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Young developer bets millions on S. Fla.'s real estate boom
BY MATTHEW HAGGMAN
[email protected]

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.
 
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If the SE 2nd St. site is turned into a office tower it will be know as International Place II! LOL! But by looking at the market, it doesn't look good right now to build office towers, especially in Miami. It's funny that all the office space of the 80's is finally being filled out. That's why Downtown hasn't seen a major office project since 1987.
 

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I have read just the opposite in many business magazines. I have read over and over that Miami has a critical shortage of office space and that new towers are in the works. Office space demand is far out pacing office supply. The next construction boom in Miami will be office and commercial/retail projects. Miami needs more projects like Lynx. Look at Met 2, the builders of the Met project are smart to change Met 2 from residential to office and commercial.
 

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Anyone know anything about this Jeremy Green dude? How does a 32 year old with no development experience get $46.5 million to buy a piece of land?

What's his story? is he a paris hiton type with a rich daddy?
 

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Discussion Starter #5
I think theres going to be too much office space currently downtown miami only has about 9million sq feet of office space.....8million is going to be built over the next 5years....thats a crazy amount of office space and i just dont see big name teneants willing to lease,major amounts of sqfootage....the only company which was looking for space was aon and steel and hector both of which are no longer looking.
 
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here's an idea, why not bring the headquarters of Blockbuster over to Miami... the way i see if, if Wayne H owns it, and Wayne H lives here... why not bring Blockbuster down here...


... just a thought.
 

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It's funny to think that Miami is probably the only major city in the country with only one office tower over 1,000,000 sq. ft. It's also incredible that the WFC encompassed 1/9 of Downtown Miami's office space. The nearest tower with that amount of space is the Miami Center and it only 8/11 the size of the Wachovia.
 

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BornInTheGrove said:
here's an idea, why not bring the headquarters of Blockbuster over to Miami... the way i see if, if Wayne H owns it, and Wayne H lives here... why not bring Blockbuster down here...


... just a thought.
i think blockbuster moved their headquarters to dallas or something like that... my aunt used to work for them but when they moved she stayed here and got a job at ivax which now got bought out and no ones sure what the future of that company in miami will be now...

but thats the kinda thinking we need, what if all those latin american headquarters in the gables started leasing office space downtown instead?
 

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Toucano said:
It needs to happen, we need to force comapnies to move their businesses to the CBD so that people may use Mass Transportation...
Oh come on..you don't really mean force them...how about we hold our elected officials accountable for providing good service for the tax dollars that we spend? Then, businesses will start to move into the CBD on their own free will and ridership on the public transport will increase.
I think that it is happening now.
 
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Roark said:
Oh come on..you don't really mean force them...how about we hold our elected officials accountable for providing good service for the tax dollars that we spend? Then, businesses will start to move into the CBD on their own free will and ridership on the public transport will increase.
I think that it is happening now.
That be a great thing to do if it was new business moving to the area setting up shop in the CBD. I dont think id like to get back to the old days of city vs city of Miami trying to take the corporate HQ's that are currently in Coral Gables away though. Two thriving business districts is better than one. Besides, their only what? 3.5 - 4 miles apart? Kind of like Midtown and Downtown Manhattan???

Now a transit connection going between the two, there is an idea.

Getting all those corporate HQ's out of the blah office parks of Doral, now there is an idea we can all get behind ;)
 

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so back to the title of this thread . . . is the beautiful Lynx building, or 3 or 4 of them, going to be built or not? I am all confused with this jabber of new headquarters and what not. so, the cool renderings we have seen for a while, yes or no? or maybe?
 

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Miami as in Perfect said:
so back to the title of this thread . . . is the beautiful Lynx building, or 3 or 4 of them, going to be built or not? I am all confused with this jabber of new headquarters and what not. so, the cool renderings we have seen for a while, yes or no? or maybe?
One clue I would look for is this new developer's track record. Have all of those previously announced projects gotten out of the ground?
 

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Real estate development isn't always pretty...

http://www.dailybusinessreview.com/news.html?news_id=38212
Development
Flip flopped March 28, 2006 By: Paola Iuspa-Abbott

developer Jeremy Green wanted to enter Miami with a bang, making a splash with a multimillion-dollar deal for one of the largest remaining vacant parcels in the downtown.

But the developer touted by the Miami Herald as the “New kid on the block” is finding his ambitious entry plans frustrated. The deal — his biggest planned in South Florida — has fallen apart and become the subject of litigation. He hoped to build a massive multiuse project on the site.

Green agreed to pay $46.5 million for the two-acre parking lot west of the landmark Bank of America tower in downtown Miami. The purchase would have set a record — at $23.25 million per acre — for land off the water in downtown Miami.

Green’s Aventura-based Nexus Development is suing Miami-based Downtown Associates, the seller of the land at 16 SE Second St., to try to force it to move forward with the deal. The suit was filed in Miami-Dade Circuit Court against the subsidiary of Prodigy International Development Sales, a Chilean investment group which is redeveloping the former Beach House hotel in Surfside.

Prodigy’s Downtown Associates is under contract to buy the property for $22.25 million from downtown landowners Guillermo Sostchin and David E. Stone, with a closing set for April 12. Prodigy in turn had agreed to resell the property to Green’s company.

Instead, said Rodrigo Nino, president of Prodigy, his investment group is considering keeping the parcel after the closing and partnering with a developer to build a mixed-use project.

“I don’t think we want to flip it any more,” said Nino, the front man for the Chilean private investment group behind Prodigy, which stood to make more than $24 million when it flipped the property to Nexus.

Nino contends he is not bound by the contract to sell the property because Nexus missed a Feb. 1 deadline to make a final deposit of $1.62 million.

“They haven’t had a contract with us since February,” Nino said. Prodigy also intends to keep $2.92 million in deposits Green’s company already put down on the purchase.

