Brickell Key developer buys up more prime land 11-2008
The builder of Brickell Key, Swire Properties, is setting its sights on six acres near Miami's Brickell Avenue in one of a string of recent deals for raw land in the area.
The developer has snapped up nearly six acres of prime downtown land west of Brickell Avenue. The price tag for the two vacant parcels straddling S. Miami Avenue: $41.3 million.
As many builders and bankers struggle to survive amid the downturn, others are now laying the groundwork for the next upturn -- at cheaper prices.
''While we may not be at the bottom of the market, we felt the discounted pricing made it a good opportunity,'' said Stephen Owens, the Miami-based president of Swire Properties. ``A site of this size and scale that's strategically located in the urban area is hard to find.''
Swire's purchase is one of a string of recent deals for raw land in the Brickell area. An Alabama developer recently paid $6.27 million for about half an acre across from the Brickell Metrorail stop with plans to Built an Embassy Suites hotel. Separately, a Miami group spent $22 million for another roughly half-acre parcel next to the Four Seasons Tower on Brickell Avenue.
''People are optimistic about the Brickell area because the infrastructure is in place, from the offices and hotels to restaurants and grocery stores,'' said Peter Zalewski, principal at Bal Harbour-based condovultures.com. ``We think the housing market will come back faster there, in two to four years, than other parts of Miami's downtown.''
The sale price on the Swire property is a sizeable drop from a recent value near $60 million -- and Owens said it was offered to him amid the boom for as much as $115 million.
The land's former owner was a group led by J. Kevin Reilly, which envisioned a massive mixed-use project called Brickell CitiCentre. But iStar Financial, which had loaned $58.1 million to the group, took the property back from Reilly in April as the economy rapidly worsened. The all-cash deal with Swire closed last month.
''What speculators lost is now the opportunity for prudent investors and developers,'' said real estate analyst Michael Cannon. ``It happens in every real estate cycle and is happening again now.''
Still, some thought the property's sale price might fall more. ''We're surprised how strong the pricing was, given this market,'' said Jack Lowell, managing director of Flagler Real Estate Services, who was not involved in the deal.
Reilly could not be reached and iStar didn't respond to calls for comment.
Swire has long been known as a prominent but conservative builder in Miami. In 1980 it purchased much of the island now called Brickell Key, commencing a long buildout that includes Courvoisier Centre offices, Mandarin Oriental hotel and condos from Tequesta to Asia.
During the last boom it kept a steady pace, neither launching a buying spree nor ramping up building plans amid the frenzy. Indeed, in recent years as prices skyrocketed, Swire was outbid for high-profile properties, like the Brickell Avenue site where the massive ICON Brickell hotel and condo is being finished and the 10-acres of parking lots surrounding The Miami Herald's headquarters that's under contract for sale.
''We focused on being quite disciplined during the boom years,'' Owens said. ``We felt there was an oversupply coming and wanted to position ourselves so when a correction did occur we would have the opportunity to look at what might be available.''
The stretch of land where Swire's now focusing is bounded by Seventh and Eighth streets, pinched between Southwest First and Southeast First avenues.
The two-block property sits just north of Mary Brickell Village, a retail and restaurant outpost that's done much to revitalize the formerly sleepy financial district. Newly constructed condos, hotels and under-construction office towers are nearby. A Metromover stop is on one side of the property and the Metrorail runs along the other; access to I-95 is close.
''It's as good a development site as there is in South Florida,'' said Peter Harrison, senior VP at Transwestern Commercial Services in Miami.
For now, Owens said they are exploring options on what to Built, though he said it will likely include a mix ranging from retail to hotels.
The 5.65 acre site is currently approved for three million square feet of development. Owens said he doesn't foresee a shovel going into the ground for at least three years.
The move comes as other developers have assembled large swaths of land in the urban core for building when the grim market brightens again.
A group led by Boca Raton developer Art Falcone and partner Marc Roberts assembled more than 25 acres in Miami's Park West neighborhood, with plans for a mixed-use project called Miami Worldcenter.
Coconut Grove native Peter Gardner has 13.5 acres in the Miami neighborhood for a project that's to include apartments, shops and offices along Grand Avenue.
