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| Lincoln Road commercial corridor, Miami Beach, FL |
WALNUT CREEK, CA -- In South Florida, a rare property moves
quickly.
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| Drew Kristol |
This South Beach retail portfolio was enough to pique any
savvy investor’s interest: It features seven ground-floor retail properties
built in the late 1920s, rich with character and exceedingly rare. Outstanding
rental potential due to low rents and short-term leases made the portfolio even
more appealing.
For Drew Kristol, a vice president investments in
Marcus & Millichap’s Miami office and a director of the firm’s National
Retail Group, and his partner, Kirk Olson, also a vice president
investments and a director of the National Retail Group, that meant they needed
to find the very best match for the property — a buyer who could appreciate its
unique qualities and ensure its success in the thriving South Beach market.
“There’s a lot of competition for these types of properties
because they’re so hard to come by,” Kristol says. “We have only five
legitimate retail corridors in South Beach: Lincoln Road, Washington Avenue,
Collins Avenue Fashion District, Ocean Drive, and the Alton Road Corridor.
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| Kirk Olson |
Alton Road, in particular, benefits from both the high-rise, professional condo
traffic and the traffic leaving and entering Lincoln Road, so these properties
are really sought after.”
The portfolio consists of six retail properties located
along the high-profile Alton Road commercial corridor, and one additional
retail property located on Collins Avenue and 73rd Street in Miami Beach.
Major tenants include Panera Bread, Papa John’s Pizza, Alex
Linens, Beach Food Market, Lambs Laundry, Nu Art Signs, and Provecho Bistro
Latino.
Selective vetting to find the right fit
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| Kirk Felici |
When a portfolio gets that kind of attention, the key is to
pick an experienced buyer with a track record of closing similar transactions.
Kristol says that his team qualified buyers who understood the process and were
willing to do the work to make the deal happen.
“On a big portfolio like this with a lot of moving parts,
Kirk and I try to be as realistic as possible about obstacles we’re likely to
encounter as we go to market,” Kristol says. “With myriad details to consider,
the most important part of the process happens before the properties ever hit
the open market — everything begins with the seller.”
Kristol and his team worked closely with the principals,
getting to know them and thoroughly researching the property. Issues, whether
they’re with tenants, the structure, the title, or environmental concerns, are
bound to surface; a good team brings them to light and develops a sound
strategy.
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| Bill Rose |
“We always learn everything there is to know about
properties we market so we can be as open as possible to the buying community,”
Olson says. “Those buyers who hear everything there is to hear and are still at
the table are the best possible candidates. They’re the ones we want to work
with.”
A commitment to sellers
Of course every deal has its unique challenges, and this one
required particular sensitivity to the sellers’ emotional state. “That’s often
the case when you have a seller who hasn’t transacted very often,” Kristol
says. “In this situation, the same family had owned the portfolio for almost 50
years. You’ve got people going through a life-changing experience and with that
comes a lot of emotion.”
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| Alton Road Bridge, Miami Beach, FL |
When it was time to take the property to market, Kristol and
Olson did so with support from Kirk Felici, first vice president and
regional manager of the Miami office, as well as from Bill Rose, vice
president and national director of the National Retail Group.
“By having dominant
local presence and expertise, national exposure and the support of
institutional-grade marketing packages, we are incredibly effective selling
these types of high-profile assets that walk the line between private and
institutional investments,” Kristol explains.
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| Ocean Drive, Miami Beach, FL |
Kristol recalls working so hard on day one that they
received multiple offers immediately, from both private and institutional
investors and out-of-area and local buyers. They chose the buyer based not just
on price but also on terms and the ability for a quick close. The sales price
of $18.1 million equates to $420 per square foot.
Kristol and Olson were able to keep the sellers focused on
the big picture and guide them to the finish line. The Marcus & Millichap team’s
many years of experience and steadfast commitment to specialization kept the
deal on track and made for a successful transaction.
“Our firm was founded on this principle,” Olson says. “The
most effective market knowledge can only come through specialization in terms
of property type and geography.
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| Collins Avenue, Miami Beach, FL |
“This specialization allows us better access to the right
buyers and to vendors that can help speed a transaction. We have a better
understanding of how to articulate the value of a deal and geographic market
and also how to overcome common deal pitfalls. That’s how we’re best able to
maximize value for our clients, and that’s what we’re in business to do.”
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