Menachem Kranz bought all the units at a waterfront Bay Harbor Islands condominium for $6.5 million, joining the trend of bulk purchases at aging buildings in the wake of the deadly Surfside collapse.
Kranz, through an affiliate, bought the 10 units at 9110 West Bay Harbor Drive, with plans to replace the existing two-story building with a boutique condo development, he told The Real Deal. The buyer scored a $3.9 million acquisition loan from Oklahoma City-based MidFirst Bank.
Kranz co-founded and runs Lauderdale-by-the-Sea-based life sciences adviser and merchant bank Allele Capital Partners, as well as Boca Raton-based investment manager Stratify Investment Partners, which focuses on the tech and life science industries.
The Bay Harbor condo building was constructed in 1953 on about a third of an acre overlooking the bay and the golf course on Indian Creek Village, a private single-family home enclave known for its celebrity and high-profile residents, according to property records and Kranz.
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The deal breaks down to $650,000 per unit.
Kranz said he plans to develop a Kobi Karp-designed project of eight stories with 10 units, eight boat slips, a rooftop pool, lanai pool and large balconies.
The smallest units will be roughly 3,000 square feet with three bedrooms, priced at about $6 million. The biggest condos will span full floors on the top three stories. With about 5,000 square feet each, they will have six bedrooms, making them “basically a house in the sky,” he said. They will cost roughly $10 million.
“There’s lots of new developments and options for people who want smaller units, but there is almost nothing on the island with very large units and for a family to live on the bay,” said Kranz, who lives in Bay Harbor Islands.
Members of the Indian Creek Country Club have called to inquire about buying a unit, he said.
An application for the project has not yet been submitted to the town. Neisen Kasdin of Akerman is the land use attorney.
Kranz, who is open to partnering with investors, expects completion in late 2024.
Investors increasingly are turning to bulk purchases of older, waterfront South Florida condos, and unit owners are more willing to sell in light of the tragic Champlain Towers South collapse in June that killed 98 people.
Two Roads Development is set to close on a bulk purchase of units in an 11-story, 191-unit bayfront condo building at 2121 North Bayshore Drive in Miami’s Edgewater, then redevelop the property into a three-tower luxury residential complex.
In another potential bulk deal, Jorge Pérez’s Related Group and 13th Floor Investments offered $500 million in March for the Castle Beach Club, which was built in 1966 at 5445 Collins Avenue in Miami Beach.
The Bay Harbor Islands deal, which closed on Friday after a year in the works, was contingent on all owners agreeing to sell. The Champlain collapse likely played into all 10 unit owners coming to an agreement, Kranz said.
“It’s an old building, and it has some of the potential issues that come with a building that is that old,” he said.
Bay Harbor Islands, a largely residential community that for a while had little new development, has caught developers’ eyes in recent years.
Ugo Colombo and Valerio Morabito are developing the eight-story, 41-unit Onda at 1135 103rd Street. Also, David Martin’s Terra is building an office-retail project with either condos or apartments at 1177 Kane Concourse.