The plan is to create a new “resort-style” mini-neighborhood — called Williamsburg Wharf — with 850 residential units, retail space and a riverfront park that will be open to the public. 

“Williamsburg Wharf represents an extraordinary vision for the last developable site along Williamsburg’s East River shoreline,” Naftali said in a statement.

The 3.75-acre site near the boundary between Williamsburg and the Brooklyn Navy Yard formerly housed an industrial building that remained untouched, even as metal and glass towers rose around it in response to the neighborhood rezoning championed by former Mayor Michael Bloomberg. 

But that changed after Michael Naftali’s firm bought the two parcels at 464-484 Kent Avenue in 2020 for $102.4 million from Abraham Rosenberg — who for decades ran a lumberyard on the site with his brother Isaac Rosenberg — and demolished the old building.

Construction is already underway on the first phase of the project, which calls for three buildings with 561 units. Naftali announced Wednesday details for the two-tower second phase. Naftali and Access secured $385 million in construction financing for the project, including a $310 million loan from Bank OZK (OZK) and $75 million in mezzanine financing from Barings.

The development will ultimately comprise about 1 million square feet and will leave the Kent Avenue pedestrian and cyclist route out front unscathed, according to Naftali. 

And it brings Naftali a little out of its comfort zone. The firm has completed dozens of residential developments in Manhattan, including The Benson at 1045 Madison Avenue and The Bellemont at 1165 Madison Avenue. But now Brooklyn beckons.

Ryan Serhant’s Serhant has signed on to market the units, which will include a mix of rental and condominium apartments. 

The first three towers are on track to be completed by the end of next year. It’s unclear when the other two buildings will finish construction.

Abigail Nehring can be reached at anehring@commercialobserver.com.

JBG Smith plans to redevelop or repurpose 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive, all of which were built in the 1960s. The move will reduce the size of the REIT’s office footprint by 12 percent, per Kelly’s letter. 

The Bell Street property went offline in the first quarter after former tenant Amazon moved into its new Metropolitan Park headquarters in Arlington, while 2100 Crystal will go offline in the second quarter following the expiration of Amazon’s lease there, according to Washington Business Journal. 2200 Crystal will move out of service once its tenants’ leases expire at an unspecified date. 

The REIT filed plans in January to redevelop the Bell Street building into 308,000 square feet of new and improved office space with 4,000 square feet of retail space, per the Business Journal. Construction on all three sites is estimated to begin in 2026. 

“Moving 1800 South Bell Street, 2100 Crystal Drive and 2200 Crystal Drive out of service … should allow us to curate a healthier, long-term office market in National Landing over the next few years,” Kelly said in his letter. “We expect to repurpose these older, obsolete and under-leased buildings for redevelopment, conversion to multifamily, hospitality or another specialty use, ultimately reducing cannibalistic competitive supply in National Landing.”

National Landing encompasses parts of Pentagon City, Crystal City and Alexandria’s Potomac Yard neighborhood. JBG Smith has almost single-handedly redeveloped the area over the past several years, particularly since Amazon announced in 2018 that it would settle parts of its second headquarters there. 

The district is or will soon be home to multifamily complexes, residential towers, restaurants and of course Amazon’s massive HQ2 campus, which officially opened last summer. Yet it will not house the recently scrapped campus for Monumental Sports and Entertainment, which opted earlier this year to keep its headquarters, and the Washington Wizards and Capitals sports franchises, in Downtown D.C. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

“This is not one person running and grabbing a candy bar. We know that these are transnational criminal organizations that are using the Internet [as a] marketplace,” Hochul said during a press conference. “We’re also making it illegal to foster the sale of stolen goods. … We’re going to make sure that prosecutors can charge third-party sellers who are profiting off the misery of our stores.”

The budget also includes a $5 million tax incentive to help businesses beef up security personnel, offsetting the cost of hiring more people for loss prevention, according to Hochul.

While retailers have been complaining about massive revenue losses caused by shoplifters — with target partly blaming the closing of its East Harlem location on theft — the extent it’s been caused by organized groups of thieves has been difficult to quantify.

The National Retail Federation recently backpedaled from its widely cited report showing the extent organized crime was behind the thefts, which has captured the attention of lawmakers on the national level, as well as retailers who have been bracing themselves against raiding parties, Commercial Observer reported at the end of 2023.

