Less than two years after buying and renovating a Miami Springs retail complex, Manny Varas’ MV Group USA is looking to cash out.
In February, Miami Springs Plaza at 1 South Poinciana Boulevard and 69 Hook Square hit the market with an asking price of $23.3 million. But a recently updated offering shows the Miami-based real estate development and investment firm dropped the price to $20.1 million.
In addition to the price cut, MV is offering $9 million in seller financing at a 4.5 percent interest rate for five years. Miami-based Dwntwn Realty Advisors is marketing the property.
After being on the market for seven months, MV adjusted Miami Springs Plaza’s estimated 4 percent cap rate to 4.5 percent, and thus lowered the price, company CEO Varas told The Real Deal. “Cap rates have increased across the entire commercial sector,” Varas said. “We increased the cap rate to be in line with existing market conditions.”
MV has declined offers below $20 million from interested buyers that see Miami Springs Plaza’s cap rate at 5 percent, Varas added.
“This is a stellar asset,” Varas said. “It’s also a big enticement when you have sellers in a liquidity position to be able to offer [financing] for trophy properties like this. It is very difficult to do when [bank] interest rates are at 7 percent. That is slowing down the sector.”
The decision to sell Miami Springs Plaza is based on a desire to recapitalize commercial properties MV owns outside of South Florida, Varas said. But if MV can’t sell the retail complex at $20.1 million or more, the firm will hold on to Miami Springs Plaza, Varas said.
Consisting of two strip malls spanning 26,947 square feet, Miami Springs Plaza is fully occupied with 15 tenants signed to new 10-year leases with annual rent increases of 3 percent, the offering states. The retail complex’s roster includes Burritoville, Ray’s Tae Kwon Do Center, Santo Dulce, Design Med Spa, Jimmy John’s and Prime Fitness.
The average rental rate at Miami Springs Plaza is $40 per square foot, Varas said.
In December 2021, an MV affiliate paid $6.1 million for the two single-story retail centers completed in 1945 and 1953. The firm invested another $6 million completely gutting and renovating the properties, Varas said. At the time of purchase, Miami Springs Plaza was 50 percent occupied, he added.
The two buildings are adjacent to the recently completed Miami Springs Town Center, a three-story mixed-use apartment and retail project.
Since its founding in 2007, MV focuses on developing luxury homes and commercial projects. The firm also provides construction services to build out office spaces and condominium common areas, according to the firm’s website.