Dade-Commonwealth Building Downtown Miami
139th NE 1 ST
Existing office building & site plan approved for a hotel development.
UNIQUE FOR SALE OPPORTUNITY
Executive summary
Introduction
The historic Dade-Commonwealth Building located at 139th NE 1st ST, an existing office building and fully site plan approved hotel development site located in the heart of Downtown Miami, Florida.
Permits have been approved to demolish the existing structure (with the exception of the façade for the first 3 stories), and drawings for the construction of a 17-story, 163-key hotel are ready. A hotel on the site would benefit from the excellent location of the Property, within short walking distance to some of Downtown Miami’s major office buildings, dining and nightlife spots and cultural attractions, offering the ability to cater to both business- and leisure-oriented travelers.
The Property is located just 400 feet from the First Street MetroMover Station, which offers rail access throughout Downtown Miami and Brickell, and a short walk from the Government Center MetroRail Station, which offers rail access throughout Miami-Dade County. It is also located near some of Downtown Miami’s top-performing luxury hotels, including the Hyatt Regency, the Kimpton EPIC, the InterContinental Miami, the JW Marriott Marquis, and the Hotel Beaux Arts.
Originally built in 1926, the Dade-Commonwealth Building’s Neo-Classical architecture made it a pioneering development in Downtown Miami, and one of the area’s most iconic buildings. Because of its rich history as a landmark building within Downtown Miami, the Property has been awarded historic status, qualifying for a Federal Historic Rehabilitation Tax Credit.
An excellent location in the heart of Downtown Miami offering walkability to Miami’s major business, cultural and entertainment destinations, proximity to three different rail transit systems, and favorable tax credits, the Property is an excellent mixed use development opportunity.
Investment highlights
Existing approvals
The Property has rare in-place approvals from the Historic Preservation Board and the City of Miami for the demolition, leaving the original front three-story façade, and reconstruction of Miami’s historic Dade-Commonwealth building into a brand new 17-story upscale hotel.
Fully approved plans, with permits pending request, for the construction of a 17-story, 163-key hotel. In conjunction with the demolition approvals, these will accelerate a project significantly, allowing a developer to break ground months faster than could be achieved at other sites.
Core Downtown Miami location
Property is located in the heart of Downtown Miami, just steps from some of the city’s landmarks including American Airlines Arena, Bayfront Park and Amphitheater, Bayside Marketplace, the Frost Science Museum, and Brickell City Centre.
The overwhelming majority of Miami’s Central Business District offices, located in Downtown and Brickell, can be reached in a ten-minute walk from the Property.
Stations serving three different modes of rail transportation can be reached within a fifteen-minute walk. The First Street Metromover station offers free access to rail serving Downtown Miami and Brickell. The Government Center MetroRail Station offers access throughout Miami-Dade County, including to Coconut Grove, the University of Miami, and the Miami International Airport. And the MiamiCentral Brightline Station offers express rail access to Fort Lauderdale, Palm Beach, and soon to Orlando.
Tax credits and Historic Designation
Historical designation under the Downtown National Register Historical District means the Property is entitled to the Ad Valorem Tax Exemption for Historic Properties.
Further, the Property is qualified for the Federal Historic Rehabilitation Tax Credit, which offers a tax credit of 20% for qualified rehabilitation of historic buildings. Qualified expenses include all direct and indirect costs of construction in renovation of the
building.
Favorable Zoning
The Property is aggressively zoned as T6-80-O, Miami 21’s most intense zoning designation. The zoning permits construction of up to 80 stories at a Floor Lot Ratio (FLR) of 24 by right, and offer unlimited height and FLR via public benefit bonuses.
The Miami 21 zoning code permits historically designated properties the sale of excess buildable square footage and density via a Transfer of Development Rights (TDR’s) and Density (TDD’s), which will assist an investor in reducing their cost basis on the project.
