Lincoln Place in Miami Beach Hits Market at $82M

Key Points

• The 111,400-square-foot Lincoln Place office building in Miami Beach is for sale through its ground lease, with a market value of about $82 million.

• The building is severely under-leased, with only 14.8% occupancy and all retail spaces currently vacant.

• Granite Point Mortgage Trust is marketing the lease, which runs until 2092, while the City of Miami Beach owns the underlying land.

Miami Beach’s Lincoln Place, a prominent yet troubled office and retail property in South Beach, is officially on the market. Once acquired by investor Elie Schwartz, the building is now being sold via its ground lease.

The Asset: Lincoln Place Overview

• Located at 1601 Washington Avenue, the eight-story building spans 111,400 square feet of office space and 26,700 square feet of retail.

• The building includes parking for 499 vehicles.

• The offering is for the ground lease only, not the land itself, which remains owned by the City of Miami Beach.

A Checkered Ownership History

• 2016 Acquisition: Elie Schwartz’s Nightingale Properties, in partnership with JBL Asset Management, bought the ground lease for approximately $80 million.

• Schwartz later became embroiled in a major fraud scandal involving misappropriation of $62.8 million raised on the crowdfunding platform CrowdStreet.

• Schwartz was sentenced to over seven years in prison and ordered to repay investors.

• By late 2023, Schwartz had agreed to sell the lease to Black Lion Investment Group and Massa Investment Group for roughly $82 million to help settle investor claims. The deal would eventually fall through.

Market Position

• The building is currently 85% vacant.

• The retail portion is entirely empty, despite its South Beach location near Lincoln Road, a key commercial artery.

• JLL’s Hermen Rodriguez and Matthew McCormack are handling the sales marketing process.

Investor Insights

• Value-Add Potential: With high vacancy, the property presents an opportunity for investors capable of repositioning both the office and retail spaces.

• South Beach Retail Trends: Lincoln Road’s retail scene has shown signs of recovery, with vacancy rates falling to around 10% and increased interest from experiential retailers.

• Ground Lease Structure: The lease expires in 2092, introducing long-term planning considerations and potential renewal complexities.

Conclusion

Lincoln Place presents a classic high-risk, high-reward scenario. For investors with a strategy to overcome the leasing challenges and navigate the nuances of a long-term ground lease, the asset could yield significant upside in a coveted Miami Beach location.