CASE STUDIES/BEST PRACTICESLooking through our case studies, you’ll see a recurring theme: Many of our clients work with us exclusively and continue to do so year after year, deal after deal. These are not necessarily our largest deals; they demonstrate our breadth, commitment to our clients and differentiate us from our competition. To us, a transaction is not just a “commissionable event”. We partner with our clients as full fiduciaries, performing the task required for each project, ensuring its success. We have developed a network of lenders, attorneys, architects, engineers, contractors and professional organizations, and have the expertise and resources required to handle the most complex projects.
TRIPLE PLAY OR HOME RUN?
Infinity Commercial Real Estate represented Rifkin Investment Company in the $7,350,000 sale of a 2.54-acre parcel with 70,000 feet of industrial buildings at 103 Street and NW 79 Avenue in Hialeah Gardens. Infinity had managed and leased the property for Rifkin for 20 years. An entity controlled by a 100-year-old developer, The Ferber Company, purchased the property to demolish the buildings and develop the site for WAWA. Working closely with the buyer, Infinity effected lease terminations and buyouts and assisted in crafting a site plan retaining one of the three buildings. We then sold the remaining building at 10101 NW 79 Avenue for $2,900,000 to Christian H. Infante, an owner-user.
Once funded, Infinity advised Rifkin Investment Company to pursue a 1031 exchange, to convert the proceeds of sale to an IRS approved security, avoiding capital gains tax. Since “hands-off” management and credit quality were paramount requirements, we advised Rifkin to invest their $7,350,000 of proceeds in a Delaware Securitized Trust (“DST”), thus utilizing a risk-reduced, diverse investment with multiple, high-quality assets, and no management responsibilities. The IRS only recently approved the DST financial instrument as a qualifying Chapter 1031 exchange vehicle. Because this is not a real estate commissionable event, most brokers would not advise their client to pursue an investment banking option, but our relationships with clients always put their needs first. Our efforts resulted in $17,600,000 of transaction value and will produce income for Ferber and Rifkin for many, many years
BROTHER, CAN YOU SAVE A DEAL?
Beacon Investments found a fantastic opportunity. Immediately adjacent to I-95, 441, 826 and with access to all major markets in Southeast Florida, an owner/operator had to shut down and sold their two-building site well under market value. Beacon planned to redevelop the 70,000 square foot buildings as industrial condos with excellent curb appeal. Unfortunately, the City of Miami Gardens incorporated immediately after the purchase. It was literally years before construction approvals were obtained because the city needed to develop standards and procedures for the building, planning and zoning departments. By the time the project was ready, the market for industrial condos had crashed, and Beacon’s former brokers were unable to bring in a single buyer. When we met with the Principals with our suggested strategy, we presented analytics and statistics demonstrating that by marketing the units for short-term lease at low rents, we could stem the bleeding and re-introduce the units for sale once the market rebounded. The strategy was exceedingly successful, and as expected, many of their tenants became buyers! The property is now totally sold. Beacon exited the property at great profit, and we have actually turned some of these units over 2 and 3 times. We forged a relationship of enduring trust and confidence with our clients, who continue to involve us in their projects.
LEMONS INTO LEMONADE
Accesso Partners (formerly known as Beacon Investments) acquired an 8 building, 211,000 square foot office park at the Golden Glades Interchange in Miami Gardens by purchasing the mortgage note from the lender. It seemed like a great deal at the time, fronting the Palmetto Expressway at the busiest intersection in the State, with abundant parking. Although the price per square foot was very low, Accesso was not afforded time for normal due diligence: There were multiple tenant defaults and expirations at the Golden Glades Office Park, and significant deferred maintenance. After 2 years and multiple brokers without a single new tenant, they asked us to lease the property. Over the next 3 years, while navigating a recession, we filled the Park with credit tenants. Once fully leased, the client wanted to bring the project to market. After considering the property’s characteristics, we formulated the tactic that would yield the highest price. We advised that the property should be sold as 3 separate parcels. This approach took advantage of the multiple curb cuts and separately metered utilities, allowing the smaller properties to be marketed to owner/users, who typically pay more than investors. Each parcel sold AT A PROFIT, instead of a loss as had been expected. The aggregate sale price was approximately $21 million.
