🛒 Blackstone Shops Florida

Happy Friday Highest & Best! Greetings from Florida’s Gulf Coast, where I’ve spent the past week and discovered a water skill I never knew I needed:

Here’s my real estate shuffle for today:

💵 Blackstone is buying things in Florida

💰 Miami office tower bucks national trend— by seeking profitable sale

🌆 Luxury condo round-up: selling and (nearly) sold out

Let’s get to it!

Blackstone 💗 South Florida?

Blackstone, the world’s largest commercial property owner, is on a South Florida real estate buying spree.

In its shopping cart last week: an oceanfront hotel and a 129,000-square-foot warehouse.

🏨 Blackstone bought the W Fort Lauderdale hotel for $153 million as the investment giant looks to beef up its hospitality portfolio, Bisnow reported. The deal includes $98 million for the 346-room property, and another $55 million for the hotel business inside (which is managed by Marriott). The seller was New York developer Related Cos, the firm founded and chaired by Stephen M. Ross, the billionaire owner of the Miami Dolphins.

📦 It’s not all fun and games on the water though. Blackstone, through its subsidiary, Link Logistics, closed this week on a 129,000-square-foot warehouse in Pompano Beach, according to property intel firm Vizzda. Blackstone paid $20.7 million for the storage facility, just twenty minutes northwest of its hotel acquisition. That’s nearly double what the seller paid for the storage site in November 2020.

🧐 South Florida’s population boom has sent retailers scouring for places to store more stuff that locals want to buy. The region’s outsized demand for storage is inspiring investors (like Blackstone) who are wagering that now might be a good time to acquire a Florida warehouse and lease it out to tenants. Warehouse rents in Broward County, where Blackstone’s purchase is located, jumped 23% in the first quarter from a year ago, according to brokerage JLL.

⏪ And let’s not forget Blackstone’s April purchase of Apartment Income REIT, a publicly traded landlord, for $10 billion. Apartment Income REIT, also known as AIR Communities, has a portfolio of 75 high-end rental developments — with 3,970 apartments in South Florida. 

🥤 Perhaps a celebratory smoothie is in order here? Well, Blackstone’s got that covered too.

⏪ Catch up on recent Highest & Best issues:

• No Apocalypse Now, April 26, 2024

• Lux, Loss and Leasing, April 19, 2024

• Ritzy Foreclosure Suit, April 12, 2024

“Man Bites Dog” — Office Building Seeks Profitable Sale

Tracking the value destruction of office buildings across the country has become a gloomy spectator sport — from which I can’t avert my eyes.

💣 In the past month alone: An empty San Francisco office building sold for $6.5 million, a nearly 90% plunge from its 2016 sale price of $62 million; A Wall Street tower reportedly sold at a 57% loss; A Chicago landmark is hitting the sales market for less than the value of the loan that’s on it. And a vacant, 44-story office tower in St. Louis sold for $3.6 million— cheaper than some luxury condos on Miami Beach.

💣 Blackstone too (see above) was exposed to New York’s cratering office values: last month an investor paid $185 million to purchase the remaining debt on a near-empty Manhattan office building that Blackstone once owned. Blackstone bought the Midtown site in 2014 for $605 million, and turned it over to the lender in 2022.

🌴 So here’s the news from Miami this week: real estate investment firm Nuveen is seeking to sell a 33-story office building in Brickell for $500 million— nearly three times what it paid for it over two decades ago.

(What’s more, the asking price is double the $250 million that Nuveen got for another, slightly larger, building it sold nearby in October— and that price made headlines).

💅 The 685,000-square-foot building Nuveen just listed for sale, at 701 Brickell Ave., has a few things going for it: it’s 92% leased, with blue chip tenants that include Bank of America and private equity firm Apollo Global Management, Bloomberg reported. It was built in 1986, and got a $30 million makeover in 2021. And there’s a 1,400-car parking garage.

💰 The Brickell neighborhood has become the go-to locale for out-of-state financial and legal firms seeking a Miami address. Though leasing demand from outside the area is cooling, asking rents for premium offices in the neighborhood surged 12% from a year ago to an average $100.56 per square foot, brokerage CBRE said.

An online site marketing space in the building lists the asking rent at $140 per square foot.

⏪ Catch up on recent Highest & Best issues:

• No Apocalypse Now, April 26, 2024

• Lux, Loss and Leasing, April 19, 2024

• Ritzy Foreclosure Suit, April 12, 2024

Luxury Condo Round-Up: Selling and (Almost) Sold Out

Seems that every week brings news of uber-pricey South Florida condos being planned, constructed or marketed. This week: one is complete! Here’s the round-up:

💰 Aston Martin: A 66-story residential tower in Miami designed by British luxury carmaker Aston Martin is complete, and buyers who committed to purchases years ago may finally move in. All but one of the tower’s 391 apartments have been sold, builder G&G Business Developments said in a statement timed to coincide with the F1 Miami Grand Prix this weekend. The largest unit, a 27,000-square-foot triplex penthouse, is still on the market. It’s listed for $59 million and comes with the last remaining Aston Martin Vulcan, of which only 24 exist, CNN reported.

💰 Boca Chic: A luxury condo project in Boca Raton sold $65 million worth of apartments in the first three months of 2024, developer El-Ad National Properties said. That sales tally at ALINA Residences includes a 4-bedroom penthouse that was listed at more than $10 million. Overall, close to 80% of the 182 units being offered for sale in the development’s second phase have found buyers. Construction will be complete by the end of this year.

💰Four Seasons: Prices start at $7 million for a condo at the Four Seasons Private Residences in Miami’s Coconut Grove, which began sales last month for its 70 units. It’s the only Four Seasons condo in Florida that doesn’t come with a Four Seasons hotel attached, developers CMC Group and Fort Partners said in a statement. The 20-story building still comes with butler, housekeeping and valet services (Phew!) and, of course, pretty neat views of Biscayne Bay.

That’s it for today!

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