Over the last five years ending in May 2023, for example, the New York City Police Department recorded a 77 percent increase in retail theft in the five boroughs, with the numbers growing by 41 percent from 2021 to 2022, Mayor Eric Adams’s administration said last year.

“[About] $500 billion of stolen or counterfeit products account for up to 10 percent of the total e-commerce market,” state Sen. Brad Hoylman-Sigal said during the announcement. “This hurts our local retail businesses from the big box stores to the luxury retailers to the small businesses, and it also hurts the legitimate online sellers.”

Mark Hallum can be reached at mhallum@commercialobserver.com.

“Joining Legence’s family of more than 5,000 team members will expand our opportunities to exceed client satisfaction and deliver impactful, high-performance outcomes across the real estate sector,” Walraven said in a statement.

The deal with Huntington Beach, Calif.-based CSS extends Legence’s expansion, which includes other recent acquisitions of P2S, A.O. Reed & Co. and OCI Associates. It should also strengthen Legence’s sustainability practice, which aims  to make properties more energy efficient and save clients money. CSS will also merge with Legence’s RE Tech Advisors, a consultant firm in Tysons Corner, Va.

“As a woman-owned organization with a deep commitment to corporate responsibility and positive change, CSS aligns perfectly with Legence’s mission to accelerate sustainability in the built environment and enhance in-house expertise,” added Deb Cloutier, chief sustainability officer of Legence and president of RE Tech.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.

Brookfield’s loan on the 52-story tower, at 601 South Figueroa Street, was set to expire in July 2023. The firm listed the property for sale in 2022 but has yet to procure a buyer. 

The New York-based firm obtained the tower in 2006 with its acquisition of Trizec Properties. Accounting firm PwC, also known as PricewaterhouseCoopers, is the main tenant at the tower with 160,000 square feet leased through 2028, per TRD. 

A representative for Brookfield did not immediately respond to a request for comment. 

Brookfield has struck out on other expensive pieces of real estate in Downtown L.A. in recent months. The sale of 777 Tower to Consus Asset Management fell through, even though the purchase price of $145 million was about half of the outstanding debt tied to property — following its default in early 2023. 

Brookfield also dumped the 52-story Gas Company Tower last year after it went into receivership following the firm’s default on that property. The tower could head to a foreclosure sale later this summer as its value has plummeted by nearly 60 percent and most of its major tenants, such as WeWork, have bugged out. 

The firm’s 41-story EY Plaza also fell into receivership after Brookfield defaulted on hundreds of millions of dollars tied to the tower. That property has also watched its value tumble off a cliff by more than 50 percent in recent months. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.

The deal closed at a massive discount from the hotel’s asking price six years ago, though it’s unclear whether the recorded purchase price included furniture, fixtures and equipment. Representatives for Related and Blackstone did not immediately respond to requests for comment.

Related bought the 567,524-square-foot hotel for $90 million in 2014, five years after its completion. In 2015, the developer embarked on a $55 million renovation, and secured a $140 million refinancing loan from KKR Real Estate Finance in 2018. That same year, it put the establishment on the market for $275 million, according to The Real Deal. 

Since the pandemic, the South Florida hotel market has remained active. Last year, Trinity Investments and Credit Suisse Asset Management bought the Diplomat Beach Resort, a 1,000-room oceanfront resort in Hollywood, for $835 million — making it South Florida largest hotel sale ever.

On a smaller scale, Blackstone sold three Marriott-branded hotels in Broward County for a combined $64 million, also in 2023. 

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

“As a long-term owner and investor, industrial is an asset class we feel particularly optimistic about due to the clear demographic tailwinds and continued expansion of e-commerce,” Ben Miller, co-founder and CEO of Fundrise, said in a statement. “This financing lets us continue to lean into new acquisitions and grow our footprint while much of the market remains on the sidelines.”   

Michael Comparato, president of FBRT, credited Fundrise in a statement with having a successful track record of “leasing up these well-located assets.”