- 7,505 square feet
- Fully approved for 17 stories & 163 key hote
- Demolition permit for existing building
- T6-80-O zoning TDR’s and TDD’s
- Core Downtown Miami location
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Historic Designation
History & Restoration
The Dade-Commonwealth Building (the “Property”) built in 1926 was originally a seventeen-story steel frame skyscraper constructed in the Commercial Style of architecture embellished with Neo-Classical features and was a pioneer as one of the first skyscrapers to be constructed in downtown Miami. The building opened its doors in March of 1926, following a year of expansion and mass migration of businesses to Miami. Among the new businesses attracted to the region was the Meyer-Kiser Bank of Indiana that financed as well as become a tenant in the building, ultimately coining the building the Meyer-Kiser Bank Building. As time went on, the Meyer-Kiser Corporation found quarters elsewhere and several other companies become prime tenants, one of which the Dade Commonwealth Title and Abstract Co. in 1936. Although the company has been long gone, the historic building still carries the Corporation’s name.
The Dade Commonwealth Building was damaged during the 1926 hurricane and was reduced to 7-stories due to
the damage. Approved plans call for the reconstruction of the original 17-story height, as well as restoration of the building’s storefront level front façade and original columns, pilasters, and entablature.
Tax Exemptions
The subject Property is located within the Downtown National Register Historic District and has been approved to benefit from the Ad Valorem Tax Exemption for Historic Properties. The Federal Historic Rehabilitation Tax Credit (“HTC”) program is intended to incentive the preservation of the nation’s historically significant buildings, structures, and landmarks. The HTC program provides a tax credit of twenty percent (20%) for qualified rehabilitation of eligible structures or buildings of historic significance of structures or buildings built prior to 1936.
Qualified rehabilitation expenses include all direct and indirect costs of construction in renovation of the building and architectural, engineering, surveying, legal, insurance, development fees, and related costs may be capitalized in relation to qualified rehabilitation expenses. Many HTC projects partner with tax credit equity investors in order to monetarily realize the benefit of the HTCs without directly utilizing the tax credits against individual taxable income. Typically a HTC transaction must have a chosen twenty-four month period for measuring qualified rehabilitation expenses, with the exception for phased construction projects allowing up to a sixty month period. Additionally, HTC’s are subject to a five-year compliance period and prohibits the Property being sold or transferred during the first five years following the Property in service.
Zoning summary
Transfer of development rights & density
The Property’s T6-80-O zoning permits tremendous intensity and density – more than can be constructed on the site’s 7,505 SF footprint. Fortunately for developers, the Miami 21 code permits historically designated properties the sale of excess buildable square footage via a Transfer of Development Rights (TDR), and sale of excess buildable units via a Transfer of Development Density (TDD). Use of TDRs and TDDs will permit a developer to reduce their basis in the project. The Property is pre-qualified for sale of these excess development rights, per Chapter 23, Article I, Sec. 23-6 of the Miami Code of Ordinances (available at this link). The remaining development rights available for sale after construction of the hotel project are shown in the table below
Property overview
Property aerials
Aerials | looking northeast
Aerials | looking southwest
Aerials | looking northeast
Aerials | looking northwest
Accessibility
Flagler Street Beautification Project
Flagler Street Beautification Project
The vision of the Flagler Street Beautification Project states: Flagler Street shall reclaim its proud and distinctive heritage as the City of Miami’s iconic main street…A vibrant, walkable and historic shopping district.” The main purpose of the project is to return Flagler Street into Miami’s pedestrian-oriented historic main street. Moreover, by drastically improving the street corridor, it will bring more people to the downtown area and act as a catalyst to attract more private dollars and redevelopment.
The construction and beautification project, budgeted at $27 MM due to design improvements, will proceed east to west in 5 sections over 2.5 years. Aged utility lines will be replaced, in addition to upgraded drainage along the historic street. The implementation of larger sidewalks and removed on-street parking should transform the corridor into a pedestrian friendly environment with a focus on walking and strolling and social interaction.
Local amenities
Drivetimes
Neighborhood map
1. DOWNTOWN – SUBJECT PROPERTY LOCATION
Downtown Miami is home to South Florida’s Central Business District, with dozens of major firms operating Latin American headquarters out of the neighborhood’s 13M SF of office space. It also contains many of Miami’s major cultural highlights, including the American Airlines Arena where the Miami Heat play, Bayfront Park which frequently hosts the popular Ultra music festival, and two recently-constructed world-class museums, the Perez Art Museum and the Frost Science Museum. Accessibility is excellent via I-95 and as well as the Brightline and MetroRail rail systems, and the neighborhood is located just 15 minutes from the Miami International Airport as well as the Port of Miami, one of the busiest cruise terminals in the world.
