Arkadia Property Group has acquired one of the last remaining gas stations in Miami Beach, with plans to redevelop the site into a mixed-use Class A office building. The property, located at 1840 Alton Road in the Sunset Harbour neighborhood, was purchased from Alton Road Supreme Services, led by Jose M. Suarez. The gas station and car wash were originally developed in 1997 and are among only six such facilities left in Miami Beach.
Richard Kilstock and David Aaron of Arkadia closed on the acquisition last week. According to Aaron, the firm intends to build a 40,000-square-foot office building called Sunset House, which will also include 2,500 square feet of food and beverage retail space on the 0.4-acre lot. The project will stand 75 feet tall and feature at least one residential-office live-work unit as required by local zoning rules.
Arkadia secured zoning changes two years ago that allow for an additional 10 feet of height for this development and neighboring properties. Aaron noted that planning for this deal began over a decade ago when he and his partner bought an option to purchase the property twelve years ago. Mika Mattingly, now with Colliers, arranged that contract in 2013.
The sale price was $4.2 million, according to Aaron. Vertix’s Jose Godoy provided a $4.5 million loan that will also cover some predevelopment costs.
Aaron cited strong demand for new office space in Sunset Harbour and pointed out limited availability at Eighteen Sunset—a nearby five-story office project developed by Deco Capital Group’s Bradley Colmer and RWN Real Estate Partners’ Marc Rowan—where leases have reportedly reached $160 per square foot net (https://therealdeal.com/miami/2023/05/19/deco-capital-lands-record-office-leases-at-eighteen-sunset-in-miami-beach/). Audemars Piguet is among tenants set to open there.
Kobi Karp Architecture & Interior Design designed the new project. Newmark’s Matt Himmelsbach is handling office leasing while Sara Wolfe of Wolfe Town Retail manages retail leasing. Debt brokers Robert Kaplan and Mark Rutherford of Cushman & Wakefield were involved along with attorneys Mark Meland and Bryan Vega at Meland Budwick, as well as land use attorney Michael Larkin of Berkow.
Environmental remediation will be completed before construction begins, with delivery expected about 30 months from now.
“We saw this convergence of neighborhoods and we knew something was happening but we didn’t pretend to know what and when,” Aaron said. The deal was originally structured as a sale-leaseback but fell apart at the last minute: “The only solution we found was to create an option for the property.”
Kilstock commented on changes in the area: “The neighborhood has changed dramatically over the past 12 years.”
Himmelsbach said preleasing is underway but declined to disclose asking rents: “Sunset Harbour is extremely demanded and special. People want to work there but there’s no supply,” he said. “There’s a missing hole that this building will fill.”
Prospective tenants may include residents from North Bay Road, Sunset Harbour itself, as well as Venetian Islands.
