In one of the largest South Florida real estate deals in recent memory, six properties in Miami Beach’s Lincoln Road retail district have traded hands.
The $342 million portfolio sale paves the way for redevelopment of at least three of the properties, one of the buyers said in a statement. The move is seen as working to accommodate even more national retailers to the region’s hottest retail strip.
The buildings at 600, 719, 741, 801 and 826 Lincoln Road as well as 723 Lincoln Lane sold as a package for $191 million more than what the sellers—a partnership between Miami Beach-based Terranova Corp. and Acadia Realty Trust—spent acquiring the properties in 2011 and 2012.
The buyer was the real estate investment arm of New York-based Morgan Stanley with “affiliates of Terranova” staying on as equity partners, according to a Terranova statement. Terranova will be in charge of future leasing.
Stephen Bittel, chairman of Terranova, said the transaction exemplified investor and retailer interest for “top urban shopping centers, of which Lincoln Road is the absolute best south of Madison Avenue in New York City.”
The Terranova statement also noted three of the properties had received city approval to be redeveloped, “enabling the accommodation of new flagship retail opportunities.”
Lincoln Road has seen a recent stratospheric rise in property values with new asking rents around $300 per square foot and properties trading as much as 10 times that price.
The latest deal values the properties just shy of $3,200 per square foot.
Although the commercial strip has been on the upswing since art galleries began moving in during the late 1980s, current market dynamics driving the high prices are of a more recent vintage. Global brands now see Lincoln Road as a landmark destination that affords them the opportunity to expose their brand to international shoppers and other vacationers, a marketing opportunity worth spending more than sales could sustain by themselves.
Retail is planned or expected to pop up even in places unaccustomed to storefronts, including the courtyard of the Miami Beach Community Church south of Lincoln Road Mall and the building owned by the ArtCenter South Florida arts nonprofit, which is up for sale at 800 Lincoln Road.