2. BRICKELL – 2 MINS FROM PROPERTY
Brickell is one of Miami’s most desirable neighborhoods, home to its financial district and a large and growing portion of its luxury condominium stock. South of the Miami River from Downtown Miami, Brickell is bounded to the north by the Miami River, by I-95 to the west, and Biscayne Bay to the east. Popular areas within Brickell include Brickell City Centre, a climate-controlled outdoor mall home to some of Miami’s best retailers, and Mary Brickell Village, an outdoor shopping and nightlife with tremendous pedestrian traffic. It also houses some of the best hotels in Miami, including the Conrad, East Miami, the JW Marriott Miami, and the
Mandarin Oriental Hotel. Access is excellent, with quick drive times to Downtown Miami, the Miami International Airport, Key Biscayne, and South Beach.
3. LITTLE HAVANA – 2 MINS FROM PROPERTY
Little Havana serves as a tribute to the American dream pursued by the hundreds of thousands of Cubans who fled to Miami after Fidel Castro came to power in 1959. One only has to visit this neighborhood to experience the sights, sounds and smells of classic Miami. The stretch of Calle Ocho is vibrant, providing a place to indulge in authentic food, hand-rolled cigars, and a strong Cuban-style coffee. In the evening its commercial establishments are energetic and great for leisurely dining and entertainment.
Market overview
Miami-Dade hospitality market
After a world-wide slowdown in hospitality markets during the COVID-19 shutdowns in 2020, the Miami hospitality market is in the early stages of a recovery. While pre-pandemic occupancy levels were consistently above 75% over the past decade, the shutdowns and travel restrictions over the course of the pandemic caused occupancy rates to dip to an average of 44.8% over the past year. ADR and RevPAR fell accordingly, to $168 and $75 respectively, across all hotel product. Importantly, though, the fall in these metrics was significantly less than what was seen in other major metros, with the lowest rate-drop of the country’s top 25 hospitality markets. By March 2021, occupancy had returned to 72.7%, and ADR to $250. Most industry observers expect demand to return to pre-pandemic levels by 2024, and some believe that return will occur even more quickly. In support of that thesis, per-key pricing for luxury and upper upscale product held relatively constant over the past year, perhaps pointing to an expectation among investors than Miami’s hospitality market will quickly return to its recent strength
- 60,383 Keys of inventory
- 4,577 Keys under construction
- 72.7% Occupancy rate
- $250 Average daily rate
- $461,000 Per key sale price (Luxury + Upper Upscale)
Greater downtown Miami hospitality market
The Greater Downtown hospitality market is characterized by large, high-end hotels, with more than half of the existing stock falling within the luxury or upper upscale category. This submarket contains many of Miami’s primary tourist draws aside from South Beach, and draws a significant portion of its visitation from leisure travelers, a group expected to return to normal travel patterns more quickly than business travelers. New construction is largely concentrated in the northern downtown corridor including Wynwood and Edgewater, as hospitality groups seek to gain a foothold in these rapidly growing neighborhoods.
- 12,610 Keys of inventory
- 600 Keys under construction
- $292 12-month ADR (Luxury)
- Zero Luxury projects under construction
Hotel comparables
Area overview
Miami | A growing city
Known as the “Magic City,” the City of Miami is located in Southeast Florida, in Miami-Dade County on the Miami River, between the Florida Everglades and the Atlantic Ocean. Miami is one of the state’s – and the world’s – most popular vacation spots with over 15 beaches including South Beach, Bal Halbour Beach and Sunny Isles. Nearby cities include Ft. Lauderdale and Miami Beach.
Miami is home to a huge business market, with countless company headquarters based out of the city including Bacardi, Benihana, Brightstar Corporation, Burger King, Carnival Cruise Lines, Holland & Knight, Inktel Direct, Lennar, Norwegian Cruise Lines, Perry Ellis International, Royal Caribbean Cruise Lines, Ryder Systems, Telemundo, U.S. Century Bank, and World Fuel Services.
Miami was ranked the fifth-most walkable of the largest cities in the United States in 2019, and consistently ranks among the top cities in the United States in terms of finance, commerce, culture, entertainment, fashion, education, and other sectors. The city’s towering skyline is the third largest in U.S.A.
