Related, Shoma set sights on giant Doral project
Jorge Perez and Related Group have staked a claim in the anticipated Doral construction boom by joining forces with Shoma Group.
The two companies have formed a joint venture to develop 48 acres within the Park Square at Doral site. The first step for the companies is to build 400 multifamily units and an undisclosed amount of retail space on six acres adjacent to Carnival Cruise Line's headquarters.
The venture was confirmed Wednesday by Related and Blanca Commercial Real Estate.
Blanca Commercial president and CEO Tere Blanca arranged the joint venture. She was assisted by Robert Kaplan and Mark Rutherford in the Miami office of Ackman-Ziff Real Estate Group.
Telephone calls to Shoma president Masoud Shojaee were not returned.
Miami-Dade County on Tuesday recorded a special warranty deed in which Park Square Commercial Retail 1, a company managed by Shojaee, transferred ownership of eight acres to a land trust. City National Bank of Florida is identified in the deed as trustee of the land trust.
The land trust also obtained a $12.5 million mortgage from Regions Bank. Based on the mortgage document filed with the county, Perez and Miami Dolphins owner Stephen Ross, who is also chairman, CEO and founder of Related Cos., are involved. The document identifies Perez Ross Holdings as part of the loan agreement.
State corporate records identify The Related Group as the manager of Perez Ross Holdings.
Related and Shoma expect to start construction of the first phase as soon as the fourth quarter of 2012, according to Steve Patterson, president and CEO of Related Development, the multifamily development arm of Related Group.
The existing approvals for the first phase allow for up to 400 residential units, but the companies are considering increasing the residential component, Patterson said.
"We're still modifying various master plans and meeting preliminarily with the city to discuss their thoughts," he said. "We're looking at a lot of different options, including townhomes and multifamily units. It's kind of a market driven decision."
Patterson added that first-phase plans should be finalized within 60 to 90 days. If the companies decide to include different residential product types, they could construct multiple project phases at the same time.
While Doral's rental market "will always be strong," Related and Shoma should get construction started on the multifamily portion as soon as possible, according to Howard Taft, senior managing director at Miami-based Aztec Group. Taft was not involved in the transaction.
"The quicker they can get into the ground, the better, so they don't miss the window of opportunity to experience rapid absorption," Taft said. "The only problem that might exist is if too many rental projects are built at the same time, which would result in rental concessions and slow absorption."
Including retail in the first phase makes sense because Doral is "really underserved," Taft said.
Park Square at Doral was originally planned as a mixed-use project, with the retail and residential components to be developed on land that was previously the headquarters of Ryder System. Shoma only completed One Park Square, the office component of the project, which it sold in 2010 to New Boston Fund.
Shoma had faced a foreclosure lawsuit from Wells Fargo Bank over a nearly $28 million mortgage secured by the undeveloped Park Square land.
Existing debt secured by the Park Square site was paid off as part of the transaction, according to Blanca. That presumably resolves the foreclosure case, which is still pending, according to Miami-Dade Circuit Court records.
Blanca and Patterson declined comment on the financial structure of the joint venture.
Related in January acquired a nearly 34-acre residential site in the Fontainebleau section of unincorporated Miami-Dade County from a company co-managed by Shojaee for $20.5 million. That transaction was not related to the Doral joint venture.
By partnering with Shoma, Related gains a foothold in a Doral market that has been coveted by some of South Florida's most prominent builders.
In another venture, Miami home-builders Lennar and Sergio Pino worked out a deal to develop 225 acres at 8200 NW 107th Ave., which includes the site of Pino's scuttled Century Grand project. Under the agreement, a Lennar affiliate assumed ownership of the site to resolve a 2-year-old foreclosure case, while Pino will still be able to build 1,546 of 4,137 single-family units approved for at the site.
Lennar is also moving forward with a scaled down version of another Doral project, St. Moritz. The company is seeking to reduce the size and impact of St. Moritz on 13.75 acres south of Northwest 89th Street and west of 114th Avenue. The 2003 site plan approval called for 285 condos on the site. Lennar wants to amend that permit to build 70 townhouses and 53 single-family homes, a total reduction of 162 units, according to documents filed with the city's Planning and Zoning Department.
Meanwhile, other major builders are ready to start toned down versions of previously planned Doral projects. This includes Vintage Estates, a development led by Coral Gables-based Renegade Investments and Miami-based Terra Group that has been reduced from 314 townhouses on 28 acres to 170 single-family homes, and Lakeside at Doral, Armando Codina's planned development north of Northwest 41st Street between 114th and 117th avenues. Codina's 16.4-acre site was approved in 2008 for a 195-room hotel and 434,000-square-feet of office and retail space. He now wants to build a 325-unit mid-rise apartment building and up to 52,000 square feet of commercial space.
Doral's rapid growth over the last 10 years is fueling the recent aggression from developers, according to Blanca.
The city "is one of the hottest development markets in South Florida for sure," Blanca said in a Wednesday interview with the Daily Business Review.
"With major corporate headquarters like Carnival, Univision and [the upcoming relocation of] the Miami Herald, there's a lot of strength in the business sector already in place. There's a need for housing and retail because the commercial sector grew faster than those two product types."
Eric Kalis can be reached at (305) 347-6651.