Magic City Tech Boom? Microsoft In Negotiations At 830 Brickell And Elon Musk Wants To Build Tunnels Under Miami

Miami, the magic city, is on track to become the next Silicon Valley as the fallout from the COVID-19 pandemic has brought people flocking to South Florida. Florida saw the second highest population growth over any other state in 2020, following Texas, adding over 240,000 new residents in a single year. The influx of new residents is being driven by those looking to take advantage of remote-working opportunities or seek a state that has let business remain open and has pro-business tax structure. This has led to Miami and Palm Beach real estate pricing and absorption reaching near record highs.

Not only are the new residents flocking from the high-tax New York, at the same time as South Florida’s population boom, the San Francisco Bay Area has seen an exodus of venture capitalists and tech entrepreneurs. Mayor Francis Suarez has opened up the city to tech entrepreneurs and has expressed interest in bringing innovative companies to the magic city and making Miami a global tech hub. Mayor Suarez recently announced he will be appointing a Chief Technology Officer for the city.

Miami’s office market is being a surge in demand and setting record high pricing. Microsoft (NASDAQ: MSFT) is one of the major tech firms looking to move to Miami, the multinational software provider is actively in negotiations to lease 30,000 square feet of space at OKO Group’s 830 Brickell, a 56-story office tower adjacent to Brickell City Centre which is currently under construction. Pricing is still relatively cheap compared to other major markets, asking rates at 830 Brickell are reportedly in the $70’s PSF range. Ken Griffin’s Citadel Securities hedge fund is also reportedly looking at office space in 830 Brickell as is the Chicago-based law firm Baker McKenzie.

The biggest news came when Tesla and SpaceX founder Elon Musk tweeted that he had talked with Florida Governor Ron DeSantis about building a tunnel system underneath Miami to eliminate traffic and pollution. Mayor Suarez tweed that “we will do it,” and invited Musk to visit him at City Hall. In the past Miami has had success building tunnels at a comparatively low cost. The initiative would be led by Elon Musk’s Boring Company, who is getting ready to reveal the Vegas Loop to the public, a 4,475’ tunnel loop under the Las Vegas Convention Center. In the Las Vegas Loop passengers will reach speeds up to 155 mph and will ride in Tesla Model X’s, Model 3’s, and a 16-passenger modified Model 3. Las Vegas in now working with the Boring Company to build a citywide network of tunnels.

For more information about 830 Brickell, Brickell office space, private showings or purchasing/ leasing information please fill out the form below:

Inside Stool Presidente, Dave Portnoy's $35K Miami Beach Rental At 1 Hotel & Homes

Take a look inside Barstool Sports Founder also known as “Stool Presidente,” Dave Portnoy’s lavish Miami Beach rental while he was in town visiting multiple Miami hot spots just days after announcing his fundraising efforts to help struggling small business owners. Portnoy’s “Barstool Fund” has recently hit $20M in less than one month, helping nearly 100 small business that have struggling due to the COVID-19 pandemic. Portnoy started the fund with his own $500,000 but other big name donors include Tom Brady, Guy Fieri and Kid Rock.

Unit 1440 at 1 Homes South Beach is listed for $38,000 per month by Richard Goihman and Neal Klotsman of Douglas Elliman, Portnoy was able to snag the unit for $35,000 as he occupied residence for a one month period in December till January.

The 3 bedroom, 3 bath unit features over 2,092 sq.ft. and is completely furnished and equipped by interior designs of Meyer Davis Studio, the unit is provided with housekeeping and concierge services by the hotel, which can include everything from pre-arrival pantry stocking to luxurious bathroom toiletries. Located directly on the ocean and centered in the heart of South Beach, enjoy 600 linear FT of beachfront, 4 pools, 14,000 sq.ft. fitness center and Bamford Spa.

While Portnoy was in town, he was spotted at Miami’s newest hot spot “Casa Tiki” on Calle Ocho and was treated to the New Year’s Eve celebration “Midnight in Paris” ringing in the New Year in style at David Grutman‘s Swan Miami, where rapper Meek Mill was spotted alongside Chris Brown, Tyga. 

