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The Real Deal Miami

Rebuilt CVS building on Washington Avenue hits the market for $21.4M

Building is leased to CVS through 2035, with 5% base rent increases every five years
By Ina Cordle | February 16, 2017 04:50PM

Rendering of 973 Washington Avenue, with Drew Kristol, left and Kirk Olson, right

A building leased to CVS that is undergoing a gut renovation on Miami Beach’s Washington Avenue just hit the market for $21.385 million, The Real Deal has learned.

Marcus & Millichap has the listing for the two-story building with 12,443 square feet of rentable space at 983 Washington Avenue. The price breaks down to $1,719 per square foot.

Drew Kristol, first vice president of investments in Marcus & Millichap’s Miami office, told TRD that CVS is expected to move in by June. The building is triple-net-leased to CVS through March 2035. 

Kristol is listing the property with Kirk D. Olson, first vice president of investments. 

Records show Club Invest Group LLC bought the building for $2.95 million in 2009. Kristol declined to disclose the identity of the owner, but said he is an Italian developer who lives in South Florida. Developer Russell Galbut sold the building in 2006 to 999 A D M Y LLC for $3.4 million, records show, and his family members had owned the property since 1977.

Kobi Karp designed the gut rebuild of the former office building to deliver it to CVS, Kristol said. “Beyond the architectural significance and the fact it is going to be a beautiful build-out the lease terms are really rare,” he said. “Very rarely do you see CVS or drugstore with rental increases during the base term period, but it has 5 percent increases every five years.”

The five-year option periods have 10 percent increases, he added, but declined to disclose the rates. 

Washington Avenue is experiencing a new wave of redevelopment, amid the city’s approval of new measures that are designed to increase hotel space and retail and dining opportunities on the street, which lags far behind Lincoln Road and Ocean Drive in attracting first-tier retail, dining and hotel venues.

Among the new projects, Lightstone Group received approval in December for the demolition, renovation and restoration of three aging storefronts at 915, 947 and 955 Washington Avenue to make way for a new 202-room Moxy South Beach. And Michael Simkins and Robert Finvarb have teamed up to propose a new mixed-use project on city-owned lots at 900 Washington Avenue. They plan to redevelop the lots into a mixed-use, 247-space parking garage with hotel and retail components.