Fundrise purchased the portfolio, which is 95 percent leased to three tenants, with four separate acquisitions between February 2022 and June 2023. The properties are Cubes at Glendale in Litchfield, Ariz.; 8123 South Hardy in Tempe, Ariz.; I-215 Interchange Logistics Center in Las Vegas; and 4653 Nall Road in Farmers Branch, Texas.

Cushman & Wakefield (CWK) arranged the transaction with a team led by Rob Rubano, Brian Share, Max Schafer and Ernesto Sanchez, who represented the borrower. Will Strong of C&W’s national industrial advisory group also advised on the deal.

“This is a prominent portfolio of top-tier industrial products strategically located in some of the country’s most competitive and strongest performing industrial submarkets,” Share said in a statement. “The portfolio’s investment profile is supported by strong recent leasing and significant investment by the tenants, with some upside opportunity remaining via bringing the portfolio up to 100 percent occupancy.”

Andrew Coen can be reached at acoen@commercialobserver.com. 

“Joining Ripco allows us to leverage their extensive back-end services and robust client base to elevate the retail environments we are passionate about creating,” Arrivo said in a statement.

The acquisition ups Ripco’s Miami headcount by four, bringing the total to 30 employees, starting Wednesday. Arrivo and Quintana will serve as executive vice presidents. 

The Acre team’s “expertise and market credibility are unsurpassed. This acquisition marks a significant milestone in our strategy to compete for and secure the most prestigious leasing assignments in the market,” Ripco President Mark Kaplan said in a statement.

New York-based Ripco, whose clients have included Shake Shack, Chipotle, Aldi and Target, launched in Florida three years ago, opening offices in Miami and Tampa.

The deal also marks Ripco’s second in the past 12 months. In June, Ripco purchased restaurant brokerage Branded Concept Development, again for an undisclosed amount. 

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

“The Texas market is appealing for solar because it’s a major energy economy in the U.S. and one of the states where solar is easiest [from a permitting perspective] and has lower cost land,” Scott Canada, executive vice president of McCarthy Building Companies’ renewable energy team, told Commercial Observer via email.

Texas, despite its deep red Republican leanings, has indeed proven itself a leader in both solar and wind, though the state’s focus on renewable energy isn’t immune to politicization and ongoing pushback from the right. Ironically, many of the country’s top-producing solar states tend to be red: After California and Texas, Florida and North Carolina rank as the third and fourth top-producing solar states, according to the Solar Energy Industries Association (SEIA).

In 1999, Texas was an early adopter to develop the Renewable Portfolio Standard, which requires a set amount of power to come from renewable resources. The move jump-started the solar market in Texas and prompted people to pay attention.

Now, “the amount of large corporate buyers who want to enter into a long-term power purchase agreement to buy clean energy [has] gone through the roof,” said Timothy Heinle, vice president of business development at Texas solar utility company OCI Solar Power. “Texas, and specifically ERCOT [the Electric Reliability Council of Texas], is ‘ground zero’ for what are called corporate power purchase agreements.”

As a liquid energy market, ERCOT covers 75 percent of Texas’ geography and 90 percent of the state’s electrical demand. “That has helped develop the market for independent power in general, be it no matter what the resources, whether it’s gas, solar, wind,” said James Scott, OCI’s vice president of project development.

Texas’ history with energy, coupled with its terrain, sunshine and landowner relationships, empowers the state for solar power. The process of siting land for development, however, is far more complex than typical buying and building. Developers consider a location’s topographical and infrastructural characteristics, not to mention policy, zoning and an ability to lease or buy the land. Development therefore doesn’t happen overnight, though the solar market — in Texas and beyond — can increasingly withstand even the cloudiest of days.

Development categories
Solar development falls into three categories that cater to three markets, explains John Bernhardt, vice president of policy and market strategy at national solar provider Pivot Energy. Among the most widely recognized, residential or rooftop solar generally connects to a customer meter and provides power for an individual.

Then, there are the major, 500-megawatt projects connected to significant transmission infrastructure that require hundreds, if not thousands, of acres. These tend to generate energy that’s injected into a bulk system.

As an engineer, procurement and construction contractor, McCarthy Building works on large-scale or utility-scale solar projects that generally produce hundreds of megawatts of power. “This means we design the solar plant to fit the land parcel and maximize production; purchase much of the equipment; and construct the plant,” said Canada.