Brickell City Centre Launches Digital Turnkey Units

Swire Properties has designed digital turnkey units at Reach and Rise Residences at Brickell City Centre. The customized digital spaces give buyers a real-life glimpse at how their unit will look before they even step foot in it. Swire Properties has strategically partnered with the NYC design firm, Interior Marketing Group, to target the New Yorkers moving to South Florida seeking lower taxes. With threats from the COVID-19 pandemic, buyers from out of state have been buying homes without seeing them in person. These digital turnkey units can be purchased exactly as they appear in digital renderings, starting at $500,000. Out of state buyers can move into their new Brickell City Centre residences having trust that their units will look exactly as they expect from the digital renderings. All new home owners need to bring is their toothbrush after choosing a digital turnkey unit from Reach or Rise are residence.

Fontainebleau Miami Beach Exits Special Servicing On $975 Million CMBS Loan

Jeffrey Soffer’s Fontainebleau Miami Beach has exited special servicing on its $975 million commercial mortgage-backed security loan (CMBS). When issued in November 2019, the loan was the largest CMBS hotel loan in South Florida. The loan entered special servicing on March 30 amid the onset of the COVID-19 pandemic and following a modification request. The loan was returned to its master servicer on September 23 and payments reportedly remained current throughout the special servicing period, although as part of a forbearance agreement monthly reserve payments have been deferred to 2021; additionally, the hotel’s 2020 financials will not be used when calculating the property’s debt yield.

CMBS loans, which are secured by a mortgage on a commercial real estate property, are among the hardest to restructure as under the typical CMBS structure. A loan is transferred into a CMBS pool and a Master Servicer administers the loan. The Master Servicer is generally not permitted to enter into a loan modification or restructuring agreement and a Special Servicer is needed to potentially modify or restructure an individual loan in a CMBS pool. When loans are in special servicing the borrower cannot take out new debt or refinance their property.

South Florida’s hotels have bit hit with some of the hardest economic impact from COVID-19 where the industry must meet nearly $4.2 billion in CMBS payments. Miami Beach hotels, motels and short-term rentals were ordered shut on March 23 and have laid off thousands of employees. Fontainebleau Development also owns the JW Marriott Turnberry Miami, Turnberry Isle Marina, Turnberry Ocean Club and The Big Easy Casino in Hallandale Beach.

The Fontainebleau Miami Beach opened in 1954 and was designed by architect Morris Lapidus. The property spans more than 15 acres with 11 pools, a 40,000 SF spa, and 12 different restaurants and bars including Hakkasan and LIV Nightclub. The hotel is made up of four towers including the Chateau and Versailles towers with 846 hotel rooms as well as the Tresor and Sorrento towers with 748 condo-hotel units. It was acquired by Turnberry Associates for $325 million in 2005.

Miami, Palm Beach County and Fort Lauderdale recover about 28,000 jobs since the start of the COVID-19 pandemic

Almost 28,000 jobs have been recovered since the beginning of the COVID-19 pandemic in Miami, Palm Beach County and Fort Lauderdale.  Majority of these jobs fall into the government, hospitality and retail sectors.  The Bureau of Labor Statistics released data showing the Miami market has gained  over 16,000 jobs in August, Palm Beach has gained about 7,000 and Fort Lauderdale has gained over 5,000.  The largest growth in the job market over the last few months is coming from the government sector.  The majority of these jobs are temporary positions tied to the 2020 Census, but has helped the unemployment rate fall to single digits for the first time since COVID-19 hit.  

Hospitality and retail are industries that have suffered considerably from the COVID-19 pandemic across the Country.  Miami has lost about 70,000 jobs in hospitality and about 22,000 jobs in retail since March and April.  As stores and restaurants continue to open up operating at limited capacity, both industries combined have recovered an average of 55% of the jobs lost.  This has significantly boosted Miami’s total COVID-19 job recovery rate to about 45%. 

Palm Beach County’s hospitality and retail industries are slowly making a comeback but not at the same rapid pace as Miami.   At the beginning of the pandemic hospitality in Palm Beach County lost about 48,000 jobs and retail lost almost 10,000.  Since April, hospitality has recovered about 30% of jobs lost and retail has recovered about 45%.  Palm Beach County has regained about 35% of the 100,000 total jobs lost from the pandemic. 

