A buying binge led by Miami Beach-based developer Michael Simkins is generating seven-figure deals along a four block stretch of Overtown, Miami’s historically African-American neighborhood.
“Prices have increased dramatically,” Simkins told The Real Deal of the area, which is one of the city’s poorest communities. “When we started purchasing land, it was in the $20 a square foot range. It is now approaching $150 a square foot.”
Overtown runs from Northwest Fifth Street to 20th Street and is bounded on the west by the Miami River and State Road 836 and on the east by the Florida East Coast Railway tracks on Northwest First Avenue. In addition to Simkins, a handful of other buyers have proven to be increasingly bullish on apartment buildings and vacant parcels between Northwest Eighth and 12th streets and Northwest First and Third avenues.
The properties that have been snapped up are in close proximity to three grand-scale, mixed-use developments: All Aboard Florida’s MiamiCentral, Miami Worldcenter, and Simkin’s proposed Miami Innovation Tower, the signature piece to a technology district he wants to develop in Park West, the neighborhood directly abutting Overtown.
“The area we are focused on was the main commercial corridor for historic Overtown,” Simkins said. “The Overtown of the 1940s was a thriving place. The neighborhood has soul and character.”
During the Jim Crow era, the neighborhood was known as “Colored Town” and was a bustling business and entertainment center for Miami’s black community. It’s where entertainers like Count Basie, Cab Calloway and Josephine Baker stayed when they performed in Miami. However, the construction of I-95 through portions of Overtown decimated the neighborhood’s prosperity. Riots in the 1980s further eroded Overtown.
Today, the annual median household income for Overtown residents is $17,450, according to recent U.S. Census data.
Nevertheless, investors like Simkins have recently paid top dollar for Overtown properties. In mid-October, he closed an all-cash $2 million deal there for two apartment buildings with a combined 28 units and three commercial units. Simkins paid $116 per square foot for the 16,300-square-foot assemblage .
“These buildings will be renovated with our own dollars and continue as rentals,” Simkins said. “The people living there will hopefully continue living there, as well as other Overtown residents.”
He said market-rate rent in Overtown for a one-bedroom unit is $700, compared to $1,963 in Miami, and a two-bedroom unit is $850, compared to $2,911 in Miami, according to RentJungle.com.
That deal marks the third seven-figure Overtown property transaction involving Simkins in the past 10 months. In February, Simkins paid $94 a square foot for three vacant lots totaling 13,750 square feet . In June, he bought two vacant parcels totalling 15,000 square feet on Northwest 11th Street and Northwest Second Avenue for $92 a square foot.
Simkins is not alone. In January, Bahia Apartments LLC, a company registered to Horacio Segal and Marcela Segal, a North Miami-based real estate broker, paid $3.5 million for three apartment buildings with a combined 26,887 square feet. That’s $130 a square foot. According to Miami-Dade records, Bahia obtained a $2.4 million loan from Ocean Bank that it used toward the purchase.
In July, an entity called Beacon 87 Member Inc. purchased a 75-unit apartment building for $3.68 million — about $107 a square foot. According to state incorporation records, Beacon’s manager is Joanne Rosen, a partner in New York City-based real estate investment and development firm, Beacon Advisors, LLC. The seller DJ Acquisitions 1136 paid $2.6 million for the property in May 2014.
The more recent prices are a far cry from what Simkins paid only a year ago. The developer purchased a 24-unit apartment complex at 1160 Northwest Second Avenue for $330,000 in November 2014. Today, the property has a market value of $1.6 million, according to the Miami-Dade County Property Appraiser’s website. He also paid $555,000 for a two-floor retail building at 937 Northwest Third Avenue in October 2014.
The same year, Simkins purchased another 22 lots between Northwest Ninth and Tenth streets and Northwest Second Avenue and Second Court for a combined $14.1 million. Aside from the city of Miami Park West/Overtown Community Redevelopment Agency, he believes he has the largest portfolio in Overtown.
