Richard LeFrak touts Solé Mia’s progress from landfill to paradise: ULI symposium
New York developer also offered his insights on tech disruption in real estate and the Miami market’s strengths and weaknesses
Richard LeFrak recounted the moment roughly nine years ago when he received a call gauging his interest in 184 acres of waterfront land fronting Biscayne Boulevard in North Miami. “It’s a [former] landfill and it’s kind of had a checkered past,” LeFrak recalled the unnamed individual on the line telling him. “I asked what’s the minimum bid? He said $21 million. That’s all I had to hear.”
It was chump change compared to the expected $4 billion LeFrak and his Aventura-based partners, the Soffer family, are putting into building Solé Mia, a master-planned community that will ultimately have 12 residential buildings totaling 4,390 units with more than 1 million square feet of commercial space in North Miami.
In January, the partnership completed the first phase, with the opening of twin 17-story towers called The Shoreline, a Costco and a 7-acre lagoon. It’s a marked contrast from when the U.S. Environmental Protection Agency designated the tract a Superfund site due to the amount of toxic materials that leached into the soil.
LeFrak, the keynote speaker at Thursday’s Urban Land Institute Miami Symposium at the Mandarin Oriental, Miami, told attendees that developing the massive site isn’t easy. But he’s confident the project will be successful.
“We had to deal with the politics, straightening out the environmental stuff and doing everything you have to do,” LeFrak said. “And we are going to turn that landfill into a paradise. It takes a lot of capital and effort and faith to envision something that is going to be 20 years away.”
The New York City developer has been bullish about Miami real estate since the aftermath of the 2008 crash when he became an investor in then-struggling BankUnited and partnered in purchasing the real estate portfolio held by the failed Corus Bank. In 2012, LeFrak partnered with Starwood Capital Group chairman Barry Sternlicht to buy and rebrand the former Gansevoort Miami Beach Hotel into 1 Hotel & Homes South Beach, a luxury condominium and resort. In February, LeFrak and Starwood sold the hotel portion for $610 million.
“I asked Barry to show me the brand book and he pointed to his head,” LeFrak said. “I had faith in him. He knows how to get things done. Now he’s spreading the 1 Hotels brand around the country and the world.”
Even as the luxury condo market has stalled in Miami, the population growth and the amount of land available for development and redevelopment, will lead real estate investors to continue flocking to the region, LeFrak said. “You follow the population,” he said. “You don’t create it. You have to be here ready to serve them. So, yes, I do see more investors coming here. I think too many for my taste.”
He also noted how technology is creating “tremendous disruption in the real estate business.” LeFrak said trends such as co-living and short-term rentals are driven by a younger generation that demands more mobility in their lives. “You’ve got to get in front of it,” he said. “You have to cater to it.”
As an example, LeFrak said a manager at one of his company’s new apartment buildings recently explained to him that not many new tenants are showing up in moving trucks. “He told me some people are moving in by taxicab,” LeFrak said. “They just bring in their luggage. When I asked what about the rest of it, he said it’s all being sent by Amazon.”