David Martin’s Terra is offering to purchase units at the Amethyst condo building in Miami Beach, where Mast Capital has been working on a buyout for years, The Real Deal has learned.
An affiliate of Terra sent offers to owners of the 11-story, 120-unit condominium at 5313 Collins Avenue in recent days, sources told TRD. Meanwhile, Mast Capital, led by Camilo Miguel Jr., has closed on eight units and is in contract to acquire a majority of the building’s units.
Mast does not control units owned by a group of 28 owners, which are needed to give the developer the minimum required to move forward with a termination. TRD previously reported that owners allege the developer is dragging out the planned buyout, tying up the majority of residents and leaving the sale in limbo.
The two development firms could work together on a condo termination and redevelopment of the property, but it is unclear if they will. Martin said in a statement that a group of owners approached Terra about purchasing units, and that Terra is open to partnering with Mast Capital “to reach a solution that benefits all unit owners.”
A spokesperson for Mast said that Mast is in contract to acquire a majority of units and expects “to close on the remaining units by year’s end.”
If the sellers accept Terra’s offers, Terra could close by the end of 2024, the contracts show. But it is also unclear if Terra could purchase the units that Mast is in contract to acquire, and if not, if that would spark litigation with Mast.
Terra is offering $850,000 each to the group of 28 owners, and $550,000 each to others. That would total more than $74 million if Terra could acquire the remaining 92 units. (It likely can’t because Mast already owns some and is in contract to acquire many others.)
Mast owns the former La Costa condo building next door, which it plans to knock down and redevelop into a luxury condo building called The Perigon with its partner on the deal, Barry Sternlicht’s Starwood Capital Group.
Owners at Amethyst said that Mast Capital planned to close on a majority of the units in November 2022, but that the developer has exercised extensions and has not been clear about when it plans to close on the rest of the units. The developer terminated the contracts it had with the 28 owners, which were all contingent on each other closing, leaving those deals in limbo.
Mast has so far paid $235,000 to $480,000 for each of the eight units it has closed on, ranging from about $300 per square foot to nearly $660 per square foot. It’s spent just over $3 million on those condos, property records show.
Condo buyout and termination deals — in which the developer purchases at minimum 80 percent of a building — are risky, but can be highly lucrative. Florida law allows 5 percent of a building’s ownership to challenge terminations, which is why developers may look to secure just over 95 percent of a building’s units. After acquiring the majority of units, the developer would move forward with the termination and eventual demolition of a property.
The Amethyst property is zoned RM-3, which allows for buildings of up to 200-feet tall along the oceanfront, and it includes a sliver of land fronting the Intracoastal Waterway.
More developers are bidding on older, waterfront condo buildings because of the lack of undeveloped land and also because it has become more expensive for unit owners to maintain their buildings. The latter has become a bigger issue in the two years since the Surfside condo collapse. Ninety-eight people died when Champlain Towers South came down unexpectedly overnight on June 24, 2021.
Some unit owners say that developers are using scare tactics to get them to sign contracts. In a previous statement, Mast said that many owners who agreed to sell are concerned Amethyst is in “extreme disrepair.” But Amethyst, built in 1964, passed its 50-year recertification in 2014, and the building was considered structurally and electrically safe for occupation as recently as 2020, according to the city.
Earlier this year, Terra offered $500 million to buy out the Castle Beach Club building at 5445 Collins Avenue. That came months after Related and 13th Floor Investments withdrew their $500 million bid for the 57-year-old property.
In addition to Terra and Mast, Related Group, 13th Floor Investments and other major firms are actively pursuing condo buyout deals along the coastline.
In Miami’s Edgewater, a group of unit owners are fighting Two Roads Development’s termination and planned demolition of Biscayne 21, a waterfront condo building. The owners filed a lawsuit in May, alleging they were “manipulated, bullied, deceived and pressured” to sell their units to the developer.
Read more
Residential
South Florida
How Terra’s proposed $500M Miami Beach condo buyout could play out
Residential
South Florida
Macklowe assembling waterfront development site in Miami's North Bay Village