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Shoppers keen on “revenge buying” this holiday season need look no further than Miami’s Design District, an 18-block cluster of luxury retailers, art galleries and restaurants.
Gucci, Balenciaga and Dior Homme are just a few of the luxury outposts where shoppers can console themselves with fine threads for a healthy markup.
A trio of developers and investors behind the mammoth project — Dacra, L Catterton and Brookfield Asset Management — are scheduled to receive $250 million in CMBS loan proceeds to pay down $205.5 million in debt on nearby land they own, according to a report from Morningstar DBRS.
Of the remaining funds, $15 million will go toward a tenant build out of 75,000 square feet at 191 North East 40th Street for a members-only club consisting of a restaurant and lounge, a co-working space and 15 hotel rooms as well as a public restaurant.
Seven buildings spanning 286,000 square feet of retail, restaurant, office and event space, as well as a 924-space parking garage, will secure the loan. Documents associated with the securitization provide an inside look at the properties’ finances.
As of August, the buildings were 91.2 percent leased to 64 tenants. Tenants include fashion designers Gucci and Dior Homme, which both pay more than $500 per square foot, plus Balenciaga, Christian Louboutin and Tory Burch. Restaurants ZZ’s Sushi Bar, a private membership club, and L’Atelier de Joel Robuchon pay under $150 per square foot. Excluding tenants still working on build-outs, the properties are 68 percent occupied. Chanel is expected to open in December.
In the twelve months preceding May 2021, the properties generated net operating income of $9.6 million on $19 million in revenue. In February, the Miami Planning and Zoning Appeals Board approved Dacra’s plan to build a mixed-use project anchored by a 36-story tower at 3750 Biscayne Boulevard and 299 Northeast 39th Street, acting as a gateway into the District.
Elsewhere in the District, the home-furnishings retailer Restoration Hardware, now known as RH, inked a lease this summer at Apollo Commercial Real Estate Finance and the Comras Company’s buildings on the west end of the District.
When Florida lifted most of its Covid restrictions last summer, the Design District quickly rebounded, benefiting from the influx of wealth escaping lockdowns in New York and California, as well as workers taking advantage of remote employment, Dacra CEO Craig Robins said.