JUMP FOR JOY
We’ve represented Off the Wall, the family entertainment center group, for many years. Their locations contain everything from trampoline systems to rock climbing walls to laser tag to virtual reality games to sports bars with great food, full bar service, and big-screen TVs. Our initial location in Coconut Creek earned Infinity multiple awards and was the largest retail transaction in Broward County that year. We located a 40,000 square foot ex-Publix in a half-million square foot suburban mall that was surrounded by schools. The mall had lost tenants and was about 50% vacant. Brixmor, the national REIT that owned the mall was anxious to work with us on the 10-year lease deal: We needed them, and they needed us. However, the City was not so sure, and an adjacent anchor tenant had a restricted use clause in their lease, which specifically excluded family entertainment centers as neighboring tenants. It took about 6 months, but we led a campaign for our client to convince the mall tenants we’d bring traffic and business to them and, sold the city on school-age residents having a safe, indoor location to let off steam. It was all true. The kids are happy, the city is happy, and the mall is now at full occupancy.
Our latest Off the Wall assignment resulted in the purchase of this fully air-conditioned, 60,000 square foot mixed-use industrial building on a 2.5-acre site, for $5,000,000. It was a complicated transaction: We spent close to 6 months and brought in our preferred SBA lenders, architects, civil engineers and land use/zoning attorneys to assist in obtaining a use variance and site plan approval from the City of Hollywood, Florida. Soon after receiving our approvals, another nearby family entertainment center filed bankruptcy and their landlord made us a too-good-to-be-true deal on 50,000 square feet, including all equipment and fitments. Without a need for this property, we marketed it for immediate sale. Within 3 months, it sold to Avid Asset Management, a New York based developer for $7,350,000, which was the highest price per square foot ever paid within the submarket. Almost 50% profit in under a year!
THREAD THE (ZONING) NEEDLE
Atlas Materials Testing has a unique business, testing materials and finished products for weathering under various environmental conditions. They are the world’s premiere weathering testing organization, servicing almost all of the Fortune 500 and have locations around the world: Norway, testing for arctic salt air, Nevada, for desert conditions; South Florida for subtropical conditions, etc. The cost to develop a site for their use is inordinately high, as they also have patented accelerated testing machines with immense electricity and chilled water requirements. Engineering standards for measurement are stringent and necessitate the physical locations for testing be insulated from outside influence. This is complicated because most government entities view their use as industrial, dictating they cannot be in an environmentally pure area without a use variance. So, about every 20 years, surrounding development catches up with each site, making it obsolete for their use. When we realized the area around their main, 23-acre South Florida site had been re-designated for limestone mining, putting thick rock dust and heavy truck exhaust into the air, we reached out to them, and began a multi-year relationship. We found Atlas the only industrially zoned site in the Homestead agricultural area, sold their site in Miami to a rock miner, consulted in Nevada and the Port at Jacksonville. All from a single phone call, because we had the intelligence and foresight to understand the impact of surrounding development to their business.
EXECUTE THE BUSINESS PLAN
A few years ago, we worked with an asset manager at one of our Beacon Investment assignments. He was young and very sharp, but (like most finance MBA’s), did not have experience with construction or the “art of the deal”. He was a very quick learner, and we developed a close relationship. After leaving Beacon, he approached us with a concept: Acquire smaller, well-located 2nd generation industrial buildings at bargain prices and reposition them for long-term hold and rental income. He had access to financial backing, so acting in an advisory capacity we assisted his team vetting properties across the State. More often than not, we advised him NOT to purchase. Within 3 years, Warehomes acquired over 30 industrial assets. So, when this 143,000 square foot property just a stone’s throw from Amazon’s new 855,000 square foot DC in Opa Locka became available, it seemed like time to raise the bar. The existing owner/operator was distressed but needed time to wind down. There were other challenges: Deferred maintenance, an office component too large for most tenants, and the building configuration were not economically divisible for multi-tenant use. However, the location was great, it had an oversized electric service and a great parking ratio. Acting as Warehomes’ Broker, we put it under contract well under market value for $8,775,000 and began leasing efforts during due diligence. Before we closed, we had leased it to GRM Document Management, document storage and digitation company owned by Moshe Mana, the visionary developer of Wynwood and Miami CBD properties.