McCarthy typically builds projects for developers and sells power through a power purchase agreement (PPA). That power then goes to the grid, unless it goes to a battery energy storage systems facility (BESS). McCarthy has installed or is currently installing projects that amount to roughly 3-gigawatts solar and 500-megawatts BESS in Texas. 

Somewhere in the middle fall companies such as OCI and Pivot. Primarily focused on ground-mount, utility-scale solar projects, OCI sells power at wholesale to companies like electricity providers that, in turn, sell that energy at retail to end users. A typical OCI project has a capacity of 100- to 200-megawatts of alternating current (AC), said Heinle, while OCI’s solar farms often require between 500 to 1,000 acres of land.

Pivot — which operates at a national level, but doesn’t currently have any projects in Texas — does a lot with community solar. Individual customers like renters, small businesses or nonprofits can subscribe to a portion of the energy output.

Siting specificities
Given the varied nature of solar developers, the process of siting requires its fair share of specificity. Solar developers have to do their homework to assess topography, zoning and interconnection ability before they even think about construction.

Luckily, Texas takes off some of that pressure. Scott called Texas’ abundant land resources “a geographic accident” as the state has plenty of rural land, over which both the wind and sun come on strong. These characteristics ring true across the state, though solar found its footing in West Texas. The farther west you go, the more desert you encounter, explained Scott. That means more hours of higher, productive solar.

Yet, as solar and wind energy resources fill up available sites in West Texas, solar development is shifting East. “Those [West Texas] transmission lines have now become congested just like a highway,” said Heinle. “And, so, now you’re seeing solar projects happening closer to metropolitan centers.”

Transmission ability remains an utmost priority for solar farm development. A solar project needs to be in proximity to the electric transmission system, meaning towers, poles and high-voltage lines, said Heinle. From the get-go, OCI’s engineers identify transmission lines on the electric grid that can handle the necessary power, take additional generation, and transmit it to where it needs to go.

Finding the right connection also has financial benefits. “If you can site close to the existing grid infrastructure, whether it’s on the transmission side or the distribution side, that tends to make for a more cost-effective interconnection process,” said Bernhardt, who called reasonable interconnection costs — which tend to be measured per kilowatt — a driving factor for good siting. According to data from the Midcontinent Independent System Operator (MISO), solar interconnection costs are rising but vary by location.

On the topographical side, flat land is more conducive to solar farms than steeper terrain, as is softer soil.  “We look for large tracts of land that are relatively flat, free of environmental red flags or environmental concerns,” said Scott, who listed notable limitations like wetlands, hydrology issues, floodplains and the presence of endangered species.

These factors mean certain states — like Texas — may be better equipped to handle solar projects. Take Hawaii, for example, where volcanic bedrock presents challenges for drilling into the land, said Bernhardt. Meanwhile, Colorado (where Bernhardt is based) has softer soil that lends itself to construction.

A strong labor force is also pivotal for large solar site construction. “For example, a 1,500-acre site, which is relatively average, will employ approximately 200 to 250 workers over 12 to 15 months,” Canada said.

Leasing with landowners
Only once a site has been fully analyzed does OCI reach out to landowners, who are passive in OCI’s solar projects, said Heinle. While the company often leases the land, OCI will occasionally buy a property for a solar farm. Some energy companies like Pivot will also lease roofs of commercial buildings to install solar projects.

Leasing for a solar farm isn’t unlike leasing for an office building. Essentially, the landowner owns the land but companies like OCI or Pivot own their solar projects. Scott estimates a typical lease rate for OCI of around $800 per acre annually, though the numbers vary. The nature of the lease — for OCI, a typical one has a base period of 30 years, with extension provisions — means the land stays with the owner.

“At the end of the lease, we’re required by the lease and by law to remediate the site and return it to its condition,” Heinle said. “So a lot of landowners seek us out because they can make more from the land for doing less and the land stays in the family for generations.”

Timing
Given all this legwork, it’s no wonder that development — which Heinles defines as everything leading up to construction — takes time and is often longer than construction. After a site has been identified, Scott estimates several months to a year to get land leased. Once everything is scouted and prepared, OCI employs an EPC contractor.

