Sales and Acquisitions

April 19, 2022

FinCEN Russia Sanctions Alerts Warn Real Estate, Finance Industries to Exercise Effective Due Diligence

by Oscar R. Rivera

Oscar R. Rivera

The U.S. real estate and banking industries have been put on notice to adjust to the new U.S. sanctions against Russia and Russian entities with two recent alerts from the Financial Crimes Enforcement Network (FinCEN), which is the division of the U.S. Treasury Department that combats money laundering in collaboration with international financial authorities.

The March alerts focused in part on identifying suspicious transactions involving real estate. They note that Russians may seek to evade U.S. sanctions by acquiring or selling significant U.S. commercial and residential real estate assets. FinCEN notes that real estate’s high value and investment potential make it a target for layered transactions aimed at concealing buyers/sellers’ true identities. It warns that sanctioned Russians may attempt to purchase or maintain real estate through shell companies or trusts, or to liquidate real estate owned in countries that have imposed sanctions on them.

The federal agency directs industry members to stay on alert for the purchase, sale, donation or legal ownership transfer of high-value real estate in the name of a foreign legal entity, shell company, or trust; legal entities or arrangements that may have a connection to sanctioned Russian individuals to hide the ultimate beneficiary or the origins or source of the funds; changes to the transaction patterns of a firm located in a country other than the United States, Russia, Belarus and Ukraine, where the new transactions involve convertible virtual currency and Russian-related investments or firms; Russian individuals or entities requesting wire transfers from a non-US (particularly non-Russian) bank to pay for an all-cash purchase; the dilution of equitable interest held in real property by sanctioned Russian individuals, by the addition of, or the transfer of real estate to, an individual not affiliated with the buyer or seller; and the maintenance, purchase or termination of real estate insurance by persons with a known connection to sanctioned Russian individuals.

March 29, 2022

Article by Oscar Rivera in Today’s Daily Business Review: “Potential Pitfalls to Avoid with Restrictive Clauses in Outparcel Sales, Developments for CRE Owners”

by Siegfried Rivera

Siegfried Rivera

Firm managing shareholder Oscar R. Rivera authored an article that is featured in the online edition of today’s Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and will soon be appearing in the “Board of Contributors” page of the print edition. The article, which is titled “Potential Pitfalls to Avoid with Restrictive Clauses in Outparcel Sales, Developments for CRE Owners,” focuses on the growing trend of the carving out of parts of shopping centers and mall parking lots to create “outparcels” for stores, restaurants, and even multi-family apartments. He notes that the growth of online shopping and curbside pickup at major big-box retailers and grocery chains has diminished the need for vast parking fields for in-store shoppers, and property owners are trying to tap into the growing appeal of mixed-use sites that provide a live, work and play experience. Oscar’s article reads:

. . . However, for commercial real estate owners hoping to create and sell an outparcel for further redevelopment, or even acquire an existing outparcel owned by others for their own redevelopment, there is a significant potential hitch that must be addressed prior to closing. This issue requires the utmost care and attention, and is oftentimes overlooked, only to cause potential snags down the line.

The application of a property’s current restrictive covenants with existing tenants in outparcel deals can become a challenge depending on the nature of the plans for the new or redeveloped site. CRE owners can never lose sight of the fact that the new store/restaurant category or other planned use for a newly created outparcel being marketed and sold to a third party should not run afoul of the restrictive use clauses contained in the lease agreements with their property’s existing tenants. Otherwise, they can expose themselves to serious legal liability if the new enterprise planned for the outparcel is in a category that is a protected exclusive for any of the current tenant(s) at the property or a prohibited use that is forbidden by existing leases.

Therefore, always in close consultation with experienced CRE attorneys, owners need to address any such restricted uses that may be in play with all the parties prior to finalizing any transaction. The most efficient and effective way to do so would be to make the outparcel buyer aware of all the existing exclusives and restricted uses, and then negotiate their inclusion in the sales contract as an exhibit and as a covenant running with the parcel being purchased. The latter causes these exclusives and restricted uses to be a title burden that runs with the land and binds not only the current owner, but also all future owners and tenants on the outparcel.

