CLIENT NEWS: Bizzi+Bilgili, partners score $47M construction loan for office building in Miami Beach’s South of Fifth
January 3, 2024A pair of development firms scored a $47.3 million construction loan for a five-story office building in Miami Beach’s South of Fifth neighborhood.
Bizzi+Bilgili — a partnership between Bizzi & Partners and Turkish investor Serdar Bilgili — and Sumaida + Khurana are developing The Fifth Miami Beach. Former Google CEO Eric Schmidt is a partner in the project. The 60,200-square-foot building, which will include retail and restaurant space, will be at 944 Fifth Street and 411 Michigan Avenue.
The Miami Beach Historic Preservation Board approved the project last year, including the developers’ plan to renovate a historic two-story building on the site and move it closer to Michigan Avenue.
Construction of The Fifth started in May, and completion is expected in 2025, according to a news release. The building is nearly 20 percent pre-leased.
Cain International provided the financing, amid an uptick of construction loans this month as developers rush to close deals before year-end.
An entity led by Sumaida + Khurana and Bizzi & Partners principals bought the development site in 2021 for $8.9 million, records show. Schmidt, who served as Google CEO from 2001 to 2011, and his wife, Wendy Schmidt, have an 88 percent stake in the entity that owns the site, The Real Deal reported last year based on records filed with Miami Beach. Sumaida and Bizzi own the remaining 12 percent.
Bilgili got involved in The Fifth Miami Beach after he and his BLG Capital development firm partnered this year with Bizzi & Partners on various projects in the U.S. and Europe. Bilgili, whose BLG’s projects in Turkey include Soho House Istanbul and Ritz-Carlton Residences Istanbul, entered U.S. real estate in 2018 when he partnered with developer Michael Shvo to scoop up properties nationwide. But their partnership devolved into litigation, and the two parted ways following a court settlement.
Bilgili and Bizzi’s other planned joint investments include the 88-story 125 Greenwich condo tower in Lower Manhattan, a long-stalled and recently restarted development.
New York-based Bizzi & Partners is led by Davide Bizzi and Alessandro Pallaoro. The firm has projects in the U.S. and Europe, mostly in Italy. In Miami Beach, the firm co-developed the Eighty Seven Park condo tower with Terra.
Sumaida + Khurana, based in New York, has a portfolio of $1.2 billion of projects completed and under development, in New York and Miami, according to the release. This includes the 611 West 56th Street and 152 Elizabeth Street condominiums in Manhattan. The firm is led by Saif Sumaida and Amit Khurana.
The Fifth South Beach is among numerous South Florida office projects under construction, despite a leasing slowdown and increased sublease availability due to remote work and more expensive financing costs that have prompted some tenants to reevaluate their needs. An analysis by The Real Deal of six Miami-Dade County projects showed half of them hadn’t scored any pre-leases as of August.
In Miami Beach, some city leaders have pushed for more office development as a way to shake the city’s party-place image and attract companies that moved to South Florida from 2020 to last year.
Shvo is among the developers seizing on Miami Beach. Roughly a dozen blocks north of The Fifth Miami Beach, he plans The Alton, a six-story office-residential project on the northwest corner of Alton and Lincoln roads. Shvo also wants to build a six-story office building at 1665-1667 Washington Avenue and redevelop the 13-story office building at 407 Lincoln Road.
