A South Florida opportunity fund received a 31 percent discount in purchasing an undeveloped oceanfront commercial property that had been the site of a proposed ultra-luxury condominium tower in Sunny Isles Beach, which is located in Northeast Miami-Dade County.
The newly created R.K. Land Holdings LLC paid $9.6 million, or $300 per square foot, for the 32,000-square-foot lot that had been the site of the proposed Da Vinci on the Ocean condominium at 17141 Collins Avenue.
Mully SB LLC, a Virginia Beach, Va.-based entity with Nathan D. Benson as a member, was the seller. Waterbrook Developers with L. William Rudnick and Thomas N. Yianilos had proposed building a 69-unit ultra-luxury condominium on the site, according to the Da Vinci website.
It is unclear what the relationship was between Mully SB LLC and Waterbrook Developers.
Under the terms of the deal, the seller could receive as much as $2 million more for the land if the new buyer is successful in developing or selling the property.
“In the event the Grantee [R.K. Land Holdings LLC] obtains profits on its sale of the property (whether the property is improved and sold in units or sold in an unimproved state) in excess of $20,000,000, then the Grantor [Mully SB, LLC] shall be paid an additional $2,000,000 by Grantee [R.K. Land Holdings LLC] in excess of the purchase price under the purchase contract between Grantor and Grantee,” according to the deed.
The buying entity plans to build a 300-unit hotel on the property, according to the South Florida Business Journal.
The hotel would be constructed between the new Ocean 4 condominium to the north and the soon-to-be completed Jade Ocean condominium.
The buying entity is a combination of three limited liability corporations that include as members Raanan Katz of RK Associates which owns several retails centers in Miami-Dade and Broward counties, and Aventura residential developer Yizhak Toledano of Sky Development.
Toledano is involved in the Skyvest Real Estate Opportunity Fund 1 LLC, which is a joint venture between Sky Development and condo converter SunVest USA.
The seller Mully SB LLC paid a combined $13 million to assemble the land in April 2005 by purchasing each of the existing 55 units of the former condo-hotel that once stood on site, according to county records.
Upon buying out each of the condo-hotel unit owners, the seller terminated the condo association and proceeded to raze the previous structure in August 2005 in order to open a sales center of the proposed Da Vinci.
The developer spent nearly three years marketing the project extensively to high-end buyers but was never able to construct the tower.
The seller Mully SB LLC obtained a predevelopment loan for $11.7 million in July 2005 from LaSalle Bank in Chicago. In August 2007, the borrower modified the mortgage and reduced the amount to $8 million, according to county records.
The assessed value of the property for 2008 is not yet available however in 2007 the site was valued at $9.6 million, according to the Miami-Dade Property Appraiser. Industry watchers said that assessed value is often about 15 percent below market value.
Sunny Isles Beach is a 40-block long stretch of barrier island city that is home to six towers with featuring real estate magnate Donald Trump’s name. At least 12 oceanfront towers with more than 300 units each were constructed or completed in Sunny Isles Beach in the last five years. Prices for these units range from $400 to $900 per square foot.
Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.
Copyright © 2008, Condo Vultures® LLC
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