Edgewater, a bayfront Miami neighborhood north of downtown, continues to attract big spenders.
The latest, Beach Hill Capital Partners — a Miami-based investment firm led by Daniel Rotenberg — is offering $130 million for an older waterfront condo complex called Bay Park, The Real Deal has learned.
The company submitted a letter of intent in mid-May for the 253-unit, two building development that was completed in the early 1960s. Rotenberg declined to comment.
Condo buyouts are notoriously complicated, with competing buyers often coming forward after an initial offer is made, dividing unit owners. At Bay Park, 80 percent of condo owners would have to agree to sell for the deal to move forward.
At 3301 Northeast Fifth Avenue, the complex is immediately south of the Hamilton on the Bay, a rental tower acquired last year by REIT Aimco, where tenants are protesting after being notified that their leases had been terminated. Aimco is rumored to be assembling more land for a larger project, but the company denied it is involved in offers for Bay Park. A source with knowledge of the Bay Park deal confirmed that Aimco is not involved.
According to the LOI from Beach Hill, the buyer would give Bay Park unit owners between nine and 12 months to find new housing.
The property, developed in 1961, includes 13- and 14-story buildings with more than 211,000 square feet, parking, a tennis court and a pool. It’s zoned T6-36A-L, which allows for at least a 36-story building.
Though tricky, condo buyouts have become more common in South Florida due to a scarcity of undeveloped land, especially along the waterfront. Vlad Doronin’s OKO Group recently completed a bulk purchase of a condo in Brickell where the developer is now building Una Residences. Jules Trump and Gil Dezer have done the same for condo towers in Sunny Isles Beach.
Older buildings approaching their 40-year recertifications, which often require unit owners to pay a special assessment to bring their buildings up to code, are prime targets. After a 40-year recertification, buildings are re-assessed every decade.
That, coupled with rising property taxes, insurance and other costs, often result in owners taking the offer and moving elsewhere.
“All of these things sort of snowball,” said condo consultant and former TRD columnist Peter Zalewski. “That’s typically why people decide to sell. Terminations, that’s what’s going to happen a lot this cycle.”
Developers, including the Melo Group, OKO Group, Related Group and Two Roads Development, all have new condo projects in Edgewater. Melo recently launched sales of the first of two towers at Aria Reserve about ten blocks south, with prices ranging from $750,000 to $12 million for penthouses. The developer spent a decade buying more than 80 parcels, including condo units, to complete the five-acre assemblage.
Elsewhere in South Florida, developer Jean Francois Roy is in contract to buy out the condo owners of a property in downtown Fort Lauderdale and replace the building with a rental project called Avica Rio Vista, fronting the south bank of the New River.
Last year, a group of developers including Bruce Eichner and Two Roads Development were competing to purchase an aging condo building in Bal Harbour, with offers of more than $100 million. A deal for that property has not yet closed.