Virgin Trains closes $1.75 billion bond issue to fund expansion to Orlando

From left: Francis Suarez, Patrick Goddard, Richard Branson, Esteban Bovo and Ken Russell

From left: Francis Suarez, Patrick Goddard, Richard Branson, Esteban Bovo and Ken Russell

Virgin Trains USA, formerly Brightline, closed a $1.75 billion private-activity bond issue to fund an expansion of its passenger train service to Orlando.

Investment banking firm Morgan Stanley was the underwriter for the bond issue purchased by 67 investors. A state agency, the Florida Development Finance Corp., approved the bond issue April 5.

Part of the Virgin Group founded by Richard Branson, Virgin Trains will use the bond-issue proceeds to fund construction of 170 miles of new track from West Palm Beach to an intermodal facility at Orlando International Airport.

Construction will start soon and is expected to conclude in 2022.

Virgin Trains, which also plans to extend its service in Florida to Tampa, has announced that it will operate passenger train service between Southern California and Las Vegas.

A subsidiary of Fortress Investment Group LLC, Virgin Trains last year launched service at downtown train stations in Miami, Fort Lauderdale and West Palm Beach.

“We have already seen firsthand the economic benefits our project has delivered in South Florida from revitalizing downtown Miami to spurring growth in Fort Lauderdale and West Palm Beach.” Patrick Goddard, president of Virgin Trains, said in a prepared statement. – Mike Seemuth

from The Real Deal Miami https://therealdeal.com/miami/2019/04/21/virgin-trains-closes-1-75-billion-bond-issue-to-fund-expansion-to-orlando/
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Risky business: Marijuana dispensaries present high risk, high reward for landlords, panelists say

From left: Matt Ginder, Nick Hansen, Tara Tredow, and Dan Dietz

Landlords who rake in rents from medical marijuana dispensaries may put their commercial bank accounts and title insurance at risk, according to cannabis real estate experts. Meanwhile, cannabis retailers are baking early termination clauses into leases in the event municipalities deny permits to open dispensaries.

Dan Deitz, manager of real estate acquisitions for GrowHealthy, a Florida medical marijuana company founded in 2014, said his firm retained SRS Realty Advisors, a commercial brokerage based in Orlando, to handle all of its real estate deals in Florida. The SRS brokers are well-versed on state regulations on dispensaries, as well as at convincing landlords to accept the risks associated with leasing to a retail cannabis shop, Deitz said.

“We have pretty tight lease clauses we include,” Deitz said. “There are termination provisions based on the inability to achieve government requirements to operate, and line items that acknowledge [selling marijuana products] is against federal law.”

Deitz, whose company operates three dispensaries in Florida, was a panelist for an Urban Land Institute discussion on cannabis real estate in Fort Lauderdale on Thursday. He joined Matt Ginder, senior counsel with law firm Greenspoon Marder’s cannabis practice; Nick Hansen, Southeast U.S. government affairs director for MedMen, a national cannabis company based in Culver, City, California that is currently suing Miami Beach over its dispensary restrictions; and Tara Tedrow, a shareholder at Lowndes, Drosdick, Doster, Kantor & Reed who chairs the firm’s cannabis & controlled substances group.

Leasing to dispensaries is a risky proposition because banks and major insurance companies do not want to do business with anyone tied to the cannabis industry since marijuana is still a federally banned illicit narcotic, Tredow told attendees.

“For rent checks, that is a problem,” Tredow said. “If a bank knows you are receiving rent from a cannabis company [those are] illegal funds you are knowingly accepting.”

She said most federally insured banks do not care if the dispensary tenant is a licensed medical marijuana provider complying with Florida law. “The money is considered dirty even if it comes from a legit cannabis company,” Tredow said.

She said a real estate investor or a cannabis company seeking to buy new land may also find it difficult to get title insurance if insurers find out the property will be used for marijuana purposes.

MedMen’s Hansen said the company retained Blake Wilder to handle leasing for several locations, including in Fort Lauderdale and Miami Beach. “They have a pretty good working knowledge of what to look for,” Hansen said.