Fort Lauderdale’s hospitality industry lost over 3,000 jobs and retail lost about 14,000 since March and April.  Hospitality has recovered about 44% of the jobs lost and retail has recovered about 60%.  Fort Lauderdale has a total recovery rate of about 36% of the 130,000 jobs lost from the pandemic.  Overall even though job loss from COVID-19 remains down, it is hopeful to see industries slowly coming back as customers begin to leave their houses and support local communities.   

License Agreement Ends Between Brightline And Virgin Trains USA Amid COVID-19 Pandemic

The partnership between Brightline and Virgin Trains has been terminated amid the COVID-19 pandemic and South Florida’s new commuter train service will go back to using the Brightline brand. The train service which runs between Downtown Miami, Fort Lauderdale and West Palm Beach, has not run since March 25 and has laid off 250 employees. Virgin Trains USA was expected to make a minority investment into the Brightline train system which was set to complete their rebrand to Virgin Trains by mid-2020. Brightline and Virgin Trains had signed a Licensing Agreement in November 2018 although Brightline’s parent company, Fortress Investment Group, reportedly sent a termination notice in July of this year.

WeWork Leaves Lincoln Road Location As Landlord Seeks $19.5 Million In Unpaid Rent

WeWork’s trouble’s due to COVID-19 continue as the landlord of their 350 Lincoln Road location has sued the co-working giant in Miami-Dade Circuit Court. SML 350 Lincoln Inc., an entity controlled by Shaul Levy and Meir Levy, alleges that WeWork breached their lease by failure to pay rent in April, May and June while occupying the 40,000 square foot space and now owes in-excess of $19.5 million in back-rent and legal fees. WeWork said in a statement that the lawsuit is without merit and will continue to work with the landlord to resolve the situation in a mutually beneficial fashion. WeWork’s 16-year lease at 350 Lincoln Road began in November 2014 and runs through October 2030.

WeWork will close the Lincoln Road location on August 14 and has also moved to consolidate its Miami Beach members to 429 Lenox Avenue. Last month we reported that Goddard Investment Group has moved to evict WeWork from the Lenox Avenue location, but the two parties were reportedly able to resolve their differences.

WeWork, which is now led by CEO Sandeep Mathrani, still has locations in Downtown Miami, Brickell and Coral Gables. Times have not been good to WeWork following its failed IPO in 2019. The coworking giant recently announced that it will being closing its first location to ever open in New York City and saw its valuation slashed from over $47 billion to $2.9 billion.

In May 2020, a group of WeWork’s members moved toward suing the co-working giant demanding that WeWork cease collecting rental fees. Many tenants had already requested rent relief, cancelled their leases or stopped paying, which put over $5.5 billion of CMBS loans backed by WeWork occupied properties at risk. Some of the CMBS loans back WeWork flagship locations in New York and San Francisco. WeWork has retained Newmark Knight Frank and JLL to try to renegotiate leases and negotiate concessions from landlords at some of their properties as the firm try to stave off a potential bankruptcy.

WeWork’s problems do not end there. Former CEO and co-founder Adam Neumann is reportedly under investigation for self-dealing by the New York State Attorney General. In addition, the Tokyo-based SoftBank led by Masayoshi Son and a special committee of WeWork board members have been locked in a legal battle after Softbank walked away from a $3 billion tender offer in April 2020 which was part of the $9.5 billion bailout package SoftBank signed with WeWork following WeWork’s failed IPO.

Le Sirenuse Restaurant & Champagne Bar at The Surf Club The Latest Permanent Closure Due To COVID-19

COVID-19’s impact on the restaurant industry and commercial real estate is beginning to show its ugly face. Just several years after their well received March 2017 opening, Le Sirenuse Restaurant & Champagne Bar at The Surf Club has permanently closed its doors citing the fallout from the COVID-19 pandemic. The Surfside location was the first Le Sirenuse location outside of Positano, Italy, where the original restaurant is located at Hotel Le Sirenuse. Le Sirenuse Restaurant & Champagne Bar at the Surf Club was located in The Four Seasons Hotel & Residences at The Surf Club, at 9011 Collins Ave. The ultra-luxury hotel-condo development was developed by Fort Partners, led by Nadim Ashi and delivered in 2017. The Surf Club Restaurant by Thomas Keller, which is also located at The Four Seasons Hotel & Residences at The Surf Club, remains open.

