The Real Deal Miami

WeWork building in South Beach for sale, could fetch in high $40M range

Five-story building last sold two years ago for $14.3M
By Katherine Kallergis | September 23, 2016 02:25PM

The WeWork-leased building in the South-of-Fifth neighborhood of Miami Beach has hit the market without a price tag.

The property could sell in the high $40 million range, Marcus & Millichap’s Douglas K. Mandel, who’s active in South Beach, told The Real Deal.

The 43,500-square-foot Class B office building at 429-455 Lenox Avenue was listed for sale Sept. 7, according to CoStar. Convicted tax evaders and father-and-son developers, Mauricio Cohen Assor and Leon Cohen-Levy sold the five-story building in 2014 for $14.3 million, or $329 per square foot.

An affiliate of Goddard Investment Group now owns the property, which includes a two-story parking garage with 80 spaces. CBRE is listing the WeWork building. Agents Christian Lee, Jose Lobon, and Marcos Minaya did not respond to requests for comment.

Doug Mandel of Marcus & Millichap

Doug Mandel of Marcus & Millichap

“Depending upon subtenants and the impact that income will have on the overall [net operating income] of the building, we can see this asset trading in the mid-to-upper 40s [millions],” Mandel, senior vice president at Marcus & Millichap, told TRD.

Before WeWork, Maclee had its name on the building. It was originally a Jewish cultural center, which was restored and redeveloped to include a landscaped garden and entertainment area on the rooftop, office space and parking, according to architect Kobi Karp’s website. It’s also undergone a multimillion-dollar gut renovation, according to GlobeSt, which first reported the listing.

WeWork signed a lease in April and moved in July. The shared office space company also has a location on Lincoln Road with plans for Brickell City Centre and downtown Miami.

The neighborhood, south of Fifth Street in Miami Beach, is home to high-end condo towers and restaurants that include Joe’s Stone Crab, Estiatorio Milos, the Continuum and Apogee. In May, the Fogo de Chao building at 834-836 First Street was listed for sale at $19.5 million, and later this year a low-rise condo complex at 65 and 75 Washington Avenue for $14 million.

Mandel, who’s listing the Sheridan Center on 41st Street and Arthur Godfrey Road, said there’s very little available office product in the Miami Beach submarket. Marcus & Millichap listed that office building unpriced, as well, but Mandel said he’s aiming for about $21 million.

He also brokered the deal of the Chase Bank building at 1801 Alton Road, which sold for $18 million in 2014, exceeding the asking price.

“It’s Miami Beach. There are some cap rate trades that don’t make sense anywhere else,” he told TRD. “The beach is on fire.”