Likewise, Pivot’s development process takes between 12 and 18 months, while construction tends to fall between six to 12. “It could be multiple years, easily, from when we initially lease a site to when we have a fully constructed project that’s online and generating electricity,” said Bernhardt, with the caveat that every development is different.

While a solar project requires patience, it often pays off with a degree of security. Before OCI even breaks ground on a farm, some or all of the project’s power may already be contracted with a utility or a long-term power purchaser. Those contracts can be 20 or so years, so OCI can anticipate the fruit of its labor.

As for the cost to develop and access solar, prices vary, depending on the nature of the project. The National Renewable Energy Laboratory analyzes solar prices in units of installed cost per watt. For residential solar panels, Forbes estimates it costs homeowners $12,700 for a six-kilowatt installation. That’s enough to produce about 750 kilowatt hours of electricity monthly, per EcoWatch. (A typical home might use 900 kWH per day.)

It’s difficult to estimate a specific cost for any given project, said Canada, as every project has its own site and labor conditions, permitting requirements, expected building timeline and business goals from the owner.

Generally, however, solar in Texas has proven cost-competitive to — if not cheaper than — conventional forms of power generation, said Heinle. Once solar is developed, it’s fixed-price for a long time. It can therefore hedge against inflation and be modeled to understand its lifetime cost, said Scott.

“Nationally, the cost for solar energy, which is measured in kilowatt hours, is approximately 80 cents per kWH,” Canada said. The price to access solar in Texas, per SEIA, has declined by 47 percent in the past decade.

“Texas has and will continue to be one of the states with the lowest cost of solar due to low cost of land, ease of permitting, workforce availability and its business-friendly climate,” added Canada, citing Arizona and Colorado as other low cost states.

Yet, just because solar comes cheaper doesn’t mean it skimps on consistency. OCI’s Alamo 1 project in Bexar County, home of San Antonio, operates at 99 percent availability year-on-year, said Scott. Even during periods of grid disruption or on cloudy days, Alamo’s solar energy may slow but it doesn’t go to zero, said Scott.

“Solar is very reliable,” he said. “It’s very predictable. You know the sun’s going to rise.”

The brokerage firm reports that sales for $1 million or more accounted for 11 percent of the 5,872 condo sales in South Florida during the  first quarter, compared with 9.3 percent of the 6,695 condo sales in the first quarter of 2023.

In the first three months of the year, Miami-Dade County accounted for about two-thirds of all condo sales priced at $1 million or more in tri-county South Florida, while Palm Beach County accounted for about a fourth, and  Broward County  less than a 10th, according to Douglas Elliman.

Regardless of price, however, few condos in South Florida are selling fast these days. The number of days that condo sellers spend on the market, from listing units for sale to putting them under contract, has doubled since last year, said Peter Zalewski, who runs Condo Vultures Realty, a Miami-based brokerage. The number of days on the market before South Florida condo sellers find buyers is now 140, up from an average of 67 days last year, according to data compiled by Condo Vultures.

One reason condos in South Florida are selling so slowly is the spread between list prices and comparable sale prices. List prices normally exceed comparable sale prices by about 20 percent. But, in some submarkets, “we’re seeing 40, 50, 60 and 70 percent spreads, so the sellers are way too high,” Zalewski said. Compared to sellers of cheaper condos, he said, sellers of condos priced at $1 million or more demand bigger spreads and spend more days on the market trying to find buyers.

Some South Florida real estate pros put the “luxury” label on any condo priced at $1 million or more. Others say luxury condos are in a higher price range. “It may be pushing a little bit more toward the $1.5 million, $2 million range at this point,” said Nick Falcone, whose family owns Falcone Group, a Boca Raton-based real estate development company. “With prices going the way they’re going, you’re not talking about a very big unit for $1 million — under 1,000 square feet, conceivably.”

Unit size is one of the primary ways to define luxury in the South Florida condo market, said Eric Fordin, senior vice president of Miami-based developer Related Group. “The demand is for even larger units than we’re planning,” Fordin said, citing Related’s development of a 25-story waterfront condominium in Bal Harbour called Rivage. Related markets Rivage as an “ultra luxury” residence with three- to six-bedroom condos no smaller than 3,300 square feet and prices starting at $10 million. Despite the eight-figure price, some preconstruction buyers are committing to two or more units to combine them.

