💎 Ritzy Foreclosure Suit

A loan default; Blackstone buys Miami; Apple finds an office

Happy Friday Highest & Best! Here’s the rundown for the South Florida real estate week:

🚨 A foreclosure lawsuit near America’s priciest neighborhood

🌴 Blackstone adds Miami rentals to its massive global portfolio

 Apple commits to Florida office space

🔀 An assisted living plan goes lux condo instead

Condo Site Faces Foreclosure Near Ritziest US neighborhood

Proposed condo site facing foreclosure (Photo: Coral Gables Planning Division)

The site of a proposed condo tower near America’s priciest neighborhood is facing foreclosure.

The owner of the development parcel in Coral Gables (just outside of Miami) failed to repay a $10 million loan that came due in November, according to property intel firm Vizzda.

So its lender, LDHC Holdings, filed a lawsuit yesterday seeking to foreclose on the 1.56 acre site where 80 luxury condos were planned.

That dirt — at 1505 Ponce de Leon Blvd. —could be pretty valuable to whomever ends up owning it.

Because Coral Gables is now home to America’s most expensive neighborhood, Gables Estates, according to Bloomberg News. It dethroned Beverly Hills from that top spot.

A typical home in Gables Estates, exceeds $21.1 million, Bloomberg reported. A standard home in Beverly Hills, California costs just under $12 million.

But back to that condo site foreclosure: The guarantor of the defaulted loan is Miami developer Rishi Kapoor, who’s already busy with larger legal troubles:

He’s being sued by the SEC for an alleged $93 million fraud scheme; is facing lawsuits from South American investors who want $10 million in deposits back; had a court-appointed receiver take control of his development firms; and — perhaps most painfully? — saw his 68-foot yacht seized by U.S. Marshals in November.

Fred A. Schwartz and John Shahady, attorneys for Kapoor in his SEC case, did not respond to an e-mail this morning seeking comment.

Catch up on recent Highest & Best issues:

Hey Big Renter!

Flamingo Point apartments in Miami Beach will be acquired by Blackstone

Some pretty big truths about Miami’s rental market are embedded in this week’s news. In short: it’s costly to be a tenant — and opportune to be a landlord.

💸 The Miami region’s youngest tenants will have paid nearly $184,000 in rent by the time they’ve turned 30, according to a report by apartment data firm RentCafe.

🚫 And it’s not cheaper for them to buy, based on the area’s still-rising home prices and skyrocketing insurance burdens. Homeownership costs for members of Generation Z would set them back an additional $38,000 by age 30, RentCafe estimated.

📈 Miami’s metro area is going through a wave of apartment construction, but that won’t stop rents from rising dramatically, according to RentCafe’s forecast. Building 7,700 new apartments annually— more than the current yearly add of 5,500— means rents would climb by 74% over the next decade, instead of 90%.

🏦 Blackstone, the world’s largest commercial property owner, announced a big deal this week: it’s buying 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. according to their annual report. 

Blackstone is betting that homeownership may still be out of reach (or out of mind) for even the most well-heeled young professionals in pricey coastal markets. But those professionals make a very alluring tenant base, with six-figure incomes and excellent credit.

New tenants at AIR Communities’ apartments had an average household income of $237,000 in 2023, the company said in its annual report.

Blackstone’s soon-to-be apartment portfolio in South Florida includes the Flamingo South Beach where a 602-square-foot studio apartment starts at $2,116 per month, according to its website.

Bay Parc Apartments in Miami’s Edgewater neighborhood will be owned by Blackstone

See You in the Office!

So it looks like Apple is getting a South Florida office.

The California-based iPhone-maker signed a lease for about 42,000 square feet on the 11th and 12th floor at The Plaza Coral Gables (see above: wealthiest U.S. neighborhood).

The lease deal with Apple was the second-largest in the Miami region for the first quarter, Bisnow reported.

Coral Gables has drawn interest from both new-to-the-area tenants and New York office investors seeking an alternative to the ever-costly rents in Miami’s high-flying financial district, known as Brickell.

Asking rent for Class-A office space in Coral Gables averaged $55.64 per square foot in the first quarter, compared with $100.56 in Miami’s Brickell neighborhood, brokerage CBRE reported.

The Plaza Coral Gables (Instagram @theplazacoralgables)

This Boca Site Went From Seniors to Spenders

Rendering of The Concierge in Boca Raton (Sun-Sentinel)

I can’t think of a better storyline to illustrate the transformation of South Florida’s housing market since the pandemic:

A vacant lot in downtown Boca Raton that was slated to become an 88-unit assisted living facility will now become…. a luxury condo building instead.

The planned condo, called — what else? — The Concierge will feature 42 apartments at 22 SE Sixth St., near a Mandarin Oriental Hotel and Residences, the Sun-Sentinel reported this week.

Building a senior home is no longer financially feasible at the site, given a surge in construction costs since 2020 when the area was cleared for development, the attorney representing the project told the newspaper.

The condo project, still getting approvals from Boca, would rise nine stories and include 60 valet-only parking spots.

That’s it for today!

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