Power Studios’ former site in Miami’s Design District has traded hands for $14 million, with plans to develop it into a two-story retail and entertainment venue, The Real Deal has learned.
A partnership, majority owned by former banker Leonard Abess, as well as Chariff Realty Group partners Lyle Chariff and Mauricio Zapata, and others, sold the site on Tuesday, Chariff, president of Chariff Realty Group, told TRD.
The group had purchased the property at 3711 Northeast Second Avenue in May 2013 for $8 million. They knocked down Power Studios building, first built in 1925, about a year ago, Chariff said.
The buyer is an affiliate of Wharton Equity Partners, a New York City-based real estate firm founded by Peter C. Lewis and David E. Eisenberg, with offices in Miami. Wharton has been active in the Miami market, and is currently building District 36, a 500,000 square-foot, mixed-use project at Northeast 36th Street and Northeast First Avenue on the edge of the Design District and Midtown. Wharton also owns a more than 2-acre development site in the heart of Miami’s Central Business District, zoned for more than 3 million square feet of mixed-use development, including more than 2,200 residential units.
Plans for the Power Studios site are to build a two-story, 20,000-square-foot retail project, with a 9,000-square-foot rooftop entertainment deck, Chariff said. The sale includes the construction plans, designs by Touzet Studio, entitlements, construction bids that are ready to be signed, and permitting. One of the conditions that the purchaser made was that Chariff Realty Group stay on to be the exclusive leasing agent, he said.
“It’s mixed and ready to bake,” Chariff told TRD. “Just put it in the oven, and it’s done. And Wharton is going to step right in and finish it off.”
Power Studios’ inception dates back to 1998, when David Wallach, owner of Mango’s Tropical Cafe on Ocean Drive in Miami Beach, partnered with his friend Ross Power, a metal sculptor who worked out of a cavernous old warehouse with artists studios, in what was then considered the derelict Miami Design District.
Wallach bought the property in 1990 for $90,000, and envisioned turning the space into a restaurant, nightclub, cinema, and recording studio, and a venue for performance art. Power Studios opened to the public in 2000, with the Poets Cafe, a gourmet dining room/art gallery, three performance stages, a recording studio, and a movie theater on the rooftop.
Wallach had listed the property for seven years with Metro 1 before Chariff and his partners purchased it in 2013, Chariff said. “I was sitting at lunch with one of my partners, and we decided it was a great deal and put a contract on it that day and closed immediately,” he said.
Since 1990, two sets of owners have made a combined $13.9 million in profits.
Now, he said Wharton “made us an offer we couldn’t refuse,” and will redevelop the site. “We think that the building, if built today, would be worth at least $30 million, but we all agreed we were very pleased with our return, and we were happy to hand it over to Wharton and allow them to go through the whole process of building, and take the risk of building it, and allow them to make the profit,” Chariff said.
Chariff and his partners have been involved in several recent sales of Design District properties at escalating prices, as Craig Robins’ Dacra transforms the area into a luxury shopping destination.
Two weeks ago, a property at the edge of the Miami Design District — whose tenants include Michael Schwartz’s Cypress Room — traded hands at triple its 2012 price. A partnership between Lyle Chariff, Mauricio Zapata and Shawn Chemtov — sold the 5,186-square-foot building, at 3620 Northeast Second Avenue for $5.5 million.
Last week, a Design District property across the street from the Palm Court Garage traded hands for $6.9 million — up nearly 3.5 times in less than three years. The seller of the building at 170 Northeast 38th Street was a partnership between Avra Jain and Miami-based investment firm 13th Floor Investments, in a deal brokered by Chariff and Zapata.
Wharton Equity Partners’ Eisenberg said in a statement that the firm is “thrilled to be developing such a special property” in the Design District. “Touzet Studio has designed an iconic building that will serve as an enduring landmark,” he said, “anchoring the 2nd Avenue entrance to the Design District.”