Young developer bets millions on S. Fla.'s real estate boom
BY MATTHEW HAGGMAN
mhaggman@MiamiHerald.com
A developer is paying a bold $46.5 million for the two-acre parking lot just west of Miami's Bank of America Tower at International Place. But perhaps even more surprising: He's never constructed a building before.
Jeremy Green, 32, is buying the parcel pinched between Southeast 2nd Street and the Metromover line for nearly double the price paid less than two years ago, in a bid to turn it into office towers. It's part of a development spree by Green that includes four condominium projects in Miami's Design District and two recently purchased downtown Miami properties for future office projects.
The move doesn't put Green in the league of South Florida's biggest developers. But it does represent a significant -- and risky -- foray into Miami's crowded and pricey real estate market at a time when many experienced developers are buckling down to build existing projects rather than branching out into new ones.
Real estate analyst Michael Cannon is scratching his head over the $46.5 million deal, which has not closed.
''To my knowledge, if the sale goes through, it would represent the highest price on a per square foot land basis of any property that I know of sold in South Florida,'' Cannon said. ``I don't get it.''
Green, who founded Nexus Development Group just last year, is hardly the first new developer to brashly jump head first into South Florida's sometimes Wild West real estate market. Pedro Martin agreed to pay $190 million for 10 acres of parking lots surrounding The Miami Herald's bayfront headquarters with only a 6-story condo in Miami Beach to his credit.
But that was then -- a year ago, to be exact. This is now, and now is an anxious time for the market.
TOUGH MARKET
Construction costs are up. The labor market is tight. Banks are reining in their lending. And some inexperienced builders have jumped into the red-hot market only to learn development is not so easy, and ultimately canceled their projects. Meanwhile, buyer demand for residential condos has cooled from the frenzy a year ago.
But Green is betting he sees things other eyes have missed. He's zooming in on residential development in Miami's Design District because the new construction there so far has been largely commercial. He's keen on downtown Miami office development because construction there is largely condos, shops and restaurants.
''We are strategically bullish,'' said Green. ``We are focused on the long term in neighborhoods which are poised for growth. We are not focused on Miami broadly speaking.''
In recent months, Green's group plunked down $20 million for a 14-story Flagler Street building that he'll turn into office condos and rename the Lapidus Building, after the famous Miami Beach architect. The company's paying $13 million for a 1.6-acre vacant parcel on which to build new offices, next to the city of Miami's Riverside Center on the Miami River.
Green has also launched sales of condo units at the 18-story Casa, designed by Miami architect Chad Oppenheim on 90 Northeast 41st Street in the Design District. The developer said he's finalizing terms on a general contractor this week and hopes to break ground in the next two months.
He plans to follow with a 22-story condo called Cube at 60 NE 41st St., a condo and office project at 3814 NE Miami Ct. called Cor, and 21 town homes called Canvas at 4200 North Miami Ave.
''Jeremy's plans are very positive,'' said developer Craig Robins, president of Dacra and the Design District's biggest landowner. ``We want more residents to come in and make it a 24-hour neighborhood.''
FINANCIAL BACKING
Green asserts his financial backers -- Eli Weinstein and Michael Gindi of a New Jersey-based real estate investment firm, Pine Projects -- are in it for the long haul. And the young builder says he's making up for his inexperience by hiring veteran managers.
William Tripodi, for instance, joined Nexus to become its vice president of construction, Green said. Tripodi formerly worked for Miami Beach-based Dacra Development and oversaw building of AQUA, a recently completed condo and town-home development on Miami Beach's Allison Island.
And his chief financial officer is Veronique Damseau, who formerly worked at Florida's biggest condo developer, Related Group of Florida.
Green may be young, but his ambitious move into the Miami market still amounts to a second act of sorts. In 2001 he formed a real estate development company with broker Jeff Morr, CEO of Miami Beach-based Majestic Properties. They launched a Design District condo called Aria and had plans for another called Cube.
But the projects fizzled. They ultimately sold the two projects to a California investor group for $8 million and dissolved their partnership in 2004.
''It was a stressful thing to be a developer, and it wasn't for me,'' explained Morr.
But Green wanted to build. In 2005, he joined up with investors Weinstein and Gindi and founded Nexus Development Group. They paid $10.9 million to buy back the two failed projects.
Green's $46.5 million deal comes with architectural plans, approved by the city, for an office, condo and hotel project called Lynx. Green's buying from an investor group led by real estate broker Rodrigo Nino.
Illustrating how land prices have soared, Nino's group agreed to buy it for $24 million in 2004. In 2003, it sold for $8.8 million.