ASRR brings in Chinese, Hong Kong investors to partner on Miami project

Alex Sapir and the Arts & Entertainment District property
Alex Sapir and the Arts & Entertainment District property

ASRR Capital Ltd. — the publicly-traded Israeli company led by New York real estate moguls Alex Sapir and Rotem Rosen — has brought in Chinese and Hong Kong investors to partner in redeveloping the Miami Arts & Entertainment District property it purchased earlier this year, The Real Deal has learned.

The deal marks the latest major Chinese investment in Miami, as Asian buyers continue to target the area.

The Asian investors, CNMB International, a giant construction company based in Beijing, and G-Resources Group, a Hong Kong-based public investment group, will have a 67 percent interest in ASRR’s project, according to an announcement on the Tel Aviv Stock Exchange, where ASRR’s shares are traded.

Yi Bao Nelson, the former CEO of Morgan Stanley in China, represents the group, according to the statement on the stock exchange. Nelson was introduced to Sapir and Rosen at a dinner hosted by TRD during TRD‘s U.S. Real Estate Showcase & Forum in Shanghai last September, Rosen said.

In February, ASRR Capital paid $33 million for the property, which runs from 17th Terrace to 18th Street, and between Northeast Second Avenue and Northeast Second Court. It excludes the “Real Padel Miami” courts but includes S&S Diner. The site is 60,000 square feet wide and has 1.5 million square feet of air rights.

The price equates to $546 per square foot for 60,000 square feet — or $22 per square foot for the air rights, which is likely the lowest price in the booming district — near the Adrienne Arsht Performing Arts Center and between downtown Miami and Midtown Miami — since the recession.

Currently, the site is occupied by a retail building built in 1924, two buildings built in 1937, including the S&S Diner, and a parking lot, Miami-Dade property records show. The seller was 17th and Second Avenue Properties Corp., whose directors are Enrique Manhard and Viviane Sasson. Manhard, an Uruguayan, owns Chic Parisien.

It is unclear what the developers plan for the site, but the zoning permits residential, commercial and retail use.

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The Arts & Entertainment District is booming with redevelopment. Near ASRR Capital’s site, the condo project Canvas is under construction and the multifamily project Melody Tower was recently completed. In January 2015, a 7.4-acre lot at the corner of Northeast Second Avenue and 17th Street sold for $64 million. And in April, the Related Group’s 60-story Auberge Residences & Spa Miami celebrated the launch of its $2 million sales gallery.

ASRR Capital has been particularly active in the past year in Miami-Dade County as well as in New York.

In October, ASRR Capital teamed up with fashion heavyweight Gerard Guez on a $13.3 million contract for an office tower in downtown Miami. The deal for Tower 33, a 14-story, 95,000-square-foot building at 33 Southwest Second Avenue in Miami, equated to $140 per square foot.

ASRR Capital made its first foray into South Florida last year when it paid $40 million for an oceanfront building in Surfside,  in a joint venture with the Turkish conglomerate Suzer Group. Together with Turkish businesswoman Ozlem Onal, the group plans to build an ultra-high end hotel and condos. Onal’s family owns the Turkish luxury hotel chain Dedeman Hotels & Resorts, which operates 16 hotels in Turkey, Russia and Kazakhstan. Across the street, the investors plan to put a parking lot, and on top of that, a tennis court.

Among ASRR’s deals in New York, Sapir and Rosen leased 2.3 million square feet at 11 Madison Avenue to Credit Suisse, Sony and Yelp in 2014, and then sold the office building for $2.6 billion in August 2015, marking the largest single-building sale in New York history.

ASRR Capital raises bonds on a frequent basis on the Tel Aviv stock market. About 9 percent of the company is owned by Yalin Lapidot, the largest pension fund in Israel.

Meanwhile, Chinese interest in Miami has grown in recent months. In April, China City Construction won approval from the Miami Beach Historic Preservation Board to build the first major project by a Chinese developer on Miami Beach. The company plans to build an 18-story tower with 42 residences and 87 parking spaces at 6747-6757 Collins Avenue in North Beach.

It’s the second major project that China City Construction has planned for Miami. In 2014 the company paid $74.7 million for a 2.4-acre site that encompasses an entire city block along the west side of South Miami Avenue in the city of Miami’s Brickell financial district.

Also on Brickell, Hong Kong-based Swire Properties is developing the $1.05 billion, mixed-use Brickell City Center, with a shopping center, two residential towers Rise and Reach, two mid-rise office towers, and East Miami, a 40-story hotel that opened on Tuesday.

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