The Weekly Dirt: A condo buyout a decade in the making
Related Group is nearing a deal to acquire the Miami Beach Club in Sunny Isles
Related Group is nearing a deal to acquire an older Sunny Isles Beach condo complex. The two have a long and complicated relationship.
The Miami Beach Club, a 107-unit condominium fronting the ocean, was built in 1951 as part of a larger complex that included the former Seashore Club condo building next door. Related, the Miami-based firm owned by the Pérez family, teamed up with Gil Dezer’s Dezer Development to build the Residences by Armani/Casa on the Seashore Club site.
All the while, the two were planning to also acquire Miami Beach Club. Executives from both firms bought five units at Miami Beach Club in 2014. That’s one way developers approach buyouts, by purchasing individual units one by one. Depending on your perspective, it can be harder to put a deal together this way, especially if other unit owners catch on.
That appears to be what happened here, though Related declined to comment. The developer is in contract to pay $145 million for the majority of units, according to a source. Related plans a luxury condo tower on the 2-acre site.
Richard Meruelo, who we have covered in the past, sold the five units to the current and former Related executives. Investors like Meruelo typically identify waterfront buildings where a buyout and subsequent termination are likely so they can cash in later when a developer comes along.
A lawsuit that the Miami Beach Club condo association filed against the Related/Dezer entity in 2018 alleged that the Related/Dezer entity “engaged in a series of tactics… to reduce the marketability of the Miami Beach Club” to outside buyers, by acquiring individual units and engaging in expensive litigation. That suit was dismissed in 2022.
The upside, if successful, is huge for developers. The Armani/Casa tower next door sold out for nearly $1 billion in 2021, two years after it was completed.
One other interesting side note: Andrew Chesnick, formerly COO at Dezer, owns two of the Miami Beach Club units mentioned above.
Chesnick alleged in a scathing lawsuit filed years ago that a toxic work environment forced him to resign from his role at Dezer. Gil Dezer referred to Chesnick as a “douchebag” and a “fucking moron” in emails, and admitted in a deposition that he may have threatened to kill Chesnick, calling it a “good motivator,” Bisnow reported in 2020. Chesnick alleged Dezer owed him more than $10 million in profits from projects that included the Residences by Armani/Casa.
What we’re thinking about: How will the litigation between Bal Harbour and Whitman Family Development play out over Whitman’s planned mixed-use affordable housing development? And what does it mean for other cities trying to circumvent state law? Send me a note at email@example.com.
Residential: Supermarket supplier Michael Bozzuto paid $31.2 million for a waterfront Palm Beach Shores estate in an off-market deal. Longtime owner Molly Fleming sold the 7,400-square-foot, four-bedroom home at 170 Lake Drive.
Development: Kolter Group paid $73.6 million for 491 homesites at the Avenir community in Palm Beach Gardens. Landstar Development Group sold the 150 acres on the northwest corner of Avenir. As part of the deal, Kolter will pay Landstar $16,620 and 2 percent of proceeds for each home sold.
— Research by Adam Farence
NEW TO THE MARKET
Insurance executive Seth Cohen listed the peninsula lot at 1818 Southeast 10th Street in Fort Lauderdale for nearly $49 million. The “White House” that sits on the 1.4-acre property is being demolished, according to the listing for the Rio Vista lot. It has 840 feet of water frontage, enough for multiple yachts. It’s listed with Compass agent Angeline Earnest. The property last sold in late 2021 for $24.5 million.
A thing we’ve learned
A jury ordered that Donald Trump pay E. Jean Carroll $83.3 million for defamatory statements he made against her in 2019. Carroll was seeking at least $10 million.
Elsewhere in Florida
- Bills that could wipe out protections for historic buildings along the coast are moving forward in the Florida Legislature this session, a possible win for developers in cities like Miami Beach, the Miami Herald reports. A pair of similar bills died in the Florida House last year after passing the Senate.
- Florida’s state university system — one of the largest in the country — eliminated sociology as a core course requirement and replaced it with a “factual history course,” according to the New York Times. The American Sociological Association said the decision seemed to come “not from an informed perspective, but rather from a gross misunderstanding of sociology as an illegitimate discipline driven by ‘radical’ and ‘woke’ ideology.”
- Nearly 1,000 manatees (a record!) gathered at a Florida state park last week, likely to avoid the cold waters in a nearby river where they’re known to hang out. Manatees are typically solitary animals, so it’s unusual to see so many all together, BBC reports.