Downtown Miami WeWork building expected to sell as part of massive cryptocurrency auction
Investors will make bids using digital currency in exchange for ownership in the 90K sf building, along with other properties
UPDATED, March 27, 4:18 p.m.: A downtown Miami office building leased to WeWork is expected to sell for $65.5 million in a deal that will be financed through one of the largest known cryptocurrency real estate auctions of its kind.
Andrew Joblon, founder and managing principal of Turnbridge Equities, and his partners, Daniel Gohari, Rory Greenberg and Ricky Weisfisch, are selling the nearly 93,000-square-foot building at 117 Northeast First Avenue. The buyer is Inveniam Capital Partners, a New York-based financial and advisory services firm that focuses on raising capital for small and medium-sized businesses.
The Miami building, also known as the Capital Lofts, was built in 1926 and is on the national register of historic places. Joblon and his partners bought a majority interest in the former condo building in 2015 for $25.5 million and converted it to office space. Joblon’s Turnbridge, an investment and development firm, also owns property in Miami Beach.
WeWork has 12 years remaining on the triple-net lease, according to a press release.
Inveniam made a deposit on the building using an undisclosed amount of Bitcoin in January, according to CoinGeek, a cryptocurrency news site.
The sale will happen through a “dutch auction” — expected to close this month — in which investors make bids in cryptocurrency based on what they think the asset is worth. Essentially, they are buying shares in the property. To participate, investors must have at least $10 million in cryptocurrency. Bids for shares of the property start at $500,000. The auction will only accept the top 50 cryptocurrencies, which include Bitcoin, Etherium and XRP.
If it closes at the expected price, the sale would mark the largest cryptocurrency deal of its kind in South Florida.
Investors will also be able to bid on three other real estate partnerships at the auction, including a 500-unit apartment complex in southwest Florida, three student housing developments at North Dakota State University and a North Dakota water pipeline project.
Together, all of the properties including the downtown Miami building, are valued at $260 million.
Digital currency remains highly volatile, and while smaller real estate deals have used it, it has yet to become an industry-accepted form of payment. Bitcoin investor Michael Komaransky sold his Miami home nearly entirely in cryptocurrency last year, for about $6 million. At the time, each coin was worth around $13,000. The value of the currency has since plummeted, with each coin now worth around $3,800. At the time, it marked the most expensive Bitcoin-to-Bitcoin real estate sale to close.
The proceeds of the WeWork-leased building auction would be converted back into dollars for Inveniam to close on the building. If less than the purchase price is raised at auction, the buyer plans to secure financing to fund the rest, said Pat O’Meara, Inveniam’s chairman and CEO.
Investors would receive returns, either in cryptocurrency or cash, from the income that the property generates, O’Meara said. If the investor decides on cash, the payout would essentially work like stock dividends.
Manuel L. Crespo and Frank Whitaker of the law firm Greenspoon Marder are representing Inveniam in the deal; and Jay Koenigsberg of Carlton Fields is representing the seller.
Tony Cho and Jack Conrad of Miami-based Metro 1 brokered the deal. Philippe Lancry and Andrea Tardy of Central Park Sàrl advised the buyer.