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Spanish billionaire buys stretch of Miami Beach’s Lincoln Road for $370 million

Spanish Billionaire Buys Stretch Of Miami Beach’s Lincoln Road

The deal by Zara mogul Amancio Ortega includes a new Apple store, the Gap, Intermix, Athleta and a forthcoming Nike location.

An entire block of Lincoln Road has sold for $370 million, to Spanish billionaire Amancio Ortega, who owns Zara, the global fashion giant. The Apple Store, at 1021 Lincoln Rd. in Miami Beach, is near the center of the block, which extends east from Lennox to Michigan avenues. It is shown on Friday, Sept. 4, 2015. Marsha Halper Miami Herald Staff

A company linked to Spanish billionaire and fashion mogul Amancio Ortega paid $370 million for an entire block of Lincoln Road this week, the second largest real-estate deal in Miami-Dade County history.

The prime stretch of South Beach retail property includes the new Apple store, the Gap, Intermix, Athleta and a forthcoming Nike location.

Justin Greider Spanish billionaire and fashion mogul Amancio Ortega paid $370 million for an entire block of Lincoln Road. Michael Comras Justin Greider Spanish billionaire and fashion mogul Amancio Ortega paid $370 million for an entire block of Lincoln Road.
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Spanish billionaire and fashion mogul Amancio Ortega paid $370 million for an entire block of Lincoln Road. AP
The sellers were South Florida real estate investors and developers Jonathan Fryd and Michael Comras, who assembled the properties between 1001 Lincoln Rd. and 1035 Lincoln Rd. for about $12 million in 1999 and 2000.

“We’ve invested in these properties for 16 years, and I believe Lincoln Road has come a long way and is in excellent shape,” Fryd said. “We’ve created a tremendous amount of value and now is a perfect time to sell for us.”

The deal includes about 48,000 square feet of land and — once the new Nike is finished — about 75,000 square feet of buildings, Fryd said. That’s a price tag of about $7,700 per square foot of land.

Lincoln Road’s heady rents, now above $300 per square foot, justify the massive deal, Comras said.

“It’s become one of the top retail streets in the world by virtue of the fact that it’s on the beach and attracts people from all over the world,” Comras said.

Commercial real-estate firm HFF brokered the sale.

Lincoln Road has seen a flurry of activity as out-of-town buyers hoover up properties. Earlier this summer, New York investor David Edelstein paid about $6,500 per square foot for two buildings at 918 and 920 Lincoln Road.

Ortega, who owns global fashion giant Zara, has a net worth of $67.7 billion, according to Forbes. He recently opened a Zara location on Lincoln Road and partnered with Ugo Colombo in 2009 to develop the Epic Residences & Hotel downtown.

The company that paid $370 million for the Lincoln Road block is listed on county property records as Playa Retail Investments. Playa shares an office at the Epic with Ponte Gadea Miami, the local branch of Ortega’s real-estate investment firm.

Ortega hasn’t confirmed the deal or discussed his plans for the site but it seems unlikely he would change the profitable mix of national retailers already in place.

The sale sets a record for Lincoln Road, surpassing a $342 million deal for six properties that closed last year. The biggest commercial transaction in Miami-Dade history remains the $375 million sale of 50 percent of the Fontainebleau Miami Beach hotel to a company owned by the government of Dubai in 2008.

The size of the deal reflects a hot retail market in Miami, said Justin Greider, vice president for Florida retail at the commercial real-estate firm JLL, which was not involved in the sale.

“Retailers are driving hard to get into Miami,” Greider said, in part because South Florida has a large population of millennials, a steady stream of foreign investment and visitors from all over the world.

Given the strength of the local market, Greider added that JLL isn’t worried about “bubble pricing.”

“It’s very competitive but we don’t see these prices as being overpaying right now,” he said.

Steven Gombinski, president of the Lincoln Road Property Association, said Ortega’s purchase was also a sign that investors are excited about plans by the city of Miami Beach to give the street a major makeover with wider sidewalks, public art, new fountains and other renovations.

The redesign is being led by architect James Corner, best known for his work on the High Line in New York City. Early drafts of the plan drew criticism from some preservationists concerned that the neighborhood is being developed more for tourists than locals.

But Gombinski said the work will create a “more friendly environment” for locals.