February 13, 2022

Firm’s Latest Miami Herald Real Estate Counselor Column: “Condo Terminations Take Hold as an Exit Strategy for Owners at Aging Towers”

by Siegfried Rivera

Siegfried Rivera

The latest edition of the firm’s exclusive Real Estate Counselor column in the Miami Herald appeared in today’s Neighbors section and was authored by managing shareholder Oscar R. Rivera. Titled “Condo Terminations Take Hold as an Exit Strategy for Owners at Aging Towers,” the article focuses on the legal termination of older condominium communities and buyout of all the unit owners to make way for new construction. Oscar writes that the owners of units in aging condo communities near the water are receiving more offers from industry-leading developers than ever before, and some of these offers are coming just as the 40- and 50-year recertifications for their towers come due. His article reads:

. . . The costs for repairs, even at the 40-year mark, can be too much for many unit owners to afford. Some associations’ financial reserves are woefully inadequate, or even nonexistent, so they would need to impose significant special assessments to pay for major repairs.

In such cases, offers that are sometimes two to three times over market value for each unit can become a very appealing exit strategy for owners, and Florida has a legal mechanism for such condominium terminations that has proven to be effective. Terminations led to the development of the Armani/Casa tower in Sunny Isles Beach and the Una Residences now under construction in the Brickell area.

For developers, the math is even simpler than that of the unit owners. Once the value of the land for redevelopment becomes greater than that of the combined property values of all the existing units in a community, a condominium termination presents a fruitful opportunity.

February 7, 2022

Firm Assists Seller in Sale of Office Towers in West Palm Beach for $29.25 Million

by Siegfried Rivera

Siegfried Rivera

The firm’s real estate practice group assisted client Forum Capital LLC, an affiliate of Triarch Capital Group, in the sale of two office buildings located in West Palm Beach. The buildings, totaling 185,650 square feet, sold for $29.25 million to commercial real estate firm David Associates, marking a 30 percent gain since the Forum office towers last sold for $22.5 million in 2017.

We are proud to have assisted our client with the sale of 1655 and 1675 Palm Beach Lakes Blvd. (pictured below). The transaction was covered recently by the South Florida Business Journal. Click here to read the complete report in the business weekly’s website (registration required).

May 19, 2021

Article by Oscar Rivera in Today’s Daily Business Review: “Caveat Emptor Still Dictates in Florida’s Courts for Real Estate Buyers”

by Siegfried Rivera

Siegfried Rivera

The firm’s Oscar Rivera authored an article that was featured as the “Board of Contributors” guest commentary column on the homepage of the website of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper, and will soon be appearing in the newspaper’s print edition. The article, which is titled “Caveat Emptor Still Dictates in Florida’s Courts for Real Estate Buyers,” focuses on a recent ruling by Florida’s Fourth District Court of Appeal on the doctrine of caveat emptor, which holds that buyers are solely responsible for checking the quality and suitability of goods before purchase. The decision reaffirmed that the principle still holds true in the state for real estate buyers who seek to have their property acquisitions nullified by the courts due to alleged misrepresentations and hidden defects. Oscar’s article reads:

. . . In Florida Holding 4800 v. Lauderhill Mall Investment, Florida Holding purchased a commercial property from Lauderhill Mall, then sued the seller for alleged misrepresentations and concealments of its physical condition. The trial court entered final summary judgment in favor of the seller, concluding that the buyer’s claims were all expressly contradicted by the purchase and sale agreement that the parties had executed.

In the buyer’s subsequent appeal, the Fourth DCA panel found that the sale agreement stipulated it was an “as is” sale, using language that is standard for the industry. It noted that the seller made absolutely no warranties, representations or covenants to the buyer regarding the condition of the property, and the buyer acknowledged that it was purchasing the property in its “as is” condition and based solely on its own inspection, investigation and evaluation.

March 24, 2021

Real Estate Team Represents Buyer in Multimillion Dollar Purchase

by Siegfried Rivera

Siegfried Rivera

Firm shareholders Oscar R. Rivera and John Catalano successfully concluded work recently on a $79 million purchase by client Bar Invest Residential 4 LLC, a Bar Invest Group division.

The transaction involved the purchase of an apartment complex known as The Landings at Pembroke Lakes, a large community located in Pembroke Pines, Florida (pictured below). The multifamily residential rental complex houses 358 units, as well as a clubhouse with resort-style amenities. REIT counsel at Greenberg Traurig assisted our team in the acquisition of this project, and our client obtained financing through BankUnited.

Our firm congratulates and salutes Oscar, John and their support staff for all of the hard work they put forth in completing this transaction for our client.

