Friday, December 26, 2014

Jordache buys Setai Hotel on Miami Beach for $90 million

By Rene Rodriguez

The Jordache look, a quaint relic of the 1980s, is coming back in style in a different way.
Nakash Holdings, the investment company controlled by the designer jeans firm Jordache Enterprises, announced Wednesday it has purchased the 120-room Setai Hotel, one of Miami Beach’s most vaunted celebrity haunts, for about $90million.
The Setai is the latest acquisition by Jordache, which bought the Versace Mansion last year for a reported $41.5 million, and also owns five other hotels in the area, including the Breakwater Hotel and the Hotel Victor.
“The Setai is really the crown jewel of Miami Beach,” said Jonathan Bennett, managing director of Nakash Holdings, the real estate division of Jordache. “It is the epitome of luxury in that city. We’ve enjoyed spending time there, and when it came up for sale, we knew it was something that would be a great fit for us. It’s special and unique, and there’s nothing else on the Beach that can compete with it.”
With 85 hotel suites and another 35 condo units, the price averages out to $750,000 per room. That makes it one of the highest per-room sales ever in Miami Beach, said Scott Brush, a Miami-based hotel consultant. The condo units are privately owned, but most can be rented through the hotel program.
“There have been some really high numbers recently — numbers that five years ago would have you committed to an asylum,” Brush said. “Rumors have it that the Delano might be available for $1million a room. We’re also talking about a market, Miami Beach, where the numbers have gone through the roof. You can still pay more in New York City or San Francisco, but for an area that did so poorly for so long, it has really come into its own in the past few years. As occupancy numbers go up, so do the value of the hotels.”
Built originally in 1938 as the Art Deco-styled Dempsey Vanderbilt Hotel, the hotel at 2001 Collins Ave. was renovated in 2004 and augmented by a 40-foot tower that is home to one, two and three-bedroom condos ranging in size from 900 to 3,500 square feet. Conceived partly by Aman Resorts founder Adrian Zecha, the beachfront Asian-inspired grounds include an interior courtyard pool surrounded by pergolas and an expansive outdoor pool garden. In 2013, readers of Conde Nast Traveler voted it the best hotel in Miami Beach and No.2 in Florida.
Past guests have included Hugh Jackman, Jennifer Hudson and Dylan McDermott. Its hotel suites bring some of the highest rates on Miami Beach, with a one-night stay on Jan. 4 starting at $1,360 plus tax; according to the hotel website, it is sold out through Jan. 2. In 2013, a full-floor, 7,100-square-foot condo unit on the building’s 40th floor sold for a record-setting $27 million — just over $3,800 per square foot.
Bennett said the current contract with the management firm that operates the condo portion of the facility expires early next year. He said the decision has not been made whether to renew or go in a different direction.
Jordache’s interest in Miami Beach won’t stop with the Setai, he said.
“We own several other properties there and the chairman of our company [Joe Nakash] has a residence on Fisher Island, so he spends a lot of time there,” Bennett said. “We’re going to continue to seek out these kinds of opportunities and add to our portfolio as they come along.”

Posted by
Article Source:

Read more here:

