The 800 Brickell office and retail building and next-door parking garage were acquired for over $120 million in July 2019 by New York family firm Gatsby Enterprises. The 800 Brickell office and retail building and next-door parking garage were acquired for over $120 million in July 2019 by New York family firm Gatsby Enterprises. Courtesy photo

A New York family firm made its first venture into Miami real estate with the $125.5 million buy of the 800 Brickell office tower and next-door parking garage.

Gatsby Enterprises bought the 15-story, 209,122-square-foot tower and adjacent nine-story, 550-space garage on 2 acres southwest of Brickell Avenue and Southeast Eighth Street. Friday's transaction is the latest in a string of notable office sales in the last two years.

Gatsby, led by principal and chairman Nader Shalom, bought the asset with Master Mind LLC, led by Babak Ebrahimzadeh, from an affiliate of Chicago-based real estate investment trust RREEF America REIT II Inc.

The sale price, which breaks down to $600 per square foot, is a 12.5 percent increase from the $111.6 million paid by RREEF America four years ago.

This is a long-term, value-add investment for Gatsby, which plans to pump about $5 million into upgrades in the hallways, restrooms, tenant space, lobby, courtyard and exterior, said Isaac Shalom, a managing member with the firm and son of Nader Shalom.

The buyer also plans to fill the vacant retail and office space. With 71% of the building leased, 61,000 square feet is open. Rent increases are expected, although Isaac Shalom didn't have an estimate of the increase.

“We plan on getting some really great retailers in there as well as increasing occupancy with the office tenants and attracting a wide variety of both financial firms, legal firms, TAMI,” Shalom said Monday, using the abbreviation for technology, advertising, media and information companies.

Current tenants include the law firms Jonathan H. Green & Associates and Krinzman Huss Lubetsky Feldman & Hotte, the headquarters of trading company Alpha Co., a BoConcept furniture showroom and Chile's consulate general.

The property has plenty of redevelopment potential as the 1981-built tower could be replaced with an up to 80-story tower with a maximum of 1.4 million square feet. A project of that size is allowed by right under the Miami 21 zoning code without City Commission approval.

Gatsby doesn't plan to pursue a new project until “very far” down the line, Shalom said.

“As we are a family firm, we like to look at a long-term horizon with our properties,” he said. “We also are looking for more opportunities in the South Florida market as well. We plan on this being the first of many acquisitions.”

Gatsby will look at commercial and residential assets in South Florida urban cores, Shalom said.

CBRE capital markets vice chairman Christian Lee and executive vice President José Lobón represented the seller. CBRE first vice president Amy Julian with the debt and structured finance division and senior financial analyst Andrew Chilgren also worked on the transaction.

Darryl R. Kaplan Co. president Darryl Kaplan in Hollywood represented Gatsby and Master Mind.

Gatsby's other holdings are in New York, including office towers at 56 W. 45th St. and 224 W. 35th St. as well as retail along Perry Street, according to its website. It also has apartment buildings in New York's Upper East Side, Upper West Side, Chelsea, East Village, Greenwich Village and Nolita neighborhoods.

Gatsby was attracted to the Miami building by its proximity to the Brickell City Centre mixed-use complex and The Shops at Mary Brickell Village.

The same sentiment was expressed by another new-to-market Brickell investor, New York-based global investor KKR & Co. Inc., which bought the Sabadell Financial Center last year. Projects like Brickell City Centre drive the coveted live-work-play lifestyle making Brickell office towers a smart investment, KKR told the Daily Business Review.

KKR bought the 522,892-square-foot, 30-story Sabadell building in a joint venture with Orlando-based office real estate owner and operator Parkway Properties for $248.5 million in June 2018.

Another trophy property, Brickell City Tower, sold for $117 million last September.

 

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