Related Group, 13th Floor Investments Offer $500M for Miami Beach Condo Building
If finalized, the sale would be the priciest residential deal in South Florida this year
Related Group and 13th Floor Investments are offering an eye-watering $500 million for an oceanfront condominium building in Miami Beach, according to a document obtained by Commercial Observer.
The deal requires the approval of the majority of the 570 unit owners in the building. If they accept, the deal would become South Florida’s most expensive residential sale so far this year, at least in gross terms, surpassing Harbor Group International’s purchase of an apartment complex in Downtown Miami earlier this month.
The condo building, Castle Beach Club, sits on a prime Miami Beach strip, offering 576 linear feet along the ocean at 5445 Collins Avenue. The building, constructed in 1966 on a 3.98-acre site, holds 570 apartments, according to property records.
The move comes as owners of aging apartments look to sell them — rather than pay for costly repairs — in light of the deadly condo collapse last year just up the road. Owners of the now-fallen building, Champlain Towers South, had delayed renovations for years, ballooning to an estimated $15 million by June of last year.
Since oceanfront condos command top dollar amid Miami’s sizzling market, the tragedy has made owners more amenable to termination, freeing up valuable land for developers to knock down existing properties and build anew.
“There’s only so much beach and there are really no development opportunities left. You have to find old and replace with new,” Related Group Senior Vice President Nick Pérez told Commercial Observer late last year.
After receiving several unsolicited offers from developers, the Castle Beach Club condo association hired brokers to represent them last December to shore up the highest price. They included Colliers’ Ken Krasnow, Gerard Yetming, Brooke Berkowitz, and Julian Zuniga.
Related and 13th Floor responded to the association’s open call for acquisition proposals, said a spokesperson for the joint venture. The Colliers team selected four companies to interview as finalists earlier this month, they wrote in an email to all unit owners.
The homeowner association selected Related and 13th Floor not only because of the “record-breaking pricing” offered but also because the firms are “one of most experienced, qualified and committed development teams,” the email states. The Related Group, led by CEO and Chairman Jorge Pérez, is widely considered Miami’s largest condo developer.
Related and 13th Floor plan to “redevelop the Castle Beach Club into a world-class property,” the developers said in a statement. Under Miami Beach’s RM-3 zoning rule, the parcel can accommodate up to “150 units per acre” and “3.0 FAR / 200 feet,” according to marketing materials.
The pair’s proposed price averages out to $875,656 per apartment, though individual offers will vary according to unit size and location within the building. Unit owners will receive the personalized proposals on April 4, according to an email from the condo association.
For the sale to close, the majority of unit owners, likey over 90 percent, would have to sell. As of Thursday, there is no set deadline to accept the offers. Negotiations between developers and individual owners are notoriously fraught and lengthy, which can result in lawsuits.
But the condo association is on the developers’ side. “This market change represents a once-in-a-lifetime opportunity for our unit owners to capitalize on their investment,” the association states in the email.
Julia Echikson can be reached at firstname.lastname@example.org.
Update: The article was amended to mention the involvement of Colliers’ Julian Zuniga.