“It’s an unprecedented level of investment,” he said. “We are committed to really reviving and redeveloping Overtown into what it has always been.”
But Overtown still faces challenges, according to Emile Farah, chief executive of the Farah Group of Companies. Farah assisted in brokering Simkin’s most recent deal. “Whoever wanted to buy it had to come with cash,” Farah said. “It’s difficult to get financing for Overtown properties.”
Banks will only lend money based on the rental income a building produces and not on the property’s appraisal price, he said. “In that area, rents are averaging $600 and are starting to go up to $700 a month,” Farah said. “The income approach doesn’t justify making a deal for most buyers.”
Farah said the area remains a tough sell, despite All Aboard Florida and other major projects. But we was optimistic about the impact of Simkins’ acquisitions. The developer “has a vision for the future of the neighborhood,” he said.
The Miami Innovation Tower is a kinetic sculpture proposed as a new icon for the city of Miami and a major public entry-point into the creative life of the Miami Innovation District at 1031 NW First Avenue. With its fully-integrated active skin—a global first—the Miami Innovation Tower celebrates the unique flavor and vitality of Miami and announces its arrival as a world-class center for information technologies.
The architecture of the tower is inspired by a variety of forms associated with the identity of the city, ranging from contemporary sculpture and fashion to the taught, wing-like, graphics-covered sails of modern racing sailboats—an homage to nearby Biscayne Bay. The lighting, too, is intended as a continuation of the tradition of building illumination that Miami has taken to a high art.
The programming of the tower’s displays will include public service announcements, updates from companies within the district, video art, as well as advertising which, in addition to generating significant revenue for the community, will become art itself as creative directors customize their messages to the special possibilities and parameters of the tower’s unique active skin.
Unlike traditional billboard signage, the mesh-like messaging technologies are in fact integrated completely into the complex, pleated form of the tower’s exterior. The result is an ethereal, highly-transparent surface, open to the slender concrete tower core and views of the city and the sky beyond.
Like the Miami Innovation District as a whole, this Digital Age landmark is also a responsible neighbor. At ground level, a public plaza and amphitheater will host cultural events for all comers, as well as providing an inspiring setting for retail. As it rises, the tower hosts several observation decks, one of which, a garden in the sky, will also serve as a demonstration site for the installation of environmental technologies. Two restaurants complete the Tower’s program.
In addition to drawing visitors to the local Park West streets, these programs will drive sustainable economic growth to the nearby Overtown historic community. They will create employment opportunities—a percentage of which are reserved through agreement with the city for job-seekers from a local labor pool. In addition, a significant proportion of revenue generated by the tower’s signage will be channeled every year to the support of the local community. All of these community benefits are vitally important to the developer, Michael Simkins, whose family presence and philanthropy in Miami span decades.
Inspiring and responsible, inventive and original, rooted in the traditions of the local community even as it marks its place in global culture, the Miami Innovation Tower signals to the world that Miami is holding on to its special flare even as it catches and rides the coming high-tech wave.
The developer planning a 633-foot observation tower equipped with electronic murals is moving his plans forward even as the mayor of Miami talks of slowing him down.
Michael Simkins’ Innovate Development Group applied this week to Miami’s building department for a permit to erect five large electronic signs embedded within the skin of the tower’s twisting facade and mounted along its pedestal. The signs, which would flash advertisements as well as public art and messages, are as large as 30,000 square feet and would be visible from Interstates 395 and 95.
The high-tech tower is envisioned as the centerpiece of a 10-acre technology district around 10th Street and Northwest First Avenue. Simkins expects to go before the city’s Southeast Overtown Park West Community Redevelopment Agency on June 29 to finalize a crucial community benefits agreement that, when last made public, included $5 million in upfront payments to the redevelopment agency and at least $1 million every year after it opens.
