In a sign of continued rising prices for property on Lincoln Road, Terranova Corporation and Acadia Realty Trust paid $139 million in cash Tuesday for a three-building portfolio of retail storefronts.
The deal is being billed as the largest retail acquisition in Florida during 2012 in terms of dollar value. The next closest was Vornado Realty Trust’s $132 million purchase in July of the 1100 Lincoln Road property that is home to Regal Cinemas and Banana Republic.
The Terranova acquisition includes the properties at 801, 826 and 719 Lincoln Road, currently home to tenants including Score, Tiramesu, Spris, Fossil, Kiehl’s, Steve Madden and the new Dylan’s Candy Bar opening next month. At $2,300 per square foot, the purchase represents one of the highest prices paid for space on Lincoln Road.
“We have a lot of confidence in this street,” said Stephen Bittel, chairman of Terranova, the Miami Beach real estate firm. Partner Acadia is a publicly traded real estate investment trust from White Plains, New York.
“The value is a function of the rents. We look at where the rents are today and where we think they can be down the road. These numbers may seem high, but there is enormous upside potential.”
The properties previously were owned by David Edelstein’s Tristar Capital. The New York-based real estate mogul was an early investor in Lincoln Road’s revival and developed the W Hotel on South Beach.
The catalyst for increased property values has been the interest from high-profile retailers like H&M, Forever 21, Armani Jeans and Lacoste. Many retailers on Lincoln Road ring up sales of $1,000 to $2,000 per square foot or more — numbers that rank among the top five shopping streets in the country.
Those sales figures have sent retailers are clamoring for space, despite rents that broke the $200 mark in the last year and continue to climb as high as $300 in select cases.
For Terranova, the recent acquisition continues the firm’s move away from investing in suburban real estate and focusing on urban street front retail. Terranova and Acadia now own almost 120,000-square-feet of retail space on Lincoln Road and nearby Lincoln Lane, making them the largest single owner of retail property in the area. Since purchasing the first properties in February 2010, Terranova has brought in tenants including Armani Jeans, Khong River House and Muse Cafe opening next spring. Bittel also owns two office buildings on Meridian Avenue and a parking garage on 17th Street.
“We have a real concentration of real estate in a tight geographic area,” Bittel said. “The challenge of owning and operating on Lincoln Road, is that it’s the easiest thing to say yes to every national tenant that wants to go there. If you do that it becomes a mall. We want to bring in a mix of unique retailers and restaurants.”
Sale of Lincoln Road properties sets record
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Sale of Lincoln Road properties sets record
