Harry Macklowe Sells $20 Million Development Site at a Steep Discount

Overview of the Sale

Harry Macklowe has sold a prime development site intended for a 770-unit multifamily complex for $20 million, reflecting a significant 37% discount from its purchase price just three years prior. This transaction highlights the evolving dynamics of the South Florida real estate market, where high demand has recently faced new challenges.

Site Details and Recent Developments

• Location: 8609 Southwest 72nd Avenue, Kendall, Miami-Dade County
• Size: 1.6 acres
• Buyer: The Pérez family’s Related Group, based in Coconut Grove.
• Proximity: The vacant site sits east of Simon Property Group’s Dadeland Mall.

Three years ago, Macklowe, a prominent figure in real estate known for landmarks like 432 Park Avenue in Manhattan, acquired the property for $31.9 million. His plans included building two 25-story towers featuring 770 residential units and approximately 12,200 square feet of commercial space, including an 8,800-square-foot restaurant.

Factors Influencing the Sale

Economic Challenges

Macklowe’s ambitious project faced hurdles due to:

• Rising interest rates
• Soaring insurance costs
• Strained capital markets

These economic factors contributed to financial difficulties, prompting Fortress Investment Group to initiate foreclosure actions against both the Kendall site and another property located at 5 East 51st Street in Midtown Manhattan.

December 2022 Situation

In December 2022, Macklowe had borrowed $39.2 million from Fortress for acquiring the Kendall site. Following the foreclosure filing, he promptly listed the property on the market. Interestingly, the sale closed successfully, allowing Macklowe to pay off the Fortress mortgage, which halted the planned foreclosure auction.

Future Prospects in South Florida

Despite these setbacks, Macklowe remains active in the South Florida market. He is collaborating with Related Group on another ambitious project in North Bay Village. This new proposal involves a pair of 43-story towers offering a total of 364 apartments on a scenic bayfront site at 7946, 8000, 8010, and 8020 East Drive.

Notable Market Trends

The tri-county area of South Florida has experienced a real estate boom since late 2020, fueled by an influx of out-of-state residents. This surge in demand led to unprecedented rent increases in multifamily housing, creating a landscape where developers are adapting to both challenges and opportunities rapidly.

Conclusion

The recent sale of the Kendall site by Harry Macklowe for $20 million underscores the complexities of the current real estate market in South Florida. The easing of financial woes through this transaction does not mark an end to Macklowe’s ventures in the region. Instead, it sets the stage for potential collaborations with established players like the Related Group.

For more on zoning laws, development trends, and investment opportunities in South Florida, explore resources from Miami-Dade County and The Real Deal.

This article serves to inform stakeholders and potential investors about recent movements within South Florida’s multifamily real estate sector and the evolving landscape shaped by economic variables.