“The CRA board has to accept the benefits [for the project to move forward], but we submitted our permit because we are looking at a bigger picture,” said Simkins. “We’re looking at an innovation district as a whole, with 7.4 million square feet and 13,000 high-paying jobs to downtown Miami. And we’re hoping to start phase one in June” of 2016.
Simkins stressed that he’s followed the “letter of the law,” in part because critics have accused him and the Overtown CRA of quietly negotiating his project for months without involving the public.
When city commissioners considered his project in April in their capacity as CRA board members, they decided that they didn’t need to vote on the tower’s signage and then deferred a vote on the community benefits agreement. Audience members weren’t allowed to speak, and left the meeting wondering if they’d lost their only chance to comment on the project before it was approved.
That would seem a moot point now, with Simkins going back to the CRA board for another hearing. County ethics commissioners began poking around after receiving complaints but decided they had no reason to pursue the issue further.
Still, Mayor Tomás Regalado says he doesn’t believe the CRA should be given the power to approve a billboard tower. Previously, a similar project in the Omni area went before the Miami City Commission. But under Miami law, the executive director of the Overtown redevelopment agency is tasked with reviewing and approving a “media tower” in the redevelopment area, and its correlating public benefits.
This week, at Regalado’s behest, Miami’s legal staff released two pieces of legislation that would repeal the laws that place the authority with the redevelopment agency, and replace it with a new zoning code that requires city commission approval.
“I think it’s unfair for the residents, that they won’t be able to participate in public hearings,” said Regalado, who was accused of fast-tracking the proposed billboard tower in the Omni several years ago.
At first glance, though, activists who hailed Regalado in April for his position on the Innovation Tower are cringing at the legislation. Peter Ehrlich, a member of anti-billboard group Scenic Miami, said Wednesday after reading Regalado’s legislation that he worries it would actually allow for more billboard towers with less scrutiny.
“This legislation is horrible,” he said.
Simkins’ attorneys don’t believe the proposed legislation would even apply to the project should it be approved, since Simkins has submitted his plans to the city and the CRA.
City Attorney Victoria Méndez couldn’t say Wednesday whether she agrees. But in late April, her office issued a legal opinion stating that Simkins must still receive administrative approvals for his project, including the approval of a warrant, which can be appealed.
MIAMI, FL (Oct. 22, 2015)
— When major developers need to find a prime piece of property in Miami's urban core, they turn to the Farah Group of Companies.
In the latest example of Farah Group's real estate dealmaking prowess, the company produced a rare acquisition opportunity near Downtown Miami for developer Michael Simkins. CEO Emile “Ur-Cousin” Farah and USA Lending Realty Vice President Zena Bardawell and Sales and Marketing Director Jean Kelly teamed up to arrange the sale of an Overtown apartment site to Simkins, who plans to develop the Miami Innovation Tower and eight additional buildings in the neighborhood.
“With so much development and investment activity occurring in and around Downtown Miami, it has become extremely difficult to find sites in the area,” Farah said. “That's where we come in. We have a 35-year track record of producing results for real estate clients when others cannot.”
USA Lending is owned and operated by Farah Group, which recently opened a new corporate headquarters at Synergy Workspaces in Downtown Miami's One Biscayne Tower. The company is hosting a special event to celebrate its new headquarters on Nov. 12.
In the Overtown deal, the Farah team facilitated the all-cash, $2 million sale of two apartment buildings totaling 28 units and three commercial units at 1117 NW Third Ave. and 220 NW 11th Terrace to Simkins. The site is located just west of Downtown Miami and the future All Aboard Florida station.
As part of the transaction, Farah worked out a deal with Simkins to allow existing tenants to remain at the apartment buildings in the short-term while the developer finalizes project plans for his Overtown portfolio. That was one of several obstacles Farah had to overcome to complete the sale. Other potential buyers could not obtain financing, so Farah had to find an all-cash buyer.
Farah Group specializes in complex transactions. Last summer, Farah brokered the $17 million sale of 18 acres in North Miami Beach known as Biscayne Village. The land was previously used by a gas distributor and designated as a brownfield site. Farah successfully educated the buyer about the future development potential of the site.
