Terra Offers $500M for Oceanfront Miami Beach Condo Building

The deal — if finalized — would effectively become the most expensive land purchase in the Miami area. Terra, led by David Martin, will most likely tear down the 18-story building and construct an ultra-luxury condo complex. The site can accommodate a structure up to 200 feet tall. 

The proposed buyout is part of a growing trend following the deadly collapse of Champlain Towers South, a condominium built in 1981 that was poorly maintained. Some condo associations of similar, decades-old buildings are choosing to sell to developers to avoid footing the bill for costly repairs, now mandated by Florida law.

In late 2021, the homeowners association of Castle Beach Club put the property, which dates back to the 1960s, on the market, hiring a team led by Colliers’ Ken Krasnow and Gerard Yetming to shore up the highest price. (The brokers declined to comment.)

Jorge Perez’s Related Group and 13th Floor Investments first swooped in a year ago, together bidding $500 million. But the joint venture backed out of the deal in October after their financing fell apart as interest-rate hikes rattled capital markets and a handful of unit owners held out. 

Last Friday, Terra officially entered the picture, matching Related’s original offer. 

A letter penned by Yetming was sent to unit owners announcing Terra’s $500 million bid, which averages out to $877,192 per unit. The property’s 570 unit owners are set to receive individual offers in the next two weeks, after which they will have about two months to decide whether to accept the offer. To complete the sale, Terra will likely need 95 percent buy-in from condo owners. 

“We can confirm that Terra has the capability to complete this purchase, and has the funding in place to do so,” according to a letter. The source of Terra’s financing remains unclear, though the developer is said to have a partner on the deal with whom it previously worked with. 

Back in 2022, Terra and seven other firms had bid on Castle Beach Club, according to The Real Deal, which first reported the most recent proposal.  

The offer comes nearly a year after Terra resolved a suit over the Champlain condo’s collapse. The firm had led the development of a luxury condo next door to Champlain, called Eight Seven Park. Surviving residents and victims’ families alleged the construction of Eight Seven Park contributed to Champlain’s demise. Terra settled the case as part of a billion-dollar settlement without admitting fault. 

The developer remains one of the most active firms in Miami Beach. By the MacArthur Causeway, Terra is building a 48-story luxury condominium with Crescent Heights after securing a $345 construction loan from Blackstone. It’s gearing to start construction of the hotel next door to the Miami Beach Convention Center in partnership with Turnberry Associates. 

A representative for Terra declined to comment. 

Julia Echikson can be reached at jechikson@commercialobserver.com.