BEST INDUSTRIAL CONCEPT-EVER
An MIT Master of Science in Real Estate graduate approached us with his master’s thesis, a brilliant concept: Develop industrial parks to be marketed to small contractors. This entailed assembling sites large enough for the vision, with immediate highway access, near major population centers Land like this is hard to find (and expensive) in South Florida These sites would be walled in for security with discount fuel stations, trailer parking, exterior equipment storage, drive through truck washes, and a dock high, Class A industrial “anchor building” with training rooms and kitchens available for the use of all owners. The developer would lease the anchor buildings to suppliers of the contractors, such as HVAC, electric parts and plumbing manufacturers. We identified an area in Pompano, but the off-market parcels had to be assembled and there were multiple zoning, DOT and density challenges. We worked with our client to create presentation materials, met with the city and surrounding helping to obtain the approvals and entitlements and the developer broke ground. The condo units started selling like hotcakes, and we quickly leased up the anchor building. Not long after, we negotiated a deal for the 2nd site in Palm Beach. Taurus Investment Holdings, the international real estate developer was so impressed, they bought the sites and made our client a partner! We sold the fully tenanted anchor buildings, so Taurus could deploy their profits into additional Contractor’s Business Park developments. This concept is now rolling out around the country, and we are helping to make it happen!
HIGHEST AND BEST USE
An entrepreneur based in Italy owns a 20,000 square foot building on the perimeter of Miami International Airport, in Doral’s Blue Lagoon area, a premier South Florida commercial submarket It’s surrounded by office and retail but is zoned industrial, not the highest and best use of the site. It had been NNN leased to an industrial aerospace company that had extensively modified it for that use and the lease was about to end. Multiple brokers had put the site under contract for sale to developers, only to have the deals fall through, primarily because they did not understand the challenges to redevelopment. Although the land area is large, a communications tower is on-site with a 100-year lease and access easements, and the DOT has large setback requirements due to highway proximity. Additionally, there was significant deferred maintenance and a number of building code violations. So, after diligent market research, we found the perfect tenant: A retailer of motorcycles, watercraft and all-terrain vehicles, whose franchise requirements limited them to this area. They signed a long-term lease at retail rent levels with a purchase option at an above market price, and with our guidance, completely redeveloped the property at their cost for retail use. A win-win for both sides.
MOVE FAST AND BREAK THINGS
Groupe Pacific has completed many projects across the US and Canada. They are best known locally for kicking off the last round of residential condo development, with their magnificent two-tower, 42 story Brickell on the River project. They also developed and owned a number of office and industrial buildings. They struggled with multiple brokers and high vacancy for years, on this 234,000 square foot building in Sunshine State International Park. The building has some great attributes: It’s dock high, cross-dock and very well located, but had a 2- story component with low ceilings. Once we obtained the listing, we recognized the 2-story section was not leasable, obtained construction estimates for its removal, performed the financial analysis required to determine its feasibility. The owners decided to move forward with the re-design, and we worked closely with their engineers and architects helping to formulate a plan to create a highly desirable space without compromising the structural integrity of the building. After completion, the building was fully leased almost immediately. Later that year, as Groupe Pacific was to be dissolved, they needed to sell this building quickly. Leveraging our relationships, we began a nationwide marketing campaign, targeting entities with the ability to enter into transactions that were not subject to financing contingencies. We sold it to DCT (later absorbed by Prologis) ALL CASH for $12,000,000, a record price for the market at that time.