Shortly after completing the North Miami Beach deal, Farah, Bardawell and Kelly arranged the $6 million sale of a West Brickell hotel development property to Venezuelan developer William Hammani.
“In deals like these, our role goes beyond bringing a seller and buyer together,” Farah said. “We help our clients create a long-term vision for a site and assist them in carrying out that vision.”
To learn more about Farah Group's current real estate investment opportunities, visit "http://www.farahreacquisitions.com/".
About The Farah Group of Companies
Led by Emile “Ur-Cousin” Farah, The Farah Group of Companies specializes in all types of real estate transactions in Miami and beyond. Farah Group is often hired to facilitate complex deals involving a variety of distressed assets, including commercial bank-owned properties, short sales and bank notes. Headquartered at Synergy Workspaces in Downtown Miami's One Biscayne Tower, Farah Group has direct contact with bank asset managers throughout the world. That gives the company access to all property types, including multifamily communities, shopping centers, warehouses and developable land.
About Emile “Ur-Cousin” Farah
Emile “Ur-Cousin” Farah has been CEO of The Farah Group of Companies for more than 35 years. During that time, Farah has successfully completed the sale of a variety of real estate portfolios and rehabilitated thousands of square feet within buildings. Originally from Jerusalem, Farah is also a renowned philanthropist and community leader. He formed the Naim and Marie Foundation in honor of his parents. The foundation helps raise money for causes supporting the construction of new schools, orphanages and medical centers in areas like the Middle East. Farah has also been recognized for donating to the American Cancer Society and organizations supporting Autism awareness.
Farah is also the The World Ambassador ,. In that role, he travels around the world to encourage the exchange of culture, research and business between Cities worldwide.
Miami Innovation Tower is officially on life support.
Late Thursday, the Miami City Commission ratified an initial June vote adopting an ordinance that eliminates so-called “media towers” on the site proposed for the 633-foot high-rise featuring five large LED signs. The measure, championed by Miami Mayor Tomas Regalado, deletes the term “media towers” from the city’s zoning code known as Miami 21.
However, an attorney for Michael Simkins, the Miami Beach-based developer of the innovation tower, told commissioners that his client plans to move forward with pending permit applications to build the project.
“We will continue to implement this development irrespective of what is done today,” said Tony Recio, a partner with Weiss Serota Helfman Cole & Bierman. “We look forward to having the permits fairly reviewed and evaluated.”
In a statement to The Real Deal, Simkins said he does not believe the new ordinance can be applied to his project.
“We are disappointed by the commission’s action,” Simkins said. “But we expect the city to comply with the law and respect our rights by honoring the sign permit applications and media tower approval by the CRA, and processing the sign applications in good faith.”
City commissioners Frank Carrollo, Willy Gort and Marc Sarnoff again voted in favor of the ordinance despite an impassioned plea from Commissioner Keon Hardemon, who was the innovation tower’s main supporter because he believes the project will generate jobs and millions of dollars in revenue for Overtown.
“That one time things are moving forward in a community that has been stagnant for such a long time, we make sure we put the roadblock right in the middle of it,” Hardemon said. “This is a slap in the face of the Overtown community.”
Simkins has touted the tower as the anchor to a 10-acre technology district that will help revitalize one of the city’s poorest neighborhoods. Hardemon, who represents the district and who is chairman of the Southeast Overtown/Park West Community Development Agency, backs the project because Simkins has agreed to pay the semi-autonomous city agency $5 million prior to construction, and $1 million, or 3 percent of gross sales generated by the project every year after completion.
Recio also said Simkins has committed to giving local preference to Overtown residents on construction jobs and for the operation of the innovation tower.
In June, prior to the city commission’s first vote, Simkins’ company Innovate applied for permits to embed the LED signs within the skin of the proposed tower’s twisting façade and along its pedestal.