The biggest hurdle is time and the changing political winds in cities tackling dispensary regulations, Hansen said. In Miami Beach, Hansen claimed, permitting officials had given the company assurances it could open a location on Alton Road. After MedMen signed a 10-year lease and invested $1 million renovating a former Panera Bread restaurant, the city commission passed new regulations that prohibited its dispensary from being within 1,200 feet of another medical cannabis store that is already open, Hansen said.

The company details the allegations in a recently filed lawsuit. Hansen said MedMen has had similar experiences in other cities and counties.

“That is not an outlier,” he said. “That kind of stuff happens all the time, every day.”

from The Real Deal Miami https://therealdeal.com/miami/2019/04/19/risky-business-marijuana-dispensaries-present-high-risk-high-reward-for-landlords-panelists-say/
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South Florida resi sales fell in Q1: Elliman

Miami skyline (Credit: iStock)

Residential sales volume declined in a number of South Florida markets during the first quarter, according to the latest Douglas Elliman reports.

Jonathan Miller, who authored the reports, said market conditions are generally improving, but decreases in sales are sending mixed messages.

Miami Beach and barrier islands

Miami Beach, which in previous quarters has been saddled with an oversupply of inventory, was among the stronger areas. Unlike other markets that Elliman tracks, the median price for luxury condos in Miami Beach rose, and inventory fell. “The decline in supply probably has more to do with [condo] developers managing inventory,” Miller said. “We’ve seen it level off and we’ve seen a little bit of tightening but there’s still a ways to go.”

Still, the volume of residential sales dipped in Miami Beach and the barrier islands during the first quarter. The number of sales totaled 772, down 2 percent from the previous year, while the median sales price increased 2.3 percent to $440,000.

Single-family home sales remained flat in the first quarter, at 81 closings. Condo sales fell 2.3 percent to 691. Pricing held steady for condos, which reported a median sales price of $380,000 in the first quarter, but skyrocketed for single-family homes — up nearly 18 percent to a median price of $1.65 million.

Condos sat on the market for much longer than they did in the first quarter of last year, up 76.5 percent to 143 days. Single-family houses lingered for 171 days, an increase of a whopping 144 percent from the same period last year.

The area of the barrier islands includes Sunny Isles Beach, Bal Harbour, Bay Harbor Islands, Surfside, North Bay Village, North Beach, Key Biscayne and Fisher Island.

Coastal Miami mainland

Sales volume fell 7.5 percent to 3,104 on the coastal Miami mainland, which covers Aventura, downtown Miami, Brickell, Coconut Grove, Coral Gables, South Miami, Pinecrest and Palmetto Bay. Condo sales dropped by 4.6 percent to 1,580, while single-family home sales tumbled by 10.3 percent to 1,524 closings.

The Coral Gables condo market and the Palmetto Bay single-family market were the only markets on the coastal mainland to experience a positive quarter, with sales increasing 10.5 percent to 63 closings, and 24.4 percent to 56, respectively.

The median sales price in Miami was $249,000 for condos – up 4 percent year-over-year – and $375,000 for houses, an increase of 2.7 percent.

The condo inventory grew to 8,276, up 4.1 percent from the same period last year. The inventory of single-family homes grew by 13.2 percent to 3,971, according to Elliman.

Fort Lauderdale

Residential sales volume declined by 13 percent in the first quarter in Fort Lauderdale, down to 878 closings. Condo sales decreased to 507 closings, down 8.8 percent; while single-family home sales tumbled to 371 – an 18.3 percent decline.

The median price of a condo was $295,000, down 9 percent year-over-year. For a house, it reached $385,000, up 5.7 percent.

Condo inventory grew slightly (2.1 percent) to 1,584; and the single-family home inventory was 1,102, up 6.6 percent.

Palm Beach

In Palm Beach, sales volume fell 8.8 percent to 104 – a difference of 10 units compared to the first quarter of last year. Condo sales rose nearly 5 percent to 85 closings, and single-family home sales plummeted to 19, down 42.4 percent. It was the lowest level in seven years, according to Elliman.

The median price in Palm Beach for a house was $4.2 million, up 5 percent from last year, and $599,000 for a condo, roughly on par with the median condo price last year.

