns the 1.4-acre development site at 850 South Miami Avenue in Miami, planned for Brickell Heights, as well as a portfolio of hotels in Key West.
“It is a strong company that is able to hold the property, and it will probably redevelop it at some point in time and will reposition it,” Denberg told TRD. “If there is a higher and better use, they will look to work something out with both of the tenants.”
Lincoln Road ranks as the 10th most expensive retail street in the United States, according to a Cushman & Wakefield research report released in November. Rents on Lincoln Road have held steady for the past year, at $325 per square foot.
“This is a telling time in South Florida real estate — the prices per square foot are still moving in some of these very hot pockets,” Denberg said. “It shows that the companies based in New York and Boston and northeastern cities have a lot of faith in the South Florida market and continue to make significant investments in our land and buildings.”
Indeed, properties along the western end of Lincoln Road have been trading at prices approaching $5,000 per square foot for land.
In September, Michael Comras and his partner Jonathan Fryd sold the entire block from 1001 to 1035 Lincoln Road to Spanish billionaire Amancio Ortega for $370 million, or $7,708 per square foot for the land and $4,933 per square foot for the buildings. The transaction marked one of the largest real estate deals in Miami-Dade history.
In October, Comras Company listed 421 Lincoln Road for sale or lease. The property, currently leased to Surf Style, sits on a 10,500 foot lot. No price was listed, but based on a square footage valuation from the $370 million sale, 421 Lincoln Road could fetch more than $65 million, or as much as $80 million, based on the land.
“If you have some patience and you hold on and are getting decent cash flow,” Denberg said, “there are opportunites that come along.”