A New York-based developer is diving into the Miami Worldcenter building boom with plans for two residential towers on a site the seller had proposed for a multifamily, retail and co-working mixed-use project.
In a $40.5 million deal, Naftali Group, led by Chairman and CEO Miki Naftali, and its partner, Cara Real Estate Management, acquired the 44,500-square-foot property at 1016 Northeast Second Avenue, according to a press release. The seller is Chicago-based Akara Partners.
Mika Mattingly with Colliers represented the buyer and the seller in the off-market deal, the release states. In July 2020, an affiliate of Akara paid $18.8 million for the property, according to records.
Naftali plans to begin pre-sales for two “supertall” residential towers by the end of the year, the release states. It is not clear if they will be apartments or condos. A Naftali spokesperson told The Real Deal that additional details about the project will be announced at a later date.
In a statement, Miki Naftali said his firm conducted an “extensive search for the right location” and chose the Miami Worldcenter site because it represents “a truly unique opportunity to develop in the downtown Miami urban core.”
Mattingly said that Naftali has been actively pursuing sites in the Miami market in recent months. “I showed them many sites, including this one,” Mattingly said. “Other brokers did as well.”
Akara and Naftali have been working on this deal since November, Mattingly added.
Naftali’s latest acquisition also includes 8,227 square feet of undevelopable land underneath the adjacent Eleventh Street Metromover Station. A project of roughly 1.3 million square feet can be built on the overall site, Mattingly said.
When Akara bought the site two years ago, the firm announced it planned to build Kenect, a hospitality-oriented multifamily project with 450 apartments, 20,000 square feet of coworking space and 10,000 square feet of retail space.
In an email, Akara founder and CEO Rajen Shastri said initially his firm and Naftali discussed selling only a portion of the Miami Worldcenter site, but that it turned into an all out sale.
“This was a unique opportunity to capitalize on the explosive demand for entitled development sites due to the unprecedented post-Covid growth of the Miami market,” Shastri said. “It was clear that there was a higher and better use than what we were building on the site.
Akara still achieved its desired return on investment, Shastri said. “Akara is still extremely bullish on the market and is working on a few other immediate sites to build its Kenect-branded apartment product, as well as other apartment brands in Akara’s pipeline,” Shastri said.
Founded in 2011, Naftali’s current and past portfolio includes 37 condominium and mixed-use projects encompassing more than $12 billion in total value, the release states. In December, the firm paid $72.6 million for two vacant five-story apartment buildings in Manhattan’s Upper East Side. Naftali is also developing a pair of 22-story apartment buildings in Brooklyn.
Spanning 27 acres, the $4 billion Miami Worldcenter is divided into several projects by different developers. Completed buildings include the 60-story Paramount Miami Worldcenter condominium tower, and Caoba, a 444-unit apartment tower. The 348-room CitizenM Hotel and a 434-unit ZOM Living apartment tower are under construction.
WeWork’s co-founder Adam Neumann is among the big names tied to Miami Worldcenter. Neumann purchased stakes in or took over ownership of the two companies that own Caoba and a development site slated for a new apartment tower.
The phased Miami Worldcenter project also includes 300,000 square feet of retail, restaurant and entertainment space.