Ocean City, Maryland-based Sunsations sold a retail building on Collins Avenue in South Beach to a Staten Island-based investor for $7.1 million.
The beachwear company, a tenant of the building, sold the property at 919 Collins Avenue for less than $1,000 a foot. Silver Hill One LLC, controlled by investor Kathleen Rampaul, is the buyer. The LLC put down more than 50 percent in cash and financed the balance with a local bank, One Commercial agent Susan Gale told The Real Deal.
Gale represented the buyer and seller. The 7,941-square-foot building was listed for $7.7 million for slightly less than six months before it closed.
Sunsations has about two years left on its nearly 3,000-square-foot lease, and the remaining two tenants, Mango’s Tropical Cafe and Artisan Coffee have about five years left on their leases – renewals included. Mango’s uses the 4,206-square-foot space for office and storage, and Artisan Coffee takes up 746 square feet, according to marketing materials. They are all triple-net leases.
The three-story building was built in 1924. Records show S&P Properties, an affiliate of Sunsations, bought the property out of foreclosure in 2010 for $1.1 million, built an addition and renovated the building. It sits on a 7,000-square-foot lot that’s zoned MXE, short for mixed-use entertainment, which Gale said is “the most liberal zoning on all of South Beach.” It could eventually be developed into a five-story project.
“It was a deal that made financial sense,” she told TRD. “Prices are going between $1,000 and $1,500 per square foot on Collins Avenue. I think they’re too high. There’s properties on Collins that have been on the market for years and they haven’t sold.”
Earlier this month, a New York company paid $12.5 million, or $964 per square foot, for the 13,000-square-foot Charming Charlie building nearby at 735 Collins Avenue. At an even higher price, the Club Monaco building at 624 Collins Avenue sold for more than $2,800 per square foot in September of last year.
Gale said a correction is coming for retail in South Beach, but that the market is still very hot. “What I think stands out about this is it’s a moneymaker. Very few properties on South Beach have a good return,” she said. “This had over a 7 percent return.”