Kushner Breaks Ground On First Florida Project
Kushner Cos. broke ground Thursday on its first development project in Florida, where the company has been purchasing land over the past few years.
Wynd, formerly called Wynwood 27 & 28, will be a mixed-use complex in Miami composed of two buildings at 130 NW 27th St. in the Wynwood arts district. Designed by Arquitectonica and developed in partnership with Miami-based Block Capital Group, it will include 152 luxury apartments, 33.5K SF of retail and 46K SF of office. Across the street from one another and connected by paseos, the buildings will rise five and eight stories, and they will have three usable rooftop areas.
“We've been looking to buy multifamily in Florida for five years. We just couldn't make sense of some of the valuations," Kushner Cos. President Laurent Morali told Bisnow by phone before the groundbreaking. "That's why we decided to develop there — to build it, which really allows us to essentially buy multifamily at a better price, because it's just cheaper to build than to buy.”
The project site is evidence of massive price appreciation in Wynwood. Kushner and Block paid $32M for the assemblage. The parcel at 127 Northwest 27th St. had traded for $66K in 2013 and $725K in 2014 before they bought it for $10.7M in 2019. Nearby, the partners paid $4.6M last year for two lots with single-family homes that had traded for $135K and $130K in 2004 and 2006. Those will be developed for a separate project to be announced later, Block Capital Group principal Martin Miculitzki told Bisnow.
“That’s really the beauty of having a local partner," Morali said. "In addition to being amazing friends, the principals at Block Capital brought to us their ability to source deals. Because they know the market so well, they were able to give us a quick read on what they found, and why it was a good value… And now, their network in terms of the ability to lease the space, will be put to great use. If you look at how much we paid for our land compared to our peers, I think we did a great job.”
Miculitzki, whose family has been active in Wynwood for more than a decade, said that prices are now around $500 to $1K per SF in Wynwood, and even at those rates, he is still looking to buy.
"What has been pushing us over the past 10 years is the tenants coming in," Miculitzki said.
Demand has stayed strong even during the pandemic, with new leases being signed even if people are delaying taking occupancy, he said. He has potential ground-floor food and beverage tenants lined up for Wynd but can't announce them yet.
The Real Deal reported that BM2 Realty is handling the commercial leasing, with rents targeted for about $50 per SF for office to $75 per SF for retail. Axos Bank and Fortress provided $80M in construction financing.
At the groundbreaking event, Kushner principal Nicole Kushner Meyer said the companies teamed up after she had been visiting Wynwood and stopped at Panther Coffee, where a barista overheard her say she should buy land in the neighborhood. The barista was Block Capital co-founder Gustavo Miculitzki, who had stepped in to help his tenant serve coffee on an understaffed day.
Miami Mayor Francis Suarez encouraged more development and said he was trying to make taxes the lowest ever.
"If any of you want to do a project, you should have my personal cellphone number," Suarez said. He had already met with Kushner Cos. founder Charles Kushner regarding another project, he said.
Kushner has additional projects on tap in Florida. Blocks away from the Wynd site, at 1900 and 2000 Biscayne, in an opportunity zone in the Edgewater neighborhood, Kushner plans a three-tower luxury rental megaproject with 1,149 units.
Further north, in Fort Lauderdale, Kushner is developing a project pitched as the new gateway to downtown Fort Lauderdale. Called Fort Lauderdale City Center, it is steps away from a station for Brightline, Florida’s private train. Four mixed-use towers are planned on the 4.2-acre site.
In Palm Beach County, Kushner recently bought two sites from the owner of a plant nursery. In Delray Beach, it plans a 900K SF industrial development, and in Lake Worth, a development with 384 apartments and 60K SF of retail.
Morali said all of the projects have architects attached and are currently in zoning and permitting stages.
“The plan is to hang on to these long-term, similar to most of what we do," he said of the company's Florida projects. "Every investment is for the family, and we own them for the long run.”
Morali said that he is 100% willing to network with new potential partners. He will continue to be based in New York but comes to Florida for two to three days each month.
Kushner opened a South Florida office in 2019 and has hired Gabriela Toledo as head of development for the region. She previously led project planning at Paramount Miami Worldcenter.
Michael Szafranski is serving as director of Florida acquisitions. Szafranski in 2015 was sentenced to two-and-a-half years in federal prison after pleading guilty to one count of wire fraud conspiracy. A former financial adviser, he enabled Scott Rothstein in carrying out a $1.4B Ponzi scheme and recruited investors to it. He later blogged about his experience in prison.
“Michael Szafranski heads up our operations in Florida," Morali said. "We are very proud of having Michael on board. He brings a breadth of knowledge and always has an educated opinion on the deals we look at.”
Kushner founder Charles Kushner, who served 14 months in prison before he was pardoned by former President Donald Trump, has previously hired ex-felons into executive roles.
Morali declined to comment about whether Jared Kushner, who served as CEO before working in Trump’s White House, will rejoin the company. He did not attend the groundbreaking event. During his years as senior adviser to the president, who is his father-in-law, Jared Kushner was scrutinized for conflicts of interests, given Kushner Cos.' involvement with matters of national policy such as EB-5 financing and opportunity zones.
“I think that the scrutiny was behind us after two years because I think people realize that there was really nothing other than we are a real estate company," Morali said. "I think it's behind us now.”