For nearly 20 years, different developers had ambitious visions for the Miami retail center currently known as Miracle Marketplace. None of the plans stuck, however, and the property languished.
If the recent $92 million sale of the 3301 Coral Way shopping center is any indication, Coral Gables developer James Schlesinger and his partners came up with a strategy that finally worked.
In South Florida’s first major retail transaction of 2013, Miracle Marketplace LLC on Jan. 15 sold the nearly 250,000-square-foot center to HART Miracle Marketplace LLC. The special warranty deed was recorded by Miami-Dade County on Friday. No financing was recorded.
The founder and CEO of AWE Talisman LLC, James Schlesinger signed the deed as president of Miracle Marketplace LLC. He confirmed the sale and the transaction details in a Tuesday phone interview.
HART Miracle Marketplace LLC is managed by Chicago-based real estate investment management firm Heitman Capital Management LLC. Calls to Heitman executive Thomas Kelly, who is identified in state corporate records as the registered agent of the buyer company, were not returned by deadline.
The center was not being publicly marketed when a Heitman executive recently reached out to AWE Talisman representatives about acquiring it, according to Schlesinger.
The Heitman executive “called us through our broker and said, ‘We know the center and like it,’ ” Schlesinger said.
Miracle Marketplace, which includes a parking garage, was constructed in 1989 on 3.46 acres. Schlesinger and partners completely rehabbed the center several years ago. The company paid $15 million for the building in July 2004.
That discounted price was critical for the Schlesinger-led group to afford its extensive and complicated redevelopment plan, Schlesinger said.
“We turned the center around from the inside out, making it from an interior mall to a center that has walkways from the outside,” he said. “It was a really difficult engineering feat. I was willing to do it when other developers weren’t willing to really sacrifice to make it work for big-box tenants.”
Bally Total Fitness, Bed Bath & Beyond, DSW and Marshalls anchor Miracle Marketplace. Nordstrom Rack gave the center a boost when it opened in 2010.
Miracle Marketplace is more than 96 percent leased, according to CoStar Group. Triple-net annual rents average $38.93 per square foot. Triple-net leases include taxes, maintenance and insurance costs and are common in the retail sector.
Vertical Big Box
The temporary home of the Miami Children’s Museum had a troubled history before AWE Talisman redeveloped the center.
Built 24 years ago at a cost of $52 million, the center was originally called Miracle Center. It gained more attention in the local retail market for its large vacant spaces than its tenant base. Bally has been the only constant, remaining open for much of its existence.
“Over that period, except for the first year or so, it was a slow decline,” according to Jason Shapiro, managing director of Miami-based real estate investment banking firm Aztec Group. He was not involved in the latest sale. In April 2012 he represented the owner of the adjacent Winn-Dixie retail building in obtaining a $7.02 million refinancing from TotalBank.
Stocks & Stocks, a South African investment company, completed the first major transformation of the property in 1997. It worked with prominent local developer Swerdlow Group to reposition the center as the Paseos Mall.
Swerdlow in 2000 paid $20 million to acquire the mall and changed its name to Lightspeed Miracle Center. The company unsuccessfully attempted to capitalize on the dot-com boom by marketing the center as a telecom facility. Those plans were abandoned in 2002 when Swerdlow put the center up for sale, eventually closing the deal with Miracle Marketplace LLC two years later.
AWE Talisman and partners tore out the interior floors and converted the seven-story structure with five levels of retail into a three-story retail center with two decks of parking above.
Schlesinger was a partner in redeveloping the former Cutler Ridge Mall, now Southland Mall, and also revamped and sold the former Midway Mall, now Mall of the Americas.
Before projects like Miracle Marketplace and Berkowitz Development Group’s Dadeland Station, vertical big-box retail centers were virtually nonexistent in Miami-Dade County, according to Shapiro.
“Vertical multi-tenant retail is challenging in this town,” he said. “It was just not part of the landscape historically.”
While the center has a Miami address, it has successfully drawn substantial traffic from both Miami and Coral Gables under AWE Talisman’s ownership, Shapiro said.
“One thing [AWE Talisman] is very good at is assessing what tenant mix will be best for the location of the property,” he said.