Boca Raton

Home and condo sales volume fell in Boca Raton during the first quarter to 1,083, an 8.4 percent drop year-over-year. Single-family home sales dropped 10.5 percent to 486; and condo sales decreased by 6.6 percent to 597.

The median sales price for a condo was up only 1.2 percent to $270,500. The median sales price of a single-family house was $450,000, an increase of 4.7 percent from the previous year, but flat from the fourth quarter of 2018.

from The Real Deal Miami https://therealdeal.com/miami/2019/04/18/south-florida-resi-sales-fell-in-q1-elliman/
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Carolyn Block Ellert joins Compass to head new dev division

Carolyn Block Ellert

UPDATED, April 17, 2:25 p.m.: More than six months after buying out her partner at Premier Sales Group, Carolyn Block Ellert is joining Compass to head its development division in Florida.

Ellert is now managing director of the company’s new development wing, based in Compass’ Fort Lauderdale office at 1200 East Las Olas Boulevard, according to a release. She’ll oversee projects in the southern half of the state.

Ellert bought out her ex-business partner Laurie Ingber in September to become the full owner of the Fort Lauderdale-based Premier Sales Group. Ingber said at the time she had joined Mattamy Homes, the largest privately owned home builder in North America, to lead sales and marketing of its new Southeast Florida Division.

As owner and CEO of Premier, Ellert was involved in luxury condo and condo hotel sales totaling more than $4 billion. She co-founded the company in 2000 and worked on selling Fort Lauderdale projects that included The Brazilian Court Palm Beach, Las Olas Riverhouse, Sapphire and the Atlantic Hotel. Ellert was also previously a director of sales for the Sunshine Group in New York and launched the company’s South Florida division in 1993.

Ellert will keep ownership of Premier Sales Group but will focus her new development efforts on Compass, according to a spokesperson.

Ellert is also the current and founding chair of the Master Brokers Forum’s Gold Coast chapter.

Compass’ development division is handling sales and marketing of Amrit Ocean Resort and Residences in Singer Island, 6080 Collins Avenue Beach House in Miami Beach, and Aquavue and Aquablu in Fort Lauderdale, among other projects.

Earlier this year, Compass expanded in Palm Beach with the acquisition of Hall Real Estate, an 11-agent boutique firm led by broker Steve Hall, and brought on Elizabeth DeWoody, a top producer at Corcoran Group.

After expanding nationwide last year – increasing from 37 markets to 122, hiring over 1,000 employees and signing on almost 6,000 new agents – Compass CEO Robert Reffkin said the brokerage won’t enter new markets this year, instead focusing on hiring and growth in its current markets.

from The Real Deal Miami https://therealdeal.com/miami/2019/04/17/carolyn-block-ellert-joins-compass-to-head-new-dev-division/
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Bending over backwards for Beckham? New lawsuit targets Fort Lauderdale stadium deal

Rendering of the Lockhart Stadium redevelopment and David Beckham

A competing bidder for Fort Lauderdale’s Lockhart Stadium who lost to David Beckham’s group is suing the city and Miami Beckham United over the way Fort Lauderdale evaluated and ranked bids.

FXE Futbol filed a lawsuit Monday morning in Broward County Circuit Court, alleging Fort Lauderdale skipped steps when it was reviewing Miami Beckham United’s Inter Miami proposal, and that Inter Miami exaggerated an asbestos issue at Lockhart to speed up demolition approval of the stadium, the Miami Herald reported. FXE Futbol is being represented by Miami attorney David Winker. Winker is also pursuing legal action against the city of Miami over how it handled the Melreese stadium deal with Miami Beckham United.

Beckham’s team, Inter Miami, is planning to build a training facility for the Major League Soccer team, as well as an 18,000-seat stadium on the Fort Lauderdale property.

Inter Miami, also known as Club Internacional de Fútbol Miami, would play its first two seasons at Lockhart Stadium while a stadium is built in Miami. After the team’s second season, Lockhart Stadium would serve solely as an 18,000-seat exhibition and training facility.

The Fort Lauderdale Commission ranked Inter Miami ahead of FXE Futbol on April 2, and green-lighted an interim agreement with Beckham’s group to knock down the stadium as it negotiates a final agreement with the city.

John F. Reynal, FXE’s managing partner, said in a statement to the Herald that FXE “can no longer stand on the sidelines while our due process is being violated.”

