A retail building in Miami’s Design District has sold for $21.5 million in an off-market deal, as prices continue to escalate in the luxury shopping destination, The Real Deal has learned.
Elizabeth and Neil Rosen, who had owned and operated Carpet Creations in the Design District for more than 40 years, sold 111 Northeast 40th Street, Lyle Chariff, president of Chariff Realty Group, told TRD. The couple closed their carpeting business two years ago.
They earned a hefty profit on the sale of the property. The Rosens purchased the 8,794-square-foot, two-story building for $320,000 in 1999, Miami-Dade County property records show. Built in 1954, the building sits on a 5,000-square-foot lot. It was rebuilt two years ago, Chariff said.
The new sale price equates to $2,445 per square foot for the building and $4,300 per square foot for the land.
Harbor Group International, based in Norfolk, Virginia, is the buyer, through a foreign limited liability company. Harbor Group has a $4.2 billion portfolio, with more than 7.4 million square feet of commercial properties and 29,000 apartments, according to its website. Its holdings include 1801 Alton Road in Miami Beach, among several properties in Florida.
Chariff and Mauricio Zapata of Chariff Realty Group brokered the sale, and will continue to handle leasing, Chariff said. The building currently has two retail spaces. One space is leased to Rimowa and the other space, formerly the men’s store Sartorial, is available for lease. It has 2,954 square feet, including 2,245 square feet in the ground floor and 710 square feet in the mezzanine. The asking rate of $215 per square foot, blended, Chariff told TRD.
“The building was built in a way to add a second floor very easily,” he said. “It’s built four stories high, and each floor is two stories in ceiling height… Structurally it’s ready to have a slab poured in the space, so it is ready to have another retail floor.”
Mendel Fellig and Sam Zalmanov with Judith Rosen and Associates represented the buyers, Chariff said. They have no relation to Neil and Elizabeth Rosen.
After initially leasing space for their carpeting and flooring business, the Rosens began purchasing properties in the Design District 17 years ago, and have bought and sold several sites over the years, said Chariff, whose firm has exclusively represented the couple’s sales, leasing and management.
Chariff said all their deals are done with just a handshake. “What is amazing is we do it purposely, because in today’s day and age nobody trusts anybody,” he said. “We get along even better because we don’t have anything in writing.”
The Design District is increasingly attracting major investors. In February, Brooklyn-based Redsky Capital and London-based JZ Capital Partners added to their growing portfolio in the area, buying eight sites encompassing nearly two blocks for $128.3 million. In all, the joint venture partners have invested more than $233 million in the district in recent months.
Thor Equities was the seller in the latest purchase. They had paid a total of $46.8 million in 2013 and 2014 for the sites. Thor still owns property in the Design District, after buying the site of a United States Post Office at 70 Northeast 39th Street, in November for $43 million.
By the end of next year, the Design District is expected to have more than 120 luxury-brand stores, a boutique hotel, 15 to 20 restaurants, luxury residential condos and lofts, galleries, furniture showrooms, as well as large-scale public art, design and graphic art installations. Dacra President and CEO Craig Robins has led the area’s transformation. In 2015, blockbuster transactions in the Design District included the $65 million sale of Atlas Plaza, home to Michael’s Genuine Food & Drink, Rolex and Longchamp, among other tenants. Russell Atlas sold those properties, on 39th and 40th streets, to David Edelstein’s TriStar Capital in September.
Correction: an earlier version of this story had an incorrect address and seller for Thor’s post office property.