Russian ruble’s skip hits Miami realty market

Written by on December 23, 2014, Miami Today

Residential brokers who help Russians find homes in Miami say the plunging value of the ruble will probably affect their clients in a variety of ways, including apprehension over buying and renting here alongside higher motivation to place their money in a more secure country.
Russians are already buying in Miami and they know the market, said Anita Funtek, broker at The Boscolo Realty and CEO of the Miami New Construction Show.
“Their buying power is definitely shrinking as the ruble is falling, but as they have doubts in the future of the Russian economy, their motivation is higher to place their savings to a more secure country,” she said. “Many just want to stop their loss right now and, if they were planning to buy in the last couple of months, the current situation is helping them to make the decision faster.”
Ms. Funtek has a large number of Russian clients in Sunny Isles where there’s a community of Russian stores, restaurants and newspapers. She said there’s also a growing Russian population in Hollywood and Golden Beach.
It’s difficult to be a fortuneteller, she said, but the falling ruble could increase as easily as decrease the number of Russians buying and renting property in the Miami area.
“I just returned from a month-long trip to Ukraine and Russia where I talked to many friends who are worried about the ruble,” Ms. Funtek said. “Just like in the stock market crash, some want to stop the loss and put their money in a safe haven because they don’t feel they have a future in Russia; others are hesitant to buy and want to wait until the market improves.”
At the beginning of the year, $1 bought 33 rubles. The escalating currency crisis began in the second half of 2014 due to the fall in the price of oil, a major export of Russia, along with the international economic sanctions imposed on Russia by the US and European Union following President Vladimir Putin’s military intervention in Ukraine.
Last week, the Russian ruble steadied around 62.5 against the US dollar after Russian authorities announced Dec. 18 measures to ease banking regulations and encourage exporters to sell foreign currency. On Dec. 19, Mr. Putin endorsed the Russian central bank’s raising its key interest rate 6.5 percentage points to 17%, its highest since 2003.
The exchange rate from rubles to dollars results in properties that are twice as expensive for Russian buyers and current condo owners, said Irina Kim Sang, broker/associate for Coldwell Banker Miami Beach.
“The devaluation of the ruble and oil price decrease is distressing a lot of Russians,” she said. “I’ve seen the effect of this confusion and worry in my daily practice for the past three months.”
There will be a number of consequences, Ms. Sang said. “Those who have invested $1 million plus [for a condo] have at least $1,000 in monthly fees,” she said. “With the ruble devalued, they’re paying double the amount for maintenance and, should they only be using the property for three to six months of the year, they may want to sell.”
For her affluent Russian clients who have an investment portfolio of homes, sometimes three or more in Miami and elsewhere around the world, Ms. Sang doesn’t believe they are concerned with finances.
However, Ms. Sang said, political instability and the uncertainty of getting a visa might affect people of all income levels if they can’t travel to their vacation home.
“There are people in Russia who don’t want to immigrate and are more interested in investing their money in property here,” she said. “They prefer a tourist visa so they don’t have to pay worldwide income taxes.”
With the shrinking ruble and the possibility that the problem will continue to loom, Ms. Sang said there’s a potential for clients who might be interested in committing to immigration through an EB-5 visa, bringing investment to Miami for an approved regional center project. Those people, she said,  are potential homebuyers. 

Posted by
Article source:

Monday, December 8, 2014

In Miami, Luxury Knows No Limits

MIAMI — With a construction worker’s hard hat tipped to a jaunty angle on his bald head, the developer Craig Robins marched toward a cavernous three-story space, raw with dusty building materials and cables poking from unfinished walls.
“This is going to be Valentino,” Mr. Robins, 51, said in October in the Miami Design District, once a sleepy swath of furniture stores in a less-than-desirable part of town that Mr. Robins and his partners are transforming into a large concentration of luxury shops.

Louis Vuitton’s flagship store will stand just north of Valentino, and Van Cleef & Arpels to the south. Facing them will be Bulgari and Christian Dior. About 20 top-drawer brands are to open in the district this month, in individual buildings along spotless walkways and streets, in the manner of Worth Avenue in Palm Beach, Fla., and Rodeo Drive in Beverly Hills, Calif.
Another 30 or so are planned for the first half of 2015. And by the end of 2016, Mr. Robins plans to have about 120 high-end tenants in a 10-square-block radius, alongside restaurants, galleries, a boutique hotel, sculptures, murals and 300 new trees, some perched on roofs. “We’re not a mall, we’re a neighborhood,” Mr. Robins said in a thinly veiled jab at Bal Harbour Shops.