“Not only do we believe the ranking was carried out without the proper statutory review, but the subsequent signing of the interim agreement to demolish Lockhart would render our proposal impossible to deliver,” he added.

Fort Lauderdale City Attorney Alain E. Boileau said the lawsuit is “without any legal merit and will be defended vigorously.” [Miami Herald] —Katherine Kallergis

from The Real Deal Miami https://therealdeal.com/miami/2019/04/16/bending-over-backwards-for-beckham-new-lawsuit-targets-fort-lauderdale-stadium-deal/
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Bank seeks to foreclose on Fort Lauderdale mansion, Fisher Island condo of former Patriot National CEO

Steven Mariano and 414 Riviera Isle Drive (Credit: Zillow)

In 2015, Steven Mariano was one of Fort Lauderdale’s most prominent businessmen and on the verge of taking his upstart insurance company Patriot National public on the New York Stock Exchange.

Fast forward four years and Mariano has been ousted from his now bankrupt company amid allegations of fraud, and a bank is now seeking to foreclose upon Mariano’s $7 million Fort Lauderdale waterfront mansion.

UBS Bank is seeking to foreclose on Mariano’s house at 414 Riviera Island Drive after the bank alleges in a Broward County Circuit Court filing that he failed to pay back a balance of $4.5 million that he owed.

414 Riviera Isle Drive

UBS is also seeking to foreclose upon Mariano’s Fisher Island condo, unit 5212 at the Bayview, which is on the market for $6.5 million.

Another bank, Fifth Third Bank, is seeking to collect on the proceeds from the sale of the foreclosed Fort Lauderdale home in order to collect on a $32 million loan for a yacht and $12.5 million revolving loan the bank claims it made to Mariano.

The eight bedroom, 10-and-a-half bathroom, three-story mansion spans 18,491 square feet and overlooks the New River. It is currently on the market for $7 million, $2 million more than Mariano paid for the house in 2011, records show.

The estate, which includes a 16-seat theater, a game room, a full gym, a sauna and a custom wine cellar, embodied the life that Mariano sought to live.

The businessman donated millions of dollars to universities including Nova Southeastern University and the University of Miami, while his company was the main sponsor for charity events such as the American Heart Association’s Heart Ball and the American Fine Wine Competition Gala.

414 Riviera Isle Drive (Credit: Zillow)

His two companies, Patriot National and Guarantee Insurance Co., occupied two floors in Fort Lauderdale’s premier Class A office building, Las Olas City Centre at 401 East Las Olas Boulevard in downtown. Guarantee Insurance Co.’s floor was formerly occupied by the law office of Scott Rothstein, the convicted mastermind of Florida’s biggest Ponzi scheme.

Despite Mariano’s outward appearance of success, which included his 187-foot yacht, named Lady Sara, behind the scenes Mariano’s insurance companies were experiencing major financial troubles. Guarantee Insurance Co. was a worker’s compensation insurer, while Patriot National provided back office technology support for insurance companies.

Issues arose when it was discovered that Guarantee Insurance Co. accounted for up to 80 percent of Patriot National’s business, according to Securities and Exchange Commission filings.

Under Mariano’s direction, Patriot National then injected $30 million to Guarantee Insurance Co., which appeared to be done so that Guarantee Insurance could meet its capital requirements with regulators and remain solvent.

Mariano, who had been trying desperately to keep his insurance empire afloat, was pushed out as CEO of the company in July 2017. In November 2017, Guarantee Insurance Co. was deemed to be insolvent by state regulators, who also alleged that Guarantee Insurance Co. systematically transferred at least $15.74 million to Mariano with “no documented business purpose.”

Patriot National was eventually acquired by its two biggest creditors and announced it would file for Chapter 11 bankruptcy in December 2017.

Since then, Mariano has kept a low profile, facing a number of lawsuits from creditors and investors who allege that Mariano’s actions caused the stock to drop.

