More Than a Tourism Hub? 17 Big-Name Development Groups Eyeing Miami Beach Offices

Some of the biggest names in South Florida real estate are vying to build offices on Miami Beach’s Lincoln Road — a sign the barrier island is evolving beyond being a tourist destination.

The city had issued a request for letters of interest to build Class A offices and received 17 responses, including from Related Group, East End Capital, Dacra, and a joint venture proposal by Terra and The Comras Co.

The vacant lots total 1.3 acres and are on the north side of Lincoln Road. Up to 383,000 square feet can be built across the properties.

Miami Beach Commissioner Ricky Arriola said the number of responses and the experience of groups that expressed interest exceeded expectation. Arriola had bet on roughly five groups submitting letters of interest, he said.

“If you get 17 responses of this caliber it really shows the market believes in a couple of things. One, in Miami Beach, and secondly, that the office market is going to come roaring back once this pandemic is in the rear-view mirror,” Arriola said.

Although the 65-foot height limit in the area could be increased through commission approval of variances, the new offices won’t be high-rises, he added.

The city is envisioning law firms and media groups as well as private equity companies and hedge funds as it looks to get a slice of the influx of financial companies to South Florida.

The new offices will diversify Miami Beach as the city traditionally has been an entertainment destination, leaving it prone to hard economic hits during the coronavirus pandemic when hotels, restaurants and bars closed.

“Miami Beach has always been viewed as a tourist destination but I think what we are starting to see with COVID is people want to live and work and play in the same neighborhood,” Arriola said. “We saw what happened after Zika and during the pandemic, when hotels and restaurants had no visitors and our resort taxes plummeted.”

Miami Beach also has a residential sector and the addition of offices will make it more of a live-work-play destination. This will help the barrier island remain more economically resilient during pandemics and other impacts to tourism.

“By having a more diversified economy having a small office market — obviously not Brickell — will help sustain our local businesses with local residents and not be so dependent on tourist traffic,” Arriola said.

Related, founded and led by Jorge Pérez, is known as one of the biggest condominium developers, although it has projects in other asset classes. Dacra, led by Craig Robins, is best known for developing the Miami Design District, a high-end shopping area north of Midtown Miami.

Comras already has deep roots in Miami Beach, and Terra is known for building high-end residences in Coconut Grove and most recently embarked on a West Miami-Dade County multifamily project Natura Gardens.

Some of the other groups that submitted letters of interest are 13th Floor Investments, Adler Group, R & B Realty Group LLC, Russell Galbut’s Galbut Family Office LLC, Andalex Capital and Oak Capital Group LLC, according to a letter from Interim City Manager Raul Aguila to the mayor and commissioners.

Aside from the Comras-Terra letter of interest, others submitted letters as joint ventures. They are Integra Investments and Starwood Capital Group; Sterling Bay, Place Projects and Deco Capital Group; and Mangrove Real Estate Partners, Tricera Capital and Sasaki.

The City Commission is to consider the letters of intent on March 17, when it could direct staff to draft a request for proposals. If it does seek proposals, then developers would have to submit their project plans roughly by the summer. A selection committee will review qualifying project proposals and make a recommendation.

Any project on the site would then have to be approved by city voters in a referendum, given the acreage is publicly owned and a developer would lease it for at least 10 years. If there are no hiccups in the process, then the referendum could be held in the 2022 election.