Sapir Organization's Alex Sapir On Miami's Condo Market
Early last year, Alex Sapir, president and CEO of The Sapir Organization, had received a certificate of occupancy for Arte, the 16-unit luxury condo his team developed in Surfside, just north of Miami Beach. He was working through a punch list when the coronavirus pandemic hit.
“February of 2020, we were negotiating with two contracts which were, we thought, at the end of the negotiation like March 9 or 8,” he said. “Then by the 11th, we've found out that they backed out because nobody knew what the hell was going on, the world clamping down.”
Sapir said he felt confident the project would sell because of its beachfront location, extremely low density, top-line amenities like an indoor lap pool and rooftop tennis court, and service that aims to be on par with a five-star hotel. As the world grappled with the pandemic uncertainty, Sapir’s team decided to rent out a few units, which would bring life to the building and cover costs.
One of the units at Arte went to Ivanka Trump and Jared Kushner, which put the project in headlines as paparazzi staked out the buildings.
“Our strategy was really to keep confidential all of our buyers, which we've done quite well,” Sapir said. “It was extremely difficult to do that with Jared and Ivanka, even though they actually didn't buy — they just rented — just because of who they are. There was a lot of talk around town that they were moving to Arte.”
The Sapir Organization was founded by Sapir’s father, Tamir, who made his fortune investing in Manhattan real estate when it was depressed in the 1990s. The elder Sapir died in 2014. The company's holdings today include significant Manhattan assets like the headquarters for the Metropolitan Transportation Authority in New York City and the Nusr-Et steakhouses, made famous by the chef known as Salt Bae.
Arte, meaning "art" in Italian, was developed under its subsidiary, Sapir Corp. Ltd., which was publicly traded on the Tel-Aviv Stock Exchange until last year when the younger Sapir took it private. The property was bought for $40M and the project developed with a $90M construction loan.
As of last November, only three units had sold — to Sapir’s family members and a business partner. But since December, the penthouse sold for $33M, reportedly to an unnamed private equity executive from New York who paid cash. Other units sold for $16M and $10.2M. Remaining units are priced from $9.9M to $23.25M, according to The New York Times.
Though all the sales are not yet reflected in property records, Sapir said he has sold nine or 10 units. “We have another few closings happening over the course of the next month [or so],” he said.
That’s even with foreign buyers — normally crucial to the Miami market — sidelined in their home countries due to the coronavirus.
“We always thought that we'd probably have a few sales from Europe, and just because of our architect, [Italian] Antonio Citterio, we did have some inquiries," Sapir said. "It was very difficult to get them obviously to come in, and we ended up moving those units before they were able to, but I actually think that, hopefully, we'll be done with our sales very soon. If we still have a couple units by the summer, you know, I think that's where the Europeans or South Americans will start to be able to come in, so long as restrictions are lifted.”
A Q1 market report from Douglas Elliman put the average sale price of a luxury condo on Miami Beach at $1,163,502, a 31.9% increase from the prior quarter and up 55.1% from a year prior. In Surfside, the average condo sales price is $856,391.
Sapir said he thinks New Yorkers will want to return north by the fall, but that won’t preclude them from keeping a home in Miami. Although South Florida has no shortage of luxury condo developers, Sapir didn’t sound worried about competing for high-end buyers, because they want different things and the city's offerings are distinct.
“It's a very different type of mindset to live on the beach versus in downtown,” he said.
For example, a buyer with a $10M budget could choose a unit at Arte, one at the Zaha Hadid-designed One Thousand Museum if being downtown is a priority or one at the Porsche Design Tower in Sunny Isles Beach if a car lover, but that’s a high-density building.
Sapir’s other Miami holdings include a site in an opportunity zone in Edgewater, where he initially planned a 1.7M SF project, later putting it on the market. He now might develop after all.
“The pre-sale market has for the first time in years been active,” Sapir said.
Though the Sapir family has long been close to the Trumps — Tamir Sapir lived in Trump Tower, and the Sapirs were development partners in the ill-fated Trump SoHo project — Alex Sapir said he doesn't currently have any development projects with the Trumps or the Kushners.
He declined to comment on a pair of $100M lawsuits with his sister’s ex-husband, Rotem Rosen, or on his role in a $2.4B bid to take the REIT Columbia Property Trust private. Columbia’s portfolio includes 19 buildings in New York and San Francisco.
Sapir, who contracted Covid-19 this year, said he's sad for businesses that got crushed by the pandemic but is optimistic that restaurants, hotels and even offices will soon bounce back.
"My wife and I talked about how many places we haven't been to and for the next years, we want to go visit, because you never know what's going to happen in life," he said.