“It’s going to open up Lincoln Road,” he said, “and make it much more accessible and attractive for people who live here.”

Read more here: http://www.miamiherald.com/news/business/real-estate-news/article34027158.html

Source: Spanish billionaire buys stretch of Miami Beach’s Lincoln Road for $370 million

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Real Estate

Lincoln Road Retail buildings sell for record $342 million

Lincoln Road

Retail buildings on Miami Beach’s Lincoln Road sell for record $342 million

The biggest property sale on Miami Beach’s Lincoln Road — and one of the highest-priced deals in South Florida history — is in the works, as the South Florida real estate market continues to soar.

Miami Beach-based Terranova Corp., and investment partner Acadia Realty Trust, the largest property owners on Lincoln Road, have agreed to sell their six-building portfolio on Lincoln Road for $342 million. The information was disclosed in Acadia’s recent earnings release and conference call with Wall Street analysts. The buyer has not yet been named.

The properties, sprinkled along the pedestrian promenade and on nearby Lincoln Lane, include the sites of such popular Lincoln Road hang-outs as Sushi Samba and Dylan’s Candy Store. They were originally purchased in two parcels in February 2011 and December 2012, for a total of $191 million. Therefore, the transaction translates to a profit of $151 million — or 79 percent, in a combined total of a little over three years.

The deal, to an-as-yet undisclosed institutional investor, has not yet been completed.

Terranova Corp. Chairman Stephen Bittel declined to discuss the pending sale, saying “our policy is never to discuss unclosed transactions.”

Acadia, a publicly traded, White Plains, N.Y.-based, real estate investment trust specializes in the acquisition, re-development and operation of retail and urban mixed-use properties. In its recent analysts’ conference call, Acadia Chief Executive Kenneth F. Bernstein called the buyer a “very high quality institutional investor from whom we received a compelling and preemptive proposal.”

At $342 million, the Lincoln Road sale ranks among one of the highest priced deals in South Florida. The only commercial property to bring a higher price was the April 2008 purchase of a 50 percent share in the Fontainebleau Miami Beach, according to research dating to 2001 by Jones Lang LaSalle, a commercial real estate firm. A unit of the Dubai government bought the stake for $375 million from Turnberry Associates.

Steve Medwin, managing director of Jones Lang LaSalle, called the Lincoln Road deal a “needle mover.”

“It is a megadeal,” he said. “We don’t see very many of those in the Miami market.”

When the Lincoln Road sale closes, Terranova and Acadia will set a new record in retail real estate sales in South Florida, underscoring how hot a commodity the shopping and dining haven has become.

For the past few years, Lincoln Road has become a magnet for global brands, amid an influx of new capital from New York institutional investors. Prices have hit new heights as the pedestrian mall attracts more international and national retail tenants. In June, the Gap opened a new two-story store, with Athleta next door and Intermix alongside it. Lululemon, Zara, Apple, and Zadig & Voltaire are under construction on the street, which boasts other new tenants — including Urban Outfitters, American Eagle Apparel, H&M and Forever 21.

In the realm of commercial real estate, experts say Lincoln Road has taken its place among the most regaled high streets of the world.

Prospective national tenants like Nike, Abercrombie & Fitch and Old Navy have been circling the promenade, report insiders. The British brand Topshop might not be far behind as retailers and restaurants pour out to side streets, expanding the corridor that runs from Alton Road to the ocean, into a broader district.

Acadia and Terranova’s properties are in the heart of the action, at 600, 719-737, 740, 801-821, 826-838 Lincoln Rd., and 723 N Lincoln Lane. Tenants include Starbucks, Fossil, A/X Armani Jeans and the Khong River House restaurant, owned by Miami-based 50 Eggs.

During Acadia’s analysts’ conference call, Bernstein said that Lincoln Road rents have shown “very significant movement,” doubling from $150 a square foot to $300 a square foot since Terranova and Acadia bought the properties.

Bernstein credited Terranova for its contribution in raising the value of the properties through its leasing efforts. He said Terranova will remain active in the properties after the sale.

“This was an opportunity to make some pretty significant profit, and it is in our financial interests,” Acadia Chief Financial Officer Jon Grisham told analysts, adding that talks heated up in May. “So it makes sense to do this.”

Read More at Miami Herald