Major Joint Venture Acquires Prime Miami Development Site: LeFrak, Related, and 13th Floor Secure Strategic Property
Power Players Join Forces in Strategic Miami Property Acquisition
In a significant real estate transaction signaling continued confidence in Miami's development market, a formidable joint venture has acquired a prime 2.5-acre property in the city for $35 million. The partnership brings together three major development forces: 13th Floor Investments, the LeFrak Organization, and Related Group.
The acquisition, led by an entity managed by Arnaud Karsenti, principal of Coconut Grove-based 13th Floor Investments, transfers ownership of the shuttered car dealership at 3650 Bird Road from Shoma Group, which had previously planned to redevelop the site. This transaction represents a premium of $1 million over what Shoma paid just three years ago, highlighting the continued appreciation of strategically located Miami properties.
LeFrak's Strategic Return to the South Florida Market
This acquisition marks a significant milestone for the New York-based LeFrak Organization, representing its first major South Florida acquisition since partnering with Aventura-based Turnberry in 2015. That earlier collaboration resulted in the acquisition of a 183-acre site in North Miami, which the partners transformed into SoLé Mia – an ambitious master-planned community featuring condominium towers, apartment buildings, and retail spaces.
The LeFrak Organization, led by billionaire Richard LeFrak, has a storied history of successful large-scale developments across multiple markets. Their renewed interest in Miami properties signals continued confidence in the region's growth potential despite market fluctuations in other parts of the country.
Development Potential and Strategic Location
The newly acquired property comes with valuable entitlements already in place. The site is approved for an ambitious mixed-use development featuring two 40-story high-rise towers that would accommodate 748 apartment units and approximately 20,000 square feet of retail space.
Located near the ongoing Link at Douglas development – another 13th Floor project in partnership with Adler Group – this acquisition creates potential synergies between neighboring developments. The Link at Douglas project is currently entering its second phase of construction and will ultimately deliver 1,603 apartments, 280,000 square feet of office space, and 68,000 square feet of retail upon completion.
While Karsenti has not yet commented on specific plans for the former dealership site, the acquisition by these experienced developers suggests a significant project is likely forthcoming. The property's strategic location and existing entitlements make it particularly valuable in Miami's competitive real estate landscape.
Shoma Group's Strategic Repositioning
For Shoma Group, led by husband-and-wife team Masoud and Stephanie Shojaee, the sale represents a shift in development strategy. The firm purchased the property in 2022 for $34 million and secured a $38.8 million loan against the former dealership, which was originally constructed in 1952.
Records indicate that Shoma paid off this loan on the same day it completed the sale to the 13th Floor-led joint venture. This transaction comes during a period of financial recalibration for Shoma Group, which has recently resolved multiple financial challenges.
In January, the firm quickly settled a foreclosure lawsuit brought by City National Bank, which was dismissed less than a month after filing. The bank reinstated three loans totaling $14.1 million that it had alleged were in default, including a mortgage secured by a Coral Gables condominium where the Shojaees reside.
Similarly, another lender – an affiliate of Delaware entity Right Meow Capital – dismissed a December foreclosure lawsuit against a Shoma entity and the Shojaees just two weeks after filing the complaint. That lawsuit had alleged failure to repay a $10.5 million loan secured by the retail component of Shoma Village, a mixed-use project with 304 apartments in Hialeah that Shoma completed three years ago.
Market Implications and Future Outlook
This high-profile transaction underscores several key trends in Miami's real estate development landscape. First, it demonstrates continued interest from national developers in Miami properties, even as some markets experience cooling trends. Second, it highlights the premium value placed on sites with existing entitlements, which can significantly reduce development timelines.
The participation of three major development entities in this joint venture also suggests a strategy of risk mitigation through partnership – a prudent approach in the current economic climate where construction costs and financing challenges have impacted feasibility for some projects.
Insights on Miami's Real Estate Development Landscape
How significant is LeFrak's return to Miami's development scene?
LeFrak's return signals strong confidence in Miami's long-term growth potential. As a multigenerational development firm with extensive experience in major markets nationwide, their investment decisions are typically based on thorough analysis of market fundamentals. Their partnership with local experts 13th Floor and Related combines national capital with local market expertise.
Why are developers increasingly forming joint ventures for new acquisitions?
Joint ventures allow developers to share risk while pooling expertise and capital. In today's challenging financing environment, having multiple strong partners improves project viability and may facilitate better lending terms. The collaboration between 13th Floor, LeFrak, and Related brings together complementary strengths in residential, mixed-use, and large-scale development.
What makes the Bird Road location particularly valuable?
The site's proximity to the Link at Douglas development creates potential for neighborhood transformation through coordinated development. The property's existing entitlements for two 40-story towers significantly enhances its value, as the entitlement process in Miami has become increasingly complex and time-consuming in recent years.
How does this transaction reflect the current state of Miami's development market?
While some segments of Miami's real estate market have experienced cooling, strategically located properties with development potential continue to command premium prices. This transaction demonstrates that experienced developers remain willing to make significant investments when they identify properties with strong fundamentals and development potential.
What can we expect from this site in the coming years?
Given the caliber of the development team and the existing entitlements, we can anticipate a significant mixed-use project that will likely include luxury residential components with premium amenities. The retail portion will likely be carefully curated to complement the residential offerings and serve the surrounding neighborhood.
