New York Investor Zeroes in on Flagler

Located at 44 West Flagler Street in the heart of Downtown Miami, Courthouse Tower was not listed or on the market before it sold.

MIAMI—Downtown Miami’s landmark Courthouse Tower just sold to a New York real estate private equity firm. Brickman snapped up the asset for $27.5 million. Mika Mattingly of Mika Miami represented the seller, Courthouse Towers LLC , which is owned and operated by the Donovan family. RFK senior directors Benjamin Mandell and John Ellis represented the buyer. Located at 44 West Flagler Street in the heart of Downtown Miami, Courthouse Tower was not listed or on the market before it sold. Courthouse Tower stands at 26 stories and offers 176,292 square-foot mixed-used office and retail space. “The West Flagler area, which has underperformed for some time, is a diamond in the rough and has become one of the few remaining add-value sectors left in Miami,” says Mattingly. “Downtown’s urban core has been evolving under the radar and Brickman’s purchase only validates its progression.” Courthouse Tower was built in 1974. It sits across the street from the Miami-Dade County Courthouse and other government buildings, between South Miami and Southwest 1st Avenues on the south side of Flagler Street. “Brickman’s acquisition of the Courthouse Tower in Miami marks an important milestone and makes a big statement for the future of Downtown, as it highlights the market’s future potential and Brickman’s desire to play an important role in revitalizing the area,” says Mandell. “There are plans to renovate the existing office unit and upgrade the building’s common areas, including the lobby, to better suit their new vision for Downtown Miami.” According to Mattingly, the West Flagler area—the area west of South Miami Avenue—has historically been undervalued and overshadowed by the neighboring East Flagler region, which sits closer to Biscayne Bay. However, a combination of recent developments such as The Langford Hotel and Brightline—an express passenger train service that will connect the major cities of south and central Florida along a 235-mile route—has made the West Flagler area considerably more attractive to investors. The acquisition marks the second property Brickman purchased in Downtown Miami. The commercial real estate investor also snapped up 141,687-square-foot building at 200 Southeast 1st Street two weeks ago for $33.85 million. New Yorker Moishe Mana has also been an active investor in Downtown Miami, having acquired $198 million in properties. “In January 2015, a company led by Israeli investor Moishe Mana acquired 48 and 76 East Flagler Street, also known as Flagler Station, for $35 million,” Alex Zylberglait, senior vice president of Investments and senior director of the National Office and Industrial Practice Group at Marcus & Millichap, tells GlobeSt.com. “That price up 192% from the previous $12 million sale in 2012. The 1.1-acre lot has buildings of 113,742 and 47,339 square feet. The deal fetched about $217 per square foot.” Downtown Miami boasts strong demographics, with 80,750 residents and over 220,000 employees. Work-life integration has attracted an affluent, educated residential market in Downtown with 38 residential projects under development. More than $3 billion is being invested in new public and private projects in mass transit, cultural institutions, recreational parks and entertainment venues. The All Aboard Florida is a new privately-run passenger train between Miami and Orlando that is projected to service approximately five million riders in its first year of operation, and is scheduled to begin in 2017. According to Mattingly, some of the factors increasing the West Flagler area’s appeal include how close it is to the burgeoning Miami River area, its low cost in comparison to other US metropolitan areas, and value-add opportunities. Commercial real estate prices in West Flagler range from $200 to $500 per square foot. The City of Miami also recently approved a $13 million renovation of Flagler Street, which will include enhanced pedestrian amenities and large-scale revitalization, according to the DDA. Construction along the west side of the Courthouse, the side facing Courthouse Towers, is already underway.