$342 Million Sale Of Six Properties On Miami Beach’s Lincoln Road Closes

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MIAMI HERALD – August 19, 2014 – BY INA PAIVA CORDLE

In one of the largest deals in South Florida’s history, the $342 million sale of six buildings on Miami Beach’s Lincoln Road closed on Tuesday. It marks the biggest transfer of property on the pedestrian promenade, with one of the sellers remaining part owner in the new entity.

Miami Beach-based Terranova Corp., and investment partner Acadia Realty Trust, the largest property owners on Lincoln Road, sold their six-building Lincoln Road portfolio to a new partnership of Morgan Stanley Real Estate Investing along with affiliates of Terranova.

The properties, sprinkled along the Lincoln Road and on nearby Lincoln Lane, include the sites of such popular Lincoln Road hang-outs as Sushi Samba and Dylan’s Candy Store. They were originally purchased in two parcels in February 2011 and December 2012, for a total of $191 million. In all, the transaction translated to a profit of $151 million — or 79 percent for Terranova and Acadia, in a combined total of a little over three years.

“It was a very rewarding investment for everyone involved,” said Terranova Corp. Chairman Stephen Bittel, calling it “one of the most exciting deals” in the company’s 35-year history.

Terranova will be the managing member of the new entity, and will continue to manage, lease and develop the properties, Bittel said. Two of the properties on Lincoln Road already have received Historic Preservation Board approval for expansions, allowing for a new large flagship retailer. And an additional development is proposed on Lincoln Lane, creating a three-level building, he said.

“We are fully engaged in the two redevelopments and the one ground-up development that are part of this portfolio,” he said. “And we remain laser focused on working with the city to make sure the redevelopment of the common areas is completed.”

“This partnership is very eager to grow its holdings on Lincoln Road, and the pricing is expensive, but from time to time we hope there are opportunities to increase our ownership,” he said.

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Retail Buildings On Miami Beach’s Lincoln Road Sell For Record $342 Million

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MIAMI HERALD – August 6, 2014 – BY INA PAIVA CORDLE Terranova Corp. and its investment partner are selling a six-building portfolio at a record price for South Florida retail properties.

The biggest property sale on Miami Beach’s Lincoln Road — and one of the highest-priced deals in South Florida history — is in the works, as the South Florida real estate market continues to soar.

Miami Beach-based Terranova Corp., and investment partner Acadia Realty Trust, the largest property owners on Lincoln Road, have agreed to sell their six-building portfolio on Lincoln Road for $342 million.

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Three Lincoln Road Buildings Sell For $139 Million

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DAILY BUSINESS REVIEW – December 20, 2012 – BY ERIC KALIS The $139 million sale of three Lincoln Road buildings caps a banner year for the popular South Beach retail destination.

With Tuesday’s purchase of buildings at 719, 801 and 826 Lincoln Road by Terranova Corp. and Acadia Realty Trust, the pedestrian mall has had the two most expensive retail transactions of 2012 in South Florida. The buying groups in both sales included institutional investors from New York: Acadia and Vornado Realty Trust, which paid $132 million for 1100 Lincoln Road in July.

The latest sale of 719, 801 and 826 Lincoln was first reported by the Miami Herald. Terranova chairman Stephen Bittel confirmed the acquisition in a phone interview Wednesday. The transaction has not been recorded by Miami-Dade County.

“Acadia and Vornado represent the most sophisticated professional capital in the United States and world,” Bittel said. “It’s a real vote of confidence in the future growth of the street when the smartest and richest guys in the real estate world are targeting Lincoln Road.”

Calls to Acadia executive vice president and chief investment officer Joel Braun were not returned by deadline.

The 1100 Lincoln complex is home to Regal Cinemas and Banana Republic and includes a 298-space parking garage.

In July, another New York investor, RC Lincoln Road Holdings LLC, paid $16 million for the Van Dyke Building at 846 Lincoln Road. The RC stands for Richard Chera, an executive at family-run Crown Acquisitions Inc.

Lincoln Road also has had an active year on the leasing front. Notable national retailers who signed leases in the area over the past 12 months include fashion retailers Lacoste and Gap, which is having a two-story, 29,000-square-foot store constructed to replace its existing 1001 Lincoln Road building after signing a long-term lease there in July. H&M and Forever 21 opened new Lincoln Road stores this year after signing leases in 2011.

“The rental rates on Lincoln Road have been skyrocketing to in excess of $250 a foot,” according to Howard Taft, senior managing director at Miami-based Aztec Group.

“There is a lot of upside in the existing rents, which is probably the motivation [for Terranova and Acadia] paying top dollar” for the 719, 801 and 826 Lincoln buildings, Taft said.

For Miami Beach-based Terranova and White Plains, New York-based Acadia, the 719, 801 and 826 Lincoln acquisition makes them Lincoln Road’s largest retail landlords. The companies teamed up in February 2011 to buy three other Lincoln Road buildings for nearly $52 million.

“We have a 15-year relationship with the executives at Acadia and talked about doing things together for much of that time,” Bittel said. “Independently, each of us has been growing our high street retail portfolios. They wanted to be in our market.”

The three buildings acquired this week by Terranova and Acadia total about 60,000 square feet, which puts the purchase price per square foot at a whopping $2,300. Tenants include Fossil, Steve Madden and the Tiramesu restaurant.

Both of the Lincoln Road portfolios owned by Terranova and Acadia have future development rights, according to Taft, who was not involved in the most recent transaction but brokered the February 2011 deal for the companies.

“The synergy of this property with the other site will be the catalyst for them to control the western portion of Lincoln Road,” Taft said.

Rental rates at the buildings are frequently less than half of what other Lincoln Road tenants are currently paying, according to Bittel. That gives the companies an opportunity to capitalize on future rent increases.

Terranova intends to handle leasing and management at the buildings, he said. It plans to work with the city of Miami Beach on any potential building improvements.

Bittel refused to rule out future acquisitions in the area by the Terranova-Acadia partnership.

“We’re always looking to make advantageous buys in markets that have opportunities for growth,” he said.

The seller of the buildings is South Beach TriStar Capital LLC, which is managed New York-based real estate firm TriStar Capital. TriStar owns the 475,000-square-foot Miracle Mile Shops at Planet Hollywood Resort & Casino in Las Vegas and the W South Beach hotel in Miami Beach.

Calls to developer David Edelstein, TriStar’s president, were not returned by deadline.

Eric Kalis can be reached at (305) 347-6651.

Daily Business Review – By Eric Kalis

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