🚨 Miami Tower Turmoil

So it’s happened. A major Miami office building defaulted on a mortgage and its lender is seeking to foreclose.

🚨 It wasn’t the only foreclosure lawsuit filed in Miami this month.

🏗️ PLUS, a new luxury condo perk: an office suite with every apartment sale.

👋🏻 And a clarification: In last week’s issue we incorrectly said that a development at 2600 Biscayne Blvd. would have 187,000 square feet of office space. The 187,000 square feet accounts for office and retail space combined.

OK, now let’s get to it!

This New Miami Office Building is Facing Foreclosure

The Gateway at Wynwood epitomizes Miami’s high-flying office market: It was built in 2021, by a New York developer, in a former industrial-turned-art scene neighborhood, with a roster of tech and startup tenants from out of town.

This week, something unusual happened: Its mortgage lender filed a lawsuit seeking to foreclose on the building.

The lender said the owners of the office building, Manhattan’s R&B Realty Group, stopped making mortgage payments on a $113 million loan in December, according to property intel firm Vizzda.

It’s the largest Miami foreclosure lawsuit, based on loan amount, that Vizzda has tracked since it began gathering such data in 2022.

The office building’s lender is seeking payment in full on the $101.7 million that remains on the loan —or foreclosure on the property, according to court filings this week in Miami.

R&B Realty Group, the owner of Gateway at Wynwood, did not respond to an email seeking comment.

The Gateway at Wynwood— with the acronym ‘TGAW’ emblazoned on its front awning—is a 14-story building, with a rooftop terrace and 195,000 square feet of office space, for which brokers are still attempting to find tenants. Available space is being marketed at $70 per square foot, which is 14% less than the average Class A office asking rents for the area at the end of 2023, according to Colliers.

Miami’s office market has thus far been resistant to the empty building turmoil that’s engulfed commercial property in other major metros. Relocations of well-heeled finance, legal and tech firms from out of state have propped up the city’s office market and driven rents to new records— in contrast to pretty much everywhere else in the U.S.

But that move-in-from-elsewhere market is slowing, which means fewer takers for office space as compared to two years ago.

⏪ Catch up on recent Highest & Best issues:

• Condo Boom, Office Gloom?, March 15, 2024

• High on Supply, March 8, 2024

• Condo Cornucopia!, March 1, 2024

Second Foreclosure Filing: An Unfinished Office Building

A medical office building in Aventura is facing foreclosure— before it’s fully built.

The under-construction seven-story property, Aventura Eco, was hit with a foreclosure lawsuit last week, after its owner defaulted on a $15 million loan, according to Vizzda.

The owner of. the planned property, at 21291 NE 28th Ave., has not made mortgage payments since July, according to the lawsuit filed in Miami this week. The loan was issued just last year, Vizzda said. Construction of the building, near Aventura Hospital, was expected to be complete in December 2024.

The lender is seeking court permission to take the property, which is just outside of Miami.

 Would You Like an Office With That?

Buyers in this Miami condo building get a perk with each purchase: a private office suite— and a secretary.

Developer PMG is launching sales for its newest planned condo tower, One Twenty Brickell Residences, where buying a home gets you a deeded work space outside of your apartment.

The planned project, at 120 SW 8th St., will be built in Miami’s financial district, Brickell, where Class A office rents are the highest in the region. PMG is banking on the idea that buyers in that neighborhood might like working from home— but not working AT home.

“We’re testing out a theory,” Ryan Shear, managing partner at PMG, said in an interview.

The 240 furnished condos for purchase will be on the uppermost floors of the 34-story building , and range in price from $600,000 to $1.5 million. The private offices will occupy the second through 11th stories and be accessible from their own elevator in the lobby, Shear said.

“Even if you live in the building, taking an elevator and going to your office is culturally different than working in your home office,” he said.

That’s true. You’d have to wear pants, for starters. (Or would you?)

Anyway, the office suites — ranging in size from 100 to 387 square feet — will be glass-paneled, come furnished with a desk and chairs, and include “complimentary concierge secretary service,” according to the developer.

The project is expected to break ground at the end of this year and be complete by early 2028.

(For a rundown of new condos and amenities coming to South Florida, including PMG’s new Fort Lauderdale tower, see last week’s issue here).

That’s it for today!

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