The pandemic killed the sale of Rail 71. It’s back on the market for $32M

Brokers say the building’s layout makes it appealing in a coronavirus world

Miami /
Jun.June 16, 2020 01:30 PM
Rail 71, Tony Arellano and Devlin Marinoff

Rail 71, Tony Arellano and Devlin Marinoff

After a deal to sell the Rail 71 property in Miami’s Little River fell through due to the pandemic, owner Morgan Reed Group is looking for a new buyer.

Brokers Tony Arellano and Devlin Marinoff of Dwntwn Realty Advisors are relisting the office and retail development at 7205 Northeast Fourth Avenue for $32 million or $253 per square foot, they said, calling it “the perfect post-Covid building.”

“Covid killed the deal but it also made us realize why the asset was set up for the new normal,” Arellano said. “I don’t necessarily see people paying $45 triple net [for office space].”

The 127,562-square-foot building, which backs up to the Florida East Coast Railway, was built on a 3.4-acre site west of Biscayne Boulevard. It hit the market in November for $33 million. A pending deal had gone through the due diligence period but when the pandemic hit the sale was canceled.

Now, the listing brokers say the layout – each tenant has its own entrance/exit, air conditioning unit, outdoor parking – makes it appealing in a coronavirus world. Both brokers worked out of the office during the lockdown.

“We realized how lucky we were,” Marinoff said.

The flex building is currently nearly 70 percent occupied with office, showroom and gallery tenants, including Dwntwn’s office, Saladino Design Studio, Twill & Texture, and Bousa Brewing. Rail 71’s annual net operating income is about $1.6 million, with average gross rents of $20 per square foot, according to the offering memo.

In November, Rail 71 was 89 percent occupied. Arellano said the landlord isn’t giving many concessions to tenants and some left due to the pandemic. Marketwide, retail and office rents are experiencing a 20 to 30 percent correction, he said.

“Our rent is so low compared to other asset classes,” Arellano said, later adding, “You can put anything here with the exception of residential. It’s recession-resistant.”

The building is part of the Little River business district, near Ironside, the Citadel and the MiMo District. Nearby, developers, including Plaza Equity Partners and Tony Cho, are planning the Magic City Innovation District, an 18-acre, $1 billion phased project at Northeast 62nd Street and Fourth Avenue.


Related Articles

arrow_forward_ios
From left: Charles Kushner, Laurent Morali, David Arditi, and Nicole Kushner Meyer along with renderings of 1900-2000 Biscayne (left) and 2222 Brickell Avenue (right) (Getty, Kushner Companies, Aria Development Group)
Miami board to vote on Kushner’s Edgewater rental project, Aria’s Brickell condo building
Miami board to vote on Kushner’s Edgewater rental project, Aria’s Brickell condo building
Conway Commercial Real Estate's Thomas Conway with 8038 Northeast Second Avenue (Getty)
Thomas Conway sells Miami Little River multifamily dev site
Thomas Conway sells Miami Little River multifamily dev site
Turnberry's Rock Soffer, Native Construction's Gaudi Castro and Cade Capital's Jose Vizcarrondo with 123 and 137 Northeast 79th Street (LinkedIn, Cade Capital Partners, Google Maps)
Rock Soffer, partners bet on Little River multifamily
Rock Soffer, partners bet on Little River multifamily
Pan Am Equities President and CEO Scott Solomon and Rail 71 at 7205 Northeast Fourth Avenue (DWN TWN Realty Advisors, LinkedIn)
Pan Am Equities lists Little River business park for $39M
Pan Am Equities lists Little River business park for $39M
7101 and 7111 North Miami Avenue (Metro 1, iStock)
Wynwood investor Link pays $15M for Little River office-retail property
Wynwood investor Link pays $15M for Little River office-retail property
AJ Capital Partners founder and CEO Benjamin Weprin and properties at 7133 Northwest Second Court and 7122 Northwest Second Avenue (NorthWestern.edu, Google Maps)
AJ Capital Partners picks up Little River warehouse portfolio for $17M
AJ Capital Partners picks up Little River warehouse portfolio for $17M
From left: Pedro Villar, owner of Aloft Miami Brickell, along with his attorney Joe Pack (Newstar Media)
Aloft Miami-Brickell exits bankruptcy, staves off foreclosure
Aloft Miami-Brickell exits bankruptcy, staves off foreclosure
Eric Hassberger and Matthew Vander Werff with an aerial of the property
AJ Capital Partners invests in Opportunity Zone portfolio in Miami’s Little River
AJ Capital Partners invests in Opportunity Zone portfolio in Miami’s Little River
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...