Oak Row Equities is in line for one of South Florida’s biggest real estate deals.
The firm is in contract to purchase a 4.25-acre bayfront assemblage in Miami’s Brickell Financial District for $520 million.
Aimco, a Denver-based real estate investment trust, is selling the 32-story Brickell Bay Office Tower at 1001 Brickell Bay Drive and the adjacent 31-story, 357-unit Yacht Club Apartments at 1111 Brickell Bay Drive to Brickell Bay Property Owner LLC, according to a filing to the Securities and Exchange Commission on Monday.
State records show the purchasing entity is tied to Oak Row, a private equity and real estate development firm co-founded by Erik Rutter and David Weitz. Mariposa Real Estate, whose partners include Sam Franklin, is partnering on the purchase, according to a news release.
The assemblage has 485 feet of bay frontage. It could be redeveloped with multiple supertalls totaling more than 3.1 million square feet with condos, hotel keys, offices or a mix of these, according to CBRE news release from March, when the sites hit the market. Robert Given and Troy Ballard led the brokerage’s team that marketed the sites.
At the time, the target price was roughly $650 million, sources told The Real Deal in March.
Under the agreement with Oak Row, the sale price bumps up to $540 million if Oak Row finances up to $115 million of the purchase through a transferable seller financing note from Aimco, according to the SEC filing. The note would have an 18-month term at an interest rate of 12 percent and will be secured by a lien on the purchasing entity’s equity interest in the properties.
Oak Row’s news release shows a redevelopment of the sites is planned but didn’t provide specifics.
The assemblage is an opportunity “to build a transformative project,” Rutter said in the release, adding that it has a “perfect blend of zoning, site geometry, bay frontage and location.” Weitz added in the release that Oak Row plans “to collaborate with world-class talent” on a project.
As of last month, Oak Row was in talks with Aimco about buying the site, having signed a letter of intent and put down a refundable deposit, Commercial Observer first reported, citing anonymous sources.
By now, the firm’s $38 million deposit is non-refundable and due diligence is completed, according to Aimco’s SEC filing. The deal is expected to close in March, though closing can be extended to the fourth quarter, which would require the buyer to increase its non-refundable deposit.
A peak price
The sale would surpass the biggest development site deal in South Florida to date, which was billionaire hedge funder Ken Griffin’s $363 million purchase in 2022 of the 2.5-acre bayfront lot at 1201 Brickell Bay Drive in Miami’s Brickell. The Aimco assemblage is likely selling for more because it has two income-producing buildings, while Griffin bought a vacant lot.
The 300,000-plus-square-foot Brickell Bay Office Tower was 80 percent leased as of March, with most of the terms running through 2027, meaning the property is encumbered until then, CBRE’s Given told TRD at the time. Yacht Club Apartments was 97 percent leased, he said.
Still, Griffin’s purchase broke down to $145.2 million per acre, more than what Oak Row would pay on a per-acre basis. At $520 million, the Aimco assemblage sale would break down to $122.4 million per acre. If the site sells for $540 million, the deal would be for $127.1 million per acre.
The deal would generate between $300 million and $320 million in net proceeds for Aimco, the majority of which would go to shareholders, according to its SEC filing. Aimco is led by CEO Wes Powell.
Oak Row, which has offices in New York and Miami, has steadily escalated its bet on South Florida over the past year.
In March, Oak Row landed a $181 million construction loan for a 41-story tower with 399 luxury apartments and 187,000 square feet of commercial space at 2600 Biscayne Boulevard in Miami’s Edgewater. Also in Edgewater, Oak Row is partnering on a multifamily tower on the northeast corner of Northeast 29th Street and Northeast Fourth Avenue slated for a construction start early next year.
Oak Row also is partnering on the development of Wynwood Plaza at 95 Northwest 29th Street in Miami. The project will consist of a 12-story, 266,000-square-foot office building, a 509-unit luxury apartment building, 32,000 square feet of indoor and outdoor retail space, and a 26,000-square-foot public plaza.
In downtown Miami, Oak Row proposes the 45-story, 526-unit First & Fifth apartment tower with 7,000 square feet of commercial space on a portion of the 0.8-acre site at 49 Northwest Fifth Street and 50 Northwest Sixth Street. The project would preserve the historic Salvation Army Citadel building on the site.
Last month, a Miami projects review board shot down the First & Fifth project mainly taking issue with the difference in design between the five-story podium and the tower. Oak Row has a chance to redraw the project and go back in front of the board, which merely issues recommendations as final approval rests with Miami planning and zoning administrators.