A small restaurant building on South Dixie Highway in Coral Gables sold for $6.4 million, marking another sign of increased demand for commercial real estate along the corridor.
The building, occupied by Starbucks and a Moon Thai & Japanese restaurant, hit the market in late August for $6.9 million, The Real Deal previously reported. It sold on Wednesday to an Argentinian family that owns properties in downtown Miami, listing broker Marcos Puente told TRD. Tony Ulloa of the Keyes Company represented the buyer.
The price breaks down to $1,154 per square foot for the building.
Puente, a vice president at Colliers International South Florida, declined to identify the family, but said the buyer is Gem Pyramid LLC. State records show the entity is controlled by a local attorney. Puente said it is not the Coto family, also of Argentina.
The seller is Konhauzer Inc., a company controlled by Jeffrey J. Weiss of Boca Raton, which has owned the property for more than 50 years. Weiss also sold an office building in South Miami about a year ago for $40 million, and Puente said he’s selling off his Miami assets and re-investing in other parts of the country.
Moon Thai has less than 7.5 years left on its lease with the option for two five-year extensions, which comes out to more than 17 years. Starbucks has less than 1.5 years left on its lease. Together, they have a net operating income of about $307,500 for the first year, which is slightly under market. While the market is asking closer to $65 per square foot, Moon Thai and Starbucks are paying closer to $58 a foot, Puente told TRD.
The site “doesn’t lend to favorable future development” because of its small footprint and long-term lease in place, but Puente said he had a handful of offers above $6 million from private owners, developers and investors “willing to pay a premium and accept a lower rate of return really without a plan for much future growth,” he said.
The deal went under contract in October, and the Argentinian family plans to hold onto the property and “enjoy rent appreciation.” The buyer financed the deal with a $4.8 million mortgage from Banesco, according to Puente.
The 5,546-square-foot building, at 1114 South Dixie Highway, was built in 1955 and sits on a 15,000-square-foot lot. The property in Coral Gables is separated from the University of Miami by U.S. 1, the Metrorail and Ponce de Leon Boulevard. Underneath the Metrorail is the Underline, a 10-mile linear park and trail that will add to the existing green space and bike path.
Commercial activity along South Dixie Highway in Coral Gables and South Miami has been picking up over the past two years. New projects include two mixed-use developments from NP International, and the planned redevelopment of the Riviera Plaza retail strip into a new Publix store by Gadinsky Real Estate, Echion USA and 13th Floor Investments.