A company linked to Spanish billionaire and fashion mogul Amancio Ortega paid $370 million for an entire block of Lincoln Road this week, the second largest real-estate deal in Miami-Dade County history.
The prime stretch of South Beach retail property includes the new Apple store, the Gap, Intermix, Athleta and a forthcoming Nike location.
The sellers were South Florida real estate investors and developers Jonathan Fryd and Michael Comras, who assembled the properties between 1001 Lincoln Rd. and 1035 Lincoln Rd. for about $12 million in 1999 and 2000.
“We’ve invested in these properties for 16 years, and I believe Lincoln Road has come a long way and is in excellent shape,” Fryd said. “We’ve created a tremendous amount of value and now is a perfect time to sell for us.”
The deal includes about 48,000 square feet of land and — once the new Nike is finished — about 75,000 square feet of buildings, Fryd said. That’s a price tag of about $7,700 per square foot of land.
Lincoln Road’s heady rents, now above $300 per square foot, justify the massive deal, Comras said.
“It’s become one of the top retail streets in the world by virtue of the fact that it’s on the beach and attracts people from all over the world,” Comras said.
Commercial real-estate firm HFF brokered the sale.
Lincoln Road has seen a flurry of activity as out-of-town buyers hoover up properties. Earlier this summer, New York investor David Edelstein paid about $6,500 per square foot for two buildings at 918 and 920 Lincoln Road.
Ortega, who owns global fashion giant Zara, has a net worth of $67.7 billion, according to Forbes. He recently opened a Zara location on Lincoln Road and partnered with Ugo Colombo in 2009 to develop the Epic Residences & Hotel downtown.
The company that paid $370 million for the Lincoln Road block is listed on county property records as Playa Retail Investments. Playa shares an office at the Epic with Ponte Gadea Miami, the local branch of Ortega’s real-estate investment firm.
Ortega hasn’t confirmed the deal or discussed his plans for the site but it seems unlikely he would change the profitable mix of national retailers already in place.
The sale sets a record for Lincoln Road, surpassing a $342 million deal for six properties that closed last year. The biggest commercial transaction in Miami-Dade history remains the $375 million sale of 50 percent of the Fontainebleau Miami Beach hotel to a company owned by the government of Dubai in 2008.
The size of the deal reflects a hot retail market in Miami, said Justin Greider, vice president for Florida retail at the commercial real-estate firm JLL, which was not involved in the sale.
“Retailers are driving hard to get into Miami,” Greider said, in part because South Florida has a large population of millennials, a steady stream of foreign investment and visitors from all over the world.
Given the strength of the local market, Greider added that JLL isn’t worried about “bubble pricing.”
“It’s very competitive but we don’t see these prices as being overpaying right now,” he said.
Steven Gombinski, president of the Lincoln Road Property Association, said Ortega’s purchase was also a sign that investors are excited about plans by the city of Miami Beach to give the street a major makeover with wider sidewalks, public art, new fountains and other renovations.
The redesign is being led by architect James Corner, best known for his work on the High Line in New York City. Early drafts of the plan drew criticism from some preservationists concerned that the neighborhood is being developed more for tourists than locals.
But Gombinski said the work will create a “more friendly environment” for locals.
“It’s going to open up Lincoln Road,” he said, “and make it much more accessible and attractive for people who live here.”
This story was originally published September 04, 2015 11:46 AM.