Macy’s Property Sells For $15.55 Million

Jan 02, 2013 No Comments by

The late Richard and Harriet Ashby helped put Miami on the retail map with their 1917 lease of a Flagler Street property to R.W. Burdine of the pioneering Burdine family.

Nearly a century later, more than 20 Ashby heirs completed the $15.55 million sale of much of that downtown property, which is currently the home to Macy’s.

In a transaction that took four years to complete, Aetna Realty on Monday purchased a 1.12-acre portion of the 1.8-acre property at 22. E. Flagler St. according to Gray Robinson shareholder Lewis R. Cohen, who worked the sale along with associate Christina Guzman.

By acquiring the fee simple ownership of the 1.12 acres, Aetna gains control of the ground lease with Macy’s and the portion of the retail building that was constructed on the property.

Macy’s owns the remaining portion of the property. The company is in negotiations to sell that property to Aetna “so that Macy’s will become purely a tenant,” Cohen said. He announced the sale Wednesday. The transaction has not been recorded by Miami-Dade County.

“This was a huge undertaking that went right down to the wire on New Year’s Eve,” Cohen said.

New York-based Aetna’s South Florida portfolio includes office properties PRC Building in southern Miami-Dade County, Flagler Waterview in West Palm Beach and four retail buildings on Clematis Street in downtown West Palm Beach.

Three years remain on the original 99-year lease signed by Burdines. The retailer had its headquarters at the location until 2005. At that time, Federated Department Stores Inc. rebranded the flagship Burdines store as Macy’s. Burdines merged with Federated, which owns Macy’s.

Macy’s is expected to renew its lease before the current deal expires, according to Cohen.

Sluzewski declined to comment on the potential lease renewal or possible sale of the remaining land by Macy’s.

The retailer anchors the more than 467,000-square-foot building on the property. The building is more than 91 percent leased, according to CoStar Group.

The Cincinnati-based company “for now does wish to maintain its presence downtown,” he said.

Before the sale to Aetna, the property had more than 20 co-owners, including some Ashby descendants who currently reside in Albania and Scotland.

“It was very difficult to get a consensus and keep good lines of communication with everybody,” Cohen said. “We had to get everybody on board with the contract and in full agreement with all the terms.

Aetna was one of three companies bidding for the property, he said. Cohen declined to disclose the other two potential buyers.

The interest in the property from multiple bidders reflects how real estate investors perceive downtown Miami’s future growth, Cohen said.

“There is a vision for the future of Miami,” he said. “They see the Florida East Coast Railway site coming and development being imminent. Now that we are coming out of a period of economic decline, they see the renaissance on the horizon.”

Florida East Coast Industries is planning a $1.5 billion passenger rail line from Miami to Orlando called “All Aboard Florida.”

FECI plans a rail station and other development on more than nine acres it owns in downtown Miami northwest of Northwest First Street and First Avenue. The site is just north of the Miami-Dade County Government Center and Metrorail and Metromover stations.

The Macy’s transaction would have been scuttled had it not closed by Dec. 31 because of potential changes to federal tax laws, according to Cohen.

“There are so many unknowns coming up in 2013 that it was critical to a good percentage of the sellers that [the sale] at this price closed in 2012,” he said.

 

Source: DBR

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Industry News, Miami-Dade County Retail, NA, Retail
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