Heritage Equity Buys Miami Redevelopment Site For $6M
Heritage Equity Partners’ Toby Moskovits and Michael Lichtenstein with the property at 2140 Northeast Second Avenue. (Heritage Equity Partners, Apex Capital Realty)
Amid legal battles involving their office and hotel projects in New York, developers Toby Moskovits and Michael Lichtenstein splashed into Miami’s Edgewater neighborhood with a $6.3 million acquisition.
Heritage Equity Partners, a Brooklyn-based development firm led by Moskovits and Lichtenstein, bought the Midas automotive service center at 2140 Northeast Second Avenue.
Heritage plans to redevelop the half-acre site into Edgewood 22, an 18-story, 120-unit rental project designed by Miami architect Bernard Zyscovich, Moskovits and Lichtenstein told The Real Deal.
The site is in an Opportunity Zone, a federally designated area that offers developers and investors a tax break for investing in projects in purportedly low-income communities.
Jamie Rose Maniscalco and Alexandros K. Tsoulfas of Apex Capital Realty represented the seller, Harold Noordhoek Revocable Trust. Miguel Pinto, also with Apex, represented Heritage.
The trust paid $6.3 million for the property in 2019, while the building was still under construction, according to records. The service center was completed the same year.
Edgewood 22 is a play on names of Edgewater and Wynwood, Miami’s two booming neighborhoods, Lichtenstein said. The project is near the FEC train tracks that straddles the border between Wynwood and Edgewater.
“This would be the first ground-up, large-scale project in Miami for Heritage,” Lichtenstein said. “We have been developing in tech-centric neighborhoods in New York for a long time, and there has been a real transformation in the Miami area involving tech firms.”
Lichtenstein noted Wynwood is a “major target location” for tech companies. “They bring jobs, and they bring a certain clientele with them,” he said. “We cater to this type of crowd.”
Heritage, which is involved in a foreclosure lawsuit and bankruptcy proceedings involving three separate properties in New York, joins a slate of out-of-town developers aiming to capitalize on South Florida’s hot multifamily market. The area’s sales, monthly rents and occupancy levels reached record highs in 2021, according to a recent Cushman & Wakefield report.
Heritage’s new property is about a block north of a 2.3-acre Opportunity Zone site assembled by New York-based Kushner Companies. The developer is partnering with Miami-based PTM Partners to build a three-tower rental project with 1,300 apartments. Kushner paid a total of $58.1 million for the assemblage and landed two construction loans for $127 million.
A little further north, Chicago-based Trilogy Real Estate Group picked up another Opportunity Zone redevelopment site in Edgewater for $12.5 million.
“The evolution of Wynwood and Edgewater very much reflects what happened in the Brooklyn neighborhoods where we developed,” Moskovits said. “There is a high concentration of beautiful office and residential buildings being built. The digital nomad who is our tenant in Brooklyn is here as well.”
As they plant their flag in Miami, Moskovits and Lichtenstein are looking to avoid losing control of commercial projects Heritage built on its home turf. In the past two years, two of Heritage’s New York hospitality projects, the Williamsburg Hotel and a stalled hotel development in Bushwick, filed for bankruptcy protection to stave off lenders.
In June, Fortress Investment Group filed a foreclosure lawsuit tied to the Bushwick property at 232 Seigel Street. The complaint alleges the developer owes $8.2 million plus interest and penalties.
In December, Moskovits and Lichtenstein claimed in court filings that they had secured $14 million to remove another development site, a planned rental project in the Bronx, out of bankruptcy.
Moskovits said the bankruptcies and litigation in New York have no bearing on Heritage’s ability to secure construction financing for Edgewood 22. She also said Heritage suffered delays and setbacks like “every commercial developer in New York.”
Still, in the case of the Williamsburg Hotel, the property is open and is turning a profit, Moskovits said.
“Like every commercial developer, we are still a ways away from being fully recovered,” she said. “We were one of the only developers to close on a middle-market construction loan during Covid. Our business is doing extremely well, and we are way ahead of the competition.”
