WeWork Co-Founder’s RE Firm Enters Partnership To Buy Miami Office Building

Updated November 25, 2024

WeWork co-founder Adam Neumann has partnered with an Israeli investment firm to acquire a Miami office building on a prime property set to be redeveloped into residential towers.

Neumann’s company, Flow, in partnership with Canada Global, an Israeli investment firm, has purchased the Aventura Corporate Center for $116.2 million, according to filings with the Tel Aviv Stock Exchange, as reported by the South Florida Business Journal. The deal was partially funded by an $80 million acquisition loan from Ladder Capital Finance.

The three existing office buildings, Aventura Corporate Center I, II and III, will be remaining and the existing two parking decks facing Biscayne Blvd. would be replaced with two new residential towers, retail and a new garage, according to Tere Blanca, Founder, Chairman & CEO of Blanca CRE. Blanca CRE is the exclusive leasing agent and property manager for the property on behalf of the ownership group.

The property was sold by New York-based Stonecutter Capital Management, led by Scott Zucker and Robert Kunzweiler, who originally acquired the site in 2021 for $140 million, financing it with a $112.8 million loan from Ladder Capital. In 2023, Stonecutter secured approval to rezone the 10-acre site at 20801, 20803, and 20807 Biscayne Blvd., allowing for the construction of two 24-story towers with 495 residential units and 39,000 square feet of commercial space. The sale represents a 17% loss for Stonecutter before factoring in expenses related to securing zoning approvals for mixed-use development.

Neumann contributed a total of $36 million toward the acquisition, with $11 million coming from Flow and the remaining $25 million from his purchase of a 30% stake in Canada Global in September. The majority of Canada Global is owned by Asaf Tuchmair and Barak Rosen.

The Aventura Corporate Center is a 253,000-square-foot office building built in 1986 and expanded in 2007, complete with 931 parking spaces. It is currently 92% occupied, and its income is expected to yield a 7% return on investment. Flow, the Miami-based residential real estate firm Neumann founded in 2022, will earn a 5% fee for facilitating the deal with Canada Global. Flow will also handle asset management, day-to-day operations, and residential services.

Neumann’s new venture follows his tumultuous journey with WeWork, the coworking company he co-founded in 2010. After rapid growth, WeWork filed for an IPO in 2019, revealing massive financial losses and raising questions about its management, leading to Neumann stepping down as CEO. WeWork filed for bankruptcy in 2023.

Despite this, Neumann returned to the real estate game with Flow, which secured a $350 million investment from Andreessen Horowitz. Flow currently has properties in Fort Lauderdale, Miami, and even Saudi Arabia. Neumann also attempted to purchase WeWork out of bankruptcy last year, but the company was instead taken private by an investor group led by Anant Yardi, CEO of Yardi Systems.

However, Neumann hasn’t completely turned away from the coworking space sector. Last month, he launched Workflow, a WeWork competitor, with plans to create coworking spaces in Flow properties and manage locations for other landlords. His vision for the first office building in Flow’s portfolio is yet to be revealed.

 

Source:  Bisnow