For decades, Bal Harbour was the only shopping center in the Miami area where customers were assured a wide choice of luxury goods. Now, it has lost some of retail’s choicest names, like Louis Vuitton, Hermès, Cartier, Emilio Pucci, Givenchy and several others, to the Design District.
In Miami and its environs, a thumping economy is continuing to animate a construction boom. And in the once-genteel world of luxury retail, it has spurred a no-holds-barred skirmish for the attentions of the roughly 14 million people who arrive each year, many of them cash-wielding visitors from Latin America, Russia and Western Europe, and the five million people who live here and in the area, including Broward and Palm Beach Counties.
For example, in the Brickell area south of downtown, cranes hover like colossal flamingos over dozens of building sites, the largest of them the Brickell City Centre, a $1 billion, 8.3-million-square-foot shopping, office, condominium and hotel project on nine acres. Saks Fifth Avenue plans to open the site’s anchor store in fall 2016.
“Seventy percent of the retail sales in Miami are to visitors from Latin America,” said Deborah Overholt, the center’s retail leasing director. “Their No. 1 priority is luxury. That’s what they’re looking for.”
In 2012, she said, visitors staying at hotels in the Brickell area alone, which includes the Mandarin Oriental and the Four Seasons, spent $800 million on shopping in and around Miami.
The Brickell project, she said, will cater to that clientele. As for the Design District, Ms. Overholt said she was not concerned that it may pull away a hefty amount of business long before Brickell can open its doors. “We feel that high tides float all boats,” she said. “It’s better for everyone if we’re all successful.”
On Lincoln Road in Miami Beach, a pedestrian thoroughfare of shops and restaurants that has begun to attract upscale businesses, six retail buildings sold in August for a total of $342 million, a transaction that The Miami Herald called one of the largest in South Florida’s history.
And Bal Harbour Shops and the Aventura Mall, which is increasingly a home to premium retailers, are planning their own costly expansions.
Developers and shopkeepers seem unfazed, at least for now, about warnings in recent quarterly reports from many high-end brands. “Most of the negative financial issues in the luxury market are in China and Europe,” Mr. Robins said. “But business in the U.S. remains robust, increasing the importance of the Miami market.”
Matthew W. Lazenby, the 37-year-old president and chief executive of Whitman Family Development, Bal Harbour’s parent company, seemed untroubled, too.
“Over the years, Bal Harbour Shops has proved to be largely defiant in terms of bucking prevailing trends, even in the luxury sector,” he said. “We tend to think in terms of decades, not quarters, so we are somewhat intentionally oblivious to flash-in-the-pan trends.”
Yet Bal Harbour’s long hegemony over Miami’s top-tier retail market has faltered, apparently, at least in part because of its own rules. For decades, Bal Harbour leases stipulated that if tenants opened stores elsewhere in South Florida, percentages of their sales had to be paid to Bal Harbour’s owners, the Whitman family. To some leaseholders, it amounted to a prohibition on unfettered commerce.
In the last three years, frustrated tenants, notably brands owned by LVMH Moët Hennessy Louis Vuitton, began packing up their Bal Harbour stores and moving out, many to temporary quarters in the Design District while new flagships were built. Some also opened outlets in the Aventura Mall, which draws 28 million shoppers a year in northeast Miami-Dade County, while a few rented spaces in the Village of Merrick Park, in Coral Gables, a few miles south of downtown Miami.
Mr. Lazenby said that some “bad blood” remained in the wake of the leases’ so-called radius clause. “We did have a firm stance in the past, but we’re not taking that stance anymore,” said Mr. Lazenby, whose grandfather Stanley F. Whitman built the shops in 1965. “We frankly learned a lot from all this.”
But in what seems a display of confidence, Bal Harbour now is seeking approval of a $300 million expansion that will add roughly 300,000 square feet of store space, including a third department store to join Saks Fifth Avenue and Neiman Marcus.
On a recent Saturday, Bal Harbour’s parking lot was all but full as shoppers chatting in various languages ambled in and out of Balenciaga, Chanel, Harry Winston and some of the 100 or so other stores. Only a couple of shops on the top floor were boarded up, awaiting new tenants. On the ground floor, open to the sky and the palms, three sleek, shiny Jaguars were lined up. “We lease vehicles to foreign nationals,” a pamphlet said in Portuguese, Russian, Spanish and English.
“This is still a destination,” said Marquietta Buffaloe, a sales assistant at the Bal Harbour outpost of the South Florida chain Books & Books, where sales last year were up 7.5 percent over 2012.
At least one Bal Harbour shopper was irked that, after 30 years, Louis Vuitton had left and opened in the Design District and Aventura. “I hated it when that happened,” said Ana Fernandez, who lives less than three miles away. “I liked it here. But it’s not going to stop me from going to Louis Vuitton just because it’s not here.”

A version of this article appears in print on December 7, 2014, on page ST14 of the New York edition with the headline: In Miami, Let Luxury Know No Limits.