David Martin’s Terra has offered to buy units at the Amethyst condo complex in Miami Beach, which Mast Capital has been working on for years, real deal Already learned.
An affiliate of Terra made offers in recent days to the owners of the 11th-floor, 120-unit building at 5313 Collins Avenue, the sources said. TRD. Meanwhile, Mast Capital, led by Camilo Miguel Jr., has closed eight units and entered into a contract to acquire most of the building’s units.
Mast does not control the units owned by the group of 28 owners that provide the developer with the minimum required to terminate the contract. TRD It follows reports that sales have struggled as owners claim the developer is stalling acquisition plans, leaving most residents stranded.
The two development companies could work together to terminate the apartments and redevelop the property, but it’s unclear if they would. In a statement, Martin said Terra was approached by a group of homeowners about buying units and Terra was willing to work with Mast Capital “to reach a solution that would benefit all unit owners”.
A spokesman for Mast said it had entered into contracts to acquire the majority of the units and expected to “complete the acquisition of the remaining units by the end of the year”.
If the seller accepts Terra’s offer, Terra could close by the end of 2024, according to the contract. But it’s unclear whether Terra could purchase the units purchased under the Mast contract, and if it couldn’t, whether it would trigger a lawsuit with Mast.
Terra provided $850,000 to each of the 28 property owners and $550,000 to each of the other property owners. If Terra is able to acquire the remaining 92 units, the total would be more than $74 million. (It probably won’t, since Mast already owns some and has contracts to acquire many others.)
Mast owns the former La Costa apartment complex next door, which it plans to demolish and redevelop with its deal partner, Barry Sternlicht’s Starwood Capital Group, as The Perigon luxury apartment complex.
The Amethyst owner said Mast Capital planned to close most of the units in November 2022, but the developer has extended it, but has not yet clarified when it plans to close the remaining units. The developers terminated contracts with 28 property owners that were conditional on closing, leading to a deadlock in those deals.
Mast has paid between $235,000 and $480,000 for each of the eight units it has closed so far, ranging from about $300 per square foot to nearly $660 per square foot. Property records show the company spent just over $3 million on the apartments.
Condo buyouts and termination deals (where developers buy at least 80% of a building) are risky, but lucrative. Florida law allows 5% of building owners to challenge termination, which is why a developer may want to acquire ownership of more than 95% of the units in a building. After acquiring most of the units, the developer will proceed to terminate and eventually demolish the property.
The Amethyst property is zoned RM-3, which allows for buildings up to 200 feet along the waterfront, including a small parcel of land facing the Intracoastal Waterway.
With a scarcity of undeveloped land and it becoming more expensive for unit owners to maintain buildings, more developers are bidding on older waterfront apartment buildings. The latter has become a bigger problem in the two years since the Surfside apartment collapse. On the night of June 24, 2021, Champlain Towers South unexpectedly collapsed, killing 98 people.
Some unit owners say developers are using intimidation tactics to force them to sign contracts. Many of the owners who agreed to sell were concerned that the amethyst was in “extreme disrepair,” Masters said in a previous statement. But the Amethyst Building, built in 1964, underwent a 50-year recertification in 2014, and the building is not considered structurally and electrically safe for use until 2020, according to the city.
Earlier this year, Terra paid $500 million for the Castle Beach Club building at 5445 Collins Avenue. A few months ago, Related and 13th Floor Investments withdrew their $500 million bid for the 57-year-old property.
In addition to Terra and Mast, Related Group, 13th Floor Investments and other major players are actively pursuing apartment deals along the coast.
In Miami’s Edgewater, a group of unit owners is fighting against two-way developments’ plans to terminate and demolish Biscayne 21, an oceanfront apartment building. The owners filed the lawsuit in May, claiming they were “manipulated, bullied, deceived and pressured” into selling the unit to the developer.