Mariano’s lawyer, Bernard L. Egozi Egozi & Bennett, said he could not comment on pending litigation. UBS Bank’s lawyer, Brian Albaum of Phelan Hallinan Diamond & Jones did not respond to a request for comment.

from The Real Deal Miami https://therealdeal.com/miami/2019/04/16/bank-seeks-to-foreclose-on-fort-lauderdale-mansion-fisher-island-condo-of-former-patriot-national-ceo/
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South Florida resi sales fell in Q1: Elliman

Miami skyline (Credit: iStock)

Residential sales volume declined in a number of South Florida markets during the first quarter, according to the latest Douglas Elliman reports.

Jonathan Miller, who authored the reports, said market conditions are generally improving, but decreases in sales are sending mixed messages.

Miami Beach and barrier islands

Miami Beach, which in previous quarters has been saddled with an oversupply of inventory, was among the stronger areas. Unlike other markets that Elliman tracks, the median price for luxury condos in Miami Beach rose, and inventory fell. “The decline in supply probably has more to do with [condo] developers managing inventory,” Miller said. “We’ve seen it level off and we’ve seen a little bit of tightening but there’s still a ways to go.”

Still, the volume of residential sales dipped in Miami Beach and the barrier islands during the first quarter. The number of sales totaled 772, down 2 percent from the previous year, while the median sales price increased 2.3 percent to $440,000.

Single-family home sales remained flat in the first quarter, at 81 closings. Condo sales fell 2.3 percent to 691. Pricing held steady for condos, which reported a median sales price of $380,000 in the first quarter, but skyrocketed for single-family homes — up nearly 18 percent to a median price of $1.65 million.

Condos sat on the market for much longer than they did in the first quarter of last year, up 76.5 percent to 143 days. Single-family houses lingered for 171 days, an increase of a whopping 144 percent from the same period last year.

The area of the barrier islands includes Sunny Isles Beach, Bal Harbour, Bay Harbor Islands, Surfside, North Bay Village, North Beach, Key Biscayne and Fisher Island.

Coastal Miami mainland

Sales volume fell 7.5 percent to 3,104 on the coastal Miami mainland, which covers Aventura, downtown Miami, Brickell, Coconut Grove, Coral Gables, South Miami, Pinecrest and Palmetto Bay. Condo sales dropped by 4.6 percent to 1,580, while single-family home sales tumbled by 10.3 percent to 1,524 closings.

The Coral Gables condo market and the Palmetto Bay single-family market were the only markets on the coastal mainland to experience a positive quarter, with sales increasing 10.5 percent to 63 closings, and 24.4 percent to 56, respectively.

The median sales price in Miami was $249,000 for condos – up 4 percent year-over-year – and $375,000 for houses, an increase of 2.7 percent.

The condo inventory grew to 8,276, up 4.1 percent from the same period last year. The inventory of single-family homes grew by 13.2 percent to 3,971, according to Elliman.

Fort Lauderdale

Residential sales volume declined by 13 percent in the first quarter in Fort Lauderdale, down to 878 closings. Condo sales decreased to 507 closings, down 8.8 percent; while single-family home sales tumbled to 371 – an 18.3 percent decline.

The median price of a condo was $295,000, down 9 percent year-over-year. For a house, it reached $385,000, up 5.7 percent.

Condo inventory grew slightly (2.1 percent) to 1,584; and the single-family home inventory was 1,102, up 6.6 percent.

Palm Beach

In Palm Beach, sales volume fell 8.8 percent to 104 – a difference of 10 units compared to the first quarter of last year. Condo sales rose nearly 5 percent to 85 closings, and single-family home sales plummeted to 19, down 42.4 percent. It was the lowest level in seven years, according to Elliman.

The median price in Palm Beach for a house was $4.2 million, up 5 percent from last year, and $599,000 for a condo, roughly on par with the median condo price last year.

Boca Raton

Home and condo sales volume fell in Boca Raton during the first quarter to 1,083, an 8.4 percent drop year-over-year. Single-family home sales dropped 10.5 percent to 486; and condo sales decreased by 6.6 percent to 597.

The median sales price for a condo was up only 1.2 percent to $270,500. The median sales price of a single-family house was $450,000, an increase of 4.7 percent from the previous year, but flat from the fourth quarter of 2018.

from The Real Deal Miami https://therealdeal.com/miami/2019/04/18/south-florida-resi-sales-fell-in-q1-elliman/
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