“Rivage originally was planned for 61 units. Then demand changed, and it got reduced to 56,” Fordin said. “And, right now, it’s trending closer to 50 units as people continue to combine.”

Related is developing another ultra-luxury boutique condo on exclusive Fisher Island, a private isle just south of Miami Beach, with prices that start at $15 million. The project’s original 57-unit design has changed and may end up at a little more than 40 units. “The smallest unit there is 3,800 square feet, and people have started to combine for 7,000- and 8,000- and 10,000-square-foot units,” Fordin said. “It’s people coming from the Northeast and the Midwest. They’re used to large homes and want the benefits of the Florida lifestyle, and don’t want to give up that space.”

Affluent business owners and executives new to South Florida are prime prospects for luxury condos. Since the COVID-19 pandemic, accelerated migration to the Sunshine State has brought not just a slew of new residents but also new businesses and their employees. 

“There are a lot of organizations that already have made commitments to move here and move their team here, yet they still have not moved here. They are doing it over time,” said Camilo Miguel Jr., founder and CEO of Mast Capital, a Coconut Grove-based development company. “And I think that will continue to bolster the migration story across Florida.”

Miguel said Mast Capital has amassed contracts to sell more than half of the 470 units at two luxury condo projects now under construction in Miami. 

Mast has raised about $600 million from lenders — including billionaire Carlos Slim’s Banco Incursa — to finance construction of Cipriani Residences Miami. The 80-story, 397-unit condominium is rising in the bustling Brickell area just south of Downtown Miami. Cipriani’s unit prices start at $1.7 million. The other project, the Perigon Miami Beach, is a 17-story, 73-unit condo development on an oceanfront site in Miami Beach, where co-developers Mast Capital and Starwood Capital Group held a groundbreaking ceremony April 2. The Perigon’s amenities will include a residents-only restaurant and private speakeasy led by Michelin-starred chef Shaun Hergatt. Unit prices range upward from $4.5 million.

High interest rates have restrained sales in the South Florida condo market, but they have less impact on people in the luxury segment of the market who can buy without borrowing. “Most of our buyers are cash buyers, so interest rates have not really been a subject of discussion,” Miguel said.

Some luxury condominiums developments in South Florida are designed to let the owners market their units as short-term rentals. Miami-based Newgard Development Group, for example, is working on several condo projects that will allow owners to rent their units to short-term users through a platform the company has created or through others, such as Airbnb and Vrbo. 

“In essence, the buildings will operate as a hotel. They are designed and built as a hotel,” said Harvey Hernandez, the founder and CEO of Newgard. “We just allow our buyers to own the units and share those units, using our hotel management program, whenever they want.” After launching a preconstruction sales program earlier this year, Newgard has reservations for nearly 20 percent of the units at Natiivo Fort Lauderdale, designed as a 40-story condominium with 384 fully furnished units, and licensed for short-term rentals. Two other Natiivo-branded condos are under construction in Miami and Austin, Texas, and Hernandez expects to break ground for the Downtown Fort Lauderdale location by early 2025.

Newer condo buildings in South Florida are drawing more interest from prospective buyers since the deadly collapse of a middle-aged oceanfront condo building in Surfside, a Miami suburb. Built in 1981, the Champlain Towers South collapsed in 2021, killing 98 people. Now, homeowner associations in older condo buildings are facing tougher regulations, and many are raising maintenance fees and considering special assessments to fortify the buildings.

“When you’re buying older product, you may have one assessment now. But, as time progresses, the potential for future assessments is unknown and ongoing,” said John Farina, president of Jersey City, N.J.-based U.S. Development. “Buyers feel comfortable and reassured that the new products, due to state laws, are protecting buyers by requiring the appropriate reserves and insurance.” 

In recent years, U.S. Development has built two boutique condos on oceanfront sites in Delray Beach, about nine miles north of Boca Raton. Farina’s company last year completed and sold out 1625 Ocean, a 14-unit condominium, at prices from $6 million to $9 million. On a nearby site in 2022, the company completed Ocean Delray, a 19-unit condo that sold out at prices from $5.9 million to $8.1 million.