THE HOLE IN THE DOUGHNUT
Once the (very profitable) disposal of Groupe Pacific’s assets was completed, the former President created the Ceiba Groupe, focused on the development of multi-family rental apartment and mixed-use projects, for a long-term hold. We worked with them on many assemblages, but are most proud of Zona Village, in Davie, Florida. Davie, located 10 miles west of Fort Lauderdale International Airport, is the home of Broward College and Nova University but was otherwise lacking in development: Sort of the hole in the doughnut of Broward County, without quality market-priced apartments for students of the expanding colleges and residents of the nearby dense and expensive metropolitan areas. The ideal spot was in Davie’s underdeveloped downtown. We found 6 off-market parcels owned by three entities, two of which were controlled by siblings that had not spoken for years. For the project to work, all parties would have to agree to sell. We learned that many brokers had approached them, but the deals always fell apart. We spent a year patiently negotiating and successfully assembled the 3-acre site for Zona Village: Over 200 apartments and 15,000 square feet of retail and office! Ceiba has many more projects in its pipeline, and we are proud to continue working with them as they implement their sophisticated initiatives throughout the US.
WHAT SHOULD WE BUILD?
Accesso hired us to do the leasing at a newly constructed, Class A office building near Aventura that was in shell condition. The building was magnificent, designed by the internationally acclaimed Arquitectura Bentata. We had also provided them with our favorite local architect and engineer, as they needed someone who was proficient in local code requirements. We researched the market and advised they needed to build suites on spec (a scary prospect when you don’t know what the specific tenants require). Utilizing our leasing experience, we worked closely with the team to design flexible space that could be built on spec, shortening the time lag between signed lease to move-in, which is often a deal-breaker. We now have 4 of 5 floors leased to credit tenants and the remaining floor is being built out using the same effective formula!
ONE CHAPTER CLOSES, ANOTHER OPENS
Before Lowes and Home Depot, there was Miron. When they decided to exit the business, Miron owned properties across the US, most with their stores as anchors of larger retail developments, which they also owned. Our first project with them illustrates our research capabilities and creativeness. This 112,000 square foot building on Dixie Highway in the Aventura area is grade level and not easily divisible. They interviewed every major brokerage company for the sale assignment. Only Infinity identified the property was located in a zoning overlay district, which allowed for redevelopment as high as 17 stories. The area was primed for a significant change and Miron had a choice: hold the property for another 5 years as zoning attracted new development or sell and redeploy their capital. We sold the building, well over the market price to an owner/operator with a real estate background, who was willing to pay a price reflecting the long-term redevelopment potential. They are using the building as their distribution center and will sell or redevelop it in the future. There is a Virgin Train station proposed within throwing distance, and it is now surrounded by hundreds of apartments and major office buildings. Everyone won on this one. Since this deal, we continue to represent Miron on other real property holdings. Additionally, they have recommended us to their colleagues at Forum Capital Partners, Guggenheim Partners, and Kayne Anderson across all categories: sales, consulting, leasing and development.
HOW TO FIT A SQUARE PEG IN A ROUND HOLE
To the casual observer, the Palmetto Glades Center has it all, at the Golden Glades Interchange, on the busiest section of highway in Florida. I-95, 826, 441 and the Turnpike all meet directly in front of this 2-building retail project. Too bad you can’t get to it without Uncle Google helping you navigate. It was half empty when we took on the leasing, although many prior brokers had tried to fill it up with traditional retail operators. Realizing we needed destination tenants, and that the zoning allowed for disparate uses, we targeted schools, wholesale, service, and even light industrial tenants and knocked on a lot of doors! We are now 100% leased with a Sketcher’s footwear outlet, the Hotel Workers Union, Nolte, the high-end kitchen manufacturer and other companies that need quick, centralized access to major markets, and do not depend on walk-in retail shoppers.