Harry Macklowe Is Piecing Together A Waterfront Development Site In Miami
New York developer Harry Macklowe is assembling a large development site in Miami’s North Bay Village.
An affiliate of his development firm, Macklowe Properties, is in the process of acquiring two sites for more than $58M in the island neighborhood between Miami and Miami Beach, The Real Deal reports. While no plans have been announced, the sites' likeliest future is as a multifamily development.
The acquisitions, which haven't yet closed, would represent a further push into South Florida for Macklowe, who developed the Apple Cube on Fifth Avenue in Manhattan. His firm first entered the market last April when it purchased a 1.7-acre site near the Dadeland Mall for $32M, where it is planning up to 650 apartments.
In the latest acquisitions, an affiliate of Macklowe Properties is under contract to pay $47.7M for the Biscayne Sea Club, a 51-unit co-op at 8000 East Drive, TRD reported. Macklowe is also under contract to buy a nearby apartment building at 7941 East Drive for $10.6M.
The developer could be looking to acquire more properties on Harbor Island, one of three islands that make up North Bay Village. A third development, the Bays Water condo, sits between the two parcels Macklowe has under contract. The Majestic Isle condo building across the street from Macklowe’s planned acquisitions was also deemed unsafe in April, and its 55 residents were forced to leave.
The Biscayne Sea Club sale is expected to close on June 1, TRD reported. The smaller apartment building deal was originally expected to close last year. The seller, RobMar, sued to enforce the sale, according to TRD, but the lawsuit was dismissed.
Older condo projects across Florida could become attractive acquisitions for developers as the cost of ownership rises. The collapse of the Champlain Tower South in Surfside, Florida, in June 2021 led to new rules, regulations and laws governing condo inspections and safety.
In May 2022, Gov. Ron DeSantis signed a law that mandated residential tower inspections, which had to be completed by Feb. 1, 2023, that have left many condo owners facing unexpected increases to maintenance and insurance costs. Other legislation, which goes into effect at the end of 2024, will require condo associations to fully fund their financial reserves.
The rising rates aren't only the result of new safety rules but also because many private insurers started pulling out of Florida last year.
Southern Fidelity was forced into liquidation in June 2022, leaving around 80,000 Florida homeowners without insurance. In early September, United Insurance Holdings Corp. dropped around 200,000 policies as it pulled out of the state. Other Florida insurance providers, including Weston Property & Casualty Insurance and FedNat, also fell into insolvency last year.
“This is a widespread problem; it’s affecting tens of thousands of homeowners in Florida,” Danny Sands, the owner of Jacksonville-based Brightway Insurance, told Insurance.com. “We’ve never seen this number of insurance companies go out of business in such a short period of time."
As rising costs put pressure on owners, there is an expectation that many condo associations or apartment owners will sell to bulk investors or developers.
At least one distressed property in North Miami has already sold. Investors Giovanni Bertolotti, Abiel Ballesteros, Rene Sanchez and Michael Mallory paid $13M for the Ocean King Apartments at 14500 Northeast Sixth Ave. in North Miami after the property failed to win recertification under the new inspection regime that followed the Champlain Tower South collapse.