U.S. Development is currently conducting a preconstruction sales program for Salato Residences in Pompano Beach, designed as a 10-story, 40-unit oceanfront condominium. Farina said his company plans to break ground later this year on Salato, deliver in 2026, and so far has found buyers for 27 percent of units. “We have interest from the Canadian market and the Northeast,” Farina said, “but also from west Broward people looking to downsize and move closer to the beach as their children move out of their homes.”

Other developers with luxury condo projects in the preconstruction phase are attracting a similar mix of prospective domestic and foreign buyers. “Early this year, it was a very local market. Then we really got a wave from Boston, Chicago, D.C., Connecticut, New York and New Jersey,” said David Martin, co-founder and CEO of Coconut Grove-based Terra Group, which has about 600 planned condos in various stages of development. “Now we have an interesting European mix. We’re seeing a strong Canadian migration as well.”

David Martin in Miami in October 2023. Photo: Diego Texera/for Commercial Observer

Finding land in exclusive enclaves is one of the challenges that luxury condo developers face in South Florida. But opportunities to redevelop older condo buildings in prime locations have increased since the collapse of the 40-year-old Champlain Tower South in Surfside three years ago, as more condo owners in aging buildings consider selling their units rather than pay more in maintenance fees and special assessments.

Among other examples is Mast Capital’s Perigon project in Miami Beach at 5333 Collins Avenue, the oceanfront site of the old La Costa condo building. Mast bought out the owners at La Costa after the city declared the building unsafe in 2021 in the wake of the Surfside tragedy.

“They’re very difficult, they’re very challenging, and they’re very time-consuming,” Miguel said of bulk condo purchases. “But that’s where you can potentially unlock new development projects in the luxury condo space in Miami Beach.”

Condo Vultures’ Zalewski said bulk condo purchases by developers may surge later this year when government-sponsored enterprise Fannie Mae, the nation’s leading buyer of mortgage loans, is expected to reveal its so-called “blacklist” of condo buildings across the United States. Fannie Mae won’t buy mortgage loans collateralized by units in these buildings, or the buildings themselves, because they are structurally unsound, financially impaired, or occupied by too many residents renting owners’ units. The Miami Herald reported that the Fannie Mae blacklist includes 250 condo buildings in South Florida. 

According to a statement by a spokesperson for the agency, “Fannie Mae does not maintain a condo exclusionary list.” However, the mortgage-buying agency does publish a free, web-based tool called Condo Project Manager that lists “project eligibility statuses” for lenders that sell mortgage loans to Fannie Mae, and “these include approval statuses as well as information and statuses for projects that currently do not meet our requirements.”

Either way, the information’s going to be impactful. 

“The biggest flaw in condominiums in Florida is the fact that the information from each association is private, protected, and not shared with the market,” said Zalewski. “Once that list comes out,” he said, “get ready for the selloff.”

The deal closed on April 12 and was first reported by PincusCo.

The four facilities range in size from 35,589 to 154,782 square feet and are currently occupied by Life Storage, which also manages the properties.

Carlyle’s acquisitions include 87-16 121st Street in Richmond, Queens, the biggest individual sale at $50.3 million, and three properties in Brooklyn: 145 18th Street in South Slope, 651 Utica Avenue and 1690 East New York Avenue, both in Brownsville.

Cushman & Wakefield (CWK)’s Mike Mele brokered the deal, which has been a long time coming as the brokerage first began marketing pieces of the four-property portfolio in 2019.

Mele and spokespeople for Carlyle and Safe N Lock did not respond to requests for comment.

Safe N Lock has developed at least 25 self-storage facilities in the outer boroughs since Marc Sharinn founded the company in 2012. But it’s gotten into hot water recently with several of its investors, including Equity Resource Investment, separately suing the company for allegedly cheating them out of their share of profits for the developments, court records show.

Equity Resource also alleged that Safe N Lock misappropriated funds that led to their jointly owned properties going into foreclosure last year, with Equity Resource unloading 1301 Avenue M to its lender Heitman Capital for $46.9 million in February.

Meanwhile, Carlyle has been scooping up self-storage properties all over the globe in recent years, including picking up a Long Island City, Queens one for $80 million in 2022 and developing one in Crown Heights.

Abigail Nehring can be reached at anehring@commercialobserver.com.