Near Lincoln Road, Miami Beach Office Assets Trade

The office buildings total 120,000 square feet and are 69% occupied.

MIAMI— Ivy Realty just purchased Miami Beach Towers, a two-building class A office portfolio in the heart of Miami Beach. The sale price: over $47 million. The office buildings sit on Meridian Road just 400 feet from the Lincoln Road esplanade that sees over 20,000 visitors daily. The office buildings total 120,000 square feet and are 69% occupied. The Miami Beach Towers buy comes on the heels of Ivy Realty’s purchase of over 350,000 square feet of class A office buildings by Miami International Airport less than two months ago. “There are enormously high barriers to entry for office space in Miami Beach with virtually no new inventory in nearly a decade and no new construction on the horizon,” Rusty Warren , co-CEO of Ivy Realty, tells GlobeSt.com. “Once we revitalize Miami Beach Towers in the tried and true formula we’ve employed with other office buildings in South Florida, we expect occupancies to soar. It’s a stellar addition to our 1.7 million square-foot o ffice portfolio in South Florida, and the plans for Lincoln and Meridian Roads’ transformation will only add to Miami Beach Towers’ future value.” Sitting at 1674 and 1688 Meridian Road, the two office buildings rise five and 10 stories high and total 30,000 and 90,000 square feet, respectively. The former was built in 1959 and the latter in 1961. Both office towers were upgraded in 2004. The office portfolio purchase also includes two neighboring land parcels of 0.2 acres and 0.5 acres that serve as parking lots. Ivy could develop these parcels into commercial or residential real estate . When the upgrades are complete, the retail space will be repositioned in a way that aims to capitalize on the influx of retailers to Meridian Road. That’s strategic, seeing how retailers are searching for more economical space as Lincoln Road rents soared to near $400 per square foot. Plans for the Lincoln Road District transformation, which was awarded to design firm James Corner Field Operations —of New York City’s famed High Line— include an overhaul of the pedestrian-only promenade as well as Meridian Avenue and other side streets. The plan is expected to involve a year of design and engineering work. The Community Redevelopment Agency has earmarked $20 million to develop the pedestrian part of Lincoln Road, and $12 million more for the side streets connecting Lincoln Road and the convention center. The latter sits less than two blocks from Miami Beach Towers. The district plans will upgrade infrastructure, create distinctive public spaces, and generally enhance the shopping and dining experience to further elevate the Lincoln Road District as a world-class destination. “Miami has long been on our radar with its extremely compelling demographics and international trade-drivers,” says Anthony DiTommaso, Jr. , co-CEO of Ivy Realty. “Miami Beach Towers especially fit our criteria for a value-added investment since the area’s planned transformation is directly aligned with the revitalization approach we take to office properties. Ivy Realty will be an agent of change in line with Meridian Road’s upcoming transformation.” DiTommaso notes the Miami Beach office submarket as severely supply constrained. A proliferation of residential and retail development has added to the dearth as possible prime office sites were usurped for residential and retail development. “Building a stand-alone  office  tower from the ground-up in today’s market has become cost prohibitive just as demand for Miami  real estate soars,” Warren Weiser , chairman of CREC, tells GlobeSt.com. “This is putting existing buildings benefitting from quality locations and strong income in-place at a premium.”