A joint venture paid $100.3 million for a shopping mall in a Cutler Bay Opportunity Zone, with plans for a major renovation while adding a residential component.
North Palm Beach-based Electra America and Miami-based BH Group teamed up to acquire the 808,776-square-foot indoor mall on a nearly 80-acre site at 20505 South Dixie Highway, according to a press release.
Avison Young’s Michael T. Fay, John Crotty, David Duckworth and Brian de la Fé brokered the Southland Mall sale. The seller is Wells Fargo Bank as trustee for a JP Morgan Chase commercial mortgage-backed securities trust, which seized the property in February of last year as a result of a $68.7 million foreclosure judgment against the previous owner.
The deal does not include a Mercedes-Benz dealership and a former Sears store and auto center that are also on the property, a spokesperson for the joint venture said.
Southland Mall will be “dramatically renovated and upgraded” and “plans are being developed for beautiful residential spaces on excess land,” the spokesperson said. The new owners will provide more information about those plans at a later date, the spokesperson added.
The property could attract investors seeking tax benefits from funding a project in an Opportunity Zone, a federally designated area meant to encourage development and job creation in low-income communities.
In the meantime, the joint venture retained Boca Raton-based Urban Retail Properties to manage and lease Southland Mall, which has a 20 percent vacancy rate, the spokesperson said. Current tenants include JCPenney, Macy’s, TJ Maxx, L.A. Fitness, Regal Cinemas and Old Navy.
In 2004, Southland Mall Properties paid $46 million for the retail site, according to records. In June 2020, Wells Fargo filed a foreclosure lawsuit against Southland Mall Properties for defaulting on a $65.1 million mortgage. Miami-Dade Circuit Court Judge Mavel Ruiz entered a final judgment on behalf of Wells Fargo in January 2021. A month later, the bank bought the property for $2,600 in a foreclosure sale, court records show.
The hospitality investment arm of Electra America, co-founded by managing partner Joe Lubeck, recently teamed up with Korman Communities to purchase an 217-micro-unit multifamily project in West Palm Beach for $83.9 million. The partnership converted the building into an AKA hotel.
In November, BH Group partnered with Related Group and billionaire Teddy Sagi to buy the long-shuttered White House Inn in North Miami for $11.3 million. The joint venture plans to redevelop the waterfront property into a luxury condominium.