Immocorp Capital is upping the ante on its bid to buy out a waterfront condo building, and it brought in reinforcements.
BEKO Equities, a newly formed joint venture between Gilbert Benhamou’s Miami-based Immocorp and Hong Kong-based alternative asset manager O.D. Kobo, wants to purchase a pair of West Palm Beach condo buildings for about $430 million, according to sources familiar with the matter.
BEKO is targeting the 140-unit Portofino South Condominium with a minimum offer of $250 million, and the 39-unit Flagler Yacht Club condo with an offer from $150 million to $180 million.
It marks an increase in Immocorp’s previous offer for the Portofino for $202 million, and adds the Flagler Yacht Club in the proposal. If the purchases close for $430 million, it would break down to an average of $2.4 million per unit for both buildings, making it one of the most expensive buyout offers in West Palm Beach.
The properties span a combined 7 acres, across the Intracoastal Waterway from Mar-a-Lago, adjacent to the city’s El Cid and SoSo neighborhoods.
The Portofino, at 3800 Washington Road, and Flagler Yacht Club, at 3701 South Flagler Drive, are separated by a 1.4-acre lot where Kolter Group and Perko Development Partners plan the 39-unit luxury Maison d’Or condo project.
Competition for West Palm Beach’s waterfront development sites has grown heated in recent years.
Jessica Julian, an agent with Douglas Elliman who recently brokered Nadim Ashi’s $100 million buyout of Harbor Towers, said deals like hers and Steve Ross’ buyout of nearby Southbridge have boosted other developers’ confidence in the market.
“They think that strip is going to be the new Billionaires’ Row,” she said. But the prices Benhamou and Kobo are offering are astounding, she added.
“No one else was willing to bid that high,” she said. “They think if they can just hold that land, maybe in the future they’ll be able to build at those numbers.”
Despite the eye-popping price, the deal is far from done.
Although the building faces a $12 million special assessment and some owners have supported the buyout, others have opposed the deal. Gregory D’Elia, the president of the Portofino association, previously told The Palm Beach Post he didn’t want to sell, calling the building a “jewel.” D’Elia said he was speaking as a unit owner and not as a representative of the association.
The condo is one of many on West Palm’s waterfront with rules in place that allow just 5 percent of owners to block such a deal, meaning Benhamou and Kobo need to win over at least 135 unit owners.
The Portofino was built in 1971, and Flagler Yacht Club in 1981.
Across South Florida, developers have targeted aging condos, and coastal buildings in particular, with buyout offers. Many of the buildings face high special assessments due to more stringent structural integrity regulations imposed in the aftermath of the deadly Surfside condo collapse.
Among the developers betting they can get a majority to sell to avoid paying the hefty assessments are Related Group, Dezer Development and BH Group.
The sources said BEKO is hoping it would get all unit owners at both buildings on board because it wants to avoid devolving into a battle with holdout unit owners, citing the ongoing Biscayne 21 litigation that has derailed Two Roads Development’s plan for an Edition-branded condo project on the site in Miami’s Edgewater.
Benhamou and Kobo declined to comment. They haven’t disclosed any project plans.
Kobo has participated in and managed structured capital investments on behalf of institutional investors and sovereign wealth funds. Previously, he led investment initiatives in China on behalf of the Qatar Investment Authority, and then co-led a UK-based private equity firm, according to BEKO’s website.
Immocorp’s South Florida projects include the 382-unit Arte at the District mixed-use apartment project in West Palm’s Northwood District. Gideon Friedman of New York-based Beachwold Residential is partnering on the three-building complex.
In Miami Gardens, Immocorp and New York-based Kushner are partnering on a multifamily project part of a larger 36-acre mixed-use redevelopment Immocorp is working on. The site is near Steve Ross’ Hard Rock Stadium.