Green and his attorney, Lawrence A. Kellogg with Tew Cardenas in Miami, did not return calls before deadline Monday.

Green is suing Prodigy to try to resuscitate the flipping agreement and move ahead with the acquisition. Nexus claims Prodigy interfered with its effort to obtain money needed to close on time.

Last year, Prodigy obtained city approval to build 521 condos, 401 hotel rooms, 148,000 square feet of office space and 50,307 square feet of retail on the site.

Prodigy’s contract for the land dates back to May 2004.

Prodigy and Nexus signed a $46.5 million flipping deal in August 2005.

In the following months, Green put down $2.92 million in deposits but failed to make the final deposit. Prodigy declared Nexus in default, kept the money already on deposit and canceled the Feb. 13 closing.

On March 10, Nexus sued Prodigy’s Downtown Associates, the limited liability company Prodigy was using to buy the downtown parcel.

Nexus claims it was unable to secure financing by Feb. 1 because Prodigy interfered with its lender causing it to lose financing for the purchase.

Nexus was negotiating with Marshall BankFirst for a mortgage. The suit claims Prodigy was aware of the talks and contacted Marshall to negotiate a loan to buy the land April 12.

In talks with Marshall, Prodigy told the lender that Nexus was having trouble meeting its deposit requirements and that caused Marshall to end its dealings with Nexus, the suit said.

In the complaint, Nexus also claimed Prodigy didn’t move fast enough to complete a $16.45 million purchase money mortgage that would have helped Nexus make the final deposit. In a purchase money mortgage the seller of a property finances part of the acquisition.



Another player



The lawsuit also alleges that after signing the deal with Prodigy’s Downtown Associates, it learned that there was another buyer involved in the deal. Green claimed he soon found himself dealing with another middleman, a company named Taluga, which had a deal to buy the property from Prodigy for $37 million.

“After the agreement was signed, Nexus was shocked to learn Taluga was not affiliated with Downtown,” according to the suit.

Eventually Nexus realized that Taluga unsuccessfully tried to buy the land from Prodigy’s Downtown Associates and flip it to Green’s firm for $46.5 million. When Taluga disappeared from the picture, Nexus was left to pay the inflated price set by the unsuccessful flipper, according to the suit.

The complaint claims Prodigy failed to disclose its relationship with Taluga.

“Had Nexus known that it was negotiating with an interloper and that two flips would be necessary to close the transaction, it [Nexus] would not have entered into the assignment contract,” according to court documents.

Prodigy’s Nino said Green has no grounds to sue. He said his company did as much as it could to make the sale by amending the initial agreement with Nexus several times to extend deposit requirements and closing deadlines.

Nino said his investment group was eager to make $24.25 million by flipping the land. In the suit, Nexus said Prodigy could have waited until early April to close if it wanted to.

“It makes no sense to think we tried not to close this transaction understanding the economics behind it,” Nino said.

The relationship between Nexus and Prodigy runs deeper than the sale of the property. Prodigy is marketing some of the small projects that Nexus plans to build in Miami, Nino said.

Green, whose partners are Michael Gindi and Eli Weinstein, has a Web site where he promotes four planned residential projects: the 78-unit Casa and the 21-unit Canvas in Miami’s Design District, Cor and Cube.

The parcel, a block north of the Miami River and four blocks west of Biscayne Bay, has been the subject of a complicated series of flips since the 90’s when a plan to build a telecom hotel and office building was abandoned as the explosion of the Internet bubble neared.

Real estate investment firm Alex. Brown bought the parcel in 1989 for $6.2 million and planned to build a 17-story telecom hotel there. The building was never built and the real estate arm of Deutche Bank Alex. Brown held on to the land.

In September 2003, Sostchin and Stone bought the parking lot for $8.8 million from Alex. Brown. They agreed to sell it to Prodigy at about three times that price, which in turn was set to almost double its money.

Miami real estate analyst Michael Y. Cannon said the series of flips at rapidly exploding prices makes executing a project on the site more difficult.

“It is symptomatic of an exuberant market when the price of land escalated exponentially higher,” said Cannon, managing director of Integra Realty Resources-AREEA/South Florida. He cautioned that at the current price for the site a development “may not be feasible.”
 
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So Lynx was all just a ruse to sell the property but now that they have a buyer offering a huge amount, they plan on keeping it?

Instead, said Rodrigo Nino, president of Prodigy, his investment group is considering keeping the parcel after the closing and partnering with a developer to build a mixed-use project.

“I don’t think we want to flip it any more,” said Nino, the front man for the Chilean private investment group behind Prodigy, which stood to make more than $24 million when it flipped the property to Nexus.
 

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dave8721 said:
So Lynx was all just a ruse to sell the property but now that they have a buyer offering a huge amount, they plan on keeping it?
Or, and quite possibly, the seller knows that the property wouldn't have gotten the necessary bank financing to complete the deal and saw an opportunity to keep a newbies deposits.
 
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If lynx is done Brickell On the River is going to have the best views ever!!!! Can you imagine? Lynx-BAO-Met3-Wachovia staring at you!!

By the way, does anyone know if anyone is going to develop the land east of BOR? I know that to the south 500 Brickell is going to be buildt, but how about east of BOR? You know closer to brickell av itself.
 

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interesan-t said:
By the way, does anyone know if anyone is going to develop the land east of BOR? I know that to the south 500 Brickell is going to be buildt, but how about east of BOR? You know closer to brickell av itself.
The building directly east of BotR is an immigration building, about 4 floors. The building directly east of that is the 444 Brickell Building and is about 11 floors. The 444 Building has a Capital Grille restaurant (with a long lease) and is owned by American Captial Partners, it is not likely to be demolished any time in the near future.
 
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