TriStar Capital turns huge profit on $13M sale in Miami’s Wynwood

Some foresight into the success of Wynwood byDavid Edelstein and his TriStar Capital turned into a big gain on the sale of two buildings in the street art-adorned Miami neighborhood.

SBT Wynwood, an affiliate of New York-based TriStar, sold the buildings at 2605-2637 North Miami Ave. for $13 million to Miami-based MGC Development Corp.

The buildings total 17,954 square feet on 33,825 square feet of land. The price equates to $724 a square foot of building, or $384 a square foot of land if viewed as a redevelopment.

Miami has a pending rezoning for the entire Wynwood neighborhood that could increase the allowable building height to as tall as 12 stories on North Miami Avenue and permit 150 residential units an acre.

Edelstein’s company paid $5 million for the property in 2013. It repositioned the one-story buildings into storefronts. They are 95 percent leased. Tenants include Made in Italy, Beaker and Gray, and art galleries Fernando Sucre and Ranivilu.

“This transaction reinforces the strength of Wynwood and its attractiveness to investors,” Mandell said. “RKF previously did a deal with the buyers on the sale of the Wynwood Block at 2621 N.W. Second Ave. earlier this year, and they turned around and reinvested in Wynwood due to the continued surge of energy in the area.”

Mandell said TriStar brought the property up to a 5 percent cap rate. He expects that the new buyer will hold it for five years while raising rents and bringing in new tenants as the original leases expire, and then consider redevelopment. Mandell said he’s already seen interest from potential tenants who would pay higher rent to be in Wynwood.

RKF has helped bring tenants such as Warby Parker, Aesop and RED Digital Cinema to Wynwood.

Schaul said the pending upzoning of Wynwood has also caused land prices to increase. The national market sees the area as attractive for millennial shoppers, he added.

Earlier in June, TriStar sold another Wynwood property to Thor Equities for $26.9 million, or $491 a square foot for the buildings.

Original Content From South Florida Business Journal