Miami’s cultural attractions draw millions of visitors every year. In addition to the major museums such as the Museum of Contemporary Art, The Miami Art Museum, The Frost Museum of Science and the Perez Art Museum, there are countless galleries in Miami. Miami is also the home to several performing arts companies, large entertainment venues and historic homes, buildings, and churches.
The Miami area offers something for everyone. Vibrant South Beach nightlife is famous for its revelers. Wynwood Walls and the Design District are renowned amongst modern art and architecture fans. Little Havana brings culture and energy to the city of Miami and its visitors. And of course, Miami’s white sand beaches are famous around the world. The city is also known for its numerous high-end shopping areas and local sports teams including the Marlins, Dolphins and Miami Heat.
Its major entry points for trade, business and travel include Miami International Airport, the fifteenth busiest airport in the United States, and the Port of Miami, the busiest passenger seaport in the United States. With an on-going influx of domestic and international visitors and new residents, Miami appears set to continue its impressive track record for the foreseeable future.
- Busiest cruise port in the U.S.
- 15th busiest airport In the U.S.
- 5th most walkable city in the U.S.
- Annual visitors 23,000,000
Economics
Employment and economic impact
The majority of Miami’s economy is centered around tourism, with its extensive beaches, luxurious hotels, and renowned shopping hotspots.
The city is visited year-round, especially when northern snow birds flee to the south during the harsh winter months. However, trade has also helped stimulate the economy. The city’s location makes it a top domestic location for entities doing business in the Caribbean and Latin America. As a result, Miami’s employment numbers continue to be strong, with historically low 1.4% unemployment as of December 2022.
Region and population
Greater Downtown Miami is the largest metro area of the third most populous state in the United States. As of 2019, Miami-Dade has a population of over 2.75M residents, and Miami ranked 6 overall among US cities in overall population growth in 2022. At current growth rates, Miami Dade county is gaining 275 residents per day. More broadly, South Florida’s population has boomed since 2010, driven in part by domestic immigration from the Northeast United States as mobile, affluent residents of high-tax states continue to relocate to the more favorable tax environment in Florida. Retirees and international immigrants from Latin America also account for a large portion of this growth.
Points of interest
1. Miami Design District
An 18-square block creative neighborhood and shopping district dedicated to innovative fashion, design, art, architecture, entertainment, and dining experiences. Historically a part of Buena Vista neighborhood.
2. Wynwood
One of the most popular sites to visit in the heart of Miami, Florida. Wynwood overflows with vibrant artwork, restaurants, breweries, clothing stores, dance and club venues, among other retail options. It is north of Downtown Miami and vertown, and adjacent to Edgewater.
3. Shops at Midtown Miami
The Shops at Midtown Miami is a 645,000-sf retail property featuring the largest critical mass of value-oriented retailers in the City of Miami. The Shops at Midtown Miami is situated near the convergence of I-95 and I-195, just west of Miami Beach and north of downtown Miami.
4. MiMo Historic District
MiMo Historic District runs roughly from 50th Street to 77th Street along Biscayne Boulevard. The area is filling up with stylish shops, restaurants, bars, and boutique hotels.
5. Brickell City Centre
Brickell City Centre is a $1.05 billion shopping and mixed-use project in Downtown Miami
6. Bayfront Park
Bayfront Park is 32 acres of lush greenery which includes a small sand beach, tropical rock garden and waterfall, playground, fountain, Light Tower, and many different monuments.
7. Adrienne Arsht Center
Set in the heart of downtown Miami and designed by world renowned architect Cesar Pelli, the Adrienne Arsht Center for
the Performing Arts of Miami-Dade County is one of the world’s leading performing arts organizations and venues.
8. Frost Museum of Science
The Phillip and Patricia Frost Museum of Science is a science
museum, planetarium, and aquarium located in Museum Park in Downtown Miami. The museum recently completed a $35M renovation and features a 500,000 gallon aquarium.
9. Perez Art Museum Miami
Pérez Art Museum Miami (PAMM) is a modern and contemporary art museum located in Downtown Miami, dedicated to collecting and exhibiting international art of the 20th and 21st centuries.
10. American Airlines Arena
A sports and entertainment arena located in Downtown along Biscayne Bay. The Arena has 2,105 club seats, 80 luxury suites, and 76 private boxes and is home to the Miami Heat.
