Elon Musk’s potential purge of federal properties across the country includes three South Florida office buildings and the FBI’s headquarters in Miramar.
The properties could be prime redevelopment opportunities for buyers. Up to 90 of government leases across 79 buildings could also be terminated — the cuts have so far resulted in two terminated leases in Hollywood and Homestead.
Musk’s Department of Government Efficiency, or DOGE, directed the General Services Administration to put 443 government buildings in 47 states on the market. Collectively, they span 80 million square feet, and selling these properties could save about $430 million in annual operating costs. (Courthouses and prisons are reportedly not part of this plan.)
While the sales of these properties may benefit developers, the lease purge in South Florida could also hit the already struggling office market.
“Oftentimes these government buildings are in prime locations, and usually very well under market value, like some of these old post office buildings are smack in the middle of downtowns where they do not belong anymore,” Forman Capital’s Ben Jacobson says.
The GSA’s list, which was only online for a short period of time, included the historic David W. Dyer Federal Building and U.S. Courthouse in downtown Miami.
Miami Dade College has another 106 years left on its lease of the property, which is undergoing a $60 million renovation. The college has not received any notices from GSA or DOGE, but some brokers and developers say they wouldn’t be shocked to see it hit the market.
One of the properties, the nine-story Brickell Bay Plaza, is arguably the most valuable. It was already on the market. It houses offices for the Coast Guard, the departments of labor and contract compliance, and housing and urban development (HUD), but its biggest and best use is in its future. The property can be developed into a 48-story tower, or higher if public benefits such as affordable housing are included.
But developers may not be able to be the first in line to make offers. The GSA’s process calls for first offering buildings for public uses such as homeless shelters, then to state and local governments. Only then would the GSA go to the private sector through a sealed bid or auction.
What we’re thinking about: Developers of Miami’s $1 billion mixed-use soccer complex are being accused of owing a contractor $590,000. This comes as Miami Freedom Park’s owners and Miami Mayor Francis Suarez were criticized for the direction of $10 million in funds meant for other city parks to the public park planned for the property. Will any of this affect the project? Send me a note at [email protected].
CLOSING TIME
Residential: Billionaire developer Vlad Doronin sold his waterfront Star Island estate for $120 million, setting a new record for home sales in Miami-Dade County. Doronin’s Garden Islands International LLC sold the 2.5-acre property at 26 Star Island Drive in Miami Beach to Constellation Drive LLC, a Delaware entity led by businessman Michael Ferro.
Commercial: Shoma Group sold a development site in Miami for $35 million to a partnership that includes 13th Floor Investments, Related Group and LeFrak. The 2.5-acre property at 3650 Bird Road was previously home to a portion of the car dealership Deel Volkswagen.
NEW TO THE MARKET
The waterfront estate at 284 Bal Bay Drive in Bal Harbour hit the market for $78 million. The nine-bedroom, 11-and-a-half-bathroom home was built on a half-acre lot, property records show. Coldwell Banker’s Danny and Jill Hertzberg, of the Jills Zeder Group, have the listing. Oil trader Mark B. Fisher and his wife Eloah Fisher own the 22,000-square-foot mansion.
A thing we’ve learned: New York City Comptroller Brad Lander, who’s running for mayor, said he wants to incorporate form-based zoning in the city if he’s elected. Miami’s form-based zoning code, which we all know as Miami 21, was adopted in 2008.
Elsewhere in Florida
- Tri-Rail, short of funding from Miami-Dade, Broward and Palm Beach counties, will run out of pandemic-era stimulus money in less than two years, the South Florida Business Journal reports. That may result in Tri-Rail cutting services or future projects.
- Miami city commissioners are set to vote on a proposal that would impose term limits for elected officials, which could upend local politics in the Magic City, according to the Miami Herald.
- Florida Republicans are considering Gov. Ron DeSantis’ plan to phase out property taxes, a move that would cause a major blow to funding of schools, law enforcement and other public services, the Tallahassee Democrat reports. Shifting the tax burden to sales taxes to make up the approximate $50 billion in revenue would disproportionately affect lower-income residents, critics say.
