Related and 13th Floor Back Out of $500M Condo Termination Deal
By Julia Echikson October 22, 2022 11:42 am
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Related Group and 13th Floor Investments’ blockbuster Miami Beach deal is no more.
Back in March, the joint venture offered $500 million to buy out the Castle Beach Club, an oceanfront condominium building in Miami Beach built in 1966.
The proposed deal would have effectively become Miami’s most expensive land trade, surpassing Citadel’s $363 million purchase of a vacant site in Brickell earlier this year.
After last year’s deadly collapse of the Champlain Towers South — a condominium built in 1981 that was poorly maintained — owners of similar, decades-old properties are opting to sell to developers, instead of paying for costly repairs. Developers will typically tear down the existing building and construct a luxury condo property.
Castle Beach Club, located on a prime Miami Beach strip at 5445 Collins Avenue, sits on a 4-acre site, offering 576 linear feet along the ocean. Last year, the condo association put the property on the market, hiring a team of brokers to shore up the highest price.
Still, these types of takeovers are difficult to achieve because they often require the vast majority of unit owners to agree to sell. Now even Related Group, Miami’s largest condo developer, and 13th Floor Investments, another prominent Miami development firm, failed to close the deal.
“The JV was unable to secure the necessary number of purchase agreements required to complete a transaction. The JV is appreciative of the widespread support it received from Castle Beach Club owners,” the firms said in a statement.
Brokers representing the association — Colliers’ Ken Krasnow, Gerard Yetming, Brooke Berkowitz and Julian Zuniga — did not immediately respond to a request for comment.
The pullout comes as South Florida’s residential market has softened after two years of ever-soaring prices and as both interest rates and inflation continue to rise.
Earlier this month, Related announced that it would downsize its uber-luxury St. Regis condo development in Brickell from two towers to one. The firm said the move was to accommodate buyers who wanted more space and exclusivity and not due to rising construction costs.
Julia Echikson can be reached at jechikson@commercialobserver.com.
