Comras Under Contract to Buy Prime Miami Retail Portfolio From Morgan Stanley

Developer and investor Michael Comras is under contract to buy a collection of buildings on Miami Beach’s famed Lincoln Road shopping promenade, Commercial Observer has learned. 

Morgan Stanley Real Estate Investing and Stephen Bittel’s Terranova are selling the portfolio, according to sources familiar with the pending transaction. The price is pegged at around $140 million. 

While the deal is slated to close in the coming weeks, it could still fall apart, the sources warned. A spokesperson for Morgan Stanley declined to comment. Representatives for Comras and Terranova were not immediately available to comment.

It’s unclear whether Comras has an equity partner for the acquisition. The Miami Beach-based investor has considered going it alone, investing $50 million of his own equity and financing the remainder of the transaction with debt, said one source.

Morgan Stanley has been pushing for a sale for the past few months, seeking to cut its losses after acquiring the assets at the peak of the market over a decade ago. In 2014, it purchased six retail buildings — 600, 719–737, 741, 801–821, 826–838 Lincoln Road and 723 North Lincoln Lane — in a deal valued at $342 million. Terranova sold control of the portfolio to the finance giant but retained a stake.

Current tenants include Cheesecake Factory, It’Sugar, AX Armani Exchange and Salt & Straw. Some buildings remain vacant and could require extensive renovations. 

Earlier this year, the portfolio went under contract to members of the Cohen family, who founded and owned the Duane Reade drugstore chain, for just over $150 million. But the deal fell through in part because the New York-based family failed to find an equity partner and secure debt. 

As it stands now, the deal with Comras would exclude the two-story building at 826 and 838 Lincoln Road, where the Salvation Army owns the ground lease and Terrenova has an office on the top floor. 

Comras already owns a few buildings on the promenade, including 701 Lincoln Road. In 2015, alongside Jonathan Fryd, Comras sold a block on Lincoln Road, leased to Nike, Apple and Gap, to the family office of Zara’s billionaire founder Amancio Ortega for $370 million. At the time, the transaction was the largest retail sale in Miami-Dade County’s history.

Since the sale, though, Lincoln Road, Miami Beach’s marquee shopping destination, has struggled. Rents shot up too high, making it hard for local businesses to operate, while Brickell City Centre and the Miami Design District emerged as formidable competition for shopping. 

But in recent months, the promenade has shown signs of a comeback. Last month, the City of Miami Beach launched a $29 million revitalization project to improve landscaping, add outdoor seating and upgrade sidewalks. 

Alo Yoga, a popular athleisure brand among celebrities and influencers, purchased a retail condo, while the Nice Guy restaurant, another celebrity haunt from L.A., is set to open. 

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