As of early June, the co-founders of Miami-based MSP Group LLC have closed on real estate deals totaling $80.6 million since the beginning of the year.
Given that they opened the doors to their brokerage just 15 months ago, Deme Mekras and Elliot Shainberg are pleased.
“If we had done $80 million in deals and had 50 producers, that would not be viewed as remarkable,” Shainberg said. “For the size of the firm, having only two producers, that is a healthy number year-to-date.”
The total jumped substantially when they closed on four transactions totaling $54 million in three days.
The capstone came June 2 when they finalized Sunset Palms United LLC’s $38.5 million cash acquisition of the 318-unit Sunset Palms apartment complex on 14 acres at 7400 Stirling Road in Davie. The buyer is an affiliate of the Gottlieb Family Partnership in New York.
The seller was Les Chalet Investments LLC, an affiliate of CFH Group LLC, which paid $29.9 million for the former Conquistador Apartments in May 2015. CFH Group, which state corporate records show is managed by Tomas Cabrerizo in Miami, is a real estate and development and management company active throughout South Florida that buys neglected rental properties and refurbishes them, according to its website.
The other three deals closed May 31 for the 10-unit Deco Apartments in Miami Beach, a bulk sale of 117 units at
Sabal Pointe Condominiums in Palm Springs and the 55-unit Continental Springs Apartments in Miami Springs.
“The only way you get that volume of deals done in that time is by having seasoned brokers and experienced clients,” Mekras said.
Mekras and Shainberg represented Deco Apartments seller West Avenue Deco Apartments LLC, whose principal is attorney and real estate investor George Befeler, who practices with Homer Bonner Jacobs in Miami. He is also a founder of the Citadel Group, a Miami real estate investment firm that renovates historically significant buildings in Miami and Miami Beach, according to its website.
The buyer is 242 Miami LLC, whose managers include Juan Potau, according to state corporate records. MSP Group identifies the buyer as a Spanish investment group.
West Avenue realized nearly $2.2 million, a nice gain after acquiring the building at 1443 West Ave. for $1.6 million in February 2015.
The two-story building built in 1936 has operated as a traditional apartment building, but the buyer wants to position it as a short-term vacation rental. The property is in the West Avenue Bayfront Overlay District, where properties can operate under the city’s suite hotel designation, Mekras said. The buyer will apply to change the use from multifamily to suite hotel.
Noting the controversy that surrounds online sites such as Airbnb, he said, “This zoning allows the property to operate as a hotel legally.”
The challenge was understanding the suite hotel zoning and conveying that so the buyer was comfortable that “the zoning is in fact going to facilitate what they are going to do,” Mekras said. “Helping clarify what the zoning code calls for and how it applies to this property was the critical component.”
Mekras and Shainberg represented six affiliated sellers of 117 out of 176 units at Sabal Pointe Condominiums as they exit their multifamily holdings. The brokers also represented the buyer, MCMG Management LLC in Boynton Beach, a real estate investment management organization led by Michael Goldburg and Michael Cherry, according to state corporate records. They paid $8.2 million, or about $70,000 for each unit.
Mekras said their marketing of the property yielded numerous offers, and MCMG was among those asked to submit best and final offers.
“We and the seller selected MCMG on the merits of their offer with regard to price, terms and their credentials as buyers,” he said. “They already were owners of a fractured condo deal. We felt comfortable they understood the nuances.”
In the Continental Springs Apartments cash sale, they represented buyer Royal Poinciana Residences LLC, which state corporate records show is managed by John Sismanoglou. He paid $5.3 million, or just under $100,000 per unit, for the property at 801 S. Poinciana Blvd.
Mekras said Sismanoglou, a former New Yorker, is a repeat client who is an active multifamily buyer in Miami- Dade County.
The four deals involved different types of buyers and sellers, submarkets and market drivers, Mekras said. “Thankfully, we have many years of experience to help navigate that.”
Mekras and Shainberg spent about 10 years with Marcus & Millichap before being recruited by Franklin Street Real Estate Services to help launch its Miami office. After about 2½ years there, “we arrived at the conclusion we were more interested in conducting business with our personal brand, and we were off to the races,” Mekras said.
Having client relationships that they had developed themselves helped, the two said.
“It is a natural evolution for us,” Shainberg said.
For now, they plan on doing more deals in South Florida. But they are considering expansion with new hires and seeking out new clients in other Florida markets.
“We will go where our clients take us,” Mekras said.
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