The Surf Club has been an integral part of the cultural history of Miami Beach since its inception as a private social club in the 1930's. The Four Seasons branded redevelopment led by Fort Partners broke ground in March 2014. The building features a 77 room hotel and 150 residences across three glass towers, two of which are residential and one hotel.

Neiman Marcus To Close Worth Avenue Location After Filing Chapter 11 Bankruptcy

COVID-19 continues to shake the commercial real estate industry, especially when it comes to retail. The Dallas-based Neiman Marcus Group has announced that they will be will be closing their Worth Avenue location in Palm Beach amid the luxury retailer’s Chapter 11 Bankruptcy Protection Proceedings. Neiman Marcus is actively working with A&G Real Estate to find someone to take over their 48,661 SF lease at 151 Worth Avenue which runs through May 31, 2026 and has options available to the tenant through 2051. 151 Worth Avenue is owned by the New York-based O’Connor Real Estate Advisors who acquired the property in January 2014 for $40 million.

"Real estate is a long-term play. These leases represent an incredible opportunity for retailers and investors to gain a foothold in markets that, under normal conditions, are renowned for their traffic and sales – as well as for their high barriers to entry," said A&G Real Estate Co-President Emilio Amendola. "Additionally, some of these locations are particularly promising for conversion to hotel, office or residential use." 

The Worth Avenue, Palm Beach store currently remains open for curbside pickup and appointments only. Neiman Marcus first filed for Chapter 11 Bankruptcy in May 7, 2020, amid the fallout from the COVID-19 pandemic in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

CC Homes Offers On-Demand Telemedicine Services Through Exclusive Partnership With Baptist Health South Florida

CC Homes, one of Florida’s leading homebuilders led by Jim Carr, has teamed up with Baptist Health South Florida in an exclusive partnership to provide health care on demand to homebuyers in CC Homes communities Canarias at Downtown Doral and Maple Ridge in Ave Maria, FL. With health top of mind globally amidst the COVID-19 pandemic, Canarias and Maple Ridge homebuyers will receive complimentary Baptist Health Digital Health Kits powered by TytoCare™. The digital health kit offers unlimited virtual urgent care visits and the innovative TytoHome personal exam device, an easy-to-use touchscreen, HD camera and microphone, infrared digital thermometer, as well as several adapters to record ears, throat, heart and lungs.

“As a homebuilder we strive to create exceptional places to live. Places that are comfortable, healthy and that offer many conveniences and uncommon luxuries,” said Andres Miyares, Chief Operating Officer at CC Homes. “Baptist Health Care On Demand delivers the same value and quality, and we’re proud to offer our homebuyers premium access to this cutting-edge medical technology.”

Available for non-life-threatening illness and injuries, the technology enables Canarias and Maple Ridge homebuyers to avoid busy waiting rooms while saving time, money and finding peace of mind with 24/7 access to Baptist Health South Florida’s trusted healthcare providers in the comfort of their own homes.

CC Homes’ Canarias development, a community of more than 300 luxury single-family homes and townhomes in Miami’s Downtown Doral neighborhood, began offering Digital Health Kits in December 2019. When the COVID-19 pandemic hit South Florida earlier this year, CC Homes decided it was crucial that buyers in their other master-planned development, Maple Ridge in Ave Maria, also receive privileged access to the technology. All homebuyers at Canarias and Maple Ridge receive one year of free and unlimited face-to-face video Urgent Care visits as well as the TytoHome Medical Exam Device. They also receive concierge setup and 24/7 customer support.

“The convenience and value of telehealth isn’t a secret after the last three months, and Baptist Health has led the way in giving consumers access to virtual care since 2016,” said Danny Elfenbein, director of Digital and Consumer Solutions at Baptist Health South Florida. “This innovative ‘healthcare included’ approach with CC Homes and TytoCare™ will make healthcare more convenient than ever as we empower consumers to be more engaged in their own care.”

For more information about Canarias at Downtown Doral, private showings or purchasing/ leasing information please fill out the form below: