RCLCO takes big hit offloading Miami Design District buildings

In a perplexing move, RCLCO Fund Advisors offloaded two retail buildings in Miami’s Design District, one of the nation’s top retail real estate submarkets, at a steep $17.9 million discount.

In one deal, Bethesda, Maryland-based RCLCO sold a two-story, 23,645-square-foot building at 3800 Northeast Miami Court to an affiliate of Miami Beach-based Comras Company, records show. Comras is led by CEO Michael Comras. 

In the other deal, RCLCO sold a single-story, 9,906-square-foot building at 3946 North Miami Avenue to Kohler for $12.5 million. Signs on the property state the luxury bathroom manufacturer is opening a new store soon. 

In 2016, RCLCO paid $26 million for the larger building, and $18.7 million for the smaller one, records show. 

Given recent retail sales in the Miami Design District, Comras and Kohler paid below market value for the properties, said Tony Arellano with Dwntwn Realty Advisors, who was not involved in either deal.

“That is about as close to hitting a lottery ticket in the Design District,” Arellano said. “Michael [Comras] made money on that deal. I could sell the building he just bought at a higher price by just making three phone calls.” 

Kohler also “certainly did very well,” Arellano said. 

Comras told The Real Deal that his eponymous firm paid a fair price. “I think we did okay,” he said. “Clearly there have been great sales in the Design District recently. It’s all relative.”

An RCLCO spokesperson declined to comment. 

Records show RCLCO wasn’t facing any looming maturity dates and refinancing problems because both properties were not encumbered by any mortgages. 

Last year, RCLCO paid off a $5.6 million loan secured by 3800 Northeast Miami Court on a scheduled maturity date. The building is vacant. The other property at 3946 North Miami Avenue didn’t have any loans during the period RCLCO owned it, records show. 

 In other recent Miami Design District sales, New York-based ASG Equities sold two small retail buildings for a combined $32 million to Miami Design District Associates, a partnership led by Craig Robins’ Miami-based Dacra. Both deals were brokered by Dwntwn Realty Advisors.

In 2014 and 2015, ASG paid a combined $30.6 million for both properties.