March 16, 2021

Firm’s Real Estate Practice Group Represents Sellers in Two Major Transactions

by Siegfried Rivera

Siegfried Rivera

Firm shareholders Oscar R. Rivera and John Catalano represented our clients, PM Edgartown, LLC and PM Vineyard Haven, LLC in two separate sale transactions. The first transaction involved Prime Marina Vineyard Haven’s sale, a property located on Martha’s Vineyard. Prime Vineyard Haven has the largest set of seasonal private docks and slips available on the vineyard. It also houses a large on-site indoor and outdoor storage facility, as well as other amenities that are made available to its members.

Additionally, our team represented their sister company, PM Edgartown, LLC, on the sale of Edgartown Marine. Edgartown Marine is also located on Martha’s Vineyard and offers a full set of storage, launch, and haul services. The transactions involved the sale of all of the assets and dockage agreements of both operating marinas.

February 16, 2021

Reports in New York Times, Other Major News Outlets Document Miami’s Post-Pandemic Surge in Business Relocations

by Oscar R. Rivera

Oscar R. Rivera

“America’s business leaders, freed from the office, looked around the country, taking note of its coronavirus lockdowns, taxes and rabble rousers. And many said as if in unison: Miami!”

That’s how a major article on the cover of the Technology section of the Jan. 29 edition of The New York Times begins. It goes on to note that several finance and technology titans as well as Silicon Valley venture capitalists are relocating to Miami, where Mayor Francis X. Suarez has rolled out the red carpet.

The article reads:

“Dozens of big names have arrived. There was a tech contingent: Keith Rabois, a PayPal co-founder and investor, and his husband. Then their friend Peter Thiel, the tech investor and prominent conservative. Jon Oringer, founder of the stock-photography provider Shutterstock, and the media mogul Bryan Goldberg. Steven Galanis, the head of the celebrity-video product Cameo, is here. Elon Musk is talking about building car tunnels under Miami.

“There are also hedge funds and private equity funds. Paul Singer’s Elliott Management is moving its headquarters to the Miami area, as is Carl Icahn’s firm, Icahn Enterprises. Others are opening major Miami offices: Kenneth Griffin’s Citadel as well as Blackstone Group. Goldman Sachs is weighing moving parts of its operation to Miami.”

February 11, 2021

Firm’s Real Estate Practice Group Represents Seller in Sale of Monty’s Coconut Grove

by Siegfried Rivera

Siegfried Rivera

Firm shareholders Oscar R. Rivera and John Catalano represented the sellers, Aligned Bayshore Marina and Aligned Bayshore Raw Bar, in the sale of Monty’s Bayshore located in Coconut Grove. This fully leased mixed-use property features offices, retail and restaurants, including the iconic Tiki Style waterfront restaurant Monty’s Raw Bar. The enormous property, which is pictured along the waterfront below, boasts over 30,000 square feet of retail and office space, a 111-slip marina, and a 750-seat restaurant that has been at the same location for 50 years. The notable transaction has been covered by publications such as the Miami Herald and CityBizList.

We are proud to have represented our clients in this transaction, and our firm would like to commend Oscar, John and the supporting real estate staff on all their hard work!

June 10, 2020

Oscar Rivera Quoted in Miami Herald Article: “The Pandemic Gave Franchisees Shopping South Florida Real Estate a Leg Up”

by Siegfried Rivera

Siegfried Rivera

The firm’s Oscar R. Rivera was quoted in an article that appeared in the Miami Herald‘s website today and is expected to appear in the print edition in the coming days. The article, which is titled “The Pandemic Gave Franchisees Shopping South Florida Real Estate a Leg Up,” focuses on opportunities that are now opening up for commercial real estate buyers and franchises catering to middle-market shoppers and diners. It reads:

. . . A variety of national and local franchisees want to buy: Dunkin’ Donuts, 7-Eleven and Mr. Gomas Tires. Categories include beauty, experiential retail, cloud kitchens — think: co-working facilities for individual professional chefs — and, yes, gyms. . .

. . . But buyers aren’t necessarily finding bargains. While some pre-COVID contracts have been re-negotiated, most prices remain steady, said Oscar Rivera, lawyer and partner at the Coral Gables-based firm Siegfried Rivera, a retail specialist.

Still, franchise owners are jumping into the market “There’s pent up demand to eat out. There will be a drop off in people’s buying power [due to the economy and job losses]. That will be felt across the board,” Rivera said. “But since the price point in these restaurants are not significantly high compared to other restaurants, it will be felt less so.”. . .

Our firm salutes Oscar for sharing his insights into one of the impacts of the coronavirus pandemic on commercial real estate in South Florida with the readers of the Miami Herald. Click here to read the complete article in the newspaper’s website.