Sunshine Amid the Clouds: South Florida Top 2022 Deals
By Julia Echikson December 28, 2022 5:17 pm
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Last year life began to look normal again after the pandemic hit in 2020. With vaccines out, consumers and investors alike went on buying sprees, turbocharging the real estate market. In South Florida, at least, the party continued into 2022. Even as interest rates ticked up, and CEOs went on CNBC to say they were terrified of an ensuing recession, the region didn’t quite feel the sting like other parts of the country and continued to nab sizable deals.
Still fueling the South Florida market were newcomers. The Sunshine State became the fastest-growing state, recording a 1.9 percent population increase in the past two years, according to a Census report. It’s those newly minted Floridians who helped push home prices and rents to new heights. In turn, investors continued to drop major cash to buy residential properties, just as they had in 2021. Two of the largest deals in 2022 — across all asset classes — were multifamily acquisitions.
One of those new Florida residents was Ken Griffin, founder and CEO of Citadel, who relocated the financial firm from Chicago to Miami. The move anointed Griffin as Florida’s wealthiest resident with an estimated net worth of $31.3 billion, and turned him into a kingmaker for South Florida real estate.
The billionaire was behind Miami’s most expensive land trade — ever — paying $363 million for a 2.5-acre site, where he plans to develop a headquarters for Citadel. He also bought the office building across the street for $287 million, making it the Magic City’s largest office acquisition this year.
On the residential side, Griffin broke Miami’s (and his own) record for the most expensive single-family home. In 2021 he bought a waterfront mansion on Miami Beach’s Star Island for $75 million. This year, he outdid himself by paying over $100 million for a two-mansion compound in Coconut Grove, previously owned by philanthropist Adrienne Arsht.
On the selling side of the equation, the biggest beneficiary of the Miami boom may have been Rockpoint, a Boston-based real estate private equity firm. Back in 2015 and 2017, Rockpoint purchased an office and mall in Brickell. In this heated market, it cashed out — selling both properties for nearly double what it paid. Like those of Citadel, the firm’s deals accounted for two of the biggest deals of the year.
Despite South Florida’s sizzling market, some deals were just too hot. Related Group and 13th Floor Investments offered $500 million to buy out an oceanfront condo building in Miami Beach. But not all unit owners took the offer, and the deal fell apart.
These deals might set some fairly long-lasting records. The outlook for 2023 looks murky, given that interest rates and home insurance costs will most likely continue to jump, cooling the residential market, a trend that began to take hold toward the end of 2022.
Here, in list form, are the top five deals of 2022:
- Citadel Brickell Site purchase for $363M
- Hines buys Gables Station for $430M
- Harbor Group International buys Parkline Miami for over $400M
- Citadel buys 1221 Brickell office building for $287M
- Rockpoint Sells The Shops at Mary Brickell Village for $216M
Julia Echikson can be reached at jechikson@commercialobserver.com.
