What Terra’s exit from record $1.2B Miami land deal signals for the market
What Terra’s exit from record $1.2B Miami land deal signals for the market
Terra sought extension, amendments to purchase of Genting assemblage.
The shock is wearing off from developer David Martin’s decision to pull the plug on a record $1.2 billion purchase of a waterfront assemblage in Miami.
A reality check dusted with disappointment is setting in, brokers say.
Smart City Miami, the Terra-led group that canceled its contract to acquire Genting Group’s 15.5-acre partially bayfront property north of downtown Miami, had sought an extension and amendments to the terms of the sale, which Genting denied, the developer and Genting confirmed.
“Terra had asked for an extension, which is understandable in this market,” said Devlin Marinoff, co-managing partner of Dwntwn Realty Advisors. “The fact that Genting did not give them an extension I think was a huge, huge error.”
Many brokers called it a temporary setback. Terra could still rebid on the site at 1431 North Bayshore Drive, while Genting is likely in talks with four other groups that offered more than $1 billion for the property. The zoning allows for a mix of uses, which could include retail space and thousands of residential units. Condos would likely be built on the bayfront parcels, and rental apartments inland.
But the market hasn’t improved since Genting announced nearly two months ago that it was in contract with Terra’s Smart City.
Lender Brett Forman, managing partner of Forman Capital, said the sale’s falling apart is indicative that all real estate deals are harder to finance and ultimately close. Using a baseball game analogy, he said that the market is in the second inning of a downturn, even if Miami is somewhat insulated from some of the pain that other cities are experiencing.
“In the last six months, a lot of things have changed and not for the better…. The debt markets are very slow and challenging,” he said. “It’s still an outstanding piece of land, but things today are getting priced differently.”
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Terra has projects scattered across South Florida, in addition to a half-billion-dollar buyout of the Castle Beach condo complex it’s pursuing in Miami Beach. It also recently closed on a site in Midtown Miami with a partner for $40 million.
“[Developers] are being a little more picky and choosy about what they are deciding to work on,” said Matt Rotolante, president of Lee & Associates in South Florida. “At the end of the day, I think [Terra] might have had a project they’re more focused on on the beach.”
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Lee & Associates South Florida is a fully vertical commercial real estate brokerage firm focused on industrial, office, retail, multifamily, investment and land sectors. Our dedicated team of professionals is led by Matthew Rotolante, CCIM, SIOR a 4th generation South Florida native in a family that has owned and operated commercial property here since 1928. Lee & Associates is the largest agent owned brokerage in the nation with Senior Agent’s ability to earn profit share resulting in the highest splits while still receiving full resources, support and leads from our national network. Our collaborative and cheerful culture allows for open communications throughout the company, fostering the sharing of information and best practices to better enable client decision making. The Lee & Associates’ robust national network that sold and leased over $32 Billion in 2022 offers clients a cross-market platform of expertise and deal opportunities across all asset specialties and representation roles. For the latest news from Lee & Associates South Florida, visit leesouthflorida.com or follow us on Facebook, LinkedIn, Twitter and Instagram, our company local news.
About Lee & Associates
Lee & Associates is a commercial real estate brokerage sales, leasing and management firm. Established in 1979, Lee & Associates has grown its service platform to include over 75 offices in the United States and Canada. Lee & Associates is the largest agent owned commercial real estate brokerage where agents get the greatest return for their efforts and hence are more committed and better enabled to provide superior results for their customers. For the latest news from Lee & Associates, visit lee-associates.com or follow us on Facebook, LinkedIn, Twitter and Link, our company blog.
